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EXHIBIT 10.4
WEATHERFORD INTERNATIONAL, INC.
EXECUTIVE DEFERRED COMPENSATION
STOCK OWNERSHIP PLAN
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WEATHERFORD INTERNATIONAL, INC.
EXECUTIVE DEFERRED COMPENSATION
STOCK OWNERSHIP PLAN
WHEREAS, Energy Ventures, Inc. and certain of its subsidiaries
previously adopted the Energy Ventures, Inc. Executive Deferred Compensation
Stock Ownership Plan (the "Plan") effective January 1, 1992;
WHEREAS, on May 27, 1998, Weatherford Enterra, Inc. was merged into
EVI, Inc. and the name of the surviving entity, EVI Weatherford, Inc., was
subsequently changed to Weatherford International, Inc.;
WHEREAS, as a consequence of the above-referenced transaction it is
necessary to make certain conforming changes in the terms of the Plan;
NOW, THEREFORE, effective September 28, 1999, the name of the Plan is
changed to "Weatherford International, Inc. Executive Deferred Compensation
Stock Ownership Plan" and Weatherford International, Inc. hereby adopts the
amendment and restatement of the Plan, the terms of which are set forth in this
Agreement.
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WEATHERFORD INTERNATIONAL, INC.
EXECUTIVE DEFERRED COMPENSATION
STOCK OWNERSHIP PLAN
TABLE OF CONTENTS
Section
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ARTICLE I -- DEFINITIONS
Account................................................................................................1.1
Basic Benefit..........................................................................................1.2
Beneficiary............................................................................................1.3
Board of Directors.....................................................................................1.4
Code...................................................................................................1.5
Committee..............................................................................................1.6
Common Stock...........................................................................................1.7
Company................................................................................................1.8
Company Match..........................................................................................1.9
Compensation..........................................................................................1.10
Deferral..............................................................................................1.11
Deferred Compensation Ledger..........................................................................1.12
Disability............................................................................................1.13
ERISA.................................................................................................1.14
Grant Spin-Off........................................................................................1.15
Grant Stock...........................................................................................1.16
Participant...........................................................................................1.17
Plan..................................................................................................1.18
Plan Year.............................................................................................1.19
Retirement............................................................................................1.20
Sponsor...............................................................................................1.21
Subsidiary............................................................................................1.22
Trustee...............................................................................................1.23
Year of Service.......................................................................................1.24
ARTICLE II - ELIGIBILITY
ARTICLE III - DEFERRALS AND BENEFIT ACCRUALS
Basic Benefit Accrual..................................................................................3.1
Deferral Election......................................................................................3.2
Company Match Accrual..................................................................................3.3
Reduction of Accruals..................................................................................3.4
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ARTICLE IV - ACCOUNT
Establishing a Participant's Account...................................................................4.1
Basic Benefit Account..................................................................................4.2
Deferral Account.......................................................................................4.3
Company Match Account..................................................................................4.4
Gauge for Determining Benefits.........................................................................4.5
Adjustments for the Grant Spin-Off.....................................................................4.6
ARTICLE V - VESTING
Deferrals..............................................................................................5.1
Basic Benefit and Company Match........................................................................5.2
ARTICLE VI - DISTRIBUTIONS
Death..................................................................................................6.1
Disability.............................................................................................6.2
Retirement.............................................................................................6.3
Termination Prior to Death, Disability or Retirement...................................................6.4
Forfeiture for Cause...................................................................................6.5
Responsibility for Distributions and
Withholding of Taxes.................................................................................6.6
Distribution Determination Date........................................................................6.7
ARTICLE VII - ADMINISTRATION
Committee Appointment..................................................................................7.1
Committee Organization and Voting......................................................................7.2
Powers of the Committee................................................................................7.3
Committee Discretion...................................................................................7.4
Annual Statements......................................................................................7.5
Reimbursement of Expenses..............................................................................7.6
ARTICLE VIII - ADOPTION BY SUBSIDIARIES
Procedure for and Status After Adoption................................................................8.1
Termination of Participation by Adopting Subsidiary....................................................8.2
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ARTICLE IX - AMENDMENT AND/OR TERMINATION
Amendment or Termination of the Plan...................................................................9.1
No Retroactive Effect on Awarded Benefits..............................................................9.2
Effect of Termination..................................................................................9.3
ARTICLE X - PAYMENT
Payments Under This Agreement Are the Obligation
of the Company......................................................................................10.1
Payments May Be Made to a Rabbi Trust.................................................................10.2
Participants Must Rely Only on the General
Credit of the Company..............................................................................10.3
Plan Unfunded.........................................................................................10.4
ARTICLE XI - MISCELLANEOUS
Limitation of Rights..................................................................................11.1
Distribution to Minor or Incapacitated Person.........................................................11.2
Nonalienation of Benefits.............................................................................11.3
Reliance Upon Information ............................................................................11.4
Severability..........................................................................................11.5
Notice................................................................................................11.6
Gender and Number.....................................................................................11.7
Governing Law.........................................................................................11.8
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ARTICLE I
DEFINITIONS
1.1 "ACCOUNT" means all ledger accounts pertaining to a
Participant which are maintained by the Committee to reflect the amount of
deferred compensation due the Participant. The Committee shall establish the
following Accounts and any additional Accounts that the Committee considers
necessary.
(a) Deferral Account - The Participant's deferral, if any,
between one percent and 7 1/2 percent of his Compensation.
(b) Basic Benefit Account - The Company's accrual of 7 1/2
percent of Compensation for each Participant, or such lesser amount as
the Committee establishes pursuant to Section 3.4.
(c) Company Match Account - The Company's match equal to 100
percent of the Participant's Deferral, if any, or such lesser amount as
the Committee establishes pursuant to Section 3.4.
1.2 "BASIC BENEFIT" means the accrual made by the Company for
the benefit of a Participant equal to 7 1/2 percent of the Participant's
Compensation, or such lesser amount as the Committee establishes pursuant to
Section 3.4.
1.3 "BENEFICIARY" means a person or entity designated by the
Participant under the terms of the Plan to receive any amounts distributed under
the Plan upon the death of the Participant.
1.4 "BOARD OF DIRECTORS" means the Board of Directors of the
Sponsor.
1.5 "CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
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1.6 "COMMITTEE" means the persons who are from time to time
serving as members of the committee administering the Plan.
1.7 "COMMON STOCK" means the common stock, $1.00 par value, of
the Sponsor.
1.8 "COMPANY" means the Sponsor and any Subsidiary that adopts
the Plan.
1.9 "COMPANY MATCH" means the 100 percent match which the
Company accrues with respect to the amount deferred during a Plan Year by a
Participant under the Plan, or such lesser amount as the Committee establishes
pursuant to Section 3.4.
1.10 "COMPENSATION" means remuneration paid to a Participant
by the Company during the portion of the Plan Year in which he is eligible to
participate in the Plan, or that would have been paid to a Participant during
such portion of the Plan Year by the Company but for the Participant's election
to make a Deferral under the Plan or his deferrals under a cash or deferred
arrangement described in section 401(k) of the Code or a cafeteria plan
described in section 125 of the Code, including and limited to regular base pay,
merit and incentive bonuses (other than bonuses paid by the Company with respect
to services for a predecessor employer that has not adopted the Plan or with
respect to services performed by the Participant prior to his employment by the
Company, as determined by the Committee in its sole discretion), commissions,
short-term disability pay, vacation pay paid while the Participant is employed
by the Company, vacation pay paid upon a Participant's termination of
employment, and retention bonuses. Compensation does not include sign-on
bonuses, foreign service premiums or bonuses, position allowances, location
coefficient payments, housing allowances, car allowances, goods and services
allowances, tax gross-up payments, hypothetical tax payments, expense
reimbursements, travel allowances or bonuses, cash and non-cash fringe benefits,
severance pay, relocation allowances or expense reimbursements, deferred
compensation (such as income as a result of the exercise of a stock option or
stock
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appreciation right), or benefits under any pension plan or welfare plan as
defined in ERISA (whether or not paid under a program that is subject to
regulation under ERISA). Notwithstanding the foregoing, Compensation does
include car allowances paid to a Participant by the Company prior to April 1,
2000.
1.11 "DEFERRAL" means the amount of Compensation deferred
under a deferral election made by a Participant under Section 3.2.
1.12 "DEFERRED COMPENSATION LEDGER" means the ledger
maintained by the Committee for each Participant which reflects the amount of
Compensation deferred by the Participant under the Plan, the Company Basic
Benefit and the Company Match provided under the Plan, and the amount of
earnings and losses credited on each of these amounts.
