<PAGE>
As filed with the Securities and Exchange Commission on October 5, 1995
Registration No. 33-__________
- -----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------
WEATHERFORD ENTERRA, INC.
(Exact name of issuer as specified in its charter)
Delaware 74-1681642
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1360 Post Oak Boulevard, Suite 1000, Houston, Texas 77056-3098
(Address of Principal Executive Offices) (Zip Code)
Weatherford Enterra, Inc. 1991 Stock Option Plan
Weatherford Enterra, Inc. Restricted Stock Incentive Plan
D. Dale Wood Stock Option Agreement
Enterra Corporation Severance Agreements/Weatherford International Incorporated
Change of Control Agreements
- ------------------------------------------------------------------------------
(Full title of the plans)
H. SUZANNE THOMAS
Sr. Vice President, Secretary and General Counsel
Weatherford Enterra, Inc.
1360 Post Oak Boulevard, Suite 1000
Houston, Texas 77056-3098
(Name and address of agent for service)
(713) 439-9400
(Telephone number, including area code, of agent for service)
--------------
Copies to:
FULBRIGHT & JAWORSKI L.L.P.
ATTN: CHARLES L. STRAUSS
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010-3095
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE PRICE FEE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 1,959,500
$.10 par value shares (1) $12.94 $25,355,930(2) $8,743.43(2)
- --------------------------------------------------------------------------------------
</TABLE>
(1) There are also registered hereby such indeterminate number of
shares of Common Stock as may become issuable by reason of the anti-dilution
provisions of the Weatherford Enterra, Inc. 1991 Stock Option Plan;
Weatherford Enterra, Inc. Restricted Stock Incentive Plan; D. Dale Wood
Stock Option Agreement; and Enterra Corporation Severance
Agreements/Weatherford International Incorporated Change of Control
Agreements.
(2) Pursuant to Rule 457(h), the maximum aggregate offering price is
estimated, solely for the purpose of determining the registration fee, on
the basis of the average of the high and low prices of the Common Stock as
reported on the New York Stock Exchange on October 3, 1995.
==============================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been filed by
Weatherford Enterra, Inc., a Delaware corporation (the
"Company"), with the Securities and Exchange Commission (the
"Commission"), are incorporated by reference into this
Registration Statement:
1. Annual Report on Form 10-K of the
Company for the year ended December 31, 1994,
filed by the Company under the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
2. Quarterly Report on Form 10-Q of the
Company for the quarter ended March 31, 1995.
3. Quarterly Report on Form 10-Q of the
Company for the quarter ended June 30, 1995.
4. Current Report on Form 8-K of the
Company filed with the Commission on July 8, 1995.
Any document filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Registration Statement and prior to the filing of a post-
effective amendment hereto which indicates that all securities
offered have been sold or which deregisters all such securities
then remaining unsold, shall be deemed to be incorporated herein
by reference and to be a part hereof from the date of filing of
such document.
ITEM 4. DESCRIPTION OF SECURITIES.
The Company is authorized by its Restated Certificate of
Incorporation (the "Certificate") to issue 80,000,000 shares of
Common Stock, $.10 par value, of which 27,182,892 shares
were legally issued and outstanding on September 30, 1995 and
1,000,000 shares of Serial Preferred Stock, $1.00 par value, of
which no shares were issued and outstanding on September 30,
1995. The Company held 32,104 shares of Common Stock in
its treasury as of such date. On October 5, 1995, the Company
issued approximately 24,000,000 shares of Common Stock in
conjunction with the merger of Enterra Corporation into
Weatherford International Incorporated, the predecessor of the
Company. Also on October 5, 1995, the Company effected a one-
for-two reverse stock split of shares of Common Stock. All of
the share numbers stated in this paragraph reflect such reverse
stock split.
The Board of Directors of the Company is authorized by the
Certificate to provide for the issuance of one or more series of
Serial Preferred Stock. The Board of Directors has the power to
fix various terms with respect to each such series, including
voting powers, designations, preferences,
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dividend rates, conversion and exchange provisions, redemption
provisions and the amounts which holders are entitled to receive
upon any liquidation, dissolution or winding up of the Company.
All outstanding shares of Common Stock are fully paid and
nonassessable. The holders of Common Stock are entitled to one
vote for each share on all matters voted on by stockholders,
including the election of directors, and are not permitted to
cumulate their votes for the election of directors. The holders
of Common Stock have no preemptive rights to subscribe for or
purchase any additional securities issued by the Company.
Subject to the preferential rights of the holders of the Serial
Preferred Stock, if any is outstanding, the holders of Common
Stock are entitled to receive any dividends which may be declared
by the Board of Directors out of funds legally available therefor
and to share pro rata in the net assets of the Company upon
liquidation. However, dividends have not been paid on the Common
Stock since December 1982, and the Company does not anticipate
paying dividends on the Common Stock at any time in the
foreseeable future.
Certain provisions of the Certificate and By-Laws of the
Company could have the effect of preventing a change in control
of the Company in certain situations. These provisions generally
provide for (a) the classification of the Board of Directors of
the Company into three classes having staggered terms of three
years each; (b) the removal of directors only for cause and with
the approval of holders of at least 80% of the then outstanding
voting stock entitled to vote for the election of directors; (c)
the filling of any vacancy on the Board of Directors by the
remaining directors then in office; (d) the limitation of the
number of directors to a minimum of six and a maximum of fifteen,
with the exact number to be determined by the Board of Directors;
(e) the elimination of the stockholder written consent procedure;
(f) the calling of special meetings of stockholders only by the
Board of Directors; (g) the requirement that certain business
combinations involving the Company and any beneficial owner of
20% or more of the outstanding voting securities of the Company
be approved by holders of at least 80% of the then outstanding
shares of voting stock of the Company, including those held by
such beneficial owner, unless the business combination is
approved by the continuing directors then in office or certain
minimum price requirements are met; and (h) the increased
stockholder vote required to amend, repeal or adopt any provision
inconsistent with the foregoing provisions to 80% or more of the
then outstanding shares of voting stock.
The transfer agent and registrar for the Common Stock is
American Stock Transfer and Trust Company.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the issuance of the shares of Common Stock
offered hereby has been passed upon for the Company by H. Suzanne
Thomas, Sr. Vice President, Secretary and General Counsel of the
Company. Ms. Thomas is a participant in the Weatherford Enterra,
Inc. 1991 Stock Option Plan and the Weatherford Enterra, Inc.
Restricted Stock Incentive Plan and has a Weatherford
International Incorporated Change of Control Agreement. As of
the date hereof, Ms. Thomas owned beneficially 37,221 shares of
Common Stock and held options to purchase an additional 28,000
shares of Common Stock (such numbers reflect the one-for-two
reverse stock split effected by the Company on October 5, 1995).
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<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate contains a provision that eliminates the
personal monetary liability of a director to the Company and its
stockholders for breach of his fiduciary duty of care as a
director to the extent currently allowed under the Delaware
General Corporation Law ("DGCL"). If a director were to breach
the duty of care in performing his duties as a director, neither
the Company nor its stockholders could recover monetary damages
from the director, and the only course of action available to the
Company's stockholders would be equitable remedies, such as an
action to enjoin or rescind a transaction involving a breach of
the fiduciary duty of care. To the extent certain claims against
directors are limited to equitable remedies, the provision in the
Certificate may reduce the likelihood of derivative litigation
and may discourage stockholders or management from initiating
litigation against directors for breach of their duty of care.
Additionally, equitable remedies may not be effective in many
situations. If a stockholder's only remedy is to enjoin the
completion of the Board of Directors' action, this remedy would
be ineffective if the stockholder does not become aware of a
transaction or event until after it has been completed. In such
a situation, it is possible that the stockholders and the Company
would have no effective remedy against the directors. The
directors do not have liability for monetary damages for grossly
negligent business decisions (in violation of their duty of
care), including decisions made in connection with attempts to
acquire the Company. Liability for monetary damages remains for
(i) any breach of the duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law,
(iii) payment of an improper dividend or improper repurchase of
the Company's stock under Section 174 of the DGCL or (iv) any
transaction from which the director derived an improper personal
benefit. The Certificate further provides that in the event the
DGCL is amended to allow the further elimination or limitation of
the liability of directors, then the liability of the Company's
directors shall be limited to the fullest extent permitted by the
amended DGCL.
The DGCL permits a corporation to indemnify certain
persons, including officers and directors, who were or are (or
are threatened to be made) parties to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
right of the corporation) by reason of their being officers or
directors of the corporation. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him, provided the
officer or director acted in good faith and in a manner he
reasonably believed to be in or not opposed to the corporation's
best interests and, in the case of criminal proceedings, provided
he had no reasonable cause to believe that his conduct was
unlawful. The By-Laws of the Company provide indemnification to
the fullest extent allowed pursuant to the foregoing provisions
of the DGCL.
The DGCL further permits a corporation to indemnify
certain persons, including officers and directors, who were or
are (or are threatened to be made) parties to any threatened,
pending or completed action, suit or proceeding by or in the
right of the corporation to procure a judgment in its favor by
reason of their status officers as or directors of the
corporation. The indemnity may include expenses (including
attorneys' fees) actually and reasonably incurred by him,
provided the officer or director acted in good faith and in a
manner he reasonably believed to be in or not opposed to the
corporation's best interests. However, no such person will be
indemnified as to matters for which he is found to be liable for
negligence or misconduct in the performance of his duties to the
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<PAGE>
corporation unless, and only to the extent that, indemnification
is ordered by a court. The By-Laws of the Company provide
indemnification to the fullest extent allowed pursuant to the
foregoing provisions of the DGCL.
The Company also has entered, or will enter, into an
indemnification agreement with each of its directors and certain
of its officers. Each such indemnification agreement provides
for indemnification to the fullest extent permitted by the DGCL
and for the advancement of expenses, including attorneys' fees
and other costs, expenses and obligations, paid or incurred in
connection with investigating, defending, being a witness in or
participating in (including on appeal) any threatened, pending or
completed action, suit or proceeding related to the fact that
such director was serving for or at the request of the Company.
To the extent that the Board of Directors or the stockholders of
the Company may in the future wish to limit or repeal the ability
of the Company to indemnify or advance expenses to officers and
directors, such repeal or limitation may not be effective as to
officers and directors who are parties to an indemnification
agreement, since their rights to full protection are
contractually assured by the indemnification agreement.
Delaware corporations also are authorized to obtain
insurance to protect officers and directors from certain
liabilities, including liabilities against which the corporation
cannot indemnify its directors and officers. The Company
currently has in effect a directors' and officers' liability
insurance policy providing aggregate coverage in the amount of
$10,000,000.
All of the foregoing indemnification provisions provide
that such provisions are not to be deemed exclusive of any other
right to indemnity to which a director or officer may be entitled
under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933, as amended (the "Securities Act"),
may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, or otherwise,
the Company has been informed that in the opinion of the
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following is a list of all Exhibits filed with this
Registration Statement:
EXHIBIT NO.
*4.1-- Restated Certificate of Incorporation of the Company,
as amended through October 5, 1995.
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<PAGE>
4.2-- By-Laws of the Company, as amended through March 17,
1994 (incorporated by reference to Exhibit 3.1 to the
Company's Current Report on Form 8-K dated April 28,
1994 (File No. 1-7867)).
*4.3-- Weatherford Enterra, Inc. 1991 Stock Option Plan, as
amended through October 5, 1995.
*4.4-- Weatherford Enterra, Inc. Restricted Stock Incentive
Plan, as amended through October 5, 1995.
*4.5-- D. Dale Wood Stock Option Agreement dated October 5,
1995 between D. Dale Wood and the Company.
*4.6-- Enterra Corporation Severance Agreement with M.
Timothy Carey, C. Paul Evans, Brian Charles Goff,
Steven C. Grant, Edward C. Grimes, Steven W. Krablin,
Windell D. Norris, Jr., J. Joseph Percle, Michael
Peter Smith, Michael L. Stansberry and D. Dale Wood.
*4.7-- Amendment 1995-1 to Severance Agreement with M.
Timothy Carey, C. Paul Evans, Brian Charles Goff,
Steven C. Grant, Edward C. Grimes, Steven W. Krablin,
Windell D. Norris, Jr., J. Joseph Percle, Michael
Peter Smith, Michael L. Stansberry and D. Dale Wood.
4.8-- Weatherford International Incorporated Change of
Control Agreements with Philip Burguieres, James R.
Burke, M.E. Eagles, Norman W. Nolen and H. Suzanne
Thomas (incorporated by reference to Exhibit 10.5 to
the Company's Annual Report on Form 10-K for the year
ended December 31, 1993 (File No. 1-7867)); James D.
Green, Gay S. Mayeux, Jon Nicholson and Weldon W.
Walker (incorporated by reference to Exhibit 10.4 to
the Company's Annual Report on Form 10-K for the year
ended December 31, 1994 (File No. 1-7867)); and
Philip D. Gardner, Robert A. Seekely and F. Thomas
Tilton (incorporated by reference to Exhibit 10.1
to the Company's Quarterly Report Form 10-Q for the
quarter ended March 31, 1995 (File No. 1-7867)).
4.9-- 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
(incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report Form on Form 10-Q for the
quarter ended March 31, 1995 (File No. 1-7867)); and
Philip D. Gardner, Robert A. Seekely and Frederick
T. Tilton (incorporated by reference to Exhibit
10.2 to the Company's Registration Statement on Form
S-4 (Registration No. 33-62195)).
4.10-- Second 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
(incorporated by reference to Exhibit 10.1 to the
Company's Registration Statement on Form S-4
(Registration No. 33-62195)).
*5.1-- Opinion of H. Suzanne Thomas, General Counsel of the
Company.
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<PAGE>
*23.1-- Consent of Arthur Andersen LLP.
*23.2-- Consent of H. Suzanne Thomas, General Counsel of the
Company (contained in Exhibit 5.1 hereto).
*24.1--Power of Attorney (contained on page II-9 hereof).
__________
* Filed herewith.
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<PAGE>
ITEM 9. UNDERTAKINGS.
The undersigned hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
hereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in this Registration Statement or any material change to
such information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (i) and (ii) do not apply if
the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the Company pursuant to Section 13 or Section 15(d) of
the Exchange Act, that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Exchange Act, and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Exchange Act, that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director,
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<PAGE>
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, as amended, Weatherford Enterra, Inc. certifies that it has
reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on October 5, 1995.
WEATHERFORD ENTERRA, INC.
By: /s/ Philip Burguieres
-----------------------------
Philip Burguieres
Chairman, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
POWER OF ATTORNEY
Each person whose signature appears below appoints Philip
Burguieres and H. Suzanne Thomas, and both of them, either of
whom may act without the joinder of the other, as his true and
lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him, and in his name, place
and stead, in any and all capacities to sign any and all
amendments (including post-effective amendments to this
Registration Statement), and to file the same, with all exhibits
thereto and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-
in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-
fact and agent or their substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
SIGNATURE TITLE DATE
--------- ----- ----
Chairman, President,
/s/ Philip Burguieres Chief Executive October 5, 1995
- ------------------------ Officer and Director
(Philip Burguieres) (Principal Executive
Officer)
Senior Vice President,
Chief Financial
/s/ Norman W. Nolen Officer and Treasurer October 5, 1995
- ------------------------ (Principal Financial and
(Norman W. Nolen) Accounting Officer)
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<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Thomas N. Amonett Director October 5, 1995
- ------------------------
(Thomas N. Amonett)
Director
- ------------------------
(William E. Greehey)
/s/ John A. Hill Director October 5, 1995
- ------------------------
(John A. Hill)
/s/ John W. Johnson Director October 5, 1995
- ------------------------
(John W. Johnson)
/s/ William E. Macaulay Director October 5, 1995
- ------------------------
(William E. Macaulay)
/s/ Robert K. Moses, Jr. Director October 5, 1995
- ------------------------
(Robert K. Moses, Jr.)
/s/ Robert L. Parker, Sr. Director October 5, 1995
- ------------------------
(Robert L. Parker, Sr.)
/s/ R. Rudolph Reinfrank Director October 5, 1995
- ------------------------
(R. Rudolph Reinfrank)
/s/ Roger M. Widmann Director October 5, 1995
- ------------------------
(Roger M. Widmann)
II-10
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ------- --------------------------------------------------------
*4.1 -- Restated Certificate of Incorporation of the Company,
as amended through October 5, 1995.
4.2 -- By-Laws of the Company, as amended through March 17,
1994 (incorporated by reference to Exhibit 3.1 to
the Company's Current Report on Form 8-K dated April
28, 1994 (File No. 1-7867)).
*4.3 -- Weatherford Enterra, Inc. 1991 Stock Option Plan, as
amended through October 5, 1995.
*4.4 -- Weatherford Enterra, Inc. Restricted Stock Incentive
Plan, as amended through October 5, 1995.
*4.5 -- D. Dale Wood Stock Option Agreement dated October 5,
1995 between D. Dale Wood and the Company.
*4.6 -- Enterra Corporation Severance Agreement with M. Timothy
Carey, C. Paul Evans, Brian Charles Goff, Steven C.
Grant, Edward C. Grimes, Steven W. Krablin, Windell D.
Norris, Jr., J. Joseph Percle, Michael Peter Smith,
Michael L. Stansberry and D. Dale Wood.
*4.7 -- Amendment 1995-1 to Severance Agreement with M. Timothy
Carey, C. Paul Evans, Brian Charles Goff, Steven C.
Grant, Edward C. Grimes, Steven W. Krablin, Windell D.
Norris, Jr., J. Joseph Percle, Michael Peter Smith,
Michael L. Stansberry and D. Dale Wood.
4.8 -- Weatherford International Incorporated Change of
Control Agreement with Philip Burguieres, James R.
Burke, M.E. Eagles, Norman W. Nolen and H. Suzanne
Thomas (incorporated by reference to Exhibit 10.5 to
the Company's Annual Report on Form 10-K for the year
ended December 31, 1993 (File No. 1-7867)); James D.
Green, Gay S. Mayeux, Jon Nicholson and Weldon W.
Walker (incorporated by reference to Exhibit 10.4 to
the Company's Annual Report on Form 10-K for the year
ended December 31, 1994 (File No. 1-7867)); and Philip
D. Gardner, Robert A. Seekely and F. Thomas Tilton
(incorporated by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995 (File No. 1-7867)).
4.9 -- 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
(incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995 (File No. 1-7867)); and Philip D.
Gardner, Robert A. Seekely and Frederick T. Tilton
(incorporated by reference to Exhibit 10.2 to the
Company's Registration Statement on Form S-4
(Registration No. 33-62195)).
<PAGE>
4.10-- Second 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
(incorporated by reference to Exhibit 10.1 to the
Company's Registration Statement on Form S-4
(Registration No. 33-62195)).
*5.1 -- Opinion of H. Suzanne Thomas, General Counsel of the
Company.
*23.1 -- Consent of Arthur Andersen, LLP.
*23.2 -- Consent of H. Suzanne Thomas, General Counsel of the
Company (contained in Exhibit 5.1 hereto).
*24.1 -- Power of Attorney (contained on page II-9).
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
WEATHERFORD ENTERRA, INC.
(Originally incorporated on December 14, 1970
under the name Dixel Industries, Inc.)
FIRST: The name of the Corporation is Weatherford Enterra, Inc.
SECOND: The registered office of the Corporation in the State of
Delaware is located at 32 Loockerman Square, Suite L-100 in the City of
Dover, County of Kent. The name and address of its registered agent is The
Prentice-Hall Corporation System, Inc., 32 Loockerman Square, Suite L-100,
Dover, Delaware.
THIRD: The nature of the business, objects and purposes to be
transacted, promoted or carried on by the Corporation are:
To manufacture, purchase or otherwise acquire, invest in, own, mortgage,
pledge, sell, assign and transfer or otherwise dispose of, trade, deal in and
with goods, wares and merchandise and personal property of every class and
description;
To acquire, and pay for in cash, stock or bonds of this Corporation or
otherwise, the goodwill, rights, assets and property, and to undertake or
assume the whole or any part of the obligations or liabilities of any person,
partnership, trust, joint stock company, syndicate, firm, association or
corporation;
To acquire, hold, use, sell, assign, lease, grant licenses in respect
of, mortgage or otherwise dispose of letters patent of the United States or
any foreign country, patent rights, licenses and privileges, inventions,
improvements and processes, copyrights, trademarks and trade names, relating
to or useful in connection with any business of this Corporation;
To acquire by purchase, subscription or otherwise, and to receive, hold,
own, sell, assign, exchange, transfer, mortgage, pledge or otherwise dispose
of or deal in and with any of the shares of the capital stock, or any voting
trust certificates in respect of the shares of capital stock, scrip,
warrants, rights, bonds, debentures, notes, trust receipts and other
securities, obligations, chosen in action and evidences of indebtedness or
interest issued or created by any corporations, joint stock companies,
syndicates, associations, firms, trusts or persons, public or private, or by
the government of the United States of America, or by any foreign government,
or by any state, territory, province, municipality or other political
subdivision or by any governmental agency, and as owner thereof to possess
and exercise all the rights, powers and privileges of ownership, including
the right to execute consents and vote thereon, and to do any and all acts
and things necessary or advisable for the preservation, protection,
improvement and enhancement in value thereof;
<PAGE>
To borrow or raise moneys for any of the purposes of the Corporation
and, from time to time without limit as to amount, to draw, make, accept,
endorse, execute and issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable or non-negotiable
instruments and evidences of indebtedness, and to secure the payment of any
thereof and of the interest thereon by mortgage upon or pledge, conveyance or
assignment in trust of the whole or any part of the property of the
Corporation, whether at the time owned or thereafter acquired, and to sell,
pledge or otherwise dispose of such bonds or other obligations of the
Corporation for its corporate purposes;
To purchase, receive, take by grant, gift, devise, bequest or otherwise,
lease, or otherwise acquire, own, hold, improve, employ, use and otherwise
deal in and with, real or personal property, or any interest therein,
wherever situated, and to sell, convey, lease, exchange, transfer or
otherwise dispose of, or mortgage or pledge, all or any of the Corporation's
property and assets, or any interest therein, wherever situated; and
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
The business and purposes specified in the foregoing clauses shall,
except where otherwise expressed, be in nowise limited or restricted by
reference to, or inference from, the terms of any other clause in this
Restated Certificate of Incorporation, but the business and purposes
specified in each of the foregoing clauses of this article shall be
regarded as independent business and purposes.
FOURTH: The total number of shares of stock of all classes which the
Corporation shall have authority to issue is 81,000,000, of which
1,000,000 shares of the par value of $1 each shall be designated Serial
Preferred Stock (the "Serial Preferred Stock"), and of which 80,000,000
shares of the par value of $.10 each shall be designated Common Stock (the
"Common Stock"). A statement of all powers, preferences and rights,
and the qualifications, limitations or restrictions thereof, in respect
of the Serial Preferred Stock and the Common Stock is as follows:
A. REVERSE STOCK SPLIT
Effective as of 12:15 p.m. on October 5, 1995 (the "Effective
Time"), each two shares of Common Stock issued and outstanding immediately
prior to the Effective Time shall automatically be changed and converted,
without any action on the part of the holder thereof, into one share of
Common Stock and, in lieu of interests in a fraction of a share of Common
Stock, each holder whose aggregate holdings of Common Stock prior to the
Effective Time amounted to a number of shares not evenly divisible by two
shall be entitled to receive for such interest in a fraction of a share of
Common Stock, and at the Effective Time such interest in a fraction of a
share of Common Stock shall be converted into the right to receive, upon the
surrender of the stock certificates formerly representing shares of Common
Stock, an amount in cash equal to $12.88 for such interest in a fraction of a
share of Common Stock.
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B. SERIAL PREFERRED STOCK
(1) Shares of Serial Preferred Stock may be issued from time to time
in one or more series, each such series to have distinctive
serial designations, as shall hereafter be determined in the
resolution or resolutions providing for the issue of such
Preferred Stock from time to time adopted by the Board of
Directors pursuant to authority so to do, which is hereby vested
in the Board of Directors.
(2) Each series of Preferred Stock
(a) may have such number of shares;
(b) may have such voting powers, full or limited, or may be
without voting powers;
(c) may be subject to redemption at such time and at such
prices;
(d) may be entitled to receive dividends (which may be
cumulative or noncumulative), at such rate or rates, on
such conditions, from such date or dates, and at such
times, and payable in preference to, or in such relation
to, the dividends payable on any other class or classes or
series of stock;
(e) may have such rights upon the dissolution of, or upon any
distribution of the assets of, the Corporation;
(f) may be made convertible into, or exchangeable for, shares
of any other class or classes or of any other series of the
same or any other class or classes of stock of the
Corporation at such price or prices or at such rates of
exchange, and with such adjustments;
(g) may be entitled to the benefit of a sinking fund or purchase
fund to be applied to the purchase or redemption of shares
of such series in such amount or amounts;
(h) may be entitled to the benefit of conditions and
restrictions upon the creation of indebtedness of the
Corporation or any subsidiary, upon the issue of any
additional stock (including additional shares of such
series or of any other series) and upon the payment of
dividends or the making of other distributions on and the
purchase, redemption or other acquisition by the Corporation
or any subsidiary of any outstanding stock of the
Corporation; and
(i) may have such other relative, participating, optional or
other special rights, and qualifications, limitations or
restrictions thereof;
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as shall be stated in said resolution or resolutions
providing for the issue of such Serial Preferred Stock.
Except where otherwise set forth in the resolution or
resolutions adopted by the Board of Directors providing
for the issue of any series of Serial Preferred Stock, the
number of shares comprising such series may be increased
or decreased (but not below the number of shares then
outstanding) from time to time by like action of the Board
of Directors.
(3) Shares of any series of Serial Preferred Stock which have
been redeemed (whether through the operation of a sinking fund
or otherwise) or purchased by the Corporation, or which, if
convertible or exchangeable, have been converted into or
exchanged for shares of stock of any other class or classes
shall have the status of authorized and unissued shares of
Serial Preferred Stock and may be reissued as a part of the
series of which they were originally a part or may be
reclassified and reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board
of Directors or as part of any other series of Serial Preferred
Stock, all subject to the conditions or restrictions on issuance
set forth in the resolution or resolutions adopted by the Board
of Directors providing for the issue of any series of Serial
Preferred Stock and to any filing required by law.
C. COMMON STOCK
(1) Except as otherwise provided by law or by the resolution or
resolutions of the Board of Directors providing for the issue
of any series of the Serial Preferred Stock, the Common Stock
shall have the exclusive right to vote for the election of
directors and for all other purposes, each holder of the Common
Stock being entitled to one vote for each share held.
(2) Subject to all of the rights of the Serial Preferred Stock or
any series thereof, the holders of the Common Stock shall be
entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available therefor, dividends
payable in cash, stock or otherwise.
(3) Upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, and after the
holders of the Serial Preferred Stock of each series shall have
been paid in full the amounts to which they respectively shall
be entitled, or a sum sufficient for such payments in full shall
have been set aside, the remaining net assets of the Corporation
shall be distributed pro rata to the holders of the Common
Stock in accordance with their respective rights and interests,
to the exclusion of the holders of the Serial Preferred Stock.
D. GENERAL PROVISIONS
(1) Any action required or permitted to be taken by the stockholders
of the Corporation must be effected at a duly called annual or
special meeting
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of stockholders of the Corporation and may not be effected by
any consent in writing by such stockholders. Special meetings
of stockholders of the Corporation may be called only by the
Board of Directors pursuant to a resolution approved by a
majority of the entire Board of Directors, upon not less than
thirty nor more than sixty days written notice. Notwithstanding
anything contained in this Restated Certificate of Incorporation
to the contrary, the affirmative vote of the holders of at least
80% of the voting power of all of the shares of the Corporation
entitled to vote for the election of directors shall be required
to amend or repeal, or to adopt any provision inconsistent with,
this paragraph (1), Section D of Article FOURTH.
(2) No stockholder shall be entitled as a matter of right to
subscribe for or receive additional shares of any class of stock
of the Corporation, whether now or hereafter authorized, or any
bonds, debentures or other securities convertible into stock, but
such additional shares of stock or other securities convertible
into stock may be issued or disposed of by the Board of
Directors to such persons on such terms as, in its discretion,
it shall deem advisable.
FIFTH: The Corporation is to have perpetual existence.
SIXTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
(1) To make, alter or repeal the by-laws of the Corporation, in the
manner and subject to any limitations contained in such by-laws,
to the extent such action is not inconsistent with the provisions
of this Restated Certificate of Incorporation.
(2) To authorize and cause to be executed mortgages and liens upon
the real and personal property of the Corporation.
(3) To set apart out of any of the funds of the Corporation available
for dividends a reserve or reserves for any proper purpose and to
abolish any such reserve in the manner in which it was created.
(4) By a majority of the whole Board of Directors, to designate one
or more committees, each committee to consist of two or more of
the directors of the Corporation. The Board of Directors may
designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at
any meeting of the committee. Any such committee, to the extent
provided in the resolution or in the by-laws of the Corporation,
shall have and may exercise the powers of the Board of Directors
in the management of the business and affairs of the Corporation
and may authorize the seal of the Corporation to be affixed to
all papers which may require it; provided, however, the by-laws
may provide that in the absence or disqualification of any member
of such
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committee or committees the member or members thereof present at
any meeting and not disqualified from voting, whether or not he
or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member.
(5) When and as authorized by the affirmative vote of the holders of
a majority of the stock issued and outstanding having voting
power given at a stockholders meeting duly called upon such
notice as is required by statute, this Restated Certificate of
Incorporation or the by-laws of the Corporation, to sell, lease
or exchange all or substantially all the property and assets of
the Corporation, including its goodwill and its corporate
franchises, upon such terms and conditions and for such
consideration, which may consist in whole or in part of money or
property, including securities of any other corporation or
corporations, as the Board of Directors shall deem expedient and
for the best interests of the Corporation; provided, however,
that to the extent any such sale, lease or exchange would
constitute a "Business Combination" as defined in Article
ELEVENTH of this Restated Certificate of Incorporation, the
provisions of such Article ELEVENTH shall control and no such
sale, lease or exchange shall be made except upon compliance with
and pursuant to the applicable terms and provisions of such
Article ELEVENTH.
SEVENTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a
summary way of this Corporation or of any creditor or stockholder thereof or
on the application of any receiver or receivers appointed for this
Corporation under the provisions of section 291 of Title 8 of the Delaware
Code or on the application of trustees in dissolution or of any receiver or
receivers appointed for this Corporation under the provisions of section 279
of Title 8 of the Delaware Code, order a meeting of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the said
court directs. If a majority in number representing three-fourths in value of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, agree to any compromise
or arrangement and to any reorganization of this Corporation as consequence
of such compromise or arrangement, the said compromise or arrangement and the
said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of this
Corporation, as the case may be, and also on this Corporation.
EIGHTH: Meetings of stockholders may be held within or without the State
of Delaware, as the by-laws may provide. The books of the Corporation may be
kept (subject to any provision contained in the statutes) outside the State
of Delaware at such place or places as may be designated from time to time by
the Board of Directors
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or in the by-laws of the Corporation. Elections of directors need not be by
written ballot unless the by-laws of the Corporation shall so provide.
NINTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation,
in the manner now or hereafter prescribed by statute, and all rights
conferred upon stockholders herein are granted subject to this reservation;
provided, however, that to the extent that any provision of this Restated
Certificate of Incorporation requires for approval of any such amendment,
alteration, change or repeal the approving vote of a greater percentage of
the capital stock of the Corporation having voting power with respect to such
action than the percentage required by statute, then such provision shall be
controlling and no such action shall be taken except upon a vote meeting the
greater percentage requirements of such provision.
TENTH: Board of Directors.
A. NUMBER, ELECTION AND TERMS. The business and affairs of the Corporation
shall be managed by a Board of Directors consisting of not less than six
nor more than fifteen persons. The exact number of directors within the
minimum and maximum limitations specified in the preceding sentence shall
be fixed from time to time by the Board of Directors pursuant to a
resolution adopted by a majority of the entire Board of Directors. At the
1983 annual meeting of stockholders, the directors shall be divided into
three classes, as nearly equal in number as possible, with the term of
office of the first class to expire at the 1984 annual meeting of
stockholders, the term of office of the second class to expire at the
1985 annual meeting of stockholders and the term of office of the third
class to expire at the 1986 annual meeting of stockholders. At each annual
meeting of stockholders following such initial classification and election,
directors elected to succeed those directors whose terms expire shall be
elected for a term of office to expire at the third succeeding annual
meeting of stockholders after their election.
B. NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Subject to the rights of the
holders of any series of Serial Preferred Stock then outstanding, newly
created directorships resulting from any increase in the authorized number
of directors or any vacancies in the Board of Directors resulting from
death, resignation, retirement, disqualification, removal from office or
other cause shall be filled by a majority vote of the directors then in
office, and directors so chosen shall hold office for a term expiring at
the annual meeting of stockholders at which the term of the class to which
they have been elected expires. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director.
C. REMOVAL. Subject to the rights of the holders of any series of Serial
Preferred Stock then outstanding, any director or the entire Board of
Directors, may be removed from office at any time, but only for cause
and only by the affirmative vote of the holders of at least 80% of the
voting power of all of the shares of the Corporation entitled to vote for
the election of directors.
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D. AMENDMENT, REPEAL, ETC. Notwithstanding anything contained in this Restated
Certificate of Incorporation to the
contrary, the affirmative vote of the holders of at least
80% of the voting power of all the shares of the Corporation
entitled to vote for the election of directors shall be
required to amend or repeal, or to adopt any provision
inconsistent with, this Article TENTH.
E. LIMITATION OF LIABILITY. A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability
(i) for any breach of the director's duty of loyalty to the Corporation or
its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, as the same exists or
hereafter may be amended, or (iv) for any transaction from which the
director derived an improper personal benefit. This section shall not
eliminate or limit the liability of a director for any act or omission
occurring prior to the effective date of the amendment adding this section
to the Company's Restated Certificate of Incorporation. Any repeal or
modification of this section by the stockholders of the Company shall be
prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the Corporation existing at the time
of such repeal or modification. If the Delaware General Corporation Law
hereafter is amended to authorize the further elimination or limitation
of the personal liability of directors, then the liability of each
director of the Corporation, in addition to the limitation on personal
liability provided herein, shall be limited to the fullest extent permitted
by the amended Delaware General Corporation Law.
ELEVENTH: Vote Required for Certain Business Combinations.
A. HIGHER VOTE REQUIRED FOR APPROVAL OF CERTAIN BUSINESS COMBINATIONS.
(1) HIGHER VOTE FOR CERTAIN BUSINESS COMBINATIONS. In addition to any
affirmative vote required by law or this Restated Certificate of
Incorporation, and except as otherwise expressly provided in
paragraph B of this Article ELEVENTH:
(a) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with (i) any Interested Stockholder (as
hereinafter defined) or (ii) any other corporation (whether or
not itself an Interested Stockholder) which is, or after such
merger or consolidation would be, an Affiliate (as hereinafter
defined) of an Interested Stockholder; or
(b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to
or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate Fair Market Value (as hereinafter
defined) of $1,000,000 or more; or
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(c) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of transactions) of any securities of
the Corporation or any Subsidiary to any Interested Stockholder
or any Affiliate of any Interested Stockholder in exchange for
cash, securities or other property (or a combination thereof)
having an aggregate Fair Market Value of $1,000,000 or more; or
(d) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an
Interested Stockholder or any Affiliate of any Interested
Stockholder; or
(e) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or
any other transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate share of
the outstanding shares of any class of equity or convertible
securities of the Corporation or any Subsidiary which is directly
or indirectly owned by any Interested Stockholder or any
Affiliate of any Interested Stockholder;
shall require the affirmative vote of the holders of at least 80% of
the voting power of the then outstanding shares of capital stock of
the Corporation entitled to vote generally in the election of
directors (the "Voting Stock"), voting together as a single class (it
being understood that for purposes of this Article ELEVENTH, each
share of the Voting Stock shall have the number of votes granted to
it pursuant to Article FOURTH of this Restated Certificate of
Incorporation, including any resolution of the Board of Directors
providing for the designation of any series of the Serial Preferred
Stock). Such affirmative vote shall be required notwithstanding the
fact that no vote may be required, or that a lesser percentage may be
specified, by law or in any agreement with any national securities
exchange or otherwise.
(2) DEFINITION OF "BUSINESS COMBINATION." The term "Business Combination"
as used in this Article ELEVENTH shall mean any transaction which is
referred to in any one or more of clauses (a) though (e) of such
paragraph (1) of this paragraph A.
B. WHEN HIGHER VOTE IS NOT REQUIRED. The provisions of paragraph A of this
Article ELEVENTH shall not be applicable to any particular Business Combination,
and such Business Combination shall require only such affirmative vote as is
required by law and any other provisions of this Restated Certificate of
Incorporation, if all of the conditions specified in either of the following
paragraphs (1) and (2) are met:
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(1) APPROVAL BY CONTINUING DIRECTORS. The Business Combination shall
have been approved by a majority of the Continuing Directors (as
hereinafter defined.)
(2) PRICE AND PROCEDURE REQUIREMENTS. All of the following conditions
shall have been met:
(a) The aggregate amount of the cash and the Fair Market Value
as of the date of the consummation of the Business
Combination of consideration other than cash to be received
per share by holders of Common Stock in such Business
Combination shall be at least equal to the highest of the
following:
(i) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes
and soliciting dealers fees) paid by the Interested
Stockholder for any shares of Common Stock acquired
by it (A) within the two-year period immediately
prior to the first public announcement of the proposal
of the Business Combination (the "Announcement Date")
or (B) in the transaction in which it became an
Interested Stockholder, whichever is higher;
(ii) the Fair Market Value per share of Common Stock on
the Announcement Date or on the date on which the
Interested Stockholder became an Interested
Stockholder (such latter date is referred to in this
Article ELEVENTH as the "Determination Date"),
whichever is higher; and
(iii) (if applicable) the price per share equal to the Fair
Market Value per share of Common Stock determined
pursuant to subparagraph B(2)(a)(ii) above, multiplied
by the ratio of (A) the highest per share price
(including any brokerage commissions, transfer taxes
and soliciting dealers fees) paid by the Interested
Stockholder for any shares of Common Stock acquired
by it within the two-year period immediately prior to
the Announcement Date to (B) the Fair Market Value
per share of Common Stock on the first day in such
two-year period upon which the Interested Stockholder
acquired any shares of Common Stock.
(b) The aggregate amount of the cash and the Fair Market Value
as of the date of the consummation of the Business
Combination of consideration other than cash to be received
per share by holders of shares of any other class of
outstanding Voting Stock (other than Institutional Voting
Stock, as hereinafter defined) shall be at least equal to
the highest of the following (it being intended that the
requirements of this subparagraph (B)(2)(b) shall be
required to be met with respect to every class of
outstanding Voting Stock
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(other than Institutional Voting Stock)), whether or not
the Interested Stockholder has previously acquired any
shares of a particular class of Voting Stock:
(i) (if applicable) the highest per share price (including
any brokerage commissions, transfer taxes and
soliciting dealers fees) paid by the Interested
Stockholder for any shares of such class of Voting
Stock acquired by it (A) within the two-year period
immediately prior to the Announcement Date or (B) in
the transaction in which it became an Interested
Stockholder, whichever is higher;
(ii) (if applicable) the highest preferential amount per
share to which the holders of shares of such class of
Voting Stock are entitled in the event of any
voluntary or involuntary liquidation, dissolution or
winding up of the Corporation;
(iii) the Fair Market Value per share of such class of
Voting Stock on the Announcement Date or on the
Determination Date, whichever is higher; and
(iv) (if applicable) the price per share equal to the Fair
Market Value per share of such class of Voting Stock
determined pursuant to subparagraph B(2)(a)(iii)
above, multiplied by the ratio of (A) the highest per
share price (including any brokerage commissions,
transfer taxes and soliciting dealers fees) paid by
the Interested Stockholder for any shares of such
class of Voting Stock acquired by it within the
two-year period immediately prior to the Announcement
Date to (B) the Fair Market Value per share of such
class of Voting Stock on the first day in such
two-year period upon which the Interested Stockholder
acquired any shares of such class of Voting Stock.
(c) The consideration to be received by holders of a particular
class of outstanding Voting Stock (including Common Stock)
shall be in cash or in the same form as the Interested
Stockholder has previously paid for shares of such class of
Voting Stock. If the Interested Stockholder has paid for
shares of any class of Voting Stock with varying forms of
consideration, the form of consideration for such class of
Voting Stock shall be either cash or the form used to
acquire the largest number of shares of such class of Voting
Stock previously acquired by it.
(d) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business
Combination: (i) except as approved by a majority of the
Continuing Directors, there shall have been no failure to
declare
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and pay at the regular date therefor any full quarterly
dividends (whether or not cumulative) on the outstanding
Serial Preferred Stock; (ii) there shall have been (A) no
reduction in the annual rate of dividends paid on the
Common Stock (except as necessary to reflect any subdivision
of the Common Stock), except as approved by a majority of
the Continuing Directors, and (B) any increase in such
annual rate of dividends as necessary to reflect any
reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction
which has the effect of reducing the number of outstanding
shares of the Common Stock, unless the failure so to
increase such annual rate is approved by a majority of the
Continuing Directors; and (iii) such Interested Stockholder
shall not have become the beneficial owner of any additional
shares of Voting Stock except as part of the transaction
which results in such Interested Stockholder becoming an
Interested Stockholder.
(e) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have
received the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any
tax credits or other tax advantages provided by the
Corporation, whether in anticipation of or in connection
with such Business Combination or otherwise.
(f) A proxy or information statement describing the proposed
Business Combination and complying with the requirements
of the Securities Exchange Act of 1934 and the rules and
regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations) shall be mailed
to public stockholders of the Corporation at least 30 days
prior to the consummation of such Business Combination
(whether or not such proxy or information statement is
required to be mailed pursuant to such Act or subsequent
provisions).
C. CERTAIN DEFINITIONS. For the purposes of this Article ELEVENTH:
(1) A "person" shall mean any individual, firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean any person (other than the
Corporation or any Subsidiary) who or which:
(a) is the beneficial owner, directly or indirectly, of more than
20% of the voting power of the outstanding Voting Stock; or
(b) is an Affiliate of the Corporation and at any time within the
two-year period immediately prior to the date in question was
the beneficial owner, directly or indirectly, of 20% or more
of the voting power of the then outstanding Voting Stock; or
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(c) is an assignee of or has otherwise succeeded to any shares of
Voting Stock which were at any time within the two-year period
immediately prior to the date in question beneficially owned by
any Interested Stockholder, if such assignment or succession
shall have occurred in the course of a transaction or series of
transactions not involving a public offering within the meaning
of the Securities Act of 1933.
(3) A person shall be a "beneficial owner" of any Voting Stock:
(a) which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly;
or
(b) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any agreement,
arrangement or understanding; or
(c) which are beneficially owned, directly or indirectly, by any
other person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for
the purpose of acquiring, holding, voting or disposing of any
shares of Voting Stock.
(4) For purposes of subparagraph (2) of this paragraph C, the number of
shares of Voting Stock deemed to be outstanding shall include shares
deemed owned through application of subparagraph (3) of this paragraph
C but shall not include any other shares of Voting Stock which may be
issuable pursuant to any agreement, arrangement or understanding, or
upon exercise of conversion rights, warrants or options, or
otherwise.
(5) "Affiliate" or "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as in effect on May 27, 1983.
(6) "Subsidiary" means any corporation of which a majority of any class of
equity security is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of
Interested Stockholder set forth in subparagraph (2) of this paragraph
C, the term "Subsidiary" shall mean only a corporation of which a
majority of each class of equity security is owned, directly or
indirectly, by the Corporation.
(7) "Continuing Director" means any member of the Board of Directors of
the Corporation (the "Board") who is unaffiliated with the
Interested Stockholder and was a member of the Board prior to the
time that the
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Interested Stockholder became an Interested Stockholder, and any
successor of a Continuing Director who is unaffiliated with the
Interested Stockholder and is recommended to succeed a Continuing
Director by a majority of Continuing Directors then on the Board.
(8) "Fair Market Value" means: (a) in the case of stock, the highest
closing sales price during the 30-day period immediately preceding
the date in question of a share of such stock on the Composite Tape
for New York Stock Exchange Listed Stocks, or, if such stock is not
quoted on the Composite Tape for the New York Stock Exchange, or, if
such stock is not listed on such Exchange, on the principal United
States securities exchange registered under the Securities Exchange
Act of 1934 on which such stock is listed, or, if such stock is not
listed on any such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day period preceding
the date in question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any system then in use,
or if no such quotations are available, the fair market value on the
date in question of a share of such stock as determined by the Board
of Directors in good faith; and (b) in the case of property other
than cash or stock, the fair market value of such property on the date
in question as determined by the Board of Directors in good faith.
(9) "Institutional Voting Stock" shall mean any class of Voting Stock
which was issued to and continues to be held solely by one or more
insurance companies, pension funds, commercial banks, savings banks
or similar financial institutions or institutional investors.
(10) In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash" as used in
subparagraphs (2)(a) and (b) of paragraph B of this Article ELEVENTH
shall include the shares of Common Stock and/or the shares of any
other class of outstanding Voting Stock retained by the holders of
such shares.
D. DETERMINATION BY DIRECTORS. Notwithstanding anything to the contrary in
this Article ELEVENTH, the directors of the Corporation shall have the
power to determine for the purposes of this Article ELEVENTH, on the basis
of information known to them after reasonable inquiry, (1) whether a
person is an Interested Stockholder, (2) the number of shares of Voting
Stock beneficially owned by any person, (3) whether a person is an
Affiliate or Associate of another, (4) whether a class of Voting Stock is
Institutional Voting Stock, and (5) whether the assets which are the
subject of any Business Combination have, or the consideration to be
received for the issuance or transfer of securities by the Corporation or
any Subsidiary in any Business Combination has, an aggregate Fair Market
Value of $1,000,000 or more.
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E. NO EFFECT ON FIDUCIARY OBLIGATIONS OF INTERESTED STOCKHOLDERS. Nothing
contained in this Article ELEVENTH shall be construed to relieve any
Interested Stockholder from any fiduciary obligation imposed by law.
F. AMENDMENT, REPEAL, ETC. Notwithstanding any other provisions of this
Restated Certificate of Incorporation or the by-laws of the Corporation
(and notwithstanding the fact that a lesser percentage may be specified
by law, this Restated Certificate of Incorporation or the by-laws of the
Corporation), the affirmative vote of the holders of 80% or more of the
voting power of the shares of the then outstanding Voting Stock, voting
together as a single class, shall be required to amend or repeal, or adopt
any provisions inconsistent with, this Article ELEVENTH of this Restated
Certificate of Incorporation.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which
only restates and integrates and does not further amend the provisions of the
Restated Certificate of Incorporation of this Corporation as heretofore
amended or supplemented, there being no discrepancies between those
provisions and the provisions of this Restated Certificate of Incorporation,
and it having been duly adopted by the Corporation's Board of Directors in
accordance with Section 245 of the Delaware General Corporation Law, has been
executed by its duly authorized officer this 5th day of October, 1995.
WEATHERFORD ENTERRA, INC.
By /s/ H. Suzanne Thomas
-----------------------------------------------
H. Suzanne Thomas
Senior Vice President, Secretary and
General Counsel
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WEATHERFORD ENTERRA, INC.
1991 STOCK OPTION PLAN
AS AMENDED AND RESTATED THROUGH OCTOBER 5, 1995
1. PURPOSE. This 1991 Stock Option Plan (the "Plan") of Weatherford
Enterra, Inc. (the "Company"), for executive officers and other key employees
(who may be members of the Board of Directors) of the Company and of certain
related corporations, and others providing services to the Company and such
related corporations (an "Optionee"), is intended to advance the best
interest of the Company and those related corporations by providing those
persons who have a substantial responsibility for its management and growth
with additional incentive and by increasing their proprietary interest in the
success of the Company and those related corporations--thereby encouraging
them to continue their employment or affiliation.
2. ADMINISTRATION. The Plan shall be administered by a committee to
be appointed by the Board of Directors of the Company (hereinafter called the
"Committee"); and all questions of interpretation and application of the Plan,
or of options granted hereunder (hereinafter called the "Options") shall be
subject to the determination, which shall be final and binding, of the
Committee. The Committee shall consist of not less than three members of the
Board of Directors, all of whom shall be "disinterested persons". A
"disinterested person" is a person who at the time he exercises discretion with
respect to the grant of any Option is not, and for at least one year prior to
that time has not been, eligible to receive options under the Plan or under
other similar plans of the Company. A majority of its members will constitute a
quorum. All determinations of the Committee will be made by a majority of its
members. Any decision or determination reduced to writing and signed by a
majority of the members will be as effective as if it had been made by a
majority vote at a meeting properly called and held. The Plan shall be
administered in such a manner as to permit the Options granted hereunder which
are designated as such to qualify as "incentive stock options" ("Incentive
Options") as described in section 422A of the Internal Revenue Code of 1986, as
amended (the "Code").
3. (a) SHARES AVAILABLE. The stock subject to the Options and
other provisions of the Plan shall be shares of the Company's Common Stock,
$0.10 par value (the "Stock"). The total amount of the Stock with respect to
which Options may be granted shall not exceed in the aggregate 1,814,894 shares;
provided, that such aggregate number of shares shall be subject to adjustment in
accordance with the provisions of Paragraph 18 hereof. Such shares may be
treasury shares or authorized but unissued shares.
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<PAGE>
(b) MAXIMUM AWARD. The maximum aggregate number of shares of
Stock available for Options to any one Optionee during any 12-month period is
200,000.
(c) SHARE COUNTING. For purposes of determining at any time the
number of shares that remain available for grant under this Plan, the number of
shares then authorized pursuant to Section 3 of the Plan shall be (i) decreased
by the "gross" number of shares issued pursuant to exercised Options, (ii)
decreased by the "gross" number of shares issuable pursuant to outstanding
unexercised Options, and (iii) increased by the difference between the "gross"
number of Shares and the "net" number of shares issued pursuant to exercised
Options. As used herein, the "gross" number of shares refers to the maximum
number of shares that may be issued upon the exercise of an Option. The "net"
number of shares refers to the net number of shares actually issued to an
Optionee upon exercise of an Option, after reducing the "gross" number of shares
by the number of shares tendered back to the Company in payment of the Option
Price (as defined hereinafter) for the satisfaction of any tax payment
obligation. If an Optionee shall forfeit, voluntarily surrender or otherwise
permanently lose his or her right to exercise an Option under any provision of
this Plan or otherwise, or if any Option shall terminate or expire pursuant to
its terms, the shares subject to the Option shall once again be available to be
awarded and issued under this Plan pursuant to a new Option grant hereunder.
4. AUTHORITY TO GRANT OPTIONS. The Committee may grant from time to
time to such eligible individuals as it shall from time to time determine an
Option, or Options, to buy a stated number of shares of Stock under the terms
and conditions of the Plan. With respect to each Option, the Committee shall
specify whether such Option shall constitute an Incentive Option or an Option
not intended to qualify as an Incentive Option (a "Nonqualified Option").
Subject only to any applicable limitations set forth elsewhere in the Plan, the
number of shares of Stock to be covered by any Option shall be as determined by
the Committee.
5. ELIGIBILITY. The individuals who shall be eligible to receive
Incentive Options shall be such executive officers and other key employees (who
may be members of the Board of Directors) of the Company, or of any parent or
subsidiary corporation, as the Committee shall determine from time to time.
With respect to Incentive Options, any reference to a parent or subsidiary
corporation shall mean a parent corporation within the meaning of section 425(e)
of the Code or a subsidiary corporation within the meaning of section 425(f) of
the Code. The individuals who shall be eligible to receive Nonqualified Options
shall be such executive officers and other key employees (who may be members of
the Board of Directors) of the Company, or of any parent or subsidiary
corporation, or any other person performing services for the Company or any
parent or subsidiary corporation, as the Committee shall determine from time to
time. With respect to Nonqualified Options, any reference to a parent
corporation shall mean a corporation which has actual control of the Company
through its direct or indirect
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<PAGE>
ownership of not less than 51 percent of each class of voting stock of the
Company; and any reference to a subsidiary corporation shall mean a corporation
of which the Company owns, directly or indirectly, not less than 40 percent of
each class of voting stock.
6. OPTION PRICE. The price at which shares may be purchased pursuant
to an Option (the "Option Price") shall be determined by the Committee at the
time each Option is granted but shall not be less than 100 percent of the Fair
Market Value (as defined hereinafter) of the shares of Stock on the date the
Option is granted. In the case of any employee of the Company or a parent or
subsidiary corporation who owns stock possessing more than 10 percent of the
total combined voting power of all classes of stock of the corporation
employing the employee or of its parent or subsidiary corporation, the price at
which shares may be so purchased under an Incentive Option shall be not less
than 110 percent of the Fair Market Value of the Stock on the date the Incentive
Option is granted. "Fair Market Value" for purposes of this Plan means the
average of the high and low reported sales prices per share of Stock (as
reported on the New York Stock Exchange) as of the relevant measuring date, or
if there is no sale on the New York Stock Exchange on that date, then as of the
next following day on which there is a sale.
7. DURATION OF OPTIONS. Each Option shall expire on the tenth (10th)
anniversary date of its grant. In the case of any employee of the Company who
owns stock possessing more than 10 percent of the total combined voting power
of all classes of stock of the corporation employing the employee or of its
parent or subsidiary corporation, no Incentive Option shall be exercisable after
the expiration of five years after the date such Incentive Option is granted.
The Committee in its discretion may provide that an Option shall be exercisable
during such 10-year period or five-year period, as the case may be, or during
any lesser period of time.
8. MAXIMUM VALUE OF STOCK SUBJECT TO INCENTIVE OPTIONS.
Notwithstanding any other provisions of the Plan to the contrary, the aggregate
Fair Market Value (determined as of the date the Incentive Option is granted) of
the Stock with respect to which Incentive Options are exercisable for the first
time by the Optionee in any calendar year (under this Plan and any other
incentive stock option plan(s) of the Company and any parent and subsidiary
corporation) shall not exceed $100,000.
9. AMOUNT EXERCISABLE. Each Option may be exercised, so long as it is
valid and outstanding, from time to time, in whole or in part, in such manner
and subject to such conditions, as the Committee in its discretion may provide
in the option agreement (described in Paragraph 22 hereof).
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<PAGE>
10. EXERCISE OF OPTIONS.
(a) NOTICE. Options shall be exercised by the delivery of
written notice (the "Exercise Notice") to the Secretary of the Company setting
forth the number of shares with respect to which the Option is to be exercised
and the address to which the certificates representing shares of the Stock
issuable upon the exercise of such Option shall be mailed (the "Exercise Date").
