<PAGE>
===============================================================================
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to __________
Commission file number 1-7867
WEATHERFORD INTERNATIONAL INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 74-1681642
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1360 POST OAK BOULEVARD
SUITE 1000
HOUSTON, TEXAS
77056
(Address of principal executive offices)
(Zip code)
(713) 439-9400
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
---- ----
There were 54,354,698 shares of Common Stock, $.10 par value, of the registrant
outstanding as of April 30, 1995, including 30,577 and 24,212 shares,
respectively, deemed to be outstanding pending the exchange of shares of common
stock of Petroleum Equipment Tools Co. and H & H Oil Tool Co., Inc., but
excluding 118,933 shares classified as Treasury Stock.
===============================================================================
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WEATHERFORD INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
ASSETS 1995 1994
----------- ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents........................... $ 11,475 $ 22,324
Receivables, net of allowance of $7,896 and $7,610.. 106,078 104,424
Inventories, net of allowance of $9,783 and $9,352.. 52,264 54,381
Deferred tax assets................................. 1,178 1,148
Prepayments and other............................... 7,326 7,251
-------- --------
Total current assets............................... 178,321 189,528
-------- --------
PROPERTY, PLANT AND EQUIPMENT, AT COST............... 557,700 544,199
Less -- Accumulated depreciation.................... 339,182 329,043
-------- --------
218,518 215,156
-------- --------
GOODWILL, NET........................................ 36,274 34,970
-------- --------
OTHER ASSETS......................................... 14,365 14,309
-------- --------
$447,478 $453,963
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt...................................... $ 450 $ 113
Current portion of long-term debt.................... 16,255 16,262
Accounts payable..................................... 18,702 27,299
Accrued income taxes................................. 6,686 6,329
Other accrued liabilities............................ 41,203 49,586
-------- --------
Total current liabilities........................... 83,296 99,589
-------- --------
LONG-TERM DEBT........................................ 53,692 55,701
-------- --------
DEFERRED TAX LIABILITIES.............................. 2,602 2,597
-------- --------
OTHER LONG-TERM LIABILITIES........................... 14,444 13,876
-------- --------
STOCKHOLDERS' EQUITY:
Preferred stock, $1 par; shares authorized 1,000,000;
none issued......................................... -- --
Common stock, $.10 par; shares authorized 80,000,000;
issued 54,343,391 and 54,256,434.................... 5,434 5,426
Paid-in capital...................................... 277,367 277,114
Retained earnings (deficit).......................... 7,604 (1,552)
Cumulative translation adjustment.................... 3,988 2,013
Treasury stock, 118,112 and 102,404 common shares,
at cost............................................. (949) (801)
-------- --------
293,444 282,200
-------- --------
$447,478 $453,963
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE>
WEATHERFORD INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED - IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
--------------------
1995 1994
-------- --------
<S> <C> <C>
REVENUES:
International.................................... $ 49,496 $ 41,354
United States.................................... 51,538 47,439
-------- --------
Total revenues................................. 101,034 88,793
-------- --------
COSTS AND EXPENSES:
Cost of sales and services....................... 73,315 63,666
Selling, general and administrative expenses..... 14,278 14,227
Research and development......................... 818 635
Equity in earnings of unconsolidated affiliates.. (525) (358)
Foreign currency (gain) loss, net................ (33) 334
Other (income) expense, net...................... (512) (121)
-------- --------
Total operating costs and expenses............. 87,341 78,383
-------- --------
OPERATING INCOME:
International.................................... 8,781 7,137
United States.................................... 5,912 4,126
Corporate........................................ (1,000) (853)
-------- --------
Total operating income........................... 13,693 10,410
Interest expense................................... 1,821 718
Interest income.................................... (214) (223)
-------- --------
INCOME BEFORE INCOME TAXES......................... 12,086 9,915
Income taxes..................................... 2,930 2,731
-------- --------
NET INCOME......................................... $ 9,156 $ 7,184
======== ========
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING.................... 54,396 54,331
======== ========
INCOME PER COMMON AND COMMON
EQUIVALENT SHARE................................. $ 0.17 $ 0.13
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
WEATHERFORD INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1995
(UNAUDITED - IN THOUSANDS)
<TABLE>
<CAPTION>
RETAINED CUMULATIVE
COMMON PAID-IN EARNINGS TRANSLATION TREASURY
STOCK CAPITAL (DEFICIT) ADJUSTMENT STOCK TOTAL
------ -------- --------- ----------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1994.. $5,426 $277,114 $(1,552) $2,013 $(801) $282,200
Shares issued under
employee benefit plans... -- 48 -- -- -- 48
Stock grants and options
exercised................ 8 205 -- -- (148) 65
Currency translation
adjustment............... -- -- -- 1,975 -- 1,975
Net income................ -- -- 9,156 -- -- 9,156
------ -------- -------- ------- ------- --------
BALANCE, MARCH 31, 1995 $5,434 $277,367 $ 7,604 $3,988 $ (949) $293,444
====== ======== ======= ====== ====== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
WEATHERFORD INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED--IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
----------------------
1995 1994
---------- ----------
<S> <C> <C>
NET INCOME........................................................ $ 9,156 $ 7,184
Income items not requiring (providing) cash:
Depreciation and amortization................................... 10,664 8,681
Undistributed earnings of affiliates............................ (231) (358)
Gain on disposal of property, plant and equipment, net.......... (1,269) (986)
Deferred income tax benefit..................................... (140) (28)
Increase(decrease) in cash from changes in operating accounts:
Receivables, net.............................................. (273) 1,147
Inventories, net.............................................. 3,195 (4,792)
Prepayments and other......................................... (4) (427)
Accounts payable and accrued liabilities...................... (17,813) (4,503)
Other long-term liabilities................................... 378 50
-------- -------
CASH PROVIDED BY OPERATING ACTIVITIES............................. 3,663 5,968
-------- -------
Purchases of property, plant and equipment........................ (11,733) (6,870)
Acquisitions, net of notes issued and cash acquired............... -- (2,200)
Proceeds from disposition of assets............................... 2,330 1,344
Other net cash flows from investing activities.................... (231) (1,249)
-------- -------
CASH USED IN INVESTING ACTIVITIES................................. (9,634) (8,975)
-------- -------
Proceeds from bank borrowings..................................... 6,314 --
Repayments of indebtedness........................................ (8,010) (2,323)
Net cash flows from currency hedging transactions................. (4,368) --
Proceeds from sale of stock to employee benefit plans and stock
option exercises................................................ 113 473
-------- -------
CASH USED IN FINANCING ACTIVITIES................................. (5,951) (1,850)
-------- -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH........................... 1,073 121
-------- -------
DECREASE IN CASH AND CASH EQUIVALENTS............................. (10,849) (4,736)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.................... 22,324 21,905
-------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD.......................... $ 11,475 $17,169
======== =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest........................................................ $ 1,340 $ 286
Income taxes.................................................... 2,939 1,379
Purchase of equipment financed by debt............................ -- 300
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
WEATHERFORD INTERNATIONAL INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) The consolidated financial statements of Weatherford International
Incorporated and its subsidiaries (the "Company" or "Weatherford") included
herein have been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. In the opinion of
management, the information furnished reflects all adjustments, consisting only
of normal recurring adjustments, which are necessary for a fair presentation of
the results of the interim periods. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations. However, the Company believes that the disclosures are
adequate to make the information presented not misleading.
Certain reclassifications were made to previously reported amounts in the
consolidated financial statements and notes to make them consistent with the
current presentation format.
It is suggested that these financial statements be read in conjunction with
the financial statements and the notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1994. No significant
accounting changes have occurred during the three months ended March 31, 1995.
(2) INCOME PER COMMON AND COMMON EQUIVALENT SHARE. Income per common and
common equivalent share is computed on the basis of the weighted average number
of shares of common stock and common stock equivalents (if dilutive) outstanding
during the respective periods. Fully diluted earnings per share are equal to
primary earnings per share in all periods presented.