1.13 "DISABILITY" means a physical or mental condition that
prevents the Participant from earning a reasonable livelihood with any Company,
Grant Prideco, Inc. and any subsidiary of Grant Prideco, Inc. and which was not
the result of having engaged in a felonious criminal enterprise, alcoholism,
addiction to narcotics or service in the U.S. Armed Forces. The Committee's
determination of a Participant's Disability shall be in its sole discretion and
shall be final.
1.14 "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
1.15 "GRANT SPIN-OFF" means the distribution by the Sponsor to
its stockholders of all the outstanding shares of stock of Grant Prideco, Inc.
1.16 "GRANT STOCK" means the common stock, $.01 par value, of
Grant Prideco, Inc.
1.17 "PARTICIPANT" means an employee of a Company who is
eligible for and is participating in the Plan.
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1.18 "PLAN" means the Weatherford International, Inc.
Executive Deferred Compensation Stock Ownership Plan set out in this document,
as amended from time to time.
1.19 "PLAN YEAR" means a one year period which coincides with
the calendar year.
1.20 "RETIREMENT" means the retirement of a Participant from
any Company covered by the Plan, Grant Prideco, Inc. and any subsidiary of Grant
Prideco, Inc. on or after attaining age 60 under its retirement policy.
1.21 "SPONSOR" means Weatherford International, Inc., the
sponsor of the Plan, or any successor of Weatherford International, Inc. into
which Weatherford International, Inc. is merged or consolidated.
1.22 "SUBSIDIARY" means any domestic wholly owned subsidiary
of the Sponsor.
1.23 "TRUSTEE" means collectively or individually one or more
corporations with trust powers which have been appointed by the Sponsor and have
accepted the duties of trustee of the Weatherford International, Inc. Executive
Deferred Compensation Stock Ownership Trust, and all successors appointed by the
Sponsor.
1.24 "YEAR OF SERVICE" means 365 days of employment with the
Sponsor or a Subsidiary. Employment with Grant Prideco, Inc. and its affiliates
up to the fifth anniversary of the effective date of the distribution by the
Sponsor to its stockholders of all the outstanding shares of stock of Grant
Prideco, Inc. shall be treated as employment with the Sponsor.
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ARTICLE II
ELIGIBILITY
The employees eligible to participate in the Plan include the
key employees of the Sponsor and each Subsidiary, who are in a select group of
management or are highly compensated employees, as determined by the Committee
from time to time. The Committee shall notify each Participant of his
eligibility to participate in the Plan. Except as specified below, each
Participant in the Plan during a Plan Year shall continue to participate in the
Plan unless the Committee shall have notified the Participant prior to the
beginning of the next Plan Year that he will not participate in the Plan for
that Plan Year. The Committee may at any time during a Plan Year on 60 days'
notice to a Participant advise the Participant that he shall not participate in
the Plan after the expiration of such notice period. A former participant who
has been notified that he will no longer participate in the Plan, but who
remains in the employ of the Company, shall retain the balance in his Accounts
under the terms of the Plan, but shall not make additional deferrals under
Section 3.2 or receive any additional allocations to his Accounts under Sections
4.2 and 4.4 during the periods in which he is not an eligible Participant in the
Plan.
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ARTICLE III
DEFERRALS AND BENEFIT ACCRUALS
3.1 BASIC BENEFIT ACCRUAL. Subject to Section 3.4, the Company
shall accrue an amount for the benefit of each Participant equal to 7 1/2
percent of the Participant's Compensation for the Plan Year.
3.2 DEFERRAL ELECTION. A Participant may elect, within 30 days
of notification that he is eligible to participate in the Plan, and not less
than six months prior to the effective date of the first deferral, and
thereafter not later than June 30 preceding the next Plan Year, the percentage,
if any, of his Compensation that is to be deferred under the Plan. A Participant
may defer a minimum of one percent but not more than 7 1/2 percent of his
Compensation for the Plan Year. A Participant may only defer Compensation that
has not yet been paid to him. Prior to the election period the Committee shall
notify all eligible Participants of their right to make a deferral election.
Once an election has been made as to the percentage to be deferred, it becomes
irrevocable for the Plan Year. The election to defer a percentage of
Compensation shall be effective only upon the timely receipt by the Committee of
the Participant's percentage deferral election on such form as will be
determined by the Committee from time to time. Except with respect to the
election by a newly eligible Participant as described above, if the Committee
fails to receive a properly filed election form on or prior to June 30 of the
year immediately preceding the Plan Year to which the election applies, revoking
or modifying a prior election, the prior election shall remain in effect. If a
timely election form is not received, the Participant shall be deemed to have
elected not to defer any part of his Compensation for that Plan Year. An
election to defer for one Plan Year shall remain effective for subsequent Plan
Years until modified or revoked in accordance with this Section 3.2.
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3.3 COMPANY MATCH ACCRUAL. Subject to Section 3.4, the Company
shall award each Participant who elects to defer a portion of his Compensation
under the Plan with an amount equal to 100 percent of the amount that is
deferred by him.
3.4 REDUCTION OF ACCRUALS. The Committee may reduce the
percentage of the Basic Benefit accrual and/or the Company Match accrual upon
written notice to a Participant. Such reduction shall apply only as to Plan
Years following such notice, or in the case of a new Participant, beginning on
the date that the Participant first receives credit under Section 3.1, 3.2 or
3.3.
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ARTICLE IV
ACCOUNT
4.1 ESTABLISHING A PARTICIPANT'S ACCOUNT. The Committee shall
establish an Account for each Participant in a special Deferred Compensation
Ledger which shall be maintained by the Company. The Account shall reflect the
amount of the Company's obligation to the Participant at any given time.
4.2 BASIC BENEFIT ACCOUNT. The Basic Benefit shall be credited
to each Participant's Basic Benefit Account as of the last day of each month of
each Plan Year for the accrual attributable to Compensation paid during that
month.
4.3 DEFERRAL ACCOUNT. The amount deferred by a Participant, if
any, shall be credited to each Participant's Deferral Account as of the last day
of each month in which the Participant would have received the amount deferred
but for his election to defer.
4.4 COMPANY MATCH ACCOUNT. The Company Match shall be credited
to each Participant's Company Match Account coincident with the allocation of
the Participant's Deferral to the Participant's Deferral Account.
4.5 GAUGE FOR DETERMINING BENEFITS. Except as specified in
Section 4.6, the Basic Benefit, Deferral and Company Match described in Sections
4.2, 4.3 and 4.4, shall be deemed to be credited in non-monetary units equal to
the number of whole shares of Common Stock which could have been purchased at a
price equal to the average closing sale price of a share of Common Stock during
the calendar month for which the credit is made as reported by the principal
national securities exchange on which the Common Stock is then listed if the
Common Stock is listed on a national securities exchange or the average of the
bid and asked price of a share of Common Stock
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during such month as reported in the National Association of Securities Dealers
Automated Quotation National Market System (or successor system) listing if the
Common Stock is not then listed on a national securities exchange, provided that
if no such closing price or quotes are so reported during that month or if, in
the discretion of the Committee, another means of determining the fair market
value of the Common Stock for such month shall be necessary and advisable, the
Committee may provide for another means of determining such value, and in
monetary units for any amount which is less than the value of a whole share. Any
monetary unit credited to an Account will be added to the next such amount
credited to the Account and converted into a non-monetary unit as quickly as
possible. The value of each unit credited to an Account and therefore the
ultimate value of the deferred compensation payable to each Participant will
increase or decrease in proportion to the change in the value of a share of
Common Stock between the date of the initial crediting of a unit and the date
that the unit is valued for distribution under Article VI of the Plan.
4.6 ADJUSTMENTS FOR THE GRANT SPIN-OFF. Following the Grant
Spin-Off, the Committee shall credit to a Participant's Account one non-monetary
unit equal to one share of Grant Stock for every one non-monetary unit equal to
one share of Common Stock that is deemed to be credited to his Account as of the
date of the Grant Spin-Off or subsequently credited to his Account for
Compensation earned through the date of the Grant Spin-Off.
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ARTICLE V
VESTING
5.1 DEFERRALS. A Participant shall have a 100 percent
nonforfeitable interest in his Deferrals under the Plan at all times. A
Participant will also have a 100 percent nonforfeitable interest in any increase
in the Deferral as a result of the rise in the value of the non-monetary units
after his Deferral has been initially credited.
