<PAGE>
As filed with the Securities and Exchange Commission on August 18, 1995
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
VARCO INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
California 95-0472620
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
743 North Eckhoff Street 92668
Orange, California (Zip Code)
(Address of Principal Executive Offices)
1994 Directors' Stock Option Plan
(Full title of the plan)
RICHARD A. KERTSON
Vice President-Finance and Chief Financial Officer
743 North Eckhoff Street
Orange, California 92668
(Name and address of agent for service)
(714) 978-1900
(Telephone number, including area code, of agent for service)
The Commission is requested to send copies of all communications to:
LARRY M. MEEKS, ESQ.
Pircher, Nichols & Meeks
1999 Avenue of the Stars, Suite 2600
Los Angeles, California 90067
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum
Title of securities Amount offering price aggregate Amount of
to be registered to be registered per unit offering price registration fee
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 650,000 shares $10.8125(1) $7,028,125(1) $2,423.50
====================================================================================================
</TABLE>
(1) Calculated pursuant to Rule 457(c), based on the average of the high and low
prices for the Common Stock on the New York Stock Exchange Composite Tape for
August 16, 1995.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents which have heretofore been filed by Varco
International, Inc. (the "Company") with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934 are incorporated by reference in
this registration statement:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.
(2) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1995 and June 30, 1995.
(3) The description of the Company's Common Stock contained in the
Company's Form 8-A Registration Statement filed May 29, 1981, including any
amendment or report filed for the purpose of updating such description.
In addition, all documents filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, after the date
hereof and prior to the filing of a post-effective amendment to this
Registration Statement which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from their respective dates of filing.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the Common Stock registered pursuant to this Registration
Statement has been passed upon for the Company by Pircher, Nichols & Meeks, of
which Leo J. Pircher, a director of the Company, is a partner. Mr. Pircher
owns, and has options to purchase, Common Stock of the Company and is eligible
to participate in the Company's 1994 Directors' Stock Option Plan.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
1.
<PAGE>
Section 204(a)(10) of the California General Corporation Law (the "GCL")
permits a corporation, in its Articles of Incorporation, to eliminate or limit
the personal liability of directors for monetary damages in an action brought by
or in the right of the corporation (a "derivative action") for breach of a
director's duties to the corporation provided, however, that such a provision
may not eliminate or limit the liability of directors for (1) acts or omissions
that involve intentional misconduct or a knowing and culpable violation of law;
(2) acts or omissions that a director believes to be contrary to the best
interests of the corporation or its shareholders or that involve the absence of
good faith on the part of the director; (3) any transaction from which the
director derived an improper personal benefit; (4) acts or omissions that show a
reckless disregard for the director's duty to the corporation or its
shareholders in circumstances in which the director was aware, or should have
been aware, in the ordinary course of performing a director's duties, of a risk
of serious injury to the corporation or its shareholders; (5) acts or omissions
that constitute an unexcused pattern of inattention that amounts to an
abdication of the director's duty to the corporation or its shareholders; (6)
transactions between a corporation and its directors or corporations having
interrelated directors under Section 310 of the GCL; or (7) improper
distributions to shareholders, loans or guaranties under Section 316 of the GCL.
Section 204(a)(11) of the GCL permits a corporation in its Articles of
Incorporation to provide for indemnification of directors, officers, employees
and other agents by bylaw, agreement or otherwise in excess of that expressly
permitted by Section 317 of the GCL except that provision may not be made for
indemnification which is expressly prohibited by Section 317 of the GCL or for
acts or omissions from which a director may not be relieved of liability under
Section 204(a)(10) of the GCL.
Section 317(b) of the GCL permits a corporation to indemnify a director,
officer, employee or other agent against expenses, judgments, fines, settlements
and other amounts incurred in connection with any proceeding other than a
derivative action if he acted in good faith and in a manner he reasonably
believed to be in the best interests of the corporation and, in the case of a
criminal proceeding, had no reasonable cause to believe that his conduct was
unlawful.
