<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WEATHERFORD INTERNATIONAL INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
<TABLE>
<S> <C>
Weatherford International Incorporated
1360 Post Oak Boulevard
Suite 1000
Houston, TX 77056-3098 [LOGO]
P.O. Box 27608
Houston, TX 77227-7608
713/439-9400
Telex: 203337 WII UR
Telefax: 713/621-0994
</TABLE>
April 7, 1995
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Weatherford International Incorporated on Friday, May 19, 1995, at 9:00 a.m. at
The Ritz-Carlton, 1919 Briar Oaks Lane, Houston, Texas.
The Board of Directors appreciates and encourages stockholder participation
in the Company's affairs. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING,
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED. PLEASE MARK, SIGN,
DATE AND RETURN YOUR PROXY AT YOUR EARLIEST CONVENIENCE IN THE ENVELOPE
PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. If you have
multiple stockholder accounts and receive more than one set of these materials,
please be sure to vote each proxy and return it in the respective postage-paid
envelope provided.
Thank you for your continued interest and cooperation.
Very truly yours,
PHILIP BURGUIERES
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
<PAGE>
WEATHERFORD INTERNATIONAL INCORPORATED
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 19, 1995
Notice is hereby given that the Annual Meeting of Stockholders of
Weatherford International Incorporated (the "Company") will be held on Friday,
May 19, 1995, at 9:00 a.m. at The Ritz-Carlton, 1919 Briar Oaks Lane, Houston,
Texas, for the following purposes:
(1) To elect three directors, each for a term of three years;
(2) To consider and act upon a proposal to approve the Non-Employee Director
Stock Option Plan, as described in the accompanying proxy statement;
(3) To consider and act upon a proposal to amend the Company's 1987 and 1991
Stock Option Plans to meet the requirements of performance-based compensation
under Section 162(m) of the Internal Revenue Code of 1986, as amended, and to
make certain other changes, as described in the accompanying proxy statement;
and
(4) To consider and act upon any other matter which may properly come before
the meeting or any adjournment thereof.
Only holders of record of the Company's Common Stock, $0.10 par value (the
"Common Stock"), at the close of business on March 31, 1995 are entitled to
notice of and to vote at the Annual Meeting or any adjournment or postponement
thereof. A list of the holders of record of Common Stock as of March 31, 1995
will be open to the examination of any such stockholder for any purpose germane
to the Annual Meeting after May 8, 1995 at the Company's offices at 1360 Post
Oak Boulevard, Suite 1000, Houston, Texas, during normal business hours.
By Order of the Board of Directors,
[LOGO]
H. SUZANNE THOMAS
SECRETARY
Houston, Texas
April 7, 1995
IMPORTANT
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. EVEN IF YOU
PLAN TO BE PRESENT, PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY AT
YOUR EARLIEST CONVENIENCE IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING, YOU MAY VOTE EITHER IN
PERSON OR BY YOUR PROXY.
<PAGE>
WEATHERFORD INTERNATIONAL INCORPORATED
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 19, 1995
GENERAL INFORMATION
This Proxy Statement is being furnished to stockholders of Weatherford
International Incorporated, a Delaware corporation (the "Company" or
"Weatherford"), in connection with the solicitation by the Board of Directors of
proxies for use at the Annual Meeting of Stockholders (the "Meeting") to be held
on Friday, May 19, 1995, at 9:00 a.m. at The Ritz-Carlton, 1919 Briar Oaks Lane,
Houston, Texas, and at any adjournment or postponement thereof, for the purposes
set forth in the foregoing Notice of Annual Meeting of Stockholders. This Proxy
Statement is first being sent or delivered to stockholders on or about April 7,
1995.
The securities of the Company entitled to vote at the Meeting consist of
shares of Common Stock, $0.10 par value (the "Common Stock"). At the close of
business on March 31, 1995 (the "Record Date"), there were outstanding and
entitled to vote 54,225,279 shares of Common Stock. The holders of record of
Common Stock on the Record Date will be entitled to one vote per share.
The Annual Report to Stockholders for the year ended December 31, 1994 is
being furnished with this Proxy Statement to the holders of record of Common
Stock on the Record Date. The Annual Report to Stockholders does not constitute
a part of the proxy materials.
VOTING AND PROXY PROCEDURES
Properly executed proxies received in time for the Meeting will be voted.
Stockholders are urged to specify their choices on the proxy, but if no choice
is specified, eligible shares will be voted for the election of the three
nominees for director named below and for the recommended proposals. At the date
of this Proxy Statement, management of the Company knows of no other matters
which are likely to be brought before the Meeting. However, if any other matters
should properly come before the Meeting, the persons named in the enclosed proxy
will have discretionary authority to vote such proxy in accordance with their
best judgment on such matters.
If the enclosed form of proxy is executed and returned, it may nevertheless
be revoked by a later-dated proxy or by written notice filed with the Secretary
at the Company's executive offices at any time before the enclosed proxy is
exercised. Stockholders attending the Meeting may revoke their proxies and vote
in person. The Company's executive offices are located at 1360 Post Oak
Boulevard, Suite 1000, Houston, Texas 77056.
The holders of a majority of the total shares of Common Stock issued and
outstanding at the close of business on the Record Date, whether present in
person or represented by proxy, will constitute a quorum for the transaction of
business at the Meeting. The affirmative vote of a plurality of the total shares
of Common Stock present in person or represented by proxy and entitled to vote
at the Meeting is required for the election of directors, and the affirmative
vote of a majority of the total shares of Common Stock present in person or
represented by proxy and entitled to vote at the Meeting is required for the
approval of the recommended proposals and any other matters as may properly come
before the Meeting or any adjournment thereof.
Abstentions are counted toward the calculation of a quorum, but are not
treated as either a vote for or against a proposal. An abstention has the same
effect as a vote against the proposal. Any unvoted position in a brokerage
account will be considered as not voted and will not be counted toward
fulfillment of quorum requirements.
The cost of solicitation of proxies will be paid by the Company. In addition
to solicitation by mail, proxies may be solicited by the directors, officers and
employees of the Company, without additional compensation, by personal
interview, telephone, telegram or otherwise. Arrangements will also be made with
brokerage firms and other custodians, nominees and fiduciaries who hold the
voting
1
<PAGE>
securities of record for the forwarding of solicitation materials to the
beneficial owners thereof. The Company will reimburse such brokers, custodians,
nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them
in connection therewith. The Company also has engaged the services of Beacon
Hill Partners, Inc., a proxy solicitation firm, to distribute proxy solicitation
materials to brokers, banks and other nominees and to assist in the solicitation
of proxies from stockholders for an anticipated fee of $3,500 plus mailing
expenses.
OWNERSHIP OF COMMON STOCK
PRINCIPAL STOCKHOLDERS. The following table sets forth certain information
with respect to the Common Stock beneficially owned by persons who are known to
the Company to be the beneficial owners of more than five percent of the Common
Stock as of the Record Date. For purposes of this Proxy Statement, beneficial
ownership is defined in accordance with the rules of the Securities and Exchange
Commission (the "Commission") to mean generally the power to vote or dispose of
shares, regardless of any economic interest therein. The persons listed have
sole voting power and sole dispositive power with respect to all shares set
forth in the table unless otherwise specified in the footnotes to the table.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP(1)
----------------------------
SHARES OWNED
DIRECTLY
NAME AND ADDRESS OF BENEFICIAL OWNER OR INDIRECTLY PERCENT
- ------------------------------------------------------------------------------ --------------- -----------
<S> <C> <C>
FMR Corp. and Edward C. Johnson 3d ........................................... 5,237,133(2) 9.7
82 Devonshire Street
Boston, MA 02109
Jurika & Voyles, Inc. ........................................................ 3,703,706(3) 7.2
1999 Harrison Street, Suite 700
Oakland, CA 94612
<FN>
- ------------------------
(1) Information with respect to beneficial ownership is based upon information
furnished by each stockholder or contained in filings made with the
Commission. To the Company's knowledge, none of such shares are deemed to
be beneficially owned because the holder has the right to acquire such
shares within 60 days.
(2) Based upon information contained in a joint Schedule 13G dated February 14,
1995, filed with the Commission by FMR Corp., on behalf of itself and its
subsidiaries, Fidelity Management & Research Company (beneficial owner of
3,617,800 shares or 6.68% of the total outstanding Common Stock), Fidelity
American Special Situations Trust (beneficial owner of 46,000 shares or
0.08% of the total outstanding Common Stock), Fidelity Management Trust
Company (whose interest amounted to 1,619,333 shares or 2.99% of the total
outstanding Common Stock), and by Edward C. Johnson 3d. FMR Corp. and Mr.
Johnson each has sole dispositive power with respect to 5,237,133 shares.
FMR Corporation has voting power with respect to 1,603,733 shares, and Mr.
Johnson has voting power with respect to 1,557,733 shares.
(3) Based upon information contained in a Schedule 13G dated February 27, 1995,
filed with the Commission by Jurika & Voyles, Inc., whose interest amounted
to 3,703,706 or 7.2% of the total outstanding Common Stock of the Company.
Jurika & Voyles, Inc. has shared dispositive power with respect to
3,703,706 shares and shared voting power with respect to 3,553,606 shares.
</TABLE>
2
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT. The following table sets forth certain
information with respect to the Company's Common Stock beneficially owned by
each of its directors and nominees for director, each executive officer named in
the Summary Compensation Table and by all its directors and officers as a group,
as of the Record Date. Such persons have sole voting power and sole dispositive
power with respect to all shares set forth in the table unless otherwise
specified in the footnotes to the table.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP(1)
--------------------------
SHARES OWNED
DIRECTLY OR
NAME INDIRECTLY(2)(3) PERCENT
- --------------------------------------------- ---------------- -------
<S> <C> <C>
Directors and Nominees for Director
Thomas N. Amonett.......................... 19,151 *
Thomas C. Brown............................ 17,576 *
Philip Burguieres.......................... 436,528(4) *
J. Kelly Elliott........................... 6,660 *
William E. Greehey......................... 35,176 *
John W. Johnson............................ 156,343(5) *
Robert K. Moses, Jr........................ 1,568,725(6) 2.9
W. Randolph Smith.......................... 108,330(7) *
Executive Officers
James R. Burke............................. 69,684(8) *
M.E. Eagles................................ 51,793(9) *
Norman W. Nolen............................ 69,732(10) *
H. Suzanne Thomas.......................... 106,442(11) *
All Directors, Nominees and Executive
Officers as a Group (12 in number).......... 2,646,140 4.8
<FN>
- ------------------------
* Percent of class is less than one percent.
(1) Information with respect to beneficial ownership is based upon information
furnished by each director or officer of the Company or contained in
filings made with the Commission.
(2) Includes shares held under the Company's Employee Stock Purchase Plan in
the accounts of participants, as to which shares such participants have
sole voting power and no dispositive power prior to withdrawal of such
shares from such Plan. Shares may be withdrawn from such Plan by a
participant on March 31 of each year upon written notice by such
participant. Also includes shares held under the Company's 401(k) Savings
Plan in the accounts of participants, as to which shares such participants
have sole voting power and no dispositive power, unless 100 percent vested.
(3) Includes shares subject to acquisition within 60 days by such person or
group.
(4) Also President and Chief Executive Officer. Includes (a) 2,000 shares held
by Mr. Burguieres' wife, with respect to which he has no voting or
dispositive power, (b) 1,000 shares held by Mr. Burguieres as custodian for
his minor child, with respect to which he has sole voting and dispositive
power, and (c) 1,000 shares held by Mr. Burguieres' adult child, with
respect to which he has no voting or dispositive power; Mr. Burguieres
disclaims beneficial ownership of all such shares. Also includes (a) 60,500
shares granted to Mr. Burguieres pursuant to the Restricted Plan (as
hereinafter defined), with respect to which he has sole voting power and no
dispositive power, and (b) 180,000 shares subject to acquisition by Mr.
Burguieres within 60 days pursuant to the 1991 Option Plan (as hereinafter
defined).
</TABLE>
(FOOTNOTES CONTINUED ON THE FOLLOWING PAGE)
3
<PAGE>
<TABLE>
<S> <C>
(5) Does not include 2,135,716 shares owned by Permian Mud Service, Inc.
("Permian"). Mr. Johnson is a director, officer and substantial beneficial
shareholder of Permian and therefore may be deemed to be a beneficial owner
of the shares of the Common Stock held by Permian; Mr. Johnson disclaims
beneficial ownership of all such shares. Includes (a) 12,000 shares held by
Mr. Johnson as a trustee of various trusts for his children, with respect
to which he has sole voting and dispositive power, and (b) 240 shares held
as custodian for Mr. Johnson's children, with respect to which he has sole
voting and dispositive power; Mr. Johnson disclaims beneficial ownership of
all such shares.