5.2 BASIC BENEFIT AND COMPANY MATCH. Upon his Retirement,
death or Disability while employed with the Company, a Participant will have a
100 percent nonforfeitable interest in the Basic Benefit and Company Match
credited to his Account together with any increase in the accruals as a result
of the rise in the value of the non-monetary units after they have been
initially credited, except for the events of forfeiture described in Section
6.5. In addition, a Participant's interest in the Basic Benefit and Company
Match credited to his Account together with any increase in the accruals as a
result of the rise in the value of the non-monetary units after they have been
initially credited shall vest at the rate set out in the vesting schedule below,
except for events of forfeiture described in Section 6.5 and upon termination of
the Plan as provided in Section 9.3.
Completed Years of Service
With the Company Beginning
January 1 of the Plan Year the Employee
First Becomes a Participant Percentage Vested
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Less than one year...............................................................0
One but less than two...........................................................20
Two but less than three.........................................................40
Three but less than four........................................................60
Four but less than five.........................................................80
Five or more...................................................................100
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ARTICLE VI
DISTRIBUTIONS
6.1 DEATH. Upon the death of a Participant, the Participant's
Beneficiary or Beneficiaries shall receive the value of the amounts credited to
the Participant's Accounts in the Deferred Compensation Ledger determined under
Section 6.7, and the distribution shall be made in shares of Common Stock.
Notwithstanding the foregoing, to the extent that shares of Grant Stock are
deemed credited to the Participant's Account, the Committee may cause shares of
Grant Stock to be distributed to his Beneficiary or Beneficiaries. The
distribution shall be made within 30 days after the Participant's death.
Each Participant, upon notification of his participation in
the Plan, shall file with the Committee a designation of one or more
Beneficiaries to whom distributions otherwise due the Participant shall be made
in the event of his death prior to the distribution of the amount credited to
his Accounts in the Deferred Compensation Ledger. The designation will be
effective upon receipt by the Committee of a properly executed form which the
Committee has approved for that purpose. The Participant may from time to time
revoke or change any designation of Beneficiary by filing another approved
Beneficiary designation form with the Committee. If there is no valid
designation of Beneficiary on file with the Committee at the time of the
Participant's death, or if all of the Beneficiaries designated in the last
Beneficiary designation have predeceased the Participant or otherwise ceased to
exist, the Beneficiary will be the Participant's spouse, if the spouse survives
the Participant, or otherwise the Participant's estate. Any Beneficiary
designation which designates any person or entity other than the Participant's
spouse must be consented to in writing by the spouse in a form acceptable to the
Committee in order to be effective.
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6.2 DISABILITY. Upon the Disability of a Participant, the
Participant shall receive the value of the amounts credited to the Participant's
Accounts in the Deferred Compensation Ledger determined under Section 6.7, and
the distribution shall be made in shares of Common Stock. Notwithstanding the
foregoing, to the extent that shares of Grant Stock are deemed credited to the
Participant's Account, the Committee may cause shares of Grant Stock to be
distributed to him. The distribution shall be made within 30 days after the
Participant becomes disabled.
6.3 RETIREMENT. Upon the Retirement of a Participant on or
after attaining age 60, the Participant shall receive the value of the amounts
credited to his Accounts in the Deferred Compensation Ledger determined under
Section 6.7, and the distribution shall be made in shares of Common Stock.
Notwithstanding the foregoing, to the extent that shares of Grant Stock are
deemed credited to the Participant's Account, the Committee may cause shares of
Grant Stock to be distributed to him. The distribution shall be made within 30
days after the Participant's Retirement.
6.4 TERMINATION PRIOR TO DEATH, DISABILITY OR RETIREMENT. Upon
a Participant's termination from the employ of the Company prior to death,
Disability or Retirement, he shall receive the portion of the amount credited to
his Accounts in the Deferred Compensation Ledger, determined under Section 6.7,
which is vested under Sections 5.1 and 5.2, and the distribution shall be made
in shares of Common Stock. Notwithstanding the foregoing, to the extent that
shares of Grant Stock are deemed credited to the Participant's Account, the
Committee may cause shares of Grant Stock to be distributed to him. The
distribution shall be made within 30 days after the Participant's termination.
Any amounts not then vested shall be forfeited. A Participant who continues to
be employed by Grant Prideco, Inc or a subsidiary of Grant Prideco, Inc.
following the Grant Spin-Off shall not be treated as having terminated from the
employ of the Company until he terminates from the employ of Grant Prideco, Inc.
and its subsidiaries.
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6.5 FORFEITURE FOR CAUSE. If the Committee finds, after full
consideration of the facts presented on behalf of both the Company and a former
Participant, that the Participant was discharged by the Company for fraud,
embezzlement, theft, commission of a felony, proven dishonesty in the course of
his employment by the Company which damaged the Company, or for disclosing trade
secrets of the Company, the entire amount credited to his Basic Benefit Account
and Company Match Account in the Deferred Compensation Ledger shall be forfeited
even though it may have been previously vested under Section 5.2. The decision
of the Committee as to the cause of a former Participant's discharge and the
damage done to the Company shall be final. No decision of the Committee shall
affect the finality of the discharge of the Participant by the Company in any
manner.
6.6 RESPONSIBILITY FOR DISTRIBUTIONS AND WITHHOLDING OF TAXES.
The Committee shall furnish information to the Company last employing the
Participant concerning the amount and form of distribution to any Participant
entitled to a distribution so that the Company may make or cause the rabbi trust
to make the distribution required. It will also calculate the deductions from
the amount of the benefit paid under the Plan for any taxes required to be
withheld by federal, state or local government and will cause them to be
withheld and paid to the appropriate authority. If a Participant has deferred
compensation under the Plan while in the service of more than one Company, each
Company for which the Participant worked shall pay the amount attributable to
the period the Participant was in the service of that Company, except to the
extent the Company paid an amount to the Trust which was paid the Participant.
6.7 DISTRIBUTION DETERMINATION DATE. For purposes of all
distributions described in this Article VI, the determination date for valuing
the amounts credited to a Participant's Accounts shall be the day which triggers
the beginning of the 90-day period described in Section 6.1, 6.2, 6.3
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or 6.4, as applicable. For purposes of all distributions in Common Stock and
Grant Stock described in this Article VI, the determination date shall be the
date of the actual distribution of the Common Stock or Grant Stock to the
Participant or his Beneficiary, and the number of shares issued shall be equal
to the vested non-monetary units allocated to the Participant's Accounts.
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ARTICLE VII
ADMINISTRATION
7.1 COMMITTEE APPOINTMENT. The Committee consisting of not less
than two members shall be appointed by the Board of Directors. Each Committee
member shall serve until his or her resignation or removal. The Board of
Directors shall have the sole discretion to remove any one or more Committee
members and appoint one or more replacement or additional Committee members from
time to time.
7.2 COMMITTEE ORGANIZATION AND VOTING. The Committee shall
select from among its members a chairman who shall preside at all of its
meetings and shall elect a secretary without regard to whether that person is a
member of the Committee. The secretary shall keep all records, documents and
data pertaining to the Committee's supervision and administration of the Plan. A
majority of the members of the Committee shall constitute a quorum for the
transaction of business and the vote of a majority of the members present at any
meeting shall decide any question brought before the meeting. In addition, the
Committee may decide any question by a vote, taken without a meeting, of a
majority of its members. A member of the Committee who is also a Participant
shall not vote or act on any matter relating solely to himself.
7.3 POWERS OF THE COMMITTEE. The Committee shall have the
exclusive responsibility for the general administration of the Plan according to
the terms and provisions of the Plan and shall have all powers necessary to
accomplish those purposes, including but not by way of limitation the right,
power and authority:
(a) to make rules and regulations for the administration of
the Plan;
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(b) to construe all terms, provisions, conditions and
limitations of the Plan;
(c) to correct any defect, supply any omission or reconcile
any inconsistency that may appear in the Plan in the manner and to the
extent it deems expedient to carry the Plan into effect;
(d) to designate the persons eligible to become Participants;
(e) to determine all controversies relating to the
administration of the Plan, including but not limited to:
(1) differences of opinion arising between the
Company and a Participant; and
(2) any question it deems advisable to determine in
order to promote the uniform administration of the Plan for
the benefit of all parties at interest; and
(f) to delegate by written notice those clerical and
recordation duties of the Committee, as it deems necessary or advisable
for the proper and efficient administration of the Plan.
7.4 COMMITTEE DISCRETION. The Committee in exercising any
power or authority granted under the Plan or in making any determination under
the Plan shall perform or refrain from performing those acts using its sole
discretion and judgment. Any decision made by the Committee or any refraining to
act or any act taken by the Committee in good faith shall be final and binding
on all parties and shall not be subject to de novo review.