With respect to derivative actions, Section 317(c) of the GCL permits a
corporation to indemnify a director, officer, employee or other agent against
expenses incurred in connection with the defense or settlement of such an action
if he acted in good faith and in a manner which he believed to be in the best
interests of the corporation and its shareholders. Under Section 317(c),
indemnification in a derivative action is not permitted (1) with respect to any
matter in which the person seeking indemnification is held to be liable to the
corporation in the performance of his duties to the corporation and its
shareholders unless and only to the extent that the court in which the
proceeding was brought
2.
<PAGE>
determines that, in view of all of the circumstances of the case, such person is
fairly and reasonably entitled to indemnification for expenses and then only to
the extent that such court shall determine; (2) for any amount paid in settling
or otherwise disposing of a pending action without court approval; or (3) for
expenses incurred in defending a pending action which is settled or otherwise
disposed of without court approval.
Section 317(d) of the GCL requires a corporation to indemnify any director,
officer, employee or other agent for all expenses actually and reasonably
incurred by him in any proceeding to the extent that he is successful on the
merits.
The Company's Amended and Restated Articles of Incorporation (1) eliminate
the liability of directors for monetary damages to the fullest extent permitted
under California law and (2) permit the Company to provide indemnification to
directors, officers, employees and other agents by bylaw provisions, agreements,
vote of shareholders or disinterested directors, or otherwise, in excess of the
indemnification otherwise permitted by Section 317 of the GCL subject only to
the limits set forth in Section 204 of the GCL.
The Bylaws of the Company generally require indemnification of any officer
or director of the Company for all costs, charges, expenses, liabilities and
losses (including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties, and amounts paid in settlement) incurred in any action, suit or
proceeding by reason of the fact that he is or was a director of the Company
except to the extent that such indemnification would be expressly prohibited
under California law or the Company's Amended and Restated Articles of
Incorporation.
The Company is a party to an Indemnity Agreement with each of its directors
and executive officers which generally provides the indemnitee with a
contractual right to indemnification for all Expenses (which is defined to
include attorneys' fees and amounts paid in settlement), judgments, fines,
penalties and ERISA excise taxes incurred in any action, suit or proceeding by
reason of his position with the Company, except to the extent that such
indemnification is prohibited by California law.
The Company also maintains a liability insurance policy under which
officers and directors are generally indemnified against losses and liability
(including costs, expenses, settlements and judgments) incurred by them in such
capacities, other than specified excluded losses.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
3.
<PAGE>
ITEM 8. EXHIBITS.
4.1 Amended and Restated Articles of Incorporation of the Company,
incorporated by reference to Exhibit 3 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1995.
*4.2 1994 Directors' Stock Option Plan.
*5 Opinion of Pircher, Nichols & Meeks.
*23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Pircher, Nichols & Meeks (included in Exhibit 5).
*24 Power of Attorney.
_____________
*Filed herewith.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most
recent post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference
in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
4.
<PAGE>
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) of Section 15(d) of the
Securities Exchange Act of 1934 (and each filing of the annual report of the
Plan pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
5.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Orange, State of California, on August 16, 1995.
VARCO INTERNATIONAL, INC.
By: /s/Richard A. Kertson
-------------------------------------
Richard A. Kertson
Vice President-Finance
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
----------------------------------- ---------------------- -----------------
President and Chief
Executive Officer and
Director
*GEORGE BOYADJIEFF (Principal Executive
----------------------------------- Officer) August 16, 1995
George Boyadjieff
Vice President-Finance
and Chief Financial
Officer
/s/Richard A. Kertson (Principal Financial
----------------------------------- Officer) August 16, 1995
Richard A. Kertson
Controller-Treasurer
and Chief Accounting
Officer
/s/Donald L. Stichler (Principal Accounting
----------------------------------- Officer) August 16, 1995
Donald L. Stichler
*WALTER B. REINHOLD Director August 16, 1995
-----------------------------------
Walter B. Reinhold
6.