(3) INVENTORIES. Consolidated net inventories consist of the following (in
thousands):
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
--------- ------------
<S> <C> <C>
Spare parts and components.. $17,403 $17,593
Raw materials............... 4,531 4,984
Work in process............. 5,391 5,211
Finished goods.............. 24,939 26,593
------- -------
$52,264 $54,381
======= =======
</TABLE>
6
<PAGE>
(4) SUMMARIZED FINANCIAL INFORMATION OF 50% OR LESS-OWNED AFFILIATES. The
Company owns a 49% interest in each of two Saudi Arabian companies and an Abu
Dhabi joint venture, which are included in other assets in the accompanying
consolidated balance sheets. The Company owned a 50% interest in a U.S.
partnership that was dissolved in 1994. Summarized financial information for
these affiliates is as follows (in thousands):
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
--------- ------------
<S> <C> <C>
BALANCE SHEET DATA:
Current assets........... $3,746 $3,591
Non-current assets....... 969 947
------ ------
Total assets........... $4,715 $4,538
====== ======
Current liabilities...... $1,174 $1,462
Non-current liabilities.. 386 391
------ ------
Total liabilities...... $1,560 $1,853
====== ======
FOR THE THREE MONTHS
ENDED MARCH 31,
--------------------
1995 1994
------ ------
INCOME STATEMENT DATA:
Revenues................. $2,198 $2,624
Gross profit............. 1,217 887
Net income............... 1,070 727
</TABLE>
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
WEATHERFORD INTERNATIONAL INCORPORATED AND SUBSIDIARIES
BUSINESS REVIEW
Weatherford is a diversified international energy service and manufacturing
company that provides a variety of services and equipment to the oil and gas
industry. Weatherford's principal businesses consist of providing tubular
handling services, renting specialized oilfield equipment and providing fishing
services and related tools, and manufacturing and selling cementation products
and other equipment. Weatherford operates in virtually every oil and gas
exploration and production region in the world, with locations in more than 40
countries, including the United States.
Weatherford has grown significantly through acquisition in recent years,
having acquired 18 businesses since November 1991. Management believes that
the Company is the industry leader in each of its three principal businesses
and, since April 1993, the Company's revenues have been approximately equally
balanced between United States and international operations.
The following tables sets forth the Company's revenues attributable to each
of its principal businesses (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------ ----------------------------
1995 1994 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Oilfield services and rentals:
Tubular handling services $ 28,689 $26,586 $109,503 $105,715 $103,360
Rental tools and fishing
tool services 44,209 40,012 170,387 130,943 53,651
Other services 3,322 2,307 12,264 14,118 8,819
-------- ------- -------- -------- --------
Total services & rentals 76,220 68,905 292,154 250,776 165,830
-------- ------- -------- -------- --------
Oilfield products and equipment:
Cementation products 10,718 10,391 43,201 41,734 30,160
Other products and equipment 14,096 9,497 36,959 40,573 26,974
-------- ------- -------- -------- --------
Total products & equipment 24,814 19,888 80,160 82,307 57,134
-------- ------- -------- -------- --------
Total revenues $101,034 $88,793 $372,314 $333,083 $222,964
======== ======= ======== ======== ========
</TABLE>
Demand for the Company's services and products depends primarily upon the
number of oil and gas wells being drilled, the depth and drilling conditions of
such wells, the number of well completions and the level of workover activity
worldwide. Drilling activity is largely dependent on the level and volatility
of oil and natural gas prices. The following table sets forth selected
statistics reflecting industry conditions and the Company's financial results:
8
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------ -----------------------------
1995 1994 1994 1993 1992
-------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Average rig count (a):
United States...................... 711 760 775 754 721
International...................... 1,060 1,059 997 960 959
------ ------ ------ ------ ------
Worldwide.......................... 1,771 1,819 1,772 1,714 1,680
Revenue per rig (in thousands)(b):
United States...................... $ 72 $ 62 $ 240 $ 233 $ 115
International...................... 47 39 187 164 146
Worldwide.......................... 57 49 210 194 133
</TABLE>
- --------
(a) Calculated by averaging rig count figures as published by Baker Hughes
Incorporated.
(b) Calculated by dividing revenues by average rig count.
FINANCIAL CONDITION
The Company's operations provided cash of $3,663,000 during the first three
months of 1995 compared to $5,968,000 during the first three months of 1994.
The decrease in operating cash flow is primarily attributable to net decreases
in cash from changes in operating accounts totaling $14,517,000 in the first
three months of 1995, compared to $8,525,000 in the same period of 1994,
primarily as a result of increased payments in 1995 related to capital assets
and inventories purchased in the fourth quarter of 1994. Net income before
depreciation and amortization of $19,820,000 in the first three months of 1995
increased $3,955,000 when compared to the same period in 1994.
Capital expenditures increased to $11,733,000 during the three months ended
March 31, 1995 compared to $6,870,000 for the same period in 1994. The increase
was primarily attributable to the international segment, where the Company
expanded its operations since March 1994 with acquisitions in the North Sea, the
Asia-Pacific Region and South America. Management anticipates that 1995 capital
expenditures, excluding acquisitions, will not exceed the level incurred for the
full year of 1994.
The Company's consolidated indebtedness decreased from $72,076,000 at
December 31, 1994 to $70,397,000 at March 31, 1995, primarily as a result of
scheduled debt repayments partially offset by borrowings under revolving credit
facilities. The Company's total debt-to-total capitalization ratio was 19% at
March 31, 1995 compared to 20% at December 31, 1994.
The Company has a $75,000,000 Term Loan (the "Term Loan") and a $50,000,000
Revolving Credit Facility (the "Revolving Credit Facility"; collectively, the
"Facilities"). The Term Loan is repayable in equal quarterly installments
through March 31, 1999. The balance outstanding at March 31, 1996 under the
Revolving Credit Facility will be repayable in equal quarterly installments
through March 31, 1999. Amounts outstanding under the Facilities accrue
interest at a variable rate, depending on the Company's total debt-to-total
capitalization ratio. The applicable interest rate on amounts outstanding at
March 31, 1995 was 7.1%. The Facilities are secured by the stock of certain of
the Company's significant subsidiaries. The Company is required under the
Facilities agreement to maintain certain financial ratios and is limited thereby
in its ability to pay dividends on and repurchase Common Stock, incur
indebtedness, make investments, and dispose of, pledge or otherwise transfer
assets of the
9
<PAGE>
Company. At March 31, 1995, the balances outstanding under the Term Loan and the
Revolving Credit Facility were $63,158,000 and $6,000,000, respectively. At
March 31, 1995, the Company had $44,000,000 available to borrow under the
Revolving Credit Facility and $13,886,000 available for borrowing under working
capital facilities of certain of its international subsidiaries.
The Company has entered into forward exchange contracts as a hedge against
currency exposures related to certain intercompany loans resulting from the
acquisition of the Rental Division of Odfjell Drilling and Consulting Company
("Odfjell Rental") in April 1994. Market value gains and losses recognized on
the hedges offset foreign currency transaction gains and losses recognized on
the related exposures. Settlement of forward exchange contracts resulted in net
cash outflows totaling $4,368,000 during the first quarter of 1995.
Management believes the combination of working capital, the unused portion of
existing credit facilities and cash flows from operations provide the Company
with sufficient capital resources and liquidity to manage its routine
operations. The Company continues to seek opportunities to enhance its
competitiveness through strategic acquisitions. The Company is currently
considering several potential acquisitions, which are at various stages of
negotiation or due diligence. Management believes that any borrowings made in
connection with any such acquisitions will not have a materially adverse impact
on the Company's liquidity. Management believes that it is premature to provide
specific information with respect to any such possible acquisitions because of
the status of, and possible adverse impact on, negotiations, and because, in any
event, there can be no assurance that any of such possible acquisitions will be
consummated.