7.5 ANNUAL STATEMENTS. The Committee shall cause each
Participant to receive an annual statement as soon as administratively feasible
after the conclusion of each Plan Year containing a statement of the
Participant's Accounts in the Deferred Compensation Ledger through the end of
that Plan Year. The statement shall include a report of the Basic Benefit, the
Participant Deferral and Company Match, if any, and the number of units
allocated to the Accounts for that Plan Year.
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7.6 REIMBURSEMENT OF EXPENSES. The Committee shall serve
without compensation for their services but shall be reimbursed by the Sponsor
for all expenses properly and actually incurred in the performance of their
duties under the Plan.
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ARTICLE VIII
ADOPTION BY SUBSIDIARIES
8.1 PROCEDURE FOR AND STATUS AFTER ADOPTION. Any Subsidiary
may, with the approval of the Committee, adopt the Plan by appropriate action of
its board of directors. The terms of the Plan will apply separately to each
Subsidiary adopting the Plan and its Participants in the same manner as is
expressly provided for the Sponsor and its Participants except that the powers
of the Board of Directors and the Committee under the Plan shall be exercised by
the Board of Directors alone. The Sponsor and each Subsidiary adopting the Plan
shall bear the cost of providing plan benefits for its own Participants. It is
intended that the obligation of the Sponsor and each Subsidiary with respect to
its Participants shall be the sole obligation of the Company that is employing
the Participant and shall not bind any other Company.
8.2 TERMINATION OF PARTICIPATION BY ADOPTING SUBSIDIARY. Any
Subsidiary that adopts the Plan may, by appropriate action of its board of
directors, terminate its participation in the Plan. The Committee may, in its
discretion, also terminate a Subsidiary's participation in the Plan at any time.
The termination of the participation in the Plan by a Subsidiary shall not,
however, affect the rights of any Participant who is working or has worked for
the Subsidiary as to amounts and/or units previously standing to his credit in
his Accounts in the Deferred Compensation Ledger.
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ARTICLE IX
AMENDMENT AND/OR TERMINATION
9.1 AMENDMENT OR TERMINATION OF THE PLAN. The Board of
Directors may amend or terminate the Plan at any time by an instrument in
writing without the consent of any adopting Company or any Participant; provided
however, the amount of the Basic Benefit Accrual specified in Section 3.1 may
not be amended more than once every six months other than to comport with
changes to the Code or the Employee Retirement Income Security Act, or the rules
thereunder.
9.2 NO RETROACTIVE EFFECT ON AWARDED BENEFITS. No amendment
shall affect the rights of any Participant to the amounts and/or units then
standing to his credit in his Accounts in the Deferred Compensation Ledger.
However, the Board of Directors shall retain the right at any time to change in
any manner the method of calculating all Basic Benefits to be accrued in the
future, all amounts deferred by a Participant and all amounts matched by the
Company and the gauge to be used to determine future increases or decreases in
amounts accrued or deferred after the date of the amendment, if it has been
announced to the Participants.
9.3 EFFECT OF TERMINATION. If the Plan is terminated, all
amounts of Basic Benefits accrued by the Company, deferred by Participants and
matched by the Company and credited to a Participant's Accounts shall
immediately vest as if the Participant were entitled to and did retire on the
date the Plan terminated. Distribution would then commence in accordance with
Section 6.3. However, the forfeiture provisions of Section 6.5 would continue to
apply until the actual date of distribution.
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ARTICLE X
PAYMENT
10.1 PAYMENTS UNDER THIS AGREEMENT ARE THE OBLIGATION OF THE
COMPANY. The Company shall be liable for all benefits due the Participants under
the Plan.
10.2 PAYMENTS MAY BE MADE TO A RABBI TRUST. It is specifically
recognized by both the Company and the Participants that under all
circumstances, the rights of the Participants to the assets held in the trust,
if any, shall be no greater than the rights expressed in this agreement. Nothing
contained in the trust agreement which creates the trust shall constitute a
guarantee by any Company that the amounts transferred by it to the trust shall
be sufficient to pay any benefits under the Plan or would place the Participant
in a secured position ahead of judgment and/or general creditors should the
Company become insolvent or bankrupt. Any trust agreement prepared under the
Plan must specifically set out these principles so it is clear in that trust
agreement that the Participants in the Plan are only unsecured general creditors
of the Company in relation to their benefits under the Plan.
10.3 PARTICIPANTS MUST RELY ONLY ON THE GENERAL CREDIT OF THE
COMPANY. It is also specifically recognized by both the Company and the
Participants that the Plan is only a general corporate commitment and that each
Participant must rely upon the general credit of the Company for the fulfillment
of its obligations under the Plan. Under all circumstances the rights of
Participants to any asset held by the Company shall be no greater than the
rights expressed in this agreement. Nothing contained in this agreement shall
constitute a guarantee by the Company that the assets of the Company will be
sufficient to pay any benefits under the Plan or would place the Participant in
a secured position ahead of general creditors and judgment creditors of the
Company.
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Although the Company has established or become a signatory to a rabbi trust to
accumulate assets to fulfill its obligations under the Plan, the maintenance of
the Plan and the rabbi trust shall not create any lien, claim, encumbrance,
right, title or other interest of any kind in any Participant in any asset held
by the Company, contributed to any trust created, or otherwise be designated to
be used for payment of any of its obligations created in this agreement. No
specific assets of the Company have been or will be set aside, or will be
transferred to the trust or will be pledged for the performance of the Company's
obligations under the Plan which would remove those assets from being subject to
the general creditors and judgment creditors of the Company.
10.4 PLAN UNFUNDED. It is intended that the Plan shall be
unfunded for tax purposes and for purposes of Title I of ERISA.
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ARTICLE XI
MISCELLANEOUS
11.1 LIMITATION OF RIGHTS. Nothing in the Plan will be
construed:
(a) to give any employee of any Company any right to be
designated a Participant in the Plan;
(b) to give a Participant any right with respect to the Basic
Benefit accrued, the Deferral, or the Company Match accrued except in
accordance with the terms of the Plan;
(c) to limit in any way the right of the Company to terminate
a Participant's employment with the Company at any time;
(d) to evidence any agreement or understanding, expressed or
implied, that the Company will employ a Participant in any particular
position or for any particular remuneration; or
(e) to give a Participant or any other person claiming through
him any interest or right under the Plan other than that of any
unsecured general creditor of the Company.
11.2 DISTRIBUTION TO MINOR OR INCAPACITATED PERSON. If the
Committee determines that any person to whom a payment is due is a minor or
unable to care for his affairs because of physical or mental disability, it
shall have the authority to cause his payments under the Plan to be made to his
parent, legal guardian, spouse, brother, sister or other person whom the
Committee determines. The Committee shall not be responsible to oversee the
application of those payments. Payments made pursuant to this power shall be a
complete discharge of all liability under the Plan and the obligations of the
Company and the Committee.
11.3 NONALIENATION OF BENEFITS. No right or benefit provided in
the Plan shall be transferable by the Participant except, upon his death, to a
named Beneficiary as provided in the Plan. No right or benefit under the Plan
shall be subject to anticipation, alienation, sale, assignment,
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pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell,
assign, pledge, encumber, or charge the same shall be void. No right or benefit
under the Plan shall in any manner be liable for or subject to any debts,
contracts, liabilities or torts of the person entitled to such benefits. If any
Participant or any Beneficiary becomes bankrupt or attempts to anticipate,
alienate, sell, assign, pledge, encumber or charge any right or benefit under
the Plan, that right or benefit shall, in the discretion of the Committee,
cease. In that event, the Committee may have the Company hold or apply the right
or benefit or any part of it to the benefit of the Participant or Beneficiary,
his or her spouse, children or other dependents or any of them in any manner and
in any proportion the Committee believes to be proper in its sole and absolute
discretion, but is not required to do so.
11.4 RELIANCE UPON INFORMATION. The Committee shall not be
liable for any decision or action taken in good faith in connection with the
administration of the Plan. Without limiting the generality of the foregoing,
any decision or action taken by the Committee when it relies upon information
supplied it by any officer of the Company, the Company's legal counsel, the
Company's independent accountants or other advisors in connection with the
administration of this Plan shall be deemed to have been taken in good faith.
11.5 SEVERABILITY. If any term, provision, covenant or condition
of the Plan is held to be invalid, void or otherwise unenforceable, the rest of
the Plan shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
11.6 NOTICE. Any notice or filing required or permitted to be
given to the Committee or a Participant shall be sufficient if in writing and
hand delivered or sent by U.S. mail to the principal office of the Company or to
the residential mailing address of the Participant. Notice shall be deemed to be
given as of the date of hand delivery or if delivery is by mail, as of the date
shown on the postmark.