The date on which the Exercise Notice is delivered to the Company is the "Notice
Date".
(b) PAYMENT. Unless otherwise prescribed by the Committee, the
Optionee shall tender to the Company on, or within three business days after,
the Exercise Date full payment of the Option Price for the shares of Stock,
together with any federal, state or local taxes required to be collected or
withheld by the Company in connection with the exercise of the Option ("Taxes"),
in cash (by personal check, cashier's check, certified check, bank draft or
postal or express money order payable to the order of the Company or by payroll
deduction). Alternatively, subject to the provisions of Rule 16b-3 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), payment of the
Option Price and any Taxes may be made by the Optionee's delivering to the
Company the Exercise Notice together with irrevocable instructions to a broker
to promptly deliver to the Company an amount equal to the Option Price of such
shares of Stock and any Taxes, such amount being either from loan proceeds or
from the sale of the shares of Stock to be issued to the Optionee.
Alternatively, unless otherwise provided in the option agreement, payment of the
Option Price and any Taxes may be made in whole or in part in shares of Stock
previously issued to the Optionee, if at the time of delivery of the Exercise
Notice (i) the Company has unrestricted earned surplus in an amount not less
than the Option Price of such shares, (ii) all accrued cumulative preferential
dividends and other current preferential dividends on all outstanding preferred
stock of the Company have been fully paid, (iii) the reacquisition or exchange
by the Company of its own shares for the purpose of enabling such Optionee to
exercise such Option is otherwise permitted by applicable law and without any
vote or consent of any shareholder of the Company and would not result in the
Company's being in violation of any agreement by which it is bound, and (iv)
there shall have been adopted, and there is in full force and effect, a
resolution of the Board of Directors of the Company authorizing the
reacquisition by the Company of its own shares for such purpose. If payment is
made in whole or in part in shares of Stock, then the Optionee shall deliver to
the Company, in payment of the Option Price of the shares with respect of which
such Option is exercised, (i) certificates registered in the name of such
Optionee representing a number of shares of Stock legally and beneficially owned
by such Optionee, free of all liens, claims, and encumbrances of every kind, and
having a Fair Market Value on the date of delivery of such notice that is not
greater than the Option Price of the shares with respect to which such Option
is to be exercised, such certificates to be accompanied by stock powers duly
endorsed in blank by the record holder of the shares represented by such
certificates, with the signature of such record holder guaranteed by a national
banking
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<PAGE>
association, and (ii) if the Option Price of the shares with respect to which
such Option is to be exercised exceeds the Fair Market Value of such
certificates, payment of the difference shall be made as provided above.
Notwithstanding the foregoing provisions of this Paragraph 10, the Committee, in
its sole discretion, may refuse to accept shares of Stock in payment of the
Option Price of the shares with respect to which such Option is to be exercised
and, in that event, any certificates representing shares of Stock which were
delivered to the Company with such written notice shall be returned to such
Optionee together with notice by the Company to such Optionee of the refusal of
the Committee to accept such shares of Stock.
(c) STOCK PURCHASE AGREEMENT. In its sole and absolute
discretion, the Committee may require, as an additional condition to the
issuance of Stock upon exercise of an Option, that the Optionee furnish the
Committee with an executed copy of a stock purchase agreement, in such form as
may be required by the Committee, at the time the Exercise Notice is delivered
to the Company or within three business days after the proposed agreement is
presented to the Optionee, if later.
(d) SHARE CERTIFICATES. As promptly as practicable after the
receipt by the Company of (i) the Exercise Notice from the Optionee setting
forth the number of shares with respect to which such Option is to be exercised,
(ii) payment of the Option Price of such shares in the form required by the
foregoing provisions of this Paragraph 10, and (iii) a fully executed stock
purchase agreement in the form required by the Committee, if any is so required,
the Company shall cause to be delivered to such Optionee (or to a specified
escrow agent, if so required under the terms of any applicable stock purchase
agreement) certificates representing the number of shares of Stock with respect
to which such Option has been so exercised, such certificates to be registered
in the name of such Optionee, provided that such delivery shall be considered to
have been made when such certificates shall have been mailed, postage prepaid,
to such Optionee at the address specified for such purpose in the Exercise
Notice from the Optionee to the Company.
(e) VALUATION. Any calculation with respect to an Optionee's
income, required tax withholding or otherwise shall be made using the Fair
Market Value of such shares of Stock on the Notice Date, whether or not the
Exercise Notice is delivered to the Company before or after the close of trading
on that date, unless otherwise specified by the Committee.
11. TRANSFERABILITY OF OPTIONS. Options shall not be transferable by
the Optionee otherwise than by will or under the laws of descent and
distribution, and shall be exercisable, during his lifetime, only by the
Optionee.
12. TERMINATION OF EMPLOYMENT OR AFFILIATION OF OPTIONEE. Except as
may be otherwise expressly provided in this Paragraph 12 or elsewhere in the
Plan, if the Optionee's employment with the Company is terminated, the Optionee
shall have the
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<PAGE>
right to exercise the Option, to the extent to which he was entitled to exercise
such Option immediately prior to such termination, at any time during the period
ending the earlier of 30 days after such termination and the expiration of the
Option. Whether authorized leave of absence, or absence on military or
government service, shall constitute severance of the employment or affiliation
relationship between the Company and the Optionee shall be determined by the
Committee at the time thereof. In the event of the death of the Optionee while
affiliated with or in the employ of the Company, or within three months after
his retirement or termination due to age or disability as provided below, such
Option shall terminate on the earlier of one year following the date of such
death and the expiration of the Option. After the death of the Optionee, the
time for exercise of the Option shall be accelerated and the Option shall be
exercisable in full, and the Optionee's executors, administrators or any persons
to whom his Option may be transferred by will or by the laws of descent and
distribution, shall have the right, at any time prior to such termination, to
exercise the Option, in whole or in part, without regard to any limitations set
forth in or imposed pursuant to Paragraph 9 hereof. If, before the date of
expiration of the Option, the Optionee shall be retired in good standing from
the employ of the Company, or the affiliation shall be severed for reasons of
age or disability under the then established rules of the Company, the Option
shall terminate on the earlier of three months after the date of such retirement
or severance and the expiration of the Option. In the event of such retirement
or severance, the Optionee shall have the right prior to the termination of such
Option to exercise the Option to the extent to which he was entitled to exercise
such Option immediately prior to such retirement or severance. For the purpose
of determining the employment relationship or other affiliation between the
Company and the Optionee, employment by or affiliation with any parent or
subsidiary corporation shall be considered employment by or affiliation with the
Company.
13. REQUIREMENTS OF LAW. The Company shall not be required to sell or
issue any shares of Stock under any Option if the issuance of such shares shall
constitute or result in a violation by the Optionee or the Company of any
provision of any law, statute or regulation of any governmental authority.
Specifically in connection with the Securities Act of 1933, as now in effect or
hereafter amended (the "Securities Act"), upon exercise of any Option, the
Company shall not be required to issue such shares unless the Committee has
received evidence satisfactory to it to the effect that the Optionee will not
transfer such shares except pursuant to a registration statement in effect under
such Act or unless an opinion of counsel satisfactory to the Company has been
received by the Company to the effect that such registration is not required.
Any determination in this connection by the Committee shall be final, binding
and conclusive. The Company may, but shall in no event be obligated to,
register the shares of Stock covered hereby pursuant to the Securities Act. In
the event the shares of Stock issuable on exercise of an Option are not
registered under the Securities Act, the Company may imprint the following
legend or any other legend which counsel for the Company considers necessary or
advisable to comply with the Securities Act:
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<PAGE>
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities laws
of any State and may not be sold or transferred except upon such
registration or upon receipt by the Corporation of an opinion of counsel
satisfactory to the Corporation, in form and substance satisfactory to the
Corporation, that registration is not required for such sale or transfer."
The Company shall not be obligated to take any other affirmative action in order
to cause the exercise of an Option or the issuance of shares pursuant thereto to
comply with any law or regulation of any governmental authority.
14. NO RIGHTS AS STOCKHOLDER. No Optionee shall have rights as a
stockholder with respect to shares of Stock covered by his Option until the date
of issuance of a stock certificate for such shares; and, except as otherwise
provided in Paragraph 18 hereof, no adjustment for dividends, or otherwise,
shall be made if the record date therefor is prior to the date of issuance of
such certificate.
15. EMPLOYMENT OR AFFILIATION OBLIGATION. The granting of an Option
shall not impose upon the Company or any parent or subsidiary corporation any
obligation to employ or become affiliated with, or continue to employ or be
affiliated with, any Optionee; and the right of the Company or any parent or
subsidiary corporation to terminate the employment or affiliation of any person
shall not be diminished or affected by reason of the fact that an Option has
been granted to him.
16. FORFEITURE FOR COMPETITION. Notwithstanding any other provision of
the Plan, if at any time during the term of an Option granted hereunder the
Committee finds by a majority vote, after full consideration of the facts
presented on behalf of the Company and the Optionee, that such Optionee, without
the written consent of the Company, directly or indirectly owns, operates,
manages, controls or participates in the ownership, management, operation or
control of, or is employed by or is paid as a consultant or as an independent
contractor by a business which competes with the Company or any parent or
subsidiary corporation in the trade area served by the Company or any parent or
subsidiary corporation at any time during the term of the Option but prior to
its exercise in full and in which area the Optionee had performed services for
the Company or any parent or subsidiary corporation while employed by it, the
Optionee shall forfeit all unexercised Options and all exercised Options under
which the Company has not yet delivered the certificates and which had been
granted to the Optionee by the Committee earlier. The preceding provisions of
this Paragraph 16 shall not be deemed to have been violated solely by reason of
the Optionee's ownership of a stock or securities of any publicly owned
corporation, provided that such ownership does not result in effective control
of such corporation, and provided further that written notice of such ownership,
if in excess of one percent of the outstanding stock of said corporation, is
given to the Committee within 60 days after the later of
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(i) the date on which the Optionee is notified of the award of an Option, or
(ii) the date on which such ownership is acquired.
17. FORFEITURE FOR DISHONESTY. Notwithstanding anything to the
contrary in the Plan, if the Committee finds by a majority vote, after full
consideration of the facts presented on behalf of both the Company and the
Optionee, that the Optionee has been engaged in fraud, embezzlement, theft,
commission of a felony or proven dishonesty in the course of his employment by
or affiliation with the Company or any parent or subsidiary corporation which
damaged the Company or any parent or subsidiary corporation, or for disclosing
trade secrets of the Company or any parent or subsidiary corporation, the
Optionee shall forfeit all unexercised Options and all exercised Options under
which the Company has not yet delivered the certificates and which had been
granted the Optionee by the Committee earlier. The decision of the Committee as
to the cause of an Optionee's discharge and the damage done to the Company or
any parent or subsidiary corporation shall be final. No decision of the
Committee, however, shall affect the finality of the discharge of such Optionee
by the Company or any parent or subsidiary corporation in any manner.
18. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
If the Company shall effect a subdivision or consolidation of shares
or other capital readjustment, the payment of a stock dividend, or other
increase or reduction of the number of shares of Stock outstanding, without
receiving compensation therefor in money, services or property, then (a) the
number, class and per share price of shares of Stock subject to outstanding
Options hereunder shall be appropriately adjusted in such a manner as to entitle
an Optionee to receive upon exercise of an Option, for the same aggregate cash
consideration, the same total number and class of shares as he would have
received had he exercised his Option in full immediately prior to the event
requiring the adjustment; and (b) the number and class of shares then reserved
for issuance under the Plan shall be adjusted by substituting for the total
number and class of shares of Stock then reserved that number and class of
shares of stock that would have been received by the owner of an equal number of
outstanding shares of each class of stock as the result of the event requiring
the adjustment; provided in each case that with respect to Incentive Stock
Options and Nonqualified Options intended to be qualified as performance-based
compensation under Section 162(m)(4)(c) of the Code, no adjustment shall be
authorized to the extent that the
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adjustment would cause the Plan to violate Section 422(b)(1) of the Code or
would cause any part of such Option to fail to qualify under Section 162(m) of
the Code, as the case may be, or any successor provisions thereto, and provided
further, that the number of shares of Stock subject to any Option shall always
be a whole number.
After a merger of one or more corporations into the Company or after
a consolidation of the Company and one or more corporations in which the Company
shall be the surviving corporation, without regard to any limitations set forth
or imposed pursuant to Paragraph 9 hereof, each holder of an outstanding Option
shall, at no additional cost, be entitled upon exercise of such Option to
receive (subject to any required action by stockholders) in lieu of the number
and class of shares as to which such Option shall then be so exercisable, the
number and class of shares of stock or other securities to which such Optionee
would have been entitled pursuant to the terms of the agreement of merger or
consolidation if, immediately prior to such merger or consolidation, such
Optionee had been the holder of record of the number and class of shares of
Stock equal to the number and class of shares as to which such Option shall be
so exercised.
Notwithstanding any other provision of this Paragraph 18, if (i) the
Company merges or consolidates with any other corporation (other than a wholly
owned subsidiary) and is not the surviving corporation (or survives only as a
subsidiary of another corporation), (ii) the Company sells all or substantially
all of its assets to any other person or entity (other than a wholly owned
subsidiary), (iii) the Company is dissolved or liquidated, or (iv) there is a
Change of Control (as hereinafter defined) of the Company that is not approved,
recommended or supported by the Board of Directors of the Company in actions
taken prior to, and with respect to, such Change of Control, the Optionee shall
have the right, within 30 days after the approval by the stockholders of the
Company of such merger or consolidation, sale of assets or dissolution or the
occurrence of such Change of Control, to elect to surrender all or part of such
Options outstanding, irrespective of whether such Options are then exercisable,
in exchange for a cash payment by the Company in an amount equal to the number
of shares of Stock subject to the Option held by such Optionee multiplied by the
difference between the Change of Control Price (as defined below) and the Option
Price of a particular Option; provided, however, that if the occurrence of an
event specified herein is within six months after the date of grant of a
particular Option held by an Optionee who is subject to Section 16(b) of the
Exchange Act, any cash payment to the Optionee shall be made on the day which is
six months and one day after the date of grant of such Option. Notwithstanding
the foregoing, if any right granted pursuant to the foregoing would make any of
the occurrences specified above ineligible for pooling of interests accounting
treatment under APB No. 16 that but for this provision would otherwise be
eligible for such accounting treatment, the Optionee shall receive shares of
Stock with a Fair Market Value equal to the cash that would otherwise be payable
hereunder in substitution for the cash. If an Optionee does not elect to
surrender all outstanding Options for a cash payment (or shares of Stock) as
provided
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<PAGE>
above, such Options, or replacement or substitution Options to be issued by the
surviving or acquiring corporation, shall become fully exercisable, to the
extent they are not, and shall remain exercisable for three months after the
Optionee's termination of employment or until the stated expiration of the term
of the Option, whichever is shorter. In the event that the consideration offered
to stockholders of the Company in any transaction described in this paragraph
consists of anything other than cash, the Committee shall determine the fair
cash equivalent of the portion of the consideration offered which is other than
cash.
For purpose of this Plan, "Change of Control" means: a) any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) (a "Person") acquires of beneficial ownership of 20 percent
or more of either (i) the then outstanding shares of 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; provided, however, that for
purposes of this subsection (a), a Person shall not include the Company or any
subsidiary or any employee benefit plan (or related trust) sponsored or
maintained by the Company or any subsidiary; or b) as a result of, or in
connection with, a contested election for directors, the persons who were
directors of the Company before such election shall cease to constitute a
majority of the Board of Directors of the Company. The Committee shall
determine whether a Change of Control has occurred within the herein meaning and
shall determine whether any such Change of Control has been approved,
recommended or supported by the Board of Directors of the Company, and its
determination shall be final and conclusive.
For purposes of this Plan, "Change of Control Price" means the
higher of (i) the highest reported sales price of a share of Stock in any
transaction reported on the New York Stock Exchange during the 60-day period
prior to and including the date of the approval by the stockholders of the
Company of such merger, sale of assets or dissolution or the occurrence of the
Change of Control and (ii) if the Change of Control is the result of a tender or
exchange offer, the highest price per share of Stock paid in such tender or
exchange offer; provided, however, that in the case of an Option which is held
by an Optionee who is subject to Section 16(b) of the Exchange Act and was
granted within six months of the occurrence of an event specified herein, then
the Change of Control Price for such Option shall be the Fair Market Value of
the Stock on the date such Option is cancelled.
Except as hereinbefore expressly provided, the issue by the Company
of shares of any class, for cash or property, or for labor or services, either
upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number, class or price of
shares of Stock then subject to outstanding Options.
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19. SUBSTITUTION OPTIONS. Options may be granted under this Plan from
time to time in substitution for stock options held by employees of other
corporations who are about to become employees of or affiliated with the Company
or any parent or subsidiary corporation as the result of a merger or
consolidation of the employing corporation with the Company or any parent or
subsidiary corporation, or the acquisition by the Company or any parent or
subsidiary corporation of the assets of the employing corporation, or the
acquisition by the Company or any parent or subsidiary corporation of stock of
the employing corporation as the result of which it becomes a subsidiary of the
Company. The terms and conditions of the substitute Options so granted may vary
from the terms and conditions set forth in this Plan to such extent as the Board
of Directors of the Company at the time of grant may deem appropriate to
conform, in whole or in part, to the provisions of the stock options in
substitution for which they are granted.
20. AMENDMENT OR TERMINATION OF PLAN. The Board of Directors may
modify, revise or terminate this Plan at any time and from time to time;
provided, however, that without the further approval of the holders of at least
a majority of the outstanding shares of Stock, the Board of Directors may not
(i) materially increase the benefits accruing to participants under the Plan;
(ii) change the aggregate number of shares of Stock which may be issued under
Options pursuant to the provisions of the Plan; (iii) reduce the Option Price at
which Options may be granted to an amount less than the Fair Market Value per
share at the time the Option is granted; or (iv) change the class of employees
eligible to receive Options; provided, however, that the Board shall have the
power to make such changes in the Plan and in the regulations and administrative
provisions hereunder or in any outstanding Incentive Option as in the opinion of
counsel for the Company may be necessary or appropriate from time to time to
enable any Incentive Option granted pursuant to the Plan to qualify as an
incentive stock option or such other stock option as may be defined under the
Code so as to receive preferential federal income tax treatment.
21. INTENTIONALLY OMITTED.
22. WRITTEN AGREEMENT. Each Option granted hereunder shall be embodied
in a written option agreement, which shall be subject to the terms and
conditions prescribed above and shall be signed by the Optionee and by an
authorized officer of the Company for and in the name and on behalf of the
Company. Such an option agreement shall contain such other provisions as the
Committee in its discretion shall deem advisable.
23. INDEMNIFICATION OF THE COMMITTEE AND THE BOARD OF DIRECTORS. With
respect to administration of the Plan, the Company shall indemnify each present
and future member of the Committee and the Board of Directors against, and each
member of the Committee and the Board of Directors shall be entitled without
further act on his part to indemnity from the Company for, all expenses
(including the amount of
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judgments and the amount of approved settlements made with a view to the
curtailment of costs of litigation, other than amounts paid to the Company
itself) reasonably incurred by him in connection with or arising out of any
action, suit or proceeding in which he may be involved by reason of his being or
having been a member of the Committee and the Board of Directors, whether or
not he continues to be such member of the Committee and the Board of Directors
at the time of incurring such expenses; provided, however, that such indemnity
shall not include any expenses incurred by any such member of the Committee and
the Board of Directors (i) in respect of matters as to which he shall be finally
adjudged in any such action, suit or proceeding to have been guilty of gross
negligence or willful misconduct in the performance of his duty as such member
of the Committee and the Board of Directors, or (ii) in respect of any matter in
which any settlement is effected, to an amount in excess of the amount approved
by the Company on the advice of its legal counsel; and provided further, that no
right of indemnification under the provisions set forth herein shall be
available to or enforceable by any such member of the Committee and the Board of
Directors unless, within 60 days after institution of any such action, suit or
proceeding, he shall have offered the Company, in writing, the opportunity to
handle and defend same at its own expense. The foregoing right of
indemnification shall inure to the benefit of the heirs, executors or
administrators of each such member of the Committee and the Board of Directors
and shall be in addition to all other rights to which such member of the
Committee and the Board of Directors may be entitled as a matter of law,
contract or otherwise.
24. EFFECT OF AMENDMENTS. This 1991 Stock Option Plan, as amended
through October 5, 1995, constitutes a complete amendment and restatement of
such Plan. Any Option granted under the Plan shall be subject to the terms of
the Plan as in effect at the time the Option is granted; provided, however, that
by agreement between the Committee and the Optionee, any such Option may be
amended to incorporate and become subject to the provisions of the Plan as
amended through a date which is subsequent to the date on which the Option was
granted.
25. EFFECTIVE DATE OF PLAN. The Plan became effective March 19, 1991.
No Option shall be granted pursuant to this Plan after March 18, 2001.
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WEATHERFORD ENTERRA, INC.
RESTRICTED STOCK INCENTIVE PLAN
AS AMENDED AND RESTATED THROUGH OCTOBER 5, 1995
1. INTRODUCTION AND STATEMENT OF PURPOSE.
1.1 This Restricted Stock Incentive Plan (the "Plan") of Weatherford
Enterra, Inc. (the "Company"), for executive officers and other key employees
of the Company and certain related corporations ("Key Employees"), is
intended to advance the best interest of the Company (who may be members of
the Board of Directors) and those related corporations by providing those
persons who have significant ultimate responsibility for the management and
planning of the Company's operations and who directly influence the growth
and profits of the Company and those related corporations with additional
opportunities for meaningful capital accumulation, and by increasing their
proprietary interest in the success of the Company and those related
corporations, encourage their continued employment with the Company or those
related corporations. It is desired that the benefits available under this
Plan, when added to other benefits payable to Key Employees, will furnish
total compensation to those employees which is competitive in the Company's
industry.
1.2 The Plan provides for two types of awards: Restricted Share grants
and Performance Share grants (collectively called "Share Grants"). Restricted
Share grants are designed to retain Key Employees in the employ of the
Company. Performance Share grants are designed to reward long-term and
short-term performance of Key Employees, such as reducing the debt-equity
ratio of the Company, achieving certain operating and net income goals or
stock appreciation goals (long-term), or selling or acquiring certain
business assets, identifying and developing successor candidates for Key
Employee positions or raising equity for the Company (short-term).
1.3 A Share Grant under the Plan could consist of a combination of
Restricted Shares and Performance Shares, or could consist of only one type
of shares, at the Committee's sole discretion.
2. ADMINISTRATION.
2.1 The Plan shall be administered by a committee to be appointed by
the Board of Directors of the Company (hereinafter called the "Committee").
The Committee shall consist of not less than three members of the Board of
Directors, all of whom shall be "disinterested persons". A "disinterested
person" is a person who at the time he exercises discretion with respect to
the award of a Share Grant is not, and for at least one year prior to that
time has not been, eligible to receive Share Grants under the Plan or under
other similar plans of the Company. A majority of the Committee's members
will constitute a quorum and all determinations of the Committee will be made
by a majority of its members.
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2.2 The Committee is empowered to:
(a) Make all determinations regarding individuals eligible to
participate in the Plan, including prospective employees of the Company
who, upon commencing employment, would be Key Employees of the Company
(the "Key Employees");
(b) Make all determinations and computations concerning the issuance
of Restricted Shares and Performance Shares under the Plan and the number
of shares to be granted to each Key Employee;
(c) Cause the Company to enter into a written agreement with each
Key Employee setting forth the terms and provisions of the Share Grant
awarding the Restricted Shares and Performance Shares (the "Share Grant
Agreement");
(d) Make rules and regulations for the administration of the Plan
which are not inconsistent with the terms and provisions hereof;
(e) Construe and administer all terms, provisions, conditions and
limitations of the Plan in good faith;
(f) Make equitable adjustments for any mistakes or errors in the
administration of the Plan or deemed by the Committee to be necessary as
the result of any unusual situation or any ambiguity in the Plan; and
(g) Select, employ and compensate, from time to time, such
consultants, accountants, attorneys and other agents and employees as the
Committee may deem necessary or advisable for the proper and efficient
administration of the Plan.
2.3 The foregoing list of express powers is not intended to be either
complete or exclusive, and the Committee shall, in addition, have such
powers, whether or not expressly authorized, which it may deem necessary,
desirable, advisable or proper for the supervision and administration of the
Plan. Except as otherwise specifically provided herein, the decision or
judgment of the Committee on any question arising hereunder in connection
with the exercise of any of its powers shall be final, binding and conclusive
upon all parties concerned (including the Key Employee and any person
claiming by, through or under a Key Employee) and shall not be subject to
review.
3. SHARES SUBJECT TO GRANT.
3.1 The stock subject to the Share Grants and other provisions of the
Plan shall be shares of the Company's Common Stock, $.10 par value (the
"Stock"). The total amount of the Stock with respect to which Share Grants
may be granted shall not exceed in the aggregate 160,437 shares, except as
provided below. Distributions of shares hereunder may, at the Committee's
sole discretion, be made from authorized but unissued shares or shares
reacquired by the Company and held as treasury shares. Within such aggregate
maximum number of shares
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there is no maximum number of such shares which may be issued as Restricted
Shares or Performance Shares.
3.2 In the event that any Stock issued or granted under the Plan shall
be forfeited, for any reason, the aggregate number of additional shares of
Stock which may be issued or granted hereunder shall be increased by such
number of shares, and said shares of Stock so forfeited may again be the
subject of a Share Grant under the Plan.
3.3 In the event that the issued and outstanding shares of the
Company's Stock should, as a result of any stock dividend, stock split or
spin-off, recapitalization, combination or exchange of shares, merger,
consolidation, acquisition of property or stock, separation,
reclassification, reorganization, liquidation, or other similar event, be
increased or decreased or changed into or exchanged for a different number or
kind of share of stock or other securities of the Company or of another
corporation, the number and class of additional shares or other securities
which may be issued under the Plan will be appropriately adjusted to reflect
such action. If any such adjustment results in a fractional share of Stock
being issuable under the Plan, such fraction will be disregarded.
4. ELIGIBILITY. The individuals who shall be eligible to receive Stock
under this Plan shall be such executive officers and other key employees (who
may be members of the Board of Directors) of the Company, or of any parent or
subsidiary corporation, as the Committee shall determine from time to time.
Any reference to a parent corporation shall mean a corporation which has
actual control of the Company through its direct or indirect ownership of not
less than 51 percent of each class of voting stock of the Company; and any
reference to a subsidiary corporation shall mean a corporation of which the
Company owns, directly or indirectly, not less than 40 percent of each class
of voting stock.
5. SHARE GRANTS.
5.1 The Committee may cause the Company to issue, from time to time,
Restricted Shares or Performance Shares to, and enter into Share Grant
Agreements with, such Key Employees as the Committee, in its sole discretion,
may determine and designate. Subject to the final authority of the Committee,
the selection of the Key Employees may be based on recommendations of the
Company's Chief Executive Officer.
5.2 If the Committee decides to make a Share Grant, the Committee will
designate the number of shares of Stock to be issued; whether the shares will
be Restricted Shares or Performance Shares or a combination of the two types
of shares; the nature of the restrictions on the Key Employee's ownership of
the shares; the time or times at which the restrictions on ownership will be
removed; the condition or conditions upon which the restrictions on ownership
will be removed; and such other terms and provisions, not inconsistent with
the Plan, as the Committee deems appropriate. The terms and provisions of the
Share Grant will be set forth in a Share Grant Agreement.
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<PAGE>
5.3 If the Committee decides to award Performance Shares to a Key
Employee, in addition to the other terms and provisions of the Share Grant
Agreement, the Committee will determine the Key Employee's performance
objectives and specify the times within the Performance Period at which the
Key Employee's performance will be evaluated.
5.4 The Committee will designate at the time of each Share Grant the
commencement date and length of the Performance Period. Performance Periods
with respect to Restricted Shares generally will be four years, although the
Committee will have the discretion to designate a different length for a
Performance Period, not less than three nor more than five years. Performance
Periods with respect to Performance Shares will be determined by the nature
of the applicable performance objectives and achievement thereof but in no
event less than six months nor more than eight years.
5.5 The Committee shall have the authority to make a Share Grant to a
Key Employee at any time; however, the Committee generally will commence a
Share Grant for a Key Employee only one time per year.
6. OWNERSHIP AND RESTRICTIONS ON OWNERSHIP OF SHARES.
6.1 The Key Employee will own the shares of Stock from the date of the
Share Grant, subject to the restrictions on ownership and other terms and
provisions designated by the Committee and set forth in the Share Grant
Agreement.
6.2. The Committee will determine whether a stock certificate
representing part or all of the shares granted under the Plan will be issued
to the Key Employee at the commencement of a Performance Period or at any
time prior to the unrestricted ownership of the shares vesting in the Key
Employee. In the event this occurs, the stock certificate will contain a
legend restricting the sale, exchange, transfer, assignment, pledge or other
disposition of the shares. In addition, the Committee will determine whether
a Key Employee will have the right to vote any of the shares prior to the
ownership restrictions being removed. The Committee will also determine
whether the Key Employee will have the right to receive any dividends paid on
any of such shares prior to the ownership restrictions being removed or
whether such dividends will be accrued and paid to the Key Employee only when
the restrictions on his ownership of the shares are removed.
6.3 All shares of Stock granted pursuant to the Plan will be subject to
restrictions on ownership when granted, and a Key Employee will not be able
to sell, exchange, transfer, assign, pledge or otherwise dispose of such
shares until the restrictions on ownership are removed by the Committee in
accordance with the terms and provisions of the Plan and the Share Grant
Agreement. Further, the Key Employee may not assign, transfer or otherwise
dispose of any right or interest under the Share Grant Agreement, except as
provided therein.
7. REMOVAL OF RESTRICTIONS ON OWNERSHIP OF SHARES.
7.1 The Committee will determine, in its sole discretion, when the
restrictions on ownership of the shares of stock granted under this Plan will
be removed.
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<PAGE>
7.2 The restrictions on the Key Employee's ownership of any Restricted
Shares will be removed on all such shares at the end of a Performance Period
or on a certain portion of such shares at times designated by the Committee
(such as annually). The Key Employee generally must be employed by the
Company at the designated time (or times) in order for the restrictions to be
removed, although the Committee can provide otherwise. In the event the Key
Employee's employment by the Company terminates prior to the ownership
restrictions on the Restricted Shares being removed, the Key Employee will,
upon the request of the Committee, for no consideration, forfeit all
Restricted Shares which remain subject to such restrictions and surrender to
the Company all stock certificates representing such shares, if any have been
issued and delivered to him.
7.3 The restrictions on the Key Employee's ownership of any Performance
Shares will be removed upon the achievement of the Key Employee's performance
objectives or at the end of the Performance Period, unless the Committee has
specified otherwise, provided that the Key Employee is still employed by the
Company. In the event the Key Employee's employment with the Company
terminates prior to his achieving his performance objectives or prior to the
end of the Performance Period, the Key Employee will, upon the request of the
Committee, for no consideration, forfeit all or part, as applicable, of the
Performance Shares which remain subject to ownership restrictions and
surrender to the Company all stock certificates representing such shares, if
any have been issued and delivered to him.
8. HOLDING PERIOD. Notwithstanding any other provision hereof, any
shares of stock granted hereunder must be held by the Key Employee for at
least six months prior to sale, assignment, transfer or exchange, and any
attempt to sell, assign, transfer or exchange such shares during the six
months after grant shall be void.
9. DEATH OR DISABILITY.
9.1 Should a Key Employee's employment be terminated by death or total
and permanent disability prior to the removal of the ownership restrictions
on any shares of stock granted hereunder, the Committee has the right to
remove the restrictions on part or all of such shares. The Committee will
determine, in its sole discretion, whether and on which shares the
restrictions should be removed, based on the length of service the Key
Employee has in the Performance Period, the Key Employee's performance during
the Performance Period and such other matters as the Committee deems relevant.
9.2 For purposes of the Plan, the Committee shall determine, in the
exercise of its discretion, whether or not a Key Employee is totally and
permanently disabled for purposes of the Plan and the date such disability
(if any) commenced. Any such determinations by the Committee shall be
conclusive and binding on the Key Employee and any person claiming by,
through or under the Key Employee. Any determination of total and permanent
disability and of the commencement date thereof will be made on the basis of
medical reports and other evidence satisfactory to the Committee and in
accordance with a uniform, non-discriminatory policy applied by the
Committee. However, such determinations will not be binding on the Company or
any Key Employee with respect to any other employee benefit or other plan or
insurance policy
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<PAGE>
wherein such determinations may be relevant, and need not be consistent with
any determinations made under any such other plan or insurance policy.
10. EARLY RETIREMENT. Should a Key Employee take early retirement at
the convenience of the Company prior to the removal of the ownership
restrictions on any shares of stock granted hereunder, the Committee has the
right to remove the restrictions on part or all of the shares. The Committee
will determine, in its sole discretion, whether and on which shares the
restrictions should be removed, based on the length of service the Key
Employee has in the Performance Period, the Key Employee's performance during
the Performance Period and such other matters as the Committee deems relevant.
11. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. Notwithstanding any
other provision of the Plan to the contrary, in the event of a Change of
Control (as defined below) occurs, all restrictions to which the Key
Employee's Restricted Shares or Performance Shares remained subject at such
time shall automatically terminate and such shares shall become fully vested
and transferable. The Company shall promptly deliver to the Key Employee
stock certificates for such shares without the legend restricting the sale,
exchange, transfer, assignment, pledge or other disposition, other than as
may be required by applicable Securities laws. For purposes of this
paragraph, 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 30 percent of 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 11; 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
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<PAGE>
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, (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, 30
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.
12. EMPLOYMENT OR AFFILIATION OBLIGATION. The making of a Share Grant
shall not impose upon the Company or any parent or subsidiary corporation any
obligation to employ or continue to employ a Key Employee, and the right of
the Company or any parent or subsidiary corporation to terminate the
employment of any person shall not be diminished or affected by reason of the
fact that a Share Grant has been granted to him.
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13. AMENDMENT OR TERMINATION OF PLAN.
13.1 The Board of Directors, without approval of or notice to the Key
Employees, may modify or amend this Plan at any time it deems advisable;
provided, however, that without stockholder approval the Board of Directors
may not (i) except as permitted in the case of stock splits and other
recapitalizations, materially increase the aggregate number of shares which
may be granted pursuant to the provisions of the Plan; (ii) materially
increase the benefits accruing to the Key Employees under the Plan; or (iii)
materially modify the requirements as to eligibility for participation in the
Plan.
13.2 The Board of Directors, without approval of or notice to the Key
Employees, may terminate the Plan at any time.
13.3 Any amendment or termination of the Plan shall not affect shares
already issued or Share Grant Agreements already executed, without the
consent of the Key Employee. In each case where the Board of Directors
determines it to be appropriate or is advised by counsel that such approval
is required, an amendment or termination of the Plan shall be submitted to
the stockholders of the Company for approval.
14. MISCELLANEOUS PROVISIONS.
14.1 As a condition to the issuance of shares hereunder, the Company
may require the Key Employee receiving such shares to represent and warrant
at the time of issuance that the shares are being acquired only for
investment and without any present intention to sell or distribute such
shares if, in the opinion of counsel for the Company, such representation is
required under the Securities Act of 1933, or any other applicable law,
regulation or rule of any governmental authority.
14.2 During the term of the Plan, the Company will at times reserve and
keep available, or have authorized but unissued, such number of shares of
Stock as shall be sufficient to satisfy the requirements of the Plan. The
inability of the Company to obtain from any regulatory body having
jurisdictional authority deemed by the Company's counsel to be necessary to
the lawful issuance of Stock hereunder shall relieve the Company of any
liability in respect of the non-issuance of such Stock as to which such
requisite authority shall not have been obtained.
14.3 Until the issuance of a stock certificate for Restricted Shares or
Performance Shares, as appropriate, to a Key Employee (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive cash dividends or
other distributions or any other rights as a stockholder of the Company shall
exist with respect to such Restricted Shares or Performance Shares,
notwithstanding the grant of such shares, the execution of a Share Grant
Agreement, or the occurrence of any event or the passing of any period of
time giving rise to a right in the Key Employee to receive unrestricted
ownership of such shares under the Share Grant Agreement. No adjustment will
be made for any cash dividend or other distribution or other rights for which
the record date is prior to the date the stock certificates representing such
Restricted Shares or Performance Shares are issued, except
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as otherwise expressly determined by the Committee. The Company shall
endeavor in good faith to issue stock certificates for Restricted Shares or
Performance Shares which are authorized to be issued under the Plan as
promptly as practicable. However, neither the Company, the Committee or any
member thereof, any transfer agent nor any other person shall have any
liability to any Key Employee (or to any person claiming by, through or under
any Key Employee) as the result of any delay in the issuance of any such
certificates, including delays resulting from the negligence or willful
misconduct of any such person or entity.
14.4 Notwithstanding anything to the contrary contained in this Plan or
any Share Grant Agreement entered into hereunder, any Share Grant made under
this Plan shall be granted subject to the approval of this Plan by the
affirmative vote of the holders of a majority of the Stock of the Company
present or represented and entitled to vote at a meeting duly called and held
for such purpose in accordance with applicable Delaware law. No Share Grant
Agreement entered into under this Plan nor any Share Grant made under this
Plan shall create any obligation in the Company prior to such approval. In
the event that the holders of a majority of the Stock of the Company do not
so approve this Plan, any and all Share Grant Agreements theretofore entered
into shall thereupon terminate and shall be void and of no force and effect
and no Restricted Shares or Performance Shares shall be issued thereunder.
14.5 Any and all taxes payable with respect to income to a Key Employee
resulting from the grant of Restricted Shares or Performance Shares hereunder
shall be the sole responsibility of the Key Employee, not of the Company,
whether or not the Company shall have withheld or collected from the Key
Employee any sums required to be so withheld or calculated in respect of such
income, and whether or not any sums so withheld or collected shall be
sufficient to provide for any such taxes. The Company or any parent or
subsidiary corporation shall be entitled to deduct from other compensation
payable to each Key Employee any sums required by federal, state or local tax
law to be withheld with respect to the grant of Restricted Shares or
Performance Shares hereunder; but, in the alternative, the Company may
require the Key Employee to pay such sums directly to the employer
corporation. If the Key Employee elects to pay such sums directly, written
notice of that election shall be delivered prior to the ownership
restrictions on such Shares being removed and, whether pursuant to such
election or pursuant to a requirement imposed by the Company, payment in cash
or by check of such sums for taxes shall be delivered within ten days after
the date on which ownership restrictions on such shares are removed. In
addition, any such sums may be satisfied by the Key Employee in shares of
Stock, at the discretion of the Committee, if the Key Employee instructs the
Company in writing at or before the time the ownership restrictions on such
shares are removed to withhold from the shares that number of shares having a
value equal to the amount necessary to satisfy the sums required by federal,
state or local tax law or if the Key Employee delivers to the Company that
number of shares of Stock having a value equal to such amount. The number of
shares required to satisfy such taxes will be calculated based on the fair
market value of the Stock determined in accordance with the procedures
established by the Committee.
14.6 The Company shall be entitled but shall have no obligation to
cause the shares of Stock issuable hereunder to be registered under the
Securities Act.
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15. INDEMNIFICATION OF THE COMMITTEE AND THE BOARD OF DIRECTORS. With
respect to administration of the Plan, the Company shall indemnify each
present and future member of the Committee and the Board of Directors
against, and each member of the Committee and the Board of Directors shall be
entitled without further act on his part to indemnity from the Company for,
all expenses (including the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit or proceeding in which he
may be involved by reason of his being or having been a member of the
Committee and the Board of Directors, whether or not he continues to be such
member of the Committee and the Board of Directors at the time of incurring
such expenses; provided, however, that such indemnity shall not include any
expenses incurred by any such member of the Committee and the Board of
Directors (i) in respect of matters as to which he shall be finally adjudged
in any such action, suit or proceeding to have been guilty of gross
negligence or willful misconduct in the performance of his duty as such
member of the Committee and the Board of Directors, or (ii) in respect of any
matter in which any settlement is effected in an amount in excess of the
amount approved by the Company on the advice of its legal counsel; and
provided further, that no right of indemnification under the provisions set
forth herein shall be available to or enforceable by any such member of the
Committee and the Board of Directors unless, within 60 days after institution
of any such action, suit or proceeding, he shall have offered the Company, in
writing, the opportunity to handle and defend same at its own expense. The
foregoing right of indemnification shall inure to the benefit of the heirs,
executors or administrators of each such member of the Committee and the
Board of Directors and shall be in addition to all other rights to which such
member of the Committee and the Board of Directors may be entitled as a
matter of law, contract, or otherwise.
16. EFFECT OF AMENDMENTS. This Restricted Stock Incentive Plan, as
amended through October 5, 1995, constitutes a complete amendment and
restatement of such Plan. Any Share Grant granted under the Plan shall be
subject to the terms of the Plan as in effect at the time the Share Grant is
granted; provided, however, that by agreement between the Committee and the
Key Employee, any such Share Grant may be amended to incorporate and become
subject to the provisions of the Plan as amended through a date which is
subsequent to the date on which the Share Grant was granted.
17. EFFECTIVE DATE OF PLAN. The Plan, effective March 18, 1987, is of
perpetual duration.
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<PAGE>
D. DALE WOOD
STOCK OPTION AGREEMENT
This Stock Option Agreement dated as of October 5, 1995 is entered
into by and between Weatherford Enterra, Inc., a Delaware
corporation ("Weatherford"), and D. Dale Wood (the "Optionee").
WITNESSETH:
WHEREAS, the Optionee is currently a consultant to Weatherford
in accordance with the terms of the Consulting Agreement of even date
herewith (the "Consulting Agreement"); and
WHEREAS, as part of the Optionee's compensation under the
Consulting Agreement, Weatherford has agreed to grant him an
option to purchase up to 84,500 shares of common stock, $.10 par
value, of Weatherford ("Common Stock");
NOW, THEREFORE, in consideration of the covenants and
agreements herein contained, the parties hereto hereby agree as
follows:
1. GRANT OF OPTION. Subject to the terms and conditions
hereinafter set forth, Weatherford hereby grants to the Optionee
the right and option (the "Option") to purchase up to 84,500
shares (after giving effect to the one-for-two reverse stock
split effected on even date herewith) of Common Stock (the
"Shares"). Such number of Shares shall be subject to adjustment
as hereinafter provided. The Option does not constitute an
"incentive stock option" within the meaning of the Internal
Revenue Code of 1986, as amended.
2. OPTION PRICE. The option price of the Shares shall be
$25.75 per Share. Such price shall be subject to adjustment as
hereinafter provided.
3. EXERCISE OF OPTION. The period during which the Option
is in effect shall be referred to as the "Option Period", which
shall begin on October 5, 1995 (the "Grant Date"). The Option
Period shall terminate at midnight on October 4, 2005 (the
"Expiration Date"). No exercise of the Option may be made prior
to one year after the Grant Date.
Subject to the provisions of the preceding paragraph
and Section 10 of this Agreement, the Option shall be exercisable
as follows:
On or after
October 5, 1996 20% of the Shares can be purchased
by the Optionee.
On or after
October 5, 1997 20% of the Shares can be purchased
by the Optionee, plus any Shares
that could have been purchased
previously but were not.
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<PAGE>
On or after
October 5, 1998 20% of the Shares can be purchased
by the Optionee, plus any Shares
that could have been purchased
previously but were not.
On or after
October 5, 1999 20% of the Shares can be purchased
by the Optionee, plus any Shares
that could have been purchased
previously but were not.
On or after
October 5, 2000 All Shares not previously purchased
can be purchased by the Optionee.
If the Optionee wishes to exercise the Option, the
Optionee will deliver a written, signed notice to the Corporate
Secretary of Weatherford setting forth the number of Shares with
respect to which the Option is being exercised and the address to
which the certificates representing such Shares should be mailed.
To be effective, such written notice shall be accompanied, at the
time of its delivery to the Corporate Secretary, by payment of
the option price of such Shares, which payment shall be made by
check, payable to the order of Weatherford in an amount, in
United States dollars, equal to the option price of such Shares.
Alternatively, subject to the provisions of Rule 16b-3 of the
Securities Exchange Act of 1934, payment of the option price may
be made by the Optionee's delivering to the Corporate Secretary
such written, signed exercise notice together with irrevocable
instructions to a broker to promptly deliver to Weatherford an
amount equal to the option price of such Shares, such amount
being either from loan proceeds or from the sale of the Shares to
be issued to the Optionee.
If, in the opinion of counsel for Weatherford, any law
or regulation requires Weatherford to take such action with
respect to the Shares specified in such notice, then the date of
the delivery of such Shares and payment therefor shall be
extended for the period necessary to take such action.
4. LIMITATION OF RIGHTS OF THE OPTIONEE. The Optionee
shall have no rights with respect to any Shares not expressly
conferred by this Agreement.
5. NO ASSIGNMENT. This Agreement and the Option granted
hereunder are of a personal nature and the Optionee's rights with
respect thereto may not be sold, mortgaged, pledged, assigned,
hypothecated, transferred, conveyed or disposed of in any manner
by the Optionee, and shall not be exercisable by any person,
other than the Optionee, except as expressly permitted hereby.
Any such attempted sale, mortgage, pledge, assignment,
hypothecation, transfer, conveyance, disposition or exercise
shall be void and Weatherford shall not be bound thereby.
Notwithstanding the above and subject to the provisions
of Section 10 of this Agreement, the Option granted hereunder may
be transferred by will or the laws of descent and distribution.
In addition, the Optionee may transfer the Option granted
hereunder to his children,
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<PAGE>
grandchildren or spouse or to one or more trusts for the
benefit of such family members or to partnerships in which
such family members are the only partners (a "Family Transfer"),
provided that the Optionee receives no consideration for a Family
Transfer and that the option documents relating to the Family Transfer
provide for the same terms and conditions that are applicable to the
Option.
6. SUCCESSORS. This Agreement shall be binding upon any
successors of Weatherford and the heirs, successors and legal
representatives of the Optionee.
7. RESTRICTIONS ON TRANSFER; COMPLIANCE WITH THE
SECURITIES ACT.
A. Weatherford shall use reasonable efforts to
register for sale under the Securities Act of 1933 (the
"Securities Act") the Shares represented by this Option.
Weatherford shall not be obligated to issue any shares of Common
Stock pursuant to this Option at any time when the Shares have
not been registered under the Securities Act, notwithstanding
Weatherford's efforts to do so, and such other state and federal
laws, rules or regulations as Weatherford deems applicable and,
in the opinion of legal counsel for Weatherford, there is no
exemption from the registration requirements of such laws, rules
or regulations available for the issuance and sale of such
Shares. If the Shares are not registered for sale under the
Securities Act, Weatherford shall use reasonable efforts to cause
the issuance of any Shares pursuant to this Option to qualify for
an exemption from such laws, rules or regulations, if any
exemption is available. If such an exemption is available, the
Optionee (or the person permitted to exercise this Option under
Section 5 or 10 of this Agreement), if requested by Weatherford
to do so, will execute and deliver to Weatherford in writing an
agreement containing such provisions as Weatherford may require
to assure compliance with such exemption and such laws, rules or
regulations.
B. The Shares shall not be transferable except upon
the conditions specified in this Section 7, which conditions are
intended, among other things, to ensure compliance with the
provisions of the Securities Act in respect of the transfer of
the Shares.
C. If the Shares are not registered for sale under
the Securities Act, the Optionee by acceptance hereof agrees that
prior to the transfer or attempted transfer of the Shares, he, or
his successor in interest, will give written notice to
Weatherford of his intention to effect such transfer. Each such
notice shall (i) describe the manner and circumstances of the
proposed transfer in sufficient detail, (ii) contain an
undertaking by the person giving such notice to furnish such
other information as may be required to enable counsel to render
the opinions referred to below and (iii) designate the counsel
for the person giving such notice. The person giving such notice
shall submit a copy thereof to the counsel designated in such
notice and Weatherford shall submit a copy thereof to its
counsel.
(1) If in the opinion of each such counsel the
proposed transfer of the Shares may be effected without
registration under the Securities Act of the Shares, Weatherford
shall, as promptly as practicable, so notify the Optionee, and he
shall thereupon be entitled to transfer the Shares in accordance
with the terms of the notice delivered by such holder to
Weatherford.
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<PAGE>
(2) If in the opinion of either of such counsel
the proposed transfer of the Shares may not be effected without
registration under the Securities Act of the Shares, Weatherford
shall, as promptly as practicable, so notify the Optionee, and
Weatherford shall not be obligated to effect such transfer of the
Shares.
D. If the Shares are not registered for sale under
the Securities Act, each certificate for Shares issued upon
exercise of this Option shall bear a legend to the effect that
the Shares may not be transferred except upon compliance with the
provisions of this Section 7, and each certificate for Shares
transferred pursuant to Subsection C(1) of this Section 7 shall
also bear such a legend unless, in the opinion of counsel for
Weatherford, a legend is not required. The legend shall read in
the form substantially as follows:
"The shares of stock represented by this certificate
shall have not been registered under the Securities Act of 1933
or under the securities laws of any State and may not be sold or
transferred except upon such registration or upon receipt by
Weatherford Enterra, Inc. of an opinion of counsel satisfactory
to Weatherford, in form and substance satisfactory to
Weatherford, that registration is not required for such sale or
transfer."
E. The Optionee hereby covenants and agrees with
Weatherford as follows:
(1) The Optionee acknowledges that the Shares
must be held by him indefinitely unless the Shares are registered
for sale by him under the Securities Act or an exemption from
such registration is available. He understands that any sale of
the Shares made in reliance upon Rule 144 under the Securities
Act may be made only in limited amounts after the expiration of
two years from the date of receipt of the Shares and otherwise in
accordance with the terms and conditions of such Rule.
(2) Weatherford may instruct its transfer agent
not to transfer any of the Shares unless such agent has been
advised by Weatherford or otherwise has been satisfied that the
Optionee has complied with the provisions described above.
8. CHANGES IN WEATHERFORD'S CAPITAL STRUCTURE. This
Option shall not affect in any way the right or power of
Weatherford or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes
in Weatherford's capital structure or its business, or any merger
or consolidation of Weatherford, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or
affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of Weatherford, or any sale, transfer,
lease, exchange or other disposition of all or any part of its
assets or business, or any corporate act or proceeding, whether
of a similar character or otherwise.
If Weatherford shall effect a subdivision or
consolidation of shares of Common Stock or the payment of a stock
dividend on the Common Stock outstanding, without receiving
compensation therefor in money, services or property, or if
Weatherford recapitalizes or otherwise changes its capital
structure, then
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<PAGE>
(A) The number, class and per share price of the
Shares shall be appropriately adjusted in such a manner as to
entitle the Optionee to receive upon exercise of this Option, for
the same aggregate cash consideration, the same total number and
class of shares as he would have received had he exercised this
Option in full immediately prior to the event requiring the
adjustment; and
(B) The number and class of shares then reserved for
issuance pursuant to this Option shall be adjusted by
substituting for the total number and class of shares of Common
Stock then reserved that number and class of shares of stock that
would have been received by the owner of an equal number of
outstanding shares of Common Stock as a result of the event
requiring the adjustment.
9. OTHER ISSUANCES. Except as hereinbefore expressly
provided, the issue by Weatherford of shares of stock of any
class, or securities convertible into shares of stock of any
class, for cash, property, labor or services, upon direct sale,
upon the exercise of rights or warrants to subscribe therefor, or
upon conversion of shares or obligations of Weatherford
convertible into such shares or other securities, and in any case
whether or not for fair value, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the
number or price of Shares subject to this Option.
10. LIMITATIONS ON EXERCISABILITY; DEATH OF OPTIONEE. In
the event of the termination of the Consulting Agreement pursuant
to subsection (i), (iii) or (iv) of Section 2(b) thereof before
October 5, 2000, this Option shall thereafter be exercisable only
with respect to such number of Shares that could be purchased by
the Optionee immediately prior to such termination. After the
death of the Optionee, his executors, administrators or any other
person or persons to whom this Option may be transferred by will
or by the laws of descent and distribution, shall have the right,
at any time prior to the Expiration Date, to exercise this
Option, in whole or in part, in accordance with the terms hereof.
11. NOTICES. Every notice or other communication relating
to this Option shall be in writing and shall be mailed to or
delivered to the party for whom it is intended at such address as
may from time to time be designated by it in a notice mailed or
delivered to the other party as herein provided; provided that,
unless and until some other address be so designated, all notices
or communication by the Optionee to Weatherford shall be
addressed to the Corporate Secretary of Weatherford and mailed or
delivered to Weatherford at its office at the following address:
Weatherford Enterra, Inc.
1360 Post Oak Boulevard
Suite 1000
Houston, Texas 77056-3098
All notices or communications by Weatherford to the Optionee may
be given to the Optionee personally or may be mailed to him at
the following address:
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<PAGE>
D. Dale Wood
6846 Oakwood Trace Ct.
Houston, Texas 77040
12. AMENDMENT. This Agreement may be amended, modified,
superseded or canceled only by a written instrument executed by
both parties hereto.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PROVISIONS.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
WEATHERFORD ENTERRA, INC.
By: /s/ Philip Burguieres
----------------------------
Name: Philip Burguieres
Title: Chairman, President and
Chief Executive Officer
Optionee
/s/ D. Dale Wood
------------------------------------
D. DALE WOOD
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<PAGE>
Exhibit 4.6
SEVERANCE AGREEMENT
Agreement made as of February 20, 1992 between Enterra Corporation,
a Delaware corporation (the "Company"), and M. Timothy Carey (the "Employee").
WHEREAS, the Employee has previously been employed as Executive Vice
President of CRC-Evans Pipeline International, Inc., a "Subsidiary" (as defined
in Section 1 hereof); and
WHEREAS, as of the date of this Agreement the Employee shall become
employed by the Company as President of the Oilfield Services and Equipment
Group of the Company;
WHEREAS, the Company considers it essential to foster the employment
of well qualified key management personnel for the Company and its Subsidiaries,
and, in this regard, the board of directors of the Company recognizes that, as
is the case with many publicly held corporations, the possibility of a change in
control of the Company may exist and that such possibility, and the uncertainty
and questions which it may raise among management, may result in the departure
or distraction of key management personnel to the detriment of the Company and
its Subsidiaries;
WHEREAS, the board of directors of the Company has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of key members of the management of the Company and its
Subsidiaries to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a change in
control of the Company, although no such change is now contemplated; and
WHEREAS, in order to induce the Employee to remain in the employ of
the Company, the Company agrees that the Employee shall receive the compensation
and benefits set forth in this Agreement in the event his employment with such
Subsidiary is terminated subsequent to a "Change of Control" (as defined in
Section l hereof) of the Company as a cushion against the financial and career
impact on the Employee of any such Change of Control;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, the parties hereto agree as follows:
1. DEFINITIONS. For all purposes of this Agreement, the
following terms shall have the meanings specified in this Section unless the
context clearly otherwise requires:
<PAGE>
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) "Base Salary" shall mean the total cash remuneration earned by
the Employee on an annualized basis in all capacities with the Company and its
Subsidiaries, including any compensation the payment of which has been deferred
pursuant to a salary reduction or deferral plan (including a 401(k) plan, other
than company matching contributions) or agreement, but exclusive of any cash
payments made to him under the Company's Bonus Plan, or any contributions made
for his benefit to the Company's 401(k) Plan or CRC-Evans Plan.