Like most multinational oilfield service companies, the Company has
operations in certain international areas, including parts of the Middle East,
North and West Africa, Latin America and the Asia-Pacific Region, that are
inherently subject to risks of civil disturbance and political activities which
may disrupt oil and gas exploration and production activities, restrict the
movement of funds or limit access to markets for periods of time. Historically,
the economic impact of such disruptions has been temporary and oil and gas
exploration and production activities have eventually resumed in relation to
market forces. Certain areas, including Nigeria, Algeria, Yemen and Pakistan in
particular, have experienced increased levels of social unrest in the past
twelve months. Generally, business interruptions resulting from civil or
political disruptions negatively impact near-term results of operations;
however, in the opinion of management, it is unlikely that any specific business
disruption caused by existing or foreseen civil or political instability will
have a materially adverse impact on the financial position or liquidity of the
Company.
The Company has not declared dividends on Common Stock since December 1982
and management does not anticipate paying dividends on Common Stock at any time
in the foreseeable future. The Company's ability to pay dividends on Common
Stock is restricted by the terms of the Facilities.
RESULTS OF OPERATIONS
FIRST QUARTER 1995 COMPARED TO FIRST QUARTER 1994
Revenues increased 14% from $88,793,000 in the first quarter of 1994 to
$101,034,000 in the first quarter of 1995. International revenues increased
$8,142,000, or 20%, to $49,496,000 compared to $41,354,000 during the first
quarter of 1994, primarily as a result of the inclusion of the Odfjell Rental
operations acquired in April 1994, several smaller 1994 acquisitions and
increased service activity in certain markets. During the first quarter of 1995,
the average international rig count was essentially unchanged compared to the
same period of 1994. United States revenues increased $4,099,000, or 9%, to
$51,538,000 in the first quarter of 1995 compared to $47,439,000 for the same
period of 1994, primarily as a result of a large export sale of products
totaling $5,867,000. The average U.S. drilling and workover rig counts were 6%
and 4% lower, respectively, in the first quarter of 1995 than in the first
quarter of 1994.
Gross profit increased $2,592,000, or 10%, to $27,719,000 from $25,127,000
when comparing the first quarter of 1995 to the first quarter of 1994. As a
percentage of revenues, gross profit
10
<PAGE>
declined from 28.3% to 27.4%, reflecting differences in the revenue mix
geographically and with respect to the services and products provided.
Selling, general and administrative expenses were virtually unchanged,
increasing $51,000 to $14,278,000 in the first quarter of 1995 compared to
$14,227,000 in the first quarter of 1994, primarily as a result of the addition
of Odfjell Rental and other businesses acquired in 1994, substantially offset by
cost savings achieved in consolidating the operations of H & H Oil Tool Co.,
Inc. ("H & H"), a U.S. rental and fishing tool company acquired in September
1994 as a pooling of interests. As a percentage of revenues, selling, general
and administrative expenses decreased from 16.0% to 14.1%, reflecting the impact
of revenue growth and the consolidation cost savings.
Research and development costs increased 29% from $635,000 in the first
quarter of 1994 to $818,000 in the first quarter of 1995, primarily reflecting
the expansion of the Company's development activities to support its three
principal businesses.
The Company owns a 49% interest in each of two Saudi Arabian companies and an
Abu Dhabi joint venture. The Company owned a 50% interest in a U.S. partnership
that was dissolved in 1994. The Company's equity in the earnings of these
affiliates increased $167,000 to $525,000 in the first quarter of 1995,
primarily as a result of improved operating results in Saudi Arabia.
As a result of the fluctuation of the U.S. dollar against the major foreign
currencies in which the Company conducts business, the Company recorded net
exchange transaction gains of $33,000 in the first quarter of 1995 compared to
net exchange transaction losses of $334,000 in the first quarter of 1994.
Operating income increased $3,283,000, or 32%, to $13,693,000 in the first
quarter of 1995 compared to $10,410,000 in the same period in 1994, primarily as
a result of the increased gross profit.
Interest expense increased by $1,103,000 to $1,821,000 in the first quarter
of 1995 compared to $718,000 in the first quarter of 1994, primarily as a result
of higher average debt balances outstanding in 1995 and higher market interest
rates.
The income tax provision consists of taxes on foreign earnings, foreign taxes
withheld on certain remittances from international subsidiaries, U.S.
alternative minimum taxes and U.S. state income taxes. The income tax provision
does not include U.S. regular federal income tax due to the availability of U.S.
net operating loss carryforwards. The consolidated income tax provision
increased to $2,930,000 during the first quarter of 1995 compared to $2,731,000
in the first quarter of 1994. The Company's overall effective tax rate
decreased from 28% to 24%, primarily reflecting stronger profitability in the
United States, where net operating loss carryforwards are available.
The Company conducts a portion of its business in currencies other than the
U.S. dollar, including the German mark, the U.K. pound sterling, the Norwegian
krone and the Canadian dollar. As a result of a weaker U.S. dollar, the
weighted average currency exchange rates used to translate the statements of
income of the Company's international subsidiaries were generally lower during
the first quarter of 1995 compared to the same period in 1994, thereby
increasing the amount of U.S. dollars reflected on the Company's 1995
consolidated statement of income. Had the first quarter 1995 average exchange
rates been the same as in the first quarter of 1994, revenues for the first
quarter of 1995 would have been approximately $2,300,000 lower. The impact on
net income would not have been material.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
*10.1 Change of Control Agreement with Philip D. Gardner, Robert A.
Seekely and F. Thomas Tilton.
*10.2 First Amendment to Change of Control Agreement with Philip
Burguieres, James R. Burke, M. E. Eagles, Norman W. Nolen, H.
Suzanne Thomas, James D. Green, Gay S. Mayeux, Jon Nicholson
and Weldon W. Walker.
27 Financial Data Schedule
* Management contract or compensatory plan or arrangement.
(B) Reports on Form 8-K
None
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WEATHERFORD INTERNATIONAL INCORPORATED
(Registrant)
Date: May 12, 1995 By: NORMAN W. NOLEN
---------------------------------------
NORMAN W. NOLEN
Senior Vice President, Chief Financial
Officer & Treasurer
13
<PAGE>
EXHIBIT 10.1
<PAGE>
The following persons have entered into a Change of Control Agreement dated
February 13, 1995 in the form attached hereto:
Philip Gardner
Robert A. Seekely
Frederick T. Tilton
<PAGE>
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement by and between Weatherford International
Incorporated, a Delaware corporation (the "Company"), and _______________ (the
"Executive"), dated as of ___________________.
RECITALS:
A. The Board of Directors of the Company (the "Board") has previously
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company. The Board believes it is imperative to diminish
the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control and
to encourage the Executive's full attention and dedication to the Company
currently and in the event of any threatened or pending Change of Control, and
to provide the Executive with compensation and benefits arrangements upon a
Change of Control which ensure that the compensation and benefits expectations
of the Executive, which are competitive with those of executives at other
corporations, will be satisfied.
B. To accomplish these objectives, the Board has caused the Company to
enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
(a) The "Effective Date" shall mean the first date during the Change
of Control Period (as defined in Section 1(b)) on which a Change of Control (as
defined in Section 2) occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the Executive's employment
with the Company is terminated prior to the date on which the Change of Control
occurs, and if it is reasonably demonstrated by the Executive that such
termination of employment (i) was at the request of a third party who has taken
steps reasonably calculated to effect a Change of Control or (ii) otherwise
arose in connection with or anticipation of a Change of Control, then for all
purposes of this Agreement the "Effective Date" shall mean the date immediately
prior to the date of such termination of employment.
(b) The "Change of Control Period" shall mean the period commencing on
the date hereof and ending on the first anniversary of the date hereof;
provided, however, that commencing on the date one year after the date hereof,
and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be
1
<PAGE>
hereinafter referred to as the "Renewal Date"), unless previously terminated,
the Change of Control Period shall be automatically extended so as to terminate
one year(s) after such Renewal Date, unless at least 60 days prior to the
Renewal Date the Company shall give notice to the Executive that the Change of
Control Period shall not be so extended.
2. Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control:
(i) any acquisition directly from the Company,
(ii) any acquisition by the Company,
(iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company, or
(iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of subsection (c) of this
Section 2; or
(b) Individuals, who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual was a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the Company (a
"Corporate Transaction") in each case, unless, following such Corporate
Transaction,
2
<PAGE>
(i) all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Corporate
Transaction beneficially own, directly or indirectly, more than 60 percent of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Corporate Transaction (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Corporate Transaction of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any corporation resulting from such Corporate
Transaction or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Corporate Transaction) beneficially owns,
directly or indirectly, 20 percent or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership
existed prior to the Corporate Transaction and (iii) at least a majority of the
members of the board of directors of the corporation resulting from such
Corporate Transaction were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Corporate Transaction; or
(d) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the first anniversary of
such date (the "Employment Period").
4. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements, authority, duties
and responsibilities) shall be at least commensurate in all material respects
with the most significant of those held, exercised and assigned at any time
during the 120-day period immediately preceding the Effective Date and (B) the
Executive's services shall be performed at the location where the Executive was
employed immediately preceding the Effective Date or any office or location less
than 35 miles from such location.
3
<PAGE>
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (b) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, the Executive shall
receive an annual base salary ("Annual Base Salary"), which shall be paid at a
monthly rate, at least equal to 12 times the highest monthly base salary paid or
payable, including any base salary which has been earned but deferred, to the
Executive by the Company and/or its affiliated companies in respect of the 60-
month period immediately preceding the month in which the Effective Date occurs.
During the Employment Period, the Annual Base Salary shall be reviewed no more
than 12 months after the last salary increase awarded to the Executive prior to
the Effective Date and thereafter at least annually. Any increase in Annual
Base Salary shall not serve to limit or reduce any other obligation to the
Executive under this Agreement. Annual Base Salary shall not be reduced after
any such increase and the term Annual Base Salary as utilized in this Agreement
shall refer to Annual Base Salary as so increased. As used in this Agreement,
the term "affiliated companies" shall include any company controlled by,
controlling or under common control with the Company.
(ii) Annual Bonus. In addition to Annual Base Salary, the Executive
shall be awarded, for each fiscal year ending during the Employment Period, an
annual bonus (the "Annual Bonus") in cash at least equal to the Executive's
highest bonus (whether in cash or Common Stock of the Company) under the
Company's annual incentive program for the last three full fiscal years prior to
the Effective Date (annualized in the event that the Executive was not employed
by the Company for the whole of such fiscal year) (the "Recent Annual Bonus").
Each such Annual Bonus shall be paid no later than the end of the third month of
the fiscal year next following the fiscal year for which the Annual Bonus is
awarded, unless the Executive shall elect to defer the receipt of such Annual
Bonus.
4
<PAGE>
(iii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
incentive (including any stock option or related plans, restricted stock plans
or similar plans), savings and retirement plans, practices, policies and
programs applicable generally to other peer executives of the Company and its
affiliated companies, but in no event shall such plans, practices, policies and
programs provide the Executive with incentive opportunities (measured with
respect to both regular and special incentive opportunities, to the extent, if
any, that such distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the aggregate, than the
most favorable of those provided by the Company and its affiliated companies for
the Executive under such plans, practices, policies and programs as in effect at
any time during the 120-day period immediately preceding the Effective Date, or
if more favorable to the Executive, those provided generally at any time after
the Effective Date to other peer executives of the Company and its affiliated
companies.
(iv) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be eligible
to participate in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs) to the extent applicable generally
to other peer executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with benefits which are less favorable, in the aggregate than the most favorable
of such plans, practices, policies and programs in effect for the Executive at
any time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive, those provided generally at any time after
the Effective Date to other peer executives of the Company and its affiliated
companies.
(v) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the most favorable policies, practices and
procedures of the Company and its affiliated companies in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and its
affiliated companies.
(vi) Fringe Benefits. During the Employment Period, the Executive
shall be entitled to fringe benefits (including without limitation, financial
planning services, payment of club dues, a car allowance or use of an automobile
and payment of related expenses, as appropriate) in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any
5
<PAGE>
time thereafter with respect to other peer executives of the Company and its
affiliated companies.
(vii) Office and Support Staff. During the Employment Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to personal secretarial and other
assistance, at least equal to the most favorable of the foregoing provided to
the Executive by the Company and its affiliated companies at any time during the
120-day period immediately preceding the Effective Date or, if more favorable to
the Executive, as provided generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies.
(viii) Vacation. During the Employment Period, the Executive shall
be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies in
effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.
(ix) Options/SARs. Upon the occurrence of a Change of Control
pursuant to which the Company is not the survivor (or survives only as a
subsidiary of another entity), the surviving corporation shall issue to the
Executive options and tandem stock appreciation rights ("SARs"), if applicable,
in substitution or replacement of all outstanding options or SARs previously
issued pursuant to a Company stock option plan or the Company's Stock
Appreciation Rights Plan, respectively, any such options and SARs to have terms
and conditions similar to the terms of any such original options and SARs.
5. Termination of Employment.
(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 12(b) of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective 30 days after receipt of such notice by the Executive (the
"Disability Effective Date"), provided that within the 30-day period after such
receipt, the Executive shall not have returned to full-time performance of the
Executive's duties. For purposes of this Agreement, "Disability" shall mean the
absence of the Executive from the Executive's duties with the Company on a full-
time basis for 360 consecutive business days as a result of incapacity due to
mental or physical illness which is determined to be total and
6
<PAGE>
permanent by a physician selected by the Company or its insurers and acceptable
to the Executive or the Executive's legal representative.
(b) Cause. The Company may terminate the Executive's employment
during the Employment Period for Cause. For purposes of this Agreement, "Cause"
shall mean:
(i) the willful and continued failure of the Executive to perform
substantially the Executive's duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is delivered to the
Executive by the Board or the Chief Executive Officer of the Company which
specifically identifies the manner in which the Board of Chief Executive Officer
believes that the Executive has not substantially performed the Executive's
duties, or
(ii) the willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company.
For purposes of this provision, no act, or failure to act, on the part
of the Executive shall be considered "wilful" unless it is done, or omitted to
be done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer or
of a senior officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company. The cessation
of employment of the Executive shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.
(c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean:
(i) the assignment to the Executive of any duties inconsistent in any
respect with the Executive's position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as contemplated
by Section 4(a) of this Agreement, or any other action by the Company which
results in a diminution in
7
<PAGE>
such position, authority, duties or responsibilities, excluding for this purpose
an isolated, insubstantial and inadvertent action not taken in bad faith and
which is remedied by the Company promptly after receipt of notice thereof given
by the Executive;
(ii) any failure by the Company to comply with any of the provisions
of Section 4(b) of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at any
office or location other than as provided in Section 4(a)(i)(B) hereof or the
Company's requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the Effective
Date;
(iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy Section
11(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of
"Good Reason" made by the Executive shall be conclusive. Anything in this
Agreement to the contrary notwithstanding, a termination by the Executive for
any reason during the 30-day period immediately following the first anniversary
of the Effective Date shall be deemed to be termination for Good Reason for all
purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b) of
the Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than 30
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" shall mean:
8
<PAGE>
(i) if the Executive's employment is terminated by the Company for
Cause, or by the Executive for Good Reason, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be;
(ii) if the Executive's employment is terminated by the Company other
than for Cause or Disability, the Date of Termination shall be the date on which
the Company notifies the Executive of such termination; and
(iii) if the Executive's employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of death of the
Executive or the Disability Effective Date, as the case may be.