<PAGE>
*TALTON R. EMBRY Director August 16, 1995
-----------------------------------
Talton R. Embry
*ANDRE R. HORN Director August 16, 1995
-----------------------------------
Andre R. Horn
*MAURICE E. JACQUES Director August 16, 1995
-----------------------------------
Maurice E. Jacques
*JACK W. KNOWLTON Director August 16, 1995
-----------------------------------
Jack W. Knowlton
*LEO J. PIRCHER Director August 16, 1995
-----------------------------------
Leo J. Pircher
*CARROLL W. SUGGS Director August 16, 1995
-----------------------------------
Carroll W. Suggs
*ROBERT A. TEITSWORTH Director August 16, 1995
-----------------------------------
Robert A. Teitsworth
*EUGENE R. WHITE Director August 16, 1995
-----------------------------------
Eugene R. White
*JAMES D. WOODS Director August 16, 1995
-----------------------------------
James D. Woods
*By /s/Richard A. Kertson
--------------------------------
Richard A. Kertson
Attorney-in-fact
7.
<PAGE>
EXHIBIT INDEX
Exhibit Page
------- ----
4.1 Amended and Restated Articles of Incorporation of the Company,
incorporated by reference to Exhibit 3 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1995.
4.2 1994 Directors' Stock Option Plan.
5 Opinion of Pircher, Nichols & Meeks.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Pircher, Nichols & Meeks (included in Exhibit 5).
24 Power of Attorney.
<PAGE>
EXHIBIT 4.2
VARCO INTERNATIONAL, INC.
1994 DIRECTORS' STOCK OPTION PLAN
1. PURPOSE
The purpose of this 1994 Directors' Stock Option Plan (the "Plan") of Varco
International, Inc. (the "Company") is to advance the interests of the Company
and its shareholders by enabling the Company to attract and retain highly
qualified directors who are not also employees of the Company or any of its
subsidiaries and by encouraging increased ownership of shares of the Common
Stock of the Company (the "Common Stock") by such directors.
2. ADMINISTRATION
The Plan shall be administered by a committee (the "Committee") appointed by the
Board of Directors of the Company (the "Board"), which shall consist of not less
than three directors of the Company. The Board may designate its Compensation
Committee, if any, as the Committee. The Committee is authorized to interpret
the Plan and may from time to time adopt such rules and regulations, not
inconsistent with the provisions of the Plan, as it may deem advisable.
Notwithstanding the foregoing, the Plan is intended to meet the requirements of
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "1934 Act") and, more specifically, to meet the criteria for a plan
providing for "formula awards" set forth in Rule 16b-3(c)(2)(ii) or any
successor rule or regulation, and, accordingly, the Committee shall have no
discretion with respect to the eligibility or selection of directors to be
granted options ("Options") under the Plan, the timing of the grant of any
Option, the number of Shares subject any Option or the exercise price thereof,
or any other matter or determination which would cause the Plan not to meet such
criteria. Decisions of the Committee shall be final and binding upon all
parties having an interest in the Plan.
3. PARTICIPATION
All directors of the Company who are not employees of the Company or any
subsidiary of the Company ("Eligible Directors") shall be eligible to
participate in the Plan. As used herein, "subsidiary" shall mean any
corporation at least 50% of the outstanding voting stock of which is owned,
directly or indirectly through one or more intermediaries, by the Company.
4. COMMON STOCK SUBJECT TO THE PLAN
1.
<PAGE>
Subject to adjustment as provided in Section 7 of the Plan, the maximum number
of shares of Common Stock which may be issued upon the exercise of Options shall
be 650,000. Such shares shall be authorized but unissued shares. If any Option
shall expire or terminate for any reason without having been exercised in full,
the unpurchased shares which were subject thereto shall again become available
for issuance under the Plan.