(c) A Person shall be deemed the "Beneficial Owner" of any
securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed
the "Beneficial Owner" of securities tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for payment, purchase or exchange;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including without limitation pursuant to any agreement, arrangement
or understanding, whether or not in writing; PROVIDED, HOWEVER,
that a Person shall not be deemed the "Beneficial Owner" of any
security under this subsection (ii) as a result of an oral or
written agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding (A) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act, and (B) is not then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
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<PAGE>
(iii) that are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has
any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting (except,
pursuant to a revocable proxy as described in the proviso to
subsection (ii) above) or disposing of any voting securities of the
Company;
PROVIDED, HOWEVER, that nothing in this Section 1(c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of any securities acquired through such Person's participation in good faith in
a firm commitment underwriting until the expiration of forty days after the date
of such acquisition.
(d) "Board" shall mean the board of directors of the Company.
(e) "Bonus Plan" shall mean the Company's Management Incentive
Bonus Plan, as in effect immediately prior to a Change of Control.
(f) "Change of Control" shall be deemed to have taken place if (i)
any Person (except the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, any Person or
entity organized, appointed or established by the Company for or pursuant to the
terms of any such employee benefit plan, or an Exempted Person), together with
all Affiliates and Associates of such Person acting in concert as described in
Section 14(d)(2) of the Exchange Act, shall become the Beneficial Owner in the
aggregate of 30% or more of the Common Stock of the Company then outstanding
within the meaning of Rule 13d-3 promulgated under the Exchange Act.
(g) "CRC-Evans Plan" shall mean the CRC-Evans Money Purchase
Pension Plan, as in effect immediately prior to a Change of Control.
(h) "Exempted Person" shall mean any of Shamrock Holdings of
California, Inc., a Delaware corporation ("Shamrock"), Shamrock Holdings, Inc.,
a Delaware corporation ("Shamrock Holdings"), or any Affiliate or Associate of
Shamrock or Shamrock Holdings. "Exempted Person" shall not include transferees
from any Exempted Person except where such transferees are Affiliates or
Associates of Shamrock or Shamrock Holdings.
(i) "401(k) Plan" shall mean the Company's 401(k) Plan, as in
effect immediately prior to a Change of Control.
3
<PAGE>
(j) "Normal Retirement Date" shall mean the first day of the
calendar month coincident with or next following the Employee's 65th birthday.
(k) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(l) "Stock Plan" shall mean the Company's Stock Option Plan or any
successor plan thereto, as in effect immediately prior to a Change of Control.
(m) "Subsidiary" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
(n) "Termination Date" shall mean the date of receipt of the
Notice of Termination described in Section 2 hereof or any later date specified
therein, as the case may be.
(o) "Termination of Employment" shall mean the termination of the
Employee's actual employment relationship with the Company.
(p) "Termination upon a Change of Control" shall mean a
Termination of Employment upon or within two years after a Change of Control
either:
(i) initiated by the Company or any Subsidiary for any
reason other than (x) the Employee's continuous illness, injury or
incapacity for a period of twenty-six consecutive weeks, (y) for
"cause," as defined in Section 8.3 of the Employment Agreement (as
assigned and amended), dated as of February l, 1988, among the
Company, CRC-Evans Pipeline International, Inc. and the Employee
(the "Employment Agreement") , or (z) by reason of the occurrence of
the Normal Retirement Date; or
(ii) initiated by the Employee following one or more of the
following occurrences:
(A) a significant reduction by the Company or its
Subsidiaries of the authority, duties or responsibilities of
the Employee immediately prior to the Change of Control;
(B) any removal of the Employee from or any failure to
re-elect the Employee to the officer positions with the
Company and its Subsidiaries held by him immediately prior to
the Change of Control, except in connection with promotions to
higher office or in connection with consolidations among the
Company's Subsidiaries where the
4
<PAGE>
Employee is elected to similar positions in the successor
company or companies;
(C) a reduction by the Company in the Employee's Base
Salary as in effect immediately prior to the Change of
Control;
(D) revocation or any modification (except as may be
required in the normal course of business in light of any
requirement of or change in federal law or regulations) of the
Bonus Plan, 401(k) Plan or CRC-Evans Plan, or any action taken
pursuant to the terms of such plans, which materially (x)
reduces the opportunity to receive compensation under any of
such plans of equivalent amounts received by the Employee
during the two fiscal years immediately preceding the Change
of Control, subject to the right of the Board to establish in
a manner consistent with past practice prior to the Change of
Control reasonable goals under such plans, (y) reduces the
compensation payable to the Employee under any of such plans
but which does not effect comparable reductions in the
compensation payable to the other participants in such plans,
or (z) increases the compensation payable to other
participants in any of such plans but which does not effect
corresponding increases in the amount of compensation payable
to the Employee; or
(E) a transfer of the Employee, without his express
written consent, to a location which is outside the general
metropolitan area in which his principal place of business
immediately preceding the Change of Control may be located, or
which is otherwise an unreasonable commuting distance from the
Employee's principal residence at the date of the Change of
Control.
2. NOTICE OF TERMINATION. Any Termination upon a Change of
Control shall be communicated by a Notice of Termination to the other party
hereto given in accordance with Section 14 hereof. 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) briefly
summarizes the facts and circumstances deemed to provide a basis for termination
of the Employee's employment under the provision so indicated, and (iii) if the
termination date is other than the date of receipt of such notice, specifies the
termination date (which date shall not be more than 15 days after the giving of
such notice).
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<PAGE>
3. SEVERANCE COMPENSATION UPON TERMINATION.
(a) Subject to the provisions of Section 10 hereof and to
adjustment as provided in paragraph (b) below and Section 9(a), in the event of
the Employee's Termination upon a Change of Control, the Company shall pay to
the Employee, within fifteen days after the Termination Date (or as soon as
possible thereafter in the event that the procedures set forth in Section 10(b)
hereof cannot be completed within 15 days), an amount in cash equal to two times
the sum of paragraphs (i) and (ii) below:
(i) The Employee's Base Salary in effect either immediately
prior to the Termination of Employment or immediately prior to the
Change of Control, whichever is higher; and
(ii) The average of the annual bonuses earned by the
Employee under the Bonus Plan in the two fiscal years immediately
prior to such Termination of Employment.
(b) In the event the Employee's Normal Retirement Date would occur
prior to twenty-four months after the Termination Date, the aggregate cash
amount determined as set forth in (a) above shall be reduced by multiplying it
by a fraction, the numerator of which shall be the number of days from the
Termination Date to the Employee's Normal Retirement Date and the denominator of
which shall be 730. No payments shall be due Employee in the event that the
Normal Retirement Date has been reached prior to the Termination Date.
4. OTHER PAYMENTS. Subject to the provisions of Section 10
hereof, in the event of the Employee's Termination upon a Change of Control, the
Company shall:
(a) pay to the Employee within fifteen days after the Termination
Date, unless the Employee has exercised such options and rights, an amount equal
to the excess, if any, of the aggregate fair market value of the shares of the
Company's Common Stock subject to all stock options and stock appreciation
rights outstanding and unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee under the Stock Plan, over
the aggregate exercise price of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of (x) the closing price of
the Company's Common Stock on the business day immediately preceding the
Termination Date, if such Common Stock is publicly traded at such date, (y) if
such Common Stock is not publicly traded at the Termination Date, the value
determined by an independent appraiser, such appraiser to be selected by the
Employee and to be reasonably satisfactory to the Company (the fees and expenses
of such appraiser to be borne by the Company), or (z) the highest
6
<PAGE>
per share price of the Company's Common Stock paid (in connection with the
Change of Control or at any time thereafter) by the Person or group whose
acquisition of shares of Common Stock of the Company has given rise to a Change
of Control;
(b) to the extent permitted by applicable law, continue or cause
to be continued until 24 months after the Termination Date, on the cost-sharing
basis (if any) in effect immediately prior to the Change of Control, medical,
dental and life insurance benefits (and, at the option of the Employee,
disability insurance benefits) substantially equivalent in all material respects
to those furnished by the Company and its Subsidiaries to the Employee
immediately prior to the Change of Control; PROVIDED, HOWEVER, that if the
Employee's Normal Retirement Date would have occurred prior to 24 months after
the Termination Date, the obligation of the Company to provide such benefits
shall cease at the Employee's Normal Retirement Date; and PROVIDED FURTHER,
HOWEVER, that the obligation of the Company to provide such benefits shall
cease at such time as the Employee is employed on a full time basis by a
corporation not owned or controlled by the Employee that provides the Employee,
on substantially the same cost-sharing basis (if any) between the Company and
the Employee in effect immediately prior to the Change of Control, with medical,
dental, life and disability insurance benefits substantially equivalent in all
material respects to those furnished by the Company and its Subsidiaries to the
Employee immediately prior to the Change of Control;
(c) for vesting purposes only, in the event of a Termination upon
a Change of Control occurring prior to the Normal Retirement Date, credit the
Employee with the lesser of (i) two additional "years of service" (as defined in
the Company's 401(k) Plan) or (ii) the period of time from the Termination Date
to the Normal Retirement Date under each of the Company's 401(k) Plan and
CRC-Evans Plan, in addition to the years of service that would have otherwise
been calculated by reference solely to the Termination Date, it being understood
that benefits in respect of the two additional years of service shall to the
extent permitted by applicable law be paid to the Employee under the Company's
401(k) Plan or CRC-Evans Plan, and that the Company shall, to the extent
necessary to provide the Employee the additional benefits intended hereby, amend
the 401(k) Plan or CRC-Evans Plan or pay such additional benefits outside the
plan as may be necessary; and
(d) permit the Employee to continue the use of his Company car, if
any, without any cost for a period of six months thereafter. Thereafter, the
Employee shall return the car to the Company unless, in the case of a car owned
by the Company, the Employee elects to purchase the car from the Company at the
net book value thereof at the date of the purchase or, in the case of a car
leased by the Company, the Employee pays the Company, as
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<PAGE>
such amounts become due and payable, all rental payments charged to the Company
for the use of such car for the remainder of the lease therefore.
5. VESTING AND ACCELERATION OF CERTAIN BENEFITS. In the event of
a Termination upon a Change of Control, and subject to the provisions of Section
10 hereof, all restrictions remaining on the Termination Date on the restricted
shares, if any, received by the Employee, pursuant to the Stock Plan shall
lapse, and said shares shall thereupon be owned by the Employee free and clear
of all restrictions of any nature whatsoever, except those, if any, under
applicable federal and state securities laws.
6. ENFORCEMENT.
(a) In the event that the Company shall fail or refuse to make
payment of any amounts due the Employee under Sections 3, 4 and 5 hereof within
the respective time periods provided therein, the Company shall pay to the
Employee, in addition to the payment of any other sums provided in this
Agreement, interest, compounded daily, on any amount remaining unpaid from the
date payment is required under Section 3, 4 or 5, as appropriate, until paid to
the Employee, at the rate from time to time announced by Wells Fargo Bank, N.A.
as its "prime rate" plus 2%, each change in such rate to take effect on the
effective date of the change in such prime rate.
(b) It is the intent of the parties that the Employee not be
required to incur any expenses associated with the enforcement of his rights
under this Agreement by arbitration, litigation or other legal action because
the cost and expense thereof would substantially detract from the benefits
intended to be extended to the Employee hereunder. Accordingly, the Company
shall pay the Employee on demand the amount necessary to reimburse the Employee
in full for all expenses (including all attorneys' fees and legal expenses)
incurred by the Employee in enforcing any of the obligations of the Company
under this Agreement.
7. NO MITIGATION. The Employee shall not be required to
mitigate the amount of any payment or benefit provided for in this Agreement by
seeking other employment or otherwise.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Employee's continuing or future participation in or rights
under any benefit, bonus, incentive or other plan or program provided by the
Company or any of its Subsidiaries or Affiliates and for which the Employee may
qualify.
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9. COORDINATION OF BENEFITS; NO SET-OFF; TAXES.
(a) The Employment Agreement, the severance plan or policy, if
any, applicable to employees of the Company or the Subsidiary which employs the
Employee, and any other severance payments required by applicable statutes or
provided under government programs may provide compensation and benefits to
Employee upon events which also constitute a Termination upon a Change of
Control as defined in this Agreement. In such event, Employee shall be entitled
only to the largest cash compensation provided for under any of such agreements,
plans, policies, statutes or programs and the maximum benefit continuance
provided for under any of such agreements, plans, policies, statutes or
programs, and the payments referred to in Section 3 hereof shall be reduced to
the extent necessary to effect such coordination of benefits.
(b) Except as specifically set forth in (a) above, 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 circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Employee or others.
(c) Employee alone, and not the Company or any Subsidiary, shall
be responsible for the payment of all federal, state and local taxes in respect
of the payments to be made and benefits to be provided under this Agreement.
10. CERTAIN REDUCTION OF PAYMENTS.
(a) Anything in this Agreement to the contrary notwithstanding, in
the event that it shall be determined as set forth herein that any payment or
distribution by the Company to or for the benefit of the Employee, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (a "Payment"), would constitute an "excess parachute
payment" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and that it would be economically advantageous to
the Company to reduce the Payment to avoid or reduce the taxation of excess
parachute payments under Section 4999 of the Code, the aggregate present value
of amounts payable or distributable to or for the benefit of the Employee
pursuant to this Agreement (such payments or distributions pursuant to this
Agreement are hereinafter referred to as "Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount" shall be an
amount expressed in present value which maximizes the aggregate present value of
Agreement Payments without causing any Payment to be subject to the taxation
under Section 4999 of the Code. For
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<PAGE>
purposes of this Section 10, present value shall be determined in accordance
with Section 280G(d) (4) of the Code.
(b) All determinations to be made under this Section 10 shall be
made by KPMG Peat Marwick, or the Company's independent public accountant
immediately prior to the Change of Control if other than KPMG Peat Marwick (the
"Accounting Firm"), which firm shall use its best efforts to provide its
determinations and any supporting calculations both to the Company and the
Employee within 10 days of the Termination Date. Any such determination by the
Accounting Firm shall be binding upon the Company and the Employee. The Company
shall in its sole discretion determine which and how much of the Agreement
Payments shall be eliminated or reduced consistent with the requirements of this
Section 10. Within five days after the Company's determination, the Company
shall pay (or cause to be paid) or distribute (or cause to be distributed) to or
for the benefit of the Employee such amounts as are then due to the Employee
under this Agreement.
(c) As a result of the uncertainty in the application of Section
280G of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Agreement Payments, as the case may be, will have
been made by the Company which should not have been made ("Overpayment") or that
additional Agreement Payments which have not been made by the Company could have
been made ("Underpayment"), in each case, consistent with the calculations
required to be made hereunder. Within two years after the Termination of
Employment, the Accounting Firm shall review the determination made by it
pursuant to the preceding paragraph. In the event that the Accounting Firm
determines that an Overpayment has been made, any such Overpayment shall be
treated for all purposes as a loan to the Employee which the Employee shall
repay to the Company together with interest at the applicable Federal rate
provided for in Section 7872(f) (2) of the Code (the "Federal Rate"); PROVIDED,
HOWEVER, that no amount shall be payable by the Employee to the Company if and
to the extent such payment would not reduce the amount which is subject to
taxation under Section 4999 of the Code. In the event that the Accounting Firm
determines that an Underpayment has occurred, any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Employee together with
interest at the Federal Rate.
(d) All of the fees and expenses of the Accounting Firm in
performing the determinations referred to in subsections (b) and (c) above shall
be borne solely by the Company. The Company agrees to indemnify and hold
harmless the Accounting Firm of and from any and all claims, damages and
expenses of any nature resulting from or relating to its determinations pursuant
to subsections (b) and (c) above, except for claims, damages or
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<PAGE>
expenses resulting from the gross negligence or willful misconduct of the
Accounting Firm.
11. SETTLEMENT OF ALL DISPUTES.
(a) Any dispute, controversy or claim arising out of or relating
to any provision of this Agreement or the Employee's Termination upon a Change
of Control shall be settled by arbitration in the City of Houston, Texas, in
accordance with the commercial arbitration rules then in effect of the American
Arbitration Association, before a panel of three arbitrators, two of whom shall
be selected by the Company and the Employee, respectively, and the third of whom
shall be selected by the other two arbitrators. Each arbitrator selected as
provided herein is required to be or have been a director or an executive
officer of a corporation whose shares of common stock were listed during at
least one year of such service on the New York Stock Exchange or the American
Stock Exchange or quoted on the National Association of Securities Dealers
Automated Quotations System. Any award entered by the arbitrators shall be
final, binding and nonappealable and judgment may be entered thereon by any
party in accordance with applicable law in any court of competent
jurisdiction. This arbitration provision shall be specifically
enforceable. The fees of the American Arbitration Association and the
arbitrators and any expenses relating to the conduct of the arbitration shall be
paid by the Company.
(b) The party or parties challenging the right of the Employee to
the benefits of this Agreement shall in all circumstances have the burden of
proof.
12. TERM OF AGREEMENT. This Agreement shall commence as of the
date first written above and shall continue in effect until the earlier of (i)
the date upon which the Employee ceases to be in the employ of the Company or
any Subsidiary thereof for any reason other than a Termination upon a Change of
Control, or (ii) 24 months after a Change of Control has occurred, PROVIDED,
HOWEVER, that all of the obligations of the parties hereunder arising after a
Change of Control shall continue in effect until such obligations are satisfied
or have expired.
13. SUCCESSOR COMPANY. The Company shall require any successor
or successors (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to the Employee, to
acknowledge expressly that this Agreement is binding upon and enforceable
against the Company in accordance with the terms hereof, and to become jointly
and severally obligated with the Company to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession or successions had taken place. Failure of the
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<PAGE>
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement. As used in this Agreement, the
Company shall mean the Company as hereinbefore defined and any such successor or
successors to its business and/or assets, jointly and severally.
14. NOTICE. All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and shall be delivered personally or mailed by registered or
certified mail, return receipt requested, or by overnight express courier
service, as follows:
If to the Company, to:
Enterra Corporation
13100 Northwest Freeway
Sixth Floor
Houston, TX 77040
Attention: Chief Executive Officer
With a required copy to:
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103-6993
Attention: David R. King, Esq.
If to the Employee, to:
M. Timothy Carey
14111 Indian Wells
Houston, TX 77069
With a required copy to:
Wilshire, Scott & Dyer
4450 First City Tower
Houston, TX 77002
Attention: Gene Wilshire, Esq.
or to such other names or addresses as the Company or the Employee, as the case
may be, shall designate by notice to the other party hereto in the manner
specified in this Section. Any such notice shall be deemed delivered and
effective when received in the case of personal delivery, five days after
deposit, postage prepaid, with the U.S. Postal Service in the case of registered
or certified mail, or on the next business day in the case of overnight express
courier service.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED UNDER THE LAWS OF THE STATE OF DELAWARE
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WITHOUT GIVING EFFECT TO SUCH STATE'S CONFLICT OF LAWS
PROVISIONS.
16. CONTENTS OF AGREEMENT, AMENDMENT AND ASSIGNMENT.
(a) This Agreement is intended to be in addition to the provisions
of the Employment Agreement; provided, however, that in the event of a
Termination upon a Change of Control, (i) Sections 5 and 6 of the Employment
Agreement, and (ii) any similar provisions contained in any agreements then in
effect entered into by Employee with CRC-Evans Pipeline International, Inc., a
Texas corporation, or its predecessor by merger, shall terminate and be of no
further force and effect. Subject to the foregoing, this Agreement supersedes
all prior agreements and sets forth the entire understanding between the parties
hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment executed by the
Employee and approved by the board and executed on the Company's behalf by a
duly authorized officer. The provisions of this Agreement may provide for
payments to the Employee under certain compensation or bonus plans (including
without limitation the Stock Plan, the Bonus Plan, the 401(k) Plan and the
CRC-Evans Plan) under circumstances where such plans would not provide for
payment thereof. It is the specific intention of the parties that the
provisions of this Agreement shall supersede any provisions to the contrary in
such plans, and such plans shall be deemed to have been amended to correspond
with this Agreement without further action by the Company or the Board.
(b) Nothing in this Agreement shall be construed as giving the
Employee any right to be retained in the employ of the Company or any of its
Subsidiaries.
(c) The Employee acknowledges that from time to time, the Company
and its subsidiaries may establish, maintain and distribute employee manuals or
handbooks or personnel policy manuals, and officers or other representatives of
the Company or its Subsidiaries may make written or oral statements relating to
personnel policies and procedures. Such manuals, handbooks and statements are
intended only for general guidance. No policies, procedures or statements of
any nature by or on behalf of the Company or its Subsidiaries (whether written
or oral, and whether or not contained in any employee manual or handbook or
personnel policy manual), and no acts or practices of any nature, shall be
construed to modify this Agreement.
(d) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and
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<PAGE>
responsibilities of the Employee and the Company hereunder shall not be
assignable in whole or in part by the Company.
17. SEVERABILITY. If any provision of this Agreement or
application thereof to anyone or under any circumstances shall be determined to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or application.
18. REMEDIES CUMULATIVE - NO WAIVER. No right conferred upon
the Employee by this Agreement is intended to be exclusive of any other right or
remedy, and each and every such right or remedy shall be cumulative and shall be
in addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity. No delay or omission by the Employee in
exercising any right, remedy or power hereunder or existing at law or in equity
shall be construed as a waiver thereof, including without limitation any delay
by the Employee in delivering a Notice of Termination pursuant to Section 2
hereof after an event has occurred which would, if the Employee had resigned,
have constituted a Termination upon a Change of Control pursuant to Section
1(p)(ii) of this Agreement.
19. MISCELLANEOUS. All section headings are for convenience
only. This Agreement may be executed in several counterparts, each of which is
an original. It shall not be necessary in making proof of this Agreement or any
counterpart hereof to produce or account for any of the other counterparts.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement on May 4, 1992, but as of the date first above
written.
Attest: ENTERRA CORPORATION
/s/ M. Gay Mather By: /s/ D. Dale Wood
- ------------------------------ ---------------------------------
M. Gay Mather D. Dale Wood
Secretary President and Chief
Executive Officer
/s/ Shirley M. Brandt /s/ M. Timothy Carey
- ------------------------------ ---------------------------------
Witness M. TIMOTHY CAREY
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<PAGE>
SEVERANCE AGREEMENT
Agreement made as of February 20, 1992 between Enterra Corporation,
a Delaware corporation (the "Company"), and C. Paul Evans (the "Employee").
WHEREAS, the Employee has previously been employed as President and
Chief Operating Officer of CRC-Evans Pipeline International, Inc., a
"Subsidiary" (as defined in Section 1 hereof); and
WHEREAS, as of the date of this Agreement the Employee shall become
employed by CRC-Evans Pipeline International, Inc. as its President and Chief
Executive Officer, and shall also hold the title of President of the Pipeline
Services and Equipment Group of the Company;
WHEREAS, the Company considers it essential to foster the
employment of well qualified key management personnel for the Company and its
Subsidiaries, and, in this regard, the board of directors of the Company
recognizes that, as is the case with many publicly held corporations, the
possibility of a change in control of the Company may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of key management
personnel to the detriment of the Company and its Subsidiaries;
WHEREAS, the board of directors of the Company has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of key members of the management of the Company and its
Subsidiaries to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a change in
control of the Company, although no such change is now contemplated; and
WHEREAS, in order to induce the Employee to remain in the employ of
the Company's CRC-Evans Pipeline international, Inc. Subsidiary, the Company
agrees that the Employee shall receive the compensation and benefits set forth
in this Agreement in the event his employment with such Subsidiary is terminated
subsequent to a "Change of Control" (as defined in Section l hereof) of the
Company as a cushion against the financial and career impact on the Employee of
any such Change of Control;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, the parties hereto agree as follows:
<PAGE>
l. DEFINITIONS. For all purposes of this Agreement, the
following terms shall have the meanings specified in this Section unless the
context clearly otherwise requires:
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities,Exchange Act of 1934, as amended (the "Exchange Act").
(b) "Base Salary" shall mean the total cash remuneration earned by
the Employee on an annualized basis in all capacities with the Company and its
Subsidiaries, including any compensation the payment of which has been deferred
pursuant to a salary reduction or deferral plan (including a 401(k) plan, other
than company matching contributions) or agreement, but exclusive of any cash
payments made to him under the Company's Bonus Plan, or any contributions made
for his benefit to the Company's 401(k) Plan or CRC-Evans Plan.
(c) A Person shall be deemed the "Beneficial Owner" of any
securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed
the "Beneficial Owner" of securities tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for payment, purchase or exchange;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including without limitation pursuant to any agreement, arrangement
or understanding, whether or not in writing; PROVIDED, HOWEVER,
that a Person shall not be deemed the "Beneficial Owner" of any
security under this subsection (ii) as a result of an oral or
written agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding (A) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and
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Regulations under the Exchange Act, and (B) is not then reportable
by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) that are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has
any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting (except,
pursuant to a revocable proxy as described in the proviso to
subsection (ii) above) or disposing of any voting securities of the
Company;
PROVIDED, HOWEVER, that nothing in this Section 1(c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of any securities acquired through such Person's participation in good
faith in a firm commitment underwriting until the expiration of forty days after
the date of such acquisition.
(d) "Board" shall mean the board of directors- of the Company.
(e) "Bonus Plan" shall mean the Company's Management Incentive
Bonus Plan, as in effect immediately prior to a Change of Control.
(f) "Change of Control" shall be deemed to have taken place if (i)
any Person (except the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, any Person or
entity organized, appointed or established by the Company for or pursuant to the
terms of any such employee benefit plan, or an Exempted Person), together with
all Affiliates and Associates of such Person acting in concert as described in
Section 14(d) (2) of the Exchange Act, shall become the Beneficial Owner in the
aggregate of 30% or more of the Common Stock of the Company then outstanding
within the meaning of Rule 13d-3 promulgated under the Exchange Act.
(g) "CRC-Evans Plan" shall mean the CRC-Evans Money Purchase
Pension Plan, as in effect immediately prior to a Change of Control.
(h) "Exempted Person" shall mean any of Shamrock Holdings of
California, Inc., a Delaware corporation ("Shamrock"), Shamrock Holdings, Inc.,
a Delaware corporation ("Shamrock Holdings"), or any Affiliate or Associate of
Shamrock or Shamrock Holdings. "Exempted Person" shall not include transferees
from any Exempted Person except where such
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transferees are Affiliates or Associates of Shamrock or Shamrock Holdings.
(i) "401(k) Plan" shall mean the Company's 401(k) Plan, as in
effect immediately prior to a Change of Control.
(j) "Normal Retirement Date" shall mean, the first day of the
calendar month coincident with or next following the Employee's 65th birthday.
(k) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(l) "Stock Plan" shall mean the Company's Stock Option Plan or any
successor plan thereto, as in effect immediately prior to a Change of Control.
(m) "Subsidiary" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
(n) "Termination Date" shall mean the date of receipt of the
Notice of Termination described in Section 2 hereof or any later date specified
therein, as the case may be.
(o) "Termination of Employment" shall mean the termination of the
Employee's actual employment relationship with the Company.
(p) "Termination upon a Change of Control" shall mean a
Termination of Employment upon or within two years after a Change of Control
either:
(i) initiated by the Company or any Subsidiary for any
reason other than (x) the Employee's continuous illness, injury or
incapacity for a period of twenty-six consecutive weeks, (y) for
"cause," as defined in Section 8.3 of the Employment Agreement (as
amended), dated as of February l, 1988, among the Company, CRC-Evans
Pipeline International, Inc. and the Employee (the "Employment
Agreement"), or (z) by reason of the occurrence of the Normal
Retirement Date; or
(ii) initiated by the Employee following one or more of the
following occurrences:
(A) a significant reduction by the Company or its
Subsidiaries of the authority, duties or responsibilities of the
Employee immediately prior to the Change of Control;
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<PAGE>
(B) any removal of the Employee from or any failure to
re-elect the Employee to the officer positions with the Company and
its Subsidiaries held by him immediately prior to the Change of
Control, except in connection with promotions to higher office or
in connection with consolidations among the Company's Subsidiaries
where the Employee is elected to similar positions in the successor
company or companies;
(C) a reduction by the Company in the Employee's Base
Salary as in effect immediately prior to the Change of Control;
(D) revocation or any modification (except as may be
required in the normal course of business in light of any
requirement of or change in federal law or regulations) of the
Bonus Plan, 401(k) Plan or CRC-Evans Plan, or any action taken
pursuant to the terms of such plans, which materially (x) reduces
the opportunity to receive compensation under any of such plans of
equivalent amounts received by the Employee during the two fiscal
years immediately preceding the Change of Control, subject to the
right of the Board to establish in a manner consistent with past
practice prior to the Change of Control reasonable goals under such
plans, (y) reduces the compensation payable to the Employee under
any of such plans but which does not effect comparable reductions
in the compensation payable to the other participants in such
plans, or (z) increases the compensation payable to other
participants in any of such plans but which does not effect
corresponding increases in the amount of compensation payable to
the Employee; or
(E) a transfer of the Employee, without his express written
consent, to a location which is outside the general metropolitan
area in which his principal place of business immediately preceding
the Change of Control may be located, or which is otherwise an
unreasonable commuting distance from the Employee's principal
residence at the date of the Change of Control.
2. NOTICE OF TERMINATION. Any Termination upon a Change of
Control shall be communicated by a Notice of Termination to the other party
hereto given in accordance with Section 14 hereof. 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,
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<PAGE>
(ii) briefly summarizes the facts and circumstances deemed to provide a basis
for termination of the Employee's employment under the provision so indicated,
and (iii) if the termination date is other than the date of receipt of such
notice, specifies the termination date (which date shall not be more than 15
days after the giving of such notice)
3. SEVERANCE COMPENSATION UPON TERMINATION.
(a) Subject to the provisions of Section 10 hereof and to
adjustment as provided in paragraph (b) below and Section 9(a), in the event of
the Employee's Termination upon a Change of Control, the Company shall pay to
the Employee, within fifteen days after the Termination Date (or as soon as
possible thereafter in the event that the procedures set forth in Section 10(b)
hereof cannot be completed within 15 days), an amount in cash equal to two times
the sum of paragraphs (i) and (ii) below:
(i) The Employee's Base Salary in effect either immediately
prior to the Termination of Employment or immediately prior to the
Change of Control, whichever is higher; and
(ii) The average of the annual bonuses earned by the
Employee under the Bonus Plan in the two fiscal years immediately
prior to such Termination of Employment.
(b) In the event the Employee's Normal Retirement Date would occur
prior to twenty-four months after the Termination Date, the aggregate cash
amount determined as set forth in (a) above shall be reduced by multiplying it
by a fraction, the numerator of which shall be the number of days from the
Termination Date to the Employee's Normal Retirement Date and the denominator of
which shall be 730. No payments shall be due Employee in the event that the
Normal Retirement Date has been reached prior to the Termination Date.
4. OTHER PAYMENTS. Subject to the provisions of Section 10
hereof, in the event of the Employee's Termination upon a Change of Control, the
Company shall:
(a) pay to the Employee within fifteen days after the Termination
Date, unless the Employee has exercised such options and rights, an amount equal
to the excess, if any, of the aggregate fair market value of the shares of the
Company's Common Stock subject to all stock options and stock appreciation
rights outstanding and unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee under the Stock Plan, over
the aggregate exercise price of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of (x) the closing price of
the Company's
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<PAGE>
Common Stock on the business day immediately preceding the Termination Date, if
such Common Stock is publicly traded at such date, (y) if such Common Stock is
not publicly traded at the Termination Date, the value determined by an
independent appraiser, such appraiser to be selected by the Employee and to be
reasonably satisfactory to the Company (the fees and expenses of such appraiser
to be borne by the Company), or (z) the highest per share price of the Company's
Common Stock paid (in connection with the Change of Control or at any time
thereafter) by the Person or group whose acquisition of shares of Common Stock
of the Company has given rise to a Change of Control;
(b) to the extent permitted by applicable law, continue or cause
to be continued until 24 months after the Termination Date, on the cost-sharing
basis (if any) in effect immediately prior to the Change of Control, medical,
dental and life insurance benefits (and, at the option of the Employee,
disability insurance benefits) substantially equivalent in all material respects
to those furnished by the Company and its subsidiaries to the Employee
immediately prior to the Change of Control; PROVIDED, HOWEVER, that if the
Employee's Normal Retirement Date would have occurred prior to 24 months after
the Termination Date, the obligation of the Company to provide such benefits
shall cease at the Employee's Normal Retirement Date; and PROVIDED FURTHER,
HOWEVER, that the obligation of the Company to provide such benefits shall
cease at such time as the Employee is employed on a full time basis by a
corporation not owned or controlled by the Employee that provides the Employee,
on substantially the same cost-sharing basis (if any) between the Company and
the Employee in effect immediately prior to the Change of Control, with medical,
dental, life and disability insurance benefits substantially equivalent in all
material respects to those furnished by the Company and its Subsidiaries to the
Employee immediately prior to the Change of Control;
(c) for vesting purposes only, in the event of a Termination upon
a Change of Control occurring prior to the Normal Retirement Date, credit the
Employee with the lesser of (i) two additional "years of service" (as defined in
the Company's 401(k) Plan) or (ii) the period of time from the Termination Date
to the Normal Retirement Date under each of the Company's 401(k) Plan and
CRC-Evans Plan, in addition to the years of service that would have otherwise
been calculated by reference solely to the Termination Date, it being understood
that benefits in respect of the two additional years of service shall to the
extent permitted by applicable law be paid to the Employee under the Company's
401(k) Plan or CRC-Evans Plan, and that the Company shall, to the extent
necessary to provide the Employee the additional benefits intended hereby, amend
the 401(k) Plan or CRC-Evans Plan or pay such additional benefits outside the
plan as may be necessary; and
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(d) permit the Employee to continue the use of his Company car, if
any, without any cost for a period of six months thereafter. Thereafter, the
Employee shall return the car to the Company unless, in the case of a car owned
by the Company, the Employee elects to purchase the car from the Company at the
net book value thereof at the date of the purchase or, in the case of a car
leased by the Company, the Employee pays the Company, as such amounts become due
and payable, all rental payments charged to the Company for the use of such car
for the remainder of the lease therefore.
5. VESTING AND ACCELERATION OF CERTAIN BENEFITS. In the event
of a Termination upon a Change of Control, and subject to the provisions of
Section 10 hereof, all restrictions remaining on the Termination Date on the
restricted shares, if any, received by the Employee, pursuant to the Stock Plan
shall lapse, and said shares shall thereupon be owned by the Employee free and
clear of all restrictions of any nature whatsoever, except those, if any, under
applicable federal and state securities laws.
6. ENFORCEMENT.
(a) In the event that the Company shall fail or refuse to make
payment of any amounts due the Employee under Sections 3, 4 and 5 hereof within
the respective time periods provided therein, the Company shall pay to the
Employee, in addition to the payment of any other sums provided in this
Agreement, interest, compounded daily, on any amount remaining unpaid from the
date payment is required under Section 3, 4 or 5, as appropriate, until paid to
the Employee, at the rate from time to time announced by Wells Fargo Bank, N.A.
as its "prime rate" plus 2%, each change in such rate to take effect on the
effective date of the change in such prime rate.
(b) It is the intent of the parties that the Employee not be
required to incur any expenses associated with the enforcement of his rights
under this Agreement by arbitration, litigation or other legal action because
the cost and expense thereof would substantially detract from the benefits
intended to be extended to the Employee hereunder. Accordingly, the Company
shall pay the Employee on demand the amount necessary to reimburse the Employee
in full for all expenses (including all attorneys' fees and legal expenses)
incurred by the Employee in enforcing any of the obligations of the Company
under this Agreement.
7. NO MITIGATION. The Employee shall not be required to
mitigate the amount of any payment or benefit provided for in this Agreement by
seeking other employment or otherwise.
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8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Employee's continuing or future participation in or rights
under any benefit, bonus, incentive or other plan or program provided by the
Company or any of its Subsidiaries or Affiliates and for which the Employee may
qualify.
9. COORDINATION OF BENEFITS; NO SET-OFF; TAXES.
(a) The Employment Agreement, the severance plan or policy, if
any, applicable to employees of the Company or the Subsidiary which employs the
Employee, and any other severance payments required by applicable statutes or
provided under government programs may provide compensation and benefits to
Employee upon events which also constitute a Termination upon a Change of
Control as defined in this Agreement. In such event, Employee shall be entitled
only to the largest cash compensation provided for under any of such agreements,
plans, policies, statutes or programs and the maximum benefit continuance
provided for under any of such agreements, plans, policies, statutes or
programs, and the payments referred to in Section 3 hereof shall be reduced to
the extent necessary to effect such coordination of benefits.
(b) Except as specifically set forth in (a) above, 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 circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Employee or others.
(c) Employee alone, and not the Company or any Subsidiary, shall
be responsible for the payment of all federal, state and local taxes in respect
of the payments to be made and benefits to be provided under this Agreement.
10. CERTAIN REDUCTION OF PAYMENTS.
(a) Anything in this Agreement to the contrary notwithstanding, in
the event that it shall be determined as set forth herein that any payment or
distribution by the Company to or for the benefit of the Employee, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (a "Payment"), would constitute an "excess parachute
payment" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and that it would be economically advantageous to
the Company to reduce the Payment to avoid or reduce the taxation of excess
parachute payments under Section 4999 of the Code, the aggregate present value
of amounts payable or distributable to or for the benefit of the Employee
pursuant to this Agreement (such payments or
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<PAGE>
distributions pursuant to this Agreement are hereinafter referred to as
"Agreement Payments") shall be reduced (but not below zero) to the Reduced
Amount. The "Reduced Amount" shall be an amount expressed in present value
which maximizes the aggregate present value of Agreement Payments without
causing any Payment to be subject to the taxation under Section 4999 of the
Code. For purposes of this Section 10, present value shall be determined in
accordance with Section 280G(d) (4) of the Code.
(b) All determinations to be made under this Section 10 shall be
made by KPMG Peat Marwick, or the Company's independent public accountant
immediately prior to the Change of Control if other than KPMG Peat Marwick (the
"Accounting Firm"), which firm shall use its best efforts to provide its
determinations and any supporting calculations both to the Company and the
Employee within 10 days of the Termination Date. Any such determination by the
Accounting Firm shall be binding upon the Company and the Employee. The Company
shall in its sole discretion determine which and how much of the Agreement
Payments shall be eliminated or reduced consistent with the requirements of this
Section 10. Within five days after the Company's determination, the Company
shall pay (or cause to be paid) or distribute (or cause to be distributed) to or
for the benefit of the Employee such amounts as are then due to the Employee
under this Agreement.
(c) As a result of the uncertainty in the application of Section
280G of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Agreement Payments, as the case may be, will have
been made by the Company which should not have been made ("Overpayment") or that
additional Agreement Payments which have not been made by the Company could have
been made ("Underpayment"), in each case, consistent with the calculations
required to be made hereunder. Within two years after the Termination of
Employment, the Accounting Firm shall review the determination made by it
pursuant to the preceding paragraph. In the event that the Accounting Firm
determines that an Overpayment has been made, any such Overpayment shall be
treated for all purposes as a loan to the Employee which the Employee shall
repay to the Company together with interest at the applicable Federal rate
provided for in Section 7872(f)(2) of the Code (the "Federal Rate"); PROVIDED,
however, that no amount shall be payable by the Employee to the Company if and
to the extent such payment would not reduce the amount which is subject to
taxation under Section 4999 of the Code. In the event that the Accounting Firm
determines that an Underpayment has occurred, any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Employee together with
interest at the Federal Rate.
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<PAGE>
(d) All of the fees and expenses of the Accounting Firm in
performing the determinations referred to in subsections (b) and (c) above shall
be borne solely by the Company. The Company agrees to indemnify and hold
harmless the Accounting Firm of and from any and all claims, damages and
expenses of any nature resulting from or relating to its determinations pursuant
to subsections (b) and (c) above, except for claims, damages or expenses
resulting from the gross negligence or willful misconduct of the Accounting
Firm.
11. SETTLEMENT OF ALL DISPUTES.
(a) Any dispute, controversy or claim arising out of or relating
to any provision of this Agreement or the Employee's Termination upon a Change
of Control shall be settled by arbitration in the City of Houston, Texas, in
accordance with the commercial arbitration rules then in effect of the American
Arbitration Association, before a panel of three arbitrators, two of whom shall
be selected by the Company and the Employee, respectively, and the third of whom
shall be selected by the other two arbitrators. Each arbitrator selected as
provided herein is required to be or have been a director or an executive
officer of a corporation whose shares of common stock were listed during at
least one year of such service on the New York Stock Exchange or the American
Stock Exchange or quoted on the National Association of Securities Dealers
Automated Quotations System. Any award entered by the arbitrators shall be
final, binding and nonappealable and judgment may be entered thereon by any
party in accordance with applicable law in any court of competent
jurisdiction. This arbitration provision shall be specifically
enforceable. The fees of the American Arbitration Association and the
arbitrators and any expenses relating to the conduct of the arbitration shall be
paid by the Company.
(b) The party or parties challenging the right of the Employee to
the benefits of this Agreement shall in all circumstances have the burden of
proof.
12. TERM OF AGREEMENT. This Agreement shall commence as of the
date first written above and shall continue in effect until the earlier of (i)
the date upon which the Employee ceases to be in the employ of the Company or
any Subsidiary thereof for any reason other than a Termination upon a Change of
Control, or (ii) 24 months after a Change of Control has occurred, PROVIDED,
HOWEVER, that all of the obligations of the parties hereunder arising after a
Change of Control shall continue in effect until such obligations are satisfied
or have expired.
13. SUCCESSOR COMPANY. The Company shall require any successor
or successors (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets Of the
Company, by agreement in
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<PAGE>
form and substance satisfactory to the Employee, to acknowledge expressly that
this Agreement is binding upon and enforceable against the Company in accordance
with the terms hereof, and to become jointly and severally obligated with the
Company to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform if no such succession or successions
had taken place. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement. As
used in this Agreement, the Company shall mean the Company as hereinbefore
defined and any such successor or successors to its business and/or assets,
jointly and severally.
14. NOTICE. All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and shall be delivered personally or mailed by registered or
certified mail, return receipt requested, or by overnight express courier
service, as follows:
If to the Company, to:
Enterra Corporation
13100 Northwest Freeway
Sixth Floor
Houston, TX 77040
Attention: Chief Executive Officer
With a required copy to:
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103-6993
Attention: David R. King, Esq.
If to the Employee, to:
C. Paul Evans
CRC-Evans Pipeline International, Inc.
13100 Northwest Freeway
Sixth Floor
Houston, TX 77040
Attention: C. Paul Evans
With a required copy to:
Boesche, McDermott & Eskridge
800 Oneok Plaza
100 West 5th Street
Tulsa, OK 74103-4216
Attention: David B. McKinney, Esq.
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<PAGE>
or to such other names or addresses as the Company or the Employee, as the case
may be, shall designate by notice to the other party hereto in the manner
specified in this Section. Any such notice shall be deemed delivered and
effective when received in the case of personal delivery, five days after
deposit, postage prepaid, with the U.S. Postal Service in the case of registered
or certified mail, or on the next business day in the case of overnight express
courier service.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED UNDER THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO
SUCH STATES CONFLICT OF LAWS PROVISIONS.
16. CONTENTS OF AGREEMENT AMENDMENT AND ASSIGNMENT.
(a) This Agreement is intended to be in addition to the provisions
of the Employment Agreement; provided, however, that in the event of a
Termination upon a Change of Control, (i) Sections 5 and 6 of the Employment
Agreement, and (ii) any similar provisions contained in any agreements then in
effect entered into by Employee with CRC-Evans Pipeline International, Inc., a
Texas corporation, or its predecessor by merger, shall terminate and be of no
further force and effect. Subject to the foregoing, this Agreement supersedes
all prior agreements and sets forth the entire understanding between the parties
hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment executed by the
Employee and approved by the board and executed on the Company's behalf by a
duly authorized officer. The provisions of this Agreement may provide for
payments to the Employee under certain compensation or bonus plans (including
without limitation the Stock Plan, the Bonus Plan, the 401(k) Plan and the
CRC-Evans Plan) under circumstances where such plans would not provide for
payment thereof. It is the specific intention of the parties that the
provisions of this Agreement shall supersede any provisions to the contrary in
such plans, and such plans shall be deemed to have been amended to correspond
with this Agreement without further action by the Company or the Board.
(b) Nothing in this Agreement shall be construed as giving the
Employee any right to be retained in the employ of the Company or any of its
Subsidiaries.
(c) The Employee acknowledges that from time to time, the Company
and its subsidiaries may establish, maintain and distribute employee manuals or
handbooks or personnel policy manuals, and officers or other representatives of
the Company or its Subsidiaries may make written or oral statements relating to
personnel policies and procedures. Such manuals, handbooks and statements are
intended only for general guidance. No policies,
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<PAGE>
procedures or statements of any nature by or on behalf of the Company or its
Subsidiaries (whether written or oral, and whether or not contained in any
employee manual or handbook or personnel policy manual), and no acts or
practices of any nature, shall be construed to modify this Agreement.
(d) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and responsibilities of the Employee and the Company hereunder
shall not be assignable in whole or in part by the Company.
17. SEVERABILITY. If any provision of this Agreement or
application thereof to anyone or under any circumstances shall be determined to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or application.
18. REMEDIES CUMULATIVE - NO WAIVER. No right conferred upon
the Employee by this Agreement is intended to be exclusive of any other right or
remedy, and each and every such right or remedy shall be cumulative and shall be
in addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity. No delay or omission by the Employee in
exercising any right, remedy or power hereunder or existing at law or in equity
shall be construed as a waiver thereof, including without limitation any delay
by the Employee in delivering a Notice of Termination pursuant to Section 2
hereof after an event has occurred which would, if the Employee had resigned,
have constituted a Termination upon a Change of Control pursuant to Section 1(p)
(ii) of this Agreement.
19. MISCELLANEOUS. All section headings are for convenience
only. This Agreement may be executed in several counterparts, each of which is
an original. It shall not be necessary in making proof of this Agreement or any
counterpart hereof to produce or account for any of the other counterparts.
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<PAGE>
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement on March __, 1992, but as of the date first above
written.
Attest: ENTERRA CORPORATION
/s/ M. Gay Mather By: /s/ D. Dale Wood
- ------------------------------ ------------------------------
M. Gay Mather D. Dale Wood
Secretary President and
Chief Executive Officer
/s/ Steven W. Krablin /s/ C. Paul Evans
- ------------------------------ --------------------------------
Witness C. PAUL EVANS
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<PAGE>
SEVERANCE AGREEMENT
Agreement made as of April 1, 1993 between Pipeline Induction Heat
Limited (the "Company") and Brian Charles Goff (the "Employee").
WHEREAS, the Employee is presently employed by the Company as its
Managing Director;
WHEREAS, the Company considers it essential to foster the employment
of well qualified key management personnel for the Company and, in this regard,
the directors of the Company recognize that, as is the case with many publicly
held corporations, the possibility of a change in control of Enterra Corporation
("Enterra"), the parent of the Company, may exist and that such possibility, and
the uncertainty and questions which it may raise among management of the
Company, may result in the departure or distraction of key management personnel
to the detriment of the Company;
WHEREAS, the directors of the Company, with the concurrence of
Enterra, have determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of key members of the
management of the Company to their assigned duties without distraction in the
face of potentially disturbing circumstances arising from the possibility of a
change in control of Enterra or the Company, although no such change is now
contemplated; and
WHEREAS, in order to induce the Employee to remain in the employ of
the Company, the Company agrees that the Employee shall receive the compensation
and benefits set forth in this Agreement in the event his employment with the
Company is terminated subsequent to a "Change of Control" (as defined in Section
l hereof) of Enterra or the Company as a cushion against the financial and
career impact on the Employee of any such Change of Control;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, the parties hereto agree as follows:
l. DEFINITIONS. For all purposes of this Agreement, the
following terms shall have the meanings specified in this Section unless the
context clearly otherwise requires:
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of
<PAGE>
the General Rules and Regulations under the U.S. Securities Exchange Act of
1934, as amended (the "Exchange Act").
(b) "Base Salary" shall mean the total cash remuneration earned by
the Employee on an annualized basis in all capacities with the Company and its
Subsidiaries, if any, but exclusive of any cash payments made to him under the
Company's Bonus Plan, if any, or under any type of deferred compensation or
retirement plan;
(c) A Person shall be deemed the "Beneficial Owner" of any
securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed
the "Beneficial Owner" of securities tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for payment, purchase or exchange;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including without limitation pursuant to any agreement, arrangement
or understanding, whether or not in writing; PROVIDED, HOWEVER,
that a Person shall not be deemed the "Beneficial Owner" of any
security under this subsection (ii) as a result of an oral or
written agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding (a) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act, and (b) is not then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
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(iii) that are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has
any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or disposing
of any voting securities of Enterra;
PROVIDED, HOWEVER, that nothing in this Section 1(c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of any securities acquired through such Person's participation in good faith in
a firm commitment underwriting until the expiration of forty days after the date
of such acquisition.
(d) "Bonus Plan" shall mean any Company or Enterra bonus plan in
which the Employee participates, as in effect immediately prior to a Change of
Control.
(e) "Change of Control" shall be deemed to have taken place if (i)
any Person (except Enterra, any Subsidiary of Enterra, any employee benefit plan
of Enterra or of any Subsidiary of Enterra, or any Person or entity organized,
appointed or established by Enterra for or pursuant to the terms of any such
employee benefit plan), together with all Affiliates and Associates of such
Person acting in concert as described in Section 14(d)(2) of the Exchange Act,
shall become the Beneficial Owner in the aggregate of 30% or more of the Common
Stock of Enterra then outstanding within the meaning of Rule 13d-3 promulgated
under the Exchange Act, or (ii) the Company ceases to be controlled, directly or
indirectly, by Enterra, or if it sells all or substantially all of its assets to
a company not so controlled by Enterra.
(f) "Normal Retirement Date" shall mean the first day of the
calendar month coincident with or next following the Employee's 65th birthday.
(g) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(h) "Stock Plan" shall mean Enterra's Stock Option Plan or any
successor plan thereto, as in effect immediately prior to a Change of Control.
(i) "Subsidiary" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
(j) "Termination Date" shall mean the date of receipt of the
Notice of Termination described in Section 2
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hereof or any later date specified therein, as the case may be.
(k) "Termination of Employment" shall mean the termination of the
Employee's actual employment relationship with the Company.
(l) "Termination upon a Change of Control" shall mean a
Termination of Employment upon or within two years after a Change of Control
either:
(i) initiated by the Company or Enterra for any reason other
than (x) the Employee's continuous illness, injury or incapacity for
a period of six consecutive months, (y) for "cause," which shall
mean misappropriation of funds, habitual insobriety, substance
abuse, conviction of a crime involving moral turpitude, or gross
negligence in the performance of his duties, which gross negligence
has had a material adverse effect on the business, operations,
assets, properties or financial condition of the Company and its
Subsidiaries, if any, taken as a whole, or (z) by reason of the
occurrence of the Normal Retirement Date; or
(ii) initiated by the Employee following one or more of the
following occurrences:
(A) a significant reduction by the Company or its
Subsidiaries, if any, of the authority, duties or
responsibilities of the Employee immediately prior to the
Change of Control;
(B) any removal of the Employee from or any failure to
re-elect the Employee to the officer positions with the
Company and its subsidiaries, if any, held by him immediately
prior to the Change of Control, except in connection with
promotions to higher office or in connection with
consolidations among the Company's Subsidiaries where the
Employee is elected to similar positions in the successor
company or companies;
(C) a reduction by the Company in the Employee's Base
Salary as in effect immediately prior to the Change of
Control;
(D) any revocation or material modification (except as
may be required in the
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normal course of business in light of any requirement of or
change in applicable law or regulations) of any Bonus Plan or
deferred compensation or retirement plan, or any action taken
pursuant to the terms of any of such plans, which materially
(x) reduces the opportunity to receive compensation under any
of such plans of amounts equivalent to those received by the
Employee during the two fiscal years immediately preceding the
Change of Control, subject to the right of the directors of
the Company or of Enterra to establish in a manner consistent
with past practice prior to the Change of Control reasonable
goals under such plans, (y) reduces the compensation payable
to the Employee under any of such plans but which does not
effect comparable reductions in the compensation payable to
the other participants in such plans, or (z) increases the
compensation payable to other participants in any of such
plans but which does not effect corresponding increases in the
amount of compensation payable to the Employee; or
(E) a transfer of the Employee, without his express
written consent, to a location which is outside the general
metropolitan area in which his principal place of business
immediately preceding the Change of Control may be located, or
which is otherwise an unreasonable commuting distance from the
Employee's principal residence at the date of the Change of
Control.
2. NOTICE OF TERMINATION. Any Termination upon a Change of
Control shall be communicated by a Notice of Termination to the other party
hereto given in accordance with Section 12 hereof. 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) briefly
summarizes the facts and circumstances deemed to provide a basis for termination
of the Employee's employment under the provision so indicated, and (iii) if the
termination date is other than the date of receipt of such notice, specifies the
termination date (which date shall not be more than 15 days after the giving of
such notice).
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<PAGE>
3. SEVERANCE COMPENSATION UPON TERMINATION.
(a) Subject to the adjustments provided in paragraph (b) below and
Section 9(a) hereof, in the event of the Employee's Termination upon a Change of
Control, the Company shall pay to the Employee, within 15 days after the
Termination Date, an amount in cash equal to two times the sum of paragraphs (i)
and (ii) below:
(i) the Employee's Base Salary in effect either immediately
prior to the Termination of Employment or immediately prior to the
Change of Control, whichever is higher; and
(ii) the average of the annual bonuses earned by the Employee
under any Bonus Plan in the two fiscal years immediately prior to
such Termination of Employment.
(b) In the event the Employee's Normal Retirement Date would occur
prior to 24 months after the Termination Date, the aggregate cash amount
determined as set forth in (a) above shall be reduced by multiplying it by a
fraction, the numerator of which shall be the number of days from the
Termination Date to the Employee's Normal Retirement Date and the denominator of
which shall be 730. No payments shall be due Employee in the event that the
Normal Retirement Date has been reached prior to the Termination Date.