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11.7 GENDER AND NUMBER. If the context requires it, words of one
gender when used in the Plan will include the other genders, and words used in
the singular or plural will include the other.
11.8 GOVERNING LAW. The Plan will be construed, administered and
governed in all respects by the laws of the State of Texas.
IN WITNESS WHEREOF, the Company caused this Agreement to be
executed effective as of September 28, 1999.
WEATHERFORD INTERNATIONAL, INC.
By: /s/ Curtis W. Huff
-----------------------------------------
Curtis W. Huff
Executive Vice President, Chief Financial
Officer, General Counsel and Secretary
The Subsidiaries listed on Exhibit A have
adopted the Plan.
30
EXHIBIT A
WEATHERFORD INTERNATIONAL, INC.
EXECUTIVE DEFERRED COMPENSATION
STOCK OWNERSHIP PLAN
The following subsidiaries have adopted the Plan:
Dailey International, Inc.
EVI Arrow, Inc.
Weatherford Management, Inc.
EVI Watson Packers, Inc.
Grant Prideco, Inc.
Texas Arai, Inc.
Trico Industries, Inc.
Tube-Alloy Corporation
Weatherford Artificial Lift Systems, Inc.
Weatherford Completion and Oilfield Services, Inc.
Weatherford Global Compression Company, L.P.
Weatherford International, Inc.
Weatherford U.S., L.P.
XL Systems, Inc.
Petroline Wellsystems (USA), L.L.C.
31
WEATHERFORD INTERNATIONAL, INC.
EXECUTIVE DEFERRED COMPENSATION
STOCK OWNERSHIP TRUST
32
WEATHERFORD INTERNATIONAL, INC.
EXECUTIVE DEFERRED COMPENSATION
STOCK OWNERSHIP TRUST
This agreement made and entered into by and between
Weatherford International, Inc. and Bank One, Texas, NA, located in Houston,
Harris County, Texas, as trustee (the "Trustee").
W I T N E S S E T H :
WHEREAS, effective January 1, 1992, Energy Ventures, Inc. and
certain of its subsidiaries adopted the Energy Ventures, Inc. Executive Deferred
Compensation Stock Ownership Plan (the "Plan") and established the Energy
Ventures, Inc. Executive Deferred Compensation Stock Ownership Trust (the
"Trust") to assist employers in meeting their obligations under the Plan;
WHEREAS, on May 27, 1998, Weatherford Enterra, Inc. was merged
into EVI, Inc. and the name of the surviving entity, EVI Weatherford, Inc., was
subsequently changed to Weatherford International, Inc.;
WHEREAS, effective May 27, 1998, the name of the Plan was
changed to Weatherford International, Inc. Executive Deferred Compensation Stock
Ownership Plan; and
WHEREAS, Weatherford International, Inc. and the Trustee
desire to amend and restate the Trust;
NOW, THEREFORE, effective April 1, 2000, the name of the Trust
is changed to "Weatherford International, Inc. Executive Deferred Compensation
Stock Ownership Trust" and Weatherford International, Inc. and the Trustee
hereby adopt the amendment and restatement of the Trust, the terms of which are
set forth in this agreement.
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WEATHERFORD INTERNATIONAL, INC.
EXECUTIVE DEFERRED COMPENSATION
STOCK OWNERSHIP TRUST
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS
Board of Directors...............................................................................1.1
Code.............................................................................................1.2
Committee........................................................................................1.3
Company Stock....................................................................................1.4
Employer.........................................................................................1.5
Equitable Share..................................................................................1.6
Participant......................................................................................1.7
Plan.............................................................................................1.8
Plan Year........................................................................................1.9
Sponsor.........................................................................................1.10
Subsidiary......................................................................................1.11
Trust...........................................................................................1.12
Trustee.........................................................................................1.13
ARTICLE II - ESTABLISHMENT OF TRUST
Purpose..........................................................................................2.1
Irrevocable Subject to Certain Exceptions........................................................2.2
ARTICLE III - CONTRIBUTIONS AND PLAN ADMINISTRATION
Employer Contributions...........................................................................3.1
Establishing Contribution Accounts for Participants..............................................3.2
Valuation of Trust; Allocation of Gains and Losses
to Participants' Accounts......................................................................3.3
ARTICLE IV - POWERS, DUTIES AND RESPONSIBILITIES
OF THE TRUSTEE
General Responsibilities.........................................................................4.1
Investment Responsibility of Trustee.............................................................4.2
Powers of Trustee Relating to Management of Trust Assets.........................................4.3
Payment and Distribution Powers of Trustee.......................................................4.4
Reliance Upon Representations of Trustee.........................................................4.5
Waiver of Bond, Inventory, Return and Report to Court............................................4.6
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Negation of Trustee Engaging in Business Enterprise..............................................4.7
Trustee's Power to Withhold For Payment of Taxes.................................................4.8
Trustee Not Required to Prepare Returns or Reports...............................................4.9
ARTICLE V - NOTICES AND DIRECTIONS
Proper Notice to Trustee.........................................................................5.1
Trustee's Reliance On Notice By Committee and Employer...........................................5.2
Notice To Trustee of Employer's Insolvency.......................................................5.3
ARTICLE VI - TRUSTEE'S FEE AND EXPENSE
ARTICLE VII - LIABILITY OF THE TRUSTEE
Trustee Generally Not Liable When
Acting in Good Faith...........................................................................7.1
Trustee Generally Not Liable For Act or Omission
at Direction of Committee......................................................................7.2
No Co-Fiduciary Liability........................................................................7.3
Indemnification of Trustee.......................................................................7.4
When Determining Course of Action Trustee May Rely
Upon Committee.................................................................................7.5
ARTICLE VIII - SETTLEMENT OF THE ACCOUNTS OF THE TRUSTEE
Trustee's Maintenance of Records.................................................................8.1
Trustee's Rendering of Accounting to Committee...................................................8.2
ARTICLE IX - ACTION, RESIGNATION, REMOVAL AND
SUBSTITUTION OF TRUSTEE
Appointment of Trustee...........................................................................9.1
Resignation of Trustee...........................................................................9.2
Removal of Trustee...............................................................................9.3
No Vacancy in Office of Trustee..................................................................9.4
Appointment of Successor Trustee.................................................................9.5
Vesting of Rights, Titles, Powers in
Successor Trustee..............................................................................9.6
Continuance of Corporate Trustee Through Merger..................................................9.7
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ARTICLE X - ADOPTION BY SUBSIDIARIES
Application of Trust to Adopting Subsidiary.....................................................10.1
Adoption of Single Trust........................................................................10.2
Termination of Adoptions........................................................................10.3
ARTICLE XI - AMENDMENT AND TERMINATION
The Sponsor's Right to Amend....................................................................11.1
Amendments Necessary to Comply With State or Federal
Statutes......................................................................................11.2
Termination of Trust............................................................................11.3
Continuance of Trust When the Sponsor Consolidates,
Merges or Sells Substantially All of Its Assets...............................................11.4
ARTICLE XII - MISCELLANEOUS
No Employment Commitment........................................................................12.1
Non-Alienation of Benefits......................................................................12.2
Gender and Number of Words......................................................................12.3
Texas Law Applicable............................................................................12.4
Severability of Agreement.......................................................................12.5
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ARTICLE I
DEFINITIONS
1.1 "BOARD OF DIRECTORS" means the Board of Directors of the
Sponsor.
1.2 "CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
1.3 "COMMITTEE" means the persons who are from time to time
serving as members of the committee administering the Plan.
1.4 "COMPANY STOCK" means the common stock, $1.00 par value,
of the Sponsor.
1.5 "EMPLOYER" means the Sponsor and any Subsidiary that
adopts the Plan and the Trust.
1.6 "EQUITABLE SHARE" means the proportionate part of the
Trust held for the benefit of Participants of a particular Employer. Each
Employer's proportionate part of the Trust shall be determined at any given time
by multiplying the total assets in the Trust by a fraction the numerator of
which is the total of the accounts earned by Participants while employed by the
Employer and the denominator of which is the total of the accounts earned by all
Participants at that time.
1.7 "PARTICIPANT" means an employee of an Employer who is
eligible for and is participating in the Plan.
1.8 "PLAN" means the Weatherford International, Inc. Executive
Deferred Compensation Stock Ownership Plan.
1.9 "PLAN YEAR" means the calendar year.