6. Obligations of the Company upon Termination.
(a) Good Reason; Other than for Cause, Death or Disability. If during
the Employment Period, the Company shall terminate the Executive's employment
other than for Cause or Disability, or the Executive shall terminate employment
for Good Reason:
(i) The Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
A. the sum of (1) the Executive's Annual Base Salary through the Date
of Termination to the extent not theretofore paid, (2) the product of (x) the
higher of (I) the Recent Annual Bonus and (II) the Annual Bonus paid or payable,
including any bonus or portion thereof which has been earned but deferred (and
annualized for any fiscal year consisting of less than 12 full months or during
which the Executive was employed for less than 12 full months), for the most
recently completed fiscal year during the Employment Period, if any (such higher
amount being referred to as the "Highest Annual Bonus") and (y) a fraction, the
numerator of which is the number of days in the current fiscal year through the
Date of Termination, and the denominator of which is 365 and (3) any
compensation previously deferred by the Executive (together with any accrued
interest or earnings thereon) and any accrued vacation pay, in each case to the
extent not theretofore paid (the sum of the amounts described in clauses (1),
(2) and (3) shall be hereinafter referred to as the "Accrued Obligations"), and
B. the amount equal to the product of (1) one and (2) the sum of (x)
the Executive's Annual Base Salary and (y) the Highest Annual Bonus, and
C. an amount equal to the excess of (a) the actuarial equivalent of
the benefit under the Company's qualified defined benefit retirement plan (the
"Retirement Plan") (utilizing actuarial assumptions no less favorable to the
9
<PAGE>
Executive than those in effect under the Company's Retirement Plan immediately
prior to the Effective Date), and any excess or supplemental retirement plan
related to the Retirement Plan in which the Executive participates (together,
the "SERP"), which the Executive would receive if the Executive's employment
continued for one year(s) after the Date of Termination assuming for this
purpose that all accrued benefits are fully vested, and assuming that the
Executive's compensation in each of the one year(s) is that required by Sections
4(b)(i) and 4(b)(ii), over (b) the actuarial equivalent of the Executive's
actual benefit (paid or payable), if any, under the Retirement Plan and the SERP
as of the Date of Termination, and
D. an amount equal to one times the total of the Employer Matching
Contribution credited to the Executive under the Company's 401(k) Savings Plan
(the "401(k) Plan") and the Supplemental Matching Accrual credited under the
Company's Supplemental Savings Plan (the "Excess Plan") during the 12-month
period immediately preceding the month of the Executive's Date of Termination,
such amount to be grossed up so that the amount the Executive actually receives
after payment of any federal or state taxes payable thereon equals the amount
first described above;
(ii) For one year(s) after the Executive's Date of Termination, or
such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue benefits to the
Executive and/or the Executive's family equal to those which would have been
provided to them in accordance with the plans, programs, practices and policies
described in Section 4(b)(iv) of this Agreement if the Executive's employment
had not been terminated; provided, however, that with respect to any of such
plans, programs, practices or policies requiring an employee contribution, the
Executive shall continue to pay the monthly employee contribution for same, and
provided further, that if the Executive becomes reemployed by another employer
and is eligible to receive medical or other welfare benefits under another
employer provided plan, the medical and other welfare benefits described herein
shall be secondary to those provided under such other plan during such
applicable period of eligibility;
(iii) The Company shall, at its sole expense as incurred, provide the
Executive with outplacement services, the scope and provider of which shall be
selected by the Executive in his sole discretion;
(iv) With respect to all options to purchase Common Stock held by the
Executive pursuant to a Company stock option plan on or prior to the Date of
Termination, irrespective of whether such options are then exercisable, the
Executive shall have the right, during the 60-day period after the Date of
Termination, to elect to surrender all or part of such options in exchange for a
cash payment by the Company to the Executive in an amount equal the number of
shares of Common Stock subject to the Executive's option multiplied by the
difference between (x) and (y) where (y) equals the purchase price per share
covered by the option and (x) equals the highest reported
10
<PAGE>
sale price of a share of Common Stock in any transaction reported on the New
York Stock Exchange during the 60-day period prior to and including the
Executive's Date of Termination; and with respect to all SARs held by the
Executive granted under the Company's Stock Appreciation Rights Plan on or prior
to the Date of Termination, irrespective of whether such SARs are then
exercisable, the Executive shall have the right, during the 60-day period after
the Date of Termination, to elect to surrender all or part of such SARs in
exchange for a cash payment by the Company to the Executive in an amount equal
to an amount equal to the number of SARs held by the Executive multiplied by the
difference between (x) and (y) where (y) equals the fair market value of such
SARs the date on which awarded and (x) equals the price set forth above. Such
cash payments shall be made within 30 days after the date of the Executive's
election; provided, however, that if the Executive's Date of Termination is
within six months after the date of grant of a particular option or SAR held by
the Executive and the Executive is subject to Section 16(b) of the Securities
Exchange Act of 1934, any cash payments related thereto shall be made on the
date which is six months and one day after the date of grant of such option or
SAR. Notwithstanding the foregoing, if any right granted pursuant to the
foregoing would make a Change of Control transaction ineligible for pooling of
interests accounting treatment under APB No. 16 that but for this Section
6(a)(iv) would otherwise be eligible for such accounting treatment, the
Executive shall receive shares of Common Stock with a Fair Market Value equal to
the cash that would otherwise be payable hereunder in substitution for the cash,
provided that any such shares of Common Stock so granted to the Executive shall
be registered under the Securities Act of 1933; any options or SARs outstanding
as of the Date of Termination and not then exercisable shall become fully
exercisable as of the Executive's Date of Termination, and to the extent the
Executive does not elect to surrender same for a cash payment (or the equivalent
number of shares of Common Stock) as provided above, such options and SARs shall
remain exercisable for seven months after the Executive's Date of Termination or
until the stated expiration of the stated term thereof, whichever is shorter;
restrictions applicable to any shares of Common Stock granted to the Executive
under the Company's Restricted Stock Incentive Plan shall lapse, as of the date
of the Executive's Date of Termination;
(v) All country club memberships, luncheon clubs and other memberships
which the Company was providing for the Executive's use at the time of Notice of
Termination is given shall, to the extent possible, be transferred and assigned
to the Executive at no cost to the Executive (other than income taxes owed), the
cost of transfer, if any, to be borne by the Company;
(vi) The Company shall either transfer to the Executive ownership and
title to the Executive's Company car at no cost to the Executive (other than
income taxes owed) or, if the Executive receives a monthly car allowance in lieu
of a Company car, pay the Executive a lump sum in cash within 30 days after the
Executive's Date of Termination an amount equal to one times the Executive's
annual car allowance;
11
<PAGE>
(vii) All benefits under the Company's Retirement Plan, the SERP, and
the 401(k) Plan and the Excess Plan, and any other similar plans, not already
vested shall be 100% vested, to the extent such vesting is permitted under the
Code (as defined below); and
(viii) To the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to receive
under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies (such other amounts and benefits shall be
hereinafter referred to as the "Other Benefits").
(b) Death. If the Executive's employment is terminated by reason of
the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be
paid to the Executive's estate or beneficiaries, as applicable, in a lump sum in
cash within 30 days after the Date of Termination. With respect to the
provision of Other Benefits, the term Other Benefits as utilized in this Section
6(b) shall include, without limitation, and the Executive's estate and/or
beneficiaries shall be entitled to receive, benefits equal to the benefits
provided by the Company and affiliated companies to the estates and
beneficiaries of peer executives of the Company and such affiliated companies
under such plans, programs, practices and policies relating to death benefits,
if any, in effect on the date of the Executive's death.
(c) Disability. If the Executive's employment is terminated by reason
of the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
30 days after the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(c) shall
include, without limitation, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits equal to
those generally provided by the Company and its affiliated companies to disabled
peer executives and/or their families in accordance with such plans programs,
practices and policies relating to disability, if any, in effect generally with
respect to other peer executives and their families at any time of the
Disability.
(d) Cause; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive (x) his Annual Base Salary through the Date of
Termination, (y) the amount of any compensation previously deferred by the
Executive, and (z) Other
12
<PAGE>
Benefits, in each case to the extent theretofore unpaid. If the Executive
voluntarily terminates employment during the Employment Period, excluding a
termination for Good Reason, this Agreement shall terminate without further
obligations to the Executive, other than for Accrued Obligations and the timely
payment or provision of Other Benefits. In such case, all Accrued Obligations
shall be paid to the Executive in a lump sum in cash within 30 days after the
Date of Termination.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor, subject to Section 12(f), shall
anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan, policy, practice or program of or
any contract or agreement with the Company or any of its affiliated companies at
or subsequent to the Date of Termination shall be payable in accordance with
such plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.
8. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expense which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereto (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code
of 1986, as amended (the "Code").
9. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 9) (a "Payment") would be subject to the excise tax
imposed by Section 4999
13
<PAGE>
of the Code or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Notwithstanding the foregoing provisions of this
Section 9(a), if it shall be determined that the Executive is entitled to a
Gross-Up Payment, but that the Executive, after taking into account the Payments
and the Gross-Up Payment, would not receive a net after-tax benefit of at least
$50,000 (taking into account both income taxes and any Excise Tax) as compared
to the net after-tax proceeds to the Executive resulting from an elimination of
the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an
amount (the "Reduced Amount") such that the receipt of Payments would not give
rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive
and the Payments, in the aggregate, shall be reduced to the Reduced Amount.
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination shall be made by Arthur
Andersen & Co. or, as provided below, such other certified public accounting
firm as may be designated by the Executive (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and the Executive
within 15 business days after the receipt of notice from the Executive that
there has been a Payment, or such earlier time as is requested by the Company.
In the event that the Accounting Firm is serving as accountant or auditor for
the individual, entity or group effecting the Change of Control, the Executive
shall appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 9, shall be paid by the Company to the Executive within
five days after the receipt of the Accounting Firm's determination. Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 9(c) and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and
14
<PAGE>
any such Underpayment shall be promptly paid by the Company to or for the
benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable, but no later than ten business days after the Executive is
informed in writing of such claim, and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which he gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim the Executive
shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claims; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and penalties)
incurred in connection with such costs and shall indemnify and hold the
Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 9(c), the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute such contest to determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with
15
<PAGE>
respect thereto) imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issues raised by
the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 9(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
10. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies, provided that it shall not apply to information which is or shall
become public knowledge (other than by acts by the Executive or representatives
of the Executive in violation of this Agreement), information that is developed
by the Executive independently of such information, or knowledge or data or
information that is disclosed to the Executive by a third party under no
obligation of confidentiality to the Company. After termination of the
Executive's employment with the Company, the Executive shall not, without the
prior written consent of the Company or as may otherwise be required by law or
legal process, communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no event shall an
asserted violation of the provisions of this Section 10 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement.
16
<PAGE>
11. Successors.
(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
12. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas, without reference to principles of conflict
of laws. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: ___________________
___________________
___________________
If to the Company: Weatherford International Incorporated
1360 Post Oak Blvd., Suite 1000
Houston, TX 77056
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
17
<PAGE>
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.
(f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is "at will"
and, subject to Section 1(a) hereof, prior to the Effective Date, the
Executive's employment and/or this Agreement may be terminated by either the
Executive or the Company at any time prior to the Effective Date, in which case
the Executive shall have no further rights under this Agreement. From and after
the Effective Date this Agreement shall supersede any other agreement between
the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
------------------------------------
WEATHERFORD INTERNATIONAL
INCORPORATED
By:
---------------------------------
18
<PAGE>
EXHIBIT 10.2
<PAGE>
FIRST AMENDMENT TO CHANGE OF CONTROL AGREEMENT
This First Amendment by and between Weatherford International Incorporated,
a Delaware corporation (the "Company"), and Philip Burguieres (the "Executive"),
dated as of February 11, 1994.
RECITALS:
A. The Company and the Executive have entered into that certain Change of
Control Agreement dated as of December 9, 1993 (the "Agreement") establishing
various matters related to the Executive's compensation and benefits in the
event of a Change of Control (as defined in the Agreement).
B. Certain benefits previously approved by the Board of Directors of the
Company were inadvertently omitted from the Agreement and such benefits are
included in the Agreement by virtue of this Amendment.
C. In addition, the parties have agreed to amend certain provisions of
the Agreement dealing with the Executive's rights with respect to stock-related
benefits and other benefits.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Subsection 4(b) is hereby amended to include the following subsection
(ix):
"(ix) Options/SARs. Upon the occurrence of a Change of Control
pursuant to which the Company is not the survivor (or survives only as a
subsidiary of another entity), the surviving corporation shall issue to the
Executive options and tandem stock appreciation rights ("SARs"), if
applicable, in substitution or replacement of all outstanding options or
SARs issued pursuant to a Company stock option plan or the Company's Stock
Appreciation Rights Plan, respectively, any such options and SARs to have
terms and conditions similar to the terms of any such original options and
SARs."
2. Subsection 6(a)(i) is hereby amended by deleting the existing clause C
and adding the following clauses C and D:
"C. an amount equal to the excess of (a) the actuarial equivalent of
the benefit under the Company's qualified defined benefit retirement plan
(the "Retirement Plan") (utilizing actuarial assumptions no less favorable
to the Executive than those in effect under the
1
<PAGE>
Company's Retirement Plan immediately prior to the Effective Date), and any
excess or supplemental retirement plan related to the Retirement Plan in
which the Executive participates (together, the "SERP"), which the
Executive would receive if the Executive's employment continued for three
year(s) after the Date of Termination, assuming for this purpose that all
accrued benefits are fully vested, and assuming that the Executive's
compensation in each of the three year(s) is that required by Sections
4(b)(i) and 4(b)(ii), over (b) the actuarial equivalent of the Executive's
actual benefit (paid or payable), if any, under the Retirement Plan and the
SERP as of the Date of Termination, and
D. an amount equal to three times the total of the Employer Matching
Contribution credited to the Executive under the Company's 401(k) Savings
Plan (the "401(k) Plan") and the Supplemental Matching Accrual credited
under the Company's Supplemental Savings Plan (the "Excess Plan") during
the 12-month period immediately preceding the month of the Executive's Date
of Termination, such amount to be grossed up so that the amount the
Executive actually receives after payment of any federal or state taxes
payable thereon equals the amount first described above;"
3. Subsection 6(a)(iv) is hereby amended by deleting the existing
language and adding the following language:
"(iv) With respect to all options to purchase Common Stock held by
the Executive pursuant to a Company stock option plan on or prior to the
Date of Termination, irrespective of whether such options are then
exercisable, the Executive shall have the right, during the 60-day period
after the Date of Termination, to elect to surrender all or part of such
options in exchange for a cash payment by the Company to the Executive in
an amount equal the number of shares of Common Stock subject to the
Executive's option multiplied by the difference between (x) and (y) where
(y) equals the purchase price per share covered by the option and (x)
equals the highest reported sale price of a share of Common Stock in any
transaction reported on the New York Stock Exchange during the 60-day
period prior to and including the Executive's Date of Termination; and with
respect to all stock appreciation rights ("SARs") held by the Executive
granted under the Company's Stock Appreciation Rights Plan on or prior to
the Date of Termination, irrespective of whether such SARs are then
exercisable, the Executive shall have the right, during the 60-day period
after the Date of Termination, to elect to surrender all or part of such
SARs in exchange for a cash payment by the Company to the Executive in an
2
<PAGE>
amount equal to an amount equal to the number of SARs held by the Executive
multiplied by the difference between (x) and (y) where (y) equals the fair
market value of such SARs the date on which awarded and (x) equals the
price set forth above. Such cash payments shall be made within 30 days
after the date of the Executive's election; provided, however, that if the
Executive's Date of Termination is within six months after the date of
grant of a particular option or SAR held by the Executive and the Executive
is subject to Section 16(b) of the Securities Exchange Act of 1934, any
cash payments related thereto shall be made on the day which is six months
and one day after the date of grant of such option or SAR. Notwithstanding
the foregoing, if any right granted pursuant to the foregoing would make a
Change of Control transaction ineligible for pooling of interests
accounting treatment under APB No. 16 that but for this Section 6(a)(iv)
would otherwise be eligible for such accounting treatment, the Executive
shall receive shares of Common Stock with a Fair Market Value equal to the
cash that would otherwise be payable hereunder in substitution for the
cash, provided that any such shares of Common Stock so granted to the
Executive shall be registered under the Securities Act of 1933; any options
or SARs outstanding as of the Date of Termination and not then exercisable
shall become fully exercisable as of the Executive's Date of Termination,
and to the extent the Executive does not elect to surrender same for a cash
payment (or the equivalent number of shares of Common Stock) as provided
above, such options and SARs shall remain exercisable for seven months
after the Executive's Date of Termination or until the stated expiration of
the stated term thereof, whichever is shorter; restrictions applicable to
any shares of Common Stock granted to the Executive under the Company's
Restricted Stock Incentive Plan shall lapse, as of the date of the
Executive's Date of Termination;"
4. Subsection 6(a)(vi) is hereby amended by deleting the existing
language and adding the following language:
"(vi) The Company shall either transfer to the Executive ownership
and title to the Executive's Company car at no cost to the Executive (other
than income taxes owed) or, if the Executive receives a monthly car
allowance in lieu of a Company car, pay the Executive a lump sum in cash
within 30 days after the Executive's Date of Termination an amount equal to
three times the Executive's annual car allowance;"
5. Subsection 6(a)(vii) is hereby renumbered Section 6(a)(viii) and the
following language shall be inserted as Subsection 6(a)(vii):
3
<PAGE>
"(vii) All benefits under the Company's Retirement Plan, the SERP,
the 401(k) Plan and the Excess Plan, and any other similar plans, not
already vested shall be 100% vested, to the extent such vesting is
permitted under the Code (as defined below); and"
6. The remainder of the Agreement shall remain in full force and effect
as written.