(6) Includes 125,000 shares held by a partnership in which Mr. Moses and his
wife have an 85% interest and his children, collectively, have a 15%
interest, with respect to which Mr. Moses has shared voting and dispositive
power. Also includes (a) 123,450 shares held by Mr. Moses' wife, with
respect to which Mr. Moses has no voting or dispositive power, (b) an
aggregate of 7,406 shares held in various trusts for Mr. Moses' children,
of which Mr. Moses' wife is trustee and with respect to which Mr. Moses has
no voting or dispositive power, (c) 2,500 shares held by Mr. Moses as
custodian for his children, with respect to which Mr. Moses has sole voting
and dispositive power, and (d) an aggregate of 90,000 shares held in
various trusts for Mr. Moses' children, his brother and his sister, of
which Mr. Moses is the trustee, with respect to which Mr. Moses has sole
voting and dispositive power; Mr. Moses disclaims beneficial ownership of
all such shares. Does not include an aggregate of 105,000 shares held in
various trusts for Mr. Moses' children, of which shares Mr. Smith, a
director of the Company, has shared voting and dispositive power as a co-
trustee; since Mr. Moses is not a trustee of such trusts and has no
dispositive power, he disclaims beneficial ownership of all such shares.
(7) Includes 105,000 shares held by Mr. Smith as co-trustee of various trusts
for the children of Mr. Moses, a director of the Company, with respect to
which Mr. Smith has shared voting and dispositive power; since Mr. Smith
has no relationship to the beneficiaries of the trusts by blood or
marriage, he disclaims beneficial ownership of all such shares.
(8) Includes (a) 17,326 shares granted to Mr. Burke pursuant to the Restricted
Plan with respect to which he has sole voting power and no dispositive
power, and (b) 25,000 shares subject to acquisition by Mr. Burke within 60
days pursuant to the 1991 Option Plan.
(9) Includes (a) 20,850 shares granted to Mr. Eagles pursuant to the Restricted
Plan with respect to which he has sole voting power and no dispositive
power, and (b) 16,666 shares subject to acquisition by Mr. Eagles within 60
days pursuant to the 1991 Option Plan.
(10) Includes (a) 15,356 shares granted to Mr. Nolen pursuant to the Restricted
Plan with respect to which he has sole voting power and no dispositive
power, and (b) 31,833 shares subject to acquisition by Mr. Nolen within 60
days pursuant to the 1987 Option Plan (as hereinafter defined) and 1991
Option Plan.
(11) Includes (a) 13,326 shares granted to Ms. Thomas pursuant to the Restricted
Plan with respect to which she has sole voting power and no dispositive
power, and (b) 32,333 shares subject to acquisition by Ms. Thomas within 60
days pursuant to the 1987 and 1991 Option Plans.
</TABLE>
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Company's Restated Certificate of Incorporation and By-Laws provide that
the Board of Directors will consist of not less than six nor more than 15
persons, the exact number to be fixed from time to time by the Board of
Directors. The Board of Directors has fixed the authorized number of directors
at eight.
Directors are divided into three classes, as nearly equal in number as
possible. Each class is elected for a term of three years, so that the term of
office of one class of directors expires at every Annual Meeting.
4
<PAGE>
NOMINEES FOR DIRECTOR
The Board of Directors has nominated three persons for election as directors
in the class whose term of office will expire at the Company's 1998 Annual
Meeting of Stockholders or until their respective successors are elected and
qualified. The nominees are Thomas N. Amonett, J. Kelly Elliott and Robert K.
Moses, Jr. Mr. Amonett currently is a director of the Company whose term will
expire at the Meeting. Mr. Elliott previously was a director of the Company from
May 9, 1990 until November 4, 1993. Mr. Moses also currently is a director of
the Company whose term is scheduled to expire at the Company's 1997 Annual
Meeting. However, Mr. Moses has agreed to be nominated as a member of the class
of directors to be elected at the Meeting, and upon his election his term will
expire in 1998, the purpose of this change being to ensure that the three
classes are as equal in number as possible. It is the intention of the persons
named in the enclosed proxy to vote such proxy for the election of such
nominees.
Management of the Company does not contemplate that any of such nominees
will become unavailable for any reason, but if that should occur before the
Meeting, proxies that do not withhold authority to vote for directors will be
voted for another nominee, or other nominees, in accordance with the best
judgment of the person or persons appointed to vote the proxy.
The enclosed form of proxy provides a means for the holders of Common Stock
to vote for all of the nominees listed therein, to withhold authority to vote
for one or more of such nominees or to withhold authority to vote for all of
such nominees. Each properly executed proxy received in time for the Meeting
will be voted as specified therein, or if a stockholder does not specify in his
or her executed proxy how the shares represented by his or her proxy are to be
voted, such shares shall be voted for the nominees listed therein or for other
nominees as provided above.
The following table sets forth for each nominee for election as director all
positions with the Company held by him, his age as of March 31, 1995 and the
date on which he first became a director of the Company. Also set forth below is
information on his principal occupation. Unless otherwise indicated, each person
has held the position shown, or has been associated with the named employer in
an executive capacity, for more than five years.
<TABLE>
<CAPTION>
COMPANY
NAME POSITION AGE DIRECTOR SINCE
- ---------------------------------------------------------------- ------------- --- ----------------
<S> <C> <C> <C>
Thomas N. Amonett............................................... Director 51 May 9, 1974
J. Kelly Elliott................................................ Consultant 64 N/A
Robert K. Moses, Jr............................................. Director 54 May 12, 1978
</TABLE>
Mr. Amonett has served as President of Reunion Resources Company (previously
called Buttes Gas and Oil Company), a Houston, Texas-based company primarily
engaged in oil and gas exploration, development and production and wine grape
vineyard development, since July 1992. Previously he was Of Counsel with
Fulbright & Jaworski L.L.P., Attorneys at Law, Houston, Texas, from September
1986 to July 1992. Prior thereto, he was President and a director of Houston Oil
Fields Company, an oil and gas exploration and production company, from November
1982 to September 1986. He served as Chairman of the Board of the Company from
May 1986 to May 1989. He has also served as a director of Petrocorp, Inc., a
Houston, Texas-based company engaged in the exploration and production of oil
and natural gas, since November 1993.
Mr. Elliott is the Chief Executive Officer of Sigma Electronics, Inc., a
Houston, Texas-based company engaged in the manufacture of custom designed
transformers. He is also Chairman of Grant Geophysical Co., a Houston-based
company engaged in the geophysical acquisition business. He has also served as
Vice Chairman of the Board of Tescorp, Inc., a Houston, Texas-based company
which provides services to the oilfield industry, since 1989. Previously, he
served as President and Chief Executive Officer of Tescorp, Inc. from June 1983
to November 1989. Mr. Elliott served as a director elected by the holders of the
Company's $2.625 Convertible Exchangeable Cumulative Preferred
5
<PAGE>
Stock (the "Preferred Stock") from May 9, 1990 until redemption of the Preferred
Stock on November 4, 1993. He has served as a Consultant to the Chairman,
President and Chief Executive Officer and other members of the Board of
Directors since November 5, 1993.
Mr. Moses is a private investor, principally in the oil and gas exploration
and oilfield services business, in Houston, Texas. He served as Chairman of the
Board of the Company from May 1989 to December 1992.
INFORMATION CONCERNING OTHER DIRECTORS
The following table sets forth certain information for those directors whose
present terms will continue after the Meeting. Also set forth below is
information on his principal occupation. Unless otherwise indicated, each person
has held the position shown, or has been associated with the named employer in
an executive capacity, for more than five years.
<TABLE>
<CAPTION>
TERM
NAME COMPANY POSITION AGE DIRECTOR SINCE EXPIRES
- -------------------------------------------------- -------------------------- --- ----------------- -------
<S> <C> <C> <C> <C>
Thomas C. Brown................................... Director 68 May 27, 1983 1997
Philip Burguieres................................. Director, Chairman of the 51 April 23, 1991 1996
Board, President and
Chief Executive Officer
William E. Greehey................................ Director 58 May 25, 1984 1996
John W. Johnson................................... Director 50 November 19, 1991 1997
W. Randolph Smith................................. Director 66 July 24, 1979 1997
</TABLE>
Mr. Brown is a director of Tom Brown, Inc., a Midland, Texas-based company
engaged in the exploration and production of oil and natural gas. He is also a
director and Chairman of the Board of TMBR/Sharp Drilling, Inc., a Midland,
Texas company engaged in the operation of onshore drilling rigs in west Texas
and east New Mexico.
Mr. Burguieres has served as Chairman of the Board of the Company since
December 1992, and President and Chief Executive Officer and a director of the
Company since April 1991. From January 1990 to November 1990, he was Chairman of
the Board, President and Chief Executive Officer of Panhandle Eastern
Corporation, a Houston, Texas-based company that operates interstate natural gas
transmission systems. Mr. Burguieres held various positions with Cameron Iron
Works, a Houston, Texas-based company engaged in the manufacture of oilfield
equipment, from 1971 through November 1989. He served as Chairman of the Board
of Cameron from January 1987 to November 1989, Chief Executive Officer from
January 1986 to November 1989, and President and Chief Operating Officer from
April 1981 to November 1989. Mr. Burguieres has also been a director of
McDermott International, Inc., a New Orleans, Louisiana-based company engaged in
the fabrication of oilfield equipment, since March 1990; and a director of Texas
Commerce Bancshares, a Houston, Texas-based banking organization, since March
1987.
Mr. Greehey is Chairman of the Board and Chief Executive Officer of Valero
Energy Corporation, a San Antonio, Texas-based company that refines, trades and
markets oil and gas and manages natural gas transmission operations. He has also
been a director of Santa Fe Energy Resources, Inc., a Houston, Texas-based
company engaged in oil and gas exploration and production, since March 1991.
Mr. Johnson is President and a director of Permian Mud Service, Inc., a
Houston, Texas-based company that manufactures and sells oilfield production
chemicals. He was a director of Petroleum Equipment Tools Co. ("Petco") from
March 1971 to November 1991, when Petco was acquired by merger with the Company.
He has also served as Chairman of the Board of Southwest Bank of Texas, N.A., a
Houston, Texas-based banking organization, since October 1982.
Mr. Smith is a retired partner of Vinson & Elkins L.L.P., Attorneys at Law,
in Houston, Texas.
FAMILY RELATIONSHIPS
There are no family relationships between any two directors or executive
officers.
6
<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company held five meetings during 1994. The
Board of Directors has an Audit Committee, a Compensation and Stock Plans
Committee (the "Compensation Committee") and an Executive and Nominating
Committee (the "Executive Committee").
The Audit Committee, composed of Messrs. Amonett (Chairman), Brown and
Smith, held three meetings during 1994. The Audit Committee reviews with the
Company's independent public accountants the plan, scope and results of their
annual audit and reviews the planned internal audits, procedures followed and
results of such audits performed by the Company's internal audit department. The
Audit Committee selects an accounting firm as the independent auditors of the
Company for each fiscal year and considers in general all audit and non-audit
services provided by such firm to the Company.
The Compensation Committee, composed of Messrs. Greehey (Chairman), Brown
and Moses, held one meeting during 1994. The Compensation Committee approves all
executive compensation, except the compensation of the Chief Executive Officer,
which is recommended by the Compensation Committee but approved by the Board of
Directors (excluding Mr. Burguieres), approves employee benefit plans,
establishes directors' fees, subject to approval by the Board of Directors, and
administers the Company's Option Plans (as hereinafter defined), the Stock
Appreciation Rights Plan (the "SAR Plan"), the Restricted Stock Incentive Plan
(the "Restricted Plan"), the Executive Incentive Stock Bonus Plan (the "Bonus
Plan"), the Supplemental Executive Retirement Plan (the "SERP"), the
Supplemental Savings Plan (the "401(k) Excess Plan"), the Deferred Compensation
Plan for Non-Employee Directors (the "Deferred Director Plan") and the
Non-Employee Director Retirement Plan (the "Director Retirement Plan").
The Executive Committee, composed of Messrs. Moses (Chairman), Amonett,
Burguieres, Greehey and Johnson, did not hold any meetings during 1994. The
Executive Committee meets from time to time between regularly scheduled meetings
of the Board of Directors and has authority to act on all matters during the
intervals between Board meetings. The Executive Committee also evaluates the
size and composition of the Board of Directors, makes recommendations as to
candidates for election to the Board of Directors and recommends the structuring
of various committees of the Board. The Executive Committee does not ordinarily
consider director nominees recommended by stockholders.