5. GRANTS OF OPTIONS
(a) Initial Grants. There shall be granted to each Eligible Director
(i) on the date of his or her initial election as a member of the Board in the
case of each Eligible Director who was not a member of the Board of Directors on
the date the Plan was approved by the Board (the "Board Approval Date"), (ii) on
the Board Approval Date in the case of each Eligible Director who is a member of
the Board on the Board Approval Date, and (iii) on the date a person becomes an
Eligible Director by virtue of the termination of his or her employment by the
Company or any subsidiary of the Company in the case of each Eligible Director
who was not an Eligible Director on the date of his or her initial election as a
member of the Board or on the Board Approval Date, an Option to purchase 5,000
shares of Common Stock.
(b) Annual Grants. There shall be granted to each Eligible Director
annually on the second Thursday of August in each year, commencing with the year
1995 and to an including the year 2003, an Option to purchase 5,000 shares of
Common Stock ("Annual Grant Option").
(c) Election. Any Eligible Director may elect not to receive an
Annual Grant Option, but only by written notice delivered to the Committee not
less than six months prior to the date of grant of such Option.
(d) Adjustments. The number of shares subject to any outstanding
Option and the number of shares subject to any Option to be granted under this
Section 5 shall be subject to adjustment from time to time as provided in
Section 7 of the Plan.
(e) No Limitation on Removal. No Option granted under this Section 5
shall be construed as limiting any right which either the shareholders of the
Company or the Board may have to remove at any time, with or without cause, any
Eligible Director from the Board.
2.
<PAGE>
6. TERMS AND CONDITIONS OF OPTIONS
Each Option shall be evidenced by a written instrument in
substantially the form of Exhibit 1 attached hereto or in such other form as may
be approved by the Committee and shall be subject to the following terms and
conditions:
(a) Term. The term of each Option shall be ten years from its date of
grant, subject to earlier termination in accordance with Section 7(b) of the
Plan or as follows:
(i) If any Eligible Director shall cease to be an Eligible Director
for any reason other than his or her death or disability (within the
meaning of Section 422(c)(6) of the Internal Revenue Code of 1986, as
amended (the "Code")) while holding an Option which has not expired and has
not been fully exercised, such holder may exercise such Option to the
extent that it was exercisable at the time he or she ceased to be an
Eligible Director at any time within three months after the date on which
such holder ceased to be an Eligible Director, but in no event later than
ten years from the date such Option was granted. Such Option shall
terminate upon the expiration of such period unless the holder dies prior
to such expiration, in which event he or she shall be deemed to have died
on the date he or she ceased to be an Eligible Director, and such Option be
exercisable and terminate in accordance with the provisions of paragraph
(ii) below.
(ii) If any Eligible Director shall cease to be an Eligible Director
by reason of his or her death or disability (within the meaning of Section
422(c)(6) of the Code), while holding an Option which has not expired and
has not been fully exercised, such holder (or his or her guardian or legal
representative) may exercise such Option to the extent that it was
exercisable at the time he or she ceased to be an Eligible Director by
reason of such death or disability at any time within twelve months after
the date on which such person ceased to be an Eligible Director, but in no
even later than ten years from the date such Option was granted. Such
Option shall terminate upon the expiration of such period.
(b) Exercise Price. The purchase price for each share of Common Stock
subject to an Option shall be equal to 100% of the Fair Market Value (as
hereinafter defined) of the Common Stock on the date such Option is granted. As
used in the Plan, "Fair Market Value" on any date shall be equal to the mean of
the high and low sales prices of a share of Common Stock on such date (or if
such date is not a trading day or there are no sales reported on such date, on
the next preceding trading day for which sales are reported), based on the
composite or
3.
<PAGE>
consolidated transactions for New York Stock Exchange issues reported by The
Wall Street Journal (or if The Wall Street Journal is not then being published,
by The New York Times or such other source as shall be determined by the
Committee.) In the event that the Common Stock ceases to be listed on the New
York Stock Exchange, the method of determining Fair Market Value shall be
determined by the Committee. The exercise price of outstanding Options shall be
subject to adjustment from time to time in accordance with Section 7 of the
Plan.