4. OTHER PAYMENTS. In the event of the Employee's Termination
upon a Change of Control, the Company shall also:
(a) pay to the Employee within 15 days after the Termination Date,
unless the Employee has exercised such options and rights, an amount equal to
the excess, if any, of the aggregate fair market value of the shares of
Enterra's Common Stock subject to all stock options and stock appreciation
rights outstanding and unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee under the Stock Plan, over
the aggregate exercise price of all such stock options. Upon such payment, the
options or rights shall terminate. For purposes of this paragraph, fair market
value shall mean the highest of (x) the closing price of Enterra's Common Stock
on the business day immediately preceding the Termination Date, if such Common
Stock is publicly traded at such date, (y) if such Common Stock is not publicly
traded at the Termination Date, the value determined by an independent
appraiser, such appraiser to be selected by the Employee and to be reasonably
satisfactory to the Company (the fees and expenses of such appraiser to be borne
by the Company), and (z) in respect of a Change of Control under Section 1(e)(i)
hereof, the highest
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<PAGE>
per share price of Enterra's Common Stock paid (in connection with the Change of
Control or at any time thereafter) by the Person or group whose acquisition of
shares of Common Stock of Enterra has given rise to a Change of Control;
(b) to the extent permitted by applicable law, continue or cause to
be continued until 24 months, after the Termination Date, on the cost-sharing
basis (if any) in effect immediately prior to the Change of Control, medical,
dental and life insurance benefits (and, at the option of the Employee,
disability insurance benefits) substantially equivalent in all material respects
to those furnished by the Company and its Subsidiaries to the Employee
immediately prior to the Change of Control; PROVIDED, HOWEVER, that if the
Employee's Normal Retirement Date would have occurred prior to 24 months after
the Termination Date, the obligation of the Company to provide such benefits
shall cease at the Employee's Normal Retirement Date; and PROVIDED FURTHER,
HOWEVER, that the obligation of the Company to provide such benefits shall
cease at such time as the Employee is employed on a full time basis by a
corporation not owned or controlled by the Employee that provides the Employee,
on substantially the same cost-sharing basis (if any) between the Company and
the Employee in effect immediately prior to the Change of Control, with medical,
dental, life and disability insurance benefits substantially equivalent in all
material respects to those furnished by the Company and its Subsidiaries to the
Employee immediately prior to the Change of Control; and
(c) permit the Employee to receive any car allowance or continue the
use of his Company car, if any, without any cost for a period of six months
thereafter. Thereafter, the Employee shall return the car to the Company unless,
in the case of a car owned by the Company, the Employee elects to purchase the
car from the Company at the net book value thereof at the date of the purchase
or, in the case of a car leased by the Company, the Employee pays the Company,
as such amounts become due and payable, all rental payments charged to the
Company for the use of such car for the remainder of the lease therefor.
5. VESTING AND ACCELERATION OF CERTAIN BENEFITS. In the event
of a Termination upon a Change of Control, all restrictions remaining on the
Termination Date on the restricted shares, if any, received by the Employee
pursuant to the Stock Plan shall lapse, and said shares shall thereupon be owned
by the Employee free and clear of all restrictions of any nature whatsoever,
except those, if any, under applicable U.S. federal and state securities laws.
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6. ENFORCEMENT.
(a) In the event that the Company shall fail or refuse to make
payment of any amounts due the Employee under Sections 3, 4 and 5 hereof within
the respective time periods provided therein, the Company shall pay to the
Employee, in addition to the payment of any other sums provided in this
Agreement, interest, compounded daily, on any amount remaining unpaid from the
date payment is required under Section 3, 4 or 5, as appropriate, until paid to
the Employee, at the rate from time to time announced by Wells Fargo Bank, N.A.
as its "prime rate" plus 2%, each change in such rate to take effect on the
effective date of the change in such prime rate.
(b) It is the intent of the parties that the Employee not be
required to incur any expenses associated with the enforcement of his rights
under this Agreement by arbitration, litigation or other legal action because
the cost and expense thereof would substantially detract from the benefits
intended to be extended to the Employee hereunder. Accordingly, the Company
shall pay the Employee on demand the amount necessary to reimburse the Employee
in full for all expenses (including all attorneys' fees and legal expenses)
incurred by the Employee in enforcing any of the obligations of the Company
under this Agreement.
7. NO MITIGATION. The Employee shall not be required to
mitigate the amount of any payment or benefit provided for in this Agreement by
seeking other employment or otherwise.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Employee's continuing or future participation in or rights
under any benefit, bonus, incentive or other plan or program provided by
Enterra, the Company or any of the Company's Subsidiaries or Affiliates and for
which the Employee may qualify.
9. COORDINATION OF BENEFITS; NO SET-OFF; TAXES.
(a) The severance plan or policy, if any, applicable to employees
of the Company or any Subsidiary which employs the Employee, and any other
severance payments required by employment contracts or statutes or provided
under government programs may provide compensation and benefits to the Employee
upon events which also constitute a Termination upon a Change of Control as
defined in this Agreement. In such event, Employee shall be entitled only to
the largest cash compensation provided for under any of such agreements, plans,
policies, statutes or programs and the maximum benefit continuance provided for
under any of such
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agreements, plans, policies, statues or programs, and the payments referred to
in Section 3 hereof shall be reduced to the extent necessary to effect such
coordination of benefits.
(b) Except as specifically set forth in (a) above, 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 circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Employee or others.
(c) Employee alone, and not Enterra, the Company or any
Subsidiary, shall be responsible for the payment of all taxes in respect of the
payments to be made and benefits to be provided under this Agreement.
10. SETTLEMENT OF ALL DISPUTES.
(a) Any dispute, controversy or claim arising out of or relating
to any provision of this Agreement or the Employee's Termination upon a Change
of Control shall be settled by arbitration in the City of Houston, Texas, in
accordance with the commercial arbitration rules then in effect of the American
Arbitration Association, before a panel of three arbitrators, one of whom shall
be selected by the Company, one of whom shall be selected by the Employee and
the third of whom shall be selected by the other two arbitrators. Each
arbitrator selected as provided herein is required to be or have been a director
or an executive officer of a corporation whose shares of common stock were
listed during at least one year of such service on the New York Stock Exchange
or the American Stock Exchange or quoted on the National Association of
Securities Dealers Automated Quotations System. Any award entered by the
arbitrators shall be final, binding and nonappealable and judgment may be
entered thereon by any party in accordance with applicable law in any court of
competent jurisdiction. This arbitration provision shall be specifically
enforceable. The fees of the American Arbitration Association and the
arbitrators and any expenses relating to the conduct of the arbitration shall be
paid by the Company.
(b) The party or parties challenging the right of the Employee to
the benefits of this Agreement shall in all circumstances have the burden of
proof.
11. TERM OF AGREEMENT. This Agreement shall commence as of the
date first written above and shall continue in effect until the earlier of (i)
March 31, 1998 or such earlier date upon which the Employee ceases to be in the
employ of the Company or any Subsidiary thereof for any
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reason other than a Termination Upon a Change of Control, or (ii) 24 months
after a Change of Control has occurred, PROVIDED, HOWEVER, that all of the
obligations of the parties hereunder arising after a Change of Control shall
continue in effect until such obligations are satisfied or have expired.
12. NOTICES. All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and may be delivered personally or mailed by overnight express
courier service, as follows:
If to the Company, to:
Enterra Corporation
2707 North Loop West
Suite 1050
Houston, TX 77008
USA
Attention: The Chairman
With a required copy to:
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103
USA
Attention: David R. King, Esq.
If to the Employee, to:
Brian Charles Goff
Rest Harrow
Benty Heath Lane
Willaston
Cheshire
England
or to such other names or addresses as the Company or the Employee, as the case
may be, shall designate by notice to the other party hereto in the manner
specified in this Section. Any such notice shall be deemed delivered and
effective when received in the case of personal delivery, on the next business
day in the case of overnight express courier service or when actually received
if sent in any other fashion.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED UNDER THE LAWS OF THE STATE OF
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DELAWARE, UNITED STATES OF AMERICA, WITHOUT GIVING EFFECT TO
SUCH STATE'S CONFLICT OF LAWS PROVISIONS.
14. CONTENTS OF AGREEMENT, AMENDMENT AND ASSIGNMENT.
(a) This Agreement supersedes all prior agreements and sets forth
the entire understanding between the parties hereto with respect to the subject
matter hereof and cannot be changed, modified, extended or terminated except
upon written amendment executed by (i) the Employee and (ii) after approval by
the directors of the Company and, in writing, by the chief executive officer of
Enterra, by a duly authorized director of the Company other than the Employee.
The provisions of this Agreement may provide for payments to the Employee under
certain compensation, bonus or stock option plans under circumstances where such
plans would not provide for payment thereof. It is the specific intention of
the parties that the provisions of this Agreement shall supersede any provisions
to the contrary in such plans, and such plans shall be deemed to have been
amended to correspond with this Agreement without further action by the Company
or Enterra.
(b) Nothing in this Agreement shall be construed as giving the
Employee any right to be retained in the employ of Enterra, the Company or any
Subsidiary of either.
(c) The Employee acknowledges that from time to time, Enterra, the
Company and their Subsidiaries may establish, maintain and distribute employee
manuals or handbooks or personnel policy manuals, and officers or other
representatives thereof may make written or oral statements relating to
personnel policies and procedures. Such manuals, handbooks and statements are
intended only for general guidance. No policies, procedures or statements of
any nature by or on behalf of Enterra, the Company or any Subsidiary of either
(whether written or oral, and whether or not contained in any employee manual or
handbook or personnel policy manual), and no acts or practices of any nature,
shall be construed to modify this Agreement.
(d) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and responsibilities of the Employee and the Company hereunder
shall not be assignable in whole or in part by the Company.
15. SEVERABILITY. If any provision of this Agreement or
application thereof to anyone or under any circumstances shall be determined to
be invalid or
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<PAGE>
unenforceable, such invalidity or unenforceability shall not affect any other
provisions or applications of this Agreement which can be given effect without
the invalid or unenforceable provision or application.
16. REMEDIES CUMULATIVE - NO WAIVER. No right conferred upon the
Employee by this Agreement is intended to be exclusive of any other right or
remedy, and each and every such right or remedy shall be cumulative and shall be
in addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity. No delay or omission by the Employee in
exercising any right, remedy or power hereunder or existing at law or in equity
shall be construed as a waiver thereof, including without limitation any delay
by the Employee in delivering a Notice of Termination pursuant to Section 2
hereof after an event has occurred which would, if the Employee had resigned,
have constituted a Termination upon a Change of Control pursuant to Section
1(l)(ii) of this Agreement.
17. MISCELLANEOUS. All section headings are for convenience
only. This Agreement may be executed in several counterparts, each of which
shall be an original. It shall not be necessary in making proof of this
Agreement or any counterpart hereof to produce or account for any of the other
counterparts.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first above written.
The COMMON SEAL of )
PIPELINE INDUCTION HEAT )
LIMITED was hereunto )
affixed in the presence )
of:- )
/s/ Chuck Evans
Director
Secretary
SIGNED SEALED and DELIVERED )
by the said BRIAN CHARLES ) /s/ Brian C. Goff
GOFF in the presence of:- )
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<PAGE>
SEVERANCE AGREEMENT
Agreement made as of February 8, 1990 between Enterra Corporation, a
Delaware corporation (the "Company"), and Steven C. Grant (the "Employee").
WHEREAS, the Employee is presently employed by the Company as its
Senior Vice President - Finance and Chief Financial Officer;
WHEREAS, the Company considers it essential to foster the employment
of well qualified key management personnel for the Company and its subsidiaries,
and, in this regard, the board of directors of the Company recognizes that, as
is the case with many publicly held corporations, the possibility of a change in
control of the Company may exist and that such possibility, and the uncertainty
and questions which it may raise among management, may result in the departure
or distraction of key management personnel to the detriment of the Company;
WHEREAS, the board of directors of the Company has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of key members of the management of the Company and its
Subsidiaries to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a change in
control of the Company, although no such change is now contemplated; and
WHEREAS, in order to induce the Employee to remain in the employ of
the Company, the Company agrees that the Employee shall receive the compensation
and benefits set forth in this Agreement in the event his employment with the
Company is terminated subsequent to a "Change of Control" (as defined in Section
1 hereof) of the Company as a cushion against the financial and career impact on
the Employee of any such Change of Control;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, the parties hereto agree as follows:
l. DEFINITIONS. For all purposes of this Agreement, the following
terms shall have the meanings specified in this Section unless the context
clearly otherwise requires:
<PAGE>
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) "Base Salary" shall mean the total cash remuneration earned by
the Employee on an annualized basis in all capacities with the Company and its
Subsidiaries, including any compensation the payment of which has been deferred
pursuant to a salary reduction or deferral plan (including a 401(k) plan, other
than company matching contributions) or agreement, but exclusive of any cash
payments made to him under the Company's Bonus Plan, or any contributions made
for his benefit to the Company's 401(k) Plan or CRC-Evans Plan.
(c) A Person shall be deemed the "Beneficial Owner" of any
securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed
the "Beneficial Owner" of securities tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for payment, purchase or exchange;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including without limitation pursuant to any agreement, arrangement
or understanding, whether or not in writing; PROVIDED, HOWEVER,
that a Person shall not be deemed the "Beneficial Owner" of any
security under this subsection (ii) as a result of an oral or
written agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding (A) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of
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<PAGE>
the General Rules and Regulations under the Exchange Act, and (B) is
not then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) that are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has
any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting (except,
pursuant to a revocable proxy as described in the proviso to
subsection (ii) above or the May 2, 1986 option agreement between
Shamrock Holdings, Inc. and the shareholders known as the "SGS
Group" or their successors) or disposing of any voting securities of
the Company;
PROVIDED, HOWEVER, that nothing in this Section 1(c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of any securities acquired through such Person's participation in good faith in
a firm commitment underwriting until the expiration of forty days after the date
of such acquisition.
(d) "Board" shall mean the board of directors of the Company.
(e) "Bonus Plan" shall mean the Company's Management Incentive
Bonus Plan, as in effect immediately prior to a Change of Control.
(f) "Change of Control" shall be deemed to have taken place if (i)
any Person (except the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, any Person or
entity organized, appointed or established by the Company for or pursuant to the
terms of any such employee benefit plan, or an Exempted Person), together with
all Affiliates and Associates of such Person acting in concert as described in
Section 14(d) (2) of the Exchange Act, shall become the Beneficial Owner in the
aggregate of 30% or more of the Common Stock of the Company then outstanding
within the meaning of Rule 13d-3 promulgated under the Exchange Act.
(g) "CRC-Evans Plan" shall mean the CRC-Evans Money Purchase
Pension Plan, as in effect immediately prior to a Change of Control.
(h) "Exempted Person" shall mean any of Shamrock Holdings of
California, Inc., a Delaware corporation
3
<PAGE>
("Shamrock"), Shamrock Holdings, Inc., a Delaware corporation ("Shamrock
Holdings"), or any Affiliate or Associate of shamrock or Shamrock Holdings.
"Exempted Person" shall not include transferees from any Exempted Person except
where such transferees are Affiliates or Associates of shamrock or Shamrock
Holdings.
(i) "401(k) Plan" shall mean the Company's 401(k) Plan, as in
effect immediately prior to a Change of Control.
(j) "Normal Retirement Date" shall mean the first day of the
calendar month coincident with or next following the Employee's 65th birthday.
(k) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(l) "Stock Plan" shall mean the Company's Stock Option Plan or any
successor plan thereto, as in effect immediately prior to a Change of Control.
(m) "Subsidiary" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
(n) "Termination Date" shall mean the date of receipt of the
Notice of Termination described in Section 2 hereof or any later date specified
therein, as the case may be.
(o) "Termination of Employment" shall mean the termination of the
Employee's actual employment relationship with the Company.
(p) "Termination upon a Change of Control" shall mean a
Termination of Employment upon or within two years after a Change of Control
either:
(i) initiated by the Company for any reason other than (x)
the Employee's continuous injury or incapacity for a period of six
consecutive months, (y) for "cause," which shall mean
misappropriation of funds, habitual insobriety, substance abuse,
conviction of a crime involving moral turpitude, or gross negligence
in the performance of his duties, which gross negligence has had a
material adverse effect on the business, operations, assets,
properties or financial condition of the Company and its
Subsidiaries taken as a whole, or (z) by reason of the occurrence of
the Normal Retirement Date; or
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<PAGE>
(ii) initiated by the Employee following one or more of the
following occurrences:
(A) a significant reduction by the Company or its
Subsidiaries of the authority, duties or responsibilities of
the Employee immediately prior to the Change of Control;
(B) any removal of the Employee from or any failure to
re-elect the Employee to the officer positions with the
Company and its Subsidiaries held by him immediately prior to
the Change of Control, except in connection with promotions to
higher office or in connection with consolidations among the
Company's Subsidiaries where the Employee is elected to
similar positions in the successor company or companies;
(C) a reduction by the Company in the Employee's Base
Salary as in effect immediately prior to the Change of
Control;
(D) revocation or any modification (except as may be
required in the normal course of business in light of any
requirement of or change in federal law or regulations) of the
Bonus Plan, 401(k) Plan or CRC-Evans Plan, or any action taken
pursuant to the terms of such plans, which materially (x)
reduces the opportunity to receive compensation under any
of such plans of equivalent amounts received by the Employee
during the two fiscal years immediately preceding the Change
of Control, subject to the right of the Board to establish in
a manner consistent with past practice prior to the Change of
Control reasonable goals under such plans, (y) reduces the
compensation payable to the Employee under any of such
plans but which does not effect comparable reductions in the
compensation payable to the other participants in such plans,
or (z) increases the compensation payable to other
participants in any of such plans but which does not effect
corresponding increases in the amount of compensation
payable to the Employee; or
(E) a transfer of the Employee, without his express
written consent, to a location which is outside the general
metropolitan area in which his principal place of business
5
<PAGE>
immediately preceding the Change of Control may be located, or
which is otherwise an unreasonable commuting distance from the
Employee's principal residence at the date of the Change of
Control.
2. NOTICE OF TERMINATION. Any Termination upon a Change of
Control shall be communicated by a Notice of Termination to the other party
hereto given in accordance with Section 14 hereof. 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) briefly
summarizes the facts and circumstances deemed to provide a basis for termination
of the Employee's employment under the provision so indicated, and (iii) if the
termination date is other than the date of receipt of such notice, specifies the
termination date (which date shall not be more than 15 days after the giving of
such notice).
3. SEVERANCE COMPENSATION UPON TERMINATION.
(a) Subject to the provisions of Section 10 hereof and to
adjustment as provided in paragraph (b) below and Section 9(a), in the event of
the Employee's Termination upon a Change of Control, the Company shall pay to
the Employee, within fifteen days after the Termination Date (or as soon as
possible thereafter in the event that the procedures set forth in Section 10(b)
hereof cannot be completed within 15 days), an amount in cash equal to two times
the sum of paragraphs (i) and (ii) below:
(i) The Employee's Base Salary in effect either immediately
prior to the Termination of Employment or immediately prior to the
Change of Control, whichever is higher; and
(ii) The average of the annual bonuses earned by the Employee
under the Bonus Plan in the two fiscal years immediately prior to
such Termination of Employment.
(b) In the event the Employee's Normal Retirement Date would occur
prior to twenty-four months after the Termination Date, the aggregate cash
amount determined as set forth in (a) above shall be reduced by multiplying it
by a fraction, the numerator of which shall be the number of days from the
Termination Date to the Employee's Normal Retirement Date and the denominator of
which shall be 730. No payments shall be due Employee in the event that the
Normal Retirement Date has been reached prior to the Termination Date.
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<PAGE>
4. OTHER PAYMENTS. Subject to the provisions of Section 10
hereof, in the event of the Employee's Termination upon a Change of Control, the
Company shall:
(a) pay to the Employee within fifteen days after the Termination
Date, unless the Employee has exercised such options and rights, an amount equal
to the excess, if any, of the aggregate fair market value of the shares of the
Company's Common Stock subject to all stock options and stock appreciation
rights outstanding and unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee under the Stock Plan, over
the aggregate exercise price of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of (x) the closing price of
the Company's Common Stock on the business day immediately preceding the
Termination Date, if such Common Stock is publicly traded at such date, (y) if
such Common stock is not publicly traded at the Termination Date, the value
determined by an independent appraiser, such appraiser to be selected by the
Employee and to be reasonably satisfactory to the Company (the fees and expenses
of such appraiser to be borne by the Company), or (z) the highest per share
price of the Company's Common stock paid (in connection with the Change of
Control or at any time thereafter) by the Person or group whose acquisition of
shares of Common Stock of the Company has given rise to a Change of Control;
(b) to the extent permitted by applicable law, continue or cause
to be continued until 24 months after the Termination Date, on the cost-sharing
basis (if any) in effect immediately prior to the Change of Control, medical,
dental and life insurance benefits (and, at the option of the Employee,
disability insurance benefits) substantially equivalent in all material respects
to those furnished by the Company and its subsidiaries to the Employee
immediately prior to the Change of Control; PROVIDED, HOWEVER, that if the
Employee's Normal Retirement Date would have occurred prior to 24 months after
the Termination Date, the obligation of the Company to provide such benefits
shall cease at the Employee's Normal Retirement Date; and PROVIDED FURTHER,
HOWEVER, that the obligation of the Company to provide such benefits shall
cease at such time as the Employee is employed on a full time basis by a
corporation not owned or controlled by the Employee that provides the Employee,
on substantially the same cost-sharing basis (if any) between the Company and
the Employee in effect immediately prior to the Change of Control, with medical,
dental, life and disability insurance benefits substantially equivalent in all
material respects to those furnished by the Company and its subsidiaries to the
Employee immediately prior to the Change of Control;
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<PAGE>
(c) for vesting purposes only, in the event of a Termination upon
a Change of Control occurring prior to the Normal Retirement Date, credit the
Employee with the lesser of (i) two additional "years of service" (as defined in
the Company's 401(k) Plan) or (ii) the period of time from the Termination Date
to the Normal Retirement Date under each of the Company's 401(k) Plan and
CRC-Evans Plan, in addition to the years of service that would have otherwise
been calculated by reference solely to the Termination Date, it being understood
that benefits in respect of the two additional years of service shall be paid to
the Employee under the Company's 401(k) Plan or CRC-Evans Plan, and that the
Company shall, to the extent necessary to provide the Employee the additional
benefits intended hereby, amend the 401(k) Plan or CRC-Evans Plan or pay such
additional benefits outside the plan as may be necessary; and
(d) permit the Employee to continue the use of his Company car, if
any, without any cost for a period of six months thereafter. Thereafter, the
Employee shall return the car to the Company unless, in the case of a car owned
by the Company, the Employee elects to purchase the car from the Company at the
net book value thereof at the date of the purchase or, in the case of a car
leased by the Company, the Employee pays the Company, as such amounts become due
and payable, all rental payments charged to the Company for the use of such car
for the remainder of the lease therefore.
5. VESTING AND ACCELERATION OF CERTAIN BENEFITS. In the event
of a Termination upon a Change of Control, and subject to the provisions of
Section 10 hereof, all restrictions remaining on the Termination Date on the
restricted shares, if any, received by the Employee, pursuant to the Stock Plan
shall lapse, and said shares shall thereupon be owned by the Employee free and
clear of all restrictions of any nature whatsoever, except those, if any, under
applicable federal and state securities laws.
6. ENFORCEMENT.
(a) In the event that the Company shall fail or refuse to make
payment of any amounts due the Employee under Sections 3, 4 and 5 hereof within
the respective time periods provided therein, the Company shall pay to the
Employee, in addition to the payment of any other sums provided in this
Agreement, interest, compounded daily, on any amount remaining unpaid from the
date payment is required under section 3, 4 or 5, as appropriate, until paid to
the Employee, at the rate from time to time announced by Wells Fargo Bank, N.A.
as its "prime rate" plus 2%, each change in such rate to take effect on the
effective date of the change in such prime rate.
8
<PAGE>
(b) It is the intent of the parties that the Employee not be
required to incur any expenses associated with the enforcement of his rights
under this Agreement by arbitration, litigation or other legal action because
the cost and expense thereof would substantially detract from the benefits
intended to be extended to the Employee hereunder. Accordingly, the Company
shall pay the Employee on demand the amount necessary to reimburse the Employee
in full for all expenses (including all attorneys' fees and legal expenses)
incurred by the Employee in enforcing any of the obligations of the Company
under this Agreement.
7. NO MITIGATION. The Employee shall not be required to
mitigate the amount of any payment or benefit provided for in this Agreement by
seeking other employment or otherwise.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Employee's continuing or future participation in or rights
under any benefit, bonus, incentive or other plan or program provided by the
Company or any of its Subsidiaries or Affiliates and for which the Employee may
qualify.
9. COORDINATION OF BENEFITS; NO SET-OFF; TAXES.
(a) The severance plan or policy, if any, applicable to employees
of Enterra or the Subsidiary which employs the Employee, and any other severance
payments required by applicable statutes or provided under government programs
may provide compensation and benefits to Employee upon events which also
constitute a Termination upon a Change of Control as defined in this Agreement.
In such event, Employee shall be entitled only to the largest cash compensation
provided for under any of such agreements, plans, policies, statutes or programs
and the maximum benefit continuance provided for under any of such agreements,
plans, policies, statues or programs, and the payments referred to in Section 3
hereof shall be reduced to the extent necessary to effect such coordination of
benefits.
(b) Except as specifically set forth in (a) above, 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 circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Employee or others.
(c) Employee alone, and not the Company or any Subsidiary, shall
be responsible for the payment of all
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federal, state and local taxes in respect of the payments to be made and
benefits to be provided under this Agreement.
10. CERTAIN REDUCTION OF PAYMENTS.
(a) Anything in this Agreement to the contrary notwithstanding, in
the event that it shall be determined as set forth herein that any payment or
distribution by the Company to or for the benefit of the Employee, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (a "Payment"), would constitute an "excess parachute
payment" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and that it would be economically advantageous to
the Company to reduce the Payment to avoid or reduce the taxation of excess
parachute payments under Section 4999 of the Code, the aggregate present value
of amounts payable or distributable to or for the benefit of the Employee
pursuant to this Agreement (such payments or distributions pursuant to this
Agreement are hereinafter referred to as "Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount" shall be an
amount expressed in present value which maximizes the aggregate present value of
Agreement Payments without causing any Payment to be subject to the taxation
under Section 4999 of the Code. For purposes of this Section 10, present value
shall be determined in accordance with Sect ion 280G(d) (4) of the Code.
(b) All determinations to be made under this Section 10 shall be
made by Peat Marwick Main & Co., or the Company's independent public accountant
immediately prior to the Change of Control if other than Peat Marwick Main & Co.
(the "Accounting Firm"), which firm shall use its best efforts to provide its
determinations and any supporting calculations both to the Company and the
Employee within 10 days of the Termination Date. Any such determination by the
Accounting Firm shall be binding upon the Company and the Employee. The Company
shall in its sole discretion determine which and how much of the Agreement
Payments shall be eliminated or reduced consistent with the requirements of this
Section 10. Within five days after the Company's determination, the Company
shall pay (or cause to be paid) or distribute (or cause to be distributed) to or
for the benefit of the Employee such amounts as are then due to the Employee
under this Agreement.
(c) As a result of the uncertainty in the application of Section
280G of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Agreement Payments, as the case may be, will have
been made by the Company which should not have been made
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("Overpayment") or that additional Agreement Payments which have not been made
by the Company could have been made ("Underpayment"), in each case, consistent
with the calculations required to be made hereunder. Within two years after the
Termination of Employment, the Accounting Firm shall review the determination
made by it pursuant to the preceding paragraph. In the event that the Accounting
Firm determines that an Overpayment has been made, any such Overpayment shall be
treated for all purposes as a loan to the Employee which the Employee shall
repay to the Company together with interest at the applicable Federal rate
provided for in Section 7872(f) (2) of the Code (the "Federal Rate"); PROVIDED,
HOWEVER, that no amount shall be payable by the Employee to the Company if and
to the extent such payment would not reduce the amount which is subject to
taxation under Section 4999 of the Code. In the event that the Accounting Firm
determines that an Underpayment has occurred, any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Employee together with
interest at the Federal Rate.
(d) All of the fees and expenses of the Accounting Firm in
performing the determinations referred to in subsections (b) and (c) above shall
be borne solely by the Company. The Company agrees to indemnify and hold
harmless the Accounting Firm of and from any and all claims, damages and
expenses of any nature resulting from or relating to its determinations pursuant
to subsections (b) and (c) above, except for claims, damages or expenses
resulting from the gross negligence or willful misconduct of the Accounting
Firm.
11. SETTLEMENT OF ALL DISPUTES.
(a) Any dispute, controversy or claim arising out of or relating
to any provision of this Agreement or the Employee's Termination upon a Change
of Control shall be settled by arbitration in the City of Houston, Texas, in
accordance with the commercial arbitration rules then in effect of the American
Arbitration Association, before a panel of three arbitrators, two of whom shall
be selected by the Company and the Employee, respectively, and the third of whom
shall be selected by the other two arbitrators. Each arbitrator selected as
provided herein is required to be or have been a director or an executive
officer of a corporation whose shares of common stock were listed during at
least one year of such service on the New York Stock Exchange or the American
Stock Exchange or quoted on the National Association of Securities Dealers
Automated Quotations System. Any award entered by the arbitrators shall be
final, binding and nonappealable and judgment may be entered thereon by any
party in accordance with applicable law in any court of
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competent jurisdiction. This arbitration provision shall be specifically
enforceable. The fees of the American Arbitration Association and the
arbitrators and any expenses relating to the conduct of the arbitration shall be
paid by the Company.
(b) The party or parties challenging the right of the Employee to
the benefits of this Agreement shall in all circumstances have the burden of
proof.
12. TERM OF AGREEMENT. This Agreement shall commence as of the
date first written above and shall continue in effect until the earlier of (i)
the date upon which the Employee ceases to be in the employ of the Company or
any Subsidiary thereof for any reason other than a Termination Upon a Change of
Control, or (ii) 24 months after a Change of Control has occurred, PROVIDED,
HOWEVER, that all of the obligations of the parties hereunder arising after a
Change of Control shall continue in effect until such obligations are satisfied
or have expired.
13. SUCCESSOR COMPANY. The Company shall require any successor
or successors (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to the Employee, to
acknowledge expressly that this Agreement is binding upon and enforceable
against the Company in accordance with the terms hereof, and to become jointly
and severally obligated with the Company to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession or successions had taken place. Failure of the Company to
obtain such agreement prior to the effectiveness of any such succession shall be
a breach of this Agreement. As used in this Agreement, the Company shall mean
the Company as hereinbefore defined and any such successor or successors to its
business and/or assets, jointly and severally.
14. NOTICE. All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and shall be delivered personally or mailed by registered or
certified mail, return receipt requested, or by overnight express courier
service, as follows:
If to the Company, to:
Enterra Corporation
2707 North Loop West
Suite 1050
Houston, TX 77008
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Attention: The Chairman
With a required copy to:
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103
Attention: David R. King, Esq.
If to the Employee, to:
Steven C. Grant
13610 Alchester
Houston, TX 77079
or to such other names or addresses as the Company or the Employee, as the case
may be, shall designate by notice to the other party hereto in the manner
specified in this Section. Any such notice shall be deemed delivered and
effective when received in the case of personal delivery, five days after
deposit, postage prepaid, with the U.S. Postal Service in the case of registered
or certified mail, or on the next business day in the case of overnight express
courier service.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED UNDER THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY
CONFLICT OF LAWS PROVISIONS.
16. CONTENTS OF AGREEMENT, AMENDMENT AND ASSIGNMENT.
(a) This Agreement supersedes all prior agreements (including,
without limitation, the severance agreement dated February 9, 1989 which is
hereby terminated) and sets forth the entire understanding between the parties
hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment executed by the
Employee and approved by the board and executed on the Company's behalf by a
duly authorized officer. The provisions of this Agreement may provide for
payments to the Employee under certain compensation or bonus plans (including
without limitation the Stock Plan, the Bonus Plan, the 401(k) Plan and the
CRC-Evans Plan) under circumstances where such plans would not provide for
payment thereof. It is the specific intention of the parties that the provisions
of this Agreement shall supersede any provisions to the contrary in such plans,
and such plans shall be deemed to have been amended to correspond with this
Agreement without further action by the Company or the Board.
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(b) Nothing in this Agreement shall be construed as giving the
Employee any right to be retained in the employ of the Company or any of its
Subsidiaries.
(c) The Employee acknowledges that from time to time, the Company
and its subsidiaries may establish, maintain and distribute employee manuals or
handbooks or personnel policy manuals, and officers or other representatives of
the Company or its Subsidiaries may make written or oral statements relating to
personnel policies and procedures. Such manuals, handbooks and statements are
intended only for general guidance. No policies, procedures or statements of any
nature by or on behalf of the Company or its Subsidiaries (whether written or
oral, and whether or not contained in any employee manual or handbook or
personnel policy manual), and no acts or practices of any nature, shall be
construed to modify this Agreement.
(d) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and responsibilities of the Employee and the Company hereunder
shall not be assignable in whole or in part by the Company.
17. SEVERABILITY. If any provision of this Agreement or
application thereof to anyone or under any circumstances shall be determined to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or application.
18. REMEDIES CUMULATIVE - NO WAIVER. No right conferred upon the
Employee by this Agreement is intended to be exclusive of any other right or
remedy, and each and every such right or remedy shall be cumulative and shall be
in addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity. No delay or omission by the Employee in exercising
any right, remedy or power hereunder or existing at law or in equity shall be
construed as a waiver thereof, including without limitation any delay by the
Employee in delivering a Notice of Termination pursuant to Section 2 hereof
after an event has occurred which would, if the Employee had resigned, have
constituted a Termination upon a Change of Control pursuant to Section 1(p)(ii)
of this Agreement.
19. MISCELLANEOUS. All section headings are for convenience
only. This Agreement may be executed in several
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counterparts, each of which is an original. It shall not be necessary in making
proof of this Agreement or any counterpart hereof to produce or account for any
of the other counterparts.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first above written.
Attest: ENTERRA CORPORATION
/s/ Steven W. Krablin By:/s/ Thomas S. McIntosh
- ------------------------------- --------------------------------
Asst. Secretary Thomas S. McIntosh
President and Chief
Executive Officer
/s/ Gay Mather /s/ Steven C. Grant
- ------------------------------- ----------------------------------
Witness Steven C. Grant
15
<PAGE>
SEVERANCE AGREEMENT
Agreement made as of February 8, 1990 between Enterra Corporation, a
Delaware corporation (the "Company"), and Edward C. Grimes (the "Employee").
WHEREAS, the Employee is presently employed by Key Oilfield Supply &
Rentals Ltd., a "Subsidiary" (as defined in Section 1 hereof), as its President
and Chief Operating Officer;
WHEREAS, the Company considers it essential to foster the employment
of well qualified key management personnel for the Company and its Subsidiaries,
and, in this regard, the board of directors of the Company recognizes that, as
is the case with many publicly held corporations, the possibility of a change in
control of the Company may exist and that such possibility, and the uncertainty
and questions which it may raise among management, may result in the departure
or distraction of key management personnel to the detriment of the Company;
WHEREAS, the board of directors of the Company has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of key members of the management of the Company and its
Subsidiaries to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a change in
control of the Company, although no such change is now contemplated; and
WHEREAS, in order to induce the Employee to remain in the employ of
the Subsidiary, the Company agrees that the Employee shall receive the
compensation and benefits set forth in this Agreement in the event his
employment with the Company is terminated subsequent to a "Change of Control"
(as defined in Section 1 hereof) of the Company as a cushion against the
financial and career impact on the Employee of any such Change of Control;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, the parties hereto agree as follows:
1. DEFINITIONS. For all purposes of this Agreement, the following
terms shall have the meanings specified in this Section unless the context
clearly otherwise requires:
<PAGE>
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) "Base Salary" shall mean the total cash remuneration earned by the
Employee on an annualized basis in all capacities with the Company and its
Subsidiaries, including any compensation the payment of which has been deferred
pursuant to a salary reduction or deferral plan (including a 401(k) plan, other
than company matching contributions) or agreement, but exclusive of any cash
payments made to him under the Company's Bonus Plan, or any contributions made
for his benefit to the Company's 401(k) Plan or CRC-Evans Plan.
(c) A Person shall be deemed the "Beneficial Owner" of any
securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether
or not in writing) or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; PROVIDED, HOWEVER,
that a Person shall not be deemed the "Beneficial Owner" of securities
tendered pursuant to a tender or exchange offer made by such Person or
any of such Person's Affiliates or Associates until such tendered
securities are accepted for payment, purchase or exchange;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including without limitation pursuant to any agreement, arrangement or
understanding, whether or not in writing; PROVIDED, HOWEVER, that a
Person shall not be deemed the "Beneficial Owner" of any security
under this subsection (ii) as a result of an oral or written
agreement, arrangement or understanding to vote such security if such
agreement, arrangement or understanding (A) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of
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the General Rules and Regulations under the Exchange Act, and (B) is
not then reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(iii) that are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing)
for the purpose of acquiring, holding, voting (except, pursuant to a
revocable proxy as described in the proviso to subsection (ii) above
or the May 2, 1986 option agreement between Shamrock Holdings, Inc.
and the shareholders known as the "SGS Group" or their successors) or
disposing of any voting securities of the Company;
PROVIDED, HOWEVER, that nothing in this Section 1(c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of any securities acquired through such Person's participation in good faith in
a firm commitment underwriting until the expiration of forty days after the date
of such acquisition.
(d) "Board" shall mean the board of directors of the Company.
(e) "Bonus Plan" shall mean the Company's Management Incentive Bonus
Plan, as in effect immediately prior to a Change of Control.
(f) "Change of Control" shall be deemed to have taken place if (i)
any Person (except the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, any Person or
entity organized, appointed or established by the Company for or pursuant to the
terms of any such employee benefit plan, or an Exempted Person), together with
all Affiliates and Associates of such Person acting in concert as described in
Section 14(d) (2) of the Exchange Act, shall become the Beneficial Owner in the
aggregate of 30% or more of the Common Stock of the Company then outstanding
within the meaning of Rule 13d-3 promulgated under the Exchange Act.
(g) "CRC-Evans Plan" shall mean the CRC-Evans Money Purchase Pension
Plan, as in effect immediately prior to a Change of Control.
(h) "Exempted Person" shall mean any of Shamrock Holdings of
California, Inc., a Delaware corporation
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<PAGE>
("Shamrock"), Shamrock Holdings, Inc., a Delaware corporation ("Shamrock
Holdings"), or any Affiliate or Associate of Shamrock or Shamrock Holdings.
"Exempted Person" shall not include transferees from any Exempted Person except
where such transferees are Affiliates or Associates of Shamrock or Shamrock
Holdings.
(i) "401(k) Plan" shall mean the Company's 401(k) Plan, as in effect
immediately prior to a Change of Control.
(j) "Normal Retirement Date" shall mean the first day of the calendar
month coincident with or next following the Employee's 65th birthday.
(k) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(l) "Stock Plan" shall mean the Company's Stock Option Plan or any
successor plan thereto, as in effect immediately prior to a Change of Control.
(m) "Subsidiary" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
(n) "Termination Date" shall mean the date of receipt of the Notice
of Termination described in Section 2 hereof or any later date specified
therein, as the case may be.
(o) "Termination of Employment" shall mean the termination of the
Employee's actual employment relationship with the Company.
(p) "Termination upon a Change of Control" shall mean a Termination
of Employment upon or within two years after a Change of Control either:
(i) initiated by the Company for any reason other than (x) the
Employee's continuous illness, injury or incapacity for a period of
six consecutive months, (y) for "cause," which shall mean
misappropriation of funds, habitual insobriety, substance abuse,
conviction of a crime involving moral turpitude, or gross negligence
in the performance of his duties, which gross negligence has had a
material adverse effect on the business, operations, assets,
properties or financial condition of the Company and its Subsidiaries
taken as a whole, or (z) by reason of the occurrence of the Normal
Retirement Date; or
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<PAGE>
(ii) initiated by the Employee following one or more of the
following occurrences:
(A) a significant reduction by the Company or its
Subsidiaries of the authority, duties or responsibilities of the
Employee immediately prior to the Change of Control;
(B) any removal of the Employee from or any failure to re-
elect the Employee to the officer positions with the Company and
its Subsidiaries held by him immediately prior to the Change of
Control, except in connection with promotions to higher office or
in connection with consolidations among the Company's
Subsidiaries where the Employee is elected to similar positions
in the successor company or companies;
(C) a reduction by the Company in the Employee's Base
Salary as in effect immediately prior to the Change of Control;
(D) revocation or any modification (except as may be
required in the normal course of business in light of any
requirement of or change in federal law or regulations) of the
Bonus Plan, 401(k) Plan or CRC-Evans Plan, or any action taken
pursuant to the terms of such plans, which materially (x) reduces
the opportunity to receive compensation under any of such plans
of equivalent amounts received by the Employee during the two
fiscal years immediately preceding the Change of Control, subject
to the right of the Board to establish in a manner consistent
with past practice prior to the Change of Control reasonable
goals under such plans, (y) reduces the compensation payable to
the Employee under any of such plans but which does not effect
comparable reductions in the compensation payable to the other
participants in such plans, or (z) increases the compensation
payable to other participants in any of such plans but which does
not effect corresponding increases in the amount of compensation
payable to the Employee; or
(E) a transfer of the Employee, without his express written
consent, to a location which is outside the general metropolitan
area in which his principal place of business
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<PAGE>
immediately preceding the Change of Control may be located, or
which is otherwise an unreasonable commuting distance from the
Employee's principal residence at the date of the Change of
Control.
2. NOTICE OF TERMINATION. Any Termination upon a Change of Control
shall be communicated by a Notice of Termination to the other party hereto given
in accordance with Section 14 hereof. 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) briefly summarizes the
facts and circumstances deemed to provide a basis for termination of the
Employee's employment under the provision so indicated, and (iii) if the
termination date is other than the date of receipt of such notice, specifies the
termination date (which date shall not be more than 15 days after the giving of
such notice).
3. SEVERANCE COMPENSATION UPON TERMINATION.
(a) Subject to the provisions of Section 10 hereof and to adjustment
as provided in paragraph (b) below and Section 9(a), in the event of the
Employee's Termination upon a Change of Control, the Company shall pay to the
Employee, within fifteen days after the Termination Date (or as soon as possible
thereafter in the event that the procedures set forth in Section 10(b) hereof
cannot be completed within 15 days), an amount in cash equal to two times the
sum of paragraphs (i) and (ii) below:
(i) The Employee's Base Salary in effect either immediately
prior to the Termination of Employment or immediately prior to the
Change of Control, whichever is higher; and
(ii) The average of the annual bonuses earned by the Employee
under the Bonus Plan in the two fiscal years immediately prior to such
Termination of Employment.
(b) In the event the Employee's Normal Retirement Date would occur
prior to twenty-four months after the Termination Date, the aggregate cash
amount determined as set forth in (a) above shall be reduced by multiplying it
by a fraction, the numerator of which shall be the number of days from the
Termination Date to the Employee's Normal Retirement Date and the denominator of
which shall be 730. No payments shall be due Employee in the event that the
Normal Retirement Date has been reached prior to the Termination Date.
6
<PAGE>
4. OTHER PAYMENTS. Subject to the provisions of Section 10 hereof,
in the event of the Employee's Termination upon a Change of Control, the Company
shall:
(a) pay to the Employee within fifteen days after the Termination
Date, unless the Employee has exercised such options and rights, an amount equal
to the excess, if any, of the aggregate fair market value of the shares of the
Company's Common Stock subject to all stock options and stock appreciation
rights outstanding and unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee under the Stock Plan, over
the aggregate exercise price of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of (x) the closing price of
the Company's Common Stock on the business day immediately preceding the
Termination Date, if such Common Stock is publicly traded at such date, (y) if
such Common Stock is not publicly traded at the Termination Date, the value
determined by an independent appraiser, such appraiser to be selected by the
Employee and to be reasonably satisfactory to the Company (the fees and expenses
of such appraiser to be borne by the Company), or (z) the highest per share
price of the Company's Common Stock paid (in connection with the Change of
Control or at any time thereafter) by the Person or group whose acquisition of
shares of Common Stock of the Company has given-rise to a Change of Control;
(b) to the extent permitted by applicable law, continue or cause to
be continued until 24 months after the Termination Date, on the cost-sharing
basis (if any) in effect immediately prior to the Change of Control, medical,
dental and life insurance benefits (and, at the option of the Employee,
disability insurance benefits) substantially equivalent in all material respects
to those furnished by the Company and its Subsidiaries to the Employee
immediately prior to the Change of Control; PROVIDED, HOWEVER, that if the
Employee's Normal Retirement Date would have occurred prior to 24 months after
the Termination Date, the obligation of the Company to provide such benefits
shall cease at the Employee's Normal Retirement Date; and PROVIDED FURTHER,
HOWEVER, that the obligation of the Company to provide such benefits shall cease
at such time as the Employee is employed on a full time basis by a corporation
not owned or controlled by the Employee that provides the Employee, on
substantially the same cost-sharing basis (if any) between the Company and the
Employee in effect immediately prior to the Change of Control, with medical,
dental, life and disability insurance benefits substantially equivalent in all
material respects to those furnished by the Company and its Subsidiaries to the
Employee immediately prior to the Change of Control;
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<PAGE>
(c) for vesting purposes only, in the event of a Termination upon a
Change of Control occurring prior to the Normal Retirement Date, credit the
Employee with the lesser of (i) two additional "years of service" (as defined in
the Company's 401(k) Plan) or (ii) the period of time from the Termination Date
to the Normal Retirement Date under each of the Company's 401(k) Plan and CRC-
Evans Plan, in addition to the years of service that would have otherwise been
calculated by reference solely to the Termination Date, it being understood that
benefits in respect of the two additional years of service shall be paid to the
Employee under the Company's 401(k) Plan or CRC-Evans Plan, and that the Company
shall, to the extent necessary to provide the Employee the additional benefits
intended hereby, amend the 401(k) Plan or CRC-Evans Plan or pay such additional
benefits outside the plan as may be necessary; and
(d) permit the Employee to continue the use of his Company car, if
any, without any cost for a period of six months thereafter. Thereafter, the
Employee shall return the car to the Company unless, in the case of a car owned
by the Company, the Employee elects to purchase the car from the Company at the
net book value thereof at the date of the purchase or, in the case of a car
leased by the Company, the Employee pays the Company, as such amounts become due
and payable, all rental payments charged to the Company for the use of such car
for the remainder of the lease therefore.
5. VESTING AND ACCELERATION OF CERTAIN BENEFITS. In the event of a
Termination upon a Change of Control, and subject to the provisions of Section
10 hereof, all restrictions remaining on the Termination Date on the restricted
shares, if any, received by the Employee, pursuant to the Stock Plan shall
lapse, and said shares shall thereupon be owned by the Employee free and clear
of all restrictions of any nature whatsoever, except those, if any, under
applicable federal and state securities laws.
6. ENFORCEMENT.
(a) In the event that the Company shall fail or refuse to make payment
of any amounts due the Employee under Sections 3, 4 and 5 hereof within the
respective time periods provided therein, the Company shall pay to the Employee,
in addition to the payment of any other sums provided in this Agreement,
interest, compounded daily, on any amount remaining unpaid from the date payment
is required under Section 3, 4 or 5, as appropriate, until paid to the Employee,
at the rate from time to time announced by Wells Fargo Bank, N.A. as its "prime
rate" plus 2%, each change in such rate to take effect on the effective date of
the change in such prime rate.
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(b) It is the intent of the parties that the Employee not be required
to incur any expenses associated with the enforcement of his rights under this
Agreement by arbitration, litigation or other legal action because the cost and
expense thereof would substantially detract from the benefits intended to be
extended to the Employee hereunder. Accordingly, the Company shall pay the
Employee on demand the amount necessary to reimburse the Employee in full for
all expenses (including all attorneys' fees and legal expenses) incurred by the
Employee in enforcing any of the obligations of the Company under this
Agreement.
7. NO MITIGATION. The Employee shall not be required to mitigate the
amount of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit the Employee's continuing or future participation in or rights under
any benefit, bonus, incentive or other plan or program provided by the Company
or any of its Subsidiaries or Affiliates and for which the Employee may qualify.
9. COORDINATION OF BENEFITS; NO SET-OFF; TAXES.
(a) The severance plan or policy, if any, applicable to employees of
Enterra or the Subsidiary which employs the Employee, and any other severance
payments required by applicable statutes or provided under government programs
may provide compensation and benefits to Employee upon events which also
constitute a Termination upon a Change of Control as defined in this Agreement.
In such event, Employee shall be entitled only to the largest cash compensation
provided for under any of such agreements, plans, policies, statutes or programs
and the maximum benefit continuance provided for under any of such agreements,
plans, policies, statues or programs, and the payments referred to in Section 3
hereof shall be reduced to the extent necessary to effect such coordination of
benefits.
(b) Except as specifically set forth in (a) above, 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 circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Employee or others.
(c) Employee alone, and not the Company or any Subsidiary, shall be
responsible for the payment of all
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federal, state and local taxes in respect of the payments to be made and
benefits to be provided under this Agreement.
10. CERTAIN REDUCTION OF PAYMENTS.
(a) Anything in this Agreement to the contrary notwithstanding, in
the event that it shall be determined as set forth herein that any payment or
distribution by the Company to or for the benefit or the Employee, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (a "Payment"), would constitute an "excess parachute
payment" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and that it would be economically advantageous to
the Company to reduce the Payment to avoid or reduce the taxation-of excess
parachute payments under Section 4999 of the Code, the aggregate present value
of amounts payable or distributable to or for the benefit of the Employee
pursuant to this Agreement (such payments or distributions pursuant to this
Agreement are hereinafter referred to as "Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount" shall be an
amount expressed in present value which maximizes the aggregate present value of
Agreement Payments without causing any Payment to be subject to the taxation
under Section 4999 of the Code. For purposes of this Section 10, present value
shall be determined in accordance with Section 280G(d)(4) of the Code.
(b) All determinations to be made under this Section 10 shall be
made by Peat Marwick Main & Co., or the Company's independent public accountant
immediately prior to the Change of Control if other than Peat Marwick Main & Co.
(the "Accounting Firm"), which firm shall use its best efforts to provide its
determinations and any supporting calculations both to the Company and the
Employee within 10 days of the Termination Date. Any such determination by the
Accounting Firm shall be binding upon the Company and the Employee. The Company
shall in its sole discretion determine which and how much of the Agreement
Payments shall be eliminated or reduced consistent with the requirements of this
Section 10. Within five days after the Company's determination, the Company
shall pay (or cause to be paid) or distribute (or cause to be distributed) to or
for the benefit of the Employee such amounts as are then due to the Employee
under this Agreement.
(c) As a result of the uncertainty in the application of Section 280G
of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Agreement Payments, as the case may be, will have
been made by the Company which should not have been made
10
<PAGE>
("Overpayment") or that additional Agreement Payments which have not been made
by the Company could have been made ("Underpayment"), in each case, consistent
with the calculations required to be made hereunder. Within two years after the
Termination of Employment, the Accounting Firm shall review the determination
made by it pursuant to the preceding paragraph. In the event that the Accounting
Firm determines that an Overpayment has been made, any such Overpayment shall be
treated for all purposes as a loan to the Employee which the Employee shall
repay to the Company together with interest at the applicable Federal rate
provided for in Section 7872(f) (2) of the Code (the "Federal Rate"); PROVIDED,
HOWEVER, that no amount shall be payable by the Employee to the Company if and
to the extent such payment would not reduce the amount which is subject to
taxation under Section 4999 of the Code. In the event that the Accounting Firm
determines that an Underpayment has occurred, any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Employee together with
interest at the Federal Rate.
(d) All of the fees and expenses of the Accounting Firm in performing
the determinations referred to in subsections (b) and (c) above shall be borne
solely by the Company. The Company agrees to indemnify and hold harmless the
Accounting Firm of and from any and all claims, damages and expenses of any
nature resulting from or relating to its determinations pursuant to subsections
(b) and (c) above, except for claims, damages or expenses resulting from the
gross negligence or willful misconduct of the Accounting Firm.
11. SETTLEMENT OF ALL DISPUTES.
(a) Any dispute, controversy or claim arising out of or relating to
any provision of this Agreement or the Employee's Termination upon a Change of
Control shall be settled by arbitration in the City of Houston, Texas, in
accordance with the commercial arbitration rules then in effect of the American
Arbitration Association, before a panel of three arbitrators, two of whom shall
be selected by the Company and the Employee, respectively, and the third of whom
shall be selected by the other two arbitrators. Each arbitrator selected as
provided herein is required to be or have been a director or an executive
officer of a corporation whose shares of common stock were listed during at
least one year of such service on the New York Stock Exchange or the American
Stock Exchange or quoted on the National Association of Securities Dealers
Automated Quotations System. Any award entered by the arbitrators shall be
final, binding and nonappealable and judgment may be entered thereon by any
party in accordance with applicable law in any court of
11
<PAGE>
competent jurisdiction. This arbitration provision shall be specifically
enforceable. The fees of the American Arbitration Association and the
arbitrators and any expenses relating to the conduct of the arbitration shall be
paid by the Company.
(b) The party or parties challenging the right of the Employee to the
benefits of this Agreement shall in all circumstances have the burden of proof.
12. TERM OF AGREEMENT. This Agreement shall commence as of the date
first written above and shall continue in effect until the earlier of (i) the
date upon which the Employee ceases to be in the employ of the Company or any
Subsidiary thereof for any reason other than a Termination Upon a Change of
Control, or (ii) 24 months after a Change of Control has occurred, PROVIDED,
HOWEVER, that all of the obligations of the parties hereunder arising after a
Change of Control shall continue in effect until such obligations are satisfied
or have expired.
13. SUCCESSOR COMPANY. The Company shall require any successor or
successors (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to the Employee, to
acknowledge expressly that this Agreement is binding upon and enforceable
against the Company in accordance with the terms hereof, and to become jointly
and severally obligated with the Company to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession or successions had taken place. Failure of.the Company to
obtain such agreement prior to the effectiveness of any such succession shall be
a breach of this Agreement. As used in this Agreement, the Company shall mean
the Company as hereinbefore defined and any such successor or successors to its
business and/or assets, jointly and severally.