1.10 "SPONSOR" means Weatherford International, Inc., the
sponsor of the Plan.
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1.11 "SUBSIDIARY" means any wholly owned subsidiary of the
Sponsor.
1.12 "TRUST" means the Weatherford International, Inc.
Executive Deferred Compensation Stock Ownership Trust.
1.13 "TRUSTEE" means Bank One, Texas, NA, which is serving as
trustee under this agreement or any successor entity or successor entities as
shall be appointed pursuant to this agreement upon the resignation or removal of
the previous entity serving as trustee under this agreement.
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ARTICLE II
ESTABLISHMENT OF TRUST
2.1 PURPOSE. The Trust was previously established by the
Sponsor and the Trustee, and adopted by each Employer, for the sole purpose of
creating a trust to provide for the payment of deferred compensation to the
Participants. The maintenance of the Trust shall never be construed to raise the
Employer's obligation to the Participants above that of a general corporate
obligation under which the Participant must rely upon the general credit of the
Employer for benefits accrued under the Plan. Participants and their
beneficiaries shall have no preferred claim on, or any beneficial ownership
interest in, any assets of the Trust. Any rights created under the Plan and the
Trust shall be mere unsecured contractual rights of Participants and their
beneficiaries against an Employer. Any assets held by the Trust will be subject
to the claims of the Employer's judgment creditors and/or general creditors
under federal and state law in the event of insolvency, as defined in Section
5.3 herein. The Trust is intended to be a multiple grantor trust of which the
Employers are grantors within the meaning of subpart E, part I, subchapter J,
Chapter 1, subtitle A of the Code, and shall be construed accordingly.
2.2 IRREVOCABLE SUBJECT TO CERTAIN EXCEPTIONS. Subject only to
the exceptions in this Section, all contributions to, all assets held in, and
all earnings of the Trust are solely and irrevocably dedicated, to the payment
of (a) the deferred compensation described in the Plan for the benefit of the
Participants and (b) the reasonable expenses of administering the Trust until
the liabilities under the Plan have been satisfied in full, at which time the
Trust shall terminate as provided in Section 11.3. However, the Equitable Share
of the Trust for an individual Employer shall be subject to judgment creditors
and/or general creditors of that Employer if that Employer
II-1
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becomes insolvent (as defined in Section 5.3). To that end if the Trustee
receives notice from any Employer pursuant to Section 5.3, the Trustee shall
suspend payment of all benefits to Participants who earned benefits through
employment with that Employer and shall hold that Employer's Equitable Share of
the Trust for the benefit of that Employer's judgment creditors and/or general
creditors as the case may be. Further, if the Trustee receives written
allegations of an Employer's insolvency from any other source, the Trustee shall
suspend the payment of all benefits under the Plan to Participants who earned
benefits through employment with that Employer and shall hold all of that
Employer's Equitable Share of the Trust for the benefit of that Employer's
general creditors, and must determine within 30 days whether that Employer is
solvent. However, the Trustee shall resume payments, including any benefits
suspended, if it determines that Employer is solvent. In the case of the
Trustee's actual knowledge of a levy on the Equitable Share of any Employer in
the Trust by a judgment creditor or the Trustee's actual knowledge of or
determination of any Employer's insolvency, the Trustee shall deliver the
Equitable Share of that Employer in the Trust as directed by a court of
competent jurisdiction.
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ARTICLE III
CONTRIBUTIONS AND PLAN ADMINISTRATION
3.1 EMPLOYER CONTRIBUTIONS. Any Employer may contribute to the
Trust on its own behalf, in cash, amounts to assist the Employer in meeting its
obligations under the Plan for the Participants employed by the Employer at the
time and in the manner determined by it.
3.2 ESTABLISHING CONTRIBUTION ACCOUNTS FOR PARTICIPANTS. The
Employer shall, at the time of its contribution, notify the Committee as to the
Participant for whom the contribution is made so that the Committee may maintain
separate records for the accounts of the Participants.
3.3 VALUATION OF TRUST; ALLOCATION OF GAINS AND LOSSES TO
PARTICIPANTS' ACCOUNTS. The Trustee shall provide to the Committee, at intervals
agreed upon by them, but no less often than once each Plan Year, a statement of
the number of shares of Company Stock and the value of the Trust assets held in
the Trust as a whole and the Trust income and losses, if any.
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ARTICLE IV
POWERS, DUTIES AND RESPONSIBILITIES
OF THE TRUSTEE
4.1 GENERAL RESPONSIBILITIES. The Trustee, has the exclusive
responsibility for all of the Trust assets and all the powers necessary to
receive, hold, preserve, protect, conserve, manage and invest the Trust assets
as provided generally in this agreement and to pay all costs and expenses. The
Trustee shall be responsible only for the sums actually received by it as
Trustee.
4.2 INVESTMENT RESPONSIBILITY OF TRUSTEE. Except as set forth
in this Section, the Trustee is required to invest the Trust assets exclusively
in Company Stock. When the Trustee receives amounts to be invested, those
amounts may be held uninvested in cash or invested in short term investments
such as certificates of deposit with the Trustee, U. S. Treasury bills, savings
accounts with the Trustee, commercial paper or other similar assets which may be
offered by the Trustee until the Trustee determines in its sole discretion to
purchase Company Stock in a prudent and orderly manner. All dividends on Company
Stock and all other income earned on Trust assets will be held by the Trustee
and used to purchase Common Stock for the accounts from which it is generated.
4.3 POWERS OF TRUSTEE RELATING TO MANAGEMENT OF TRUST ASSETS.
Subject to the requirements of Sections 4.1 and 4.2, the following powers,
duties and obligations relating to the receipt, preservation, conservation,
protection, management, investment and reinvestment of both principal and income
and disposition of the Trust created by this agreement, as the Trust may be
composed from time to time, in addition to all of the powers, duties and
obligations of the Trustee under common law and the Texas Trust Code until the
situs of the Trust is removed to another state in which event the laws of the
state of the situs of the Trust will then govern:
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(a) to keep any and all securities and other property in its
name provided that its fiduciary capacity is disclosed;
(b) to vote, either in person or by proxy, any share of stock
held as a part of the assets of the Trust, upon receipt of, and solely
in accordance with, written instructions provided by the Employer;
(c) to collect the principal and income of the Trust as the
same may become due and payable and to give binding receipt therefor;
(d) to take any action, whether by legal proceeding,
compromise, or otherwise, as the Trustee in its sole discretion deems
to be in the best interest of the Trust if there is a default in the
payment of any principal or income of the Trust at any time;
(e) to invest, sell and reinvest Trust assets in any assets it
selects within the limits described in Sections 4.1 and 4.2; and
(f) to employ such accountants, lawyers, brokers, or other
agents as the Trustee deems advisable in administering the Trust.
The Trustee shall not be required to take any legal action to collect, preserve
or maintain any Trust property unless it has been indemnified either by the
Trust or by the Employers with respect to any expenses or losses to which it may
be subjected by taking that action. Any property acquired by the Trustee through
the enforcement or compromise of any claim or claims it has as Trustee shall
become a part of the Trust assets.
4.4 PAYMENT AND DISTRIBUTION POWERS OF TRUSTEE. The Trustee
has the following powers relating to payments and distributions to be made from
the Trust:
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(a) pursuant to the terms of the Plan, to distribute Company
Stock held in connection with a Participant's Account, or to sell that
Company Stock and pay the amount due the Participant in cash, as
directed by the Committee under the terms of the Plan;
(b) pursuant to the terms of Sections 2.2 and 5.3 to pay,
distribute and deliver to any judgment creditor and/or general
creditor, as the case may be, who qualified for it those sums
determined to be due by the appropriate authority;
(c) to pay out of the Trust all taxes of any nature levied,
assessed or imposed upon the Trust, all reasonable expenses of
administering the Trust, including but not limited to, counsel fees,
and the Trustee's compensation; and
(d) pursuant to the terms of Section 11.3, to convey, assign
and deliver upon termination of the Trust, the assets remaining in the
Trust.
4.5 RELIANCE UPON REPRESENTATIONS OF TRUSTEE. All persons
dealing with the Trustee are entitled to rely upon the representations of the
Trustee as to its authority and are released from any duty to inquire into its
authority for taking or omitting any action or to verify that any money paid or
other property delivered to the Trustee is used by the Trustee for trust
purposes. Any action of the Trustee under the Trust created by this agreement
shall be conclusive evidence of the facts recited in it. All persons shall be
fully protected when acting or relying upon any notice, resolution, instruction,
direction, order, certificate, opinion, letter, telegram or other document
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believed by those persons to be genuine, to have been signed by the Trustee, and
to be the act of the Trustee.
