<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 6, 2000
REGISTRATION NUMBER 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
---------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
WEATHERFORD INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 04-2515019
(State or other jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)
</TABLE>
515 POST OAK BOULEVARD, SUITE 600
HOUSTON, TEXAS 77027
(713) 693-4000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
BERNARD J. DUROC-DANNER
WEATHERFORD INTERNATIONAL, INC.
515 POST OAK BOULEVARD, SUITE 600
HOUSTON, TEXAS 77027
(713) 693-4000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
CURTIS W. HUFF
WEATHERFORD INTERNATIONAL, INC.
515 POST OAK BOULEVARD, SUITE 600
HOUSTON, TEXAS 77027
(713) 693-4000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED SHARE(1) PRICE(1) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1.00 par value............... 125,941 $43.75 $5,509,918.80 $1,460.00
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(c) of the Securities Act of 1933 and based upon the
average of the high and low sale prices of the Common Stock as reported by
the New York Stock Exchange on February 29, 2000.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is
not an offer to sell these securities and it is not soliciting an offer to
buy these securities in any state where the offer or sale is not
permitted.
SUBJECT TO COMPLETION, DATED MARCH 6, 2000
PROSPECTUS
125,941 SHARES
WEATHERFORD INTERNATIONAL, INC.
COMMON STOCK
---------------------
The selling stockholders of Weatherford International, Inc. listed on page
11 may offer and resell up to 125,941 shares of our common stock under this
prospectus. We will not receive any of the proceeds from sales of shares by the
selling stockholders.
Our common stock is traded on the New York Stock Exchange under the symbol
"WFT". On March 3, 2000, the last reported sales price for our common stock on
the New York Stock Exchange was $47.44 per share.
The selling stockholders may sell these shares from time to time on the New
York Stock Exchange or otherwise. They may sell the shares at prevailing market
prices or at prices negotiated with buyers. The selling stockholders will be
responsible for their legal fees and any commissions or discounts due to brokers
or dealers. The amount of those commissions or discounts will be negotiated
before the sales. We will pay all of the other offering expenses.
Our principal executive offices are located at 515 Post Oak Boulevard,
Suite 600, Houston, Texas 77027. Our telephone number is (713) 693-4000.
---------------------
INVESTING IN THESE SHARES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 6.
---------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
The date of this prospectus is March , 2000.
<PAGE> 3
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. NEITHER WE
NOR THE SELLING STOCKHOLDERS HAVE AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. THE SELLING
STOCKHOLDERS ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES OF COMMON
STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. UNDER NO
CIRCUMSTANCES SHOULD THE DELIVERY TO YOU OF THIS PROSPECTUS OR ANY SALE MADE
PURSUANT TO THIS PROSPECTUS CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED IN THIS PROSPECTUS IS CORRECT AS OF ANY TIME AFTER THE DATE OF THIS
PROSPECTUS. IN THIS PROSPECTUS, WHEN WE REFER TO WEATHERFORD AND USE PHRASES
SUCH AS "WE" AND "US", WE ARE GENERALLY REFERRING TO WEATHERFORD INTERNATIONAL,
INC. AND ITS SUBSIDIARIES AS A WHOLE OR ON A DIVISION BASIS DEPENDING ON THE
CONTEXT IN WHICH THE STATEMENTS ARE MADE.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
WHERE YOU CAN FIND MORE INFORMATION......................... 1
FORWARD-LOOKING STATEMENTS.................................. 3
RISK FACTORS................................................ 6
SELLING STOCKHOLDERS........................................ 9
PLAN OF DISTRIBUTION........................................ 10
LEGAL MATTERS............................................... 11
EXPERTS..................................................... 11
</TABLE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934. You may inspect those reports, proxy statements
and other information at the Public Reference Section of the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and the
Regional Offices of the SEC at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511, and 7 World Trade Center, New York, New York
10048. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. You may also obtain copies of those materials from the
Public Reference Section of the SEC at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
The SEC maintains a World Wide Web site on the Internet at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding us. You can also inspect and copy those reports,
proxy and information statements and other information at the offices of the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, on which
our common stock is listed.
We have filed with the SEC a registration statement on Form S-3 covering
the shares offered by this prospectus. This prospectus is only a part of the
registration statement and does not contain all of the information in the
registration statement. For further information on us and the common stock being
offered, please review the registration statement and the exhibits that are
filed with it. Statements made in this prospectus that describe documents may
not necessarily be complete. We recommend that you review the documents that we
have filed with the registration statement to obtain a more complete
understanding of those documents.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus, except for
any information superseded by information in this prospectus. This prospectus
incorporates by reference
1
<PAGE> 4
the documents set forth below that we previously filed with the SEC. These
documents contain important information about us.
The following documents that we have filed with the SEC (File No.1-13086)
are incorporated by reference into this prospectus:
- Our Annual Report on Form 10-K for the year ended December 31, 1998;
- Our Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
- Our Quarterly Report on Form 10-Q for the quarter ended June 30, 1999;
- Our Quarterly Report on Form 10-Q for the quarter ended September 30,
1999;
- Our Current Report on Form 8-K dated February 4, 1999;
- Our Current Report on Form 8-K dated February 18, 1999;
- Our Current Report on Form 8-K dated April 29, 1999;
- Our Current Report on Form 8-K dated May 21, 1999;
- Our Current Report on Form 8-K dated July 21, 1999;
- Our Current Report on Form 8-K dated August 17, 1999;
- Our Current Report on Form 8-K dated August 31, 1999;
- Our Current Report on Form 8-K dated September 15, 1999;
- Our Current Report on Form 8-K dated October 22, 1999;
- Our Current Report on Form 8-K dated November 12 1999;
- Our Current Report on Form 8-K dated January 31, 2000;
- Our Current Report on Form 8-K dated February 11, 2000; and
- The description of our common stock contained in our Registration
Statement on Form 8-A (filed May 19, 1994) and as amended by our
Registration Statement on Form S-4, as amended (Registration No.
333-58741), including any amendment or report filed for the purpose of
updating such description.
All documents that we file pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 after the date of this prospectus will be
deemed to be incorporated in this prospectus by reference and will be a part of
this prospectus from the date of the filing of the document. Any statement
contained in a document incorporated or deemed to be incorporated by reference
in this prospectus will be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained in this prospectus or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference in this prospectus modifies or supersedes that
statement. Any statement that is modified or superseded will not constitute a
part of this prospectus, except as modified or superseded.
We will provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus has been delivered, upon written or
oral request, a copy of any or all of the documents incorporated by reference in
this prospectus, other than the exhibits to those documents, unless the exhibits
are specifically incorporated by reference into the information that this
prospectus incorporates. You should direct a request for copies to us at 515
Post Oak Boulevard, Suite 600, Houston, Texas 77027, Attention: Secretary
(telephone number: (713) 693-4000). If you have any other questions regarding
us, please contact our Investor Relations Department in writing (515 Post Oak
Blvd., Suite 600, Houston, Texas 77027) or by telephone ((713) 693-4000) or
visit our website at www.weatherford.com.
2
<PAGE> 5
FORWARD-LOOKING STATEMENTS
This prospectus and our other filings with the SEC and public releases
contain statements relating to our future results, including certain projections
and business trends. We believe these statements constitute "forward-looking
statements" as defined in the Private Securities Litigation Reform Act of 1995.
Certain risks and uncertainties may cause actual results to be materially
different from projected results contained in forward-looking statements in this
prospectus and in our other disclosures. These risks and uncertainties include,
but are not limited to, the following:
A FURTHER DOWNTURN IN MARKET CONDITIONS COULD AFFECT PROJECTED RESULTS.
Any unexpected material changes in oil and gas prices or other market
trends would likely affect the forward-looking information contained in this
prospectus and in our other filings with the SEC and public releases. Our
results for 1999 were materially and adversely affected by the downtown in the
industry that began in 1998. Although we currently expect that our results for
2000 will show a material improvement over 1999 due to higher oil prices and
drilling activity and a general industry view that market conditions have
bottomed out and are beginning to recover, the oil and gas industry is extremely
volatile and subject to change based on political and economic factors outside
our control.
Our estimates as to future results and industry trends make assumptions
regarding the future prices of oil and gas, the North American and international
rig counts and their effect on the demand and pricing of our products and
services. In analyzing the market and its impact on us for 2000, we have made
the following assumptions:
- The recent increase in the price of oil will result in improvements to
our business in 2000 with the strongest improvements expected to occur in
the second half of 2000.
- Oil prices will average over $20 per barrel for West Texas intermediate
crude.
- Average natural gas prices for 2000 will remain at or near their current
levels.
- World demand for oil will be up only slightly.
- Drilling activity will increase slightly beyond normal demand as oil
companies seek to replace and produce reserves that were not replaced or
produced in 1999.
- North American and international rig counts will improve, with increases
in the international rig count following the North American rig count
increase by around six months. In 2000, we have made our internal budgets
based upon an average rig count for North America of around 1,100 and the
international rig count of around 630.
- Pricing for many of our products and services should increase steadily
during the year. Pricing will be subject to market conditions and
continued pricing pressures in selected markets and product lines.
- Demand for compression services will remain relatively flat for most of
2000.
- Future growth in the industry will be dependent on technological advances
that can reduce the costs of exploration and production, and
technological improvements in tools used for re-entry, thru-tubing and
extended reach drilling as well as artificial lift technologies will be
important to our future.
We have based these assumptions on various macro-economic factors, and
actual market conditions could vary materially from those assumed.
A FUTURE REDUCTION IN THE RIG COUNT COULD ADVERSELY AFFECT THE DEMAND FOR OUR
PRODUCTS AND SERVICES.
Our operations were materially affected by the decline in the rig count
during 1998 and 1999. Although the North American rig count has improved
slightly from its historical low in 1999, a further
3
<PAGE> 6
decline in the North American and international rig counts would adversely
affect our results. Our forward-looking statements regarding our drilling
products assume an improvement in the rig count in 2000 and that there will not
be any material declines in the worldwide rig count, in particular the domestic
rig count. Our forward-looking statements also assume an increase in the
international markets to occur by mid 2000.
PROJECTED COST SAVINGS COULD BE INSUFFICIENT.
During 1998 and 1999, we implemented a number of programs intended to
reduce costs and align our cost structure with the current market environment.
Our forward-looking statements regarding cost savings and their impact on our
business assume these measures will generate the savings expected. However, if
the markets continue to decline, we may have to take additional actions to
achieve the desired savings.
GRANT SPIN-OFF.
We are currently proposing a spin-off of our Grant Prideco drilling
products business. The spin-off of this business is subject to the receipt of a
favorable private letter ruling from the Internal Revenue Service confirming
that the spin-off will be tax free to us and our shareholders. There can be no
assurance that a spin-off of the business will occur or the specific timing
thereof.
INTEGRATION OF ACQUISITIONS.
During 1999, we consummated various acquisitions of product lines and
businesses. The success of these acquisitions will be dependent on our ability
to integrate these product lines and businesses with our existing businesses and
eliminate duplicative costs. We have incurred various duplicative costs with
respect to the operations of companies and businesses acquired by us during 1999
pending the integration of the acquired businesses with our businesses. Our
forward-looking statements assume the successful integration of the acquired
businesses and their contribution to our income during 2000. Integration of
acquisitions is something that cannot occur overnight and is something that
requires constant effort at the local level to be successful. Accordingly, there
can be no assurance as to the ultimate success of our integration efforts.
WEATHERFORD'S SUCCESS IS DEPENDENT UPON TECHNOLOGICAL ADVANCES.
Our ability to succeed with our long-term growth strategy is dependent on
the technological competitiveness of our product and service offerings. A
central aspect of our growth strategy is to enhance the technology of our
products and services, to expand the markets for many of our products through
the leverage of our worldwide infrastructure and to enter new markets and expand
in existing markets with technologically advanced value-added products. Our
forward-looking statements have assumed gradual growth from these new products
and services during 2000.
UNEXPECTED YEAR 2000 PROBLEMS COULD HAVE AN ADVERSE FINANCIAL IMPACT.
To date, we do not know of any failures of our software, hardware,
equipment or products or those of our suppliers, vendors or customers as a
result of the occurrence of the Year 2000 date change; however, any such failure
could have a material impact on us. We have assumed that no material Year 2000
failures will occur.
AN ECONOMIC DOWNTURN COULD ADVERSELY AFFECT DEMAND FOR PRODUCTS AND SERVICES.
The economic downturn that began in Asia in 1997 affected the economies in
other regions of the world, including South America and the former Soviet Union,
and contributed to the decline in the price of oil and the level of drilling
activity. Although the economy in the United States has experienced one of its
longest periods of growth in recent history, the continued strength of the
United States economy cannot be assured. If the United States or European
economies were to begin to decline or if the economies of South America or Asia
were to experience further material problems, the demand and price for oil and
gas
4
<PAGE> 7
and our products and services could again adversely affect our revenues and
income. We have assumed that a worldwide recession or a material downturn in the
United States economy will not occur.
CURRENCY FLUCTUATIONS COULD HAVE A MATERIAL ADVERSE FINANCIAL IMPACT.
A material decline in currency rates in our markets could affect our future
results as well as affect the carrying values of our assets. World currencies
have been subject to much volatility. Our forward-looking statements assume no
material impact from changes in currencies because our financial position is
generally dollar based or hedged. For those revenues denominated in local
currency, the effect of foreign currency fluctuations is largely mitigated
because local expenses are denominated in the same currency.
CHANGES IN GLOBAL TRADE POLICIES COULD ADVERSELY IMPACT OPERATIONS.
Changes in global trade policies in our markets could impact our operations
in these markets. We have assumed that there will be no material changes in
global trading policies.
UNEXPECTED LITIGATION AND LEGAL DISPUTES COULD HAVE A MATERIAL ADVERSE FINANCIAL
IMPACT.
If we experience unexpected litigation or unexpected results in our
existing litigation having a material effect on results, the accuracy of the
forward-looking statements would be affected. Our forward-looking statements
assume that there will be no such unexpected litigation or results.
Finally, our future results will depend upon various other risks and
uncertainties, including, but not limited to, those detailed in our other
filings with the SEC. For additional information regarding risks and
uncertainties, see our other current year filings with the SEC under the
Securities Exchange Act of 1934 and the Securities Act of 1933. We will
generally update our assumptions in our filings as circumstances require.
5
<PAGE> 8
RISK FACTORS
An investment in our common stock involves various risks. When considering
your investment in our company you should consider carefully the following
factors, together with the information described elsewhere in this prospectus.
LOW PRICES FOR OIL ADVERSELY AFFECT THE DEMAND FOR OUR PRODUCTS AND SERVICES.