(c) Exercisability. Each Option shall become exercisable with respect to
50% of the shares subject thereto on the first anniversary of the date of grant
of such Option and with respect to the remaining 50% on the second anniversary
of such date of grant, provided that the holder is an Eligible Director on the
applicable anniversary date. Notwithstanding the foregoing, in the event that
(i) any person or entity, including a "group" as contemplated by Section
13(d)(3) of the 1934 Act, acquires or gains ownership or control (including,
without limitation, power to vote) of more than 50% of the outstanding Common
Stock or (ii) as a result of or in connection with a contested election of
directors, the persons who were directors of the Company before such election
shall cease to constitute a majority of the Board of Directors of the Company,
then immediately upon the occurrence of any such event (a "Change in Control")
each outstanding Option shall become exercisable with respect to all shares
subject thereto. Options shall also become exercisable pursuant to the
provisions of Section 7(b) of the Plan.
(d) Exercise and Payment. An Option may be exercised only by written
notice to the Company at its principal executive office by the person entitled
to exercise such Option, stating the number of shares of Common Stock with
respect to which such Option is being exercised and accompanied by payment of
the full purchase price for the shares with respect to which it is exercised.
The minimum number of shares of Common Stock with respect to which an Option may
be exercised at any one time shall be 500, unless the number of shares with
respect to which the Option is being exercised is the total number of shares
available for purchase under the Option. The purchase price may be paid in
cash, in shares of Common Stock owned by the Holder, or partly in cash and
partly in shares of Common Stock. The value of shares of Common Stock delivered
in payment of the purchase price shall be their Fair Market Value, as of the
date of exercise. Upon receipt of such notice and payment and payment of any
amount on account of withholding taxes as provided in paragraph (e) below, the
Company shall promptly issue and deliver to the holder (or other person entitled
to exercise the Option) a certificate or certificates for the number of shares
of Common Stock as to which the exercise is made. No holder of an Option shall
have any rights as an owner of Common Stock until the date of issuance to him or
her of such certificate or certificates.
4.
<PAGE>
(e) Withholding Taxes. It shall be a condition to the obligation of the
Company to issue shares of Common Stock upon the exercise of an Option, that the
holder pay to the Company the amount requested by the Company for the purpose of
satisfying any liability to withhold federal, state, local or foreign income or
other taxes.
(f) Transferability. No Option shall be transferable by the holder thereof
otherwise than by will or the laws of descent and distribution and any such
Option shall be exercisable during the holder's lifetime only by him or her, or
in the event of disability, by his or her guardian or legal representative.
(g) Nonstatutory Options. Each Option shall be a nonstatutory option not
intended to qualify as an incentive stock option under Section 422 of the Code.
(g) Compliance with Law. The exercise of each Option shall be on the
condition that the purchase of shares of Common Stock thereunder shall be for
investment purposes, and not with a view to resale or distribution unless such
shares are registered under the Securities Act of 1933, as amended, or if in the
opinion of counsel for the Company such registration is not required under such
Act, or any other applicable law, rule or regulation.
7. ADJUSTMENTS
(a) In the event of any change in the outstanding Common Stock by reason of
stock dividends, split-ups, consolidations, recapitalizations, reorganizations
or like events (as determined by the Committee), an appropriate and
proportionate adjustment shall be made by the Committee in the number of shares
available for issuance under the Plan, in the number of shares of Common Stock
to be subject to Options to be granted under Section 5 of the Plan, and in the
number of shares subject to, and the exercise price of shares of Common Stock
subject to Options outstanding under the Plan with respect to any unpurchased
shares. Any such adjustment to an outstanding Option shall be made without a
change in the total exercise price applicable to such unpurchased shares but
with a corresponding adjustment in the per share exercise price. No fractional
shares of Common Stock shall be issued under the Plan on account of any
adjustment under this Section 7(a).