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as of the day and year first above written.
WEATHERFORD INTERNATIONAL
INCORPORATED
By:
-----------------------------
-----------------------------
Philip Burguieres
4
<PAGE>
The following persons have entered into a First Amendment to Change of Control
Agreement dated as of February 11, 1994 in the form attached hereto:
James D. Green
Gay S. Mayeux
Jon Nicholson
Weldon Walker
<PAGE>
FIRST AMENDMENT TO CHANGE OF CONTROL AGREEMENT
This First Amendment by and between Weatherford International Incorporated,
a Delaware corporation (the "Company"), and ________________ (the "Executive"),
dated as of February 11, 1994.
RECITALS:
A. The Company and the Executive have entered into that certain Change of
Control Agreement dated as of December 9, 1993 (the "Agreement") establishing
various matters related to the Executive's compensation and benefits in the
event of a Change of Control (as defined in the Agreement).
B. Certain benefits previously approved by the Board of Directors of the
Company were inadvertently omitted from the Agreement and such benefits are
included in the Agreement by virtue of this Amendment.
C. In addition, the parties have agreed to amend certain provisions of
the Agreement dealing with the Executive's rights with respect to stock-related
benefits and other benefits.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Subsection 4(b) is hereby amended to include the following subsection
(ix):
"(ix) Options/SARs. Upon the occurrence of a Change of Control
pursuant to which the Company is not the survivor (or survives only as a
subsidiary of another entity), the surviving corporation shall issue to the
Executive options and tandem stock appreciation rights ("SARs"), if
applicable, in substitution or replacement of all outstanding options or
SARs issued pursuant to a Company stock option plan or the Company's Stock
Appreciation Rights Plan, respectively, any such options and SARs to have
terms and conditions similar to the terms of any such original options and
SARs."
2. Subsection 6(a)(i) is hereby amended by deleting the existing clause C
and adding the following clauses C and D:
"C. an amount equal to the excess of (a) the actuarial equivalent of
the benefit under the Company's qualified defined benefit retirement plan
(the "Retirement Plan") (utilizing actuarial assumptions no less favorable
to the Executive than those in effect under the
1
<PAGE>
Company's Retirement Plan immediately prior to the Effective Date), and any
excess or supplemental retirement plan related to the Retirement Plan in
which the Executive participates (together, the "SERP"), which the
Executive would receive if the Executive's employment continued for one
year(s) after the Date of Termination, assuming for this purpose that all
accrued benefits are fully vested, and assuming that the Executive's
compensation in each of the one year(s) is that required by Sections
4(b)(i) and 4(b)(ii), over (b) the actuarial equivalent of the Executive's
actual benefit (paid or payable), if any, under the Retirement Plan and the
SERP as of the Date of Termination, and
D. an amount equal to one times the total of the Employer Matching
Contribution credited to the Executive under the Company's 401(k) Savings
Plan (the "401(k) Plan") and the Supplemental Matching Accrual credited
under the Company's Supplemental Savings Plan (the "Excess Plan") during
the 12-month period immediately preceding the month of the Executive's Date
of Termination, such amount to be grossed up so that the amount the
Executive actually receives after payment of any federal or state taxes
payable thereon equals the amount first described above;"
3. Subsection 6(a)(iv) is hereby amended by deleting the existing
language and adding the following language:
"(iv) With respect to all options to purchase Common Stock held by
the Executive pursuant to a Company stock option plan on or prior to the
Date of Termination, irrespective of whether such options are then
exercisable, the Executive shall have the right, during the 60-day period
after the Date of Termination, to elect to surrender all or part of such
options in exchange for a cash payment by the Company to the Executive in
an amount equal the number of shares of Common Stock subject to the
Executive's option multiplied by the difference between (x) and (y) where
(y) equals the purchase price per share covered by the option and (x)
equals the highest reported sale price of a share of Common Stock in any
transaction reported on the New York Stock Exchange during the 60-day
period prior to and including the Executive's Date of Termination; and with
respect to all stock appreciation rights ("SARs") held by the Executive
granted under the Company's Stock Appreciation Rights Plan on or prior to
the Date of Termination, irrespective of whether such SARs are then
exercisable, the Executive shall have the right, during the 60-day period
after the Date of Termination, to elect to surrender all or part of such
SARs in exchange for a cash payment by the Company to the Executive in an
2
<PAGE>
amount equal to an amount equal to the number of SARs held by the Executive
multiplied by the difference between (x) and (y) where (y) equals the fair
market value of such SARs the date on which awarded and (x) equals the
price set forth above. Such cash payments shall be made within 30 days
after the date of the Executive's election; provided, however, that if the
Executive's Date of Termination is within six months after the date of
grant of a particular option or SAR held by the Executive and the Executive
is subject to Section 16(b) of the Securities Exchange Act of 1934, any
cash payments related thereto shall be made on the day which is six months
and one day after the date of grant of such option or SAR. Notwithstanding
the foregoing, if any right granted pursuant to the foregoing would make a
Change of Control transaction ineligible for pooling of interests
accounting treatment under APB No. 16 that but for this Section 6(a)(iv)
would otherwise be eligible for such accounting treatment, the Executive
shall receive shares of Common Stock with a Fair Market Value equal to the
cash that would otherwise be payable hereunder in substitution for the
cash, provided that any such shares of Common Stock so granted to the
Executive shall be registered under the Securities Act of 1933; any options
or SARs outstanding as of the Date of Termination and not then exercisable
shall become fully exercisable as of the Executive's Date of Termination,
and to the extent the Executive does not elect to surrender same for a cash
payment (or the equivalent number of shares of Common Stock) as provided
above, such options and SARs shall remain exercisable for seven months
after the Executive's Date of Termination or until the stated expiration of
the stated term thereof, whichever is shorter; restrictions applicable to
any shares of Common Stock granted to the Executive under the Company's
Restricted Stock Incentive Plan shall lapse, as of the date of the
Executive's Date of Termination;"
4. Subsection 6(a)(vi) is hereby amended by deleting the existing
language and adding the following language:
"(vi) The Company shall either transfer to the Executive ownership
and title to the Executive's Company car at no cost to the Executive (other
than income taxes owed) or, if the Executive receives a monthly car
allowance in lieu of a Company car, pay the Executive a lump sum in cash
within 30 days after the Executive's Date of Termination an amount equal to
one times the Executive's annual car allowance;"
5. Subsection 6(a)(vii) is hereby renumbered Section 6(a)(viii) and the
following language shall be inserted as Subsection 6(a)(vii):
3
<PAGE>
"(vii) All benefits under the Company's Retirement Plan, the SERP,
the 401(k) Plan and the Excess Plan, and any other similar plans, not
already vested shall be 100% vested, to the extent such vesting is
permitted under the Code (as defined below); and"
6. The remainder of the Agreement shall remain in full force and effect
as written.