4.6 WAIVER OF BOND, INVENTORY, RETURN AND REPORT TO COURT. The
Trustee shall not be required to give bond or other security for the faithful
performance of its duties unless required by a law which cannot be waived; and
the Trustee shall not be required to make any inventory, return, or report to
any court unless required by a law which cannot be waived.
4.7 NEGATION OF TRUSTEE ENGAGING IN BUSINESS ENTERPRISE.
Without regard to any other provision of this agreement and any powers given to
the Trustee in this agreement, the Trustee shall have no power that could give
the Trust the objective of carrying on a business and dividing the gains
therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Code.
4.8 TRUSTEE'S POWER TO WITHHOLD FOR PAYMENT OF TAXES. If
required by the Employer, and subject to the Trustee's receipt of written
instructions and all required information from the Employer, the Trustee shall
withhold any federal, state or local taxes that may be required to be withheld
with respect to the payment of benefits from the Trust, and shall pay amounts
withheld to the appropriate taxing authorities.
4.9 TRUSTEE NOT REQUIRED TO PREPARE RETURNS OR REPORTS. The
Trustee shall not be required to prepare, file, or distribute any tax return or
other report required by a governmental agency under state or federal law. All
such returns or reports shall be the obligation of the Sponsor.
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ARTICLE V
NOTICES AND DIRECTIONS
5.1 PROPER NOTICE TO TRUSTEE. The Trustee shall not be bound
by any certificate, notice, resolution, consent, order, information or other
communication unless and until it has been received at a location which is
mutually agreeable to the parties and is in writing, signed by a person
designated pursuant to Section 5.2.
5.2. TRUSTEE'S RELIANCE ON NOTICE BY COMMITTEE AND EMPLOYER.
The Trustee, in all matters pertaining to its management, investment and
distribution of the Trust, when it acts in good faith, may rely upon any such
notice, resolution, instruction, direction, order, certificate, opinion, letter,
telegram or other document believed by the Trustee to be genuine, to have been
signed by a proper representative of the Committee or other party permitted to
issue a direction to it. In this connection, each Employer and the Committee
shall furnish to the Trustee the name and signature of the person or persons who
are entitled to act on behalf of the Employer when communicating with or
directing the Trustee on matters relating to the Trust.
5.3 NOTICE TO TRUSTEE OF EMPLOYER'S INSOLVENCY. In the event
of a levy by a judgment creditor or in the event of an Employer's insolvency
during the term of the Trust, that Employer's board of directors and chief
executive officer must give written notice to the Trustee within a reasonable
time not to exceed three days of the levy or of a finding of insolvency, as the
case may be. For this purpose "insolvency" means the earliest of the Employer
becoming subject to proceedings as a debtor under the federal Bankruptcy Code,
the general assignment by that Employer to or for the benefit of its creditors,
or the inability of the Employer to pay its debts as they mature.
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ARTICLE VI
TRUSTEE'S FEE AND EXPENSE
The Trustee shall receive such compensation for services
rendered as is agreed upon from time to time between the Trustee and the
Sponsor. Likewise, the Trustee shall be reimbursed for expenses properly and
actually incurred in the performance of its duties under this agreement. The
Trustee's compensation and the expenses of the Trust shall be paid by the
Sponsor, which will then recharge the appropriate amount to each Employer.
Should the Sponsor fail to pay the Trustee, the Trustee is authorized to charge
that compensation and expenses to the Trust.
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ARTICLE VII
LIABILITY OF THE TRUSTEE
7.1 TRUSTEE GENERALLY NOT LIABLE WHEN ACTING IN GOOD FAITH.
The Trustee shall not be liable to the Trust or to any person having a
beneficial interest in the Trust for any losses or decline in value which may be
incurred upon the Company Stock or any other investment of the Trust, or for
failure of the Trust to produce any or greater earnings, interest, or profits,
so long as the Trustee acts in good faith and in compliance with Section 4.2.
7.2 TRUSTEE GENERALLY NOT LIABLE FOR ACT OR OMISSION AT
DIRECTION OF COMMITTEE. The Trustee shall not be liable for any act or omission
by it because of a direction of the Committee, an Employer or agent appointed by
either of them except to the extent required by any applicable state or federal
law, which liability cannot be waived. When the Trustee has made any payment out
of the Trust at the direction of the Committee, an Employer or any agent
appointed by either of them, it shall not be responsible for the correctness of
the amount of the payment to the recipient, or the method by which it is paid.
The Trustee is also protected in relying upon any certificate, notice,
resolution, consent, order, or other communication purporting to have been
signed on behalf of the Committee, an Employer or an agent appointed by either
of them which it believes to be genuine, without any obligation on the part of
the Trustee to ascertain whether or not the provisions of this agreement are
being fulfilled.
7.3 NO CO-FIDUCIARY LIABILITY. The Trustee shall not be liable
for the actions of any other fiduciary or the failure of any other fiduciary to
take action in a given situation.
7.4 INDEMNIFICATION OF TRUSTEE. Each Employer shall, to the
extent that the loss, liability, claim cost or expense is allocable to the
Employer's Equitable Share, indemnify and hold
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harmless the Trustee from any loss, liability, claim, cost or expense (including
attorney's fees, court costs, and other costs in defending a lawsuit) arising
out of its acting as Trustee of the Trust except for any loss, liability, claim
or expense that results from the Trustee's bad faith or gross negligence. For
this purpose, a loss, liability, claim cost or expense that affects or relates
to the entire Trust shall be allocable to each Equitable Share on a pro-rata
basis. The Sponsor shall guarantee each Employer's obligation to indemnify the
Trustee pursuant to this Section 7.4.
7.5 WHEN DETERMINING COURSE OF ACTION TRUSTEE MAY RELY UPON
COMMITTEE. If at any time the Trustee is in doubt concerning the course which it
should follow in connection with any matter relating to the administration of
the Trust, it may request the advice of the Committee and be protected in
relying upon the written advice or direction given by the Committee.
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ARTICLE VIII
SETTLEMENT OF THE ACCOUNTS
OF THE TRUSTEE
8.1 TRUSTEE'S MAINTENANCE OF RECORDS. The Trustee shall keep
all records necessary in the conduct of the Trust. The Trustee's books and
records of the Trust assets are open to inspection by the Committee and
Employers at all reasonable times during business hours of the Trustee.
8.2 TRUSTEE'S RENDERING OF ACCOUNTING TO COMMITTEE. Within 90
days after the close of each Plan Year, or such other times as requested by the
Committee and as of the date of the removal or resignation of the Trustee, the
Trustee must render to the Committee an accounting and report of the Trust
assets for the Plan Year or other period that is applicable since the previous
accounting. The report is to reflect the transactions for the period covered,
the cost of the various lots of Company Stock purchased and the cost of the
other assets and investments purchased, the number of shares of Company Stock
held by the Trust, and the fair market value of the Company Stock and other
assets held in the Trust and the same information as to the account of each
Participant as of the end of the Plan Year or any other date as is applicable.
The report is to be open for inspection for 90 days after its receipt by the
Committee, and if objections are not filed within that period of time, it is
assumed that the report is approved. That approval shall constitute a full and
complete discharge and release to the Trustee by each Employer, all of the
Participants and all other persons having or claiming any interest in the Trust.
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ARTICLE IX
ACTION, RESIGNATION, REMOVAL AND SUBSTITUTION
OF TRUSTEE
9.1 APPOINTMENT OF TRUSTEE. One entity may serve as Trustee,
as determined from time to time by the Board of Directors. The Trustee shall
serve until a successor Trustee is named by the Board of Directors or its
resignation or removal, in which event the Board of Directors shall name a
successor Trustee.
9.2 RESIGNATION OF TRUSTEE. The Trustee or any successor
Trustee may resign as Trustee at any time by filing with the Committee its
written resignation. No resignation shall take effect until 60 days from the
date of notice unless prior to that time a successor Trustee has been appointed
and it has accepted the office.
9.3 REMOVAL OF TRUSTEE. The Trustee or any successor Trustee
may be removed by the Committee at any time. No removal shall take effect until
60 days from the date of notice unless prior to that time a successor Trustee
has been appointed and it has accepted the office, and the Trustee consents to
the earlier date.
9.4 NO VACANCY IN OFFICE OF TRUSTEE. Any vacancy in the office
of Trustee created by the resignation or removal of the Trustee shall not
terminate the Trust. Upon removal or resignation of the Trustee, the Board of
Directors must appoint a successor Trustee.