(b) Notwithstanding anything in paragraph (a) above to the contrary, in the
event of any merger, consolidation or other reorganization of the Company in
which the Company is not the surviving or continuing corporation (as determined
by the Committee) or in the event of the liquidation or dissolution of the
Company, all Options shall terminate on the effective date of the merger,
consolidation, reorganization, liquidation or dissolution unless, in the case of
a merger, consolidation or reorganization, the agreement with respect thereto
provides
5.
<PAGE>
otherwise. Notwithstanding any other provision of the Plan to the contrary, all
outstanding Options shall be exercisable with respect to all shares subject
thereto for a period of 30 days prior to the effective date of any such merger,
consolidation, reorganization, liquidation or dissolution unless, in the case of
a merger, consolidation or reorganization, such Options are assumed by the
continuing or surviving corporation.
8. AMENDMENT
The Plan may be amended at any time and from time to time by the Board,
provided, however, that shareholder approval shall be required for any amendment
materially increasing the benefits accruing to participants under the Plan,
materially increasing the number of shares of Common Stock which may be issued
under the Plan (except as permitted by Section 7 of the Plan) or materially
modifying the requirements as to eligibility for participation in the Plan and
provided, further, that the Plan may not be amended more than once every six
months other than to comply with changes in the Code, the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder. No amendment
to the Plan shall impair the rights of a holder of an Option granted prior to
its adoption without such holder's consent.
9. REGULATORY REQUIREMENTS
(a) The Company may require that any holder, as a condition of the exercise
of any Option, to represent and establish to the satisfaction of the Company
that all shares of Common Stock acquired upon the exercise of such Option will
be acquired for investment and not with a view to resale or distribution. The
Company may prevent the sale or other disposition of any shares acquired
pursuant to the exercise of an Option until it is satisfied that such sale or
other disposition would not be in contravention of applicable state or Federal
securities laws.
(b) No Option shall be exercisable in whole or in part at any time the
Board shall determine in its discretion that the listing or qualification of the
shares of Common Stock subject to such Option on any securities exchange or
under any applicable law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or in connection
with, the exercise of such Option or the issuance of shares of Common Stock
thereunder, unless such listing, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Board.
6.
<PAGE>
10. TERMINATION
The Plan shall terminate upon the earlier of the adoption by the Board of a
resolution terminating the Plan or ten years from the Board Approval Date. The
termination of the Plan shall not affect the validity of any Option outstanding
under the Plan at the date of termination, but no Option shall be granted under
the Plan subsequent to its termination.
11. STOCKHOLDER APPROVAL
The Plan shall become effective upon its adoption by the Board, subject to
approval by the shareholders of the Company on or before July 31, 1995, by the
affirmative vote of the holders of a majority of the shares of Common Stock of
the Company present, or represented and entitled to vote, at a meeting duly held
in accordance with the laws of the State of California. In the event such
approval is not obtained, all Options granted under the Plan shall be void and
without effect, and no additional Options shall be granted under the Plan.
7.
<PAGE>
EXHIBIT 1
VARCO INTERNATIONAL, INC.
DIRECTOR STOCK OPTION
VARCO INTERNATIONAL, INC., a California corporation, hereby grants to
_______________________ (the "Holder") a stock option pursuant and subject to
the terms and conditions of the 1994 Directors' Stock Option Plan (the "Plan")
of the Company and upon the terms and conditions set forth below. Capitalized
terms used and not otherwise defined in this Option shall have the respective
meanings set forth in the Plan.
1. STOCK OPTION. The Company grants to the Holder the right and option
to purchase from the Company an aggregate of _____ shares of Common Stock of the
Company at an exercise price of $______ per share. This Option shall become
exercisable with respect to _____ shares on _________________, and with respect
to the remaining _____ shares on _________________, provided that the Holder is
an Eligible Director on the applicable date. Notwithstanding the foregoing,
this Option shall become exercisable with respect to all shares of Common Stock
subject hereto immediately upon the occurrence of a Change in Control and shall
become exercisable with respect to all such shares in certain events in
accordance with the provisions of Section 7(b) of the Plan. This Option shall
be a nonstatutory option not intended to qualify as an incentive stock option
under Section 422 of the Code.