ATTENDANCE AT MEETINGS
Each of the directors of the Company attended at least 75 percent of the
aggregate of the meetings of the Board of Directors and committees of which he
was a member.
EXECUTIVE COMPENSATION
COMPENSATION AND STOCK PLANS COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company, which
is composed of three independent outside directors, is responsible for setting
policies with respect to compensation of the Company's executive officers.
COMPENSATION PHILOSOPHY AND OVERALL OBJECTIVES OF THE EXECUTIVE COMPENSATION
PROGRAM. At the direction of the Board of Directors, the Compensation Committee
endeavors to ensure that the Company's executive compensation program is
effective in attracting, motivating and retaining the executives needed to
improve the Company's performance and maximize shareholder value. Toward that
end, the Compensation Committee attempts to provide the Company's executives
with a total target compensation package (which includes base salary, annual
incentives, long-term incentives and other executive benefits) that, at expected
levels of corporate performance, is competitive with packages provided to
executives of companies similar to Weatherford who hold comparable positions or
have similar qualifications.
7
<PAGE>
The Compensation Committee determines competitive levels of compensation for
executive positions based on information obtained from compensation surveys
(general industry), proxy statements for a group of comparator companies
selected by the Compensation Committee (the "compensation peer group") and
recommendations of an independent compensation consultant. Although some of the
same companies are included in both groups, the compensation peer group is not
the same as the group of companies comprising the Value Line Oilfield Services
Group used in the Performance Graph included later in this Proxy Statement. In
selecting the companies to survey for compensation purposes, the Compensation
Committee focused primarily on companies with U.S. and international business
operations; similar revenues, market capitalization, employment levels and lines
of business (including manufacturing); and a management style and corporate
culture similar to Weatherford's.
Weatherford's pay-for-performance philosophy has resulted in compensation
packages that consist in large part of variable, performance-based components,
such as bonuses and stock-based awards, which can increase or decrease to
reflect changes in corporate or individual performance. Total target
compensation is competitive with the market 63rd percentile based on general
industry data; this information is not available for the compensation peer
group. Actual total compensation is competitive with the market 63rd percentile
for the compensation peer group.
EXECUTIVE COMPENSATION PROGRAM COMPONENTS. Weatherford uses cash- and
equity-based compensation to achieve its pay-for-performance philosophy and to
reward short- and long-term performance. The mix of base salary, annual
incentives and long-term incentives is reviewed periodically to ensure the
approximate mix.
BASE SALARY. The Compensation Committee's philosophy is to control fixed
compensation costs and to place greater emphasis on incentive compensation based
on results. Weatherford's base salaries are, on average, competitive with the
market median (50th percentile) for the compensation peer group. Salaries for
executives are reviewed periodically and revised, if appropriate, based on a
variety of factors, including individual performance, general levels of market
salary increases and Weatherford's overall financial results, with emphasis on
competitive salaries in the marketplace.
INCENTIVE COMPENSATION. The Compensation Committee's philosophy is to use a
combination of annual and long-term compensation methods, including grants of
Common Stock under various plans. The Compensation Committee believes that key
employees should have a significant portion of their total compensation paid in
shares of Common Stock, as significant equity ownership in the Company focuses
executives on managing the Company from the long-term perspective of an owner,
with emphasis on enhanced shareholder value. Key employees are strongly
encouraged to retain shares of Common Stock granted as part of their
compensation.
ANNUAL INCENTIVES -- Annual incentives are based on the achievement of
specified corporate goals. Targeted corporate goals are established at the
outset of each fiscal year by the Company's management and approved by the
Compensation Committee. There is no specific weighing assigned to these goals. A
range of potential annual incentive awards competitive with the market median,
based on general industry averages, has been established for each executive
officer. Annual bonuses may be paid in cash, shares of Common Stock or a
combination of cash and shares of Common Stock.
The targeted corporate goals for 1994, which included revenues, net income,
operating cash flow, earnings before depreciation, interest and taxes, capital
spending and relative performance against other companies in the oilfield
services industry, were met or exceeded. Accordingly, annual incentive awards
were made to the executive officers named in the Summary Compensation Table
amounting to approximately 68 percent of the aggregate 1994 annual base salaries
of such individuals. Such bonuses were paid in cash.
LONG-TERM INCENTIVES -- Weatherford currently provides long-term incentives
to executives in two forms: stock options and restricted stock grants. Prior to
March 1992, stock appreciation rights ("SARs") were granted in tandem with stock
options. Each type of incentive is intended to track the
8
<PAGE>
Company's performance and reward achievement of long-term objectives through
stock price appreciation. Weatherford's overall stock option and restricted
stock grant levels are established by considering market data on grant levels
and an appropriate overall level of shares reserved for such plans in the
market. The Compensation Committee considers stock options or restricted stock
awards previously granted, industry practices, the executive's accountability
level and an assumed potential stock value when determining the amount of
individual long-term incentive grants.
Options to purchase shares of Common Stock reward participants for
generating appreciation in the Company's stock price. Stock options are granted
under the Company's Option Plans to key employees of the Company, including the
executive officers named in the Summary Compensation Table, at the fair market
value of the Common Stock on the date of grant. These options vest in three
equal installments beginning one year after the date of grant and are
exercisable for terms up to five or ten years. The optionees receive value from
the options only if the Company's stock price appreciates from the price on the
grant date. As with options, holders of SARs (granted prior to 1992, but still
in effect) receive value only if the stock price appreciates.
Weatherford's Restricted Plan is designed to meet several objectives, which
include increasing the actual share ownership position of key executives,
providing a strong emphasis on maintaining and enhancing shareholder value and
retaining executives during different stages of the business cycle. Under the
Restricted Plan, eligible employees are granted shares of Common Stock that are
subject to certain ownership restrictions. The shares are non-transferable
during the restriction period and are subject to substantial risk of forfeiture
if certain conditions are not met. The Restricted Plan provides that
restrictions will cease, at the Compensation Committee's discretion, after
continued employment for a specified period of time or upon the occurrence of
certain established goals. Ownership restrictions on shares granted prior to
1993 will lapse after continued employment for a specified period of time; for
shares granted in 1993 and 1995, restrictions on certain shares will lapse after
continued employment for a specified period of time and restrictions on the
remaining shares upon certain corporate performance goals being achieved or
after eight years; and for shares granted in 1994, restrictions will lapse upon
certain corporate performance goals being achieved or after eight years. The
restricted stock is performance sensitive, as the value of the shares granted
varies based on the Company's stock price.
DISCUSSION OF 1994 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER. As
described above, Weatherford determines total compensation for all executives,
including Mr. Burguieres, considering both a pay-for-performance philosophy and
market rates of compensation. In determining Mr. Burguieres' compensation for
1994, the Compensation Committee considered the Company's financial performance
and corporate accomplishments, individual performance and compensation data of
general industry companies and the compensation peer group. The Compensation
Committee also reviewed more subjective factors, such as development and
implementation of a corporate strategy to enhance shareholder value. With
respect to establishing Mr. Burguieres' 1994 salary, emphasis was placed on
competitive salaries in the market place. With respect to Mr. Burguieres' 1994
bonus, the targeted corporate goals for 1994 (established at the beginning of
1994, as described above) were met or exceeded, and the Compensation Committee
determined the amount of his bonus accordingly. With respect to the stock option
and restricted share grants, the Compensation Committee placed emphasis on grant
levels of general industry and the compensation peer group.
Mr. Burguieres received a 7.1 percent salary increase for 1994. Mr.
Burguieres' bonus for 1994 was $312,000, paid in cash. This award is equal to
approximately 80 percent of his 1994 base salary. Mr. Burguieres received 55,000
stock options under the 1991 Option Plan and 25,000 shares under the Restricted
Plan in February 1994.
POLICY REGARDING SECTION 162(M) OF THE INTERNAL REVENUE CODE. Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), generally
limits corporate deductions to $1,000,000 for compensation paid to a person who
on the last day of any fiscal year beginning on or after January 1, 1994 is
either the Chief Executive Officer or among the four most highly compensated
executive
9
<PAGE>
officers other than the Chief Executive Officer, provided there is an exception
for qualified performance-based compensation. Section 162(m) became applicable
to the Company, effective January 1, 1994. The Option Plans currently qualify as
performance-based compensation under Internal Revenue Service transition rules.
The Company's annual incentive compensation awards and the Restricted Plan are
based on performance measures, but do not qualify as performance-based under the
proposed tax regulations. The Compensation Committee requested and received a
review of the Company's compensation plans and has determined that is unlikely
that any of its executive officers will receive compensation in excess of
$1,000,000 in the near future. Accordingly, the Compensation Committee will not
necessarily limit executive compensation to that deductible under Section
162(m). The Compensation Committee will continue to evaluate this matter and
consider alternatives to preserve the deductibility of compensation payments and
benefits to the extent reasonably practicable and consistent with the Company's
compensation objectives.
This Compensation Committee Report on Executive Compensation shall not be
deemed incorporated by reference by any general statement incorporating by
reference this proxy statement into any filing under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
COMPENSATION AND STOCK PLANS COMMITTEE OF THE BOARD OF DIRECTORS
William E. Greehey, Chairman
Thomas C. Brown
Robert K. Moses, Jr.
10
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth with respect to the Chief Executive Officer
and the four most highly compensated executive officers of the Company as to
whom the total annual salary and bonuses for the year ended December 31, 1994
exceeded $100,000:
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
------------------------
ANNUAL COMPENSATION
------------------------------ (F)
(E) ---------- (G) (H)
(C) (D) ------------ RESTRICTED ----------- ------------
(A) (B) ------- ------- OTHER ANNUAL STOCK SECURITIES ALL OTHER
- ------------------------------------------------- ---- SALARY BONUS COMPENSATION AWARDS UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) ($)(2) ($)(3) OPTIONS (#) ($)(4)
- ------------------------------------------------- ---- ------- ------- ------------ ---------- ----------- ------------
Philip Burguieres ............................... 1994 390,000 312,000 -0- 246,875(5) 55,000 9,653
Chairman of the Board, President and Chief 1993 364,000 300,000 251 236,250 55,000 786
Executive Officer 1992 364,000 210,000 -0- -0- -0- 1,389
<S> <C> <C> <C> <C> <C> <C> <C>
M.E. Eagles(6) .................................. 1994 230,000 150,000 50,638(7) 95,788(8) 20,000 4,680
Senior Vice President 1993 183,300 120,000 216 157,500 15,000 -0-
James R. Burke .................................. 1994 168,000 100,000 -0- 53,325(9) 12,000 4,880
Senior Vice President 1993 130,000 85,000 1,561 51,188 11,000 1,733
1992 130,000 62,500 -0- -0- -0- -0-
Norman W. Nolen ................................. 1994 147,000 90,000 -0- 53,325(10) 12,000 4,340
Senior Vice President, Chief Financial Officer 1993 140,000 85,000 2,614 51,188 11,000 2,800
and Treasurer 1992 135,000 50,000 -0- -0- -0- 1,350
H. Suzanne Thomas ............................... 1994 147,000 90,000 -0- 53,325(11) 11,000 4,340
Senior Vice President, Secretary and General 1993 140,000 85,000 327 51,188 11,000 2,800
Counsel 1992 140,000 50,000 -0- -0- -0- 8,400
<FN>
- ------------------------------
(1) Bonuses paid for 1994 were paid in cash. Mr. Burguieres received 60% of his
bonus for 1993 in cash and 40% in shares of Common Stock issued under the
Bonus Plan, while other executives received 80% in cash and 20% in shares
of Common Stock. Mr. Burguieres received 50% of his bonus for 1992 in cash
and 50% in shares of Common Stock issued under the Bonus Plan, while other
executive officers received 75% in cash and 25% in shares of Common Stock.
(2) Does not include the value of perquisites and other benefits as the
aggregate amount of such compensation for each named officer does not
exceed the lesser of $50,000 or 10% of that officer's total reported annual
salary and bonus.
(3) Dollar amount shown equals number of shares issued under the Company's
Restricted Plan multiplied by the stock price on grant date. Dividends
would be paid on these shares in the event dividends are paid on the Common
Stock, which is not anticipated in the foreseeable future.
(4) Includes the amount of the Company match and discretionary contribution for
each executive officer under the Company's 401(k) Savings Plan and the
401(k) Excess Plan, to the extent the officer was eligible and participated
in such plan.