14. NOTICE. All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and shall be delivered personally or mailed by registered or
certified mail, return receipt requested, or by overnight express courier
service, as follows:
If to the Company, to:
Enterra Corporation
2707 North Loop West
Suite 1050
Houston, TX 77008
12
<PAGE>
Attention: The Chairman
With a required copy to:
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103
Attention: David R. King, Esq.
If to the Employee, to:
Edward C. Grimes
123 Varsity Estates Grove, NW
Calgary, Alberta T3B4C8
or to such other names or addresses as the Company or the Employee, as the case
may be, shall designate by notice to the other party hereto in the manner
specified in this Section. Any such notice shall be deemed delivered and
effective when received in the case of personal delivery, five days after
deposit, postage prepaid, with the U.S. Postal Service in the case of registered
or certified mail, or on the next business day in the case of overnight express
courier service.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED UNDER THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY
CONFLICT OF LAWS PROVISIONS.
16. CONTENTS OF AGREEMENT. AMENDMENT AND ASSIGNMENT.
(a) This Agreement supersedes all prior agreements and sets forth the
entire understanding between the parties hereto with respect to the subject
matter hereof and cannot be changed, modified, extended or terminated except
upon written amendment executed by the Employee and approved by the board and
executed on the Company's behalf by a duly authorized officer. The provisions
of this Agreement may provide for payments to the Employee under certain
compensation or bonus plans (including without limitation the Stock Plan, the
Bonus Plan, the 401(k) Plan and the CRC-Evans Plan) under circumstances where
such plans would not provide for payment thereof. It is the specific intention
of the parties that the provisions of this Agreement shall supersede any
provisions to the contrary in such plans, and such plans shall be deemed to have
been amended to correspond with this Agreement without further action by the
Company or the Board.
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<PAGE>
(b) Nothing in this Agreement shall be construed as giving the
Employee any right to be retained in the employ of the Company or any of its
Subsidiaries.
(c) The Employee acknowledges that from time to time, the Company and
its subsidiaries may establish, maintain and distribute employee manuals or
handbooks or personnel policy manuals, and officers or other representatives of
the Company or its Subsidiaries may make written or oral statements relating to
personnel policies and procedures. Such manuals, handbooks and statements are
intended only for general guidance. No policies, procedures or statements of any
nature by or on behalf of the Company or its Subsidiaries (whether written or
oral, and whether or not contained in any employee manual or handbook or
personnel policy manual), and no acts or practices of any nature, shall be
construed to modify this Agreement.
(d) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and responsibilities of the Employee and the Company hereunder
shall not be assignable in whole or in part by the Company.
17. SEVERABILITY. If any provision of this Agreement or application
thereof to anyone or under any circumstances shall be determined to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
provisions or applications of this Agreement which can be given effect without
the invalid or unenforceable provision or application.
18. REMEDIES CUMULATIVE - NO WAIVER. No right conferred upon the
Employee by this Agreement is intended to be exclusive of any other right or
remedy, and each and every such right or remedy shall be cumulative and shall be
in addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity. No delay or omission by the Employee in exercising
any right, remedy or power hereunder or existing at law or in equity shall be
construed as a waiver thereof, including without limitation any delay by the
Employee in delivering a Notice of Termination pursuant to Section 2 hereof
after an event has occurred which would, if the Employee had resigned, have
constituted a Termination upon a Change of Control pursuant to Section 1(p) (ii)
of this Agreement.
19. MISCELLANEOUS. All section headings are for convenience only.
This Agreement may be executed in several counterparts, each of which is an
original. It shall not be
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<PAGE>
necessary in making proof of this Agreement or any counterpart hereof to produce
or account for any of the other counterparts.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first above written.
Attest: ENTERRA CORPORATION
/s/ Steven W. Krablin By: /s/ Thomas S. McIntosh
- ------------------------------ --------------------------------
Secretary Thomas S. McIntosh
President and Chief
Executive Officer
/s/ S. Waddell /s/ E. C. Grimes
- ------------------------------ --------------------------------
Witness Edward C. Grimes
15
<PAGE>
SEVERANCE AGREEMENT
Agreement made as of February 8, 1990 between Enterra Corporation, a
Delaware corporation (the "Company"), and Steven W. Krablin (the "Employee").
WHEREAS, the Employee is presently employed by the Company as its Vice
President, Controller and Treasurer;
WHEREAS, the Company considers it essential to foster the employment
of well qualified key management personnel for the Company and its Subsidiaries,
and, in this regard, the board of directors of the Company recognizes that, as
is the case with many publicly held corporations, the possibility of a change in
control of the Company may exist and that such possibility, and the uncertainty
and questions which it may raise among management, may result in the departure
or distraction of key management personnel to the detriment of the Company;
WHEREAS, the board of directors of the Company has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of key members of the management of the Company and its
Subsidiaries to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a change in
control of the Company, although no such change is now contemplated; and
WHEREAS, in order to induce the Employee to remain in the employ of
the Company, the Company agrees that the Employee shall receive the compensation
and benefits set forth in this Agreement in the event his employment with the
Company is terminated subsequent to a "Change of Control" (as defined in Section
1 hereof) of the Company as a cushion against the financial and career impact on
the Employee of any such Change of Control;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, the parties hereto agree as follows:
1. DEFINITIONS. For all purposes of this Agreement, the following
terms shall have the meanings specified in this Section unless the context
clearly otherwise requires:
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of
<PAGE>
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(b) "Base Salary" shall mean the total cash remuneration earned by the
Employee on an annualized basis in all capacities with the Company and its
Subsidiaries, including any compensation the payment of which has been deferred
pursuant to a salary reduction or deferral plan (including a 401(k) plan, other
than company matching contributions) or agreement, but exclusive of any cash
payments made to him under the Company's Bonus Plan, or any contributions made
for his benefit to the Company's 401(k) Plan or CRC-Evans Plan.
(c) A Person shall be deemed the "Beneficial Owner" of any
securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether
or not in writing) or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; PROVIDED, HOWEVER,
that a Person shall not be deemed the "Beneficial Owner" of securities
tendered pursuant to a tender or exchange offer made by such Person or
any of such Person's Affiliates or Associates until such tendered
securities are accepted for payment, purchase or exchange;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including without limitation pursuant to any agreement, arrangement or
understanding, whether or not in writing; PROVIDED, HOWEVER, that a
Person shall not be deemed the "Beneficial Owner" of any security
under this subsection (ii) as a result of an oral or written
agreement, arrangement or understanding to vote such security if such
agreement, arrangement or understanding (A) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the Exchange
Act, and (B) is not then reportable by
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<PAGE>
such Person on Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(iii) that are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing)
for the purpose of acquiring, holding, voting (except, pursuant to a
revocable proxy as described in the proviso to subsection (ii) above
or the May 2, 1986 option agreement between Shamrock Holdings, Inc.
and the shareholders known as the "SGS Group" or their successors) or
disposing of any voting securities of the Company;
PROVIDED, HOWEVER, that nothing in this Section 1(c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of any securities acquired through such Person's participation in good faith in
a firm commitment underwriting until the expiration of forty days after the date
of such acquisition.
(d) "Board" shall mean the board of directors of the Company.
(e) "Bonus Plan" shall mean the Company's Management Incentive Bonus
Plan, as in effect immediately prior to a Change of Control.
(f) "Change of Control" shall be deemed to have taken place if (i)
any Person (except the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, any Person or
entity organized, appointed or established by the Company for or pursuant to the
terms of any such employee benefit plan, or an Exempted Person), together with
all Affiliates and Associates of such Person acting in concert as described in
Section 14(d)(2) of the Exchange Act, shall become the Beneficial Owner in the
aggregate of 30% or more of the Common Stock of the Company then outstanding
within the meaning of Rule 13d-3 promulgated under the Exchange Act.
(g) "CRC-Evans Plan" shall mean the CRC-Evans Money Purchase Pension
Plan, as in effect immediately prior to a Change of Control.
(h) "Exempted Person" shall mean any of Shamrock Holdings of
California, Inc., a Delaware corporation ("Shamrock"), Shamrock Holdings, Inc.,
a Delaware corporation ("Shamrock Holdings"), or any Affiliate or
3
<PAGE>
Associate of Shamrock or Shamrock Holdings. "Exempted Person" shall not include
transferees from any Exempted Person except where such transferees are
Affiliates or Associates of Shamrock or Shamrock Holdings.
(i) "401(k) Plan" shall mean the Company's 401(k) Plan, as in effect
immediately prior to a Change of Control.
(j) "Normal Retirement Date" shall mean the first day of the calendar
month coincident with or next following the Employee's 65th birthday.
(k) "Person" shall mean any individual, firm, corporation,
Partnership or other entity.
(l) "Stock Plan" shall mean the Company's Stock Option Plan or any
successor plan thereto, as in effect immediately prior to a Change of Control.
(m) "Subsidiary" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
(n) "Termination Date" shall mean the date of receipt of the Notice
of Termination described in Section 2 hereof or any later date Specified
therein, as the case may be.
(o) "Termination of Employment" shall mean the termination of the
Employee's actual employment relationship with the Company.
(p) "Termination upon a Change of Control" shall mean a Termination
of Employment upon or within two years after a Change of Control either:
(i) initiated by the Company for any reason other than (x) the
Employee's continuous illness, injury or incapacity for a period of
six consecutive months, (y) for "cause," which shall mean
misappropriation of funds, habitual insobriety, substance abuse,
conviction of a crime involving moral turpitude, or gross negligence
in the performance of his duties, which gross negligence has had a
material adverse effect on the business, operations, assets,
properties or financial condition of the Company and its Subsidiaries
taken as a whole, or (z) by reason of the occurrence of the Normal
Retirement Date; or
(ii) initiated by the Employee following one or more of the
following occurrences:
4
<PAGE>
(A) a significant reduction by the Company or its
Subsidiaries of the authority, duties or responsibilities of the
Employee immediately prior to the Change of Control;
(B) any removal of the Employee from or any failure to re-
elect the Employee to the officer positions with the Company and
its Subsidiaries held by him immediately prior to the Change of
Control, except in connection with promotions to higher office or
in connection with consolidations among the Company's
Subsidiaries where the Employee is elected to similar positions
in the successor company or companies;
(C) a reduction by the Company in the Employee's Base
Salary as in effect immediately prior to the Change of Control;
(D) revocation or any modification (except as may be
required in the normal course of business in light of any
requirement of or change in federal law or regulations) of the
Bonus Plan, 401(k) Plan or CRC-Evans Plan, or any action taken
pursuant to the terms of such plans, which materially (x) reduces
the opportunity to receive compensation under any of such plans
of equivalent amounts received by the Employee during the two
fiscal years immediately preceding the Change of Control, subject
to the right of the Board to establish in a manner consistent
with past practice prior to the Change of Control reasonable
goals under such plans, (y) reduces the compensation payable to
the Employee under any of such plans but which does not effect
comparable reductions in the compensation payable to the other
participants in such plans, or (z) increases the compensation
payable to other participants in any of such plans but which does
not effect corresponding increases in the amount of compensation
payable to the Employee; or
(E) a transfer of the Employee, without his express written
consent, to a location which is outside the general metropolitan
area in which his principal place of business immediately
preceding the Change of Control may be located, or which is
otherwise an
5
<PAGE>
unreasonable commuting distance from the Employee's principal
residence at the date of the Change of Control.
2. NOTICE OF TERMINATION. Any Termination upon a Change of Control
shall be communicated by a Notice of Termination to the other party hereto given
in accordance with Section 14 hereof. 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) briefly summarizes the
facts and circumstances deemed to provide a basis for termination of the
Employee's employment under the provision so indicated, and (iii) if the
termination date is other than the date of receipt of such notice, specifies the
termination date (which date shall not be more than 15 days after the giving of
such notice).
3. SEVERANCE COMPENSATION UPON TERMINATION.
(a) Subject to the provisions of Section 10 hereof and to adjustment
as provided in paragraph (b) below and Section 9(a), in the event of the
Employee's Termination upon a Change of Control, the Company shall pay to the
Employee, within fifteen days after the Termination Date (or as soon as possible
thereafter in the event that the procedures set forth in Section 10(b) hereof
cannot be completed within 15 days), an amount in cash equal to two times the
sum of paragraphs (i) and (ii) below:
(i) The Employee's Base Salary in effect either immediately
prior to the Termination of Employment or immediately prior to the
Change of Control, whichever is higher; and
(ii) The average of the annual bonuses earned by the Employee
under the Bonus Plan in the two fiscal years immediately prior to such
Termination of Employment.
(b) In the event the Employee's Normal Retirement Date would occur
prior to twenty-four months after the Termination Date, the aggregate cash
amount determined as set forth in (a) above shall be reduced by multiplying it
by a fraction, the numerator of which shall be the number of days from the
Termination Date to the Employee's Normal Retirement Date and the denominator of
which shall be 730. No payments shall be due Employee in the event that the
Normal Retirement Date has been reached prior to the Termination Date.
6
<PAGE>
4. OTHER PAYMENTS. Subject to the provisions of Section 10 hereof,
in the event of the Employee's Termination upon a Change of Control, the Company
shall:
(a) pay to the Employee within fifteen days after the Termination
Date, unless the Employee has exercised such options and rights, an amount equal
to the excess, if any, of the aggregate fair market value of the shares of the
Company's Common Stock subject to all stock options and stock appreciation
rights outstanding and unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee under the Stock Plan, over
the aggregate exercise price of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of (x) the closing price of
the Company's Common Stock on the business day immediately preceding the
Termination Date, if such Common Stock is publicly traded at such date, (y) if
such Common Stock is not publicly traded at the Termination Date, the value
determined by an independent appraiser, such appraiser to be selected by the
Employee and to be reasonably satisfactory to the Company (the fees and expenses
of such appraiser to be borne by the Company), or (z) the highest per share
price of the Company's Common Stock paid (in connection with the Change of
Control or at any time thereafter) by the Person or group whose acquisition of
shares of Common Stock of the Company has given rise to a Change of Control;
(b) to the extent permitted by applicable law, continue or cause to be
continued until 24 months after the Termination Date, on the cost-sharing basis
(if any) in effect immediately prior to the Change of Control, medical, dental
and life insurance benefits (and, at the option of the Employee, disability
insurance benefits) substantially equivalent in all material respects to those
furnished by the Company and its Subsidiaries to the Employee immediately prior
to the Change of Control; PROVIDED, HOWEVER, that if the Employee's Normal
Retirement Date would have occurred prior to 24 months after the Termination
Date, the obligation of the Company to provide such benefits shall cease at the
Employee's Normal Retirement Date; and PROVIDED FURTHER, HOWEVER, that the
obligation of the Company to provide such benefits shall cease at such time as
the Employee is employed on a full time basis by a corporation not owned or
controlled by the Employee that provides the Employee, on substantially the same
cost-sharing basis (if any) between the Company and the Employee in effect
immediately prior to the Change of Control, with medical, dental, life and
disability insurance benefits substantially equivalent in all material respects
to those furnished by the Company and its Subsidiaries to the Employee
immediately prior to the Change of Control;
7
<PAGE>
(c) for vesting purposes only, in the event of a Termination upon a
Change of Control occurring prior to the Normal Retirement Date, credit the
Employee with the lesser of (i) two additional "years of service" (as defined in
the Company's 401(k) Plan) or (ii) the period of time from the Termination Date
to the Normal Retirement Date under each of the Company's 401(k) Plan and CRC-
Evans Plan, in addition to the years of service that would have otherwise been
calculated by reference solely to the Termination Date, it being understood that
benefits in respect of the two additional years of service shall be paid to the
Employee under the Company's 401(k) Plan or CRC-Evans Plan, and that the Company
shall, to the extent necessary to provide the Employee the additional benefits
intended hereby, amend the 401(k) Plan or CRC-Evans Plan or pay such additional
benefits outside the plan as may be necessary; and
(d) permit the Employee to continue the use of his Company car, if
any, without any cost for a period of six months thereafter. Thereafter, the
Employee shall return the car to the Company unless, in the case of a car owned
by the Company, the Employee elects to purchase the car from the Company at the
net book value thereof at the date of the purchase or, in the case of a car
leased by the Company, the Employee pays the Company, as such amounts become due
and payable, all rental payments charged to the Company for the use of such car
for the remainder of the lease therefore.
5. VESTING AND ACCELERATION OF CERTAIN BENEFITS. In the event of a
Termination upon a Change of Control, and subject to the provisions of Section
10 hereof, all restrictions remaining on the Termination Date on the restricted
shares, if any, received by the Employee, pursuant to the Stock Plan shall
lapse, and said shares shall thereupon be owned by the Employee free and clear
of all restrictions of any nature whatsoever, except those, if any, under
applicable federal and state securities laws.
6. ENFORCEMENT.
(a) In the event that the Company shall fail or refuse to make payment
of any amounts due the Employee under Sections 3, 4 and 5 hereof within the
respective time periods provided therein, the Company shall pay to the Employee,
in addition to the payment of any other sums provided in this Agreement,
interest, compounded daily, on any amount remaining unpaid from the date payment
is required under Section 3, 4 or 5, as appropriate, until paid to the Employee,
at the rate from time to time announced by Wells Fargo Bank, N.A. as its "prime
rate" plus 2%, each change in such rate to take effect on the effective date of
the change in such prime rate.
8
<PAGE>
(b) It is the intent of the parties that the Employee not be required
to incur any expenses associated with the enforcement of his rights under this
Agreement by arbitration, litigation or other legal action because the cost and
expense thereof would substantially detract from the benefits intended to be
extended to the Employee hereunder. Accordingly, the Company shall pay the
Employee on demand the amount necessary to reimburse the Employee in full for
all expenses (including all attorneys' fees and legal expenses) incurred by the
Employee in enforcing any of the obligations of the Company under this
Agreement.
7. NO MITIGATION. The Employee shall not be required to mitigate the
amount of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Employee's continuing or future participation in or rights
under any benefit, bonus, incentive or other plan or program provided by the
Company or any of its Subsidiaries or Affiliates and for which the Employee may
qualify.
9. COORDINATION OF BENEFITS; NO SET-OFF; TAXES.
(a) The severance plan or policy, if any, applicable to employees of
Enterra or the Subsidiary which employs the Employee, and any other severance
payments required by applicable statutes or provided under government programs
may provide compensation and benefits to Employee upon events which also
constitute a Termination upon a Change of Control as defined in this Agreement.
In such event, Employee shall be entitled only to the largest cash compensation
provided for under any of such agreements, plans, policies, statutes or programs
and the maximum benefit continuance provided for under any of such agreements,
plans, policies, statues or programs, and the payments referred to in Section 3
hereof shall be reduced to the extent necessary to effect such coordination of
benefits.
(b) Except as specifically set forth in (a) above, 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 circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Employee or others.
(c) Employee alone, and not the Company or any Subsidiary, shall be
responsible for the payment of all
9
<PAGE>
federal, state and local taxes in respect of the payments to be made and
benefits to be provided under this Agreement.
10. CERTAIN REDUCTION OF PAYMENTS.
(a) Anything in this Agreement to the contrary notwithstanding, in
the event that it shall be determined as set forth herein that any payment or
distribution by the Company to or for the benefit of the Employee, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (a "Payment"), would constitute an "excess parachute
payment" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and that it would be economically advantageous to
the Company to reduce the Payment to avoid or reduce the taxation of excess
parachute payments under Section 4999 of the Code, the aggregate present value
of amounts payable or distributable to or for the benefit of the Employee
pursuant to this Agreement (such payments or distributions pursuant to this
Agreement are hereinafter referred to as "Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount" shall be an
amount expressed in present value which maximizes the aggregate present value of
Agreement Payments without causing any Payment to be subject to the taxation
under Section 4999 of the Code. For purposes of this Section 10, present value
shall be determined in accordance with Section 280G(d)(4) of the Code.
(b) All determinations to be made under this Section 10 shall be made
by Peat Marwick Main & Co., or the Company's independent public accountant
immediately prior to the Change of Control if other than Peat Marwick Main & Co.
(the "Accounting Firm"), which firm shall use its best efforts to provide its
determinations and any supporting calculations both to the Company and the
Employee within 10 days of the Termination Date. Any such determination by the
Accounting Firm shall be binding upon the Company and the Employee. The Company
shall in its sole discretion determine which and how much of the Agreement
Payments shall be eliminated or reduced consistent with the requirements of this
Section 10. Within five days after the Company's determination, the Company
shall pay (or cause to be paid) or distribute (or cause to be distributed) to or
for the benefit of the Employee such amounts as are then due to the Employee
under this Agreement.
(c) As a result of the uncertainty in the application of Section 280G
of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is
10
<PAGE>
possible that Agreement Payments, as the case may be, will have been made by the
Company which should not have been made ("Overpayment") or that additional
Agreement Payments which have not been made by the Company could have been made
("Underpayment"), in each case, consistent with the calculations required to be
made hereunder. Within two years after the Termination of Employment, the
Accounting Firm shall review the determination made by it pursuant to the
preceding paragraph. In the event that the Accounting Firm determines that an
Overpayment has been made, any such Overpayment shall be treated for all
purposes as a loan to the Employee which the Employee shall repay to the Company
together with interest at the applicable Federal rate provided for in Section
7872(f) (2) of the Code (the "Federal Rate"); PROVIDED, HOWEVER, that no amount
shall be payable by the Employee to the Company if and to the extent such
payment would not reduce the amount which is subject to taxation under Section
4999 of the Code. In the event that the Accounting Firm determines that an
Underpayment has occurred, any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Employee together with interest at the
Federal Rate.
(d) All of the fees and expenses of the Accounting Firm in performing
the determinations referred to in subsections (b) and (c) above shall be borne
solely by the Company. The Company agrees to indemnify and hold harmless the
Accounting Firm of and from any and all claims, damages and expenses of any
nature resulting from or relating to its determinations pursuant to subsections
(b) and (c) above, except for claims, damages or expenses resulting from the
gross negligence or willful misconduct of the Accounting Firm.
11. SETTLEMENT OF ALL DISPUTES.
(a) Any dispute, controversy or claim arising out of or relating to
any provision of this Agreement or the Employee's Termination upon a Change of
Control shall be settled by arbitration in the City of Houston, Texas, in
accordance with the commercial arbitration rules then in effect of the American
Arbitration Association, before a panel of three arbitrators, two of whom shall
be selected by the Company and the Employee, respectively, and the third of whom
shall be selected by the other two arbitrators. Each arbitrator selected as
provided herein is required to be or have been a director or an executive
officer of a corporation whose shares of common stock were listed during at
least one year of such service on the New York Stock Exchange or the American
Stock Exchange or quoted on the National Association of Securities Dealers
Automated Quotations System. Any award entered by the arbitrators shall be
final, binding and
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<PAGE>
nonappealable and judgment may be entered thereon by any party in accordance
with applicable law in any court of competent jurisdiction. This arbitration
provision shall be specifically enforceable. The fees of the American
Arbitration Association and the arbitrators and any expenses relating to the
conduct of the arbitration shall be paid by the Company.
(b) The party or parties challenging the right of the Employee to the
benefits of this Agreement shall in all circumstances have the burden of proof.
12. TERM OF AGREEMENT. This Agreement shall commence as of the date
first written above and shall continue in effect until the earlier of (i) the
date upon which the Employee ceases to be in the employ of the Company or any
Subsidiary thereof for any reason other than a Termination Upon a Change of
Control, or (ii) 24 months after a Change of Control has occurred, PROVIDED,
HOWEVER, that all of the obligations of the parties hereunder arising after a
Change of Control shall continue in effect until such obligations are satisfied
or have expired.
13. SUCCESSOR COMPANY. The Company shall require any successor or
successors (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to the Employee, to
acknowledge expressly that this Agreement is binding upon and enforceable
against the Company in accordance with the terms hereof, and to become jointly
and severally obligated with the Company to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession or successions had taken place. Failure of the Company to
obtain such agreement prior to the effectiveness of any such succession shall be
a breach of this Agreement. As used in this Agreement, the Company shall mean
the Company as hereinbefore defined and any such successor or successors to its
business and/or assets, jointly and severally.
14. NOTICE. All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and shall be delivered personally or mailed by registered or
certified mail, return receipt requested, or by overnight express courier
service, as follows:
If to the Company, to:
Enterra Corporation
2707 North Loop West
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<PAGE>
Suite 1050
Houston, TX 77008
Attention: The Chairman
With a required copy to:
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103
Attention: David R. King, Esq.
If to the Employee, to:
Steven W. Krablin
5611 Theall Road
Houston, TX 77066
or to such other names or addresses as the Company or the Employee, as the case
may be, shall designate by notice to the other party hereto in the manner
specified in this Section. Any such notice shall be deemed delivered and
effective when received in the case of personal delivery, five days after
deposit, postage prepaid, with the U.S. Postal Service in the case of registered
or certified mail, or on the next business day in the case of overnight express
courier service.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED UNDER THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY
CONFLICT OF LAWS PROVISIONS.
16. CONTENTS OF AGREEMENT, AMENDMENT AND ASSIGNMENT.
(a) This Agreement supersedes all prior agreements and sets forth the
entire understanding between the parties hereto with respect to the subject
matter hereof and cannot be changed, modified, extended or terminated except
upon written amendment executed by the Employee and approved by the board and
executed on the Company's behalf by a duly authorized officer. The provisions
of this Agreement may provide for payments to the Employee under certain
compensation or bonus plans (including without limitation the Stock Plan, the
Bonus Plan, the 401(k) Plan and the CRC-Evans Plan) under circumstances where
such plans would not provide for payment thereof. It is the specific intention
of the parties that the provisions of this Agreement shall supersede any
provisions to the contrary in such plans, and such plans shall be deemed to have
been amended to correspond with this
13
<PAGE>
Agreement without further action by the Company or the Board.
(b) Nothing in this Agreement shall be construed as giving the
Employee any right to be retained in the employ of the Company or any of its
Subsidiaries.
(c) The Employee acknowledges that from time to time, the Company and
its subsidiaries may establish, maintain and distribute employee manuals or
handbooks or personnel policy manuals, and officers or other representatives of
the Company or its Subsidiaries may make written or oral statements relating to
personnel policies and procedures. Such manuals, handbooks and statements are
intended only for general guidance. No policies, procedures or statements of any
nature by or on behalf of the Company or its Subsidiaries (whether written or
oral, and whether or not contained in any employee manual or handbook or
personnel policy manual), and no acts or practices of any nature, shall be
construed to modify this Agreement.
(d) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and responsibilities of the Employee and the Company hereunder
shall not be assignable in whole or in part by the Company.
17. SEVERABILITY. If any provision of this Agreement or application
thereof to anyone or under any circumstances shall be determined to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
provisions or applications of this Agreement which can be given effect without
the invalid or unenforceable provision or application.
18. REMEDIES CUMULATIVE - NO WAIVER. No right conferred upon the
Employee by this Agreement is intended to be exclusive of any other right or
remedy, and each and every such right or remedy shall be cumulative and shall be
in addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity. No delay or omission by the Employee in exercising
any right, remedy or power hereunder or existing at law or in equity shall be
construed as a waiver thereof, including without limitation any delay by the
Employee in delivering a Notice of Termination pursuant to Section 2 hereof
after an event has occurred which would, if the Employee had resigned, have
constituted a Termination upon a Change of Control pursuant to Section 1(p) (ii)
of this Agreement.
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<PAGE>
19. MISCELLANEOUS. All section headings are for convenience only.
This Agreement may be executed in several counterparts, each of which is an
original. It shall not be necessary in making proof of this Agreement or any
counterpart hereof to produce or account for any of the other counterparts.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first above written.
Attest: ENTERRA CORPORATION
/s/ Steven C. Grant By: /s/ Thomas S. McIntosh
- ------------------------------ ------------------------------
Secretary Thomas S. McIntosh
President and Chief
Executive Officer
/s/ Gay Mather /s/ Steven W. Krablin
- ------------------------------ ---------------------------------
Witness Steven W. Krablin
15
<PAGE>
SEVERANCE AGREEMENT
Agreement made as of November 10, 1993 between Enterra Corporation, a
Delaware corporation (the "Company"), and Windell D. Norris, Jr. (the
"Employee").
WHEREAS, the Employee is presently employed by CRC-Evans Pipeline
International, Inc., a "Subsidiary" (as defined in Section 1 hereof), as its
Executive Vice President;
WHEREAS, the Company considers it essential to foster the employment of
well qualified key management personnel for the Company and its Subsidiaries,
and, in this regard, the board of directors of the Company recognizes that, as
is the case with many publicly held corporations, the possibility of a change in
control of the Company may exist and that such possibility, and the uncertainty
and questions which it may raise among management, may result in the departure
or distraction of key management personnel to the detriment of the Company;
WHEREAS, the board of directors of the Company has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of key members of the management of the Company and its
Subsidiaries to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a change in
control of the Company, although no such change is now contemplated; and
WHEREAS, in order to induce the Employee to remain in the employ of the
Subsidiary, the Company agrees that the Employee shall receive the compensation
and benefits set forth in this Agreement in the event his employment with the
Company is terminated subsequent to a "Change of Control" (as defined in Section
l hereof) of the Company as a cushion against the financial and career impact on
the Employee of any such Change of Control;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements hereinafter set forth and intending to be legally bound hereby,
the parties hereto agree as follows:
l. DEFINITIONS. For all purposes of this Agreement, the following terms
shall have the meanings
<PAGE>
specified in this Section unless the context clearly otherwise requires:
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) "Base Salary" shall mean the total cash remuneration earned by the
Employee on an annualized basis in all capacities with the Company and its
Subsidiaries, including any compensation the payment of which has been deferred
pursuant to a salary reduction or deferral plan (including a 401(k) plan, other
than company matching contributions) or agreement, but exclusive of any cash
payments made to him under the Company's Bonus Plan, or any contributions made
for his benefit to the Company's 401(k) Plan or CRC-Evans Plan.
(c) A Person shall be deemed the "Beneficial Owner" of any
securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; PROVIDED, HOWEVER, that a Person
shall not be deemed the "Beneficial Owner" of securities tendered pursuant
to a tender or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
payment, purchase or exchange;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), including without
limitation pursuant to any agreement, arrangement or understanding, whether
or not in writing; PROVIDED, HOWEVER, that a Person shall not be deemed the
"Beneficial Owner" of any security under this subsection (ii) as a result
of an oral or written agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding (A) arises solely
from a revocable
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<PAGE>
proxy given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and (B) is not
then reportable by such Person on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(iii) that are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing)
for the purpose of acquiring, holding, voting (except, pursuant to a
revocable proxy as described in the proviso to subsection (ii) above
or disposing of any voting securities of the Company;
PROVIDED, HOWEVER, that nothing in this Section 1(c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of any securities acquired through such Person's participation in good faith in
a firm commitment underwriting until the expiration of forty days after the date
of such acquisition.
(d) "Board" shall mean the board of directors of the Company.
(e) "Bonus Plan" shall mean the Company's Management Incentive Bonus
Plan, as in effect immediately prior to a Change of Control.
(f) "Change of Control" shall be deemed to have taken place if any
Person (except the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any subsidiary of the Company, any Person or entity
organized, appointed or established by the Company for or pursuant to the terms
of any such employee benefit plan, or an Exempted Person), together with all
Affiliates and Associates of such Person acting in concert as described in
Section 14(d) (2) of the Exchange Act, shall become the Beneficial Owner in the
aggregate of 30% or more of the Common Stock of the Company then outstanding
within the meaning of Rule 13d-3 promulgated under the Exchange Act.
(g) "CRC-Evans Plan" shall mean the CRC-Evans Money Purchase Pension
Plan, as in effect immediately prior to a Change of Control.
(h) "401(k) Plan" shall mean the Company's 401(k) Plan, as in effect
immediately prior to a Change of Control.
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<PAGE>
(i) "Normal Retirement Date" shall mean the first day of the calendar
month coincident with or next following the Employee's 65th birthday.
(j) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(k) "Stock Plan" shall mean the Company's Stock Option Plan or any
successor plan thereto, as in effect immediately prior to a Change of Control.
(l) "Subsidiary" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
(m) "Termination Date" shall mean the date of receipt of the Notice
of Termination described in Section 2 hereof or any later date specified
therein, as the case may be.
(n) "Termination of Employment" shall mean the termination of the
Employee's actual employment relationship with the Company.
(o) "Termination upon a Change of Control" shall mean a Termination
of Employment upon or within two years after a Change of Control either:
(i) initiated by the Company for any reason other than (x) the
Employee's continuous illness, injury or incapacity for a period of six
consecutive months, (y) for "cause," which shall mean misappropriation of
funds, habitual insobriety, substance abuse, conviction of a crime
involving moral turpitude, or gross negligence in the performance of his
duties, which gross negligence has had a material adverse effect on the
business, operations, assets, properties or financial condition of the
Company and its Subsidiaries taken as a whole, or (z) by reason of the
occurrence of the Normal Retirement Date; or
(ii) initiated by the Employee following one or more of the
following occurrences:
(A) a significant reduction by the Company or its
Subsidiaries of the authority, duties or responsibilities of the
Employee immediately prior to the Change of Control;
(B) any removal of the Employee from or any failure to
re-elect the Employee to the
4
<PAGE>
officer positions with the Company and its Subsidiaries held by
him immediately prior to the Change of Control, except in
connection with promotions to higher office or in connection with
consolidations among the Company's Subsidiaries where the
Employee is elected to similar positions in the successor company
or companies;
(C) a reduction by the Company in the Employee's Base
Salary as in effect immediately prior to the Change of Control;
(D) revocation or any modification (except as may be
required in the normal course of business in light of any
requirement of or change in federal law or regulations) of the
Bonus Plan, 401(k) Plan or CRC-Evans Plan, or any action taken
pursuant to the terms of such plans, which materially (x) reduces
the opportunity to receive compensation under any of such plans
of equivalent amounts received by the Employee during the two
fiscal years immediately preceding the Change of Control, subject
to the right of the Board to establish in a manner consistent
with past practice prior to the Change of Control reasonable
goals under such plans, (y) reduces the compensation payable to
the Employee under any of such plans but which does not effect
comparable reductions in the compensation payable to the other
participants in such plans, or (z) increases the compensation
payable to other participants in any of such plans but which does
not effect corresponding increases in the amount of compensation
payable to the Employee; or
(E) a transfer (other than a transfer to the metropolitan
Tulsa, Oklahoma area as contemplated by Section 1.3 of that
Employment Agreement dated as of January 1, 1993 between the
Employee and CRC-Evans Pipeline International, Inc.) of the
Employee, without his express written consent, to a location
which is outside the general metropolitan area in which his
principal place of business immediately preceding the Change of
Control may be located, or which is otherwise an unreasonable
commuting distance from the Employee's principal residence at the
date of the Change of Control.
5
<PAGE>
2. NOTICE OF TERMINATION. Any Termination upon a Change of Control
shall be communicated by a Notice of Termination to the other party hereto given
in accordance with Section 14 hereof. 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) briefly summarizes the
facts and circumstances deemed to provide a basis for termination of the
Employee's employment under the provision so indicated, and (iii) if the
termination date is other than the date of receipt of such notice, specifies the
termination date (which date shall not be more than 15 days after the giving of
such notice).
3. SEVERANCE COMPENSATION UPON TERMINATION.
(a) Subject to the provisions of Section 10 hereof and to adjustment
as provided in paragraph (b) below and Section 9(a), in the event of the
Employee's Termination upon a Change of Control, the Company shall pay to the
Employee, within fifteen days after the Termination Date (or as soon as possible
thereafter in the event that the procedures set forth in Section 10(b) hereof
cannot be completed within 15 days), an amount in cash equal to two times the
sum of paragraphs (i) and (ii) below:
(i) The Employee's Base Salary in effect either immediately
prior to the Termination of Employment or immediately prior to the
Change of Control, whichever is higher; and
(ii) The average of the annual bonuses earned by the Employee
under the Bonus Plan in the two fiscal years immediately prior to such
Termination of Employment.
(b) In the event the Employee's Normal Retirement Date would occur
prior to twenty-four months after the Termination Date, the aggregate cash
amount determined as set forth in (a) above shall be reduced by multiplying it
by a fraction, the numerator of which shall be the number of days from the
Termination Date to the Employee's Normal Retirement Date and the denominator of
which shall be 730. No payments shall be due Employee in the event that the
Normal Retirement Date has been reached prior to the Termination Date.
4. OTHER PAYMENTS. Subject to the provisions of Section 10 hereof,
in the event of the Employee's Termination upon a Change of Control, the Company
shall:
(a) pay to the Employee within fifteen days after the Termination
Date, unless the Employee has exercised such
6
<PAGE>
options and rights, an amount equal to the excess, if any, of the aggregate fair
market value of the shares of the Company's Common Stock subject to all stock
options and stock appreciation rights outstanding and unexercised immediately
prior to the Termination Date, whether vested or unvested, granted to the
Employee under the Stock Plan, over the aggregate exercise price of all such
stock options. Upon such payment, such options or rights shall terminate. For
purposes of this paragraph, fair market value shall mean the highest of (x) the
closing price of the Company's Common Stock on the business day immediately
preceding the Termination Date, if such Common Stock is publicly traded at such
date, (y) if such Common stock is not publicly traded at the Termination Date,
the value determined by an independent appraiser, such appraiser to be selected
by the Employee and to be reasonably satisfactory to the Company (the fees and
expenses of such appraiser to be borne by the Company), or (z) the highest per
share price of the Company's Common Stock paid (in connection with the Change of
Control or at any time thereafter) by the Person or group whose acquisition of
shares of Common Stock of the Company has given rise to a Change of Control;
(b) to the extent permitted by applicable law, continue or cause to
be continued until 24 months after the Termination Date, on the cost-sharing
basis (if any) in effect immediately prior to the Change of Control, medical,
dental and life insurance benefits (and, at the option of the Employee,
disability insurance benefits) substantially equivalent in all material respects
to those furnished by the Company and its Subsidiaries to the Employee
immediately prior to the Change of Control; PROVIDED, HOWEVER, that if the
Employee's Normal Retirement Date would have occurred prior to 24 months after
the Termination Date, the obligation of the Company to provide such benefits
shall cease at the Employee's Normal Retirement Date; and PROVIDED FURTHER,
HOWEVER, that the obligation of the Company to provide such benefits shall cease
at such time as the Employee is employed on a full time basis by a corporation
not owned or controlled by the Employee that provides the Employee, on
substantially the same cost-sharing basis (if any) between the Company and the
Employee in effect immediately prior to the Change of Control, with medical,
dental, life and disability insurance benefits substantially equivalent in all
material respects to those furnished by the Company and its Subsidiaries to the
Employee immediately prior to the Change of Control;
(c) for vesting purposes only, in the event of a Termination upon a
Change of Control occurring prior to the Normal Retirement Date, credit the
Employee with the lesser of (i) two additional "years of service" (as defined in
the Company's 401(k) Plan) or (ii) the period of time from the
7
<PAGE>
Termination Date to the Normal Retirement Date under each of the Company's
401(k) Plan and CRC-Evans Plan, in addition to the years of service that would
have otherwise been calculated by reference solely to the Termination Date, it
being understood that benefits in respect of the two additional years of service
shall be paid to the Employee under the Company's 401(k) Plan or CRC-Evans Plan,
and that the Company shall, to the extent necessary to provide the Employee the
additional benefits intended hereby, amend the 401(k) Plan or CRC-Evans Plan or
pay such additional benefits outside the plan as may be necessary; and
(d) permit the Employee to receive any car allowance or continue the
use of his Company car, if any, without any cost for a period of six months
thereafter. Thereafter, the Employee shall return the car to the Company unless,
in the case of a car owned by the Company, the Employee elects to purchase the
car from the Company at the net book value thereof at the date of the purchase
or, in the case of a car leased by the Company, the Employee pays the Company,
as such amounts become due and payable, all rental payments charged to the
Company for the use of such car for the remainder of the lease therefor.
5. VESTING AND ACCELERATION OF CERTAIN BENEFITS. In the event of a
Termination upon a Change of Control, and subject to the provisions of Section
10 hereof, all restrictions remaining on the Termination Date on the restricted
shares, if any, received by the Employee, pursuant to the Stock Plan shall
lapse, and said shares shall thereupon be owned by the Employee free and clear
of all restrictions of any nature whatsoever, except those, if any, under
applicable federal and state securities laws.
6. ENFORCEMENT.
(a) In the event that the Company shall fail or refuse to make
payment of any amounts due the Employee under Sections 3, 4 and 5 hereof within
the respective time periods provided therein, the Company shall pay to the
Employee, in addition to the payment of any other sums provided in this
Agreement, interest, compounded daily, on any amount remaining unpaid from the
date payment is required under Section 3, 4 or 5, as appropriate, until paid to
the Employee, at the rate from time to time announced by Wells Fargo Bank, N.A.
as its "prime rate" plus 2%, each change in such rate to take effect on the
effective date of the change in such prime rate.
(b) It is the intent of the parties that the Employee not be required
to incur any expenses associated with the enforcement of his rights under this
Agreement by
8
<PAGE>
arbitration, litigation or other legal action because the cost and expense
thereof would substantially detract from the benefits intended to be extended to
the Employee hereunder. Accordingly, the Company shall pay the Employee on
demand the amount necessary to reimburse the Employee in full for all expenses
(including all attorneys' fees and legal expenses) incurred by the Employee in
enforcing any of the obligations of the Company under this Agreement.
7. NO MITIGATION. The Employee shall not be required to mitigate the
amount of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Employee's continuing or future participation in or rights
under any benefit, bonus, incentive or other plan or program provided by the
Company or any of its Subsidiaries or Affiliates and for which the Employee may
qualify.
9. COORDINATION OF BENEFITS; NO SET-OFF; TAXES.
(a) The severance plan or policy, if any, applicable to employees of
Enterra or the Subsidiary which employs the Employee, and any other severance
payments required by employment agreements or applicable statutes or provided
under government programs may provide compensation and benefits to Employee upon
events which also constitute a Termination upon a Change of Control as defined
in this Agreement. In such event, Employee shall be entitled only to the
largest cash compensation provided for under any of such agreements, plans,
policies, statutes or programs and the maximum benefit continuance provided for
under any of such agreements, plans, policies, statues or programs, and the
payments referred to in Section 3 hereof shall be reduced to the extent
necessary to effect such coordination of benefits.
(b) Except as specifically set forth in (a) above, 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 circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Employee or others.
(c) Employee alone, and not the Company or any Subsidiary, shall be
responsible for the payment of all federal, state and local taxes in respect of
the payments to be made and benefits to be provided under this Agreement.
10. CERTAIN REDUCTION OF PAYMENTS.
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<PAGE>
(a) Anything in this Agreement to the contrary notwithstanding, in
the event that it shall be determined as set forth herein that any payment or
distribution by the Company to or for the benefit of the Employee, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (a "Payment"), would constitute an "excess parachute
payment" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and that it would be economically advantageous to
the Company to reduce the Payment to avoid or reduce the taxation of excess
parachute payments under Section 4999 of the Code, the aggregate present value
of amounts payable or distributable to or for the benefit of the Employee
pursuant to this Agreement (such payments or distributions pursuant to this
Agreement are hereinafter referred to as "Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount" shall be an
amount expressed in present value which maximizes the aggregate present value of
Agreement Payments without causing any Payment to be subject to the taxation
under Section 4999 of the Code. For purposes of this Section 10, present value
shall be determined in accordance with Section 280G(d) (4) of the Code.
(b) All determinations to be made under this Section 10 shall be made
by KPMG Peat Marwick, or the Company's independent public accountant immediately
prior to the Change of Control if other than KPMG Peat Marwick (the "Accounting
Firm"), which firm shall use its best efforts to provide its determinations and
any supporting calculations both to the Company and the Employee within 10 days
of the Termination Date. Any such determination by the Accounting Firm shall be
binding upon the Company and the Employee. The Company shall in its sole
discretion determine which and how much of the Agreement Payments shall be
eliminated or reduced consistent with the requirements of this Section 10.
Within five days after the Company's determination, the Company shall pay (or
cause to be paid) or distribute (or cause to be distributed) to or for the
benefit of the Employee such amounts as are then due to the Employee under this
Agreement.
(c) As a result of the uncertainty in the application of Section 280G
of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Agreement Payments, as the case may be, will have
been made by the Company which should not have been made ("Overpayment") or that
additional Agreement Payments which have not been made by the Company could have
been made ("Underpayment"), in each case, consistent with the calculations
required to be made hereunder. Within two years after the Termination of
Employment, the Accounting Firm shall review the determination made by it
pursuant to the
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preceding paragraph. In the event that the Accounting Firm determines that an
Overpayment has been made, any such Overpayment shall be treated for all
purposes as a loan to the Employee which the Employee shall repay to the Company
together with interest at the applicable Federal rate provided for in Section
7872(f)(2) of the Code (the "Federal Rate"); PROVIDED, HOWEVER, that no amount
shall be payable by the Employee to the Company if and to the extent such
payment would not reduce the amount which is subject to taxation under Section
4999 of the Code. In the event that the Accounting Firm determines that an
Underpayment has occurred, any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Employee together with interest at the
Federal Rate.
(d) All of the fees and expenses of the Accounting Firm in performing
the determinations referred to in subsections (b) and (c) above shall be borne
solely by the Company. The Company agrees to indemnify and hold harmless the
Accounting Firm of and from any and all claims, damages and expenses of any
nature resulting from or relating to its determinations pursuant to subsections
(b) and (c) above, except for claims, damages or expenses resulting from the
gross negligence or willful misconduct of the Accounting Firm.
11. SETTLEMENT OF ALL DISPUTES.
(a) Any dispute, controversy or claim arising out of or relating to
any provision of this Agreement or the Employee's Termination upon a Change of
Control shall be settled by arbitration in the City of Houston, Texas, in
accordance with the commercial arbitration rules then in effect of the American
Arbitration Association, before a panel of three arbitrators, two of whom shall
be selected by the Company and the Employee, respectively, and the third of whom
shall be selected by the other two arbitrators. Each arbitrator selected as
provided herein is required to be or have been a director or an executive
officer of a corporation whose shares of common stock were listed during at
least one year of such service on the New York Stock Exchange or the American
Stock Exchange or quoted on the National Association of Securities Dealers
Automated Quotations System. Any award entered by the arbitrators shall be
final, binding and nonappealable and judgment may be entered thereon by any
party in accordance with applicable law in any court of competent jurisdiction.
This arbitration provision shall be specifically enforceable. The fees of the
American Arbitration Association and the arbitrators and any expenses relating
to the conduct of the arbitration shall be paid by the Company.
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(b) The party or parties challenging the right of the Employee to the
benefits of this Agreement shall in all circumstances have the burden of proof.
12. TERM OF AGREEMENT. This Agreement shall commence as of the date
first written above and shall continue in effect until the earlier of (i) the
date upon which the Employee ceases to be in the employ of the Company or any
Subsidiary thereof for any reason other than a Termination Upon a Change of
Control, or (ii) 24 months after a Change of Control has occurred, PROVIDED,
HOWEVER, that all of the obligations of the parties hereunder arising after a
Change of Control shall continue in effect until such obligations are satisfied
or have expired.
13. SUCCESSOR COMPANY. The Company shall require any successor or
successors (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to the Employee, to
acknowledge expressly that this Agreement is binding upon and enforceable
against the Company in accordance with the terms hereof, and to become jointly
and severally obligated with the Company to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession or successions had taken place. Failure of the Company to
obtain such agreement prior to the effectiveness of any such succession shall be
a breach of this Agreement. As used in this Agreement, the Company shall mean
the Company as hereinbefore defined and any such successor or successors to its
business and/or assets, jointly and severally.
14. NOTICE. All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and shall be delivered personally or mailed by registered or
certified mail, return receipt requested, or by overnight express courier
service, as follows:
If to the Company, to:
Enterra Corporation
13100 Northwest Freeway
Sixth Floor
Houston, TX 77040
Attention: The Chairman
With a required copy to:
Morgan, Lewis & Bockius
2000 One Logan square
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Philadelphia, PA 19103
Attention: David R. King, Esq.
If to the Employee, to:
Windell D. Norris, Jr.
806 West Forest
Houston, TX 77079
or to such other names or addresses as the Company or the Employee, as the case
may be, shall designate by notice to the other party hereto in the manner
specified in this Section. Any such notice shall be deemed delivered and
effective when received in the case of personal delivery, five days after
deposit, postage prepaid, with the U.S. Postal Service in the base of registered
or certified mail, or on the next business day in the case of overnight express
courier service.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED UNDER THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY
CONFLICT OF LAWS PROVISIONS.
16. CONTENTS OF AGREEMENT, AMENDMENT AND ASSIGNMENT.
(a) This Agreement supersedes all prior agreements and sets forth the
entire understanding between the parties hereto with respect to the subject
matter hereof and cannot be changed, modified, extended or terminated except
upon written amendment executed by the Employee and approved by the board and
executed on the Company's behalf by a duly authorized officer. The provisions
of this Agreement may provide for payments to the Employee under certain
compensation or bonus plans (including without limitation the Stock Plan, the
Bonus Plan, the 401(k) Plan and the CRC-Evans Plan) under circumstances where
such plans would not provide for payment thereof. It is the specific intention
of the parties that the provisions of this Agreement shall supersede any
provisions to the contrary in such plans, and such plans shall be deemed to have
been amended to correspond with this Agreement without further action by the
Company or the Board.
(b) Nothing in this Agreement shall be construed as giving the
Employee any right to be retained in the employ of the Company or any of its
Subsidiaries.
(c) The Employee acknowledges that from time to time, the Company and
its subsidiaries may establish, maintain and distribute employee manuals or
handbooks or
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personnel policy manuals, and officers or other representatives of the Company
or its Subsidiaries may make written or oral statements relating to personnel
policies and procedures. Such manuals, handbooks and statements are intended
only for general guidance. No policies, procedures or statements of any nature
by or on behalf of the Company or its Subsidiaries (whether written or oral, and
whether or not contained in any employee manual or handbook or personnel policy
manual), and no acts or practices of any nature, shall be construed to modify
this Agreement.
(d) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and responsibilities of the Employee and the Company hereunder
shall not be assignable in whole or in part by the Company.
17. SEVERABILITY. If any provision of this Agreement or application
thereof to anyone or under any circumstances shall be determined to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
provisions or applications of this Agreement which can be given effect without
the invalid or unenforceable provision or application.
18. REMEDIES CUMULATIVE - NO WAIVER. No right conferred upon the
Employee by this Agreement is intended to be exclusive of any other right or
remedy, and each and every such right or remedy shall be cumulative and shall be
in addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity. No delay or omission by the Employee in exercising
any right, remedy or power hereunder or existing at law or in equity shall be
construed as a waiver thereof, including without limitation any delay by the
Employee in delivering a Notice of Termination pursuant to Section 2 hereof
after an event has occurred which would, if the Employee had resigned, have
constituted a Termination upon a Change of Control pursuant to Section 1(o)(ii)
of this Agreement.
19. MISCELLANEOUS. All section headings are for convenience only.
This Agreement may be executed in several counterparts, each of which is an
original. It shall not be necessary in making proof of this Agreement or any
counterpart hereof to produce or account for any of the other counterparts.
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.
Attest: ENTERRA CORPORATION
/s/ M. Gay Mather /s/ D. Dale Wood
- ----------------------------- By: ------------------------------
Secretary D. Dale Wood
Chairman, President and
Chief Executive Officer
/s/ Shirley Brandt /s/ Windell D. Norris, Jr.
- ----------------------------- By: ------------------------------
Witness Windell D. Norris, Jr.
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SEVERANCE AGREEMENT
Agreement made as of February 21, 1991 between Enterra
Corporation, a Delaware corporation (the "Company"), and J. Joseph Percle (the
"Employee").
WHEREAS, the Employee is presently employed by Enterra Oil Field
Services, Ltd., a "Subsidiary" (as defined in Section 1 hereof), as its
President;
WHEREAS, the Company considers it essential to foster the
employment of well qualified key management personnel for the Company and its
Subsidiaries, and, in this regard, the board of directors of the Company
recognizes that, as is the case with many publicly held corporations, the
possibility of a change in control of the Company may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of key management
personnel to the detriment of the Company;
WHEREAS, the board of directors of the Company has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of key members of the management of the Company and its
Subsidiaries to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a change in
control of the Company, although no such change is now contemplated; and
WHEREAS, in order to induce the Employee to remain in the employ
of the Subsidiary, the Company agrees that the Employee shall receive the
compensation and benefits set forth in this Agreement in the event his
employment with the Company is terminated subsequent to a "Change of Control"
(as defined in Section 1 hereof) of the Company as a cushion against the
financial and career impact on the Employee of any such Change of Control;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, the parties hereto agree as follows:
l. DEFINITIONS. For all purposes of this Agreement, the
following terms shall have the meanings specified in this Section unless the
context clearly otherwise requires:
<PAGE>
(a) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(b) "Base Salary" shall mean the total cash remuneration earned
by the Employee on an annualized basis in all capacities with the Company and
its Subsidiaries, including any compensation the payment of which has been
deferred pursuant to a salary reduction or deferral plan (including a 401(k)
plan, other than company matching contributions) or agreement, but exclusive of
any cash payments made to him under the Company's Bonus Plan, or any
contributions made for his benefit to the Company's 401(k) Plan or CRC-Evans
Plan.
(c) A Person shall be deemed the "Beneficial Owner" of any
securities:
(i) that such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options,
or otherwise; PROVIDED, HOWEVER, that a Person shall not be
deemed the "Beneficial Owner" of securities tendered pursuant to a
tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities
are accepted for payment, purchase or exchange;
(ii) that such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under
the Exchange Act), including without limitation pursuant to any
agreement, arrangement or understanding, whether or not in
writing; PROVIDED, HOWEVER, that a Person shall not be deemed
the "Beneficial Owner" of any security under this subsection (ii)
as a result of an oral or written agreement, arrangement or
understanding to vote such security if such agreement, arrangement
or understanding (a) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable provisions of
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the General Rules and Regulations under the Exchange Act, and (b)
is not then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) that are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with
which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring, holding,
voting (except, pursuant to a revocable proxy as described in the
proviso to subsection (ii) above or the May 2, 1986 option
agreement between Shamrock Holdings, Inc. and the shareholders
known as the "SGS Group" or their successors) or disposing of any
voting securities of the Company;
PROVIDED, HOWEVER, that nothing in this Section 1(c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of any securities acquired through such Person's participation in good faith in
a firm commitment underwriting until the expiration of forty days after the date
of such acquisition.
(d) "Board" shall mean the board of directors of the Company.
(e) "Bonus Plan" shall mean the Company's Management Incentive
Bonus Plan, as in effect immediately prior to a Change of Control.