2. TERM. The term of this Option is ten years commencing on
_________________ and ending on _________________, subject to earlier
termination in accordance with Section 7(b) of the Plan or as follows:
(a) If the Holder shall cease to be an Eligible Director for any
reason other than his or her death or disability (within the meaning of
Section 422(c)(6) of the Code), prior to the expiration of this Option, the
Holder may exercise this Option to the extent that it was exercisable at
the time he or she ceased to be an Eligible Director at any time within
three months after the date on which he or she ceased to be an Eligible
Director, but in no event later than _________________. This Option shall
terminate upon the expiration of such period unless the Holder dies prior
to such expiration, in which event he or she shall be deemed to have died
on the date he or she ceased to be an Eligible Director, and this Option be
exercisable and terminate in accordance with the provisions of paragraph
(b) below.
<PAGE>
(ii) If the Holder shall cease to be an Eligible Director by reason of
his or her death or disability (within the meaning of Section 422(c)(6) of
the Code), prior to the expiration of this Option, the Holder (or his or
her guardian or legal representative) may exercise this Option to the
extent that it was exercisable at the time he or she ceased to be an
Eligible Director by reason of such death or disability at any time within
twelve months after the date on which he or she ceased to be an Eligible
Director, but in no even later than _________________. This Option shall
terminate upon the expiration of such period.
3. EXERCISE AND PAYMENT. This Option may only be exercised by written
notice to the Company at its principal executive office by the person entitled
to exercise this Option, stating the number of shares of Common Stock with
respect to which it is being exercised (which shall be not less than 500 shares
unless this Option is being exercised with respect to the total number of shares
available for purchase hereunder) and accompanied by payment of the full
purchase price for the shares with respect to which this Option is being
exercised. The purchase price may be paid in cash, in shares of Common Stock
owned by the Holder, valued at their Fair Market Value on the date of exercise,
determined as provided in the Plan, or partly in cash and partly in shares of
Common Stock. It shall be a condition to the exercise of this Option that the
Holder pay to the Company the amount requested by the Company for the purpose of
satisfying any liability to withhold federal, state, local or foreign income or
other taxes. The Holder shall not have any rights as an owner of Common Stock
by reason of the exercise of this Option until the date of issuance to him or
her of a certificate or certificates representing the shares of Common Stock
purchased.
4. ADJUSTMENTS. The number of shares of Common Stock subject to this
Option and the exercise price is subject to adjustment as provided in Section 7
of the Plan.
5. TRANSFERABILITY. This Option may not be transferred by the Holder
otherwise than by will or the laws of descent and distribution and during the
Holder's lifetime shall be exercisable only by him or her, or in the event of
disability, by his or her guardian or legal representative.
6. COMPLIANCE WITH LAW. The exercise of this Option shall be on the
condition that the purchase of shares of Common Stock hereunder shall be for
investment purposes, and not with a view to resale or distribution unless such
shares are registered under the Securities Act of 1933, as amended, or if in the
opinion of counsel for the Company such registration is not required under such
Act, or any other applicable law, rule or regulation.
2.
<PAGE>
9. REGULATORY REQUIREMENTS.
(a) The Company may require that the Holder, as a condition of any exercise
of this Option, represent and establish to the satisfaction of the Company that
all shares of Common Stock to be acquired upon such exercise will be acquired
for investment and not with a view to resale or distribution. The Company may
prevent the sale or other disposition of any shares acquired pursuant to any
exercise of this Option until it is satisfied that such sale or other
disposition would not be in contravention of applicable state or Federal
securities laws.
(b) This Option shall not be exercisable in whole or in part at any time
the Board shall determine in its discretion that the listing or qualification of
the shares of Common Stock subject hereto on any securities exchange or under
any applicable law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in connection with, the
exercise of this Option or the issuance of shares of Common Stock hereunder,
unless such listing, qualification, consent or approval shall have been effected
or obtained free of any conditions not acceptable to the Board.