(5) Held an aggregate of 48,750 shares under the Restricted Plan still subject
to restrictions as of December 31, 1994 with an aggregate total value of
$391,719; restrictions have lapsed, or will lapse, on 3,750 shares on each
of March 18, 1995, 1996 and 1997; on 12,500 shares on December 12, 1995;
and on 12,500 shares when the average stock price over a 90-day period is
at least $13.50 or on February 10, 2002, whichever is earlier.
(6) Mr. Eagles joined the Company on March 1, 1993.
(7) Includes $30,058 paid in connection with the named executive's relocation
and $20,580 reimbursement for the payment of taxes thereon.
(8) Held an aggregate of 17,200 shares under the Restricted Plan still subject
to restrictions as of December 31, 1994 with an aggregate total value of
$184,850; restrictions have lapsed, or will lapse, on 2,500 shares on each
of March 18, 1995, 1996 and 1997; and on 4,850 shares when the average
stock price over a 90-day period is at least $13.50 or on February 10,
2002, whichever is earlier.
(9) Held an aggregate of 12,838 shares under the Restricted Plan still subject
to restrictions as of December 31, 1994 with an aggregate total value of
$95,024; restrictions have lapsed, or will lapse, on 812 shares on each of
March 18, 1995, 1996 and 1997; on 5,000 shares on December 12, 1995; and on
2,700 shares when the average stock price over a 90-day period is at least
$13.50 or on February 10, 2002, whichever is earlier.
</TABLE>
(FOOTNOTES CONTINUED ON THE FOLLOWING PAGE)
11
<PAGE>
<TABLE>
<S> <C>
(10) Held an aggregate of 12,838 shares under the Restricted Plan still subject
to restrictions as of December 31, 1994 with an aggregate total value of
$97,774; restrictions have lapsed, or will lapse, on 812 shares on each of
March 18, 1995, 1996 and 1997; on 2,000 shares on April 23, 1995; on 3,000
shares on December 12, 1995; and on 2,700 shares when the average stock
price over a 90-day period is at least $13.50 or on February 10, 2002,
whichever is earlier.
(11) Held an aggregate of 13,538 shares under the Restricted Plan still subject
to restrictions as of December 31, 1994 with an aggregate total value of
$101,549; restrictions have lapsed, or will lapse, on 812 shares on each of
March 18, 1995, 1996 and 1997; on 2,700 shares on March 19, 1995; on 3,000
shares on December 12, 1995; and on 2,700 shares when the average stock
price over a 90-day period is at least $13.50 or on February 10, 2002,
whichever is earlier.
</TABLE>
STOCK OPTION PLANS AND SAR PLAN
The Company currently maintains the Option Plans, such plans having the same
terms and conditions, pursuant to which options to purchase shares of the
Company's Common Stock are outstanding or available for future grants. All
options to purchase Common Stock are granted by the Compensation Committee,
except for options granted to the Chief Executive Officer, which are recommended
by the Compensation Committee and approved by the Board of Directors (excluding
Mr. Burguieres).
All stock options granted prior to 1993 have a term of five years and are
exercisable at a rate of one-third each year beginning one year after the grant
date. All stock options granted beginning in 1993 have a term of 10 years and
are exercisable at a rate of one-third each year beginning one year after the
grant date. The exercise price is payable in cash, shares of Common Stock
(subject to certain limitations), broker-financed cashless exercises or some
combination of these approaches. No employee has any rights as a shareholder of
any shares subject to an option until the exercise price has been paid and the
shares issued to the employee.
The Company maintains the SAR Plan pursuant to which the Company could,
prior to March 20, 1992, grant SARs to eligible employees of the Company. The
SAR Plan was originally implemented to allow executives and certain other stock
option plan participants to tender their options to the Company in exchange for
cash equal to the "spread" in the option (in other words, the difference between
the market value of the Common Stock on the date of grant and the market value
of the Common Stock on the date the option is exercised). Effective March 19,
1992, the SAR Plan was amended to provide that no new awards may be made
pursuant to such plan after that date. SARs awarded under the SAR Plan prior to
that date remain in effect and are not affected by the amendment.
The following table sets forth certain information regarding stock options
granted during fiscal year 1994 to the persons named in the Summary Compensation
Table above. The hypothetical present values on the date of grant of stock
options granted in 1994 shown below are presented pursuant to the Commission's
rules and are calculated under a modified Black-Scholes Model (the "Model") for
pricing options. This hypothetical value of options trading in the stock market
bears little relationship to the compensation cost to the Company or potential
gain realized by an executive. The actual amount, if any, realized upon exercise
of stock options will depend upon the market price of the Company's Common Stock
relative to the exercise price per share of Common Stock at the time the stock
option is exercised. There is no assurance that the hypothetical present values
of stock options reflected in this table actually will be realized.
12
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANT
- ---------------------------------------------------------------------------------------- GRANT DATE
(B) (C) VALUE(3)
------------- ----------- -----------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS (D) (F)
UNDERLYING GRANTED TO ----------- (E) -----------
(A) OPTIONS EMPLOYEES EXERCISE OR ---------- GRANT DATE
- ----------------------------------- GRANTED IN FISCAL BASE PRICE EXPIRATION PRESENT
NAME (#)(1) YEAR ($/SHARE)(2) DATE VALUE ($)
- ----------------------------------- ------------- ----------- ----------- ---------- -----------
Philip Burguieres.................. 55,000 18.0 9.875 02/10/2004 317,350
<S> <C> <C> <C> <C> <C>
M. E. Eagles....................... 20,000 6.6 9.875 02/10/2004 115,400
James R. Burke..................... 12,000 3.9 9.875 02/10/2004 69,240
Norman W. Nolen.................... 12,000 3.9 9.875 02/10/2004 69,240
H. Suzanne Thomas.................. 12,000 3.9 9.875 02/10/2004 69,240
<FN>
- ------------------------
(1) Options granted in 1994 are exercisable starting 12 months after the grant
date, with 33 1/3% of the shares covered thereby becoming exercisable at
that time and an additional 33 1/3% becoming exercisable on each successive
anniversary date, with full vesting occurring on the third anniversary
date. Under the terms of the Option Plans, the Compensation Committee
retains the discretion, subject to plan limits, to modify the terms of
outstanding options, including the exercise price and expiration date in
certain events.
(2) The exercise price and tax withholding obligations related to the exercise
may be paid by delivery of already-owned shares of Common Stock or by
offsetting a portion of the underlying shares, subject to certain
conditions.
(3) The present values on grant date are calculated under the Model modified to
give effect to the expected dividend rate of the Company's Common Stock and
non-transferability factors such as timing, vesting, liquidity and
freely-traded status. The Model is a mathematical formula used to value
options traded on stock exchanges. This formula considers a number of
factors to estimate the option's present value, including the stock's
volatility (based on 36 months of historical stock price trading data),
dividend rate (0%), exercise period of the option (10 years), interest rate
(risk free rate of 5.9%) and vesting schedule (adjusted for risk of
forfeiture during three-year vesting period).
</TABLE>
The following table shows aggregate option and SAR exercises during fiscal
year 1994 and December 31, 1994 values for the Chief Executive Officer and the
four most highly compensated executive officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
(D)
----------------------------- (E)
------------------------------
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED IN-THE-
(B) (C) UNEXERCISED OPTIONS/SARS MONEY OPTIONS/SARS AT FY-END
(A) ----------------- ------------------- AT FY-END (#) ($)(1)
- -------------------- SHARES ACQUIRED VALUE ----------------------------- ------------------------------
NAME ON EXERCISE (#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- ----------------- ------------------- -------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Philip Burguieres... 0 0 143,333/62,500 91,667/0 618,749/284,375 61,876/0
M.E. Eagles......... 0 0 5,000/0 30,000/0 9,375/0 16,250/0
James R. Burke...... 0 0 17,333/6,834 19,334/0 80,334/35,876 12,251/0
Norman W. Nolen..... 0 0 24,166/10,250 19,334/0 96,436/43,500 12,251/0
H. Suzanne Thomas... 0 0 24,666/15,500 19,334/0 104,749/66,375 12,251/0
<FN>
- ------------------------------
(1) Market value of underlying securities at exercise date or year-end, as
appropriate, minus the exercise or base price of "in-the-money"
options/SARs.
</TABLE>
13
<PAGE>
DEFINED BENEFIT PLAN
The Company maintains a defined benefit plan called the Weatherford Pension
Plan (the "Pension Plan") for U.S. employees of the Company and certain of its
subsidiaries, including executive officers, which was adopted as of January 1,
1992.
The following table sets forth the estimated annual benefit payable upon
normal retirement at age 65 as a straight-life annuity to persons in specified
remuneration and years of service classifications.
PENSION PLAN TABLE(1)(2)
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
ASSUMED 10-YEAR ---------------------------------------------------------------
FINAL AVERAGE PAY 15 20 25 30 35
- -------------------------------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$100,000.............................. $ 13,500 $ 18,000 $ 22,500 $ 27,000 $ 31,500
200,000.............................. 27,000 36,000 45,000 54,000 63,000
300,000.............................. 40,500 54,000 67,500 81,000 94,500
400,000.............................. 54,000 72,000 90,000 108,000 126,000
500,000.............................. 67,500 90,000 112,500 135,000 157,500
600,000.............................. 81,000 108,000 135,000 162,000 189,000
700,000.............................. 94,500 126,000 157,500 189,000 220,500
800,000.............................. 108,000 144,000 180,000 216,000 252,000
<FN>
- ------------------------
(1) Estimated annual benefits shown above are overstated as they reflect the
higher accrual rate (.9%) based on final average pay both over and under a
participant's Covered Compensation (as defined below). Generally the
accrual rate is .45% plus an additional .45% for pay in excess of the
lesser of 125% of the participant's Covered Compensation and the current
taxable wage base. "Covered Compensation" is the average of the Social
Security Wage Bases during the 35-year period ending with the year the
employee reached Social Security Retirement Age. Benefits are not subject
to deductions for Social Security benefits or any other offset amounts.
(2) The limits imposed by the Code are not reflected in this table.
</TABLE>
The remuneration covered by the Pension Plan consists only of the salaries
paid to Pension Plan participants, as set forth in column (c) of the Summary
Compensation Table. Bonuses, including the bonuses set forth in column (d) of
that table, are excluded. Credited service for purposes of the Pension Plan is
all service with the Company after January 1, 1992. Each of Messrs. Burguieres,
Burke and Nolen and Ms. Thomas has three years of credited service under the
Pension Plan, and Mr. Eagles has two years of credited service under the Pension
Plan. The Pension Plan provides for (i) normal retirement at age 65 with an
early retirement option at age 55 for eligible employees, (ii) a vested benefit
after five years of vesting service, (iii) retirement income of approximately 32
percent of final average earnings after 35 years of credited service and (iv)
spouse and disability benefits.
The Company also maintains the SERP, adopted January 1, 1992, to supplement
the retirement benefit to be paid pursuant to the Pension Plan to certain
employees designated by the Compensation Committee, including the executive
officers named in the Summary Compensation Table. During 1994, the Code limited
the pension under the Pension Plan to $118,800 and limited the compensation used
to calculate the pension to $150,000; these amounts are indexed annually to the
changes in Social Security benefits. If the pension to certain employees would
be limited by Section 415 of the Code or if the participant's compensation used
to calculate the pension would be limited by the Code, such amounts otherwise
payable to the Pension Plan participant pursuant to the Pension Plan would be
paid directly to such participant by the Company in full, pursuant to the
provisions of the SERP. The purpose of the SERP is to pay each employee the full
retirement benefit otherwise payable to him or
14
<PAGE>
her but for the benefit limitations imposed by the Code. In addition, bonuses,
including the bonuses set forth in column (d) of the Summary Compensation Table,
are included in compensation for purposes of the SERP.
COMPENSATION OF DIRECTORS
During 1994, all members of the Board of Directors who were not employees of
the Company were paid a quarterly retainer fee of $2,500 and a fee of $1,000 for
attendance at each meeting of the Board of Directors. Additionally, committee
members were paid a fee of $1,000 for attendance at each meeting of a committee
of the Board of Directors on which they serve.
The Company maintains the Director Retirement Plan, effective January 1,
1994, pursuant to which each non-employee director who has completed five years
or more of service at the time he ceases to be a director will receive an annual
deferred compensation benefit equal to between 50 percent and 100 percent,
depending on his years of service, of his annual cash retainer fee paid for the
year in which he ceases to be a director. The benefit will be paid for the
lesser of the number of months of his service as a director or 120 months.