Low oil prices adversely affect demand throughout the oil and natural gas
industry, including the demand for our products and services. As prices decline,
we are affected in two significant ways. First, the funds available to our
customers for the purchase of goods and services declines. Second, exploration
and drilling activity declines as marginally profitable projects become
uneconomic and either are delayed or eliminated. Accordingly, as long as oil
prices are low, our revenues and income will be adversely affected. Despite the
increases in the price of oil during 1999, the market conditions existing in
1998 and 1999 affected our business in various ways. Our drilling and
intervention services business experienced declines in line with the general
reduction in industry activity. Our completion systems business experienced
declines corresponding to the lower activity levels, with the greatest declines
outside the United States markets. Our artificial lift business, which is
heavily dependent on North American production, experienced continuous declines
in revenue throughout 1998 and the first quarter of 1999. Our Grant Prideco
drilling products division, which is classified as a discontinued operation,
experienced a significant decline in new orders of drill pipe and other drill
stem products and tubular sales fell as completion activity slowed, tubular
distributors reduced inventories and due to excess drill pipe being consumed
from idle rigs. Our compression services business has only been marginally
affected by the declines in market conditions because its business is based on
levels of natural gas development and production, which has been more stable
than oil production. Our compression business was subject to price competition
in North America.
Our businesses will continue to be affected by industry conditions,
including those conditions and factors described under "Forward-Looking
Statements".
CUSTOMER CREDIT RISKS
Substantially all of our customers are engaged in the energy industry. This
concentration of customers may impact our overall exposure to credit risk,
either positively or negatively, in that customers may be similarly affected by
changes in economic and industry conditions. Many of our customers slowed the
payment of their accounts in 1999 in light of current industry conditions and
others have experienced greater financial difficulties in meeting their payment
terms. We perform ongoing credit evaluations of our customers and do not
generally require collateral in support of our trade receivables. We maintain
reserves for potential credit losses, and actual losses have historically been
within our expectations.
DISRUPTIONS IN FOREIGN OPERATIONS COULD ADVERSELY AFFECT OUR INCOME
Like most multinational oilfield service companies, we have operations in
certain international areas, including parts of the Middle East, North and West
Africa, Latin America, the Asia-Pacific region and the Commonwealth of
Independent States, that are inherently subject to risks of war, local economic
conditions, political disruption, civil disturbance and policies that may:
- disrupt our operations and oil and gas exploration and production
activities;
- restrict the movement of funds;
- lead to U.S. government or international sanctions; and
- limit access to markets for periods of time.
Historically, the economic impact of such disruptions has been temporary,
and oil and gas exploration and production activities have resumed eventually in
relation to market forces. Certain areas, including the CIS, Algeria, Nigeria,
parts of the Middle East, the Asia-Pacific region and Latin America, have been
6
<PAGE> 9
subjected to political disruption which has negatively impacted results of
operations following such events. Disruptions may occur in our foreign
operations, and losses may occur that will not be covered by insurance.
Grant Prideco recently decided to terminate an existing arrangement in
India with Oil Country Tubular Limited, which resulted in a one time charge of
$6.1 million, net of tax, directly related to the write off of certain assets in
India. OCTL manufactured drill pipe and other products for us under a long-term
exclusive manufacturing arrangement. Over the years, Grant Prideco provided OCTL
with a substantial amount of raw materials, inventory and working capital for
the products it manufactures for us. Grant Prideco's business in India through
OCTL has been adversely affected by the downturn of the economies in the eastern
hemisphere and is subject to various political and economic risks as well as
financial and operational risks with respect to OCTL.
As of December 31, 1999, OCTL owed Grant Prideco approximately $25.1
million for prior advances made by it to OCTL and Grant Prideco had assets in
India with a book value of approximately $1.7 million. In 1999, Grant Prideco
substantially curtailed its purchases from OCTL, and decided to terminate its
existing manufacturing relationship with OCTL and seek an alternative
arrangement for the recovery of its prior advances. After giving effect to the
$6.1 million after tax writeoff noted above, Grant Prideco's remaining exposure
in India is approximately $17.3 million and consists of unpaid receivable and
advances made to assist OCTL in its working capital needs as part of Grant
Prideco's manufacturing arrangement with it. Grant Prideco is currently
discussing with OCTL a restructuring of its relationship that would allow OCTL
to repay prior advances in cash, equity in OCTL or product. Based on financial
information of OCTL known to Grant Prideco and its general knowledge of the
business and assets of OCTL, OCTL would appear to have a sufficient asset and
equity value to allow for a restructuring of its debt to Grant Prideco on the
terms being discussed. There is, however, uncertainty as to how much, if any, of
the amounts owed to Grant Prideco by OCTL will ultimately be collected.
Accordingly, there can be no assurance that Grant Prideco will be able to fully
realize the amounts owed to it by OCTL or that additional charges relating to
India will not be required in the near term as the negotiation and collection
process continues. Any additional charges prior to spin-off would adversely
affect Grant Prideco's results and reduce our net income.
OUR PRODUCTS AND SERVICES ARE SUBJECT TO OPERATIONAL, LITIGATION AND
ENVIRONMENTAL RISKS
Our products are used for the exploration and production of oil and natural
gas. These operations are subject to hazards inherent in the oil and gas
industry that can cause personal injury or loss of life, damage to or
destruction of property, equipment, the environment and marine life, and
suspension of operations. These hazards include fires, explosions, craterings,
blowouts and oil spills. Litigation arising from an accident at a location where
our products or services are used or provided may result in our being named as a
defendant in lawsuits asserting potentially large claims.
In the ordinary course of business, we become the subject of various claims
and litigation. We maintain insurance to cover many of our potential losses and
we are subject to various self-retentions and deductibles with respect to our
insurance. Although we are subject to various ongoing items of litigation, we do
not believe that any of the items of litigation that we are currently subject to
will result in any material uninsured losses to us. It is, however, possible
that an unexpected judgment could be rendered against us in cases in which we
could be uninsured and beyond the amounts that we currently have reserved or
anticipate incurring for that matter.
We are also subject to various federal, state and local laws and
regulations relating to the energy industry in general and the environment in
particular. Environmental laws have in recent years become more stringent and
have generally sought to impose greater liability on a larger number of
potentially responsible parties. While we are not currently aware of any
situation involving an environmental claim that would likely have a material
adverse effect on our business, it is always possible that an environmental
7
<PAGE> 10
claim with respect to one or more of our current businesses or a business or
property that one of our predecessors owned or used could arise that could
involve the expenditure of a material amount of funds.
CURRENCY DEVALUATION AND FLUCTUATION RISKS
A single European currency ("the Euro") was introduced on January 1, 1999,
at which time the conversion rates between legacy currencies and the Euro were
set for 11 participating member countries. However, the legacy currencies in
those countries will continue to be used as legal tender through January 1,
2002. Thereafter, the legacy currencies will be canceled, and the Euro bills and
coins will be used in the 11 participating countries. We are currently
evaluating the effect of the Euro on our business operations; however, we do not
foresee that the transition to the Euro will have a significant impact.
Approximately 45% to 50% of our net assets are located outside the United
States and are carried on our books in local currencies. Changes in those
currencies in relation to the U.S. dollar result in translation adjustments
which are reflected as accumulated other comprehensive loss in the stockholders'
equity section on our balance sheet.
OUR COMMON STOCK HAS FLUCTUATED HISTORICALLY
Historically, and in recent months in particular, the market price of
common stock of companies engaged in the oil and gas industry has been highly
volatile. Likewise, the market price of our common stock has varied
significantly in the past. News announcements and changes in oil and natural gas
prices, changes in the demand for oil and natural gas exploration and changes in
the supply and demand for oil and natural gas have all been factors that have
affected the price of our common stock.
WE ARE SUBJECT TO RISKS RELATED TO THE YEAR 2000 THAT COULD NEGATIVELY IMPACT
OUR BUSINESS
The Year 2000 issue is the risk that information systems, computers,
equipment and products using date-sensitive software or containing computer
chips with two-digit date fields will be unable to correctly process the Year
2000 date change. If not identified and corrected, failures could occur in our
software, hardware, equipment and products and those of our suppliers, vendors
and customers that could result in interruptions in our business. All phases of
our Year 2000 plan have been completed. To date, we do not know of any failures
of our software, hardware, equipment or products or those of our suppliers,
vendors or customers as a result of the occurrence of the Year 2000 date change;
however, any such failure could have a material impact on us. Because no
material adverse effects from the Year 2000 have occurred, we are unable to
predict the most likely worst case Year 2000 scenario.
8
<PAGE> 11
SELLING STOCKHOLDERS
This prospectus is part of a registration statement that we filed pursuant
to registration rights granted to the selling stockholders under an agreement we
entered into in connection with the acquisition by our Completion Systems
Division of the minority stockholders' and phantom stockholder's interest in
SubTech International, Inc. Prior to the acquisition, we owned 51% of the stock
of SubTech. SubTech was formed in October 1998 for purposes of forming a joint
venture among us, the selling stockholders and certain other parties.
Pursuant to the terms of the acquisition agreement, we will pay all
expenses of registering the shares under the Securities Act of 1933, including
all registration and filing fees, printing expenses and the fees and
disbursements of our counsel and accountants. The agreement also provides that
we will indemnify the selling stockholders against certain civil liabilities,
including liabilities under the Securities Act of 1933, or will contribute to
payments the selling stockholders may be required to make in respect thereof.
The selling stockholders will pay all fees and disbursements of their counsel
and all brokerage fees, commissions and expenses for any shares that are
registered and that they sell. We expect to withdraw registration of any unsold
shares on or shortly after February 3, 2001, when we expect the shares will be
eligible for public sale pursuant to the exemption from registration provided by
Rule 144 under the Securities Act of 1933.
The following table sets forth the beneficial ownership of common stock by
each selling stockholder as of March 6, 2000, all of which may be sold pursuant
to this prospectus:
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME OF SELLING STOCKHOLDER SHARES OWNED(1) OUTSTANDING SHARES
- --------------------------- --------------- ------------------
<S> <C> <C>
Henning Hansen....................................... 12,379 *
Frode Kaland......................................... 12,379 *
Harry C. Ehlert IRA, Oppenheimer & Co., Inc.(2)...... 24,483 *
John M. Birckhead.................................... 24,483 *
Robert E. Ehlert..................................... 275 *
David M. Graham...................................... 275 *
Crawford Estate, Ltd.(3)............................. 11,166 *
Iyke Ejizu........................................... 4,741 *
Gregory B. Ford...................................... 13,540 *
Harold Ford, Jr. .................................... 17,172 *
Kerry D. Jernigan.................................... 175 *
James Troy Packard................................... 753 *
Paulo S. Tubel....................................... 4,060 *
Bobby Travis......................................... 60 *
</TABLE>
- ---------------
* Less than 1%
(1) Because the selling stockholders may offer all or a portion of the shares
pursuant to this prospectus, we cannot estimate to the number of shares of
our common stock that the selling stockholders will hold upon termination of
any sales.
(2) Harry C. Ehlert is the beneficial owner of the shares held of record by the
Harry C. Ehlert IRA, Oppenheimer & Co., Inc.
(3) Mark S. Crawford is the manager and a member of MC Holding Company, L.L.C.,
the general partner of Crawford Estate, Ltd.
During parts of the last three years, each of Mark S. Crawford, Henning
Hansen and John M. Birckhead was an officer and director of SubTech, and each of
Harry C. Ehlert and Paulo S. Tubel was an officer of SubTech. Each of Mark S.
Crawford, Henning Hansen, John M. Birckhead, Harry C. Ehlert and Paulo S. Tubel
is currently an officer of SubTech. We currently employ Mark S. Crawford, John
M.
9
<PAGE> 12
Birckhead, Harry C. Ehlert, Paulo S. Tubel, Kerry D. Jernigan, Henning Hansen
and Frode Kaland at annual base salaries of $120,000, $100,000, $100,000,
$90,000, $85,600, NOK 750,000 and $66,667, respectively.
Since November 1998, each of Mark S. Crawford and Henning Hansen has been a
director of Subsurface Technology AS, a subsidiary of SubTech. Since November
1998, Mark Crawford has been a director and officer of Dataline Petroleum
Services, Inc., a subsidiary of SubTech, and John M. Birckhead and Harry C.
Ehlert have been officers of Dataline. John M. Birckhead has been a director of
BEI Technology, Inc., a subsidiary of SubTech, and Harry C. Ehlert and Mark S.
Crawford have been officers of BEI since November 1998. During parts of the last
three years, Mark S. Crawford and James Troy Packard have been directors of
Calumet Petroleum Services Inc., a subsidiary of SubTech.
Prior to November 1998, John M. Birckhead, Harry C. Ehlert, Robert E.
Ehlert and David M. Graham were stockholders of BEI, and Crawford Estates, Ltd.,
Iyke Ejizu, Gregory B. Ford, Harold Ford, Jr., Kerry D. Jernigan, James Troy
Packard and Bobby Travis were stockholders of Dataline. On November 1998, each
of these stockholders exchanged their interest in BEI or Dataline for shares of
stock of SubTech in connection with the formation of the joint venture. Prior to
November 1998, John M. Birckhead and Harry C. Ehlert were officers and directors
of BEI, Gregory Brent Ford, Harold Ford, Jr. and Mark S. Crawford were directors
of Dataline and Mark S. Crawford and James Troy Packard were officers of
Dataline.
Within the past three years, none of the selling stockholders has held any
position, office or other material relationship with us or any of our
predecessors or affiliates, except as noted above.
PLAN OF DISTRIBUTION
The shares offered under this prospectus may be sold by the selling
stockholders from the date of this prospectus until February 3, 2001. The
selling stockholders may sell the shares on the New York Stock Exchange or
otherwise, at market prices or at negotiated prices. They may sell shares by one
or a combination of the following:
- a block trade in which a broker or dealer will attempt to sell the shares
as agent, but may position and resell a portion of the block as principal
to facilitate the transaction;
- purchases by a broker or dealer as principal and resale by the broker or
dealer for its account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which a broker
solicits purchasers; and
- privately negotiated transactions.
Brokers or dealers engaged by the selling stockholders may arrange for
other brokers or dealers to participate in sales of shares. Brokers or dealers
will receive commissions or discounts from selling stockholders in amounts to be
negotiated prior to the sale. The selling stockholders and any broker-dealers
that participate in the distribution may be deemed to be "underwriters" within
the meaning of the Securities Act of 1933, and any proceeds or commissions
received by them or any profits on the resale of shares sold by broker-dealers,
may be deemed to be underwriting discounts and commissions.