10. CONFLICT. In the event of any conflict between the terms and
provisions of this Option and the terms and provisions of the Plan, the terms
and provisions of the Plan shall govern.
11. GOVERNING LAW. This Option shall be governed by and interpreted in
accordance with the laws of the State of California.
VARCO INTERNATIONAL, INC.
BY_____________________________
Title:
Dated: _________________
3.
<PAGE>
EXHIBIT 5
PIRCHER, NICHOLS & MEEKS
Attorneys at Law
1999 Avenue of the Stars
Suite 2600
Los Angeles, California 90067
(310) 201-8900
FAX (310) 201-8922
August 16, 1995
Varco International, Inc.
743 North Eckhoff Street
Orange, California 92668
Ladies & Gentlemen:
We have acted as counsel to Varco International, Inc. (the "Company") in
connection with the preparation and filing by the Company of a Registration
Statement on Form S-8 (the "Registration Statement"), relating to 650,000 shares
of the Company's Common Stock issuable under the Company's 1994 Directors' Stock
Option Plan (the "Plan").
We have reviewed originals or copies, certified or otherwise identified to
our satisfaction, of the Registration Statement and such certificates of public
officials and of officers of the Company and such other documents, corporate
records or other instruments as we have deemed necessary or appropriate for the
purposes of this opinion. We have assumed that all signatures on all documents
examined by us are genuine, all documents submitted to us as originals are
authentic, and all documents submitted to us as copies conform with the original
executed documents.
Based upon the foregoing, we are of the opinion that:
1. The Company is validly organized and existing under the laws of the
State of California.
2. Any shares of the Common Stock of the Company issued and sold by the
Company upon the exercise of options granted pursuant to the provisions of the
Plan will constitute validly authorized and issued Common Stock of the Company
and will be fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above.
Very truly yours,
/s/ PIRCHER, NICHOLS & MEEKS
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in this Registration Statement on
Form S-8 pertaining to the 1994 Directors' Stock Option Plan of our reports
dated February 17, 1995, (a) with respect to the consolidated financial
statements of Varco International, Inc. incorporated by reference in its Annual
Report (Form 10-K) for the year ended December 31, 1994, filed with the
Securities and Exchange Commission, and (b) with respect to the schedule
included therein, filed as an exhibit thereto.
/s/ Ernst & Young LLP
Orange County
August 16, 1995
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
RICHARD A. KERTSON his or her true and lawful attorney-in-fact, with full power
of substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to execute a Registration Statement on
Form S-8 of Varco International, Inc. (the "Company") relating to the
registration under the Securities Act of 1933, as amended, of 650,000 shares of
the Common Stock of the Company issuable pursuant to the Varco International,
Inc. 1994 Directors' Stock Option Plan, and any and all amendments or post-
effective amendments to said Registration Statement and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission.
/s/ George Boyadjieff
--------------------------------
GEORGE BOYADJIEFF
/s/ Talton R. Embry
--------------------------------
TALTON R. EMBRY
/s/ Andre R. Horn
--------------------------------
ANDRE R. HORN
/s/ Maurice E. Jacques
--------------------------------
MAURICE E. JACQUES
/s/ Jack W. Knowlton
--------------------------------
JACK W. KNOWLTON
/s/ Leo J. Pircher
--------------------------------
LEO J. PIRCHER
/s/ Walter B. Reinhold
--------------------------------
WALTER B. REINHOLD
/s/ Carroll W. Suggs
--------------------------------
CARROLL W. SUGGS
/s/ Robert A. Teitsworth
--------------------------------
ROBERT A. TEITSWORTH
/s/ Eugene R. White
--------------------------------
EUGENE R. WHITE
/s/ James D. Woods
--------------------------------
JAMES D. WOODS
Dated: May 18, 1995