(f) "Change of Control" shall be deemed to have taken place if
(i) any Person (except the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of- the Company, any Person or
entity organized, appointed or established by the Company for or pursuant to the
terms of any such employee benefit plan, or an Exempted Person), together with
all Affiliates and Associates of such Person acting in concert as described in
Section 14(d) (2) of the Exchange Act, shall become the Beneficial Owner in the
aggregate of 30% or more of the Common Stock of the Company then outstanding
within the meaning of Rule 13d-3 promulgated under the Exchange Act.
(g) "CRC-Evans Plan" shall mean the CRC-Evans Money Purchase
Pension Plan, as in effect immediately prior to a Change of Control.
(h) "Exempted Person" shall mean any of Shamrock Holdings of
California, Inc., a Delaware corporation
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<PAGE>
("Shamrock"), Shamrock Holdings, Inc., a Delaware corporation ("Shamrock
Holdings"), or any Affiliate or Associate of Shamrock or Shamrock Holdings.
"Exempted Person" shall not include transferees from any Exempted Person except
where such transferees are Affiliates or Associates of Shamrock or Shamrock
Holdings.
(i) "401(k) Plan" shall mean the Company's 401(k) Plan, as in
effect immediately prior to a Change of Control.
(j) "Normal Retirement Date" shall mean the first day of the
calendar month coincident with or next following the Employee's 65th birthday.
(k) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(l) "Stock Plan" shall mean the Company's Stock Option Plan or
any successor plan thereto, as in effect immediately prior to a Change of
Control.
(m) "Subsidiary" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
(n) "Termination Date" shall mean the date of receipt of the
Notice of Termination described in Section 2 hereof or any later date specified
therein, as the case may be.
(o) "Termination of Employment" shall mean the termination of
the Employee's actual employment relationship with the Company.
(p) "Termination upon a Change of Control" shall mean a
Termination of Employment upon or within two years after a Change of Control
either:
(i) initiated by the Company for any reason other than
(x) the Employee's continuous illness, injury or incapacity for a
period of six consecutive months, (y) for "cause," which shall
mean misappropriation of funds, habitual insobriety, substance
abuse, conviction of a crime involving moral turpitude, or gross
negligence in the performance of his duties, which gross
negligence has had a material adverse effect on the business,
operations, assets, properties or financial condition of the
Company and its Subsidiaries taken as a whole, or (z) by reason of
the occurrence of the Normal Retirement Date; or
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<PAGE>
(ii) initiated by the Employee following one or more of the
following occurrences:
(A) a significant reduction by the Company or its
Subsidiaries of the authority, duties or responsibilities of
the Employee immediately prior to the Change of Control;
(B) any removal of the Employee from or any failure to
re-elect the Employee to the officer positions with the
Company and its Subsidiaries held by him immediately prior
to the Change of Control, except in connection with
promotions to higher office or in connection with
consolidations among the Company's Subsidiaries where the
Employee is elected to similar positions in the successor
company or companies;
(C) a reduction by the Company in the Employee's Base
Salary as in effect immediately prior to the Change of
Control;
(D) revocation or any modification (except as may be
required in the normal course of business in light of any
requirement of or change in federal law or regulations) of
the Bonus Plan, 401(k) Plan or CRC-Evans Plan, or any action
taken pursuant to the terms of such plans, which materially
(x) reduces the opportunity to receive compensation under
any of such plans of equivalent amounts received by the
Employee during the two fiscal years immediately preceding
the Change of Control, subject to the right of the Board to
establish in a manner consistent with past practice prior to
the Change of Control reasonable goals under such plans,
(y) reduces the compensation payable to the Employee under
any of such plans but which does not effect comparable
reductions in the compensation payable to the other
participants in such plans, or (z) increases the
compensation payable to other participants in any of such
plans but which does not effect corresponding increases in
the amount of compensation payable to the Employee; or
(E) a transfer of the Employee, without his express
written consent, to a location which is outside the general
metropolitan area in which his principal place of business
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<PAGE>
immediately preceding the Change of Control may be
located, or which is otherwise an unreasonable commuting
distance from the Employee's principal residence at the
date of the Change of Control.
2. NOTICE OF TERMINATION. Any Termination upon a Change of
Control shall be communicated by a Notice of Termination to the other party
hereto given in accordance with Section 14 hereof. 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) briefly
summarizes the facts and circumstances deemed to provide a basis for termination
of the Employee's employment under the provision so indicated, and (iii) if the
termination date is other than the date of receipt of such notice, specifies the
termination date (which date shall not be more than 15 days after the giving of
such notice).
3. SEVERANCE COMPENSATION UPON TERMINATION.
(a) Subject to the provisions of Section 10 hereof and to
adjustment as provided in paragraph (b) below and Section 9(a), in the event of
the Employee's Termination upon a Change of Control, the Company shall pay to
the Employee, within fifteen days after the Termination Date (or as soon as
possible thereafter in the event that the procedures set forth in Section 10(b)
hereof cannot be completed within 15 days), an amount in cash equal to two times
the sum of paragraphs (i) and (ii) below:
(i) The Employee's Base Salary in effect either
immediately prior to the Termination of Employment or immediately
prior to the Change of Control, whichever is higher; and
(ii) The average of the annual bonuses earned by the
Employee under the Bonus Plan in the two fiscal years immediately
prior to such Termination of Employment.
(b) In the event the Employee's Normal Retirement Date would occur
prior to twenty-four months after the Termination Date, the aggregate cash
amount determined as set forth in (a) above shall be reduced by multiplying it
by a fraction, the numerator of which shall be the number of days from the
Termination Date to the Employee's Normal Retirement Date and the denominator of
which shall be 730. No payments shall be due Employee in the event that the
Normal Retirement Date has been reached prior to the Termination Date.
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4. OTHER PAYMENTS. Subject to the provisions of Section 10
hereof, in the event of the Employee's Termination upon a Change of Control, the
Company shall:
(a) pay to the Employee within fifteen days after the Termination
Date, unless the Employee has exercised such options and rights, an amount equal
to the excess, if any, of the aggregate fair market value of the shares of the
Company's Common Stock subject to all stock options and stock appreciation
rights outstanding and unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee under the Stock Plan, over
the aggregate exercise price of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of (x) the closing price of
the Company's Common Stock on the business day immediately preceding the
Termination Date, if such Common Stock is publicly traded at such date, (y) if
such Common Stock is not publicly traded at the Termination Date, the value
determined by an independent appraiser, such appraiser to be selected by the
Employee and to be reasonably satisfactory to the Company (the fees and expenses
of such appraiser to be borne by the Company), or (z) the highest per share
price of the Company's Common Stock paid (in connection with the Change of
Control or at any time thereafter) by the Person or group whose acquisition of
shares of Common Stock of the Company has given rise to a Change of Control;
(b) to the extent permitted by applicable law, continue or cause
to be continued until 24 months after the Termination Date, on the cost-sharing
basis (if any) in effect immediately prior to the Change of Control, medical,
dental and life insurance benefits (and, at the option of the Employee,
disability insurance benefits) substantially equivalent in all material respects
to those furnished by the Company and its Subsidiaries to the Employee
immediately prior to the Change of Control; PROVIDED, HOWEVER, that if the
Employee's Normal Retirement Date would have occurred prior to 24 months after
the Termination Date, the obligation of the Company to provide such benefits
shall cease at the Employee's Normal Retirement Date; and PROVIDED FURTHER,
HOWEVER, that the obligation of the Company to provide such benefits shall
cease at such time as the Employee is employed on a full time basis by a
corporation not owned or controlled by the Employee that provides the Employee,
on substantially the same cost-sharing basis (if any) between the Company and
the Employee in effect immediately prior to the Change of Control, with medical,
dental, life and disability insurance benefits substantially equivalent in all
material respects to those furnished by the Company and its Subsidiaries to the
Employee immediately prior to the Change of Control;
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<PAGE>
(c) for vesting purposes only, in the event of a Termination
upon a Change of Control occurring prior to the Normal Retirement Date, credit
the Employee with the lesser of (i) two additional "years of service" (as
defined in the Company's 401(k) Plan) or (ii) the period of time from the
Termination Date to the Normal Retirement Date under each of the Company's
401(k) Plan and CRC-Evans Plan, in addition to the years of service that would
have otherwise been calculated by reference solely to the Termination Date, it
being understood that benefits in respect of the two additional years of service
shall be paid to the Employee under the Company's 401(k) Plan or CRC-Evans Plan,
and that the Company shall, to the extent necessary to provide the Employee the
additional benefits intended hereby, amend the 401(k) Plan or CRC-Evans Plan or
pay such additional benefits outside the plan as may be necessary; and
(d) permit the Employee to continue the use of his Company
car, if any, without any cost for a period of six months thereafter.
Thereafter, the Employee shall return the car to the Company unless, in the case
of a car owned by the Company, the Employee elects to purchase the car from the
Company at the net book value thereof at the date of the purchase or, in the
case of a car leased by the Company, the Employee pays the Company, as such
amounts become due and payable, all rental payments charged to the Company for
the use of such car for the remainder of the lease therefore.
5. VESTING AND ACCELERATION OF CERTAIN BENEFITS. In the event
of a Termination upon a Change of Control, and subject to the provisions of
Section 10 hereof, all restrictions remaining on the Termination Date on the
restricted shares, if any, received by the Employee, pursuant to the Stock Plan
shall lapse, and said shares shall thereupon be owned by the Employee free and
clear of all restrictions of any nature whatsoever, except those, if any, under
applicable federal and state securities laws.
6. ENFORCEMENT.
(a) In the event that the Company shall fail or refuse to make
payment of any amounts due the Employee under Sections 3, 4 and 5 hereof within
the respective time periods provided therein, the Company shall pay to the
Employee, in addition to the payment of any other sums provided in this
Agreement, interest, compounded daily, on any amount remaining unpaid from the
date payment is required under Section 3, 4 or 5, as appropriate, until paid to
the Employee, at the rate from time to time announced by Wells Fargo Bank, N.A.
as its "prime rate" plus 2%, each change in such rate to take effect on the
effective date of the change in such prime rate.
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(b) It is the intent of the parties that the Employee not be
required to incur any expenses associated with the enforcement of his rights
under this Agreement by arbitration, litigation or other legal action because
the cost and expense thereof would substantially detract from the benefits
intended to be extended to the Employee hereunder. Accordingly, the Company
shall pay the Employee on demand the amount necessary to reimburse the Employee
in full for all expenses (including all attorneys' fees and legal expenses)
incurred by the Employee in enforcing any of the obligations of the Company
under this Agreement.
7. NO MITIGATION. The Employee shall not be required to
mitigate the amount of any payment or benefit provided for in this Agreement by
seeking other employment or otherwise.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Employee's continuing or future participation in or rights
under any benefit, bonus, incentive or other plan or program provided by the
Company or any of its Subsidiaries or Affiliates and for which the Employee may
qualify.
9. COORDINATION OF BENEFITS; NO SET-OFF; TAXES.
(a) The severance plan or policy, if any, applicable to employees
of Enterra or the Subsidiary which employs the Employee, and any other severance
payments required by applicable statutes or provided under government programs
may provide compensation and benefits to Employee upon events which also
constitute a Termination upon a Change of Control as defined in this Agreement.
In such event, Employee shall be entitled only to the largest cash compensation
provided for under any of such agreements, plans, policies, statutes or programs
and the maximum benefit continuance provided for under any of such agreements,
plans, policies, statues or programs, and the payments referred to in Section 3
hereof shall be reduced to the extent necessary to effect such coordination of
benefits.
(b) Except as specifically set forth in (a) above, 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 circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Employee or others.
(c) Employee alone, and not the Company or any Subsidiary, shall
be responsible for the payment of all
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federal, state and local taxes in respect of the payments to be made and
benefits to be provided under this Agreement.
10. CERTAIN REDUCTION OF PAYMENTS.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event that it shall be determined as set forth herein
that any payment or distribution by the Company to or for the benefit of the
Employee, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (a "Payment"), would constitute an
"excess parachute payment" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), and that it would be economically
advantageous to the Company to reduce the Payment to avoid or reduce the
taxation of excess parachute payments under Section 4999 of the Code, the
aggregate present value of amounts payable or distributable to or for the
benefit of the Employee pursuant to this Agreement (such payments or
distributions pursuant to this Agreement are hereinafter referred to as
"Agreement Payments") shall be reduced (but not below zero) to the Reduced
Amount. The "Reduced Amount" shall be an amount expressed in present value which
maximizes the aggregate present value of Agreement Payments without causing any
Payment to be subject to the taxation under Section 4999 of the Code. For
purposes of this Section 10, present value shall be determined in accordance
with Section 280G(d) (4) of the Code.
(b) All determinations to be made under this Section 10 shall
be made by Peat Marwick Main & Co., or the Company's independent public
accountant immediately prior to the Change of Control if other than Peat Marwick
Main & Co. (the "Accounting Firm"), which firm shall use its best efforts to
provide its determinations and any supporting calculations both to the Company
and the Employee within 10 days of the Termination Date. Any such determination
by the Accounting Firm shall be binding upon the Company and the Employee. The
Company shall in its sole discretion determine which and how much of the
Agreement Payments shall be eliminated or reduced consistent with the
requirements of this Section 10. Within five days after the Company's
determination, the Company shall pay (or cause to be paid) or distribute (or
cause to be distributed) to or for the benefit of the Employee such amounts as
are then due to the Employee under this Agreement.
(c) As a result of the uncertainty in the application of
Section 280G of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Agreement Payments, as the case
may be, will have been made by the Company which should not have been made
10
<PAGE>
("Overpayment") or that additional Agreement Payments which have not been made
by the Company could have been made ("Underpayment"), in each case, consistent
with the calculations required to be made hereunder. Within two years after the
Termination of Employment, the Accounting Firm shall review the determination
made by it pursuant to the preceding paragraph. In the event that the Accounting
Firm determines that an overpayment has been made, any such Overpayment shall be
treated for all purposes as a loan to the Employee which the Employee shall
repay to the Company together with interest at the applicable Federal rate
provided for in Section 7872(f)(2) of the Code (the "Federal Rate"); PROVIDED,
HOWEVER, that no amount shall be payable by the Employee to the Company if and
to the extent such payment would not reduce the amount which is subject to
taxation under Section 4999 of the Code. In the event that the Accounting Firm
determines that an Underpayment has occurred, any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Employee together with
interest at the Federal Rate.
(d) All of the fees and expenses of the Accounting Firm in
performing the determinations referred to in subsections (b) and (c) above shall
be borne solely by the Company. The Company agrees to indemnify and hold
harmless the Accounting Firm of and from any and all claims, damages and
expenses of any nature resulting from or relating to its determinations pursuant
to subsections (b) and (c) above, except for claims, damages or expenses
resulting from the gross negligence or willful misconduct of the Accounting
Firm.
11. SETTLEMENT OF ALL DISPUTES.
(a) Any dispute, controversy or claim arising out of or relating
to any provision of this Agreement or the Employee's Termination upon a Change
of Control shall be-settled by arbitration in the City of Houston, Texas, in
accordance with the commercial arbitration rules then in effect of the American
Arbitration Association, before a panel of three arbitrators, two of whom shall
be selected by the Company and the Employee, respectively, and the third of whom
shall be selected by the other two arbitrators. Each arbitrator selected as
provided herein is required to be or have been a director or an executive
officer of a corporation whose shares of common stock were listed during at
least one year of such service on the New York Stock Exchange or the American
Stock Exchange or quoted on the National Association of Securities Dealers
Automated Quotations System. Any award entered by the arbitrators shall be
final, binding and nonappealable and judgment may be entered thereon by any
party in accordance with applicable law in any court of
11
<PAGE>
competent jurisdiction. This arbitration provision shall be specifically
enforceable. The fees of the American Arbitration Association and the
arbitrators and any expenses relating to the conduct of the arbitration shall be
paid by the Company.
(b) The party or parties challenging the right of the Employee
to the benefits of this Agreement shall in all circumstances have the burden of
proof.
12. TERM OF AGREEMENT. This Agreement shall commence as of
the date first written above and shall continue in effect until the earlier of
(i) the date upon which the Employee ceases to be in the employ of the Company
or any Subsidiary thereof for any reason other than a Termination Upon a Change
of Control, or (ii) 24 months after a Change of Control has occurred, PROVIDED,
HOWEVER, that all of the obligations of the parties hereunder arising after a
Change of Control shall continue in effect until such obligations are satisfied
or have expired.
13. SUCCESSOR COMPANY. The Company shall require any
successor or successors (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company, by agreement in form and substance satisfactory to the
Employee, to acknowledge expressly that this Agreement is binding upon and
enforceable against the Company in accordance with the terms hereof, and to
become jointly and severally obligated with the Company to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession or successions had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement. As used in this
Agreement, the Company shall mean the Company as hereinbefore defined and any
such successor or successors to its business and/or assets, jointly and
severally.
14. NOTICE. All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and shall be delivered personally or mailed by registered or
certified mail, return receipt requested, or by overnight express courier
service, as follows:
If to the Company, to:
Enterra Corporation
2707 North Loop West
Suite 1050
Houston, TX 77008
12
<PAGE>
Attention: The Chairman
With a required copy to:
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103
Attention: David R. King, Esq.
If to the Employee, to:
J. Joseph Percle
c/o Enterra Oil Field Services, Ltd.
P. O. Box 2357
Defense Roundabout #109
Rashid Building
Dubai, U.A.E.
or to such other names or address as the Company or the Employee, as the case
may be, shall designate by notice to the other party hereto in the manner
specified in this section. Any such notice shall be deemed delivered and
effective when received in the case of personal delivery, five days after
deposit, postage prepaid, with the U.S. Postal Service in the case of registered
or certified mail, or on the next business day in the case of overnight express
courier service.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED UNDER THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY
CONFLICT OF LAWS PROVISIONS.
16. CONTENTS OF AGREEMENT, AMENDMENT AND ASSIGNMENT.
(a) This Agreement supersedes all prior agreements and sets forth
the entire understanding between the parties hereto with respect to the subject
matter hereof and cannot be changed, modified, extended or terminated except
upon written amendment executed by the Employee and approved by the board and
executed on the Company's behalf by a duly authorized officer. The provisions
of this Agreement may provide for payments to the Employee under certain
compensation or bonus plans (including without limitation the Stock Plan, the
Bonus Plan, the 401(k) Plan and the CRC-Evans Plan) under circumstances where
such plans would not provide for payment thereof. It is the specific intention
of the parties that the provisions of this Agreement shall supersede any
provisions to the contrary in such plans, and such plans shall be deemed to have
been amended to correspond with this
13
<PAGE>
Agreement without further action by the Company or the Board.
(b) Nothing in this Agreement shall be construed as giving the
Employee any right to be retained in the employ of the Company or any of its
Subsidiaries.
(c) The Employee acknowledges that from time to time, the
Company and its subsidiaries may establish, maintain and distribute employee
manuals or handbooks or personnel policy manuals, and officers or other
representatives of the Company or its Subsidiaries may make written or oral
statements relating to personnel policies and procedures. Such manuals,
handbooks and statements are intended only for general guidance. No policies,
procedures or statements of any nature by or on behalf of the Company or its
Subsidiaries (whether written or oral, and whether or not contained in any
employee manual or handbook or personnel policy manual), and no acts or
practices of any nature, shall be construed to modify this Agreement.
(d) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and responsibilities of the Employee and the Company hereunder
shall not be assignable in whole or in part by the Company.
17. SEVERABILITY. If any provision of this Agreement or
application thereof to anyone or under any circumstances shall be determined to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or application.
18. REMEDIES CUMULATIVE - NO WAIVER. No right conferred
upon the Employee by this Agreement is intended to be exclusive of any other
right or remedy, and each and every such right or remedy shall be cumulative and
shall be in addition to any other right or remedy given hereunder or now or
hereafter existing at law or in equity. No delay or omission by the Employee in
exercising any right, remedy or power hereunder or existing at law or in equity
shall be construed as a waiver thereof, including without limitation any delay
by the Employee in delivering a Notice of Termination pursuant to Section 2
hereof after an event has occurred which would, if the Employee had resigned,
have constituted a Termination upon a Change of Control pursuant to Section
1(p)(ii) of this Agreement.
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<PAGE>
19. MISCELLANEOUS. All section headings are for convenience
only. This Agreement may be executed in several counterparts, each of which is
an original. It shall not be necessary in making proof of this Agreement or any
counterpart hereof to produce or account for any of the other counterparts.
IN WITNESS WHEREOF, the undersigned, intending to be legally
bound, have executed this Agreement as of the date first above written.
Attest: ENTERRA CORPORATION
/s/ M. Gay Mather By: /s/ Steven C. Grant
- ------------------------------ ---------------------------------
Secretary Steven C. Grant
Sr. Vice President and
Chief Financial Officer
/s/ Steven W. Krablin /s/ J. Joseph Percle
- ------------------------------ -------------------------------------
Witness Joseph Percle
15
<PAGE>
SEVERANCE AGREEMENT
Agreement made as of April 1, 1993 between Pipeline Induction Heat
Limited (the "Company") and Michael Peter Smith (the "Employee").
WHEREAS, the Employee is presently employed by the Company as its
Managing Director;
WHEREAS, the Company considers it essential to foster the employment
of well qualified key management personnel for the Company and, in this regard,
the directors of the Company recognize that, as is the case with many publicly
held corporations, the possibility of a change in control of Enterra Corporation
("Enterra"), the parent of the Company, may exist and that such possibility, and
the uncertainty and questions which it may raise among management of the
Company, may result in the departure or distraction of key management personnel
to the detriment of the Company;
WHEREAS, the directors of the Company, with the concurrence of
Enterra, have determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of key members of the
management of the Company to their assigned duties without distraction in the
face of potentially disturbing circumstances arising from the possibility of a
change in control of Enterra or the Company, although no such change is now
contemplated; and
WHEREAS, in order to induce the Employee to remain in the employ of
the Company, the Company agrees that the Employee shall receive the compensation
and benefits set forth in this Agreement in the event his employment with the
Company is terminated subsequent to a "Change of Control" (as defined in Section
1 hereof) of Enterra or the Company as a cushion against the financial and
career impact on the Employee of any such Change of Control;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, the parties hereto agree as follows:
l. DEFINITIONS. For all purposes of this Agreement, the
following terms shall have the meanings specified in this Section unless the
context clearly otherwise requires:
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of
<PAGE>
the General Rules and Regulations under the U.S. Securities Exchange Act of
1934, as amended (the "Exchange Act").
(b) "Base Salary" shall mean the total cash remuneration earned by
the Employee on an annualized basis in all capacities with the Company and its
Subsidiaries, if any, but exclusive of any cash payments made to him under the
Company's Bonus Plan, if any, or under any type of deferred compensation or
retirement plan;
(c) A Person shall be deemed the "Beneficial Owner" of any
securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed
the "Beneficial Owner" of securities tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for payment, purchase or exchange;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including without limitation pursuant to any agreement, arrangement
or understanding, whether or not in writing; PROVIDED, HOWEVER,
that a Person shall not be deemed the "Beneficial Owner" of any
security under this subsection (ii) as a result of an oral or
written agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding (A) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act, and (B) is not then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
2
<PAGE>
(iii) that are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has
any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or disposing
of any voting securities of Enterra;
PROVIDED, HOWEVER, that nothing in this Section 1(c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of any securities acquired through such Person's participation in good faith in
a firm commitment underwriting until the expiration of forty days after the date
of such acquisition.
(d) "Bonus Plan" shall mean any Company or Enterra bonus plan in
which the Employee participates, as in effect immediately prior to a Change of
Control.
(e) "Change of Control" shall be deemed to have taken place if (i)
any Person (except Enterra, any Subsidiary of Enterra, any employee benefit plan
of Enterra or of any Subsidiary of Enterra, or any Person or entity organized,
appointed or established by Enterra for or pursuant to the terms of any such
employee benefit plan), together with all Affiliates and Associates of such
Person acting in concert as described in Section 14(d)(2) of the Exchange Act,
shall become the Beneficial Owner in the aggregate of 30% or more of the Common
Stock of Enterra then outstanding within the meaning of Rule 13d-3 promulgated
under the Exchange Act, or (ii) the Company ceases to be controlled, directly or
indirectly, by Enterra, or if it sells all or substantially all of its assets to
a company not so controlled by Enterra.
(f) "Normal Retirement Date" shall mean the first day of the
calendar month coincident with or next following the Employee's 65th birthday.
(g) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(h) "Stock Plan" shall mean Enterra's Stock Option Plan or any
successor plan thereto, as in effect immediately prior to a Change of Control.
(i) "Subsidiary" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
(j) "Termination Date" shall mean the date of receipt of the
Notice of Termination described in Section 2
3
<PAGE>
hereof or any later date specified therein, as the case may be.
(k) "Termination of Employment" shall mean the termination of the
Employee's actual employment relationship with the Company.
(l) "Termination upon a Change of Control" shall mean a
Termination of Employment upon or within two years after a Change of Control
either:
(i) initiated by the Company or Enterra for any reason
other than (x) the Employee's continuous illness, injury or
incapacity for a period of six consecutive months, (y) for "cause,"
which shall mean misappropriation of funds, habitual insobriety,
substance abuse, conviction of a crime involving moral turpitude, or
gross negligence in the performance of his duties, which gross
negligence has had a material adverse effect on the business,
operations, assets, properties or financial condition of the Company
and its Subsidiaries, if any, taken as a whole, or (z) by reason of
the occurrence of the Normal Retirement Date; or
(ii) initiated by the Employee following one or more of the
following occurrences:
(A) a significant reduction by the Company or its
Subsidiaries, if any, of the authority, duties or
responsibilities of the Employee immediately prior to the
Change of Control;
(B) any removal of the Employee from or any failure to
re-elect the Employee to the officer positions with the
Company and its Subsidiaries, if any, held by him immediately
prior to the Change of Control, except in connection with
promotions to higher office or in connection with
consolidations among the Company's Subsidiaries where the
Employee is elected to similar positions in the successor
company or companies;
(C) a reduction by the Company in the Employee's Base
Salary as in effect immediately prior to the Change of
Control;
(D) any revocation or material modification (except as
may be required in the
4
<PAGE>
normal course of business in light of any requirement of or
change in applicable law or regulations) of any Bonus Plan or
deferred compensation or retirement plan, or any action taken
pursuant to the terms of any of such plans, which materially
(x) reduces the opportunity to receive compensation under any
of such plans of amounts equivalent to those received by the
Employee during the two fiscal years immediately preceding the
Change of Control, subject to the right of the directors of
the Company or of Enterra to establish in a manner consistent
with past practice prior to the Change of Control reasonable
goals under such plans, (y) reduces the compensation payable
to the Employee under any of such plans but which does not
effect comparable reductions in the compensation payable to
the other participants in such plans, or (z) increases the
compensation payable to other participants in any of such
plans but which does not effect corresponding increases in the
amount of compensation payable to the Employee; or
(E) a transfer of the Employee, without his express
written consent, to a location which is outside the general
metropolitan area in which his principal place of business
immediately preceding the Change of Control may be located, or
which is otherwise an unreasonable commuting distance from the
Employee's principal residence at the date of the Change of
Control.
2. NOTICE OF TERMINATION. Any Termination upon a Change of
Control shall be communicated by a Notice of Termination to the other party
hereto given in accordance with Section 12 hereof. 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) briefly
summarizes the facts and circumstances deemed to provide a basis for termination
of the Employee's employment under the provision so indicated, and (iii) if the
termination date is other than the date of receipt of such notice, specifies the
termination date (which date shall not be more than 15 days after the giving of
such notice).
5
<PAGE>
3. SEVERANCE COMPENSATION UPON TERMINATION.
(a) Subject to the adjustments provided in paragraph (b) below and
Section 9(a) hereof, in the event of the Employee's Termination upon a Change of
Control, the Company shall pay to the Employee, within 15 days after the
Termination Date, an amount in cash equal to two times the sum of paragraphs (i)
and (ii) below:
(i) the Employee's Base Salary in effect either immediately
prior to the Termination of Employment or immediately prior to the
Change of Control, whichever is higher; and
(ii) the average of the annual bonuses earned by the
Employee under any Bonus Plan in the two fiscal years immediately
prior to such Termination of Employment.
(b) In the event the Employee's Normal Retirement Date would occur
prior to 24 months after the Termination Date, the aggregate cash amount
determined as set forth in (a) above shall be reduced by multiplying it by a
fraction, the numerator of which shall be the number of days from the
Termination Date to the Employee's Normal Retirement Date and the denominator of
which shall be 730. No payments shall be due Employee in the event that the
Normal Retirement Date has been reached prior to the Termination Date.
4. OTHER PAYMENTS. In the event of the Employee's Termination
upon a Change of Control, the Company shall also:
(a) pay to the Employee within 15 days after the Termination Date,
unless the Employee has exercised such options and rights, an amount equal to
the excess, if any, of the aggregate fair market value of the shares of
Enterra's Common Stock subject to all stock options and stock appreciation
rights outstanding arid unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee under the Stock Plan, over
the aggregate exercise price of all such stock options. Upon such payment, the
options or rights shall terminate. For purposes of this paragraph, fair market
value shall mean the highest of (x) the closing price of Enterra's Common Stock
on the business day immediately preceding the Termination Date, if such Common
Stock is publicly traded at such date, (y) if such Common Stock is not publicly
traded at the Termination Date, the value determined by an independent
appraiser, such appraiser to be selected by the Employee and to be reasonably
satisfactory to the Company (the fees and expenses of such appraiser to be borne
by the Company), and (z) in respect of a Change of Control under
6
<PAGE>
Section 1(e) (i) hereof, the highest per share price of Enterra's Common Stock
paid (in connection with the Change of Control or at any time thereafter) by
the Person or group whose acquisition of shares of Common Stock of Enterra has
given rise to a Change of Control;
(b) to the extent permitted by applicable law, continue or cause
to be continued until 24 months after the Termination Date, on the
cost-sharing basis (if any) in effect immediately prior to the Change of
Control, medical, dental and life insurance benefits (and, at the option of
the Employee, disability insurance benefits) substantially equivalent in all
material respects to those furnished by the Company and its Subsidiaries to
the Employee immediately prior to the Change of Control; PROVIDED, HOWEVER,
that if the Employee's Normal Retirement Date would have occurred prior to 24
months after the Termination Date, the obligation of the Company to provide
such benefits shall cease at the Employee's Normal Retirement Date; and
PROVIDED FURTHER, HOWEVER, that the obligation of the Company to provide such
benefits shall cease at such time as the Employee is employed on a full time
basis by a corporation not owned or controlled by the Employee that provides
the Employee, on substantially the same cost-sharing basis (if any) between
the Company and the Employee in effect immediately prior to the Change of
Control, with medical, dental life and disability insurance benefits
substantially equivalent in all material respects to those furnished by the
Company and its Subsidiaries to the Employee immediately prior to the Change
of Control; and
(c) permit the Employee to receive any car allowance or continue
the use of his Company car, if any, without any cost for a period of six
months thereafter. Thereafter, the Employee shall return the car to the
Company unless, in the case of a car owned by the Company, the Employee
elects to purchase the car from the Company at the net book value thereof at
the date of the purchase or, in the case of a car leased by the Company, the
Employee pays the Company, as such amounts become due and payable, all rental
payments charged to the Company for the use of such car for the remainder of
the lease therefor.
5. VESTING AND ACCELERATION OF CERTAIN BENEFITS. In the event
of a Termination upon a Change of Control, all restrictions remaining on the
Termination Date on the restricted shares, if any, received by the Employee
pursuant to the Stock Plan shall lapse, and said shares shall thereupon be owned
by the Employee free and clear of all restrictions of any nature whatsoever,
except those, if any, under applicable U.S. federal and state securities laws.
7
<PAGE>
6. ENFORCEMENT.
(a) In the event that the Company shall fail or refuse to make
payment of any amounts due the Employee under Sections 3, 4 and 5 hereof within
the respective time periods provided therein, the Company shall pay to the
Employee, in addition to the payment of any other sums provided in this
Agreement, interest, compounded daily, on any amount remaining unpaid from the
date payment is required under Section 3, 4 or 5, as appropriate, until paid to
the Employee, at the rate from time to time announced by Wells Fargo Bank, N.A.
as its "prime rate" plus 2%, each change in such rate to take effect on the
effective date of the change in such prime rate.
(b) It is the intent of the parties that the Employee not be
required to incur any expenses associated with the enforcement of his rights
under this Agreement by arbitration, litigation or other legal action because
the cost and expense thereof would substantially detract from the benefits
intended to be extended to the Employee hereunder. Accordingly, the Company
shall pay the Employee on demand the amount necessary to reimburse the Employee
in full for all expenses (including all attorneys' fees and legal expenses)
incurred by the Employee in enforcing any of the obligations of the Company
under this Agreement.
7. NO MITIGATION. The Employee shall not be required to
mitigate the amount of any payment or benefit provided for in this Agreement by
seeking other employment or otherwise.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Employee's continuing or future participation in or rights
under any benefit, bonus, incentive or other plan or program provided by
Enterra, the Company or any of the Company's Subsidiaries or Affiliates and for
which the Employee may qualify.
9. COORDINATION OF BENEFITS; NO SET-OFF; TAXES.
(a) The severance plan or policy, if any, applicable to employees
of the Company or any Subsidiary which employs the Employee, and any other
severance payments required by employment contracts or statutes or provided
under government programs may provide compensation and benefits to the Employee
upon events which also constitute a Termination upon a Change of Control as
defined in this Agreement. In such event, Employee shall be entitled only to
the largest cash compensation provided for under any of such agreements, plans,
policies, statutes or programs and the maximum benefit continuance provided for
under any of such
8
<PAGE>
agreements, plans, policies, statues or programs, and the payments referred to
in Section 3 hereof shall be reduced to the extent necessary to effect such
coordination of benefits.
(b) Except as specifically set forth in (a) above, 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 circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Employee or others.
(c) Employee alone, and not Enterra, the Company or any
Subsidiary, shall be responsible for the payment of all taxes in respect of the
payments to be made and benefits to be provided under this Agreement.
10. SETTLEMENT OF ALL DISPUTES.
(a) Any dispute, controversy or claim arising out of or relating
to any provision of this Agreement or the Employee's Termination upon a Change
of Control shall be settled by arbitration in the City of Houston, Texas, in
accordance with the commercial arbitration rules then in effect of the American
Arbitration Association, before a panel of three arbitrators, one of whom shall
be selected by the Company, one of whom shall be selected by the Employee and
the third of whom shall be selected by the other two arbitrators. Each
arbitrator selected as provided herein is required to be or have been a director
or an executive officer of a corporation whose shares of common stock were
listed during at least one year of such service on the New York Stock Exchange
or the American Stock Exchange or quoted on the National Association of
Securities Dealers Automated Quotations System. Any award entered by the
arbitrators shall be final, binding and nonappealable and judgment may be
entered thereon by any party in accordance with applicable law in any court of
competent jurisdiction. This arbitration provision shall be specifically
enforceable. The fees of the American Arbitration Association and the
arbitrators and any expenses relating to the conduct of the arbitration shall be
paid by the Company.
(b) The party or parties challenging the right of the Employee to
the benefits of this Agreement shall in all circumstances have the burden of
proof.
11. TERM OF AGREEMENT. This Agreement shall commence as of the
date first written above and shall continue in effect until the earlier of (i)
March 31, 1998 or such earlier date upon which the Employee ceases to be in the
employ of the Company or any Subsidiary thereof for any
9
<PAGE>
reason other than a Termination Upon a Change of Control, or (ii) 24 months
after a Change of Control has occurred, PROVIDED, HOWEVER, that all of the
obligations of the parties hereunder arising after a Change of Control shall
continue in effect until such obligations are satisfied or have expired.
12. NOTICES. All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and may be delivered personally or mailed by overnight express
courier service, as follows:
If to the Company, to:
Enterra Corporation
2707 North Loop West
Suite 1050
Houston, TX 77008
USA
Attention: The Chairman
With a required copy to:
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103
USA
Attention: David R. King, Esq.
If to the Employee, to:
Michael Peter Smith
Tudor House
Forest Lane
Carr Hall Road
Barrowford Nr. Nelson
Lancashire BB9 5QL
England
or to such other names or addresses as the Company or the Employee, as the case
may be, shall designate by notice to the other party hereto in the manner
specified in this Section. Any such notice shall be deemed delivered and
effective when received in the case of personal delivery, on the next business
day in the case of overnight express courier service or when actually received
if sent in any other fashion.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED UNDER THE LAWS OF THE STATE OF
10
<PAGE>
DELAWARE, UNITED STATES OF AMERICA, WITHOUT GIVING EFFECT TO
SUCH STATE'S CONFLICT OF LAWS PROVISIONS.
14. CONTENTS OF AGREEMENT, AMENDMENT AND ASSIGNMENT.
(a) This Agreement supersedes all prior agreements and sets forth
the entire understanding between the parties hereto with respect to the subject
matter hereof and cannot be changed, modified, extended or terminated except
upon written amendment executed by (i) the Employee and (ii) after approval by
the directors of the Company and, in writing, by the chief executive officer of
Enterra, by a duly authorized director of the Company other than the Employee.
The provisions of this Agreement may provide for payments to the Employee under
certain compensation, bonus or stock option plans under circumstances where such
plans would not provide for payment thereof. It is the specific intention of
the parties that the provisions of this Agreement shall supersede any provisions
to the contrary in such plans, and such plans shall be deemed to have been
amended to correspond with this Agreement without further action by the Company
or Enterra.
(b) Nothing in this Agreement shall be construed as giving the
Employee any right to be retained in the employ of Enterra, the Company or any
Subsidiary of either.
(c) The Employee acknowledges that from time to time, Enterra, the
Company and their Subsidiaries may establish, maintain and distribute employee
manuals or handbooks or personnel policy manuals, and officers or other
representatives thereof may make written or oral statements relating to
personnel policies and procedures. Such manuals, handbooks and statements are
intended only for general guidance. No policies, procedures or statements of
any nature by or on behalf of Enterra, the Company or any Subsidiary of either
(whether written or oral, and whether or not contained in any employee manual or
handbook or personnel policy manual), and no acts or practices of any nature,
shall be construed to modify this Agreement.
(d) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and responsibilities of the Employee and the Company hereunder
shall not be assignable in whole or in part by the Company.
15. SEVERABILITY. If any provision of this Agreement or
application thereof to anyone or under any circumstances shall be determined to
be invalid or
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unenforceable, such invalidity or unenforceability shall not affect any other
provisions or applications of this Agreement which can be given effect without
the invalid or unenforceable provision or application.
16. REMEDIES CUMULATIVE - NO WAIVER. No right conferred upon the
Employee by this Agreement is intended to be exclusive of any other right or
remedy, and each and every such right or remedy shall be cumulative and shall be
in addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity. No delay or omission by the Employee in
exercising any right, remedy or power hereunder or existing at law or in equity
shall be construed as a waiver thereof, including without limitation any delay
by the Employee in delivering a Notice of Termination pursuant to Section 2
hereof after an event has occurred which would, if the Employee had resigned,
have constituted a Termination upon a Change of Control pursuant to Section
1(l)(ii) of this Agreement.
17. MISCELLANEOUS. All section headings are for convenience
only. This Agreement may be executed in several counterparts, each of which
shall be an original. It shall not be necessary in making proof of this
Agreement or any counterpart hereof to produce or account for any of the other
counterparts.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first above written.
The COMMON SEAL of )
PIPELINE INDUCTION HEAT )
LIMITED was hereunto )
affixed in the presence )
of:- )
/s/ Charles Evans
Director
Secretary
SIGNED SEALED and DELIVERED )
by the said MICHAEL PETER )/s/ M. Smith
SMITH in the presence of:- )
/s/ P. L. Morgan
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SEVERANCE AGREEMENT
Agreement made as of February 21, 1991 between Enterra Corporation,
a Delaware corporation (the "Company"), and Michael L. Stansberry (the
"Employee").
WHEREAS, the Employee is presently employed by Oil Field Rental
Service Company, a "Subsidiary" (as defined in Section 1 hereof), as its
President;
WHEREAS, the Company considers it essential to foster the employment
of well qualified key management personnel for the Company and its Subsidiaries,
and, in this regard, the board of directors of the Company recognizes that, as
is the case with many publicly held corporations, the possibility of a change in
control of the Company may exist and that such possibility, and the uncertainty
and questions which it may raise among management, may result in the departure
or distraction of key management personnel to the detriment of the Company;
WHEREAS, the board of directors of the Company has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of key members of the management of the Company and its
Subsidiaries to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a change in
control of the Company, although no such change is now contemplated; and
WHEREAS, in order to induce the Employee to remain in the employ of
the Subsidiary, the Company agrees that the Employee shall receive the
compensation and benefits set forth in this Agreement in the event his
employment with the Company is terminated subsequent to a "Change of Control"
(as defined in Section 1 hereof) of the Company as a cushion against the
financial and career impact on the Employee of any such Change of Control;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, the parties hereto agree as follows:
1. DEFINITIONS. For all purposes of this Agreement, the
following terms shall have the meanings specified in this Section unless the
context clearly otherwise requires:
<PAGE>
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) "Base Salary" shall mean the total cash remuneration earned by
the Employee on an annualized basis in all capacities with the company and its
Subsidiaries, including any compensation the payment of which has been deferred
pursuant to a salary reduction or deferral plan (including a 401(k) plan, other
than company matching contributions) or agreement, but exclusive of any cash
payments made to him under the company's Bonus Plan, or any contributions made
for his benefit to the Company's 401(k) Plan or CRC-Evans Plan.
(c) A Person shall be deemed the "Beneficial Owner" of any
securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed
the "Beneficial Owner" of securities tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for payment, purchase or exchange;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including without limitation pursuant to any agreement, arrangement
or understanding, whether or not in writing; PROVIDED, HOWEVER,
that a Person shall not be deemed the "Beneficial Owner" of any
security under this subsection (ii) as a result of an oral or
written agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding (a) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of
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the General Rules and Regulations under the Exchange Act, and (b) is
not then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) that are beneficially owned, directly Or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has
any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting (except,
pursuant to a revocable proxy as described in the proviso to
subsection (ii) above or the May 2, 1986 option agreement between
Shamrock Holdings, Inc. and the shareholders known as the "SGS
Group" or their successors) or disposing of any voting securities of
the Company;
PROVIDED, HOWEVER, that nothing in this Section 1(c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of any securities acquired through such Person's participation in good faith in
a firm commitment underwriting until the expiration of forty days after the date
of such acquisition.
(d) "Board" shall mean the board of directors of the Company.
(e) "Bonus Plan" shall mean the Company's Management Incentive
Bonus Plan, as in effect immediately prior to a Change of Control.
(f) "Change of control" shall be deemed to have taken place if (i)
any Person (except the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, any Person or
entity organized, appointed or established by the Company for or pursuant to the
terms of any such employee benefit plan, or an Exempted Person), together with
all Affiliates and Associates of such Person acting in concert as described in
Section 14(d) (2) of the Exchange Act, shall become the Beneficial Owner in the
aggregate of 30% or more of the Common Stock of the Company then outstanding
within the meaning of Rule 13d-3 promulgated under the Exchange Act.
(g) "CRC-Evans Plan" shall mean the CRC-Evans Money Purchase
Pension Plan, as in effect immediately prior to a Change of Control.
(h) "Exempted Person" shall mean any of Shamrock
Holdings of California, Inc., a Delaware corporation
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<PAGE>
("Shamrock"), Shamrock Holdings, Inc., a Delaware corporation ("Shamrock
Holdings"), or any Affiliate or Associate of Shamrock or Shamrock Holdings.
"Exempted Person" shall not include transferees from any Exempted Person except
where such transferees are Affiliates or Associates of Shamrock or Shamrock
Holdings.
(i) "401(k) Plan" shall mean the Company's 401(k) Plan, as in
effect immediately prior to a Change of Control.
(j) "Normal Retirement Date" shall mean the first day of the
calendar month coincident with or next following the Employee's 65th birthday.
(k) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(l) "Stock Plan" shall mean the Company's Stock Option Plan or any
successor plan thereto, as in effect immediately prior to a Change of Control.
(m) "Subsidiary" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
(n) "Termination Date" shall mean the date of receipt of the
Notice of Termination described in Section 2 hereof or any later date specified
therein, as the case may be.
(o) "Termination of Employment" shall mean the termination of the
Employee's actual employment relationship with the Company.
(p) "Termination upon a Change of Control" shall mean a
Termination of Employment upon or within two years after a Change of Control
either:
(i) initiated by the Company for any reason other than (x)
the Employee's continuous illness, injury or incapacity for a period
of six consecutive months, (y) for "cause," which shall mean
misappropriation of funds, habitual insobriety, substance abuse,
conviction of a crime involving moral turpitude, or gross negligence
in the performance of his duties, which gross negligence has had a
material adverse effect on the business, operations, assets,
properties or financial condition of the Company and its
Subsidiaries taken as a whole, or (z) by reason of the occurrence of
the Normal Retirement Date; or
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<PAGE>
(ii) initiated by the Employee following one or more of the
following occurrences:
(A) a significant reduction by the Company or its
Subsidiaries of the authority, duties or responsibilities of the
Employee immediately prior to the Change of Control;
(B) any removal of the Employee from or any failure to
re-elect the Employee to the officer positions with the Company
and its Subsidiaries held by him immediately prior to the Change
of Control, except in connection with promotions to higher office
or in connection with consolidations among the Company's
Subsidiaries where the Employee is elected to similar positions
in the successor company or companies;
(C) a reduction by the Company in the Employee's Base
Salary as in effect immediately prior to the Change of Control;
(D) revocation or any modification (except as may be
required in the normal course of business in light of any
requirement of or change in federal law or regulations) of the
Bonus Plan, 401(k) Plan or CRC-Evans Plan, or any action taken
pursuant to the terms of such plans, which materially (x) reduces
the opportunity to receive compensation under any of such plans
of equivalent amounts received by the Employee during the two
fiscal years immediately preceding the Change of Control, subject
to the right of the Board to establish in a manner consistent
with past practice prior to the Change of Control reasonable
goals under such plans, (y) reduces the compensation payable to
the Employee under any of such plans but which does not effect
comparable reductions in the compensation payable to the other
participants in such plans, or (z) increases the compensation
payable to other participants in any of such plans but which
does not effect corresponding increases in the amount of
compensation payable to the Employee; or
(E) a transfer of the Employee, without his express
written consent, to a location which is outside the general
metropolitan area in which his principal place of business
5
<PAGE>
immediately preceding the Change of Control may be located, or
which is otherwise an unreasonable commuting distance from the
Employee's principal residence at the date of the Change of
Control.
2. NOTICE OF TERMINATION. Any Termination upon a Change of
Control shall be communicated by a Notice of Termination to the other party
hereto given in accordance with Section 14 hereof. 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) briefly
summarizes the facts and circumstances deemed to provide a basis for termination
of the Employee's employment under the provision so indicated, and (iii) if the
termination date is other than the date of receipt of such notice, specifies the
termination date (which date shall not be more than 15 days after the giving of
such notice).
3. SEVERANCE COMPENSATION UPON TERMINATION.
(a) Subject to the provisions of Section 10 hereof and to
adjustment as provided in paragraph (b) below and Section 9(a), in the event of
the Employee's Termination upon a Change of Control, the Company shall pay to
the Employee, within fifteen days after the Termination Date (or as soon as
possible thereafter in the event that the procedures set forth in Section 10(b)
hereof cannot be completed within 15 days), an amount in cash equal to two times
the sum of paragraphs (i) and (ii) below:
(i) The Employee's Base Salary in effect either immediately
prior to the Termination of Employment or immediately prior to the
Change of Control, whichever is higher; and
(ii) The average of the annual bonuses earned by the Employee
under the Bonus Plan in the two fiscal years immediately prior to
such Termination of Employment.
(b) In the event the Employee's Normal Retirement Date would occur
prior to twenty-four months after the Termination Date, the aggregate cash
amount determined as set forth in (a) above shall be reduced by multiplying it
by a fraction, the numerator of which shall be the number of days from the
Termination Date to the Employee's Normal Retirement Date and the denominator of
which shall be 730. No payments shall be due Employee in the event that the
Normal Retirement Date has been reached prior to the Termination Date.
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<PAGE>
4. OTHER PAYMENTS. Subject to the provisions of Section 10
hereof, in the event of the Employee's Termination upon a Change of Control, the
Company shall:
(a) pay to the Employee within fifteen days after the Termination
Date, unless the Employee has exercised such options and rights, an amount equal
to the excess, if any, of the aggregate fair market value of the shares of the
Company's Common Stock subject to all stock options and stock appreciation
rights outstanding and unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee under the Stock Plan, over
the aggregate exercise price of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of (x) the closing price of
the Company's Common Stock on the business day immediately preceding the
Termination Date, if such Common Stock is publicly traded at such date, (y) if
such Common Stock is not publicly traded at the Termination Date, the value
determined by an independent appraiser, such appraiser to be selected by the
Employee and to be reasonably satisfactory to the Company (the fees and expenses
of such appraiser to be borne by the Company), or (z) the highest per share
price of the Company's Common Stock paid (in connection with the Change of
Control or at any time thereafter) by the Person or group whose acquisition of
shares of Common Stock of the Company has given rise to a Change of Control;
(b) to the extent permitted by applicable law, continue or cause
to be continued until 24 months after the Termination Date, on the cost-sharing
basis (if any) in effect immediately prior to the Change of Control, medical,
dental and life insurance benefits (and, at the option of the Employee,
disability insurance benefits) substantially equivalent in all material respects
to those furnished by the Company and its Subsidiaries to the Employee
immediately prior to the Change of Control; PROVIDED, HOWEVER, that if the
Employee's Normal Retirement Date would have occurred prior to 24 months after
the Termination Date, the obligation of the Company to provide such benefits
shall cease at the Employee's Normal Retirement Date; and PROVIDED FURTHER,
HOWEVER, that the obligation of the Company to provide such benefits shall
cease at such time as the Employee is employed on a full time basis by a
corporation not owned or controlled by the Employee that provides the Employee,
on substantially the same cost-sharing basis (if any) between the Company and
the Employee in effect immediately prior to the Change of Control, with medical,
dental, life and disability insurance benefits substantially equivalent in all
material respects to those furnished by the Company and its Subsidiaries to the
Employee immediately prior to the Change of Control;
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<PAGE>
(c) for vesting purposes only, in the event of a Termination upon
a Change of Control occurring prior to the Normal Retirement Date, credit the
Employee with the lesser of (i) two additional "years of service" (as defined in
the Company's 401(k) Plan) or (ii) the period of time from the Termination Date
to the Normal Retirement Date under each of the Company's 401(k) Plan and
CRC-Evans Plan, in addition to the years of service that would have otherwise
been calculated by reference solely to the Termination Date, it being understood
that benefits in respect of the two additional years of service shall be paid to
the Employee under the Company's 401(k) Plan or CRC-Evans Plan, and that the
Company shall, to the extent necessary to provide the Employee the additional
benefits intended hereby, amend the 401(k) Plan or CRC-Evans Plan or pay such
additional benefits outside the plan as may be necessary; and
(d) permit the Employee to continue the use of his Company car, if
any, without any cost for a period of six months thereafter. Thereafter, the
Employee shall return the car to the Company unless, in the case of a car owned
by the Company, the Employee elects to purchase the car from the Company at the
net book value thereof at the date of the purchase or, in the case of a car
leased by the Company, the Employee pays the Company, as such amounts become due
and payable, all rental payments charged to the Company for the use of such car
for the remainder of the lease therefore.
5. VESTING AND ACCELERATION OF CERTAIN BENEFITS. In the event
of a Termination upon a Change of Control, and subject to the provisions of
Section 10 hereof, all restrictions remaining on the Termination Date on the
restricted shares, if any, received by the Employee, pursuant to the Stock Plan
shall lapse, and said shares shall thereupon be owned by the Employee free and
clear of all restrictions of any nature whatsoever, except those, if any, under
applicable federal and state securities laws.
6. ENFORCEMENT.
(a) In the event that the Company shall fail or refuse to make
payment of any amounts due the Employee under Sections 3, 4 and 5 hereof within
the respective time periods provided therein, the Company shall pay to the
Employee, in addition to the payment of any other sums provided in this
Agreement, interest, compounded daily, on any amount remaining unpaid from the
date payment is required under Section 3, 4 or 5, as appropriate, until paid to
the Employee, at the rate from time to time announced by Wells Fargo Bank, N.A.
as its "prime rate" plus 2%, each change in such rate to take effect on the
effective date of the change in such prime rate.
8
<PAGE>
(b) It is the intent of the parties that the Employee not be
required to incur any expenses associated with the enforcement of his rights
under this Agreement by arbitration, litigation or other legal action because
the cost and expense thereof would substantially detract from the benefits
intended to be extended to the Employee hereunder. Accordingly, the Company
shall pay the Employee on demand the amount necessary to reimburse the Employee
in full for all expenses (including all attorneys' fees and legal expenses)
incurred by the Employee in enforcing any of the obligations of the Company
under this Agreement.
7. NO MITIGATION. The Employee shall not be required to
mitigate the amount of any payment or benefit provided for in this Agreement by
seeking other employment or otherwise.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Employee's continuing or future participation in or rights
under any benefit, bonus, incentive or other plan or program provided by the
Company or any of its Subsidiaries or Affiliates and for which the Employee may
qualify.
9. COORDINATION OF BENEFITS; NO SET-OFF; TAXES.
(a) The severance plan or policy, if any, applicable to employees
of Enterra or the Subsidiary which employs the Employee, and any other severance
payments required by applicable statutes or provided under government programs
may provide compensation and benefits to Employee upon events which also
constitute a Termination upon a Change of Control as defined in this Agreement.
In such event, Employee shall be entitled only to the largest cash compensation
provided for under any of such agreements, plans, policies, statutes or programs
and the maximum benefit continuance provided for under any of such agreements,
plans, policies, statues or programs, and the payments referred to in Section 3
hereof shall be reduced to the extent necessary to effect such coordination of
benefits.
(b) Except as specifically set forth in (a) above, 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 circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Employee or others.
(c) Employee alone, and not the Company or any Subsidiary, shall
be responsible for the payment of all
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federal, state and local taxes in respect of the payments to be made and
benefits to be provided under this Agreement.
10. CERTAIN REDUCTION OF PAYMENTS.
(a) Anything in this Agreement to the contrary notwithstanding, in
the event that it shall be determined as set forth herein that any payment or
distribution by the Company to or for the benefit of the Employee, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (a "Payment"), would constitute an "excess parachute
payment" within the meaning of Section 28OG of the Internal Revenue Code of
1986, as amended (the "Code"), and that it would be economically advantageous to
the Company to reduce the Payment to avoid or reduce the taxation of excess
parachute payments under Section 4999 of the Code, the aggregate present value
of amounts payable or distributable to or for the benefit of the Employee
pursuant to this Agreement (such payments or distributions pursuant to this
Agreement are hereinafter referred to as "Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount" shall be an
amount expressed in present value which maximizes the aggregate present value of
Agreement Payments without causing any Payment to be subject to the taxation
under Section 4999 of the Code. For purposes of this Section 10, present value
shall be determined in accordance with Section 280G(d)(4) of the Code.