When any of the selling stockholders notifies us of a particular offering
of common stock under this prospectus, we will file a prospectus supplement, if
required by the Securities Act of 1933, setting forth:
- the number of shares being offered and the terms of the offering,
including the purchase price;
- the name of each of the participating broker-dealers or agents;
- the purchase price paid for the shares purchased from the selling
stockholders; and
- any items constituting compensation from the selling stockholders.
10
<PAGE> 13
We will not receive any of the proceeds from the sale of the shares offered
by this prospectus.
LEGAL MATTERS
Curtis W. Huff, our Executive Vice President, Chief Financial Officer and
General Counsel, has advised us with respect to the validity of the shares of
common stock offered by this prospectus. Pursuant to agreements between us and
Mr. Huff, Mr. Huff holds 56,250 restricted shares of common stock and options to
purchase 250,000 shares of common stock.
EXPERTS
The restated consolidated financial statements of Weatherford
International, Inc. as of December 31, 1998 and 1997 and for each of the three
years in the period ended December 31, 1998 included in Weatherford
International, Inc.'s Current Report on Form 8-K dated October 22, 1999,
incorporated by reference in this prospectus and elsewhere in the registration
statement, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference in reliance upon the authority of Arthur Andersen LLP
as experts in giving said reports.
Ernst & Young LLP, independent auditors, have audited Dailey International
Inc.'s consolidated balance sheets as of December 31, 1998 and 1997, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for the year ended December 31, 1998, the eight month period ended
December 31, 1997 and for each of the two years in the period ended April
30,1997, as set forth in their report, which is incorporated by reference in
this prospectus and elsewhere in the registration statement. These financial
statements are incorporated by reference in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.
11
<PAGE> 14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with this offering are:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......... $ 1,460
New York Stock Exchange Listing Fee......................... 1,500
Legal Fees and Expenses..................................... 1,000
Accounting Fees and Expenses................................ 8,000
Blue Sky Fees and Expenses (including legal fees)........... 1,000
Miscellaneous............................................... 1,040
-------
TOTAL............................................. $14,000
=======
</TABLE>
The selling stockholders will pay for the fees and expenses of their
counsel.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Delaware law, a corporation may include provisions in its certificate
of incorporation that will relieve its directors of monetary liability for
breaches of their fiduciary duty to the corporation, except under certain
circumstances, including a breach of the director's duty of loyalty, acts or
omissions of the director not in good faith or which involve intentional
misconduct or a knowing violation of law, the approval of an improper payment of
a dividend or an improper purchase by the corporation of stock or any
transaction from which the director derived an improper personal benefit. The
Registrant's Amended and Restated Certificate of Incorporation, as amended,
provides that the Registrant's directors are not liable to the Registrant or its
stockholders for monetary damages for breach of their fiduciary duty, subject to
the described exceptions specified by Delaware law.
Section 145 of the Delaware General Corporation Law grants to the
Registrant the power to indemnify each officer and director of the Registrant
against liabilities and expenses incurred by reason of the fact that he is or
was an officer or director of the Registrant if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Registrant and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Amended and Restated
By-laws of the Registrant provide for indemnification of each officer and
director of the Registrant to the fullest extent permitted by Delaware law.
David J. Butters and Robert B. Millard, employees of Lehman Brothers Inc.
("Lehman Brothers"), constitute two of the eight members of the Board of
Directors of the Registrant. Under the restated certificates of incorporation,
as amended to date, of Lehman Brothers and its parent, Lehman Brothers Holdings
Inc. ("Holdings"), both Delaware corporations, Messrs. Butters and Millard, in
their capacity as directors of the Registrant, are to be indemnified by Lehman
Brothers and Holdings to the fullest extent permitted by Delaware law. Messrs.
Butters and Millard are serving as directors of the Registrant at the request of
Lehman Brothers and Holdings.
Section 145 of the Delaware General Corporation Law also empowers the
Registrant to purchase and maintain insurance on behalf of any person who is or
was an officer or director of the Registrant against liability asserted against
or incurred by him in any such capacity, whether or not the Registrant would
have the power to indemnify such officer or director against such liability
under the provisions of Section 145. The Registrant has purchased and maintains
a directors' and officers' liability policy for such purposes. Messrs. Butters
and Millard are insured against certain liabilities which they may incur in
their capacity as directors pursuant to insurance maintained by Holdings.
II-1
<PAGE> 15
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
3.1 -- Amended and Restated Certificate of Incorporation of the
Registrant, as amended (incorporated by reference to
Exhibit No. 3.1 to Form 10-K (File 1-13086) filed March
30, 1999).
3.2 -- By-laws of the Registrant, as amended (incorporated by
reference to Exhibit No. 3.2 to Form 8-K (File 1-3086)
filed June 2, 1998).
4.1 -- See Exhibits numbered 3.1 and 3.2 for provisions of the
Amended and Restated Certificate of Incorporation and
By-laws of the Registrant defining the rights of the
holders of Common Stock.
4.2 -- Amended and Restated Credit Agreement dated as of May 27,
1998, among EVI, Inc., EVI Oil Tools Canada Ltd., Chase
Bank of Texas, National Association, as U.S.
Administrative Agent, The Bank of Nova Scotia, as
Documentation Agent and Canadian Agent, ABN AMRO Bank,
N.V., as Syndication Agent, and the other Lenders defined
therein, including the forms of Notes (incorporated by
reference to Exhibit No. 4.1 to Form 8-K (File 1-13086)
filed June 16, 1998).
4.3 -- Indenture dated March 15, 1994, among Energy Ventures,
Inc., as Issuer, the Subsidiary Guarantors party thereto,
as Guarantors, and Chemical Bank, as Trustee
(incorporated by reference to Form 8-K (File 1-13086)
filed April 5, 1994).
4.4 -- Specimen 10 1/4% Senior Note due 2004 of Energy Ventures,
Inc. (incorporated by reference to Form 8-K (File
1-13086) filed April 5, 1994).
4.5 -- First Supplemental Indenture by and among Energy
Ventures, Inc., Prideco and Chemical Bank, as trustee,
dated June 30, 1995 (incorporated by reference to Exhibit
No. 4.4 to Registration Statement on Form S-3 (Reg. No.
33-61933)).
4.6 -- Second Supplemental Indenture by and among Energy
Ventures, Inc., EVI Arrow, Inc., EVI Watson, Inc. and The
Chase Manhattan Bank, as trustee, dated effective as of
December 6, 1996 (incorporated by reference to Exhibit
4.6 to Form 10-K (File 1-13086) filed March 20, 1997).
4.7 -- Third Supplemental Indenture by and among EVI, Inc.,
Ercon, Inc. and The Chase Manhattan Bank, as trustee,
dated effective as of May 1, 1997 (incorporated by
reference to Exhibit 99.2 to Form 8-K (File 1-13086)
filed October 27, 1997).
4.8 -- Fourth Supplemental Indenture by and among EVI, Inc., XLS
Holding, Inc., XL Systems, Inc. and The Chase Manhattan
Bank, as trustee, dated effective as of August 25, 1997
(incorporated by reference to Exhibit 99.3 to Form 8-K
(File 1-13086) filed October 27, 1997).
4.9 -- Fifth Supplemental Indenture by and between EVI, Inc. and
The Chase Manhattan Bank dated as of December 12, 1997
(including the Form of Note and Form of Exchange Note)
(incorporated by reference to Exhibit 4.1 to Form 8-K
(File 1-13086) filed December 31, 1997).
4.10 -- Indenture dated as of October 15, 1997, between EVI, Inc.
and The Chase Manhattan Bank, as Trustee (incorporated by
reference to Exhibit No. 4.13 to Registration Statement
on Form S-3 (Reg. No. 333-45207)).
4.11 -- First Supplemental Indenture dated as of October 28,
1997, between EVI, Inc. and The Chase Manhattan Bank, as
Trustee (including Form of Debenture) (incorporated by
reference to Exhibit 4.2 to Form 8-K (File 1-13086) filed
November 5, 1997).
</TABLE>
II-2
<PAGE> 16
<TABLE>
<C> <S>
4.12 -- Registration Rights Agreement dated November 3, 1997, by
and among EVI, Inc., Morgan Stanley & Co. Incorporated,
Donaldson, Lufkin & Jenrette Securities Corporation,
Credit Suisse First Boston Corporation, Lehman Brothers
Inc., Prudential Securities Incorporated and Schroder &
Co. Inc. (incorporated by reference to Exhibit 4.3 to
Current Report on Form 8-K (File 1-13086) filed November
5, 1997).
4.13 -- Indenture dated May 17, 1996, between Weatherford
Enterra, Inc. and Bank of Montreal Trust Company, as
Trustee (incorporated by reference to Exhibit 4.1 to
Weatherford Enterra, Inc.'s Current Report on Form 8-K
(File No. 1-7867) dated May 28, 1996).
4.14 -- First Supplemental Indenture dated and effective as of
May 27, 1998, between EVI Weatherford, Inc., the
successor by merger to Weatherford Enterra, Inc., and
Bank of Montreal Trust Company, as Trustee (incorporated
by reference to Exhibit 4.1 to Weatherford Enterra,
Inc.'s Current Report on Form 8-K (File No. 1-7867) filed
June 2, 1996).
4.15 -- Form of Weatherford Enterra, Inc.'s 7 1/4% Notes due May
15, 2006 (incorporated by reference to Exhibit 4.2 to
Weatherford Enterra, Inc.'s Current Report on Form 8-K
(File No. 1-7867) dated May 28, 1996).
4.16 -- Participation Agreement dated December 8, 1998, by and
among Weatherford Enterra Compression Company, L.P., ABN
AMRO Bank N.V., as Administrative Agent, Arranger and
Syndication Agent, Chase Bank of Texas, National
Association, and the Lessors listed on Schedule I thereto
(incorporated by reference to Exhibit 4.16 to Amendment
No. 2 to Registration Statement on Form S-4 (Reg. No.
333-65663)).
4.17 -- Master Lease Intended as Security dated as of December 8,
1998, between Weatherford Enterra Compression Company,
L.P., as Lessee, and ABN AMRO Bank N.V., as
Administrative Agent for the Lessors (incorporated by
reference to Exhibit 4.17 to Amendment No. 2 to
Registration Statement on Form S-4 (Reg. No. 333-65663)).
4.18 -- Guaranty Agreement dated as of December 8, 1998, between
Weatherford International, Inc. and ABN AMRO Bank N.V.,
as Administrative Agent for the Lessors (incorporated by
reference to Exhibit 4.18 to Amendment No. 2 to
Registration Statement on Form S-4 (Reg. No. 333-65663)).
*4.19 -- Agreement and Plan of Merger dated February 3, 2000,
among Weatherford International, Inc., SubTech
Acquisition Corp., SubTech International, Inc., and the
stockholders and phantom stockholder of SubTech
International, Inc. listed therein.
*5.1 -- Opinion of Curtis W. Huff, Executive Vice President,
Chief Financial Officer and General Counsel of the
Registrant.
*23.1 -- Consent of Arthur Andersen LLP, with respect to the
financial statements of Weatherford International, Inc.
*23.2 -- Consent of Ernst & Young LLP, with respect to the
financial statements of Dailey International Inc.
*23.3 -- Consent of Curtis W. Huff, Executive Vice President,
Chief Financial Officer and General Counsel of the
Registrant (included in Exhibit 5.1).
*24.1 -- Powers of Attorney from certain members of the Board of
Directors of the Registrant (contained on page II-5).
</TABLE>
- ---------------
* Filed herewith.
II-3
<PAGE> 17
As permitted by Item 601(b)(4)(iii)(A) of Regulation S-K, the Registrant has not
filed with this Registration Statement certain instruments defining the rights
of holders of long-term debt of the Registrant and its subsidiaries because the
total amount of securities authorized under any of such instruments does not
exceed 10% of the total assets of the Registrant and its subsidiaries on a
consolidated basis. The Registrant agrees to furnish a copy of any such
agreement to the Commission upon request.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
Provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Securities Act or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. If a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful
II-4
<PAGE> 18
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-5
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, hereunto duly
authorized, in the City of Houston, State of Texas, on March 6, 2000.
WEATHERFORD INTERNATIONAL, INC.
By: /s/ BERNARD J. DUROC-DANNER
------------------------------------
Bernard J. Duroc-Danner
President, Chief Executive Officer,
Chairman of the
Board and Director (Principal
Executive Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Bernard J. Duroc-Danner and Curtis W.
Huff, or any of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
and all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and any of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent, or any of them, or his
or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
TITLE DATE
----- ----
<C> <S> <C>
/s/ BERNARD J. DUROC-DANNER President, Chief Executive March 6, 2000
- ----------------------------------------------------- Officer, Chairman of the
Bernard J. Duroc-Danner Board and Director (Principal
Executive Officer)
/s/ CURTIS W. HUFF Executive Vice President March 6, 2000
- ----------------------------------------------------- (Principal Financial Officer)
Curtis W. Huff
/s/ FRANCES R. POWELL Vice President, Accounting and March 6, 2000
- ----------------------------------------------------- Controller (Principal
Frances R. Powell Accounting Officer)
/s/ DAVID J. BUTTERS Director March 6, 2000
- -----------------------------------------------------
David J. Butters
Director March , 2000
- -----------------------------------------------------
Philip Burguieres
</TABLE>
II-6
<PAGE> 20
<TABLE>
<CAPTION>
TITLE DATE
----- ----
<C> <S> <C>
Director March , 2000
- -----------------------------------------------------
Sheldon B. Lubar
/s/ WILLIAM E. MACAULAY Director March 6, 2000
- -----------------------------------------------------
William E. Macaulay
Director March , 2000
- -----------------------------------------------------
Robert B. Millard
/s/ ROBERT K. MOSES, JR. Director March 6, 2000
- -----------------------------------------------------
Robert K. Moses, Jr.
/s/ ROBERT A. RAYNE Director March 6, 2000
- -----------------------------------------------------
Robert A. Rayne
</TABLE>
II-7
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
NUMBER EXHIBIT
------ -------
<C> <S>
3.1 -- Amended and Restated Certificate of Incorporation of the
Registrant, as amended (incorporated by reference to
Exhibit No. 3.1 to Form 10-K (File 1-13086) filed March
30, 1999).
3.2 -- By-laws of the Registrant, as amended (incorporated by
reference to Exhibit No. 3.2 to Form 8-K (File 1-3086)
filed June 2, 1998).
4.1 -- See Exhibits numbered 3.1 and 3.2 for provisions of the
Amended and Restated Certificate of Incorporation and
By-laws of the Registrant defining the rights of the
holders of Common Stock.
4.2 -- Amended and Restated Credit Agreement dated as of May 27,
1998, among EVI, Inc., EVI Oil Tools Canada Ltd., Chase
Bank of Texas, National Association, as U.S.