The Company also maintains the Deferred Director Plan, effective January 1,
1995, pursuant to which each non-employee director can defer all or a portion of
his retainer fee or meeting fees and receive a market rate of return on such
deferred amounts.
During 1994, the Company paid Mr. Elliott consulting fees totalling $5,000.
EMPLOYMENT CONTRACT AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company currently has Change of Control Agreements (the "Severance
Agreements") with Messrs. Burguieres, Eagles, Burke and Nolen and Ms. Thomas.
The purpose of the Severance Agreements is to encourage the executive officers
to continue to carry out their duties with the Company in the event of a "change
of control" of the Company. Under each Severance Agreement, a change of control
of the Company is deemed to have occurred if (i) any person or group of persons
acting in concert becomes the beneficial owner of 20 percent or more of the
outstanding shares of Common Stock or the combined voting power of the Company's
voting securities, with certain exceptions; (ii) individuals who as of the date
of such agreement constitute the Board of Directors of the Company cease for any
reason to constitute at least a majority thereof; (iii) there occurs a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the Company's assets, unless after the transaction, all or
substantially all of those persons who were the beneficial owners of Common
Stock prior to the transaction beneficially own more than 60 percent of the then
outstanding common stock of the resulting corporation, no person who did not own
Common Stock prior to the transaction beneficially owns 20 percent or more of
the then outstanding common stock of the resulting corporation, and at least a
majority of the Board of Directors of the corporation resulting from such
transaction were members of the Board of Directors of the Company at the time
such Severance Agreement was approved by the Board of Directors or executed; or
(iv) the stockholders of the Company approve a complete liquidation or
dissolution of the Company.
Each of the Severance Agreements provides for severance payments in the
event of termination of the executive officer's employment within a specified
period after a change in control of the Company (three years for the Chief
Executive Officer and two years for other executive officers), unless the
executive's employment is terminated by the Company or its successor for "cause"
or "disability", because of the executive's death or "retirement" or by the
executive's voluntary termination for other than "good reason", in each case as
such terms are defined in the Severance Agreement. The benefits may consist of
the following: (a) an amount equal to three times for the Chief Executive
Officer, and two times for the other executive officers, the highest salary plus
bonus paid to such executive in any of the five years preceding the year of
termination of employment; (b) salary and bonus (prorated based on the highest
bonus earned in the preceding three years) to the date of termination; (c) an
amount equal to the amount that would be payable if all unvested retirement plan
benefits were vested; (d) an amount equal to the amount that would have been
contributed as the Company match
15
<PAGE>
under the Company's 401(k) Savings Plan and the 401(k) Excess Plan for three
years for the Chief Executive Officer and two years for other executive
officers; and (e) an amount equal to the amount the executive would have
received as a car allowance for three years for the Chief Executive Officer and
two years for other executive officers. In addition, if an executive is
terminated within a specific period after a change of control, all outstanding
stock options granted under any of the Company's Option Plans and all
outstanding SARs issued under the SAR Plan would automatically vest and the
executive would have the right to either exercise such options and SARs for
seven months after his date of termination (or until the stated termination of
such options and SARs, if shorter) or to surrender for cash all such options and
SARs, unless to do so would cause a transaction otherwise eligible for pooling
of interests accounting treatment under Accounting Principles Board Opinion No.
16 ("APB No. 16") to be ineligible for such treatment, in which case the
executive would receive shares of Common Stock equal in value to the cash he or
she would have received. Ownership restrictions on shares granted under the
Restricted Plan would also be terminated in the event of an executive's
termination during this period. All health and medical benefits would also be
maintained after termination, for three years for the Chief Executive Officer
and two years for other executive officers, if the executive makes his or her
required contribution. Under the Deficit Reduction Act of 1984, severance
payments that exceed a certain amount subject both the Company and the executive
to adverse U.S. Federal income tax consequences. Each of the Severance
Agreements provides that the Company shall pay the executive a "gross-up
payment" to ensure that the executive receives the total benefit intended
thereby.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Greehey, Brown and Moses served as members of the Compensation
Committee during 1994. During 1994, no member of the Compensation Committee was
an officer or employee of the Company or any of its subsidiaries, or was
formerly an officer of the Company of any of its subsidiaries.
During 1994, no executive officer of the Company served as (i) a member of
the compensation committee (or other board committee performing equivalent
functions) of another entity, one of whose executive officers served on the
Compensation Committee, (ii) a director of another entity, one of whose
executive officers served on the Compensation Committee, or (iii) a member of
the compensation committee (or other board committee performing equivalent
functions) of another entity, one of whose executive officers served as a
director of the Company.
PERFORMANCE GRAPH
The following Performance Graph compares the Company's cumulative total
stockholder return on its Common Stock for a five-year period (December 31, 1989
to December 31, 1994) with the cumulative total return of the S&P 500 Index and
a peer group consisting of the 18 companies in the Value Line Investment Survey
Index for the Oilfield Services Group (the "Peer Group"). The graph assumes $100
was invested on December 31, 1989 in the Company's Common Stock, the S&P 500
Index and the Peer Group. Dividend reinvestment has been assumed, and investment
has been weighted to reflect relative stock market capitalization.
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<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
OF WEATHERFORD, S&P 500 INDEX AND THE PEER GROUP
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WEATHERFORD S&P 500 INDEX PEER GROUP
<S> <C> <C> <C>
1989 100 100 100
1990 145 97 110
1991 90 126 101
1992 118 136 100
1993 213 150 109
1994 195 152 100
</TABLE>
* Prepared by Standard & Poor's Compustat Services
The Peer Group consists of Baker Hughes Incorporated, BJ Services Company,
Daniel Industries, Inc., Dresser Industries, Inc., Enterra Corporation, Global
Marine, Inc., Halliburton Co., Helmerich & Payne, Inc., McDermott International,
Inc., Nabors Industries, Inc., Parker Drilling Co., Production Operators
Corporation, Rowan Companies, Inc., Schlumberger Ltd., Smith International,
Inc., Tidewater, Inc., Varco International, Inc. and Western Atlas, Inc.
Weatherford used the Value Line Investment Survey Index for the Oilfield
Services Group for purposes of last year's Performance Graph, but the companies
comprising that group, selected by Value Line, included Reading & Bates, Inc.
and The Western Company of North America, and did not include BJ Services
Company, Nabors Industries, Inc. and Western Atlas, Inc.
The foregoing graph is based on historical data and is not necessarily
indicative of future performance. This graph shall not be deemed to be
"soliciting material" or to be "filed" with the Commission or subject to
Regulations 14A and 14C under the Exchange Act, or to the liabilities of Section
18 under the Exchange Act.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company and one of its subsidiaries paid Olympia Travelers, a travel
agency in Houston, Texas, an aggregate amount of approximately $143,000 in 1994
for commercial airline tickets purchased through the travel agency. Olympia
Travelers was owned by the brother-in-law of Mr. Moses, a director of the
Company, for a portion of 1994. The fees earned by Olympia Travelers in
connection with the services it provides to its customers, including the
Company, are paid for by the airlines from which airline tickets are purchased.
The Company may use the services of Olympia Travelers in 1995.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires that the Company's directors,
executive officers and persons who own more than 10 percent of a registered
class of the Company's equity securities file with the Commission and the New
York Stock Exchange initial reports of ownership and reports of
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changes in ownership of Common Stock and other equity securities of the Company.
In addition, trusts in which a director, executive officer or greater than 10
percent stockholder is a trustee, and that person or a member of his or her
immediate family is a beneficiary, have a separate filing obligation even where
the individual reports in his or her own filings the trust's transactions and
holdings in equity securities of the Company. Directors, executive officers and
greater than 10 percent stockholders are required by Commission regulations to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of the
Section 16(a) reports furnished to the Company and written representations that
no other reports were required, during the fiscal year ended December 31, 1994,
all Section 16(a) filing requirements applicable to its directors, executive
officers and greater than 10 percent beneficial owners were complied with,
except as follows: the Form 5 filed by each of Messrs. Burguieres, Burke and
Nolen and Ms. Thomas included incorrect information with respect to each such
person's ownership of Common Stock the Company's 401(k) Savings Plan as of
December 31, 1994. Each person has subsequently filed an amended Form 5 to
reflect the proper ownership.
PROPOSAL TO APPROVE THE NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(PROPOSAL 2)
On March 16, 1995, the Board of Directors adopted, subject to stockholder
approval, the Non-Employee Director Stock Option Plan (the "Director Option
Plan"), which provides for the granting of stock options, not intended to
qualify as incentive stock options as described in Section 422A of the Code, to
purchase up to 120,000 shares of Common Stock to non-employee directors of the
Company. The purpose of the Director Option Plan is to promote the achievement
of the Company's long-term objectives by linking the personal interests of the
non-employee directors to those of the Company's stockholders and to attract and
retain persons of outstanding competence to serve as directors of the Company.
The Director Option Plan, and all options granted thereunder, are subject to,
and may not be exercised before, the approval of the Director Option Plan by the
holders of a majority of the outstanding shares of the Company's Common Stock on
or before the expiration of 12 months after March 16, 1995. The following
summary of the Director Option Plan is necessarily incomplete and is, therefore,
qualified in its entirety by reference to the Director Option Plan itself.
ADMINISTRATION. The Director Option Plan is to be administered by the
Compensation Committee. However, as the Director Option Plan is intended to
comply with the "formula award" exception for grants, as set forth in the rules
promulgated under the Exchange Act, the Compensation Committee shall have no
power to determine the eligibility for options, the timing of options, the
number of shares of Common Stock covered by options granted, the option exercise
price or the vesting schedule for options.
SHARES SUBJECT TO OPTION. A total of 120,000 shares of Common Stock will be
made available for the granting of options under the Director Option Plan.
Common Stock issued upon the exercise of options granted under the Director
Option Plan may consist of authorized but unissued shares or shares reacquired
by the Company and held as treasury stock. If an option under the Director
Option Plan expires or terminates before it has been exercised in full, the
shares of Common Stock allocable to the unexercised portion of such option may
again be subject to the granting of options under the Director Option Plan. The
number of shares available for the granting of options and subject to issuance
upon the exercise of any outstanding options, and option prices, as herein
described, are to be adjusted upward or downward, as the case may be, in the
event of any subdivision or consolidation of shares or other capital
readjustment, payment of a stock dividend, merger, consolidation or similar
transaction affecting the shares.
ELIGIBILITY. Only non-employee directors of the Company are eligible to
participate in the Director Option Plan. There are currently six non-employee
directors.
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<PAGE>
OPTION GRANTS. Each non-employee director on March 16, 1995 was granted an
option to purchase 5,000 shares of Common Stock. Each individual elected after
that date as a non-employee director of the Company will receive an option to
purchase 5,000 shares upon his election. In addition, each non-employee director
on the day following each annual meeting of stockholders will receive on that
day an option to purchase 1,000 shares of Common Stock.
OPTION PRICE. The exercise price per share available for purchase under an
option will be the fair market value of a share of Common Stock on the date of
grant. A holder of an option granted under the Director Option Plan may exercise
his option by paying the option exercise price in cash, or, subject to certain
conditions, in whole or in part in shares of Common Stock previously acquired by
such holder. However, the Compensation Committee may in its discretion refuse to
accept the shares tendered in payment of the option exercise price.
DURATION OF OPTIONS. Options are exercisable for ten years after the date
such option is granted.
TRANSFERABILITY. Options granted under the Director Option Plan will be
transferable only by will or under the laws of descent and distribution.
EXERCISE OF OPTIONS. Options shall become exercisable in whole beginning
six months after the date of grant. If a holder ceases to be a director of the
Company for any reason other than death, disability or retirement, all options
not then exercisable shall terminate and all then outstanding vested options
shall be exercisable for a period ending on the earlier of the expiration date
of the options and six months following his termination. In the event of the
death, disability or retirement of an optionee before the date of expiration of
such options, all then outstanding options (including those not vested) shall be
vested and such options shall be exercisable for a period ending on the earlier
of the expiration date of the options and one year after the date of death,
disability or retirement.