9.5 APPOINTMENT OF SUCCESSOR TRUSTEE. The appointment of a
successor Trustee shall be accomplished by the delivery to the resigning or
removed Trustee, as the case may be, of a written appointment of the successor
Trustee by the Board of Directors and the written acceptance of the appointment
by the successor Trustee. Any successor Trustee must be one or more entities
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authorized and empowered to conduct a trust business in the state of the situs
of the Trust. This agreement shall then be applicable to each successor Trustee.
9.6 VESTING OF RIGHTS, TITLES, POWERS IN SUCCESSOR TRUSTEE.
Any successor Trustee, after acknowledging acceptance of this agreement, the
Trust assets and the accounting of the retiring Trustee, shall be vested with
all the estates, titles, rights, powers, duties, and discretions granted to the
retiring Trustee. The retiring Trustee must execute and deliver all assignments
or other instruments necessary or advisable for the transfer of all Trust assets
as are reasonably required by the successor Trustee.
9.7 CONTINUANCE OF CORPORATE TRUSTEE THROUGH MERGER. Any
corporation into which any corporate Trustee or any successor corporate Trustee
may be merged or consolidated, or any corporation resulting from any merger or
consolidation to which any corporate Trustee or any successor corporate Trustee
may be a party, or any corporation to which all or substantially all of the
trust business of any corporate Trustee or any successor corporate Trustee may
be transferred, shall be a successor of the Trustee under this agreement without
the filing of any instrument or the performance of any other act.
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ARTICLE X
ADOPTION BY SUBSIDIARIES
10.1 APPLICATION OF TRUST TO ADOPTING SUBSIDIARY. Any
Subsidiary may, with the approval of the Committee, adopt the Trust by
appropriate action of its board of directors. The terms of the Trust shall apply
separately to each Subsidiary adopting the Trust and to its Participants in the
same manner as is expressly provided for the Sponsor and its Participants except
that the powers of the Board of Directors and the Committee under the Plan and
the Trust shall be exercised by the Board of Directors of the Sponsor alone.
10.2 ADOPTION OF SINGLE TRUST. The adoption of the Trust by
any Subsidiary will not cause a separate Trust to be established, but the
Equitable Share of each Subsidiary in the Trust assets will remain the property
of that Subsidiary. Though assets of the Trust will be commingled for investment
purposes, the Committee shall maintain sufficient records to determine the
Equitable Share of each Employer. Only the Equitable Share of each Employer
shall be available to provide Plan benefits for the Participants who are
employed by that Employer. It is intended that the obligation of the Sponsor and
each Subsidiary with respect to its Participants shall be the sole obligation of
the Employer that employed the Participant during a given period of time.
10.3 TERMINATION OF ADOPTIONS. Any Subsidiary adopting the
Trust may, by appropriate action of its board of directors terminate its
participation in the Plan. The Committee may, in its discretion, also terminate
a Subsidiary's participation in the Plan and the Trust at any time. The
termination of the participation in the Trust by a Subsidiary shall not,
however, affect the rights of any Participant who is working or has worked for
the Subsidiary with regard to benefits previously accrued by the Participant
under the Plan, to the extent assets are held in the Trust for the
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benefit of Participants who accrued benefits while employed by the Employer,
without their consent. The Trust though ordered to terminate shall not finally
terminate until all Plan benefits accrued to the date of termination under the
Plan have been paid under the conditions, at the time and in the form then
provided in the Plan. On completion of all payments, any then remaining portion
of the Equitable Share of the Employer shall revert to that Employer and its
participation in the Trust shall then be formally terminated, at the direction
of the Committee.
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ARTICLE XI
AMENDMENT AND TERMINATION
11.1 THE SPONSOR'S RIGHT TO AMEND. The Sponsor shall have the
sole right to amend this agreement. An amendment must be made by an executed
written agreement setting forth the nature of the amendment and its effective
date. No amendment shall make this agreement nor the Trust created by this
agreement revocable or shall divert the assets held in the Trust created by this
agreement from the purposes set out in Section 2.2. Each Employer, other than
the Sponsor, shall be deemed to have adopted any amendment made by the Sponsor.
No amendment shall increase the duties of the Trustee without its written
consent.
11.2 AMENDMENTS NECESSARY TO COMPLY WITH STATE OR FEDERAL
STATUTES. The Sponsor agrees to make any amendment to this agreement as may be
necessary to maintain compliance with the various federal and state laws and any
amendment may be made retroactively.
11.3 TERMINATION OF TRUST. The Trust shall not terminate until
the date on which Participants and their beneficiaries are no longer entitled to
benefits pursuant to the terms of the Plan. Upon the termination of the Trust,
any assets remaining in the Trust shall be returned to the Employers in the
ratio of their Equitable Shares, at the direction of the Committee. Upon written
approval of Participants or beneficiaries entitled to payment of benefits
pursuant to the terms of the Plan, the Sponsor may terminate the Trust prior to
the time all benefit payments under the Plan have been made. All assets in the
Trust at termination shall be returned to the Employers in the ratio of their
Equitable Shares, at the direction of the Committee.
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11.4 CONTINUANCE OF TRUST WHEN THE SPONSOR CONSOLIDATES,
MERGES OR SELLS SUBSTANTIALLY ALL OF ITS ASSETS. The Trust created by this
agreement shall not terminate in the event the Sponsor consolidates or merges
and is not the surviving corporation, sells substantially all of its assets, is
a party to a reorganization in which its employees and substantially all of its
assets are transferred to another entity, liquidates or dissolves whether or not
there is a successor corporation. (If there is a successor corporation, it shall
be subject to all the rights and obligations of the Sponsor under the Trust.)
Instead, the Trust shall continue until all Employers have fulfilled their
obligations under Sections 6.3 and 9.3 of the Plan to their Participants, and as
set forth in Section 2.2, at which time it shall automatically terminate using
the procedure described in Section 11.3.
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ARTICLE XII
MISCELLANEOUS
12.1 NO EMPLOYMENT COMMITMENT. The adoption and maintenance of
the Trust created under this agreement shall not be deemed to be a contract
between any Employer and the Participants employed by it which gives the
Participants the right to be retained in the employment of the Employer, to
interfere with the rights of the Employer to discharge its Participants at any
time, or to interfere with the Participants' rights to terminate their
employment at any time.
12.2 NON-ALIENATION OF BENEFITS. No benefits payable or to
become payable from the Trust created by this agreement shall be subject: to
anticipation or assignment by the Participants or other persons entitled to
receive benefits under the Trust; to attachment by, interference with, or
control of any creditors of the Participants or other persons entitled to
receive benefits under the Trust; or to being taken or reached by any legal or
equitable process in satisfaction of any debt or liability of the Participants
prior to their actual receipt by the Participants or other persons entitled to
receive benefits under the Trust. Any attempted conveyance, transfer,
assignment, mortgage, pledge, or encumbrance of the Trust, any part of it, or
any interest in it by a Participant, or any person entitled to obtain benefits
under the Trust, prior to distribution shall be void, whether that conveyance,
transfer, assignment, mortgage, pledge or encumbrance is intended to take place
or become effective before or after any distribution of Trust assets or the
termination of the Trust itself. The Trustee shall never under any circumstances
be required to recognize any conveyance, transfer, assignment, mortgage, pledge
or encumbrance by a Participant, or other person entitled to receive benefits
under the Trust, of the Trust created under this agreement, any part of it, or
any interest in
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it, or to pay any money or thing of value to any creditor or assignee of a
Participant, or other person entitled to receive benefits under the Trust, for
any cause whatsoever.
12.3 GENDER AND NUMBER OF WORDS. If the context requires it,
words of one gender shall include the other genders, and words used in the
singular or the plural shall include the other.
12.4 TEXAS LAW APPLICABLE. The provisions of this agreement
shall be construed, according to the laws of the State of Texas.
12.5 SEVERABILITY OF AGREEMENT. Each provision of this
agreement is severable and if any provision is found to be void or against
public policy, it shall not affect the validity of any other provision hereof.
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IN WITNESS WHEREOF, the Sponsor and the Trustee have caused
this agreement to be executed effective as of April 1, 2000.
WEATHERFORD INTERNATIONAL, INC.
By: /s/ Curtis W. Huff
-----------------------------------------
Curtis W. Huff
Executive Vice President, Chief Financial
Officer, General Counsel and Secretary
BANK ONE, TEXAS, NA
By: /s/ Marshall J. Franklin
------------------------------------------
Name: Marshall J. Franklin
----------------------------------------
Title: Senior Vice President
---------------------------------------