Administrative Agent, The Bank of Nova Scotia, as
Documentation Agent and Canadian Agent, ABN AMRO Bank,
N.V., as Syndication Agent, and the other Lenders defined
therein, including the forms of Notes (incorporated by
reference to Exhibit No. 4.1 to Form 8-K (File 1-13086)
filed June 16, 1998).
4.3 -- Indenture dated March 15, 1994, among Energy Ventures,
Inc., as Issuer, the Subsidiary Guarantors party thereto,
as Guarantors, and Chemical Bank, as Trustee
(incorporated by reference to Form 8-K (File 1-13086)
filed April 5, 1994).
4.4 -- Specimen 10 1/4% Senior Note due 2004 of Energy Ventures,
Inc. (incorporated by reference to Form 8-K (File
1-13086) filed April 5, 1994).
4.5 -- First Supplemental Indenture by and among Energy
Ventures, Inc., Produce and Chemical Bank, as trustee,
dated June 30, 1995 (incorporated by reference to Exhibit
No. 4.4 to Registration Statement on Form S-3 (Reg. No.
33-61933)).
4.6 -- Second Supplemental Indenture by and among Energy
Ventures, Inc., EVI Arrow, Inc., EVI Watson, Inc. and The
Chase Manhattan Bank, as trustee, dated effective as of
December 6, 1996 (incorporated by reference to Exhibit
4.6 to Form 10-K (File 1-13086) filed March 20, 1997).
4.7 -- Third Supplemental Indenture by and among EVI, Inc.,
Ercon, Inc. and The Chase Manhattan Bank, as trustee,
dated effective as of May 1, 1997 (incorporated by
reference to Exhibit 99.2 to Form 8-K (File 1-13086)
filed October 27, 1997).
4.8 -- Fourth Supplemental Indenture by and among EVI, Inc., XLS
Holding, Inc., XL Systems, Inc. and The Chase Manhattan
Bank, as trustee, dated effective as of August 25, 1997
(incorporated by reference to Exhibit 99.3 to Form 8-K
(File 1-13086) filed October 27, 1997).
4.9 -- Fifth Supplemental Indenture by and between EVI, Inc. and
The Chase Manhattan Bank dated as of December 12, 1997
(including the Form of Note and Form of Exchange Note)
(incorporated by reference to Exhibit 4.1 to Form 8-K
(File 1-13086) filed December 31, 1997).
4.10 -- Indenture dated as of October 15, 1997, between EVI, Inc.
and The Chase Manhattan Bank, as Trustee (incorporated by
reference to Exhibit No. 4.13 to Registration Statement
on Form S-3 (Reg. No. 333-45207)).
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
NUMBER EXHIBIT
------ -------
<C> <S>
4.11 -- First Supplemental Indenture dated as of October 28,
1997, between EVI, Inc. and The Chase Manhattan Bank, as
Trustee (including Form of Debenture) (incorporated by
reference to Exhibit 4.2 to Form 8-K (File 1-13086) filed
November 5, 1997).
4.12 -- Registration Rights Agreement dated November 3, 1997, by
and among EVI, Inc., Morgan Stanley & Co. Incorporated,
Donaldson, Lufkin & Jenrette Securities Corporation,
Credit Suisse First Boston Corporation, Lehman Brothers
Inc., Prudential Securities Incorporated and Schroder &
Co. Inc. (incorporated by reference to Exhibit 4.3 to
Form 8-K (File 1-13086) filed November 5, 1997).
4.13 -- Indenture dated May 17, 1996, between Weatherford
Enterra, Inc. and Bank of Montreal Trust Company, as
Trustee (incorporated by reference to Exhibit 4.1 to
Weatherford Enterra, Inc.'s Current Report on Form 8-K
(File No. 1-7867) dated May 28, 1996).
4.14 -- First Supplemental Indenture dated and effective as of
May 27, 1998, between EVI Weatherford, Inc., the
successor by merger to Weatherford Enterra, Inc., and
Bank of Montreal Trust Company, as Trustee (incorporated
by reference to Exhibit 4.1 to Weatherford Enterra,
Inc.'s Current Report on Form 8-K (File No. 1-7867) filed
June 2, 1996).
4.15 -- Form of Weatherford Enterra, Inc.'s 7 1/4% Notes due May
15, 2006 (incorporated by reference to Exhibit 4.2 to
Weatherford Enterra, Inc.'s Current Report on Form 8-K
(File No. 1-7867) dated May 28, 1996).
4.16 -- Participation Agreement dated December 8, 1998, by and
among Weatherford Enterra Compression Company, L.P., ABN
AMRO Bank N.V., as Administrative Agent, Arranger and
Syndication Agent, Chase Bank of Texas, National
Association, and the Lessors listed on Schedule I thereto
(incorporated by reference to Exhibit 4.16 to Amendment
No. 2 to Registration Statement on Form S-4 (Reg. No.
333-65663)).
4.17 -- Master Lease Intended as Security dated as of December 8,
1998, between Weatherford Enterra Compression Company,
L.P., as Lessee, and ABN AMRO Bank N.V., as
Administrative Agent for the Lessors (incorporated by
reference to Exhibit 4.17 to Amendment No. 2 to
Registration Statement on Form S-4 (Reg. No. 333-65663)).
4.18 -- Guaranty Agreement dated as of December 8, 1998, between
Weatherford International, Inc. and ABN AMRO Bank N.V.,
as Administrative Agent for the Lessors (incorporated by
reference to Exhibit 4.18 to Amendment No. 2 to
Registration Statement on Form S-4 (Reg. No. 333-65663)).
*4.19 -- Agreement and Plan of Merger dated February 3, 2000,
among Weatherford International, Inc., SubTech
Acquisition Corp., SubTech International, Inc., and the
stockholders and phantom stockholder of SubTech
International, Inc. listed therein.
*5.1 -- Opinion of Curtis W. Huff, Executive Vice President,
Chief Financial Officer and General Counsel of the
Registrant.
*23.1 -- Consent of Arthur Andersen LLP, with respect to the
financial statements of Weatherford International, Inc.
*23.2 -- Consent of Ernst & Young LLP, with respect to the
financial statements of Dailey International Inc.
</TABLE>
<PAGE> 23
<TABLE>
<CAPTION>
NUMBER EXHIBIT
------ -------
<C> <S>
*23.3 -- Consent of Curtis W. Huff, Executive Vice President,
Chief Financial Officer and General Counsel of the
Registrant (included in Exhibit 5.1).
*24.1 -- Powers of Attorney from certain members of the Board of
Directors of the Registrant (contained on page II-5).
</TABLE>
- ---------------
* Filed herewith.
<PAGE> 1
================================================================================
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
WEATHERFORD INTERNATIONAL, INC.,
SUBTECH ACQUISITION CORP.,
SUBTECH INTERNATIONAL, INC.
AND
THE STOCKHOLDERS AND PHANTOM STOCKHOLDER
OF
SUBTECH INTERNATIONAL, INC.
DATED AS OF FEBRUARY 3, 2000
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1
DEFINITIONS..............................................................................................1
ARTICLE 2
THE MERGER...............................................................................................4
2.1 THE MERGER; EFFECTIVE TIME OF THE MERGER........................................................4
2.2 EFFECTS OF THE MERGER...........................................................................4
ARTICLE 3
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; SETTLEMENT
AND CANCELLATION OF PHANTOM STOCK RIGHTS.................................................................5
3.1 EFFECT ON CAPITAL STOCK.........................................................................5
3.2 MERGER CONSIDERATION............................................................................6
3.3 EXCHANGE OF SHARES..............................................................................6
3.4 SHARES OF DISSENTING STOCKHOLDERS...............................................................6
3.5 SETTLEMENT AND CANCELLATION OF PHANTOM STOCK RIGHTS.............................................7
3.6 THE CLOSING.....................................................................................7
3.7 ITEMS TO BE DELIVERED AT CLOSING................................................................7
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
THE MANAGEMENT STOCKHOLDERS REGARDING SUBTECH............................................................8
ARTICLE 5
INDIVIDUAL REPRESENTATIONS AND WARRANTIES OF THE
STOCKHOLDERS AND PHANTOM STOCKHOLDER.....................................................................8
5.1 AUTHORITY AND CAPACITY..........................................................................8
5.2 EXECUTION AND DELIVERY..........................................................................8
5.3 EFFECT OF AGREEMENT.............................................................................9
5.4 NO CONSENTS.....................................................................................9
5.5 SUBTECH STOCK AND PHANTOM STOCK RIGHTS..........................................................9
5.6 NO BROKERS......................................................................................9
5.7 INVESTMENT PURPOSE..............................................................................9
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF
WEI AND SUB.............................................................................................12
6.1 ORGANIZATION...................................................................................12
6.2 DUE AUTHORIZATION, EXECUTION AND DELIVERY; EFFECT OF AGREEMENT.................................13
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
6.3 NO CONSENTS....................................................................................13
6.4 BROKERAGE......................................................................................13
6.5 SEC DOCUMENTS..................................................................................14
6.6 OWNERSHIP OF SUBTECH COMMON STOCK..............................................................14
6.7 OWNERSHIP OF SUB...............................................................................14
6.8 CONTINUITY OF BUSINESS ENTERPRISE..............................................................14
ARTICLE 7
TERMINATION OF SUBTECH STOCKHOLDER AGREEMENT
AND PHANTOM STOCK AGREEMENT AND WRITTEN CONSENT.........................................................14
7.1 TERMINATION OF SUBTECH STOCKHOLDER AGREEMENT...................................................14
7.2 TERMINATION OF PHANTOM STOCK AGREEMENT.........................................................14
7.3 CONSENT OF STOCKHOLDERS TO MERGER..............................................................15
7.4 INDEMNIFICATION UNDER THE SUBTECH EXCHANGE AGREEMENT...........................................15
ARTICLE 8
CONDITIONS TO WEI'S OBLIGATIONS.........................................................................15
8.1 REPRESENTATIONS TRUE AND CORRECT...............................................................15
8.2 PERFORMANCE OF COVENANTS.......................................................................15
8.3 RESOLUTIONS....................................................................................15
8.4 GOVERNMENTAL APPROVALS.........................................................................15
8.5 FURTHER ACTION.................................................................................15
8.6 NO BANKRUPTCY..................................................................................16
8.7 NO MATERIAL ADVERSE CHANGE.....................................................................16
8.8 LEGAL OPINION..................................................................................16
ARTICLE 9
CONDITIONS TO THE STOCKHOLDERS AND
PHANTOM STOCKHOLDERS OBLIGATIONS.......................................................................16
9.1 REPRESENTATIONS TRUE AND CORRECT...............................................................16
9.2 PERFORMANCE OF COVENANTS.......................................................................16
9.3 RESOLUTIONS....................................................................................16
9.4 GOVERNMENTAL APPROVALS.........................................................................16
9.5 NO MATERIAL ADVERSE CHANGE.....................................................................17
ARTICLE 10
INDEMNIFICATION.........................................................................................17
10.1 INDEMNIFICATION BY THE STOCKHOLDERS AND PHANTOM STOCKHOLDERS..................................17
10.2 INDEMNIFICATION BY WEI.........................................................................17
10.3 NOTICE AND OPPORTUNITY TO DEFEND...............................................................17
10.4 EXPRESS NEGLIGENCE.............................................................................18
10.5 RELEASES.......................................................................................19
10.6 INDEMNIFICATION LIMITATIONS....................................................................20
ARTICLE 11
NATURE OF STATEMENTS AND SURVIVAL OF COVENANTS,
REPRESENTATIONS, WARRANTIES AND AGREEMENTS..............................................................20
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE 12
REGISTRATION RIGHTS.....................................................................................20
12.1 REGISTRATION RIGHTS............................................................................20
12.2 PROCEDURE......................................................................................21
12.3 INDEMNIFICATION................................................................................23
12.4 TERMINATION....................................................................................24
ARTICLE 13
MISCELLANEOUS...........................................................................................24
13.1 ENTIRE AGREEMENT...............................................................................24
13.2 SUCCESSORS AND ASSIGNS.........................................................................24
13.3 ARBITRATION....................................................................................25
13.4 EXPENSES.......................................................................................26
13.5 EFFECT OF DUE DILIGENCE........................................................................26
13.6 TAKING OF NECESSARY ACTION.....................................................................26
13.7 INVALIDITY.....................................................................................26
13.8 COUNTERPARTS...................................................................................27
13.9 HEADINGS.......................................................................................27
13.10 CONSTRUCTION AND REFERENCES....................................................................27
13.11 MODIFICATION AND WAIVER........................................................................27
13.12 NOTICES........................................................................................27
13.13 PUBLIC ANNOUNCEMENTS...........................................................................28
13.14 GOVERNING LAW; INTERPRETATION..................................................................28
13.15 INCORPORATION BY REFERENCE.....................................................................28
</TABLE>
-iii-
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") dated as of
February 3, 2000, is entered into by and among Weatherford International, Inc.,
a Delaware corporation ("WEI"), SubTech Acquisition Corp., a Delaware
corporation ("Sub"), SubTech International, Inc., a Delaware corporation
("SubTech"), the stockholders of SubTech signatory hereto (such individuals and
entities other than WEI, the "Stockholders") and the holder of phantom stock
rights of SubTech signatory hereto (the "Phantom Stockholder").
W I T N E S S E T H:
WHEREAS, WEI currently owns 51% of the issued and outstanding capital
stock of SubTech; and
WHEREAS, WEI desires to acquire the remaining issued and outstanding
shares of capital stock of SubTech from the other stockholders of SubTech and to
settle and retire the outstanding Phantom Stock Rights owned by the Phantom
Stockholder; and
WHEREAS, the parties desire to effect the acquisition such that at the
Effective Time, Sub will merge with and into SubTech and the Stockholders will
exchange their SubTech Common Stock solely for WEI Common Stock, all of which is
intended to qualify as a tax-free reorganization pursuant to Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the parties desire to set forth herein certain
representations, warranties and agreements in connection with the acquisition.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements, and upon the terms and subject to the
conditions hereinafter set forth, the parties do hereby agree as follows:
ARTICLE 1
DEFINITIONS
Capitalized terms used in this Agreement shall have the meanings given
to them in this Article 1, unless defined elsewhere in this Agreement.
1.1 "AFFILIATE" shall mean with respect to any Person, an individual or
entity that, directly or indirectly, controls, is controlled by or is under
common control with such Person; provided, however, for purposes of this
Agreement SubTech shall not be deemed an Affiliate of WEI.
<PAGE> 6
1.2 "BUSINESS DAY" shall mean any day other than Saturday, Sunday or
other day on which federally chartered commercial banks in Houston, Texas are
authorized by law to close.
1.3 "CERTIFICATE OF MERGER" shall have the meaning such term is given
in Section 2.1 hereof.