CHANGE OF CONTROL. The Director Option Plan provides that if there is a
change of control (as defined below), a director has the right to (i) surrender
all outstanding options, whether or not then exercisable, for a cash payment
equal to the amount by which the option price for shares covered by the option
is exceeded by the then fair market value of such shares, or, if applicable, the
price for such shares offered to stockholders of the Company in connection with
any such change of control, unless to do so would cause a transaction otherwise
eligible for pooling of interests accounting treatment under APB No. 16 to be
ineligible for such treatment, in which the case the director would receive
shares of Common Stock equal in value to the cash payment he would have
received, or (ii) exercise all outstanding options, which would automatically
vest, for a period ending on the earlier of the expiration date of the options
and seven months after the date of his termination as a director. The Director
Option Plan defines a "change of control" as (i) a third person becoming the
beneficial owner of 20 percent or more of the voting securities of the Company;
(ii) a situation where, as a result of a contested election for directors, the
persons who were directors of the Company before the election cease to
constitute a majority of the Board of Directors; or (iii) any merger or
consolidation of the Company, regardless of whether the Company is the surviving
corporation, the dissolution of the Company, or the sale of all or substantially
all of the Company's assets to any other person or entity. The acceleration of
vesting or the use of Company funds for payment of cash to option holders upon
the occurrence of a change of control of the Company may be seen as an
anti-takeover provision and may have the effect of discouraging such fundamental
corporate changes.
AMENDMENTS. The Board of Directors of the Company has the power to modify,
revise or terminate the Director Option Plan. However, unless it shall have
obtained the approval of the stockholders of the Company, the Board of Directors
may not (i) materially increase the benefits accruing to persons holding options
granted under the Director Option Plan; (ii) change the aggregate number of
shares of Common Stock issuable upon the exercise of options granted under the
Director Option Plan; or (iii) change the class of employees eligible to receive
options. In no event may the Director Option Plan be amended more frequently
than once every six months.
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<PAGE>
EFFECTIVE DATE AND DURATION. The Director Option Plan shall become
effective as of March 16, 1995, if within one year after that date the Director
Option Plan is approved by the stockholders of the Company. No option will be
granted under the Director Option Plan after March 15, 2005.
NEW PLAN BENEFITS. No options to purchase shares of Common Stock were
granted to non-employee directors of the Company under the Director Option Plan
or any similar plan during 1994. The following options have been or will be
granted under the Director Option Plan during 1995, subject to stockholder
approval of the Director Option Plan.
<TABLE>
<CAPTION>
NAME AND POSITION SHARES SUBJECT TO OPTION OPTION PRICE
- ----------------------------------------------------------------- ------------------------- -------------
<S> <C> <C>
Directors:
Thomas N. Amonett.............................................. 5,000 $ 9.25
1,000 *
Thomas C. Brown................................................ 5,000 $ 9.25
1,000 *
William E. Greehey............................................. 5,000 $ 9.25
1,000 *
John W. Johnson................................................ 5,000 $ 9.25
1,000 *
Robert K. Moses................................................ 5,000 $ 9.25
1,000 *
W. Randolph Smith.............................................. 5,000 $ 9.25
1,000 *
Nominees for Director:
J. Kelly Elliott............................................... 5,000 **
1,000 *
<FN>
- ------------------------
* Fair market value on May 20, 1995.
** Fair market value on May 19, 1995.
</TABLE>
VALUATION. The fair market value of the Common Stock was $10.625 per share
on April 3, 1995.
TAX CONSEQUENCES. The grant of options under the Director Option Plan will
not result in income tax consequences to either the Company or the optionee. The
optionee will generally realize ordinary income in the year in which the option
is exercised in an amount equal to the excess of the fair market value of the
purchased shares on the exercise date over the exercise price paid for the
shares. The Company ordinarily will be entitled to a tax deduction in an amount
equal to the amount of ordinary income realized by the optionee with respect to
exercised options in the taxable year in which the optionee realizes the income.
VOTE REQUIRED AND RECOMMENDATION FOR APPROVAL
The Board of Directors has unanimously approved the Director Option Plan.
However, the Director Option Plan will not be implemented unless the holders of
a majority of the shares of Common Stock present in person or represented by
proxy and entitled to vote at the 1995 Annual Meeting, vote "for" the approval
of the Director Option Plan. The enclosed form of proxy provides a means for a
stockholder to vote for the approval of the Director Option Plan, to vote
against such approval or to abstain from voting on the proposal. Each properly
executed proxy received in time for the meeting will be voted as specified
therein. If a stockholder executes and returns a proxy but does not specify
otherwise, the shares represented by such stockholder's proxy will be voted
"for" the approval of the Director Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN.
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<PAGE>
PROPOSAL TO AMEND THE 1987 AND 1991 STOCK OPTION PLANS
(PROPOSAL 3)
On February 13, 1995, the Compensation Committee approved amendment of each
of the 1987 Stock Option Plan (the "1987 Option Plan") and the 1991 Stock Option
Plan (the "1991 Option Plan", and together with the 1987 Option Plan,
collectively, the "Option Plans"), and on March 16, 1995, the Board of Directors
ratified such action. The Company's stockholders are being asked to approve
amendments to the Option Plans which will (i) establish the maximum number of
shares of Common Stock for which any one individual may be granted a stock
option under either Option Plan at 200,000 shares; (ii) provide that options
granted under an Option Plan will be granted at not less than the fair market
value of the Common Stock on the grant date; and (iii) revise the existing
provision in each Option Plan, which requires the mandatory surrender of
outstanding options for a cash payment equal to the difference between the
option exercise price and the fair market value of the Common Stock in the event
of the occurrence of certain fundamental corporate changes (the "change of
control provision"). The proposed amendment to the change of control provision
would provide that in lieu of the mandatory surrender of options for a cash
payment, the optionee would have the right to (a) surrender all outstanding
options for a cash payment, unless to do so cause the transaction not to be
eligible for pooling of interests accounting treatment under APB No. 16, in
which case the optionee would receive shares of Common Stock, or (b) exercise
all outstanding options, which would automatically vest, for a period ending on
the earlier of the expiration of the options and three months after the date of
optionee's termination of employment.
The purpose of these amendments is to (i) ensure that any compensation
deemed paid to the Company's executive officers upon their exercise of
outstanding stock options under the Option Plans will remain deductible by the
Company and will not be subject to the $1 million limitation per covered
individual on the deductibility of compensation paid to certain executive
officers of the Company, imposed by Section 162(m) of the Code; and (ii) amend
the change of control provision in each Option Plan such that a transaction that
is beneficial to the Company and its stockholders is not discouraged or defeated
by virtue of the transaction not being eligible for the pooling of interests
accounting treatment.
Each of the Option Plans has been approved previously by the stockholders of
the Company. Certain aspects of the Option Plans are described under the
subcaption "Stock Option Plans and SAR Plan" under "Executive Compensation"
above. The following summary of the major provisions of each Option Plan,
including the amendments thereto approved by the Board of Directors and proposed
herein, is necessarily incomplete and is, therefore, qualified in its entirety
by reference to the detailed provisions of each Option Plan.
ADMINISTRATION. Each Option Plan is to be administered by a committee
consisting of not less than three members of the Board of Directors, all of whom
shall be disinterested persons (the "Committee"). The Committee has the
authority to determine which eligible employees of the Company shall receive
options under the Option Plan, the times at which the options are to be granted,
whether such options shall constitute incentive stock options ("Incentive
Options"), as described in Section 411A of the Code, or options not intended to
qualify as Incentive Options ("Nonqualified Options"), the number of shares
covered by the option in each case, the duration of the options, when the
options may be exercised and other terms and conditions applicable to each
option granted under the Option Plan.
SHARES SUBJECT TO OPTION. A total of 147,134 shares of the Company's Common
Stock currently are subject to options granted under the 1987 Option Plan and
2,035 shares currently are available for future option grants under the 1987
Option Plan, while 1,020,192 shares currently are subject to options granted
under the 1991 Option Plan and 620,936 shares currently are available for future
option grants under the 1991 Option Plan. Common Stock issued upon the exercise
of options granted under either Option Plan may consist of authorized but
unissued shares or shares reacquired by the Company and held as treasury stock.
If an option under either Option Plan expires or terminates
21
<PAGE>
before it has been exercised in full, the shares of Common Stock allocable to
the unexercised portion of such option may again be subject to the granting of
options under the Option Plan. The number of shares available for the granting
of options and subject to issuance upon the exercise of any outstanding options,
and option prices, as herein described, are to be adjusted upward or downward,
as the case may be, in the event of any subdivision or consolidation of shares
or other capital readjustment, payment of a stock dividend, merger,
consolidation or similar transaction affecting the Common Stock.
ELIGIBILITY. Subject to selection by the Committee, any executive officer
or other key employee (who may be a member of the Board of Directors) of the
Company, or of any subsidiary corporation, is eligible to be granted one or more
Incentive Options under an Option Plan. Subject to selection by the Committee,
any executive officer or other key employee (who may be a member of the Board of
Directors) of the Company or any parent or subsidiary corporation, and any other
person who provides services to the Company and such related corporations, is
eligible to be granted one or more Nonqualified Options. Approximately 85
employees of the Company and its subsidiary and affiliated corporations, in
addition to the five executive officers named in the Summary Compensation Table,
are currently eligible to participate in the Option Plans. There currently are
no other persons who would be considered for option grants under an Option Plan.
OPTION PRICE. The exercise price of each option must be equal to or greater
than 100 percent of the fair market value of the Common Stock on the date such
option is granted. In the case of an Incentive Option granted under an Option
Plan to an employee who owns stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company, the option price
per share may not be less than 110 percent of the fair market value of a share
of Common Stock on the date the option is granted. A holder of an option granted
under the Option Plan may exercise his option by paying the option exercise
price in cash, or, subject to certain conditions, in whole or in part in shares
of Common Stock previously acquired by such holder. However, the Committee may
in its discretion refuse to accept the shares tendered in payment of the option
exercise price.
DURATION OF OPTIONS. Options may be made exercisable during any specified
period of time from the date such option is granted, but in no event shall the
exercise period of an option exceed ten years. 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 Company, the option period for any
Incentive Option may not exceed five years.
MAXIMUM GRANT. The maximum aggregate number of shares for which any one
individual may be granted an option under an Option Plan during any 12-month
period is 200,000 shares.
MAXIMUM VALUE OF STOCK SUBJECT TO INCENTIVE OPTIONS. Incentive Options to
purchase shares of Common Stock having an aggregate fair market value as of the
date of grant of no more than $100,000 may be exercisable for the first time by
the optionee in any calendar year.
TRANSFERABILITY. Options granted under an Option Plan will be transferable
only by will or under the laws of descent and distribution.
EXERCISE OF OPTIONS. Options shall become exercisable from time to time, in
whole or in part, beginning one year after the date of grant. Except as provided
otherwise herein, an option is exercisable by the optionee only while the
individual continues the employment relationship or other affiliation with the
Company. If an optionee retires under the then established rules of the Company,
if he terminates employment by reason of disability, or if his employment
terminates by reason of a change of control (as described below), his then
outstanding vested options shall be exercisable for a period ending on the
earlier of the expiration date of the options and three months following his
termination. In the event of the death of an optionee before the date of
expiration of such option, such option will terminate on the earlier of such
date of expiration and one year following the date of death. If an optionee's
employment is terminated for reasons other than retirement, disability, change
of control
22
<PAGE>
or death, and provided such termination did not occur because of his dishonesty
or competition, his then outstanding vested options shall be exercisable for a
period ending on the earlier of the expiration date of such options and 30 days
following his termination.
CHANGE OF CONTROL. Each Option Plan provides that if there is a fundamental
corporate change, an optionee has the right to (i) surrender all outstanding
options, whether or not then exercisable, for a cash payment equal to the amount
by which the option price for shares covered by the option is exceeded by the
then fair market value of such shares, or, if applicable, the price for such
shares offered to stockholders of the Company in connection with any such
fundamental corporate change, unless to do so would cause a transaction
otherwise eligible for pooling of interests accounting treatment under APB No.
16 to be ineligible for such treatment, in which the case the optionee would
receive shares of Common Stock equal in value to the cash payment he would have
received, or (ii) exercise all outstanding options, which would automatically
vest, for a period ending on the earlier of the expiration date of the options
and three months after the date of his termination of employment. The Option
Plans include as a fundamental corporate change (i) a change of control, defined
as a third person becoming the beneficial owner of 20 percent or more of the
voting securities of the Company, without the consent of the Board of Directors,
or a situation where, as a result of a contested election for directors, the
persons who were directors of the Company before the election cease to
constitute a majority of the Board of Directors; (ii) any merger or
consolidation of the Company in which the Company is not the surviving
corporation; (iii) the dissolution of the Company; or (iv) the sale of all or
substantially all of the Company's assets to any other person or entity. The
acceleration of vesting or the use of Company funds for payment of cash to
option holders upon the occurrence of a fundamental corporate change may be seen
as an anti-takeover provision and may have the effect of discouraging such
fundamental corporate changes.