(b) All determinations to be made under this Section 10 shall be
made by Peat Marwick Main & Co., or the Company's independent public accountant
immediately prior to the Change of Control if other than Peat Marwick Main & Co.
(the "Accounting Firm"), which firm shall use its best efforts to provide its
determinations and any supporting calculations both to the Company and the
Employee within 10 days of the Termination Date. Any such determination by the
Accounting Firm shall be binding upon the Company and the Employee. The Company
shall in its sole discretion determine which and how much of the Agreement
Payments shall be eliminated or reduced consistent with the requirements of this
Section 10. Within five days after the Company's determination, the Company
shall pay (or cause to be paid) or distribute (or cause to be distributed) to or
for the benefit of the Employee such amounts as are then due to the Employee
under this Agreement.
(c) As a result of the uncertainty in the application of Section
280G of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Agreement Payments, as the case may be, will have
been made by the Company which should not have been made
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<PAGE>
("Overpayment") or that additional Agreement Payments which have not been made
by the Company could have been made ("Underpayment"), in each case, consistent
with the calculations required to be made hereunder. Within two years after the
Termination of Employment, the Accounting Firm shall review the determination
made by it pursuant to the preceding paragraph. In the event that the Accounting
Firm determines that an Overpayment has been made, any such Overpayment shall be
treated for all purposes as a loan to the Employee which the Employee shall
repay to the Company together with interest at the applicable Federal rate
provided for in Section 7872(f)(2) of the Code (the "Federal Rate"); PROVIDED,
HOWEVER, that no amount shall be payable by the Employee to the Company if and
to the extent such payment would not reduce the amount which is subject to
taxation under Section 4999 of the Code. In the event that the Accounting Firm
determines that an Underpayment has occurred, any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Employee together with
interest at the Federal Rate.
(d) All of the fees and expenses of the Accounting Firm in
performing the determinations referred to in subsections (b) and (c) above shall
be borne solely by the Company. The Company agrees to indemnify and hold
harmless the Accounting Firm of and from any and all claims, damages and
expenses of any nature resulting from or relating to its determinations pursuant
to subsections (b) and (c) above, except for claims, damages or expenses
resulting from the gross negligence or willful misconduct of the Accounting
Firm.
Il. SETTLEMENT OF ALL DISPUTES.
(a) Any dispute, controversy or claim arising out of or relating to
any provision of this Agreement or the Employee's Termination upon a Change of
Control shall be settled by arbitration in the City of Houston, Texas, in
accordance with the commercial arbitration rules then in effect of the American
Arbitration Association, before a panel of three arbitrators, two of whom shall
be selected by the Company and the Employee, respectively, and the third of whom
shall be selected by the other two arbitrators. Each arbitrator selected as
provided herein is required to be or have been a director or an executive
officer of a corporation whose shares of common stock were listed during at
least one year of such service on the New York Stock Exchange or the American
Stock Exchange or quoted on the National Association of Securities Dealers
Automated Quotations System. Any award entered by the arbitrators shall be
final, binding and nonappealable and judgment may be entered thereon by any
party in accordance with applicable law in any court of
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competent jurisdiction. This arbitration provision shall be specifically
enforceable. The fees of the American Arbitration Association and the
arbitrators and any expenses relating to the conduct of the arbitration shall be
paid by the Company.
(b) The party or parties challenging the right of the Employee to
the benefits of this Agreement shall in all circumstances have the burden of
proof.
12. TERM OF AGREEMENT. This Agreement shall commence as of the
date first written above and shall continue in effect until the earlier of (i)
the date upon which the Employee ceases to be in the employ of the Company or
any Subsidiary thereof for any reason other than a Termination Upon a Change of
Control, or (ii) 24 months after a Change of Control has occurred, PROVIDED,
HOWEVER, that all of the obligations of the parties hereunder arising after a
Change of Control shall continue in effect until such obligations are satisfied
or have expired.
13. SUCCESSOR COMPANY. The company shall require any successor or
successors (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to the Employee, to
acknowledge expressly that this Agreement is binding upon and enforceable
against the Company in accordance with the terms hereof, and to become jointly
and severally obligated with the Company to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession or successions had taken place. Failure of the Company to
obtain such agreement prior to the effectiveness of any such succession shall be
a breach of this Agreement. As used in this Agreement, the Company shall mean
the Company as hereinbefore defined and any such successor or successors to its
business and/or assets, jointly and severally.
14. NOTICE. All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and shall be delivered personally or mailed by registered or
certified mail, return receipt requested, or by overnight express courier
service, as follows:
If to the Company, to:
Enterra Corporation
2707 North Loop West
Suite 1050
Houston, TX 77008
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Attention: The Chairman
With a required copy to:
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103
Attention: David R. King, Esq.
If to the Employee, to:
Michael L. Stansberry
c/o Oil Field Rental Service Company
P. O. Box 1331
Houston, TX 77251-1331
or to such other names or addresses as the Company or the Employee, as the case
may be, shall designate by notice to the other party hereto in the manner
specified in this Section. Any such notice shall be deemed delivered and
effective when received in the case of personal delivery, five days after
deposit, postage prepaid, with the U.S. Postal service in the case of registered
or certified mail, or on the next business day in the case of overnight express
courier service.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED UNDER THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY
CONFLICT OF LAWS PROVISIONS.
16. CONTENTS OF AGREEMENT, AMENDMENT AND ASSIGNMENT.
(a) This Agreement supersedes all prior agreements and sets forth
the entire understanding between the parties hereto with respect to the subject
matter hereof and cannot be changed, modified, extended or terminated except
upon written amendment executed by the Employee and approved by the board and
executed on the Company's behalf by a duly authorized officer. The provisions
of this Agreement may provide for payments to the Employee under certain
compensation or bonus plans (including without limitation the Stock Plan, the
Bonus Plan, the 401(k) Plan and the CRC-Evans Plan) under circumstances where
such plans would not provide for payment thereof. It is the specific intention
of the parties that the provisions of this Agreement shall supersede any
provisions to the contrary in such plans, and such plans shall be deemed to have
been amended to correspond with this
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Agreement without further action by the Company or the Board.
(b) Nothing in this Agreement shall be construed as giving the
Employee any right to be retained in the employ of the Company or any of its
Subsidiaries.
(c) The Employee acknowledges that from time to time, the Company
and its subsidiaries may establish, maintain and distribute employee manuals or
handbooks or personnel policy manuals, and officers or other representatives of
the Company or its Subsidiaries may make written or oral statements relating to
personnel policies and procedures. Such manuals, handbooks and statements are
intended only for general guidance. No policies, procedures or statements of any
nature by or on behalf of the Company or its Subsidiaries (whether written or
oral, and whether or not contained in any employee manual or handbook or
personnel policy manual), and no acts or practices of any nature, shall be
construed to modify this Agreement.
(d) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and responsibilities of the Employee and the Company hereunder
shall not be assignable in whole or in part by the Company.
17. SEVERABILITY. If any provision of this Agreement or
application thereof to anyone or under any circumstances shall be determined to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or application.
18. REMEDIES CUMULATIVE - NO WAIVER. No right conferred upon the
Employee by this Agreement is intended to be exclusive of any other right or
remedy, and each and every such right or remedy shall be cumulative and shall be
in addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity. No delay or omission by the Employee in exercising
any right, remedy or power hereunder or existing at law or in equity shall be
construed as a waiver thereof, including without limitation any delay by the
Employee in delivering a Notice of Termination pursuant to Section 2 hereof
after an event has occurred which would, if the Employee had resigned, have
constituted a Termination upon a Change of Control pursuant to Section 1(p)(ii)
of this Agreement.
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19. MISCELLANEOUS. All section headings are for convenience
only. This Agreement may be executed in several counterparts, each of which is
an original. It shall not be necessary in making proof of this Agreement or any
counterpart hereof to produce or account for any of the other counterparts.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first above written.
Attest: ENTERRA CORPORATION
/s/ M. Gay Mather By: /s/ Steven C. Grant
- ------------------------------ ---------------------------------------
Secretary Steven C. Grant
Sr. Vice President and
Chief Financial Officer
/s/ Steven W. Krablin /s/ Michael L. Stansberry
- ------------------------------ -------------------------------------
Witness Michael L. Stansberry
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<PAGE>
SEVERANCE AGREEMENT
Agreement made as of March 5, 1991 between Enterra Corporation, a
Delaware corporation (the "Company"), and D. Dale Wood (the "Employee").
WHEREAS, the Employee has previously been employed by CRC-Evans
Pipeline International, Inc., a "Subsidiary" (as defined in Section 1 hereof);
and
WHEREAS, on the date of this Agreement the Employee shall become
employed by the Company as its President and Chief Executive Officer;
WHEREAS, the Company considers it essential to foster the employment
of well qualified key management personnel for the Company and its Subsidiaries,
and, in this regard, the board of directors of the Company recognizes that, as
is the case with many publicly held corporations, the possibility of a change in
control of the Company may exist and that such possibility, and the uncertainty
and questions which it may raise among management, may result in the departure
or distraction of key management personnel to the detriment of the Company;
WHEREAS, the board of directors of the Company has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of key members of the management of the Company and its
Subsidiaries to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a change in
control of the Company, although no such change is now contemplated; and
WHEREAS, in order to induce the Employee to remain in the employ of
the Company, the Company agrees that the Employee shall receive the compensation
and benefits set forth in this Agreement in the event his employment with the
Company is terminated subsequent to a "Change of Control" (as defined in Section
1 hereof) of the Company as a cushion against the financial and career impact on
the Employee of any such Change of Control;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, the parties hereto agree as follows:
1. DEFINITIONS. For all purposes of this Agreement, the following
terms shall have the meanings
<PAGE>
specified in this Section unless the context clearly otherwise requires:
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) "Base Salary" shall mean the total cash remuneration earned by
the Employee on an annualized basis in all capacities with the Company and its
Subsidiaries, including any compensation the payment of which has been deferred
pursuant to a salary reduction or deferral plan (including a 401(k) plan, other
than company matching contributions) or agreement, but exclusive of any cash
payments made to him under the Company's Bonus Plan, or any contributions made
for his benefit to the Company's 401(k) Plan or CRC-Evans Plan.
(c) A Person shall be deemed the "Beneficial Owner" of any
securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether
or not in writing) or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; PROVIDED, HOWEVER,
that a Person shall not be deemed the "Beneficial Owner" of securities
tendered pursuant to a tender or exchange offer made by such Person or
any of such Person's Affiliates or Associates until such tendered
securities are accepted for payment, purchase or exchange;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including without limitation pursuant to any agreement, arrangement or
understanding, whether or not in writing; PROVIDED, HOWEVER, that a
Person shall not be deemed the "Beneficial Owner" of any security
under this subsection (ii) as a result of an oral or written
agreement, arrangement or understanding to vote such security if such
agreement, arrangement or understanding (A) arises solely from a
revocable
2
<PAGE>
proxy given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and (B) is not
then reportable by such Person on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(iii) that are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing)
for the purpose of acquiring, holding, voting (except, pursuant to a
revocable proxy as described in the proviso to subsection (ii) above)
or disposing of any voting securities of the Company;
PROVIDED, HOWEVER, that nothing in this Section 1(c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of any securities acquired through such Person's participation in good faith in
a firm commitment underwriting until the expiration of forty days after the date
of such acquisition.
(d) "Board" shall mean the board of directors of the Company.
(e) "Bonus Plan" shall mean the Company's Management Incentive Bonus
Plan, as in effect immediately prior to a Change of Control.
(f) "Change of Control" shall be deemed to have taken place if (i)
any Person (except the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, any Person or
entity organized, appointed or established by the Company for or pursuant to the
terms of any such employee benefit plan, or an Exempted Person), together with
all Affiliates and Associates of such Person acting in concert as described in
Section 14(d) (2) of the Exchange Act, shall become the Beneficial Owner in the
aggregate of 30% or more of the Common Stock of the Company then outstanding
within the meaning of Rule 13d-3 promulgated under the Exchange Act.
(g) "CRC-Evans Plan" shall mean the CRC-Evans Money Purchase Pension
Plan, as in effect immediately prior to a Change of Control.
(h) "Exempted Person" shall mean any of Shamrock Holdings of
California, Inc., a Delaware corporation
3
<PAGE>
("Shamrock"), Shamrock Holdings, Inc., a Delaware corporation ("Shamrock
Holdings"), or any Affiliate or Associate of Shamrock or Shamrock Holdings.
"Exempted Person" shall not include transferees from any Exempted Person except
where such transferees are Affiliates or Associates of Shamrock or Shamrock
Holdings.
(i) "401(k) Plan" shall mean the Company's 401(k) Plan, as in effect
immediately prior to a Change of Control.
(j) "Normal Retirement Date" shall mean the first day of the calendar
month coincident with or next following the Employee's 65th birthday.
(k) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(l) "Stock Plan" shall mean the Company's Stock Option Plan or any
successor plan thereto, as in effect immediately prior to a Change of Control.
(m) "Subsidiary" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
(n) "Termination Date" shall mean the date of receipt of the Notice
of Termination described in Section 2 hereof or any later date specified
therein, as the case may be.
(o) "Termination of Employment" shall mean the termination of the
Employee's actual employment relationship with the Company.
(p) "Termination upon a Change of Control" shall mean a Termination
of Employment upon or within two years after a Change of Control either:
(i) initiated by the Company for any reason other than (x) the
Employee's continuous illness, injury or incapacity for a period of
twenty-six consecutive weeks, (y) for "cause," as defined in Section
8.3 of the Employment Agreement between the Company and the Employee
of even date herewith (the "Employment Agreement"), or (z) by reason
of the occurrence of the Normal Retirement Date; or
(ii) initiated by the Employee following one or more of the
following occurrences:
(A) a significant reduction by the Company or its
Subsidiaries of the authority,
4
<PAGE>
duties or responsibilities of the Employee immediately prior to
the Change of Control;
(B) any removal of the Employee from or any failure to re-
elect the Employee to the officer positions with the Company and
its Subsidiaries held by him immediately prior to the Change of
Control, except in connection with promotions to higher office or
in connection with consolidations among the Company's
Subsidiaries where the Employee is elected to similar positions
in the successor company or companies;
(C) a reduction by the Company in the Employee's Base
Salary as in effect immediately prior to the Change of Control;
(D) revocation or any modification (except as may be
required in the normal course of business in light of any
requirement of or change in federal law or regulations) of the
Bonus Plan, 401(k) Plan or CRC-Evans Plan, or any action taken
pursuant to the terms of such plans, which materially (x) reduces
the opportunity to receive compensation under any of such plans
of equivalent amounts received by the Employee during the two
fiscal years immediately preceding the Change of Control, subject
to the right of the Board to establish in a manner consistent
with past practice prior to the Change of Control reasonable
goals under such plans, (y) reduces the compensation payable to
the Employee under any of such plans but which does not effect
comparable reductions in the compensation payable to the other
participants in such plans, or (z) increases the compensation
payable to other participants in any of such plans but which does
not effect corresponding increases in the amount of compensation
payable to the Employee; or
(E) a transfer of the Employee, without his express written
consent, to a location which is outside the general metropolitan
area in which his principal place of business immediately
preceding the Change of Control may be located, or which is
otherwise an unreasonable commuting distance from the Employee's
principal residence at the date of the Change of Control.
5
<PAGE>
2. NOTICE OF TERMINATION. Any Termination upon a Change of Control
shall be communicated by a Notice of Termination to the other party hereto given
in accordance with Section 14 hereof. 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) briefly summarizes the
facts and circumstances deemed to provide a basis for termination of the
Employee's employment under the provision so indicated, and (iii) if the
termination date is other than the date of receipt of such notice, specifies the
termination date (which date shall not be more than 15 days after the giving of
such notice).
3. SEVERANCE COMPENSATION UPON TERMINATION.
(a) Subject to the provisions of Section 10 hereof and to adjustment
as provided in paragraph (b) below and Section 9(a), in the event of the
Employee's Termination upon a "Change of Control, the Company shall pay to the
Employee, within fifteen days after the Termination Date (or as soon as possible
thereafter in the event that the procedures set forth in Section 10(b) hereof
cannot be completed within 15 days), an amount in cash equal to two times the
sum of paragraphs (i) and (ii) below:
(i) The Employee's Base Salary in effect either immediately
prior to the Termination of Employment or immediately prior to the
Change of Control, whichever is higher; and
(ii) The average of the annual bonuses earned by the Employee
under the Bonus Plan in the two fiscal years immediately prior to such
Termination of Employment.
(b) In the event the Employee's Normal Retirement Date would occur
prior to twenty-four months after the Termination Date, the aggregate cash
amount determined as set forth in (a) above shall be reduced by multiplying it
by a fraction, the numerator of which shall be the number of days from the
Termination Date to the Employee's Normal Retirement Date and the denominator of
which shall be 730. No payments shall be due Employee in the event that the
Normal Retirement Date has been reached prior to the Termination Date.
4. OTHER PAYMENTS. Subject to the provisions of Section 10 hereof,
in the event of the Employee's Termination upon a Change of Control, the Company
shall:
(a) pay to the Employee within fifteen days after the Termination
Date, unless the Employee has exercised such
6
<PAGE>
options and rights, an amount equal to the excess, if any, of the aggregate fair
market value of the shares of the Company's Common Stock subject to all stock
options and stock appreciation rights outstanding and unexercised immediately
prior to the Termination Date, whether vested or unvested, granted to the
Employee under the Stock Plan, over the aggregate exercise price of all such
stock options. For purposes of this paragraph, fair market value shall mean the
highest of (x) the closing price of the Company's Common Stock on the business
day immediately preceding the Termination Date, if such Common Stock is publicly
traded at such date, (y) if such Common Stock is not publicly traded at the
Termination Date, the value determined by an independent appraiser, such
appraiser to be selected by the Employee and to be reasonably satisfactory to
the Company (the fees and expenses of such appraiser to be borne by the
Company), or (z) the highest per share price of the Company's Common Stock paid
(in connection with the Change of Control or at any time thereafter) by the
Person or group whose acquisition of shares of Common Stock of the Company has
given rise to a Change of Control;
(b) to the extent permitted by applicable law, continue or cause to be
continued until 24 months after the Termination Date, on the cost-sharing basis
(if any) in effect immediately prior to the Change of Control, medical, dental
and life insurance benefits (and, at the option of the Employee, disability
insurance benefits) substantially equivalent in all material respects to those
furnished by the Company and its Subsidiaries to the Employee immediately prior
to the Change of Control; PROVIDED, HOWEVER, that if the Employee's Normal
Retirement Date would have occurred prior to 24 months after the Termination
Date, the obligation of the Company to provide such benefits shall cease at the
Employee's Normal Retirement Date; and PROVIDED FURTHER, HOWEVER, that the
obligation of the Company to provide such benefits shall cease at such time as
the Employee is employed on a full time basis by a corporation not owned or
controlled by the Employee that provides the Employee, on substantially the same
cost-sharing basis (if any) between the Company and the Employee in effect
immediately prior to the Change of Control, with medical, dental, life and
disability insurance benefits substantially equivalent in all material respects
to those furnished by the Company and its Subsidiaries to the Employee
immediately prior to the Change of Control;
(c) for vesting purposes only, in the event of a Termination upon a
Change of Control occurring prior to the Normal Retirement Date, credit the
Employee with the lesser of (i) two additional "years of service" (as defined in
the Company's 401(k) Plan) or (ii) the period of time from the Termination Date
to the Normal Retirement Date under each of
7
<PAGE>
the Company's 401(k) Plan and CRC-Evans Plan, in addition to the years of
service that would have otherwise been calculated by reference solely to the
Termination Date, it being understood that benefits in respect of the two
additional years of service shall to the extent permitted by applicable law be
paid to the Employee under the Company's 401(k) Plan or CRC-Evans Plan,, and
that the Company shall, to the extent necessary to provide the Employee the
additional benefits intended hereby, amend the 401(k) Plan or CRC-Evans Plan or
pay such additional benefits outside the plan as may be necessary; and
(d) permit the Employee to continue the use of his Company car, if
any, without any cost for a period of six months thereafter. Thereafter, the
Employee shall return the car to the Company unless, in the case of a car owned
by the Company, the Employee elects to purchase the car from the Company at the
net book value thereof at the date of the purchase or, in the case of a car
leased by the Company, the Employee pays the Company, as such amounts become due
and payable, all rental payments charged to the Company for the use of such car
for the remainder of the lease therefore.
5. VESTING AND ACCELERATION OF CERTAIN BENEFITS. In the event of a
Termination upon a Change of Control, and subject to the provisions of Section
10 hereof, all restrictions remaining on the Termination Date on the restricted
shares, if any, received by the Employee, pursuant to the Stock Plan shall
lapse, and said shares shall thereupon be owned by the Employee free and clear
of all restrictions of any nature whatsoever, except those, if any, under
applicable federal and state securities laws.
6. ENFORCEMENT.
(a) In the event that the Company shall fail or refuse to make payment
of any amounts due the Employee under Sections 3, 4 and 5 hereof within the
respective time periods provided therein, the Company shall pay to the
Employee, in addition to the payment of any other sums provided in this
Agreement, interest, compounded daily, on any amount remaining unpaid from the
date payment is required under Section 3, 4 or 5, as appropriate, until paid to
the Employee, at the rate from time to time announced by Wells Fargo Bank, N.A.
as its "prime rate" plus 2%, each change in such rate to take effect on the
effective date of the change in such prime rate.
(b) It is the intent of the parties that the Employee not be required
to incur any expenses associated with the enforcement of his rights under this
Agreement by arbitration, litigation or other legal action because the
8
<PAGE>
cost and expense thereof would substantially detract from the benefits intended
to be extended to the Employee hereunder. Accordingly, the Company shall pay the
Employee on demand the amount necessary to reimburse the Employee in full for
all expenses (including all attorneys' fees and legal expenses) incurred by the
Employee in enforcing any of the obligations of the Company under this
Agreement.
7. NO MITIGATION. The Employee shall not be required to mitigate the
amount of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Employee's continuing or future participation in or rights
under any benefit, bonus, incentive or other plan or program provided by the
Company or any of its Subsidiaries or Affiliates and for which the Employee may
qualify.
9. COORDINATION OF BENEFITS; NO SET-OFF; TAXES.
(a) The Employment Agreement, the severance plan or policy, if any,
applicable to employees of the Company or the Subsidiary which employs the
Employee, and any other severance payments required by applicable statutes or
provided under government programs may provide compensation and benefits to
Employee upon events which also constitute a Termination upon a Change of
Control as defined in this Agreement. In such event, Employee shall be entitled
only to the largest cash compensation provided for under any of such agreements,
plans, policies, statutes or programs and the maximum benefit continuance
provided for under any of such agreements, plans, policies, statutes or
programs, and the payments referred to in Section 3 hereof shall be reduced to
the extent necessary to effect such coordination of benefits.
(b) Except as specifically set forth in (a) above, 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 circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Employee or others.
(c) Employee alone, and not the Company or any Subsidiary, shall be
responsible for the payment of all federal, state and local taxes in respect of
the payments to be made and benefits to be provided under this Agreement.
9
<PAGE>
10. CERTAIN REDUCTION OF PAYMENTS.
(a) Anything in this Agreement to the contrary notwithstanding, in
the event that it shall be determined as set forth herein that any payment or
distribution by the Company to or for the benefit of the Employee, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (a "Payment"), would constitute an "excess parachute
payment" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and that it would be economically advantageous to
the Company to reduce the Payment to avoid or reduce the taxation of excels
parachute payments under Section 4999 of the Code, the aggregate present value
of amounts payable or distributable to or for the benefit of the Employee
pursuant to this Agreement (such payments or distributions pursuant to this
Agreement are hereinafter referred to as "Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount" shall be an
amount expressed in present value which maximizes the aggregate present value of
Agreement Payments without causing any Payment to be subject to the taxation
under Section 4999 of the Code. For purposes of this Section 10, present value
shall be determined in accordance with Section 280G(d) (4) of the Code.
(b) All determinations to be made under this Section 10 shall be made
by KPMG Peat Marwick, or the Company's independent public accountant immediately
prior to the Change of Control if other than KPMG Peat Marwick (the "Accounting
Firm"), which firm shall use its best efforts to provide its determinations and
any supporting calculations both to the Company and the Employee within 10 days
of the Termination Date. Any such determination by the Accounting Firm shall be
binding upon the Company and the Employee. The Company shall in its sole
discretion determine which and how much of the Agreement Payments shall be
eliminated or reduced consistent with the requirements of this Section 10.
Within five days after the Company's determination, the Company shall pay (or
cause to be paid) or distribute (or cause to be distributed) to or for the
benefit of the Employee such amounts as are then due to the Employee under this
Agreement.
(c) As a result of the uncertainty in the application of Section 280G of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Agreement Payments, as the case may be, will have
been made by the Company which should not have been made ("Overpayment") or that
additional Agreement Payments which have not been made by the Company could have
been made ("Underpayment"), in each case, consistent with the
10
<PAGE>
calculations required to be made hereunder. Within two years after the
Termination of Employment, the Accounting Firm shall-review the determination
made by it pursuant to the preceding paragraph. In the event that the Accounting
Firm determines that an overpayment has been made, any such overpayment shall be
treated for all purposes as a loan to the Employee which the Employee shall
repay to the Company together with interest at the applicable Federal rate
provided for in Section 7872(f)(2) of the Code (the "Federal Rate"); PROVIDED,
HOWEVER, that no amount shall be payable by the Employee to the Company if and
to the extent such payment would not reduce the amount which is subject to
taxation under Section 4999 of the Code. In the event that the Accounting Firm
determines that an Underpayment has occurred, any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Employee together with
interest at the Federal Rate.
(d) All of the fees and expenses of the Accounting Firm in performing
the determinations referred to in subsections (b) and (c) above shall be borne
solely by the Company. The Company agrees to indemnify and hold harmless the
Accounting Firm of and from any and all claims, damages and expenses of any
nature resulting from or relating to its determinations pursuant to subsections
(b) and (c) above, except for claims, damages or expenses resulting from the
gross negligence or willful misconduct of the Accounting Firm.
11. SETTLEMENT OF ALL DISPUTES.
(a) Any dispute, controversy or claim arising out of or relating to
any provision of this Agreement or the Employee's Termination upon a Change of
Control shall be settled by arbitration in the City of Houston, Texas, in
accordance with the commercial arbitration rules then in effect of the American
Arbitration Association, before a panel of three arbitrators, two of whom shall
be selected by the Company and the Employee, respectively, and the third of whom
shall be selected by the other two arbitrators. Each arbitrator selected as
provided herein is required to be or have been a director or an executive
officer of a corporation whose shares of common stock were listed during at
least one year of such service on the New York Stock Exchange or the American
Stock Exchange or quoted on the National Association of Securities Dealers
Automated Quotations System. Any award entered by the arbitrators shall be
final, binding and nonappealable and judgment may be entered thereon by any
party in accordance with applicable law in any court of competent jurisdiction.
This arbitration provision shall be specifically enforceable. The fees of the
American Arbitration Association and the arbitrators and any expenses
11
<PAGE>
relating to the conduct of the arbitration shall be paid by the Company.
(b) The party or parties challenging the right of the Employee to the
benefits of this Agreement shall in all circumstances have the burden of proof.
12. TERM OF AGREEMENT. This Agreement shall commence as of the date
first written above and shall continue in effect until the earlier of (i) the
date upon which the Employee ceases to be in the employ of the Company or any
Subsidiary thereof for any reason other than a Termination upon a Change of
Control, or (ii) 24 months after a Change of Control has occurred, PROVIDED,
HOWEVER, that all of the obligations of the parties hereunder arising after a
Change of Control shall continue in effect until such obligations are satisfied
or have expired.
13. SUCCESSOR COMPANY. The Company shall require any successor or
successors (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to the Employee, to
acknowledge expressly that this Agreement is binding upon and enforceable
against the Company in accordance with the terms hereof, and to become jointly
and severally obligated with the Company to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession or successions had taken place. Failure of the Company to
obtain such agreement prior to the effectiveness of any such succession shall be
a breach of this Agreement. As used in this Agreement, the Company shall mean
the Company as hereinbefore defined and any such successor or successors to its
business and/or assets, jointly and severally.
14. NOTICE. All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and shall be delivered personally or mailed by registered or
certified mail, return receipt requested, or by overnight express courier
service, as follows:
If to the Company, to:
Enterra Corporation
2707 North Loop West
Suite 1050
Houston, TX 77008
Attention: Chairman of the Board
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With a required copy to:
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103-6993
Attention: David R. King, Esq.
If to the Employee, to:
D. Dale Wood
9015 Tranquil Park
Spring, TX 77379
With a required copy to:
Sheinfeld, Maley & Kay
3700 First City Tower
Houston, TX 77002-4618
Attention: John B. Connolly III
or to such other names or addresses as the Company or the Employee, as the case
may be, shall designate by notice to the other party hereto in the manner
specified in this Section. Any such notice shall be deemed delivered and
effective when received in the case of personal delivery, five days after
deposit, postage prepaid, with the U.S. Postal Service in the case of registered
or certified mail, or on the next business day in the case of overnight express
courier service.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED UNDER THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO
SUCH STATE'S CONFLICT OF LAWS PROVISIONS.
16. CONTENTS OF AGREEMENT, AMENDMENT AND ASSIGNMENT.
(a) This Agreement is intended to be in addition to the provisions of
the Employment Agreement; provided, however, that in the event of a Termination
upon a Change of Control, (i) Sections 5 and 6 of the Employment Agreement, (ii)
Sections 5 and 6 of that employment agreement dated as of February 1, 1988 among
the Company, the Employee and Connect Corporation (the "Prior Employment
Agreement"), and (iii) any similar provisions contained in any agreements
entered into by Employee with CRC-Evans Pipeline International, Inc., a Texas
corporation, or its predecessor by merger, shall terminate and be of no further
force and effect. Subject to the foregoing, this Agreement supersedes all prior
agreements and sets forth the entire understanding between the parties hereto
with respect to the subject matter
13
<PAGE>
hereof and cannot be changed, modified, extended or terminated except upon
written amendment executed by the Employee and approved by the board and
executed on the Company's behalf by a duly authorized officer. The provisions
of this Agreement may provide for payments to the Employee under certain
compensation or bonus plans (including without limitation the Stock Plan, the
Bonus Plan, the 401(k) Plan and the CRC-Evans Plan) under circumstances where
such plans would not provide for payment thereof. It is the specific intention
of the parties that the provisions of this Agreement shall supersede any
provisions to the contrary in such plans, and such plans shall be deemed to have
been amended to correspond with this Agreement without further action by the
Company or the Board.
(b) Nothing in this Agreement shall be construed as giving the
Employee any right to be retained in the employ of the Company or any of its
Subsidiaries.
(c) The Employee acknowledges that from time to time, the Company and
its subsidiaries may establish, maintain and distribute employee manuals or
handbooks or personnel policy manuals, and officers or other representatives of
the Company or its Subsidiaries may make written or oral statements relating to
personnel policies and procedures. Such manuals, handbooks and statements are
intended only for general guidance. No policies, procedures or statements of any
nature by or on behalf of the Company or its Subsidiaries (whether written or
oral, and whether or not contained in any employee manual or handbook or
personnel policy manual), and no acts or practices of any nature, shall be
construed to modify this Agreement.
(d) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and responsibilities of the Employee and the Company hereunder
shall not be assignable in whole or in part by the Company.
17. SEVERABILITY. If any provision of this Agreement or application
thereof to anyone or under any circumstances shall be determined to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
provisions or applications of this Agreement which can be given effect without
the invalid or unenforceable provision or application.
18. REMEDIES CUMULATIVE - NO WAIVER. No right conferred upon the
Employee by this Agreement is intended to be exclusive of any other right or
remedy, and each and every such right or remedy shall be cumulative and shall be
in
14
<PAGE>
addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity. No delay or omission by the Employee in
exercising any right, remedy or power hereunder or existing at law or in equity
shall be construed as a waiver thereof, including without limitation any delay
by the Employee in delivering a Notice of Termination pursuant to Section 2
hereof after an event has occurred which would, if the Employee had resigned,
have constituted a Termination upon a Change of Control pursuant to Section
1(p)(ii) of this Agreement.
19. MISCELLANEOUS. All section headings are for convenience only.
This Agreement may be executed in several counterparts, each of which is an
original. It shall not be necessary in making proof of this Agreement or any
counterpart hereof to produce or account for any of the other counterparts.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first above written.
Attest: ENTERRA CORPORATION
/s/ M. Gay Mather By: /s/ Stanley P. Gold
- ------------------------------ -------------------------------
Secretary Stanley P. Gold
Chairman of the Board
/s/ Steven W. Krablin /s/ D. Dale Wood
- ------------------------------ -------------------------------
Witness D. Dale Wood
15
<PAGE>
AMENDMENT 1995-1 TO SEVERANCE AGREEMENT
This Amendment 1995-1 to Severance Agreement (the
"Amendment"), dated as of AUGUST 31, 1995, is between Enterra
Corporation, a Delaware corporation ("Enterra"), and M. TIMOTHY
CAREY (the "Employee").
WHEREAS, on FEBRUARY 20, 1992 , Enterra and the
Employee entered into a Severance Agreement, dated as of
FEBRUARY 20, 1992 (the "Agreement");
WHEREAS, the parties hereto desire to amend certain
provisions of the Agreement regarding the severance compensation
upon termination of employment in connection with a Change of
Control;
WHEREAS, the parties hereto desire to condition the
effectiveness of this Amendment upon the consummation of the
merger between Enterra and Weatherford International Incorporated
("Weatherford") pursuant to the Agreement and Plan of Merger,
dated as of June 23, 1995, as amended as of August 28, 1995,
between Weatherford and Enterra (the "Merger Agreement"); and
WHEREAS, capitalized terms used herein that are not
defined herein shall have the meanings ascribed thereto in the
Agreement;
NOW, THEREFORE, effective as of the Effective Time, as
that term is defined in the Merger Agreement, the parties hereto,
intending to be legally bound, agree as follows:
1. Section 1(p)(ii) of the Agreement is hereby
amended by adding thereto a new last paragraph, to read as
follows:
"Notwithstanding anything to the contrary under this
Section 1(p)(ii), any resignation by the Employee at
any time from the Effective Time, as that term is
defined in the Agreement and Plan of Merger, dated as
of June 23, 1995, as amended as of August 28, 1995,
between Weatherford International Incorporated
("Weatherford") and the Company (the "Merger
Agreement"), through August 12, 1996 shall constitute a
'Termination upon Change of Control' under this
Agreement."
<PAGE>
2. Section 1 of the Agreement is hereby amended by
adding thereto a new sentence at the end thereof, to read as
follows:
"With respect to all periods from and after
the Effective Time, as that term is defined
in the Merger Agreement, any reference in
this Agreement to the 'Company' or the
'Common Stock' shall be deemed to be a
reference to Weatherford or the common stock,
par value $.10 per share, of Weatherford."
3. Section 4 of the Agreement is hereby amended by
deleting therefrom the introductory provision and subsection (a)
thereof and substituting the following therefor:
"4. OTHER PAYMENTS. In the event of the Employee's
Termination upon a Change of Control, the Company
shall:
(a) deliver to the Employee within fifteen days
after the Termination Date, unless the Employee has
exercised such options and rights, such number of
shares of the Company's Common Stock the total fair
market value of which will be equal to the excess, if
any, of the aggregate fair market value of the shares
of the Company's Common Stock subject to all stock
options and stock appreciation rights outstanding and
unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee
under the Stock Plan, over the aggregate exercise price
of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of
(x) the closing price of the Company's Common Stock on
the business day immediately preceding the Termination
Date, if such Common Stock is publicly traded at such
date, (y) if such Common Stock is not publicly traded
at the Termination Date, the value determined by an
independent appraiser, such appraiser to be selected by
the Employee and to be reasonably satisfactory to the
Company (the fees and expenses of such appraiser to be
borne by the Company), or (z) the highest per share
price of the Company's Common Stock paid (in connection
with the Change of Control or at any time thereafter)
by the Person or group whose acquisition of shares of
Common Stock of the Company has given rise to a Change
of Control. The Company shall take all corporate
action necessary (i) to reserve for issuance a
sufficient number of shares of the Common Stock for
delivery pursuant to this section and (ii) to ensure
that all shares of the Common Stock issued pursuant to
this section are registered under the Securities Act of
1933, as amended, listed on the New York Stock Exchange
and may be freely transferred by the holders thereof;"
4. Section 10 of the Agreement is deleted and the
following is
-2-
<PAGE>
substituted therefor:
"10. 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 (whether by Enterra
Corporation or Weatherford or by any affiliate of, or
plan maintained by, either) to or for the benefit of
the Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement,
the Merger Agreement or otherwise, but determined
without regard to any additional payments required
under this Section 10) (a "Payment") would be subject
to the excise tax imposed by Section 4999 of the Code
or any interest or penalties are incurred by the
Employee with respect to such excise tax (such excise
tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise
Tax"), then the Employee shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Employee of all
taxes (including any interest or penalties imposed with
respect to such taxes), including without limitation,
any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Employee retains an
amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 10(c),
all determinations required to be made under this
Section 10, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving
at such determination shall be made by Arthur Andersen
LLP or, as provided below, such other certified public
accounting firm as may be designated by the Employee
(the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the
Employee within 15 business days after the receipt of
notice from the Employee that there has been a Payment,
or such earlier time as is requested by the Company.
In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or
group effecting the Change of Control, the Employee
shall appoint another nationally recognized accounting
firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant
to this Section 10, shall be paid by the Company to the
Employee within five days after the receipt of the
Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon the Company
and the Employee. As a result of the uncertainty in
the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm
-3-
<PAGE>
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 10(c)
and the Employee thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the
Employee.
(c) The Employee shall notify the Company in
writing of any claim by the Internal Revenue Service
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 Employee is informed
in writing of such claim, and shall apprise the Company
of the nature of such claim and the date on which such
claim is requested to be paid. The Employee shall not
pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice
to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such
claim is due). If the Company notifies the Employee in
writing prior to the expiration of such period that it
desires to contest such claim the Employee shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including without
limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in
order 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 Employee harmless, on an
after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto)
imposed as a result of such representation and payment
of costs and expenses. Without limitation on the
foregoing provisions of this Section 10(c), the Company
shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option,
either direct the Employee to pay the tax claimed and
sue for a refund or contest the claim
-4-
<PAGE>
in any permissible manner, and the Employee agrees to
prosecute such contest to determination before any
administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Employee to pay such claim and
sue for a refund, the Company shall advance the amount
of such payment to the Employee, on an interest-free
basis and shall indemnify and hold the Employee
harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with
respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to
such advance; and further provided that any extension
of the statute of limitations relating to payment of
taxes for the taxable year of the Employee with respect
to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore,
the Company's control of the contest shall be limited
to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee shall be
entitled to settle or contest, as the case may be, any
other issues raised by the Internal Revenue Service or
any other taxing authority.
(d) If, after the receipt by the Employee of an
amount advanced by the Company pursuant to Section
10(c), the Employee becomes entitled to receive any
refund with respect to such claim, the Employee shall
(subject to the Company's complying with the
requirements of Section 10(c)) promptly pay to the
Company the amount of such refund (together with any
interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant
to Section 10(c), a determination is made that the
Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify
the Employee in writing of its intent to contest such
denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be
paid.
5. The remainder of the Agreement shall remain in
full force and effect as written.
6. This Amendment shall be conditioned upon the
consummation of the merger between Enterra and Weatherford
pursuant to the Merger Agreement, and in the event such merger is
not so consummated, the Agreement shall remain in full force and
effect without regard to the changes contemplated by this
Amendment.
IN WITNESS WHEREOF, the parties hereto have executed
this Amendment as of the day and year first above written.
-5-
<PAGE>
ENTERRA CORPORATION
By: /s/ Steven W. Krablin
--------------------------
Steven W. Krablin
Vice President and Chief
Financial Officer
/s/ M. Timothy Carey
-------------------------------
M. Timothy Carey
<PAGE>
AMENDMENT 1995-1 TO SEVERANCE AGREEMENT
This Amendment 1995-1 to Severance Agreement (the
"Amendment"), dated as of AUGUST 31, 1995, is between Enterra
Corporation, a Delaware corporation ("Enterra"), and C. PAUL
EVANS (the "Employee").
WHEREAS, on February 20, 1992, Enterra and the
Employee entered into a Severance Agreement, dated as of
February 20, 1992 (the "Agreement");
WHEREAS, the parties hereto desire to amend certain
provisions of the Agreement regarding the severance compensation
upon termination of employment in connection with a Change of
Control;
WHEREAS, the parties hereto desire to condition the
effectiveness of this Amendment upon the consummation of the
merger between Enterra and Weatherford International Incorporated
("Weatherford") pursuant to the Agreement and Plan of Merger,
dated as of June 23, 1995, as amended as of August 28, 1995,
between Weatherford and Enterra (the "Merger Agreement"); and
WHEREAS, capitalized terms used herein that are not
defined herein shall have the meanings ascribed thereto in the
Agreement;
NOW, THEREFORE, effective as of the Effective Time, as
that term is defined in the Merger Agreement, the parties hereto,
intending to be legally bound, agree as follows:
1. Section 1 of the Agreement is hereby amended by
adding thereto a new sentence at the end thereof, to read as
follows:
"With respect to all periods from and after
the Effective Time, as that term is defined
in the Agreement and Plan of Merger, dated as
of June 23, 1995, as amended as of August 28,
1995, between Weatherford International
Incorporated ("Weatherford") and the Company,
any reference in this Agreement to the
'Company' or the 'Common Stock' shall be
deemed to be a reference to Weatherford or
the common
<PAGE>
stock, par value $.10 per share, of Weatherford."
2. Section 4 of the Agreement is hereby amended by
deleting therefrom the introductory provision and subsection (a)
thereof and substituting the following therefor:
"4. OTHER PAYMENTS. In the event of the Employee's
Termination upon a Change of Control, the Company
shall:
(a) deliver to the Employee within fifteen days
after the Termination Date, unless the Employee has
exercised such options and rights, such number of
shares of the Company's Common Stock the total fair
market value of which will be equal to the excess, if
any, of the aggregate fair market value of the shares
of the Company's Common Stock subject to all stock
options and stock appreciation rights outstanding and
unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee
under the Stock Plan, over the aggregate exercise price
of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of
(x) the closing price of the Company's Common Stock on
the business day immediately preceding the Termination
Date, if such Common Stock is publicly traded at such
date, (y) if such Common Stock is not publicly traded
at the Termination Date, the value determined by an
independent appraiser, such appraiser to be selected by
the Employee and to be reasonably satisfactory to the
Company (the fees and expenses of such appraiser to be
borne by the Company), or (z) the highest per share
price of the Company's Common Stock paid (in connection
with the Change of Control or at any time thereafter)
by the Person or group whose acquisition of shares of
Common Stock of the Company has given rise to a Change
of Control. The Company shall take all corporate
action necessary (i) to reserve for issuance a
sufficient number of shares of the Common Stock for
delivery pursuant to this section and (ii) to ensure
that all shares of the Common Stock issued pursuant to
this section are registered under the Securities Act of
1933, as amended, listed on the New York Stock Exchange
and may be freely transferred by the holders thereof;"
3. Section 10 of the Agreement is deleted and the
following is substituted therefor:
"10. 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 (whether by Enterra
Corporation or Weatherford or by any affiliate of, or
plan maintained by, either) to or
-2-
<PAGE>
for the benefit of the Employee (whether paid or payable
or distributed or distributable pursuant to the terms
of this Agreement, the Merger Agreement or otherwise,
but determined without regard to any additional payments
required under this Section 10) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties are incurred by the
Employee with respect to such excise tax (such excise
tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise
Tax"), then the Employee shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Employee of all
taxes (including any interest or penalties imposed with
respect to such taxes), including without limitation,
any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Employee retains an
amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 10(c),
all determinations required to be made under this
Section 10, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving
at such determination shall be made by Arthur Andersen
LLP or, as provided below, such other certified public
accounting firm as may be designated by the Employee
(the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the
Employee within 15 business days after the receipt of
notice from the Employee that there has been a Payment,
or such earlier time as is requested by the Company.
In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or
group effecting the Change of Control, the Employee
shall appoint another nationally recognized accounting
firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant
to this Section 10, shall be paid by the Company to the
Employee within five days after the receipt of the
Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon the Company
and the Employee. As a result of the uncertainty in
the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which
will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 10(c)
and the Employee thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the
Employee.
-3-
<PAGE>
(c) The Employee 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 Employee is informed
in writing of such claim, and shall apprise the Company
of the nature of such claim and the date on which such
claim is requested to be paid. The Employee shall not
pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice
to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such
claim is due). If the Company notifies the Employee in
writing prior to the expiration of such period that it
desires to contest such claim the Employee shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including without
limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in
order 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 Employee harmless, on an
after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto)
imposed as a result of such representation and payment
of costs and expenses. Without limitation on the
foregoing provisions of this Section 10(c), the Company
shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option,
either direct the Employee to pay the tax claimed and
sue for a refund or contest the claim in any
permissible manner, and the Employee agrees to
prosecute such contest to determination before any
administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Employee to pay such claim and
sue for a refund, the Company shall advance the amount
of such payment to the Employee, on an interest-free
basis and shall indemnify and hold the Employee
harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or
-4-
<PAGE>
with respect to any imputed income with respect to
such advance; and further provided that any extension
of the statute of limitations relating to payment of
taxes for the taxable year of the Employee with respect
to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore,
the Company's control of the contest shall be limited
to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee shall be
entitled to settle or contest, as the case may be, any
other issues raised by the Internal Revenue Service or
any other taxing authority.
(d) If, after the receipt by the Employee of an
amount advanced by the Company pursuant to Section
10(c), the Employee becomes entitled to receive any
refund with respect to such claim, the Employee shall
(subject to the Company's complying with the
requirements of Section 10(c)) promptly pay to the
Company the amount of such refund (together with any
interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant
to Section 10(c), a determination is made that the
Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify
the Employee in writing of its intent to contest such
denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be
paid.
4. The remainder of the Agreement shall remain in
full force and effect as written.
5. This Amendment shall be conditioned upon the
consummation of the merger between Enterra and Weatherford
pursuant to the Merger Agreement, and in the event such merger is
not so consummated, the Agreement shall remain in full force and
effect without regard to the changes contemplated by this
Amendment.
IN WITNESS WHEREOF, the parties hereto have executed
this Amendment as of the day and year first above written.
ENTERRA CORPORATION
By: /s/ Steven W. Krablin
---------------------------
Steven W. Krablin
Vice President and Chief Financial Officer
/s/ C. Paul Evans
--------------------------------
C. Paul Evans
-5-
<PAGE>
AMENDMENT 1995-1 TO SEVERANCE AGREEMENT
This Amendment 1995-1 to Severance Agreement (the "Amendment"),
dated as of AUGUST 31, 1995, is between Pipeline Induction Heat Limited
("PIH") and BRIAN CHARLES GOFF (the "Employee").
WHEREAS, Enterra Corporation, a Delaware Corporation ("Enterra"),
is the ultimate parent company of PIH;
WHEREAS, on April 1, 1993, PIH and the Employee entered into a
Severance Agreement, dated as of April 1, 1993 (the "Agreement");
WHEREAS, the parties hereto desire to amend certain provisions of
the Agreement regarding the severance compensation upon termination of
employment in connection with a Change of Control;
WHEREAS, the parties hereto desire to condition the effectiveness
of this Amendment upon the consummation of the merger between Enterra and
Weatherford International Incorporated ("Weatherford") pursuant to the
Agreement and Plan of Merger, dated as of June 23, 1995, as amended as of
August 28, 1995, between Weatherford and Enterra (the "Merger Agreement"); and
WHEREAS, capitalized terms used herein that are not defined herein
shall have the meanings ascribed thereto in the Agreement;
NOW, THEREFORE, effective as of the Effective Time, as that term is
defined in the Merger Agreement, the parties hereto, intending to be legally
bound, agree as follows:
1. Section 1 of the Agreement is hereby amended by adding thereto
a new sentence at the end thereof, to read as follows:
"With respect to all periods from and after the Effective Time,
as that term is defined in the Agreement and Plan of Merger,
dated as of June 23, 1995, as amended as of August 28, 1995,
between Weatherford International Incorporated
<PAGE>
("Weatherford") and Enterra, any reference in this Agreement
to 'Enterra' or the 'Common Stock' shall be deemed to be a
reference to Weatherford or the common stock, par value $.10
per share, of Weatherford."
2. Section 4 of the Agreement is hereby amended by deleting
therefrom the introductory provision and subsection (a) thereof and
substituting the following therefor:
"4. OTHER PAYMENTS. In the event of the Employee's
Termination upon a Change of Control, the Company
shall:
(a) deliver to the Employee within fifteen days
after the Termination Date, unless the Employee has
exercised such options and rights, such number of
shares of Enterra's Common Stock the total fair market
value of which will be equal to the excess, if any, of
the aggregate fair market value of the shares of
Enterra's Common Stock subject to all stock options and
stock appreciation rights outstanding and unexercised
immediately prior to the Termination Date, whether
vested or unvested, granted to the Employee under the
Stock Plan, over the aggregate exercise price of all
such stock options. For purposes of this paragraph,
fair market value shall mean the highest of (x) the
closing price of Enterra's Common Stock on the business
day immediately preceding the Termination Date, if such
Common Stock is publicly traded at such date, (y) if
such Common Stock is not publicly traded at the
Termination Date, the value determined by an
independent appraiser, such appraiser to be selected by
the Employee and to be reasonably satisfactory to the
Company (the fees and expenses of such appraiser to be
borne by the Company), or (z) the highest per share
price of Enterra's Common Stock paid (in connection
with the Change of Control or at any time thereafter)
by the Person or group whose acquisition of shares of
Common Stock of Enterra has given rise to a Change of
Control. Enterra shall take all corporate action
necessary (i) to reserve for issuance a sufficient
number of shares of the Common Stock for delivery
pursuant to this section and (ii) to ensure that all
shares of the Common Stock issued pursuant to this
section are registered under the Securities Act of
1933, as amended, listed on the New York Stock Exchange
and may be freely transferred by the holders thereof;"
3. The remainder of the Agreement shall remain in full force and
effect as written.
4. This Amendment shall be conditioned upon the consummation of
the merger between Enterra and Weatherford pursuant to the Merger Agreement,
and in the event such merger is not so consummated, the Agreement shall
remain in full force and effect without regard to the changes contemplated by
this Amendment.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the day and year first above written.
ENTERRA CORPORATION
By: /s/ Steven W. Krablin
--------------------------
Steven W. Krablin
Vice President and Chief Financial Officer
PIPELINE INDUCTION HEAT LIMITED
By: /s/ C. Paul Evans
---------------------------
C. Paul Evans
Director
/s/ Brian Charles Goff
---------------------------
Brian Charles Goff
-3-
<PAGE>
AMENDMENT 1995-1 TO SEVERANCE AGREEMENT
This Amendment 1995-1 to Severance Agreement (the
"Amendment"), dated as of AUGUST 31, 1995, is between Enterra
Corporation, a Delaware corporation ("Enterra"), and STEVEN C.
GRANT (the "Employee").
WHEREAS, on FEBRUARY 8, 1990, Enterra and the
Employee entered into a Severance Agreement, dated as of
FEBRUARY 8, 1990 (the "Agreement");
WHEREAS, the parties hereto desire to amend certain
provisions of the Agreement regarding the severance compensation
upon termination of employment in connection with a Change of
Control;
WHEREAS, the parties hereto desire to condition the
effectiveness of this Amendment upon the consummation of the
merger between Enterra and Weatherford International Incorporated
("Weatherford") pursuant to the Agreement and Plan of Merger,
dated as of June 23, 1995, as amended as of August 28, 1995,
between Weatherford and Enterra (the "Merger Agreement"); and
WHEREAS, capitalized terms used herein that are not
defined herein shall have the meanings ascribed thereto in the
Agreement;
NOW, THEREFORE, effective as of the Effective Time, as
that term is defined in the Merger Agreement, the parties hereto,
intending to be legally bound, agree as follows:
1. Section 1(p)(ii) of the Agreement is hereby
amended by adding thereto a new last paragraph, to read as
follows:
"Notwithstanding anything to the contrary under this
Section 1(p)(ii), any resignation by the Employee at
any time from the Effective Time, as that term is
defined in the Agreement and Plan of Merger, dated as
of June 23, 1995, as amended as of August 28, 1995,
between Weatherford International Incorporated
("Weatherford") and the Company (the "Merger
Agreement"), through August 12, 1996 shall constitute a
'Termination upon Change of Control' under this
Agreement."
<PAGE>
2. Section 1 of the Agreement is hereby amended by
adding thereto a new sentence at the end thereof, to read as
follows:
"With respect to all periods from and after
the Effective Time, as that term is defined
in the Merger Agreement, any reference in
this Agreement to the 'Company' or the
'Common Stock' shall be deemed to be a
reference to Weatherford or the common stock,
par value $.10 per share, of Weatherford."
3. Section 4 of the Agreement is hereby amended by
deleting therefrom the introductory provision and subsection (a)
thereof and substituting the following therefor:
"4. OTHER PAYMENTS. In the event of the Employee's
Termination upon a Change of Control, the Company
shall:
(a) deliver to the Employee within fifteen days
after the Termination Date, unless the Employee has
exercised such options and rights, such number of
shares of the Company's Common Stock the total fair
market value of which will be equal to the excess, if
any, of the aggregate fair market value of the shares
of the Company's Common Stock subject to all stock
options and stock appreciation rights outstanding and
unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee
under the Stock Plan, over the aggregate exercise price
of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of
(x) the closing price of the Company's Common Stock on
the business day immediately preceding the Termination
Date, if such Common Stock is publicly traded at such
date, (y) if such Common Stock is not publicly traded
at the Termination Date, the value determined by an
independent appraiser, such appraiser to be selected by
the Employee and to be reasonably satisfactory to the
Company (the fees and expenses of such appraiser to be
borne by the Company), or (z) the highest per share
price of the Company's Common Stock paid (in connection
with the Change of Control or at any time thereafter)
by the Person or group whose acquisition of shares of
Common Stock of the Company has given rise to a Change
of Control. The Company shall take all corporate
action necessary (i) to reserve for issuance a
sufficient number of shares of the Common Stock for
delivery pursuant to this section and (ii) to ensure
that all shares of the Common Stock issued pursuant to
this section are registered under the Securities Act of
1933, as amended, listed on the New York Stock Exchange
and may be freely transferred by the holders thereof;"
4. Section 10 of the Agreement is deleted and the
following is
-2-
<PAGE>
substituted therefor:
"10. 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 (whether by Enterra
Corporation or Weatherford or by any affiliate of, or
plan maintained by, either) to or for the benefit of
the Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement,
the Merger Agreement or otherwise, but determined
without regard to any additional payments required
under this Section 10) (a "Payment") would be subject
to the excise tax imposed by Section 4999 of the Code
or any interest or penalties are incurred by the
Employee with respect to such excise tax (such excise
tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise
Tax"), then the Employee shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Employee of all
taxes (including any interest or penalties imposed with
respect to such taxes), including without limitation,
any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Employee retains an
amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 10(c),
all determinations required to be made under this
Section 10, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving
at such determination shall be made by Arthur Andersen
LLP or, as provided below, such other certified public
accounting firm as may be designated by the Employee
(the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the
Employee within 15 business days after the receipt of
notice from the Employee that there has been a Payment,
or such earlier time as is requested by the Company.