1.4 "CLOSING" shall have the meaning such term is given in Section 3.6
hereof.
1.5 "CLOSING DATE" shall have the meaning such term is given in Section
3.6 hereof.
1.6 "CODE" shall have the meaning such term is given in the recitals.
1.7 "COMMISSION" means the Securities and Exchange Commission.
1.8 "CONSTITUENT CORPORATION" shall have the meaning such term is given
in Section 2.2 hereof.
1.9 "DAMAGES" shall mean any and all liabilities, losses, damages,
demands, assessments, claims, costs, expenses, awards, judgments, penalties,
settlements, fines, costs of remediation, diminutions in value, including
interest on any of the foregoing, and the costs and expenses incurred in
connection with investigating and defending any claims or causes of action,
including, without limitation, attorneys' fees and expenses and all fees and
expenses of consultants and other professionals.
1.10 "EFFECTIVE TIME" shall have the meaning such term is given in
Section 2.1 hereof.
1.11 "ENCUMBRANCE" shall mean any security interest, mortgage, pledge,
claim, lien, charge, option, defect, restriction, right of first refusal,
easement, license, lease, title defect or imperfection, encumbrance or other
right or interest of any third person of any nature whatsoever.
1.12 "GOVERNMENTAL BODY" shall mean any federal, state, local,
municipal, foreign or other governmental or quasi-governmental body or
authority, including any court, administrative agency or other person or entity
thereunder.
1.13 "INCOME TAX REGULATIONS" shall mean the Income Tax Regulations,
including Temporary Regulations, promulgated under the Code, as such regulations
may be amended, modified or supplemented from time to time (including
corresponding provisions of succeeding regulations).
1.14 "INDEMNIFYING PARTY" shall be as defined in Section 10.4 hereof.
1.15 "INDEMNITEE" shall be as defined in Section 10.4 hereof.
1.16 "LEGAL REQUIREMENT" shall mean any federal, state, or local law
(including environmental law), ordinance, principle of common law, rule,
regulation or statute, United States or foreign or state, local or otherwise.
-2-
<PAGE> 7
1.17 "MANAGEMENT STOCKHOLDERS" means Crawford Estate Ltd., John
Birckhead, Harry C. Ehlert IRA, Henning Hansen, Frode Kaland and Paulo S. Tubel.
1.18 "MATERIAL ADVERSE EFFECT" with respect to a party shall mean a
single event, occurrence or fact that, together with all other events,
occurrences and facts that could reasonably be expected to result in a loss to
that party (and all of its subsidiaries taken as a whole) would have, or might
reasonably be expected to have, a material adverse effect on the assets,
business, operations or financial condition of that party (and all of its
subsidiaries taken as a whole), or that would constitute a criminal violation of
law involving a felony.
1.19 "ORDER" means any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency or Governmental Body.
1.20 "PERSON" shall mean any individual, corporation, limited liability
company, association, partnership, joint venture, trust or unincorporated
organization or government or any agent or political subdivision thereof.
1.21 "PHANTOM STOCK AGREEMENT" means that certain letter dated February
5, 1999, from SubTech to the Phantom Stockholder, providing for SubTech to
employ the Phantom Stockholder and stating certain compensation arrangements
based on the value of certain phantom stock rights as stated in said letter.
1.22 "PHANTOM STOCK RIGHTS" means the rights of the Phantom Stockholder
to certain compensation based on certain SubTech "phantom stock" provisions
under the Phantom Stock Agreement.
1.23 "SEC DOCUMENTS" shall mean WEI's (a) Annual Report on Form 10-K
for the year ended December 31, 1998, (b) proxy statement with respect to the
Annual Meeting of Stockholders held on May 6, 1999, (c) Quarterly Reports on
Form 10-Q for the quarterly periods ended March 31, 1999, June 30, 1999 and
September 30, 1999, and (d) Current Reports on Form 8-K dated April 29, 1999,
May 21, 1999, July 21, 1999, August 16, 1999, August 31, 1999, September 15,
1999, October 22, 1999, November 12, 1999 and January 31, 2000.
1.24 "SECURITIES ACT" means the Securities Act of 1933, as amended.
1.25 "STOCKHOLDERS REPRESENTATIVE" shall mean Mark S. Crawford.
1.26 "SUBTECH COMMON STOCK" shall have the meaning such term is given
in Section 3.1 hereof.
1.27 "SUBTECH EXCHANGE AGREEMENT" means that certain Formation and
Exchange Agreement dated November 4, 1998, by and among WEUS Holding, Inc., the
shareholders of BEI Technology, Inc., DataLine Petroleum Services, Inc. and
Subsurface Technology, A/S, and SubTech.
-3-
<PAGE> 8
1.28 "SUBTECH STOCKHOLDERS AGREEMENT" means that certain Stockholders
Agreement dated November 4, 1998, among WEI, WEUS Holding, Inc., SubTech, the
Stockholders and Bobby Travis.
1.29 "SURVIVING CORPORATION" shall have the meaning such term is given
in Section 2.2 hereof.
1.30 "WEI COMMON STOCK" means the common stock, $1.00 par value, of
WEI.
1.31 "WEI SHARES" shall mean the shares of WEI Common Stock issued
pursuant to Sections 3.2 and 3.5.
1.32 "WEI STOCK PRICE" shall mean the average closing sales price for
the WEI Common Stock for the 20 trading days ending on the third Business Day
immediately preceding the Closing Date, as reported on the New York Stock
Exchange or other principal securities exchange on which the WEI Common Stock is
then traded, or, as quoted on the Nasdaq, or if not listed on the Nasdaq, as
reported on the NASD OTC Bulletin Board or in the Daily Quotation Sheets, as
applicable.
ARTICLE 2
THE MERGER
2.1 THE MERGER; EFFECTIVE TIME OF THE MERGER. Upon the terms and
conditions of this Agreement and in accordance with Delaware law, Sub shall be
merged with and into SubTech (the "Merger") at the Effective Time. The Merger
shall become effective immediately when a certificate of merger (the
"Certificate of Merger"), prepared and executed in accordance with the relevant
laws of Delaware, is filed with the Secretary of State of the State of Delaware
or, if agreed to by the parties, at such time thereafter as is provided in the
Certificate of Merger (the "Effective Time"). The filing of the Certificate of
Merger shall be made as soon as practicable on or after the Closing.
2.2 EFFECTS OF THE MERGER.
(a) At the Effective Time: (i) Sub shall be merged with and
into SubTech, the separate existence of Sub shall cease and SubTech shall
continue as the surviving corporation (Sub and SubTech are sometimes referred to
herein as the "Constituent Corporations" and SubTech is sometimes referred to
herein as the "Surviving Corporation"); (ii) the Certificate of Incorporation of
SubTech as in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation; and (iii) the Bylaws
of SubTech as in effect immediately prior to the Effective Time shall be the
Bylaws of the Surviving Corporation.
(b) The directors and officers of Sub at the Effective Time
shall, from and after the Effective Time, be the directors and officers of the
Surviving Corporation and shall serve until their successors have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Certificate of
Incorporation and Bylaws.
-4-
<PAGE> 9
(c) At and after the Effective Time, the Surviving Corporation
shall possess all the rights, privileges, powers and franchises of a public as
well as of a private nature, and be subject to all the restrictions,
disabilities and duties of each of the Constituent Corporations; and all and
singular rights, privileges, powers and franchises of each of the Constituent
Corporations, and all property, real, personal and mixed, and all debts due to
either of the Constituent Corporations on whatever account, as well as for stock
subscriptions and all other things in action or belonging to each of the
Constituent Corporations, shall be vested in the Surviving Corporation; and all
property, rights, privileges, powers and franchises, and all and every other
interest shall be thereafter as effectually the property of the Surviving
Corporation as they were of the Constituent Corporations; and the title to any
real estate vested by deed or otherwise, in either of the Constituent
Corporations, shall not revert or be in any way impaired; but all rights of
creditors and all liens upon any property of either of the Constituent
Corporations shall be preserved unimpaired; and all debts, liabilities and
duties of the Constituent Corporations shall thenceforth attach to the Surviving
Corporation, and may be enforced against it to the same extent as if said debts
and liabilities had been incurred by it.
ARTICLE 3
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; SETTLEMENT
AND CANCELLATION OF PHANTOM STOCK RIGHTS
3.1 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of common
stock, $.01 par value, of SubTech ("SubTech Common Stock") or capital stock of
Sub:
(a) Conversion of Sub Capital Stock. Each issued and
outstanding share of capital stock of Sub shall be converted into and become one
fully paid and nonassessable share of Common Stock of the Surviving Corporation.
(b) SubTech Shares owned by WEI and Cancellation of Treasury
Stock. Each share of SubTech Common Stock owned by WEI shall remain outstanding
and all shares of capital stock of SubTech that are owned by SubTech as treasury
stock shall be canceled and retired and shall cease to exist and no stock of WEI
or other consideration shall be delivered or deliverable in exchange therefor.
(c) Conversion of SubTech Common Stock. Subject to the
provisions of Section 3.1(d), each share of SubTech Common Stock issued and
outstanding immediately prior to the Effective Time (other than shares to remain
outstanding or be canceled in accordance with Section 3.1(b)) shall be converted
into the right to receive the Merger Consideration as set forth in Section 3.2.
(d) Cancellation of SubTech Common Stock. All shares of
SubTech Common Stock (other than shares to remain outstanding or be canceled in
accordance with Section 3.1(b)), when converted as provided in Section 3.1(c),
shall no longer be outstanding and shall automatically be canceled and retired
and shall cease to exist, and each holder of any such shares shall cease to
-5-
<PAGE> 10
have any rights with respect thereto, except the right to receive the Merger
Consideration in accordance with Section 3.3, without interest.
3.2 MERGER CONSIDERATION. "Merger Consideration" shall mean, with
respect to each record holder of shares of SubTech Common Stock (other than
WEI), that number of shares of WEI Common Stock calculated by utilizing the
formula set forth immediately below:
Number of shares of Number of shares of
WEI Common Stock SubTech Common
to be issued = Stock owned of Record x $10.00
--------------------------------------------------
WEI Stock Price
No fractional shares of WEI Common Stock shall be issued; rather, the number of
shares of WEI Common Stock issuable shall be rounded up to the nearest whole
number of shares of WEI Common Stock.
3.3 EXCHANGE OF SHARES. At the Effective Time, by virtue of the Merger
and without any action on the part of the holders of any shares of SubTech
Common Stock:
(a) Exchange Procedure. Each record holder of shares of
SubTech Common Stock (other than WEI) shall be entitled to receive in exchange
therefor the Merger Consideration that such holder has the right to receive
pursuant to the provisions of Sections 3.1 and 3.2, and the shares so
surrendered shall forthwith be canceled on SubTech's stock records.
(b) No Further Ownership Rights in SubTech Common Stock. The
Merger Consideration to be issued upon the surrender for exchange of shares of
SubTech Common Stock in accordance with the terms hereof shall be deemed to have
been issued, paid or delivered in full satisfaction of all rights pertaining to
such shares of SubTech Common Stock, and after the Effective Time there shall be
no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of SubTech Common Stock held by the record
holders of shares of SubTech Common Stock (other than WEI) that were outstanding
immediately prior to the Effective Time.
(c) No Liability. Neither WEI nor SubTech shall be liable to
any holder of shares of SubTech Common Stock for any cash amounts to the extent
such amount is delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. Any amounts remaining unclaimed by
holders of any such shares two years after the Effective Time (or such earlier
date immediately prior to the time at which such amounts would otherwise escheat
to or become property of any Governmental Body) shall, to the extent permitted
by applicable law, become the property of WEI free and clear of any claims or
interest of any such holders or their successors, assigns or personal
representatives previously entitled thereto.
3.4 SHARES OF DISSENTING STOCKHOLDERS. Each Stockholder hereby waives
any and all rights to dissent or appraisal with respect to the Merger.
-6-
<PAGE> 11
3.5 SETTLEMENT AND CANCELLATION OF PHANTOM STOCK RIGHTS.
(a) In consideration for the payments set forth in Subsections
3.5(b) and (c) below, the Phantom Stockholder hereby settles, relinquishes and
cancels his Phantom Stock Rights.
(b) As consideration for the settlement and cancellation of
the Phantom Stock Rights, WEI shall issue to the Phantom Stockholder at the
Effective Time the number of shares of WEI Common Stock determined by dividing
$75,000 by the WEI Stock Price.
(c) As additional consideration for the settlement and
cancellation of the Phantom Stock Rights, each Stockholder agrees to assign to
the Phantom Stockholder 1.720% of the number of WEI Shares received by such
stockholder pursuant to the terms of this Agreement. The Stockholders shall
execute stock assignments effective at the Effective Time to assign such shares
to the Phantom Stockholder, and WEI shall issue a certificate for such shares to
the Phantom Stockholder at the Effective Time, and the number of WEI Shares to
be issued under stock certificates to each Stockholder at the Effective Time
shall be reduced by the portion assigned to the Phantom Stockholder.
(d) No fractional shares of WEI Common Stock shall be issued
or assigned to the Phantom Stockholder; rather, the number of shares of WEI
Common Stock issued or assignable pursuant to the terms of Subsections 3.5(b)
and (c) above shall be rounded up to the nearest whole number of shares of WEI
Common Stock.
3.6 THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of WEI, 515 Post Oak
Boulevard, Suite 600, Houston, Texas, at 9:00 a.m. (local time) on the fifth
business day following the date after the later to occur of (a) the obtaining of
the last requisite regulatory approval and (b) the receipt of all other
approvals, authorizations and consents required and (c) the satisfaction or
waiver of all conditions to the obligations of the parties to consummate the
transactions contemplated hereby, or at such other time and place as parties
hereto may mutually agree (the "Closing Date"). All matters at the Closing shall
be considered to take place simultaneously and no delivery of any document shall
be deemed complete until all transactions and deliveries of documents are
completed. The parties hereto agree to promptly advise the other parties in
writing upon the occurrence of the events described in clauses (a), (b) and (c)
above. The Closing shall not occur later than February 15, 2000, unless the
parties shall agree to some later date.
3.7 ITEMS TO BE DELIVERED AT CLOSING.
(a) At the Closing, the Stockholders and Phantom Stockholder
shall deliver to WEI the following:
(i) Opinion of counsel in a form reasonably
satisfactory to WEI with respect to the transactions described
in Section 3.5(c);
(ii) Stock Powers transferring shares of SubTech
Common Stock;
-7-
<PAGE> 12
(iii) Such other documents, instruments and
conveyances as may reasonably be necessary to effectuate the
transfer of the SubTech Common Stock to WEI and the
cancellation of the Phantom Stock Rights.