AMENDMENTS. The Board of Directors of the Company has the power to modify,
revise or terminate the Option Plans. However, unless it shall have obtained the
approval of the stockholders of the Company, the Board of Directors may not (i)
materially increase the benefits accruing to persons holding options granted
under either Plan; (ii) change the aggregate number of shares of Common Stock
issuable upon the exercise of options granted under either Option Plan; (iii)
reduce the per share exercise price of any option 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. The Board of Directors will
also have the power to make such changes in the Option Plans or in any
outstanding Incentive Option granted under an Option Plan to qualify as an
incentive stock option or other stock option that will receive preferential
federal income tax treatment.
NEW PLAN BENEFITS. The proposed amendments to establish a maximum grant
level and to establish that options will be granted at the fair market value of
the Common Stock on the date of grant do not afford new or additional benefits
to optionees under either Option Plan. The benefits received by or amounts
allocable to optionees under either Option Plan as a result of the proposed
amendment to the change of control provision are not determinable.
VALUATION. The fair market value of the Common Stock was $10.625 per share
on April 3, 1995.
EFFECTIVE DATE AND DURATION. The 1987 Option Plan became effective as of
March 18, 1987 and no option will be granted under this plan after March 17,
1997. The 1991 Option Plan became effective as of March 19, 1991, and no option
will be granted under this plan after March 18, 2001.
TAX CONSEQUENCES. The grant of Incentive Options under an Option Plan will
not result in income tax consequences to either the Company or the optionee.
Persons exercising Incentive Options granted under the Option Plans generally
will not realize ordinary income in the year in which the Incentive Option is
exercised, although the exercise will result in an adjustment for calculating
the alternative minimum taxable income and may require the payment of an
alternative minimum tax. Such persons generally are expected to realize income
in the year in which the shares purchased are sold or disposed of, in an amount
equal to the excess of the amount received from the sale of such shares over the
exercise price paid for such shares. For Federal tax purposes, dispositions are
divided
23
<PAGE>
into two categories: (i) qualifying and (ii) disqualifying. A qualifying
disposition occurs if the sale or other disposition is made after the optionee
has held the shares for more than two years after the option grant date and more
than one year after the exercise date. If either of these holding periods is not
satisfied, then a disqualifying disposition will result. If a qualifying
disposition is made, the gain will be taxed to the optionee as capital gain. If
a disqualifying disposition occurs, the gain will be taxed to the optionee as
ordinary income. If the optionee makes a disqualifying disposition of the
purchased shares, then the Company will be entitled to a tax deduction in the
taxable year in which such disposition occurs in an amount equal to the income
realized by the optionee in the taxable year in which he realizes the income. In
no other instance will the Company be allowed a deduction with respect to the
optionee's disposition of the purchased shares.
The grant of Nonqualified Options under an Option Plan will not result in
income tax consequences to either the Company or the optionee. An optionee will
generally realize ordinary income in the year in which a Nonqualified Option is
exercised in an amount equal to the excess of the fair market value of the
purchased shares on the exercise date over the exercise price. The Company
ordinarily will be entitled to a tax deduction in an amount equal to the amount
of income realized by the optionee with respect to the exercised option in the
taxable year in which the optionee realizes the income.
In situations where options are exercised following a fundamental corporate
change, income recognized by optionees upon exercise of options may constitute
"parachute payments" under certain provisions of the Deficit Reduction Act of
1984 ("DEFRA"). In general, a "parachute payment" is any payment made in the
nature of compensation to a "disqualified individual" that is contingent on a
change in the ownership or effective control of a corporation, but only if the
aggregate present value of all such payments to the "disqualified individual"
equals or exceeds three times such person's "base amount". In general, a
"disqualified individual" would include a participant in the Option Plans who is
a substantial shareholder, a corporate officer or a highly compensated employee
of the Company. In general, an individual's "base amount" is his average annual
income in the nature of compensation in the five years preceding the change of
control. An "excess parachute payment" is any "parachute payment" in excess of
the "base amount" that is not shown by the recipient to be reasonable
compensation for personal service actually rendered or to be rendered. To the
extent income recognized by a participant upon exercise of options constitutes
an "excess parachute payment", no deduction would be allowed to the Company and
a nondeductible 20 percent excise tax would be imposed on the recipient of such
"excess parachute payment". In determining the amount of "parachute payment"
with respect to any "disqualified individual", amounts (if any) payable to such
individual under the Company's SAR Plan, the Restricted Plan or any other plan
(other than plans qualified under Section 401(a), 403(a) or 408(k) of the Code)
maintained by the Company, or pursuant to any applicable severance pay
agreements that are determined to be contingent upon a change of ownership or
effective control, would be aggregated with such amounts payable under the
Option Plans. Regulations indicate that the determination of what portions of
such payment constitute reasonable compensation and the determination of which
payments to such individual were contingent upon the change of ownership or
effective control of the Company must be made on the basis of all relevant facts
and circumstances. Accordingly, the Company is unable to predict what payments
made under the Option Plans, if any, would constitute "excess parachute
payments" if a fundamental corporate change of the Company were to occur.
VOTE REQUIRED AND RECOMMENDATION FOR APPROVAL
The Board of Directors has unanimously approved the proposed amendments to
the Option Plans. However, the proposed amendments will not be implemented
unless the holders of a majority of the shares of Common Stock present in person
or represented by proxy and entitled to vote at the 1995 Annual Meeting, vote
"for" the approval of the amendments to the Option Plans. The enclosed form of
proxy provides a means for a stockholder to vote for the approval of the
amendments to the Option Plans, to vote against such approval or to abstain from
voting on the proposal. Each properly executed
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proxy received in time for the meeting will be voted as specified therein. If a
stockholder executes and returns a proxy but does not specify otherwise, the
shares represented by such stockholder's proxy will be voted "for" the approval
of the amendments to the Option Plans.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE
PROPOSED AMENDMENTS TO THE 1987 STOCK OPTION PLAN AND THE 1991 STOCK OPTION
PLAN.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP as the Company's
principal independent public accountants for the current year. Representatives
of Arthur Andersen are expected to be present at the meeting, with the
opportunity to make a statement if they desire to do so, and will be available
to respond to appropriate questions.
PROPOSALS FOR NEXT ANNUAL MEETING
Any proposals of holders of Common Stock intended to be presented at the
Annual Meeting of Stockholders of the Company to be held in 1996 must be
received by the Company, addressed to the Secretary of the Company at P.O. Box
27608, Houston, Texas 77227-7608, no later than December 8, 1995, to be
considered for inclusion in the Proxy Statement and form of proxy relating to
that meeting.
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[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
FRIDAY, MAY 19, 1995
9:00 A.M.
THE RITZ-CARLTON
1919 BRIAR OAKS LANE
HOUSTON, TEXAS
<PAGE>
WEATHERFORD INTERNATIONAL INCORPORATED
1991 STOCK OPTION PLAN
AS AMENDED AND RESTATED THROUGH FEBRUARY 13, 1995
1. PURPOSE. This 1991 Stock Option Plan (the "Plan") of Weatherford
International Incorporated (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 1,951,200 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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(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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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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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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"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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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 February 13, 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 INTERNATIONAL INCORPORATED
1987 STOCK OPTION PLAN
AS AMENDED AND RESTATED THROUGH FEBRUARY 13, 1995
1. PURPOSE. This 1987 Stock Option Plan (the "Plan") of Weatherford
International Incorporated (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 350,000 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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(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 ownership of not
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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).
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
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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 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
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<PAGE>
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 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
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<PAGE>
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:
"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
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<PAGE>
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 (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.
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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 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
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<PAGE>
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 above, such Options, or replacement or substitution Options to be
issued by the surviving or acquiring corporation, shall become
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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.
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
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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 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
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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 1987 Stock Option Plan, as amended
through February 13, 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 18, 1987.
No Option shall be granted pursuant to this Plan after March 17, 1997.
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WEATHERFORD INTERNATIONAL INCORPORATED
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
MARCH 16, 1995
ARTICLE I. ESTABLISHMENT, PURPOSE AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Weatherford International Incorporated
(the "Company") hereby establishes an incentive compensation plan to be known as
the Weatherford International Incorporated Non-Employee Director Stock Option
Plan (the "Plan"), as set forth in this document. The Plan permits the grant of
Non-qualified Stock Options to Non-employee Directors, subject to the terms and
provisions set forth herein.
The Plan has been adopted by the Board of Directors of the Company,
subject to the approval of stockholders at the 1995 annual stockholders'
meeting. Subject to the approval of the stockholders, the Plan shall become
effective as of March 16, 1995 (the "Effective Date"), and shall remain in
effect as provided in Section 1.3 herein.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to promote the
achievement of long-term objectives of the Company by linking the personal
interests of Non-employee Directors to those of Company shareholders, and to
attract and retain Non-employee Directors of outstanding competence.
1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective
Date and shall remain in effect, subject to the right of the Board of Directors
to terminate the Plan at any time pursuant to Article 8 herein, until all Shares
subject to it shall have been purchased or acquired according to the Plan's
provisions. However, in no event may an Award be granted under the Plan on or
after March 15, 2005.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when the meaning is intended, the initial letter of the word is
capitalized.
(a) "Award" means a grant of Non-qualified Stock Options under the
Plan.
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(b) "Award Agreement" means an agreement entered into by and
between the Company and a Non-employee Director, setting forth the terms and
provisions applicable to an Award granted under the Plan.
(c) "Board" or "Board of Directors" means the Board of Directors
of the Company, and includes any committee of the Board of Directors designated
by the Board to administer part or all of the Plan.
(d) "Change of Control" of the Company shall mean: 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 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; (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 (the "Incumbent Board") shall cease to constitute a
majority of the Board of Directors of the Company; 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 Shares and outstanding 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 Shares and the outstanding voting
securities, as the case may be, (ii) no Person (excluding any corporation
resulting from such Corporate Transaction or any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Corporate
Transaction) beneficially owns, directly or indirectly, 20 percent or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting power of the
then outstanding voting securities of such corporation except to the extent
that such ownership existed prior to the Corporate Transaction and (iii) at
least a majority of the members of the board of directors of the corporation
resulting from such Corporate Transaction were members of the Incumbent Board
at the time of the execution of the initial agreement, or of the action of the
Board, providing for such Corporation Transaction; or (d) approval by the
stockholders of the Company of a complete liquidation of the Company.
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<PAGE>
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.
(e) "Change of Control Price" shall mean, the higher of (i) the
highest reported sales price of a Share 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 paid in such tender or exchange offer; provided, however, that in the case
of an Option which is held by a Participant who is subject to Section 16(b) of
the Exchange Act and was granted within six months of the occurrence of a Change
of Control, 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.
(f) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(g) "Company" means Weatherford International Incorporated, a
Delaware corporation, or any successor thereto.
(h) "Director" means any individual who is a member of the Board
of Directors of the Company.
(i) "Disability" means a permanent and total disability, within
the meaning of Code Section 22(e)(3).
(j) "Employee" means any full-time, non-union, salaried employee
of the Company. For purposes of the Plan, an individual whose only employment
relationship with the Company is as a Director shall not be deemed to be an
Employee.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
(l) "Fair Market Value" means the average of the high and low
reported sales prices per Share (as reported on the New York Stock Exchange on
the relevant measuring date, or if there were no sales on the New York Stock
Exchange on that date, then as of the next following date on which there were
sales).
(m) "Non-employee Director" means any individual who is a member
of the Board of Directors of the Company, but who is not otherwise an Employee
of the Company.
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(n) "Non-qualified Stock Option" or "NQSO" means an option to
purchase Shares, granted under Article 6 herein.
(o) "Option" means a Non-qualified Stock Option granted under the
Plan.
(p) "Option Price" means the price at which a Share may be
purchased under an Option.
(q) "Participant" means a Non-employee Director of the Company who
has outstanding a viable Award granted under the Plan.
(r) "Retirement" means retirement from the Board in accordance
with any retirement policy then in effect as respects Non-employee Directors.
(s) "Shares" means the shares of common stock, $0.10 par value, of
the Company.
ARTICLE 3. ADMINISTRATION
3.1 THE BOARD OF DIRECTORS. The Plan shall be administered by the
Compensation and Stock Plans Committee of the Board of Directors of the Company,
subject to the restrictions set forth in the Plan.
3.2 ADMINISTRATION BY THE BOARD OF DIRECTORS. The Board shall have
the full power, discretion and authority to interpret and administer the Plan in
a manner which is consistent with the Plan's provisions. However, in no event
shall the Board have the power to determine Plan eligibility, or to determine
the number, the value, the vesting period or the timing of Awards to be made
under the Plan (all such determinations are automatic pursuant to the provisions
of the Plan).