In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or
group effecting the Change of Control, the Employee
shall appoint another nationally recognized accounting
firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant
to this Section 10, shall be paid by the Company to the
Employee within five days after the receipt of the
Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon the Company
and the Employee. As a result of the uncertainty in
the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm
-3-
<PAGE>
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 10(c)
and the Employee thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the
Employee.
(c) The Employee shall notify the Company in
writing of any claim by the Internal Revenue Service
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 Employee is informed
in writing of such claim, and shall apprise the Company
of the nature of such claim and the date on which such
claim is requested to be paid. The Employee shall not
pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice
to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such
claim is due). If the Company notifies the Employee in
writing prior to the expiration of such period that it
desires to contest such claim the Employee shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including without
limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in
order 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 Employee harmless, on an
after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto)
imposed as a result of such representation and payment
of costs and expenses. Without limitation on the
foregoing provisions of this Section 10(c), the Company
shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option,
either direct the Employee to pay the tax claimed and
sue for a refund or contest the claim
-4-
<PAGE>
in any permissible manner, and the Employee agrees to
prosecute such contest to determination before any
administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Employee to pay such claim and
sue for a refund, the Company shall advance the amount
of such payment to the Employee, on an interest-free
basis and shall indemnify and hold the Employee
harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with
respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to
such advance; and further provided that any extension
of the statute of limitations relating to payment of
taxes for the taxable year of the Employee with respect
to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore,
the Company's control of the contest shall be limited
to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee shall be
entitled to settle or contest, as the case may be, any
other issues raised by the Internal Revenue Service or
any other taxing authority.
(d) If, after the receipt by the Employee of an
amount advanced by the Company pursuant to Section
10(c), the Employee becomes entitled to receive any
refund with respect to such claim, the Employee shall
(subject to the Company's complying with the
requirements of Section 10(c)) promptly pay to the
Company the amount of such refund (together with any
interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant
to Section 10(c), a determination is made that the
Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify
the Employee in writing of its intent to contest such
denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be
paid.
5. The remainder of the Agreement shall remain in
full force and effect as written.
6. This Amendment shall be conditioned upon the
consummation of the merger between Enterra and Weatherford
pursuant to the Merger Agreement, and in the event such merger is
not so consummated, the Agreement shall remain in full force and
effect without regard to the changes contemplated by this
Amendment.
IN WITNESS WHEREOF, the parties hereto have executed
this Amendment as of the day and year first above written.
-5-
<PAGE>
ENTERRA CORPORATION
By: /s/ Steven W. Krablin
--------------------------
Steven W. Krablin
Vice President and Chief Financial Officer
/s/ Steven C. Grant
-------------------------------
Steven C. Grant
-6-
<PAGE>
AMENDMENT 1995-1 TO SEVERANCE AGREEMENT
This Amendment 1995-1 to Severance Agreement (the "Amendment"),
dated as of AUGUST 31, 1995, is between Enterra Corporation, a Delaware
corporation ("Enterra"), and EDWARD C. GRIMES (the "Employee").
WHEREAS, on FEBRUARY 8, 1990, Enterra and the Employee entered
into a Severance Agreement, dated as of FEBRUARY 8, 1990 (the "Agreement");
WHEREAS, the parties hereto desire to amend certain provisions of
the Agreement regarding the severance compensation upon termination of
employment in connection with a Change of Control;
WHEREAS, the parties hereto desire to condition the effectiveness
of this Amendment upon the consummation of the merger between Enterra and
Weatherford International Incorporated ("Weatherford") pursuant to the
Agreement and Plan of Merger, dated as of June 23, 1995, as amended as of
August 28, 1995, between Weatherford and Enterra (the "Merger Agreement"); and
WHEREAS, capitalized terms used herein that are not defined herein
shall have the meanings ascribed thereto in the Agreement;
NOW, THEREFORE, effective as of the Effective Time, as that term is
defined in the Merger Agreement, the parties hereto, intending to be legally
bound, agree as follows:
1. Section 1(p)(ii) of the Agreement is hereby amended by adding
thereto a new last paragraph, to read as follows:
"Notwithstanding anything to the contrary under this
Section 1(p)(ii), any resignation by the Employee at
any time from the Effective Time, as that term is
defined in the Agreement and Plan of Merger, dated as
of June 23, 1995, as amended as of August 28, 1995,
between Weatherford International Incorporated
("Weatherford") and the Company (the "Merger
Agreement"), through August 12, 1996 shall constitute a
'Termination upon Change of Control' under this
Agreement."
<PAGE>
2. Section 1 of the Agreement is hereby amended by adding thereto
a new sentence at the end thereof, to read as follows:
"With respect to all periods from and after the Effective Time,
as that term is defined in the Merger Agreement, any reference in
this Agreement to the 'Company' or the 'Common Stock' shall be
deemed to be a reference to Weatherford or the common stock,
par value $.10 per share, of Weatherford."
3. Section 4 of the Agreement is hereby amended by deleting
therefrom the introductory provision and subsection (a) thereof and
substituting the following therefor:
"4. OTHER PAYMENTS. In the event of the Employee's
Termination upon a Change of Control, the Company
shall:
(a) deliver to the Employee within fifteen days
after the Termination Date, unless the Employee has
exercised such options and rights, such number of
shares of the Company's Common Stock the total fair
market value of which will be equal to the excess, if
any, of the aggregate fair market value of the shares
of the Company's Common Stock subject to all stock
options and stock appreciation rights outstanding and
unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee
under the Stock Plan, over the aggregate exercise price
of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of
(x) the closing price of the Company's Common Stock on
the business day immediately preceding the Termination
Date, if such Common Stock is publicly traded at such
date, (y) if such Common Stock is not publicly traded
at the Termination Date, the value determined by an
independent appraiser, such appraiser to be selected by
the Employee and to be reasonably satisfactory to the
Company (the fees and expenses of such appraiser to be
borne by the Company), or (z) the highest per share
price of the Company's Common Stock paid (in connection
with the Change of Control or at any time thereafter)
by the Person or group whose acquisition of shares of
Common Stock of the Company has given rise to a Change
of Control. The Company shall take all corporate
action necessary (i) to reserve for issuance a
sufficient number of shares of the Common Stock for
delivery pursuant to this section and (ii) to ensure
that all shares of the Common Stock issued pursuant to
this section are registered under the Securities Act of
1933, as amended, listed on the New York Stock Exchange
and may be freely transferred by the holders thereof;"
4. Section 10 of the Agreement is deleted and the following is
-2-
<PAGE>
substituted therefor:
"10. 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 (whether by Enterra
Corporation or Weatherford or by any affiliate of, or
plan maintained by, either) to or for the benefit of
the Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement,
the Merger Agreement or otherwise, but determined
without regard to any additional payments required
under this Section 10) (a "Payment") would be subject
to the excise tax imposed by Section 4999 of the Code
or any interest or penalties are incurred by the
Employee with respect to such excise tax (such excise
tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise
Tax"), then the Employee shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Employee of all
taxes (including any interest or penalties imposed with
respect to such taxes), including without limitation,
any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Employee retains an
amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 10(c),
all determinations required to be made under this
Section 10, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving
at such determination shall be made by Arthur Andersen
LLP or, as provided below, such other certified public
accounting firm as may be designated by the Employee
(the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the
Employee within 15 business days after the receipt of
notice from the Employee that there has been a Payment,
or such earlier time as is requested by the Company.
In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or
group effecting the Change of Control, the Employee
shall appoint another nationally recognized accounting
firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant
to this Section 10, shall be paid by the Company to the
Employee within five days after the receipt of the
Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon the Company
and the Employee. As a result of the uncertainty in
the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm
-3-
<PAGE>
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 10(c)
and the Employee thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the
Employee.
(c) The Employee shall notify the Company in
writing of any claim by the Internal Revenue Service
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 Employee is informed
in writing of such claim, and shall apprise the Company
of the nature of such claim and the date on which such
claim is requested to be paid. The Employee shall not
pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice
to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such
claim is due). If the Company notifies the Employee in
writing prior to the expiration of such period that it
desires to contest such claim the Employee shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including without
limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in
order 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 Employee harmless, on an
after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto)
imposed as a result of such representation and payment
of costs and expenses. Without limitation on the
foregoing provisions of this Section 10(c), the Company
shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option,
either direct the Employee to pay the tax claimed and
sue for a refund or contest the claim
-4-
<PAGE>
in any permissible manner, and the Employee agrees to
prosecute such contest to determination before any
administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Employee to pay such claim and
sue for a refund, the Company shall advance the amount
of such payment to the Employee, on an interest-free
basis and shall indemnify and hold the Employee
harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with
respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to
such advance; and further provided that any extension
of the statute of limitations relating to payment of
taxes for the taxable year of the Employee with respect
to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore,
the Company's control of the contest shall be limited
to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee shall be
entitled to settle or contest, as the case may be, any
other issues raised by the Internal Revenue Service or
any other taxing authority.
(d) If, after the receipt by the Employee of an
amount advanced by the Company pursuant to Section
10(c), the Employee becomes entitled to receive any
refund with respect to such claim, the Employee shall
(subject to the Company's complying with the
requirements of Section 10(c)) promptly pay to the
Company the amount of such refund (together with any
interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant
to Section 10(c), a determination is made that the
Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify
the Employee in writing of its intent to contest such
denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be
paid.
5. The remainder of the Agreement shall remain in full force and
effect as written.
6. This Amendment shall be conditioned upon the consummation of
the merger between Enterra and Weatherford pursuant to the Merger Agreement,
and in the event such merger is not so consummated, the Agreement shall
remain in full force and effect without regard to the changes contemplated by
this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed
this Amendment as of the day and year first above written.
-5-
<PAGE>
ENTERRA CORPORATION
By: /s/ Steven W. Krablin
--------------------------
Steven W. Krablin
Vice President and Chief Financial Officer
/s/ Edward C. Grimes
------------------------------
Edward C. Grimes
-6-
<PAGE>
AMENDMENT 1995-1 TO SEVERANCE AGREEMENT
This Amendment 1995-1 to Severance Agreement (the "Amendment"),
dated as of AUGUST 31, 1995, is between Enterra Corporation, a Delaware
corporation ("Enterra"), and STEVEN W. KRABLIN (the "Employee").
WHEREAS, on FEBRUARY 8, 1990, Enterra and the Employee entered
into a Severance Agreement, dated as of FEBRUARY 8, 1990 (the "Agreement");
WHEREAS, the parties hereto desire to amend certain provisions of
the Agreement regarding the severance compensation upon termination of
employment in connection with a Change of Control;
WHEREAS, the parties hereto desire to condition the effectiveness
of this Amendment upon the consummation of the merger between Enterra and
Weatherford International Incorporated ("Weatherford") pursuant to the
Agreement and Plan of Merger, dated as of June 23, 1995, as amended as of
August 28, 1995, between Weatherford and Enterra (the "Merger Agreement"); and
WHEREAS, capitalized terms used herein that are not defined herein
shall have the meanings ascribed thereto in the Agreement;
NOW, THEREFORE, effective as of the Effective Time, as that term is
defined in the Merger Agreement, the parties hereto, intending to be legally
bound, agree as follows:
1. Section 1(p)(ii) of the Agreement is hereby amended by adding
thereto a new last paragraph, to read as follows:
"Notwithstanding anything to the contrary under this
Section 1(p)(ii), any resignation by the Employee at
any time from the Effective Time, as that term is
defined in the Agreement and Plan of Merger, dated as
of June 23, 1995, as amended as of August 28, 1995,
between Weatherford International Incorporated
("Weatherford") and the Company (the "Merger
Agreement"), through August 12, 1996 shall constitute a
'Termination upon Change of Control' under this
Agreement."
<PAGE>
2. Section 1 of the Agreement is hereby amended by adding thereto
a new sentence at the end thereof, to read as follows:
"With respect to all periods from and after
the Effective Time, as that term is defined
in the Merger Agreement, any reference in
this Agreement to the 'Company' or the
'Common Stock' shall be deemed to be a
reference to Weatherford or the common stock,
par value $.10 per share, of Weatherford."
3. Section 4 of the Agreement is hereby amended by deleting
therefrom the introductory provision and subsection (a) thereof and
substituting the following therefor:
"4. OTHER PAYMENTS. In the event of the Employee's Termination
upon a Change of Control, the Company shall:
(a) deliver to the Employee within fifteen days
after the Termination Date, unless the Employee has
exercised such options and rights, such number of
shares of the Company's Common Stock the total fair
market value of which will be equal to the excess, if
any, of the aggregate fair market value of the shares
of the Company's Common Stock subject to all stock
options and stock appreciation rights outstanding and
unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee
under the Stock Plan, over the aggregate exercise price
of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of
(x) the closing price of the Company's Common Stock on
the business day immediately preceding the Termination
Date, if such Common Stock is publicly traded at such
date, (y) if such Common Stock is not publicly traded
at the Termination Date, the value determined by an
independent appraiser, such appraiser to be selected by
the Employee and to be reasonably satisfactory to the
Company (the fees and expenses of such appraiser to be
borne by the Company), or (z) the highest per share
price of the Company's Common Stock paid (in connection
with the Change of Control or at any time thereafter)
by the Person or group whose acquisition of shares of
Common Stock of the Company has given rise to a Change
of Control. The Company shall take all corporate
action necessary (i) to reserve for issuance a
sufficient number of shares of the Common Stock for
delivery pursuant to this section and (ii) to ensure
that all shares of the Common Stock issued pursuant to
this section are registered under the Securities Act of
1933, as amended, listed on the New York Stock Exchange
and may be freely transferred by the holders thereof;"
4. Section 10 of the Agreement is deleted and the following is
-2-
<PAGE>
substituted therefor:
"10. 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 (whether by Enterra
Corporation or Weatherford or by any affiliate of, or
plan maintained by, either) to or for the benefit of
the Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement,
the Merger Agreement or otherwise, but determined
without regard to any additional payments required
under this Section 10) (a "Payment") would be subject
to the excise tax imposed by Section 4999 of the Code
or any interest or penalties are incurred by the
Employee with respect to such excise tax (such excise
tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise
Tax"), then the Employee shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Employee of all
taxes (including any interest or penalties imposed with
respect to such taxes), including without limitation,
any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Employee retains an
amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 10(c),
all determinations required to be made under this
Section 10, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving
at such determination shall be made by Arthur Andersen
LLP or, as provided below, such other certified public
accounting firm as may be designated by the Employee
(the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the
Employee within 15 business days after the receipt of
notice from the Employee that there has been a Payment,
or such earlier time as is requested by the Company.
In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or
group effecting the Change of Control, the Employee
shall appoint another nationally recognized accounting
firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant
to this Section 10, shall be paid by the Company to the
Employee within five days after the receipt of the
Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon the Company
and the Employee. As a result of the uncertainty in
the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm
-3-
<PAGE>
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 10(c)
and the Employee thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the
Employee.
(c) The Employee shall notify the Company in
writing of any claim by the Internal Revenue Service
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 Employee is informed
in writing of such claim, and shall apprise the Company
of the nature of such claim and the date on which such
claim is requested to be paid. The Employee shall not
pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice
to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such
claim is due). If the Company notifies the Employee in
writing prior to the expiration of such period that it
desires to contest such claim the Employee shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including without
limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in
order 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 Employee harmless, on an
after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto)
imposed as a result of such representation and payment
of costs and expenses. Without limitation on the
foregoing provisions of this Section 10(c), the Company
shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option,
either direct the Employee to pay the tax claimed and
sue for a refund or contest the claim
-4-
<PAGE>
in any permissible manner, and the Employee agrees to
prosecute such contest to determination before any
administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Employee to pay such claim and
sue for a refund, the Company shall advance the amount
of such payment to the Employee, on an interest-free
basis and shall indemnify and hold the Employee
harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with
respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to
such advance; and further provided that any extension
of the statute of limitations relating to payment of
taxes for the taxable year of the Employee with respect
to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore,
the Company's control of the contest shall be limited
to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee shall be
entitled to settle or contest, as the case may be, any
other issues raised by the Internal Revenue Service or
any other taxing authority.
(d) If, after the receipt by the Employee of an
amount advanced by the Company pursuant to Section
10(c), the Employee becomes entitled to receive any
refund with respect to such claim, the Employee shall
(subject to the Company's complying with the
requirements of Section 10(c)) promptly pay to the
Company the amount of such refund (together with any
interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant
to Section 10(c), a determination is made that the
Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify
the Employee in writing of its intent to contest such
denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be
paid.
5. The remainder of the Agreement shall remain in full force and
effect as written.
6. This Amendment shall be conditioned upon the consummation of
the merger between Enterra and Weatherford pursuant to the Merger Agreement,
and in the event such merger is not so consummated, the Agreement shall
remain in full force and effect without regard to the changes contemplated by
this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the day and year first above written.
-5-
<PAGE>
ENTERRA CORPORATION
By: /s/ M. Gay Mather
-------------------------------
M. Gay Mather
Secretary
/s/ Steven W. Krablin
-------------------------------
Steven W. Krablin
-6-
<PAGE>
AMENDMENT 1995-1 TO SEVERANCE AGREEMENT
This Amendment 1995-1 to Severance Agreement (the
"Amendment"), dated as of AUGUST 31, 1995, is between Enterra
Corporation, a Delaware corporation ("Enterra"), and WINDELL D.
NORRIS, JR. (the "Employee").
WHEREAS, on NOVEMBER 10, 1993, Enterra and the
Employee entered into a Severance Agreement, dated as of
NOVEMBER 10, 1993 (the "Agreement");
WHEREAS, the parties hereto desire to amend certain
provisions of the Agreement regarding the severance compensation
upon termination of employment in connection with a Change of
Control;
WHEREAS, the parties hereto desire to condition the
effectiveness of this Amendment upon the consummation of the
merger between Enterra and Weatherford International Incorporated
("Weatherford") pursuant to the Agreement and Plan of Merger,
dated as of June 23, 1995, as amended as of August 28, 1995,
between Weatherford and Enterra (the "Merger Agreement"); and
WHEREAS, capitalized terms used herein that are not
defined herein shall have the meanings ascribed thereto in the
Agreement;
NOW, THEREFORE, effective as of the Effective Time, as
that term is defined in the Merger Agreement, the parties hereto,
intending to be legally bound, agree as follows:
1. Section 1 of the Agreement is hereby amended by
adding thereto a new sentence at the end thereof, to read as
follows:
"With respect to all periods from and after
the Effective Time, as that term is defined
in the Agreement and Plan of Merger, dated as
of June 23, 1995, as amended as of August 28,
1995, between Weatherford International
Incorporated ("Weatherford") and the Company,
any reference in this Agreement to the
'Company' or the 'Common Stock' shall be
deemed to be a reference to Weatherford or
the common
<PAGE>
stock, par value $.10 per share, of Weatherford."
2. Section 4 of the Agreement is hereby amended by
deleting therefrom the introductory provision and subsection (a)
thereof and substituting the following therefor:
"4. OTHER PAYMENTS. In the event of the Employee's
Termination upon a Change of Control, the Company
shall:
(a) deliver to the Employee within fifteen days
after the Termination Date, unless the Employee has
exercised such options and rights, such number of
shares of the Company's Common Stock the total fair
market value of which will be equal to the excess, if
any, of the aggregate fair market value of the shares
of the Company's Common Stock subject to all stock
options and stock appreciation rights outstanding and
unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee
under the Stock Plan, over the aggregate exercise price
of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of
(x) the closing price of the Company's Common Stock on
the business day immediately preceding the Termination
Date, if such Common Stock is publicly traded at such
date, (y) if such Common Stock is not publicly traded
at the Termination Date, the value determined by an
independent appraiser, such appraiser to be selected by
the Employee and to be reasonably satisfactory to the
Company (the fees and expenses of such appraiser to be
borne by the Company), or (z) the highest per share
price of the Company's Common Stock paid (in connection
with the Change of Control or at any time thereafter)
by the Person or group whose acquisition of shares of
Common Stock of the Company has given rise to a Change
of Control. The Company shall take all corporate
action necessary (i) to reserve for issuance a
sufficient number of shares of the Common Stock for
delivery pursuant to this section and (ii) to ensure
that all shares of the Common Stock issued pursuant to
this section are registered under the Securities Act of
1933, as amended, listed on the New York Stock Exchange
and may be freely transferred by the holders thereof;"
3. Section 10 of the Agreement is deleted and the
following is substituted therefor:
"10. 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 (whether by Enterra
Corporation or Weatherford or by any affiliate of, or
plan maintained by, either) to or
-2-
<PAGE>
for the benefit of the Employee (whether paid or
payable or distributed or distributable pursuant to
the terms of this Agreement, the Merger Agreement
or otherwise, but determined without regard to any
additional payments required under this Section 10)
(a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest
or penalties are incurred by the Employee with
respect to such excise tax (such excise tax,
together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise
Tax"), then the Employee shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Employee of all
taxes (including any interest or penalties imposed with
respect to such taxes), including without limitation,
any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Employee retains an
amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 10(c),
all determinations required to be made under this
Section 10, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving
at such determination shall be made by Arthur Andersen
LLP or, as provided below, such other certified public
accounting firm as may be designated by the Employee
(the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the
Employee within 15 business days after the receipt of
notice from the Employee that there has been a Payment,
or such earlier time as is requested by the Company.
In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or
group effecting the Change of Control, the Employee
shall appoint another nationally recognized accounting
firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant
to this Section 10, shall be paid by the Company to the
Employee within five days after the receipt of the
Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon the Company
and the Employee. As a result of the uncertainty in
the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which
will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 10(c)
and the Employee thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the
Employee.
-3-
<PAGE>
(c) The Employee 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 Employee is informed
in writing of such claim, and shall apprise the Company
of the nature of such claim and the date on which such
claim is requested to be paid. The Employee shall not
pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice
to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such
claim is due). If the Company notifies the Employee in
writing prior to the expiration of such period that it
desires to contest such claim the Employee shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including without
limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in
order 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 Employee harmless, on an
after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto)
imposed as a result of such representation and payment
of costs and expenses. Without limitation on the
foregoing provisions of this Section 10(c), the Company
shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option,
either direct the Employee to pay the tax claimed and
sue for a refund or contest the claim in any
permissible manner, and the Employee agrees to
prosecute such contest to determination before any
administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Employee to pay such claim and
sue for a refund, the Company shall advance the amount
of such payment to the Employee, on an interest-free
basis and shall indemnify and hold the Employee
harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or
-4-
<PAGE>
with respect to any imputed income with respect to
such advance; and further provided that any extension
of the statute of limitations relating to payment of
taxes for the taxable year of the Employee with respect
to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore,
the Company's control of the contest shall be limited
to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee shall be
entitled to settle or contest, as the case may be, any
other issues raised by the Internal Revenue Service or
any other taxing authority.
(d) If, after the receipt by the Employee of an
amount advanced by the Company pursuant to Section
10(c), the Employee becomes entitled to receive any
refund with respect to such claim, the Employee shall
(subject to the Company's complying with the
requirements of Section 10(c)) promptly pay to the
Company the amount of such refund (together with any
interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant
to Section 10(c), a determination is made that the
Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify
the Employee in writing of its intent to contest such
denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be
paid.
4. The remainder of the Agreement shall remain in
full force and effect as written.
5. This Amendment shall be conditioned upon the
consummation of the merger between Enterra and Weatherford
pursuant to the Merger Agreement, and in the event such merger is
not so consummated, the Agreement shall remain in full force and
effect without regard to the changes contemplated by this
Amendment.
IN WITNESS WHEREOF, the parties hereto have executed
this Amendment as of the day and year first above written.
ENTERRA CORPORATION
By: /s/ Steven W. Krablin
--------------------------
Steven W. Krablin
Vice President and Chief Financial Officer
/s/ Windell D. Norris, Jr.
-------------------------------
Windell D. Norris, Jr.
-5-
<PAGE>
AMENDMENT 1995-1 TO SEVERANCE AGREEMENT
This Amendment 1995-1 to Severance Agreement (the "Amendment"),
dated as of AUGUST 31, 1995, is between Enterra Corporation, a Delaware
corporation ("Enterra"), and J. JOSEPH PERCLE (the "Employee").
WHEREAS, on FEBRUARY 21, 1991, Enterra and the Employee entered
into a Severance Agreement, dated as of FEBRUARY 21, 1991 (the "Agreement");
WHEREAS, the parties hereto desire to amend certain provisions of
the Agreement regarding the severance compensation upon termination of
employment in connection with a Change of Control;
WHEREAS, the parties hereto desire to condition the effectiveness
of this Amendment upon the consummation of the merger between Enterra and
Weatherford International Incorporated ("Weatherford") pursuant to the
Agreement and Plan of Merger, dated as of June 23, 1995, as amended as of
August 28, 1995, between Weatherford and Enterra (the "Merger Agreement"); and
WHEREAS, capitalized terms used herein that are not defined herein
shall have the meanings ascribed thereto in the Agreement;
NOW, THEREFORE, effective as of the Effective Time, as that term is
defined in the Merger Agreement, the parties hereto, intending to be legally
bound, agree as follows:
1. Section 1(p)(ii) of the Agreement is hereby amended by adding
thereto a new last paragraph, to read as follows:
"Notwithstanding anything to the contrary under this Section 1(p)(ii),
any resignation by the Employee at any time from the Effective Time,
as that term is defined in the Agreement and Plan of Merger, dated as
of June 23, 1995, as amended as of August 28, 1995, between
Weatherford International Incorporated ("Weatherford") and the
Company (the "Merger Agreement"), through August 12, 1996 shall
constitute a 'Termination upon Change of Control' under this
Agreement."
<PAGE>
2. Section 1 of the Agreement is hereby amended by
adding thereto a new sentence at the end thereof, to read as
follows:
"With respect to all periods from and after
the Effective Time, as that term is defined
in the Merger Agreement, any reference in
this Agreement to the 'Company' or the
'Common Stock' shall be deemed to be a
reference to Weatherford or the common stock,
par value $.10 per share, of Weatherford."
3. Section 4 of the Agreement is hereby amended by
deleting therefrom the introductory provision and subsection (a)
thereof and substituting the following therefor:
"4. OTHER PAYMENTS. In the event of the Employee's
Termination upon a Change of Control, the Company
shall:
(a) deliver to the Employee within fifteen days
after the Termination Date, unless the Employee has
exercised such options and rights, such number of
shares of the Company's Common Stock the total fair
market value of which will be equal to the excess, if
any, of the aggregate fair market value of the shares
of the Company's Common Stock subject to all stock
options and stock appreciation rights outstanding and
unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee
under the Stock Plan, over the aggregate exercise price
of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of
(x) the closing price of the Company's Common Stock on
the business day immediately preceding the Termination
Date, if such Common Stock is publicly traded at such
date, (y) if such Common Stock is not publicly traded
at the Termination Date, the value determined by an
independent appraiser, such appraiser to be selected by
the Employee and to be reasonably satisfactory to the
Company (the fees and expenses of such appraiser to be
borne by the Company), or (z) the highest per share
price of the Company's Common Stock paid (in connection
with the Change of Control or at any time thereafter)
by the Person or group whose acquisition of shares of
Common Stock of the Company has given rise to a Change
of Control. The Company shall take all corporate
action necessary (i) to reserve for issuance a
sufficient number of shares of the Common Stock for
delivery pursuant to this section and (ii) to ensure
that all shares of the Common Stock issued pursuant to
this section are registered under the Securities Act of
1933, as amended, listed on the New York Stock Exchange
and may be freely transferred by the holders thereof;"
4. Section 10 of the Agreement is deleted and the
following is
-2-
<PAGE>
substituted therefor:
"10. 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 (whether by Enterra
Corporation or Weatherford or by any affiliate of, or
plan maintained by, either) to or for the benefit of
the Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement,
the Merger Agreement or otherwise, but determined
without regard to any additional payments required
under this Section 10) (a "Payment") would be subject
to the excise tax imposed by Section 4999 of the Code
or any interest or penalties are incurred by the
Employee with respect to such excise tax (such excise
tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise
Tax"), then the Employee shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Employee of all
taxes (including any interest or penalties imposed with
respect to such taxes), including without limitation,
any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Employee retains an
amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 10(c),
all determinations required to be made under this
Section 10, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving
at such determination shall be made by Arthur Andersen
LLP or, as provided below, such other certified public
accounting firm as may be designated by the Employee
(the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the
Employee within 15 business days after the receipt of
notice from the Employee that there has been a Payment,
or such earlier time as is requested by the Company.
In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or
group effecting the Change of Control, the Employee
shall appoint another nationally recognized accounting
firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant
to this Section 10, shall be paid by the Company to the
Employee within five days after the receipt of the
Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon the Company
and the Employee. As a result of the uncertainty in
the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm
-3-
<PAGE>
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 10(c)
and the Employee thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the
Employee.
(c) The Employee shall notify the Company in
writing of any claim by the Internal Revenue Service
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 Employee is informed
in writing of such claim, and shall apprise the Company
of the nature of such claim and the date on which such
claim is requested to be paid. The Employee shall not
pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice
to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such
claim is due). If the Company notifies the Employee in
writing prior to the expiration of such period that it
desires to contest such claim the Employee shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including without
limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in
order 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 Employee harmless, on an
after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto)
imposed as a result of such representation and payment
of costs and expenses. Without limitation on the
foregoing provisions of this Section 10(c), the Company
shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option,
either direct the Employee to pay the tax claimed and
sue for a refund or contest the claim
-4-
<PAGE>
in any permissible manner, and the Employee agrees to
prosecute such contest to determination before any
administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Employee to pay such claim and
sue for a refund, the Company shall advance the amount
of such payment to the Employee, on an interest-free
basis and shall indemnify and hold the Employee
harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with
respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to
such advance; and further provided that any extension
of the statute of limitations relating to payment of
taxes for the taxable year of the Employee with respect
to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore,
the Company's control of the contest shall be limited
to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee shall be
entitled to settle or contest, as the case may be, any
other issues raised by the Internal Revenue Service or
any other taxing authority.
(d) If, after the receipt by the Employee of an
amount advanced by the Company pursuant to Section
10(c), the Employee becomes entitled to receive any
refund with respect to such claim, the Employee shall
(subject to the Company's complying with the
requirements of Section 10(c)) promptly pay to the
Company the amount of such refund (together with any
interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant
to Section 10(c), a determination is made that the
Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify
the Employee in writing of its intent to contest such
denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be
paid.
5. The remainder of the Agreement shall remain in
full force and effect as written.
6. This Amendment shall be conditioned upon the
consummation of the merger between Enterra and Weatherford
pursuant to the Merger Agreement, and in the event such merger is
not so consummated, the Agreement shall remain in full force and
effect without regard to the changes contemplated by this
Amendment.
IN WITNESS WHEREOF, the parties hereto have executed
this Amendment as of the day and year first above written.
-5-
<PAGE>
ENTERRA CORPORATION
By: /s/ Steven W. Krablin
----------------------------
Steven W. Krablin
Vice President and Chief Financial Officer
/s/ J. Joseph Percle
---------------------------------
J. Joseph Percle
-6-
<PAGE>
AMENDMENT 1995-1 TO SEVERANCE AGREEMENT
This Amendment 1995-1 to Severance Agreement (the "Amendment"),
dated as of AUGUST 31, 1995, is between Pipeline Induction Heat Limited
("PIH") and MICHAEL PETER SMITH (the "Employee").
WHEREAS, Enterra Corporation, a Delaware corporation ("Enterra"),
is the ultimate parent company of PIH;
WHEREAS, on APRIL 1, 1993, PIH and the Employee entered into a
Severance Agreement, dated as of APRIL 1, 1993 (the "Agreement");
WHEREAS, the parties hereto desire to amend certain provisions of
the Agreement regarding the severance compensation upon termination of
employment in connection with a Change of Control;
WHEREAS, the parties hereto desire to condition the effectiveness
of this Amendment upon the consummation of the merger between Enterra and
Weatherford International Incorporated ("Weatherford") pursuant to the
Agreement and Plan of Merger, dated as of June 23, 1995, as amended as of
August 28, 1995, between Weatherford and Enterra (the "Merger Agreement"); and
WHEREAS, capitalized terms used herein that are not defined herein
shall have the meanings ascribed thereto in the Agreement;
NOW, THEREFORE, effective as of the Effective Time, as that term is
defined in the Merger Agreement, the parties hereto, intending to be legally
bound, agree as follows:
1. Section 1 of the Agreement is hereby amended by adding thereto
a new sentence at the end thereof, to read as follows:
"With respect to all periods from and after the Effective Time,
as that term is defined in the Agreement and Plan of Merger,
dated as of June 23, 1995, as amended as of August 28, 1995,
between Weatherford International Incorporated
<PAGE>
("Weatherford") and Enterra, any reference in this Agreement
to 'Enterra' or the 'Common Stock' shall be deemed to be a
reference to Weatherford or the common stock, par value $.10
per share, of Weatherford."
2. Section 4 of the Agreement is hereby amended by deleting
therefrom the introductory provision and subsection (a) thereof and
substituting the following therefor:
"4. OTHER PAYMENTS. In the event of the Employee's
Termination upon a Change of Control, the Company
shall:
(a) deliver to the Employee within fifteen days
after the Termination Date, unless the Employee has
exercised such options and rights, such number of
shares of Enterra's Common Stock the total fair market
value of which will be equal to the excess, if any, of
the aggregate fair market value of the shares of
Enterra's Common Stock subject to all stock options and
stock appreciation rights outstanding and unexercised
immediately prior to the Termination Date, whether
vested or unvested, granted to the Employee under the
Stock Plan, over the aggregate exercise price of all
such stock options. For purposes of this paragraph,
fair market value shall mean the highest of (x) the
closing price of Enterra's Common Stock on the business
day immediately preceding the Termination Date, if such
Common Stock is publicly traded at such date, (y) if
such Common Stock is not publicly traded at the
Termination Date, the value determined by an
independent appraiser, such appraiser to be selected by
the Employee and to be reasonably satisfactory to the
Company (the fees and expenses of such appraiser to be
borne by the Company), or (z) the highest per share
price of Enterra's Common Stock paid (in connection
with the Change of Control or at any time thereafter)
by the Person or group whose acquisition of shares of
Common Stock of Enterra has given rise to a Change of
Control. Enterra shall take all corporate action
necessary (i) to reserve for issuance a sufficient
number of shares of the Common Stock for delivery
pursuant to this section and (ii) to ensure that all
shares of the Common Stock issued pursuant to this
section are registered under the Securities Act of
1933, as amended, listed on the New York Stock Exchange
and may be freely transferred by the holders thereof;"
3. The remainder of the Agreement shall remain in full force
and effect as written.
4. This Amendment shall be conditioned upon the
consummation of the merger between Enterra and Weatherford
pursuant to the Merger Agreement, and in the event such merger is
not so consummated, the Agreement shall remain in full force and
effect without regard to the changes contemplated by this
Amendment.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the day and year first above written.
ENTERRA CORPORATION
By: /s/ Steven W. Krablin
---------------------------
Steven W. Krablin
Vice President and Chief Financial Officer
PIPELINE INDUCTION HEAT LIMITED
By: /s/ C. Paul Evans
---------------------------
C. Paul Evans
Director
/s/ Michael Peter Smith
-------------------------------
Michael Peter Smith
-3-
<PAGE>
AMENDMENT 1995-1 TO SEVERANCE AGREEMENT
This Amendment 1995-1 to Severance Agreement (the
"Amendment"), dated as of AUGUST 31, 1995, is between Enterra
Corporation, a Delaware corporation ("Enterra"), and MICHAEL L.
STANSBERRY (the "Employee").
WHEREAS, on FEBRUARY 21, 1991, Enterra and the
Employee entered into a Severance Agreement, dated as of
FEBRUARY 21, 1991 (the "Agreement");
WHEREAS, the parties hereto desire to amend certain
provisions of the Agreement regarding the severance compensation
upon termination of employment in connection with a Change of
Control;
WHEREAS, the parties hereto desire to condition the
effectiveness of this Amendment upon the consummation of the
merger between Enterra and Weatherford International Incorporated
("Weatherford") pursuant to the Agreement and Plan of Merger,
dated as of June 23, 1995, as amended as of August 28, 1995,
between Weatherford and Enterra (the "Merger Agreement"); and
WHEREAS, capitalized terms used herein that are not
defined herein shall have the meanings ascribed thereto in the
Agreement;
NOW, THEREFORE, effective as of the Effective Time, as
that term is defined in the Merger Agreement, the parties hereto,
intending to be legally bound, agree as follows:
1. Section 1(p)(ii) of the Agreement is hereby
amended by adding thereto a new last paragraph, to read as
follows:
"Notwithstanding anything to the contrary under this
Section 1(p)(ii), any resignation by the Employee at
any time from the Effective Time, as that term is
defined in the Agreement and Plan of Merger, dated as
of June 23, 1995, as amended as of August 28, 1995,
between Weatherford International Incorporated
("Weatherford") and the Company (the "Merger
Agreement"), through August 12, 1996 shall constitute a
'Termination upon Change of Control' under this
Agreement."
<PAGE>
2. Section 1 of the Agreement is hereby amended by
adding thereto a new sentence at the end thereof, to read as
follows:
"With respect to all periods from and after
the Effective Time, as that term is defined
in the Merger Agreement, any reference in
this Agreement to the 'Company' or the
'Common Stock' shall be deemed to be a
reference to Weatherford or the common stock,
par value $.10 per share, of Weatherford."
3. Section 4 of the Agreement is hereby amended by
deleting therefrom the introductory provision and subsection (a)
thereof and substituting the following therefor:
"4. OTHER PAYMENTS. In the event of the Employee's
Termination upon a Change of Control, the Company
shall:
(a) deliver to the Employee within fifteen days
after the Termination Date, unless the Employee has
exercised such options and rights, such number of
shares of the Company's Common Stock the total fair
market value of which will be equal to the excess, if
any, of the aggregate fair market value of the shares
of the Company's Common Stock subject to all stock
options and stock appreciation rights outstanding and
unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee
under the Stock Plan, over the aggregate exercise price
of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of
(x) the closing price of the Company's Common Stock on
the business day immediately preceding the Termination
Date, if such Common Stock is publicly traded at such
date, (y) if such Common Stock is not publicly traded
at the Termination Date, the value determined by an
independent appraiser, such appraiser to be selected by
the Employee and to be reasonably satisfactory to the
Company (the fees and expenses of such appraiser to be
borne by the Company), or (z) the highest per share
price of the Company's Common Stock paid (in connection
with the Change of Control or at any time thereafter)
by the Person or group whose acquisition of shares of
Common Stock of the Company has given rise to a Change
of Control. The Company shall take all corporate
action necessary (i) to reserve for issuance a
sufficient number of shares of the Common Stock for
delivery pursuant to this section and (ii) to ensure
that all shares of the Common Stock issued pursuant to
this section are registered under the Securities Act of
1933, as amended, listed on the New York Stock Exchange
and may be freely transferred by the holders thereof;"
4. Section 10 of the Agreement is deleted and the
following is
-2-
<PAGE>
substituted therefor:
"10. 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 (whether by Enterra
Corporation or Weatherford or by any affiliate of, or
plan maintained by, either) to or for the benefit of
the Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement,
the Merger Agreement or otherwise, but determined
without regard to any additional payments required
under this Section 10) (a "Payment") would be subject
to the excise tax imposed by Section 4999 of the Code
or any interest or penalties are incurred by the
Employee with respect to such excise tax (such excise
tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise
Tax"), then the Employee shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Employee of all
taxes (including any interest or penalties imposed with
respect to such taxes), including without limitation,
any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Employee retains an
amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 10(c),
all determinations required to be made under this
Section 10, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving
at such determination shall be made by Arthur Andersen
LLP or, as provided below, such other certified public
accounting firm as may be designated by the Employee
(the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the
Employee within 15 business days after the receipt of
notice from the Employee that there has been a Payment,
or such earlier time as is requested by the Company.
In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or
group effecting the Change of Control, the Employee
shall appoint another nationally recognized accounting
firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant
to this Section 10, shall be paid by the Company to the
Employee within five days after the receipt of the
Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon the Company
and the Employee. As a result of the uncertainty in
the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm
-3-
<PAGE>
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 10(c)
and the Employee thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the
Employee.
(c) The Employee shall notify the Company in
writing of any claim by the Internal Revenue Service
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 Employee is informed
in writing of such claim, and shall apprise the Company
of the nature of such claim and the date on which such
claim is requested to be paid. The Employee shall not
pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice
to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such
claim is due). If the Company notifies the Employee in
writing prior to the expiration of such period that it
desires to contest such claim the Employee shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including without
limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in
order 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 Employee harmless, on an
after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto)
imposed as a result of such representation and payment
of costs and expenses. Without limitation on the
foregoing provisions of this Section 10(c), the Company
shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option,
either direct the Employee to pay the tax claimed and
sue for a refund or contest the claim
-4-
<PAGE>
in any permissible manner, and the Employee agrees to
prosecute such contest to determination before any
administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Employee to pay such claim and
sue for a refund, the Company shall advance the amount
of such payment to the Employee, on an interest-free
basis and shall indemnify and hold the Employee
harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with
respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to
such advance; and further provided that any extension
of the statute of limitations relating to payment of
taxes for the taxable year of the Employee with respect
to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore,
the Company's control of the contest shall be limited
to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee shall be
entitled to settle or contest, as the case may be, any
other issues raised by the Internal Revenue Service or
any other taxing authority.
(d) If, after the receipt by the Employee of an
amount advanced by the Company pursuant to Section
10(c), the Employee becomes entitled to receive any
refund with respect to such claim, the Employee shall
(subject to the Company's complying with the
requirements of Section 10(c)) promptly pay to the
Company the amount of such refund (together with any
interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant
to Section 10(c), a determination is made that the
Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify
the Employee in writing of its intent to contest such
denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be
paid.
5. The remainder of the Agreement shall remain in
full force and effect as written.
6. This Amendment shall be conditioned upon the
consummation of the merger between Enterra and Weatherford
pursuant to the Merger Agreement, and in the event such merger is
not so consummated, the Agreement shall remain in full force and
effect without regard to the changes contemplated by this
Amendment.
IN WITNESS WHEREOF, the parties hereto have executed
this Amendment as of the day and year first above written.
-5-
<PAGE>
ENTERRA CORPORATION
By: /s/ Steven W. Krablin
--------------------------
Steven W. Krablin
Vice President and Chief Financial Officer
/s/ Michael L. Stansberry
-------------------------------
Michael L. Stansberry
-6-
<PAGE>
AMENDMENT 1995-1 TO SEVERANCE AGREEMENT
This Amendment 1995-1 to Severance Agreement (the
"Amendment"), dated as of AUGUST 31, 1995, is between Enterra
Corporation, a Delaware corporation ("Enterra"), and D. DALE
WOOD (the "Employee").
WHEREAS, on MARCH 5, 1991, Enterra and the Employee
entered into a Severance Agreement, dated as of MARCH 5, 1991
(the "Agreement");
WHEREAS, the parties hereto desire to amend certain
provisions of the Agreement regarding the severance compensation
upon termination of employment in connection with a Change of
Control;
WHEREAS, the parties hereto desire to condition the
effectiveness of this Amendment upon the consummation of the
merger between Enterra and Weatherford International Incorporated
("Weatherford") pursuant to the Agreement and Plan of Merger,
dated as of June 23, 1995, as amended as of August 28, 1995,
between Weatherford and Enterra (the "Merger Agreement"); and
WHEREAS, capitalized terms used herein that are not
defined herein shall have the meanings ascribed thereto in the
Agreement;
NOW, THEREFORE, effective as of the Effective Time, as
that term is defined in the Merger Agreement, the parties hereto,
intending to be legally bound, agree as follows:
1. Section 1(p)(ii) of the Agreement is hereby
amended by adding thereto a new last paragraph, to read as
follows:
"Notwithstanding anything to the contrary under this
Section 1(p)(ii), any resignation by the Employee at
any time from the Effective Time, as that term is
defined in the Agreement and Plan of Merger, dated as
of June 23, 1995, as amended as of August 28, 1995,
between Weatherford International Incorporated
("Weatherford") and the Company (the "Merger
Agreement"), through August 12, 1996 shall constitute a
'Termination upon Change of Control' under this
Agreement."
<PAGE>
2. Section 1 of the Agreement is hereby amended by
adding thereto a new sentence at the end thereof, to read as
follows:
"With respect to all periods from and after
the Effective Time, as that term is defined
in the Merger Agreement, any reference in
this Agreement to the 'Company' or the
'Common Stock' shall be deemed to be a
reference to Weatherford or the common stock,
par value $.10 per share, of Weatherford."
3. Section 4 of the Agreement is hereby amended by
deleting therefrom the introductory provision and subsection (a)
thereof and substituting the following therefor:
"4. OTHER PAYMENTS. In the event of the Employee's
Termination upon a Change of Control, the Company
shall:
(a) deliver to the Employee within fifteen days
after the Termination Date, unless the Employee has
exercised such options and rights, such number of
shares of the Company's Common Stock the total fair
market value of which will be equal to the excess, if
any, of the aggregate fair market value of the shares
of the Company's Common Stock subject to all stock
options and stock appreciation rights outstanding and
unexercised immediately prior to the Termination Date,
whether vested or unvested, granted to the Employee
under the Stock Plan, over the aggregate exercise price
of all such stock options. For purposes of this
paragraph, fair market value shall mean the highest of
(x) the closing price of the Company's Common Stock on
the business day immediately preceding the Termination
Date, if such Common Stock is publicly traded at such
date, (y) if such Common Stock is not publicly traded
at the Termination Date, the value determined by an
independent appraiser, such appraiser to be selected by
the Employee and to be reasonably satisfactory to the
Company (the fees and expenses of such appraiser to be
borne by the Company), or (z) the highest per share
price of the Company's Common Stock paid (in connection
with the Change of Control or at any time thereafter)
by the Person or group whose acquisition of shares of
Common Stock of the Company has given rise to a Change
of Control. The Company shall take all corporate
action necessary (i) to reserve for issuance a
sufficient number of shares of the Common Stock for
delivery pursuant to this section and (ii) to ensure
that all shares of the Common Stock issued pursuant to
this section are registered under the Securities Act of
1933, as amended, listed on the New York Stock Exchange
and may be freely transferred by the holders thereof;"
4. Section 10 of the Agreement is deleted and the
following is
-2-
<PAGE>
substituted therefor:
"10. 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 (whether by Enterra
Corporation or Weatherford or by any affiliate of, or
plan maintained by, either) to or for the benefit of
the Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement,
the Merger Agreement or otherwise, but determined
without regard to any additional payments required
under this Section 10) (a "Payment") would be subject
to the excise tax imposed by Section 4999 of the Code
or any interest or penalties are incurred by the
Employee with respect to such excise tax (such excise
tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise
Tax"), then the Employee shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Employee of all
taxes (including any interest or penalties imposed with
respect to such taxes), including without limitation,
any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Employee retains an
amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 10(c),
all determinations required to be made under this
Section 10, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving
at such determination shall be made by Arthur Andersen
LLP or, as provided below, such other certified public
accounting firm as may be designated by the Employee
(the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the
Employee within 15 business days after the receipt of
notice from the Employee that there has been a Payment,
or such earlier time as is requested by the Company.
In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or
group effecting the Change of Control, the Employee
shall appoint another nationally recognized accounting
firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant
to this Section 10, shall be paid by the Company to the
Employee within five days after the receipt of the
Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon the Company
and the Employee. As a result of the uncertainty in
the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm
-3-
<PAGE>
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 10(c)
and the Employee thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the
Employee.
(c) The Employee shall notify the Company in
writing of any claim by the Internal Revenue Service
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 Employee is informed
in writing of such claim, and shall apprise the Company
of the nature of such claim and the date on which such
claim is requested to be paid. The Employee shall not
pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice
to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such
claim is due). If the Company notifies the Employee in
writing prior to the expiration of such period that it
desires to contest such claim the Employee shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including without
limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in
order 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 Employee harmless, on an
after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto)
imposed as a result of such representation and payment
of costs and expenses. Without limitation on the
foregoing provisions of this Section 10(c), the Company
shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option,
either direct the Employee to pay the tax claimed and
sue for a refund or contest the claim
-4-
<PAGE>
in any permissible manner, and the Employee agrees to
prosecute such contest to determination before any
administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Employee to pay such claim and
sue for a refund, the Company shall advance the amount
of such payment to the Employee, on an interest-free
basis and shall indemnify and hold the Employee
harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with
respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to
such advance; and further provided that any extension
of the statute of limitations relating to payment of
taxes for the taxable year of the Employee with respect
to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore,
the Company's control of the contest shall be limited
to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee shall be
entitled to settle or contest, as the case may be, any
other issues raised by the Internal Revenue Service or
any other taxing authority.
(d) If, after the receipt by the Employee of an
amount advanced by the Company pursuant to Section
10(c), the Employee becomes entitled to receive any
refund with respect to such claim, the Employee shall
(subject to the Company's complying with the
requirements of Section 10(c)) promptly pay to the
Company the amount of such refund (together with any
interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant
to Section 10(c), a determination is made that the
Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify
the Employee in writing of its intent to contest such
denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be
paid.
5. The remainder of the Agreement shall remain in
full force and effect as written.
6. This Amendment shall be conditioned upon the
consummation of the merger between Enterra and Weatherford
pursuant to the Merger Agreement, and in the event such merger is
not so consummated, the Agreement shall remain in full force and
effect without regard to the changes contemplated by this
Amendment.
IN WITNESS WHEREOF, the parties hereto have executed
this Amendment as of the day and year first above written.
-5-
<PAGE>
ENTERRA CORPORATION
By: /s/ Steven W. Krablin
--------------------------
Steven W. Krablin
Vice President and Chief Financial Officer
/s/ D. Dale Wood
-------------------------------
D. Dale Wood
-6-
<PAGE>
October 5, 1995
Weatherford Enterra, Inc.
1360 Post Oak Boulevard, Suite 1000
Houston, Texas 77056
RE: REGISTRATION STATEMENT ON FORM S-8 (THE "REGISTRATION STATEMENT")--
WEATHERFORD ENTERRA, INC. 1991 STOCK OPTION PLAN
WEATHERFORD ENTERRA, INC. RESTRICTED STOCK INCENTIVE PLAN
D. DALE WOOD STOCK OPTION AGREEMENT
ENTERRA CORPORATION SEVERANCE AGREEMENTS/WEATHERFORD INTERNATIONAL
INCORPORATED CHANGE OF CONTROL AGREEMENTS
Dear Sirs:
I am Senior Vice President, Secretary and General Counsel for
Weatherford Enterra, Inc., a Delaware corporation (the "Company"), and have
acted as legal counsel in connection with the authorization of an aggregate
of 1,959,500 shares (the "Shares") of the common stock, $.10 par value, of
the Company ("Common Stock") that may be issued (i) upon the exercise of
options granted pursuant to and subject to the terms and conditions of the
Weatherford Enterra, Inc. 1991 Stock Option Plan (the "1991 Option Plan");
(ii) upon the grant of shares pursuant to and subject to the terms and
conditions of the Weatherford Enterra, Inc. Restricted Stock Incentive Plan
(the "RSIP"); (iii) upon the exercise of options granted pursuant to the D.
Dale Wood Stock Option Agreement between D. Dale Wood and the Company (the
"Wood Agreement"); and (iv) upon the cancellation of previously granted
options in accordance with the terms of the Enterra Corporation Severance
Agreements and the Weatherford International Incorporated Change of
Control Agreements (collectively, the "Agreements").
In connection with rendering the opinions hereinafter expressed, I have
examined, among other things, the 1991 Option Plan, the RSIP, the Wood
Agreement and the Agreements, the Restated Certificate of Incorporation and
By-Laws of the Company, both as amended to date, the corporate proceedings
with respect to the 1991 Option Plan, the RSIP, the Wood Agreement and the
Agreements and such other corporate documents as I have deemed appropriate.
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Weatherford International Incorporated
October 5, 1995
Page 2
Based on the foregoing, and having due regard for such legal
considerations as I have deemed relevant, I am of the opinion that the Shares
have been duly authorized for issuance and, when issued in accordance with
the respective terms of the 1991 Option Plan, the RSIP, the Wood Agreement
and the Agreements, the Shares will be validly issued, fully paid and
nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 registering the Shares and to the
reference to me under the heading "Interests of Named Experts and Counsel" in
said Registration Statement.
The opinions expressed herein are limited exclusively to the General
Corporation Law of the State of Delaware and the Federal securities law of
the United States of America.
This opinion is provided at your request and solely in connection with
the Registration Statement. This opinion may be relied upon only by you and
may not be quoted from or referred to or copies delivered to any other person
without my prior written consent, except as provided herein.
As of the date hereof, I own beneficially 37,221 shares of Common Stock
and hold options to purchase an additional 28,000 shares of Common Stock, of
which 16,166 options are immediately exercisable (all such numbers reflect
the one-for-two reverse stock split effected by the Company on October 5,
1995).
Very truly yours,
/s/ H. Suzanne Thomas
---------------------------
H. Suzanne Thomas
HST:cl
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-8 of our
reports dated March 10, 1995, included in the Form 10-K of Weatherford
International Incorporated (now known as Weatherford Enterra, Inc.), for the
year ended December 31, 1994 and to all references to our firm included in
this Registration Statement.
ARTHUR ANDERSEN LLP
Houston, Texas
October 5, 1995