(b) At the Closing, WEI shall deliver to the Stockholders and
Phantom Stockholder, the following:
(i) Certificates representing the WEI Shares;
(ii) Such other documents and instruments as may
reasonably be necessary to effectuate the issuance of the WEI
Shares to the Stockholders and Phantom Stockholder.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
THE MANAGEMENT STOCKHOLDERS REGARDING SUBTECH
For purposes of this Article 4, each Management Stockholder, severally,
and not jointly, represents and warrants to WEI that such Management Stockholder
has not taken or caused to be taken any action required by applicable law, the
Certificate of Incorporation or Bylaws of SubTech or an agreement among the
Management Stockholders and SubTech or WEI to be consented to by the
stockholders or the Board of Directors of SubTech without first obtaining the
requisite consents or having obtained ratification of such action after any such
action was taken.
ARTICLE 5
INDIVIDUAL REPRESENTATIONS AND WARRANTIES OF THE
STOCKHOLDERS AND PHANTOM STOCKHOLDER
Each Stockholder and Phantom Stockholder, severally and not jointly, as
to himself, herself or itself and not as to any other Stockholder or Phantom
Stockholder, represents and warrants to the other parties as follows:
5.1 AUTHORITY AND CAPACITY. Such Stockholder or Phantom Stockholder has
the requisite legal capacity and full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
5.2 EXECUTION AND DELIVERY. Such Stockholder or Phantom Stockholder has
duly executed and delivered this Agreement. This Agreement constitutes a legal,
valid and binding obligation of such Stockholder or Phantom Stockholder,
enforceable against such Stockholder or Phantom Stockholder in accordance with
its terms, except to the extent that such enforceability (i) may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally and (ii) is subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
-8-
<PAGE> 13
5.3 EFFECT OF AGREEMENT. The execution, delivery and performance by
such Stockholder or Phantom Stockholder of this Agreement and the consummation
of the transactions contemplated hereby will not, with or without the giving of
notice or the lapse of time, or both, (i) violate any Order or Legal Requirement
applicable to or binding upon such Stockholder or Phantom Stockholder; (ii)
violate any provision of any indenture, instrument creating any lien, lease,
agreement or instrument to which such Stockholder or Phantom Stockholder is a
party or by which such Stockholder or Phantom Stockholder is bound or (iii)
conflict with, or result in a breach or default under, the constituent documents
of such Stockholder or Phantom Stockholder to the extent such Stockholder or
Phantom Stockholder is not a natural person; except, in each case, for
violations, conflicts, breaches, defaults, terminations or modifications which
in the aggregate would not materially hinder or impair the consummation of the
transactions contemplated by this Agreement.
5.4 NO CONSENTS. There are no consents, approvals or authorizations of,
or exemptions by, or filings with, any Governmental Body or any Person required
for the Stockholder or Phantom Stockholder in connection with the execution,
delivery of or performance by such Stockholder or Phantom Stockholder of this
Agreement and the consummation of the transactions contemplated hereby, which
have not been obtained.
5.5 SUBTECH STOCK AND PHANTOM STOCK RIGHTS. Such Stockholder owns
(beneficially and of record) (except for Harry C. Ehlert, who is the beneficial
owner of his SubTech Common Stock, and for which Harry C. Ehlert, IRA is the
record owner thereof, in each case free and clear of all Encumbrances) the
shares of SubTech Common Stock as set forth opposite his or its name on Schedule
5.5 hereto free and clear of all Encumbrances and, upon consummation of the
Merger, such shares will be delivered to WEI free and clear of all Encumbrances.
Such Phantom Stockholder owns all right, title and interest in the Phantom Stock
Rights free and clear of all Encumbrances.
5.6 NO BROKERS. Such Stockholder or Phantom Stockholder has not
employed or retained any investment banker, broker, agent, finder or any other
party, or incurred any obligation for broker's fees, finder's fees or
commissions, with respect to the sale of the outstanding capital stock of
SubTech or Phantom Stock Rights or with respect to the transactions contemplated
by this Agreement, or otherwise dealt with anyone purporting to act in the
capacity of a finder or broker with respect thereto whereby SubTech or any other
party to this Agreement may be obligated to pay such a fee or commission. Such
Stockholder or Phantom Stockholder agrees to indemnify and hold WEI and the
other parties hereto harmless from and against any and all claims, liabilities
or obligations with respect to any fees, commissions or expenses asserted by any
Person on the basis of any act, statement, agreement or commitment alleged to
have been made by such Stockholder or Phantom Stockholder with respect to any
such fee, expense or commission.
5.7 INVESTMENT PURPOSE.
(a) Such Stockholder or Phantom Stockholder recognizes and
understands that the WEI Shares (collectively, the "Securities") will not,
except as expressly provided in Article 12 hereof, be registered under the
Securities Act or the securities laws of any state (the "Securities Laws"). The
Securities are not being so registered in reliance upon exemptions from the
Securities Laws that are predicated, in part, on the representations, warranties
and agreements of such Stockholder or Phantom Stockholder contained herein.
-9-
<PAGE> 14
(b) Such Stockholder or Phantom Stockholder represents and
warrants that (i) such Stockholder or Phantom Stockholder either is an
"accredited investor" within the meaning of Regulation D promulgated by the
Commission pursuant to the Securities Act and is not relying on a financial
advisor in connection with his or its participation in the transactions
contemplated hereby, or is not an accredited investor and the Stockholders
Representative is such Stockholder's or Phantom Stockholder's "purchaser
representative" within the meaning of Regulation D promulgated by the Commission
pursuant to the Securities Act in connection with evaluating the merits and
risks of this Agreement, the transactions contemplated hereby and an investment
in the Securities and the suitability thereof as an investment therefor, (ii)
such Stockholder or Phantom Stockholder, individually or together with the
Stockholders Representative, has such knowledge and experience in financial,
investment and business matters, such experience being based on actual
participation therein, that such Stockholder or Phantom Stockholder,
individually or together with the Stockholders Representative, is capable of
evaluating the merits and risks of this Agreement, the transactions contemplated
hereby and an investment in the Securities and the suitability thereof as an
investment therefor, (iii) the Securities will be acquired for such
Stockholder's or Phantom Stockholder's own account solely for investment and not
with a view toward resale or redistribution in violation of the Securities Laws,
(iv) such Stockholder or Phantom Stockholder, individually or together with the
Stockholders Representative, has reviewed such Stockholder's or Phantom
Stockholder's financial condition and commitments, and such Stockholder or
Phantom Stockholder, individually or together with the Stockholders
Representative, is satisfied that such Stockholder or Phantom Stockholder has
adequate means and providing for such Stockholder's or Phantom Stockholder's
financial needs and possible contingencies, has no present or existing or
contemplated future need to dispose of all or any portion of such Stockholder's
or Phantom Stockholder's interest in the Securities to satisfy any existing or
contemplated undertaking, need or indebtedness, and has assets or sources of
income that, taken together, are more than sufficient so that such Stockholder
or Phantom Stockholder can bear the risk of the loss of his or its entire
investment in the Securities, (v) such Stockholder or Phantom Stockholder has no
plan or intention to sell, exchange or otherwise dispose of his or its interest
in the Securities, (vi) such Stockholder or Phantom Stockholder is a natural
person whose residence and domicile are set forth on Annex A hereto or an entity
as described on Annex A hereto and (vii) in connection with the transactions
contemplated hereby, no assurances have been made concerning the future results
of WEI or as to the value of the Securities. Such Stockholder or Phantom
Stockholder understands that such Stockholder or Phantom Stockholder must bear
the economic risks of such Stockholder's or Phantom Stockholder's investment in
the Securities for an indefinite period of time. If such Stockholder or Phantom
Stockholder is relying upon the Stockholders Representative in such connection,
the Stockholders Representative has disclosed to such Stockholder or Phantom
Stockholder any material relationship between himself and his Affiliates and
SubTech, WEI or any of their respective Affiliates during the past two years or
currently contemplated and any compensation received or to be received as a
result of such relationship. Such Stockholder or Phantom Stockholder understands
that WEI is not under any obligation to file a registration statement or to take
any other action under the Securities Laws with respect to any Securities except
as expressly set forth in Article 12 hereof.
(c) Such Stockholder or Phantom Stockholder has consulted with
such Stockholder's or Phantom Stockholder's own counsel in regard to the
Securities Laws and has had the opportunity to hire his, her or its own legal
counsel other than Chamberlain, Hrdlicka, White, Williams and Martin and is
fully aware (i) of the circumstances under which such Stockholder or
-10-
<PAGE> 15
Phantom Stockholder is required to hold the Securities, (ii) of the limitations
on the transfer or disposition of the Securities, (iii) that the Securities must
be held indefinitely unless the transfer thereof is registered under the
Securities Laws or an exemption from registration is available and (iv) that no
exemption from registration is likely to become available for at least one year
from the date of acquisition of the Securities. Such Stockholder or Phantom
Stockholder has been advised by such Stockholder's or Phantom Stockholder's
counsel as to the provisions of Rules 144 and 145 as promulgated by the
Commission under the Securities Act and has been advised of the applicable
limitations thereof. Such Stockholder or Phantom Stockholder acknowledges that
WEI is relying upon the truth and accuracy of the representations and warranties
in this Article 5 by such Stockholder or Phantom Stockholder in consummating the
transactions contemplated by this Agreement without registering the Securities
under the Securities Laws.
(d) WEI has furnished such Stockholders' or Phantom
Stockholders' legal counsel with the SEC Documents, a summary description of the
terms of the WEI Common Stock and a summary description of any material written
information concerning the transactions contemplated hereby that has been
provided to such Stockholder and Phantom Stockholder that is an "accredited
investor" but has not been provided to the other Stockholders or Phantom
Stockholders. Such Stockholders' or Phantom Stockholders' legal counsel has
provided such Stockholder and Phantom Stockholder and the Stockholders
Representative with the SEC Documents and such summary descriptions. Such
Stockholder and Phantom Stockholder and the Stockholders Representative have
reviewed copies of the SEC Documents and such summary descriptions and have
attended one or more meetings at which representatives of WEI and counsel to WEI
and to such Stockholder or Phantom Stockholder have made presentations
concerning this Agreement and the transactions contemplated hereby (all such
written materials, including this Agreement and the Exhibits, Annexes and
Schedules hereto, and such presentations are hereinafter referred to as the
"Disclosure Information") and no person has made any representations or
warranties of any kind or nature to induce such Stockholder or Phantom
Stockholder to enter into this Agreement except as set forth in the written
Disclosure Information. WEI has made available to such Stockholder or Phantom
Stockholder and the Stockholders Representative the opportunity to ask questions
of, and receive answers from, its representatives concerning the terms and
conditions of the transactions contemplated by this Agreement and to obtain any
additional information that they possess or could reasonably acquire for the
purpose of verifying the accuracy of information furnished to such Stockholder's
or Phantom Stockholder's legal counsel and the Stockholders Representative as
set forth herein or for the purpose of considering the transactions contemplated
hereby. WEI has offered to make available to such Stockholder or Phantom
Stockholder and the Stockholders Representative upon request at any time all
exhibits filed by WEI with the Commission as part of any of the reports filed
therewith.
(e) Such Stockholder or Phantom Stockholder and the
Stockholders Representative have made an independent investigation of the
pertinent facts relating to the transactions contemplated hereby, have reviewed
carefully the terms of this Agreement and the information furnished to such
Stockholder or Phantom Stockholder and the Stockholders Representative
(including the Disclosure Information) to the extent each such Person deems
necessary to be fully informed with respect thereto and understand the nature of
an investment in the WEI Shares.
-11-
<PAGE> 16
(f) Such Stockholder or Phantom Stockholder agrees that the
certificates representing the Securities will be imprinted with the following
legend, the terms of which are specifically agreed to:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, OR THE SECURITIES LAWS OF ANY STATE, IN RELIANCE UPON EXEMPTIONS
FROM REGISTRATION REQUIREMENTS. SUCH SHARES MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED, EXCEPT UPON REGISTRATION OR
DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH
SALE, PLEDGE, HYPOTHECATION OR TRANSFER OR THE SUBMISSION TO THE
COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO
THE EFFECT THAT SUCH SALE, PLEDGE, HYPOTHECATION OR TRANSFER SHALL NOT
BE IN VIOLATION OF THE SECURITIES ACT OF 1933 OR APPLICABLE STATE
SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
Such Stockholder or Phantom Stockholder understands and agrees that appropriate
stop transfer notations will be placed in the records of WEI and with its
transfer agents in respect of the Securities that are to be issued to such
Stockholder or Phantom Stockholder. WEI agrees that any Securities sold pursuant
to an effective registration statement, including a registration statement filed
pursuant to Article 12 hereof, shall have the above legend removed to permit the
closing of the sale within three Business Days of written notice of the sale and
certification by such selling Stockholder or Phantom Stockholder that the sale
was made pursuant to the plan of distribution described in the registration
statement and the prospectus delivery requirements under the Securities Laws
were fully complied with in connection with the sale.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF
WEI AND SUB
WEI and Sub hereby represent and warrant to the Stockholders and
Phantom Stockholder as follows:
6.1 ORGANIZATION. Each of WEI and Sub is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and has all
requisite corporate power and authority to carry on its business as it is now
being conducted, and to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby.
-12-
<PAGE> 17
6.2 DUE AUTHORIZATION, EXECUTION AND DELIVERY; EFFECT OF AGREEMENT.
(a) The execution, delivery and performance by each of Sub and
WEI of this Agreement and the consummation by WEI and Sub of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of WEI and Sub. This Agreement
has been duly and validly executed and delivered by WEI and Sub and
constitutes the legal, valid and binding obligation of WEI and Sub,
enforceable against each in accordance with its terms, except to the
extent that such enforceability (i) may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to creditors' rights generally and (ii) is subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(b) The execution, delivery and performance by each of Sub and
WEI of this Agreement and the consummation by WEI and Sub of the
transactions contemplated hereby will not, with or without the giving
of notice or the lapse of time, or both, (i) violate any provision of
any law, rule or regulation to which WEI and Sub is subject; (ii)
violate any Order or Legal Requirement applicable to or binding upon
the WEI and Sub; (iii) conflict with, or result in a breach or default
under, the certificate of incorporation or by-laws of WEI and Sub;
except, in each case, for violations, conflicts, breaches, defaults,
terminations or modifications which in the aggregate would not
materially hinder or impair the consummation of the transactions
contemplated by this Agreement.
(c) WEI has taken all necessary corporate action to permit it
to issue the Securities pursuant to the terms of this Agreement.