3.3 DECISIONS BINDING. All determinations and decisions made by the
Board pursuant to the provisions of the Plan, and all related orders or
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its shareholders and employees, the Participants and
their estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in Section
4.3 herein, the total number of Shares available for grant under the Plan may
not exceed 120,000.
4.2 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
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authorized pursuant to Section 4.1 of the Plan shall be (i) decreased by the
"gross" number of Shares issued pursuant to exercised Awards, (ii) decreased by
the "gross" number of Shares issuable pursuant to outstanding unexercised
Awards, and (iii) increased by the difference between the "gross" number of
Shares and the "net" number of Shares issued pursuant to exercised Awards. As
used herein, the "gross" number of Shares refers to the maximum number of Shares
that may be issued upon the exercise of an Award. The "net" number of Shares
refers to the net number of Shares actually issued to an Award holder upon
exercise of an Award, after reducing the "gross" number of Shares by the number
of Shares tendered back to the Company in payment of the Award's exercise price
for the satisfaction of any tax payment obligation. If a Participant shall
forfeit, voluntarily surrender or otherwise permanently lose his or her right to
exercise and Award under any provisions of this Plan or otherwise, or if any
Award shall terminate or expire pursuant to its terms, the Shares subject to the
Award shall once again be available to be awarded and sold under this plan
pursuant to a new Award grant hereunder.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, combination of Shares or other change in the corporate
structure of the Company affecting the Shares, the Board may make such
adjustments to outstanding Awards as may be determined to be appropriate and
equitable by the Board in its sole discretion, to prevent dilution or
enlargement of rights; provided, however, that no such adjustment shall be made
if the adjustment may cause the Plan to fail to comply with the "formula award"
exception for grants of Awards to Directors, as set forth in Rule
16b-3(c)(ii)(a) of the Exchange Act.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in the Plan are
limited to Non-employee Directors who are serving on the Board on the date of
each scheduled grant under the Plan.
5.2 ACTUAL PARTICIPATION. All eligible Non-employee Directors shall
receive grants of Options pursuant to the terms and provisions set forth in
Article 6 herein.
ARTICLE 6. NON-QUALIFIED STOCK OPTIONS
6.1 INITIAL GRANT OF OPTIONS.
(a) Each individual who is a Non-employee Director on March 16,
1995 shall be granted an Option to purchase 5,000 Shares, contingent on
stockholder approval of the Plan at the 1995 annual stockholders's meeting.
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(b) In addition, subject to stockholder approval of the Plan, any
individual who subsequently becomes a Non-employee Director shall be granted an
Option to purchase 5,000 Shares upon his election or appointment as director.
6.2 SUBSEQUENT GRANTS OF OPTIONS. Subject to stockholder approval of
the Plan and subject to the limitation on the number of Shares subject to the
Plan, on the day following the 1995 annual stockholders' meeting and on the day
following each annual meeting of stockholders thereafter during the duration of
the Plan, each Non-employee Director shall be granted an Option to purchase
1,000 Shares.
6.3 LIMITATION ON GRANT OF OPTIONS. Other than those grants of
Options set forth in Section 6.1 and 6.2 herein, no additional Options shall be
granted under the Plan.
6.4 OPTION AWARD AGREEMENT. Each Option grant shall be evidenced by
an Award Agreement that shall specify the Option Price, the duration of the
Option, the number of Shares available for purchase under the Option and such
other provisions as the Board shall determine.
6.5 OPTION PRICE. The purchase price per Share available for purchase
under an Option shall equal the Fair Market Value of a Share on the date the
Option is granted.
6.6 DURATION OF OPTIONS. Except as otherwise provided herein, each
Option shall expire on the tenth (10th) anniversary date of its grant.
6.7 VESTING AND EXERCISABILITY OF SHARES SUBJECT TO OPTION.
(a) Subject to the approval by the Company's stockholders at the
1995 annual stockholders' meeting and to the terms of this Plan, Options granted
pursuant to Sections 6.1 and 6.2 hereof shall vest and become exercisable six
(6) months after the date of grant, provided that the Participant is serving as
a Director on the vesting date.
(b) Regardless of the vesting schedule set forth hereinabove, all
Options held by a Participant shall immediately become 100 percent vested and
exercisable upon the first to occur of the following events, provided that he is
then serving as a Director:
1) The death of the Participant;
2) The Disability of the Participant;
3) The Retirement of the Participant; or
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4) The effective date of a Change in Control of the
Company.
6.8 TERMINATION OF DIRECTORSHIP.
(a) In the event a Participant ceases to be a Director for any
reason other than death, Disability or Retirement, all Options not vested as of
the effective date of such cessation shall be forfeited and shall revert back to
the Company (with no further vesting to occur). All Options which are vested as
of such date shall remain exercisable for six (6) months following the date on
which the Director's service on the Board of Directors terminates, or until
their expiration date, whichever period is shorter.
(b) In the event a Participant ceases to be a Director by reason
of his death, all Options shall remain exercisable at any time prior to their
expiration date, or for one (1) year after the date of death, whichever period
is shorter, by such persons that have acquired the Participant's rights under
the Option by will or by the laws of descent and distribution.
(c) In the event a Participant ceases to be a Director by reason
of his Disability or Retirement, all Options shall remain exercisable at any
time prior to their expiration date, or for one (1) year after the Disability
Date, whichever period is shorter, by the Participant.
6.9 PAYMENT. Options shall be exercised by the delivery of a written
notice of exercise to the Secretary of the Company, setting forth the number of
Shares with respect to which the Option is to be exercised, accompanied by full
payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full either (a) in cash or its equivalent, or (b) tendering
previously acquired Shares having a Fair Market Value at the time of exercise
equal to the total Option Price (provided that the Shares tendered upon Option
exercise have been held by the Participant for at least six (6) months prior to
their tender to satisfy the Option Price, and provided further that at the time
of exercise the Company has unrestricted earned surplus in an amount not less
than the Option Price of such Shares, all accrued cumulative preferential
dividends and other current preferential dividends on all outstanding preferred
stock of the Company have been fully paid, the reacquisition or exchange between
the Company of its own Shares for such purpose is permitted by applicable law
and without the consent of stockholders and the Board shall have adopted a
resolution, which remains in full force and effect, authorizing such
reacquisition of Shares), or (c) by a combination of (a) and (b).
6.10 RESTRICTIONS ON SHARE TRANSFERABILITY. The Board shall impose
such restrictions on any Shares acquired pursuant to the exercise of an Option
under the Plan
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as it may deem advisable, including without limitation, restrictions under
applicable Federal securities laws, under the requirements of any stock exchange
or market upon which such Shares are then listed and/or traded, and under any
blue sky or state securities laws applicable to such Shares; provided, however,
that no such restrictions shall be imposed if the restriction could result in
the failure to comply with the "formula award" exception for grants of Awards to
Directors, as set forth in Rule 16b-3(c)(ii)A) of the Exchange Act.
6.11 NON-TRANSFERABILITY OF OPTIONS. No Option granted under the Plan
may be sold, transferred, pledged, assigned or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution.
Further, all Options granted to a Participant under the Plan shall be
exercisable during his lifetime only by such Participant.
ARTICLE 7. 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 Shares 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 outstanding, without receiving compensation
therefor in money, services or property, then (a) the number, class and per
share price of Shares subject to outstanding Options hereunder shall be
appropriately adjusted in such a manner as to entitle a Participant 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 then
reserved that number and class of Shares 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.
Notwithstanding any other provision of this Article 7, if a Change of
Control occurs, the Participant shall have the right, within 60 days after 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 subject to the
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Option held by such Participant multiplied by the difference between the Change
of Control Price 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 a Participant who is subject to
Section 16(b) of the Exchange Act, any cash payment to the Participant 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
Participant shall receive Shares with a Fair Market Value equal to the cash that
would otherwise be payable hereunder in substitution for the cash. If a
Participant does not elect to surrender all outstanding Options for a cash
payment (or Shares) as provided 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 seven months after the Participant's termination of the
Non-employee Director's term 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.
ARTICLE 8. AMENDMENT, MODIFICATION AND TERMINATION
8.1 Subject to the terms set forth in this Section 8.1, the Board may
amend, modify or terminate the Plan at any time from time to time, provided,
however, that the provisions set forth in the Plan regarding the amount of
securities to be awarded to Directors, the price of securities awarded to
Directors and the timing of awards to Directors, may not be amended more than
once within any six (6) month period, other than to comport with changes in the
Code, the Employee Retirement Income Security Act of 1974, as amended from time
to time, or the rules thereunder.
8.2 Without the approval of the stockholders of the Company (as may be
required by the Code, by the insider trading rules of Section 16 of the Exchange
Act, by any national securities exchange or system on which the Shares are then
listed or reported, or by a regulatory body having jurisdiction with respect
thereto) no such amendment, modification or termination may:
(a) increase the total number or value of Shares which may be
available for grant of Awards under the Plan, except as provided in Section 4.3
herein; or
(b) change of the class of Participants eligible to participate in
the Plan; or
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(c) materially increase the cost of the Plan or materially
increase the benefits accruing to Participants.
8.3 Unless required by law, no amendment, modification or termination of
the Plan shall in any manner adversely affect any Award previously granted under
the Plan, without the written consent of the Participant holding the Award.
8.4 No Award shall be granted pursuant to the Plan after March 15, 2005.
ARTICLE 9. MISCELLANEOUS
9.1 GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine, the
plural shall include the singular and the singular shall include the plural.
9.2 SEVERABILITY. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
9.3 NO RIGHT OF NOMINATION. Nothing in the Plan shall be deemed to
create any obligation on the part of the Board to nominate any Director for
reelection by the Company's stockholders.
9.4 SHARES AVAILABLE. The Shares made available pursuant to Awards
under the Plan may be either authorized but unissued Shares or Shares which have
been or may be reacquired by the Company, as determined from time to time by the
Board.
9.5 ADDITIONAL COMPENSATION. Shares granted under the Plan shall be
in addition to any annual retainer, attendance fees or other compensation
payable to each Participant as a result of his service on the Board.
9.6 REQUIREMENTS OF LAW. The granting of Awards under the Plan shall
be subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required. The Company shall not be required to sell or issue any Shares under
any Option if the issuance of such Shares shall constitute or result in a
violation by the Participant 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 holder of such Option 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
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<PAGE>
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 any securities covered
hereby pursuant to the Securities Act. In the event the Shares 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:
"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.
9.7 GOVERNING LAW. To the extent not preempted by federal law, the
Plan and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of Delaware.
9.8 INDEMNIFICATION OF THE COMMITTEE AND THE BOARD. 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, 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
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<PAGE>
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.
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<PAGE>
WEATHERFORD INTERNATIONAL INCORPORATED
ANNUAL MEETING OF STOCKHOLDERS -- MAY 19, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P The undersigned holder of Common Stock of Weatherford
International Incorporated (the "Company") hereby appoints Philip
R Burguieres and H. Suzanne Thomas, or either of them, his or her
proxies with full power of substitution, to vote at the Annual
O Meeting of Stockholders of the Company to be held on May 19, 1995,
at 9:00 a.m., Houston time, at The Ritz-Carlton, 1919 Briar Oaks
X Lane, Houston, Texas, and at any adjournment thereof, the number
of votes which the undersigned would be entitled to cast if
Y personally present, on all matters coming before the meeting.
<TABLE>
<S> <C> <C>
(1) Election of directors for a term expiring 1998:
FOR / / WITHHOLD AUTHORITY / /
all nominees listed below to vote for all nominees listed below
(except as marked below)
Thomas N. Amonett J. Kelly Elliott Robert K. Moses, Jr.
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
draw a line through or strike out that nominee's name as
set forth above.
(2) Proposal to adopt the Non-Employee Director Stock Option Plan.
FOR / / AGAINST / / ABSTAIN / /
</TABLE>
PLEASE MARK, SIGN, DATE AND RETURN IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
<PAGE>
<TABLE>
<S> <C> <C>
(3) Proposal to amend the 1987 and 1991 Stock Option Plans.
FOR / / AGAINST / / ABSTAIN / /
(4) To consider and take action upon any other matter which may properly come before the meeting
or any adjournment thereof.
</TABLE>
All as more particularly described in the proxy statement dated April 7,
1995 relating to such meeting, receipt of which is hereby acknowledged.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no directions are made, this proxy
will be voted for all of the nominees listed in Proposal 1 and for Proposals 2
and 3.
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Signature of Stockholder(s)
Please sign your name exactly as
it appears hereon. Joint owners
must each sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
your full title as it appears
hereon.
Date:
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, 1995