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as of the day and year first above written.
WEATHERFORD INTERNATIONAL
INCORPORATED
By:
-----------------------------
-----------------------------
4
<PAGE>
The following persons have entered into a First Amendment to Change of Control
Agreement dated as of February 11, 1994 in the form attached hereto:
James R. Burke
M. E. Eagles
Norman W. Nolen
H. Suzanne Thomas
<PAGE>
FIRST AMENDMENT TO CHANGE OF CONTROL AGREEMENT
This First Amendment by and between Weatherford International Incorporated,
a Delaware corporation (the "Company"), and ________________ (the "Executive"),
dated as of February 11, 1994.
RECITALS:
A. The Company and the Executive have entered into that certain Change of
Control Agreement dated as of December 9, 1993 (the "Agreement") establishing
various matters related to the Executive's compensation and benefits in the
event of a Change of Control (as defined in the Agreement).
B. Certain benefits previously approved by the Board of Directors of the
Company were inadvertently omitted from the Agreement and such benefits are
included in the Agreement by virtue of this Amendment.
C. In addition, the parties have agreed to amend certain provisions of
the Agreement dealing with the Executive's rights with respect to stock-related
benefits and other benefits.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Subsection 4(b) is hereby amended to include the following subsection
(ix):
"(ix) Options/SARs. Upon the occurrence of a Change of Control
pursuant to which the Company is not the survivor (or survives only as a
subsidiary of another entity), the surviving corporation shall issue to the
Executive options and tandem stock appreciation rights ("SARs"), if
applicable, in substitution or replacement of all outstanding options or
SARs issued pursuant to a Company stock option plan or the Company's Stock
Appreciation Rights Plan, respectively, any such options and SARs to have
terms and conditions similar to the terms of any such original options and
SARs."
2. Subsection 6(a)(i) is hereby amended by deleting the existing clause C
and adding the following clauses C and D:
"C. an amount equal to the excess of (a) the actuarial equivalent of
the benefit under the Company's qualified defined benefit retirement plan
(the "Retirement Plan") (utilizing actuarial assumptions no less favorable
to the Executive than those in effect under the
1
<PAGE>
Company's Retirement Plan immediately prior to the Effective Date), and any
excess or supplemental retirement plan related to the Retirement Plan in
which the Executive participates (together, the "SERP"), which the
Executive would receive if the Executive's employment continued for two
year(s) after the Date of Termination, assuming for this purpose that all
accrued benefits are fully vested, and assuming that the Executive's
compensation in each of the two year(s) is that required by Sections
4(b)(i) and 4(b)(ii), over (b) the actuarial equivalent of the Executive's
actual benefit (paid or payable), if any, under the Retirement Plan and the
SERP as of the Date of Termination, and
D. an amount equal to two times the total of the Employer Matching
Contribution credited to the Executive under the Company's 401(k) Savings
Plan (the "401(k) Plan") and the Supplemental Matching Accrual credited
under the Company's Supplemental Savings Plan (the "Excess Plan") during
the 12-month period immediately preceding the month of the Executive's Date
of Termination, such amount to be grossed up so that the amount the
Executive actually receives after payment of any federal or state taxes
payable thereon equals the amount first described above;"
3. Subsection 6(a)(iv) is hereby amended by deleting the existing
language and adding the following language:
"(iv) With respect to all options to purchase Common Stock held by
the Executive pursuant to a Company stock option plan on or prior to the
Date of Termination, irrespective of whether such options are then
exercisable, the Executive shall have the right, during the 60-day period
after the Date of Termination, to elect to surrender all or part of such
options in exchange for a cash payment by the Company to the Executive in
an amount equal the number of shares of Common Stock subject to the
Executive's option multiplied by the difference between (x) and (y) where
(y) equals the purchase price per share covered by the option and (x)
equals the highest reported sale price of a share of Common Stock in any
transaction reported on the New York Stock Exchange during the 60-day
period prior to and including the Executive's Date of Termination; and with
respect to all stock appreciation rights ("SARs") held by the Executive
granted under the Company's Stock Appreciation Rights Plan on or prior to
the Date of Termination, irrespective of whether such SARs are then
exercisable, the Executive shall have the right, during the 60-day period
after the Date of Termination, to elect to surrender all or part of such
SARs in exchange for a cash payment by the Company to the Executive in an
2
<PAGE>
amount equal to an amount equal to the number of SARs held by the Executive
multiplied by the difference between (x) and (y) where (y) equals the fair
market value of such SARs the date on which awarded and (x) equals the
price set forth above. Such cash payments shall be made within 30 days
after the date of the Executive's election; provided, however, that if the
Executive's Date of Termination is within six months after the date of
grant of a particular option or SAR held by the Executive and the Executive
is subject to Section 16(b) of the Securities Exchange Act of 1934, any
cash payments related thereto shall be made on the day which is six months
and one day after the date of grant of such option or SAR. Notwithstanding
the foregoing, if any right granted pursuant to the foregoing would make a
Change of Control transaction ineligible for pooling of interests
accounting treatment under APB No. 16 that but for this Section 6(a)(iv)
would otherwise be eligible for such accounting treatment, the Executive
shall receive shares of Common Stock with a Fair Market Value equal to the
cash that would otherwise be payable hereunder in substitution for the
cash, provided that any such shares of Common Stock so granted to the
Executive shall be registered under the Securities Act of 1933; any options
or SARs outstanding as of the Date of Termination and not then exercisable
shall become fully exercisable as of the Executive's Date of Termination,
and to the extent the Executive does not elect to surrender same for a cash
payment (or the equivalent number of shares of Common Stock) as provided
above, such options and SARs shall remain exercisable for seven months
after the Executive's Date of Termination or until the stated expiration of
the stated term thereof, whichever is shorter; restrictions applicable to
any shares of Common Stock granted to the Executive under the Company's
Restricted Stock Incentive Plan shall lapse, as of the date of the
Executive's Date of Termination;"
4. Subsection 6(a)(vi) is hereby amended by deleting the existing
language and adding the following language:
"(vi) The Company shall either transfer to the Executive ownership
and title to the Executive's Company car at no cost to the Executive (other
than income taxes owed) or, if the Executive receives a monthly car
allowance in lieu of a Company car, pay the Executive a lump sum in cash
within 30 days after the Executive's Date of Termination an amount equal to
two times the Executive's annual car allowance;"
5. Subsection 6(a)(vii) is hereby renumbered Section 6(a)(viii) and the
following language shall be inserted as Subsection 6(a)(vii):
3
<PAGE>
"(vii) All benefits under the Company's Retirement Plan, the SERP,
the 401(k) Plan and the Excess Plan, and any other similar plans, not
already vested shall be 100% vested, to the extent such vesting is
permitted under the Code (as defined below); and"
6. The remainder of the Agreement shall remain in full force and effect
as written.
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as of the day and year first above written.
WEATHERFORD INTERNATIONAL
INCORPORATED
By:
-------------------------------
-------------------------------
4
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 11,475
<SECURITIES> 0
<RECEIVABLES> 113,974
<ALLOWANCES> 7,896
<INVENTORY> 52,264
<CURRENT-ASSETS> 178,321
<PP&E> 557,700
<DEPRECIATION> 339,182
<TOTAL-ASSETS> 447,478
<CURRENT-LIABILITIES> 83,296
<BONDS> 53,692
<COMMON> 5,434
0
0
<OTHER-SE> 288,010
<TOTAL-LIABILITY-AND-EQUITY> 447,478
<SALES> 101,034
<TOTAL-REVENUES> 101,034
<CGS> 73,315
<TOTAL-COSTS> 73,315
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,821
<INCOME-PRETAX> 12,086
<INCOME-TAX> 2,930
<INCOME-CONTINUING> 9,156
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,156
<EPS-PRIMARY> 0.17
<EPS-DILUTED> 0.17
</TABLE>