Subject to the provisions of Articles 2 and 3, the Securities issued
pursuant to the terms of this Agreement, will, when issued, be validly
issued, fully paid and non-assessable and not subject to any
Encumbrances (other than those Encumbrances created or suffered by the
Stockholders or the Phantom Stockholder and their respective Affiliates
and restrictions on sales of the WEI Shares under applicable Securities
Laws). The Securities when issued pursuant to this Agreement, will,
when issued, be listed on the New York Stock Exchange, subject to
official notice of issuance.
6.3 NO CONSENTS. There are no consents, approvals or authorizations of,
or exemptions by, or filings with, any Governmental Body or any Person required
for WEI or Sub in connection with the execution, delivery or performance by WEI
and Sub of this Agreement and the consummation of the transaction contemplated
hereby that have not been obtained.
6.4 BROKERAGE. No banker, broker, finder or other Person is entitled to
any brokerage or finder's fee or other commission in respect of this Agreement
or the transactions contemplated hereby based in any way on agreements,
arrangements or understandings made by or on behalf of WEI or any Affiliate of
WEI. WEI agrees to indemnify and hold the Stockholders harmless from and against
any and all claims, liabilities or obligations with respect to any fees,
commissions or expenses asserted by any Person on the basis of any act,
statement, agreement or commitment alleged to have been made by WEI or any
Affiliate of WEI with respect to any such fee, expense or commission.
-13-
<PAGE> 18
6.5 SEC DOCUMENTS. WEI has delivered to the Stockholders' and Phantom
Stockholder's legal counsel all of the SEC Documents. The SEC Documents
represent each report filed by WEI with the Commission since March 30, 1999. As
of their respective dates, the SEC Documents (i) were prepared in all material
respects in accordance with the applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder
applicable to such documents and (ii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading except for such statements, if any,
as have been modified by subsequent filing with the Commission prior to the date
hereof. The consolidated financial statements of WEI included in the SEC
Documents comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission with
respect thereto, have been prepared in accordance with United States generally
accepted accounting principles (except as may be indicated in the notes thereto)
and fairly present the consolidated financial position of WEI and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended. Since September
30, 1999, other than as discussed in the SEC Documents, there has been no
material adverse change in the business of WEI and its subsidiaries, taken as a
whole.
6.6 OWNERSHIP OF SUBTECH COMMON STOCK. As of the Effective Time, WEI
owns at least 51% of the SubTech Common Stock and no Affiliate of WEI owns any
SubTech Common Stock.
6.7 OWNERSHIP OF SUB. As of the Effective Time, WEI owns 100% of the
Common Stock of Sub, as a wholly owned subsidiary formed for the specific
purpose of consummating the Merger.
6.8 CONTINUITY OF BUSINESS ENTERPRISE. As of the Effective Time, it is
the intention of WEI to continue at least one significant historic business line
of SubTech, or to use at least a significant portion of SubTech's historic
business assets in a business, in each case within the meaning of Section
1.368-1(d) of the Income Tax Regulations.
ARTICLE 7
TERMINATION OF SUBTECH STOCKHOLDER AGREEMENT
AND PHANTOM STOCK AGREEMENT AND WRITTEN CONSENT
7.1 TERMINATION OF SUBTECH STOCKHOLDER AGREEMENT. The parties hereto
agree that the SubTech Stockholders Agreement is hereby terminated on the
Closing Date in all respects and each of the parties thereto are hereby released
from any and all obligations thereunder as of the Closing Date.
7.2 TERMINATION OF PHANTOM STOCK AGREEMENT. WEI and the Phantom
Stockholder agree that the Phantom Stock Agreement is hereby terminated in all
respects as of the Closing Date and each of the parties thereto are hereby
released from any and all obligations thereunder as of the Closing Date.
-14-
<PAGE> 19
7.3 CONSENT OF STOCKHOLDERS TO MERGER. Each of the parties hereto
acknowledge, and represent, warrant and agree, that such party's execution and
delivery of this Agreement constitutes their written consent, pursuant to
Section 228(a) of the General Corporation Law of the State of Delaware (for all
shares of SubTech Common Stock for which they are the record owner) approving
the Merger, this Agreement and all of the transactions contemplated by this
Agreement.
7.4 INDEMNIFICATION UNDER THE SUBTECH EXCHANGE AGREEMENT. The parties
hereto acknowledge and agree that Section 10.7 of the SubTech Exchange Agreement
sets forth the priority and order in which an indemnified party is entitled to
receive cash or Newco Shares (as defined in the SubTech Exchange Agreement) in
satisfaction of their claims. The parties hereto represent, warrant, covenant
and agree that the term "Newco Shares" for purposes of Article 10 of the SubTech
Exchange Agreement shall mean the Securities issued pursuant to this Agreement
and the amount of any proceeds or other consideration received from the sale or
transfer of such Securities.
ARTICLE 8
CONDITIONS TO WEI'S OBLIGATIONS
The obligations of WEI and Sub to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction (or waiver
by WEI) on or prior to the Closing Date of all of the following conditions:
8.1 REPRESENTATIONS TRUE AND CORRECT. The representations of the
Stockholders and Phantom Stockholder set forth in this Agreement shall be true
and correct at and as of the Closing Date.
8.2 PERFORMANCE OF COVENANTS. The Stockholders and Phantom Stockholders
shall have performed and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed by or
complied with by them prior to or at the Closing.
8.3 RESOLUTIONS. Each Stockholder that is not an individual Stockholder
shall have delivered certified copies of resolutions of such Stockholder
approving the Agreement and the transactions contemplated hereby.
8.4 GOVERNMENTAL APPROVALS. No statute, rule or regulation or order of
any court or administrative agency shall be in effect which prohibits WEI or Sub
from consummating the transactions contemplated hereby and no suit, action,
investigation or other proceeding shall have been instituted or threatened
(other than by WEI or any Affiliate thereof) seeking to restrain or prohibit WEI
or Sub or the Stockholders or Phantom Stockholder from consummating the
transactions contemplated hereby.
8.5 FURTHER ACTION. All consents, approvals, authorizations, exemptions
and waivers shall have been obtained and be effective and all other consents,
approvals, authorizations, exceptions and waivers from third Persons that shall
be required in order to enable the Stockholders or Phantom Stockholder to
consummate the transactions contemplated hereby shall have been obtained except
where the failure to obtain any such consents, approvals, authorizations,
exemptions
-15-
<PAGE> 20
and waivers would not have a Material Adverse Effect on SubTech's condition or
materially hinder or impair the consummation of the transactions contemplated by
this Agreement.
8.6 NO BANKRUPTCY. None of the Stockholders or Phantom Stockholder
shall have: (i) filed for voluntary bankruptcy (or shall have commenced against
it an involuntary bankruptcy) under any chapter or section of the United States
Bankruptcy Code; (ii) been adjudged bankrupt or insolvent in proceedings filed
under any section or chapter of the United States Bankruptcy Code; (iii) made
any general assignment for the benefit of creditors; (iv) been unable, or stated
that it is unable, to pay its debts as they become due; or (v) taken any
preliminary action with respect to the matters described in clauses (i) or
(iii).
8.7 NO MATERIAL ADVERSE CHANGE. Except for any matter disclosed in this
Agreement (including the Schedules hereto) there shall not have occurred any
event or matter having a Material Adverse Effect on SubTech or its Affiliates
taken as a whole since September 30, 1999.
8.8 LEGAL OPINION. The Stockholders and Phantom Stockholder shall have
furnished an opinion of Chamberlain, Hrdlicka, White, Williams & Martin in a
form reasonably acceptable to WEI regarding the transactions described in
Section 3.5(c).
ARTICLE 9
CONDITIONS TO THE STOCKHOLDERS AND
PHANTOM STOCKHOLDERS OBLIGATIONS
The obligations of the Stockholders and Phantom Stockholder shall be
subject to the satisfaction (or waiver by the Stockholders and Phantom
Stockholder) on or prior to the Closing Date of all the following conditions:
9.1 REPRESENTATIONS TRUE AND CORRECT. The representations and
warranties of WEI and Sub set forth in this Agreement shall be true and correct
at and as of the Closing Date.
9.2 PERFORMANCE OF COVENANTS. WEI shall have performed and complied in
all material respects with all covenants, agreements and conditions required by
this Agreement to be performed by or complied with by it prior to or at the
Closing.
9.3 RESOLUTIONS. The Stockholders and Phantom Stockholder shall have
received certified copies of resolutions of the Board of Directors of WEI
approving the Agreement and the transactions contemplated hereby.
9.4 GOVERNMENTAL APPROVALS. No statute, rule or regulation or order of
any court or administrative agency shall be in effect which prohibits the
Stockholders or Phantom Stockholder from consummating the transactions
contemplated hereby and no suit, action, investigation or other proceeding shall
have been instituted or threatened (other than by a Stockholder, Phantom
Stockholder or SubTech) seeking to restrain or prohibit WEI or the Stockholders
or Phantom Stockholder from consummating the transactions contemplated hereby.
-16-
<PAGE> 21
9.5 NO MATERIAL ADVERSE CHANGE. Except for any matter disclosed in this
Agreement (including the Schedules hereto) there shall not have occurred any
event or matter having a Material Adverse Effect on WEI and its Affiliates taken
as a whole since September 30, 1999.
ARTICLE 10
INDEMNIFICATION
10.1 INDEMNIFICATION BY THE STOCKHOLDERS AND PHANTOM STOCKHOLDERS.
Except as otherwise limited by this Article 10 or Article 11 hereof, each of the
Stockholders, the Management Stockholders and Phantom Stockholder severally and
not jointly agree to indemnify, defend and hold WEI (and its subsidiaries,
including Sub, and Affiliates) and the other parties hereto and each of WEI's
and such other parties' officers, directors, employees, agents, stockholders,
affiliates and controlling persons and their respective successors and assigns
harmless from and against and in respect of all Damages directly or indirectly
suffered, incurred or realized by such party or parties, arising out of or
resulting from or relating to, directly or indirectly, any misrepresentation,
breach of warranty or breach of any covenant or agreement made or undertaken by
such Stockholder or Phantom Stockholder in this Agreement or any
misrepresentation in or omission from any other agreement, certificate, exhibit
or writing delivered to WEI by such Stockholder or Phantom Stockholder pursuant
to this Agreement.
10.2 INDEMNIFICATION BY WEI. Except as otherwise limited by this
Article 10 and Article 11 hereof, WEI agrees to indemnify, defend and hold each
Stockholder and each of their respective officers, directors, employees, agents,
stockholders and controlling Persons and their successors and assigns harmless
from and against and in respect of all Damages directly or indirectly suffered,
incurred or realized by such party, arising out of or resulting from or relating
to, directly or indirectly, any misrepresentation, breach of warranty or breach
of any covenant or agreement made or undertaken by WEI in this Agreement or any
misrepresentation in or omission from any other agreement, certificate, exhibit
or writing delivered to such Stockholder or Phantom Stockholder by WEI pursuant
to this Agreement.
10.3 NOTICE AND OPPORTUNITY TO DEFEND.
(a) If a party seeking indemnification (the "Indemnitee")
becomes aware of any matter that it believes may give rise to an indemnifiable
claim, or asserts any claim that it believes may be indemnifiable pursuant to
Sections 10.1 or 10.2 hereof, the Indemnitee shall give the party obligated to
provide indemnification (the "Indemnifying Party") prompt written notice of such
matter or claim, stating with particularity the nature of such matter or the
aforementioned claim and the amount thereof. Failure to provide such notice
shall not affect the right of the Indemnitee to indemnification except to the
extent such failure shall have resulted in liability to the Indemnifying Party
that could have been actually avoided had such notice been provided within such
required time period.
(b) If the matter that the Indemnitee believes gives rise to
an indemnifiable claim does not involve a third party claim against an
Indemnitee, the Indemnifying Party shall have 30 days from the date on which it
received notice of such claim pursuant to this Section 10.4 hereof to
-17-
<PAGE> 22
respond to such notice. If such Indemnifying Party accepts responsibility or
does not respond within such 30-day period, Indemnifying Party shall promptly
pay to the Indemnitee the full amount of such claim. If the Indemnifying Party
rejects any liability with respect to such claim, it shall give written notice
of such objection to the Indemnitee within such 30-day period and the parties
shall seek to resolve such claim by agreement. If such claim is unable to be
resolved by agreement within 60 days following the expiration of such 30-day
period mentioned above, the parties shall resolve the matter by arbitration
pursuant to Section 13.3 hereof (excluding any requirement in Section 13.3(a)
that the parties attempt to resolve the matter by mutual agreement for a period
of 60 days prior to submitting such matter to arbitration).
(c) In the event any action, suit, proceeding or investigation
is brought against the Indemnitee by a third party which the Indemnitee believes
may give rise to an indemnifiable claim pursuant to Section 10.1 or 10.2 hereof,
the Indemnitee shall give the Indemnifying Party prompt written notice of the
commencement of such action, suit, proceeding or investigation as provided in
subsection (a) of this Section 10.4 hereof. Such Indemnifying Party shall have a
period of 30 days after receipt of such notice within which to respond to such
notice. If such Indemnifying Party accepts responsibility, such Indemnifying
Party shall be obligated to compromise or defend such matter, at its own expense
and by counsel chosen by the Indemnifying Party reasonably acceptable to the
Indemnitee. The Indemnitee shall have the right to participate at its own
expense in the defense of such asserted liability. If such Indemnifying Party
does not respond within such 30-day period or rejects responsibility for such
matter in whole or in part, the Indemnitee shall be free to pursue, without
prejudice to any of its rights hereunder, such remedies as may be available to
such party under applicable law. The Indemnitee shall cooperate fully with the
Indemnifying Party and its counsel in the defense against any such asserted
liability. Any compromise of such asserted liability by the Indemnifying Party
shall require the prior written consent of the Indemnitee, which shall not be
unreasonably withheld. If, however, the Indemnitee refuses its consent to a bona
fide offer of settlement which involves solely the payment of cash which the
Indemnifying Party wishes to accept and fully pay subject to the limitations in
Section 10.3(a), the Indemnitee may continue to pursue such matter, free of any
participation by the Indemnifying Party, at the sole expense of the Indemnitee.
In such event, the obligation of the Indemnifying Party to the Indemnitee shall
be equal to the lesser of (i) the amount of the offer of settlement which the
Indemnitee refused to accept plus the costs and expenses of the Indemnitee prior
to the date the Indemnifying Party notifies the Indemnitee of the offer of
settlement, and (ii) the actual out-of-pocket amount the Indemnitee is obligated
to pay as a result of such party's continuing to pursue such matter. An
Indemnifying Party shall be entitled to recover from the Indemnitee any
additional expenses incurred by such Indemnifying Party as a result of the
decision of the Indemnitee to pursue such matter.
10.4 EXPRESS NEGLIGENCE. THE FOREGOING INDEMNITIES SET FORTH IN THIS
ARTICLE 10 ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH
THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING TEXAS' EXPRESS NEGLIGENCE
RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNITIES
BECAUSE OF THE SIMPLE OR GROSS NEGLIGENCE (WHETHER SOLE, CONCURRENT, ACTIVE OR
PASSIVE) OR OTHER FAULT OR STRICT LIABILITY OF ANY OF THE INDEMNIFIED PARTIES.
-18-
<PAGE> 23
10.5 RELEASES. AS OF THE EFFECTIVE TIME, EXCEPT FOR EXISTING CONTRACTS
SPECIFICALLY DISCLOSED IN SCHEDULE 10.5 HERETO AND RIGHTS AND CLAIMS AS AN
EMPLOYEE OF SUBTECH OR ITS AFFILIATES WITH RESPECT TO THE PAYMENT OF SALARIES
AND REIMBURSEMENT OF BUSINESS EXPENSES, EACH STOCKHOLDER AND PHANTOM STOCKHOLDER
DOES HEREBY FOR SUCH STOCKHOLDER OR PHANTOM STOCKHOLDER AND SUCH STOCKHOLDER'S
OR PHANTOM STOCKHOLDER'S AFFILIATES, HEIRS, EXECUTORS, ADMINISTRATORS AND LEGAL
REPRESENTATIVES REMISE, RELEASE, ACQUIT AND FOREVER DISCHARGE WEI, SUBTECH AND
THEIR AFFILIATES AND THEIR OFFICERS, DIRECTORS, CONTROLLING PERSONS OR ENTITIES,
EMPLOYEES, ATTORNEYS AND SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE "COMPANY
RELEASED PARTIES") OF AND FROM ANY AND ALL CLAIMS, DEMANDS, LIABILITIES,
RESPONSIBILITIES, DISPUTES, CAUSES OF ACTION AND OBLIGATIONS OF EVERY NATURE
WHATSOEVER, LIQUIDATED OR UNLIQUIDATED, KNOWN OR UNKNOWN, MATURED OR UNMATURED,
FIXED OR CONTINGENT, WHICH SUCH STOCKHOLDER OR PHANTOM STOCKHOLDER AND SUCH
STOCKHOLDER'S OR PHANTOM STOCKHOLDER'S AFFILIATES NOW HAVE, OWN OR HOLD OR HAVE
AT ANY TIME PREVIOUSLY HAD, OWNED OR HELD AGAINST THE COMPANY RELEASED PARTIES,
INCLUDING WITHOUT LIMITATION ALL LIABILITIES CREATED AS A RESULT OF THE SOLE OR
CONTRIBUTORY NEGLIGENCE, GROSS NEGLIGENCE AND WILLFUL ACTS OF ANY COMPANY
RELEASED PARTY, EXISTING AS OF THE CLOSING OR RELATING TO ANY MATTER THAT
OCCURRED ON OR PRIOR TO THE CLOSING; PROVIDED, HOWEVER, THAT ANY CLAIMS,
LIABILITIES, DEBTS OR CAUSES OF ACTION THAT MAY ARISE IN THE CONNECTION WITH THE
FAILURE OF ANY OF THE PARTIES HERETO TO PERFORM ANY OF THEIR OBLIGATIONS
HEREUNDER, UNDER THE SUBTECH EXCHANGE AGREEMENT OR UNDER ANY OTHER AGREEMENT
RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY OR FROM ANY BREACHES BY ANY OF
THEM OF ANY REPRESENTATIONS OR WARRANTIES HEREIN OR IN CONNECTION WITH ANY OF
SUCH OTHER AGREEMENTS SHALL NOT BE RELEASED OR DISCHARGED PURSUANT TO THIS
AGREEMENT. SUCH STOCKHOLDER OR PHANTOM STOCKHOLDER REPRESENTS AND WARRANTS THAT
SUCH STOCKHOLDER OR PHANTOM STOCKHOLDER HAS NOT PREVIOUSLY ASSIGNED OR
TRANSFERRED, OR PURPORTED TO ASSIGN OR TRANSFER, TO ANY PERSON OR ENTITY
WHATSOEVER ALL OR ANY PART OF THE CLAIMS, DEMANDS, LIABILITIES,
RESPONSIBILITIES, DISPUTES, CAUSES OF ACTION OR OBLIGATIONS RELEASED IN THIS
SECTION 10.5. SUCH STOCKHOLDER OR PHANTOM STOCKHOLDER COVENANTS AND AGREES THAT
SUCH STOCKHOLDER OR PHANTOM STOCKHOLDER WILL NOT ASSIGN OR TRANSFER TO ANY
PERSON OR ENTITY WHATSOEVER ALL OR ANY PART OF THE CLAIMS, DEMANDS, LIABILITIES,
RESPONSIBILITIES, DISPUTES, CAUSES OF ACTION OR OBLIGATIONS RELEASED IN THIS
SECTION 10.5. SUCH STOCKHOLDER OR PHANTOM STOCKHOLDER REPRESENTS AND WARRANTS
THAT SUCH STOCKHOLDER OR PHANTOM STOCKHOLDER HAS READ AND UNDERSTANDS ALL OF THE
PROVISIONS OF THIS SECTION 10.5 AND THAT SUCH STOCKHOLDER OR PHANTOM STOCKHOLDER
HAS BEEN REPRESENTED OR
-19-
<PAGE> 24
ADVISED BY LEGAL COUNSEL AND OTHER PROFESSIONAL ADVISORS IN CONNECTION WITH THE
NEGOTIATION, EXECUTION AND DELIVERY OF THIS AGREEMENT.
10.6 INDEMNIFICATION LIMITATIONS. The liability of each of the
Stockholders and the Phantom Stockholder under Section 10.1 for
misrepresentations or breaches of warranties set forth in Article 4 shall not
exceed (a) in the case of the Stockholders, an amount equal to the number of
shares of SubTech Common Stock owned by such Person immediately prior to the
Effective Time multiplied by $10, and (b) in the case of the Phantom
Stockholder, $75,000.
ARTICLE 11
NATURE OF STATEMENTS AND SURVIVAL OF COVENANTS,
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
All statements of fact contained in any written statement (including
financial statements), certificate, instrument or document delivered by or on
behalf of a party hereto pursuant to this Agreement shall be deemed
representations and warranties of that party. The representations and warranties
of the Management Stockholders set forth in Article 4 shall survive the Closing
Date for a period of three years from the Closing Date and shall be effective
with respect to any inaccuracy therein or breach thereof (and a claim for
indemnification under Article 10 hereof made therein) if a written notice
asserting the claim shall have been given within such period with respect to
such matter. Any claim for indemnification made during such period shall be
valid and the representations and warranties relating thereto shall remain in
effect for purposes of such indemnification notwithstanding such claim may not
be resolved within such period. Except as set forth in the preceding sentences,
the representations and warranties of the parties to this Agreement shall
survive the Closing Date and the Closing indefinitely. All covenants and
agreements contained herein shall survive the Closing indefinitely. All
representations, warranties and covenants and agreements made by the parties
shall not be affected by any investigation heretofore or hereafter made by and
on behalf of any of them and shall not be deemed merged into any instruments or
agreements delivered in connection with this Agreement or otherwise in
connection with the transactions contemplated hereby.
ARTICLE 12
REGISTRATION RIGHTS
12.1 REGISTRATION RIGHTS.
(a) WEI will use its best efforts to register under the
Securities Act the WEI Shares pursuant to a non-underwritten offering having a
period of distribution not to exceed one year from the Closing Date. In
furtherance of such obligation, WEI shall file, within 30 Business Days after
the Closing Date, with the Commission a registration statement on the
appropriate form seeking the registration for resale of the WEI Shares (the
"Registration Statement"), pursuant to a non-underwritten offering in accordance
with the plan of distribution described therein. References in this Article 12
to the WEI Shares shall be deemed to include any shares of WEI Common Stock
-20-
<PAGE> 25
or other securities received by the Stockholders or Phantom Stockholder on
account of any stock split, stock dividend or merger of WEI.
(b) Notwithstanding anything to the contrary contained in this
Section 12.1, WEI shall not be obligated to prepare and file the Registration
Statement pursuant to this Section 12.1, or prepare or file any amendment or
supplement thereto, at any time when WEI reasonably believes that the filing
thereof, or the offering of securities pursuant thereto, would adversely affect
a pending or proposed public offering of securities of WEI, an acquisition,
merger, recapitalization, consolidation, reorganization or similar transaction
relating to WEI or negotiations, discussions or pending proposals with respect
thereto or require premature disclosure of information not otherwise required to
be disclosed to the potential detriment of WEI or disclosure of third party
information not readily available to WEI.
(c) Notwithstanding anything to the contrary contained in this
Section 12.1, WEI shall be permitted, on written notice to the Stockholders and
Phantom Stockholder, to suspend the period of sale or distribution of the WEI
Shares at any time when WEI reasonably believes that the sale or distribution
thereof would adversely affect a pending or proposed public offering of
securities of WEI, an acquisition, merger, recapitalization, consolidation,
reorganization or similar transaction relating to WEI or negotiations,
discussions or pending proposals with respect thereto or require premature
disclosure of information not otherwise required to be disclosed to the
potential detriment of WEI or disclosure of third party information not readily
available to WEI.
(d) The filing of the Registration Statement, or any amendment
or supplement thereto, by WEI may not be deferred pursuant to Section 12.1(b)
hereof, and the sale and distribution of the WEI Shares may not be suspended
pursuant to Section 12.1(c) hereof, for more than 60 days after the abandonment
or consummation (or the completion of the distribution of securities in the case
of a public offering) of any of the proposals or transactions described therein
or, in any event, for more than 150 days.
(e) The Stockholders and Phantom Stockholder agree and
covenant to fully cooperate with and assist WEI and its counsel and
representatives in connection with WEI's obligations under this Article 12,
including providing such information as requested by WEI in connection with the
preparation of the Registration Statement and the resale of the WEI Shares.
12.2 PROCEDURE. WEI will, subject to the provisions of Sections 12.1,
12.2 and 12.4 hereof:
(a) seek to cause the Registration Statement to become and
remain effective for a period of up to one year following the Closing Date or
such shorter period of time until the transfer or sale of all the WEI Shares has
been completed;
(b) as expeditiously as reasonably practicable, prepare and
file with the Commission such amendments and supplements to the Registration
Statement and the prospectus used in connection therewith as may be necessary to
keep the Registration Statement effective and to comply with the provisions of
the Securities Act with respect to the disposition of the WEI Shares
-21-
<PAGE> 26
covered by the Registration Statement in accordance with the intended method of
distribution set forth therein;
(c) afford the Stockholders and the Phantom Stockholder a
reasonable opportunity to review and comment on drafts of the Registration
Statement and each amendment thereof and supplement thereto, and drafts of each
preliminary prospectus used in connection with the Registration Statement, prior
to their filing or distribution, as the case may be;
(d) as expeditiously as reasonably practicable, furnish to the
Stockholders and Phantom Stockholder such number of copies of prospectuses and
preliminary prospectuses in conformity with the requirements of the Securities
Act, and such other documents as the Stockholders and Phantom Stockholder may
reasonably request, in order to facilitate the public sale or other disposition
of the WEI Shares owned by the Stockholders and Phantom Stockholder; provided,
however, that the obligation of WEI to deliver copies of prospectuses or
preliminary prospectuses to the Stockholders and Phantom Stockholder shall be
subject to the receipt by WEI of reasonable assurances from the Stockholders and
Phantom Stockholder that they will comply with the applicable provisions of the
Securities Act and of such other securities laws as may be applicable in
connection with any use by them of any prospectuses or preliminary prospectuses;
(e) as expeditiously as practicable, use its best efforts to
register or qualify the WEI Shares under such other securities laws of such
United States jurisdictions as the Stockholders and Phantom Stockholder shall
reasonably request (considering the nature and size of the offering) and do any
and all other acts and things that may be necessary or desirable to enable the
Stockholders and Phantom Stockholder to consummate the public sale or other
disposition in such jurisdictions of the WEI Shares; provided, however, that WEI
shall not be required to qualify to transact business as a foreign corporation
in any jurisdiction in which it would otherwise not be required to be so
qualified or to take any action that would subject it to general service of
process in any jurisdiction in which it is not then so subject;
(f) notify the Stockholders and the Phantom Stockholder
promptly (i) when a prospectus or any prospectus supplement has been filed with
the Commission and, with respect to the Registration Statement or any
post-effective amendment thereto, when such document has been declared effective
by the Commission, (ii) of any request by the Commission for amendments or
supplements to the Registration Statement or related prospectus, or for
additional information, (iii) of the issuance by the Commission of any stop
order or the initiation of any proceedings for such or a similar purpose (and
WEI shall make every reasonable effort to obtain the withdrawal of any such
order as soon as practicable) and (iv) of the receipt by WEI of any notification
with respect to the suspension of the qualification of any of the WEI Shares for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose (and WEI shall use commercially reasonable efforts to obtain the
withdrawal of any such suspension as soon as practicable); and
(g) bear all Registration Expenses (as defined below) in
connection with the registration hereunder; provided, however, that all Selling
Expenses (as defined below) of the WEI Shares and all fees and disbursements of
counsel for the Stockholders and Phantom Stockholder shall be borne by the
Stockholders and Phantom Stockholder. For purposes of this Section 12.2,
expenses incurred by WEI in complying with this Agreement, including (i) all
registration and filing
-22-
<PAGE> 27
fees, (ii) all printing expenses, (iii) all fees and disbursements of counsel
for WEI, (iv) all blue sky fees and expenses and (v) all fees and expenses of
accountants for WEI, are herein referred to as "Registration Expenses". All
brokerage and selling commissions and fees and expenses of counsel for the
Stockholders and Phantom Stockholder in connection with any such registration or
resale are herein referred to as "Selling Expenses".
12.3 INDEMNIFICATION.
(a) In the event of a registration of the WEI Shares under the
Securities Act pursuant to this Agreement, WEI will indemnify and hold harmless
each Stockholder and Phantom Stockholder and any other Person, if any, who
controls such Stockholder or Phantom Stockholder within the meaning of Section
15 of the Securities Act, against any losses, claims, damages or liabilities,
several, to which such Stockholder or Phantom Stockholder or such controlling
Person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities or actions in respect thereof arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in the Registration
Statement, any preliminary prospectus distributed with the consent of WEI or
final prospectus contained therein, or any amendment thereof or supplement
thereto, including all documents incorporated by reference therein, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will, unless WEI assumes the defense as provided in
Section 12.3(c) hereof, promptly following request and receipt of reasonable
supporting documents, such as invoices, reimburse the Stockholders and Phantom
Stockholder and each such controlling Person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that WEI will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in such Registration
Statement, such preliminary prospectus, such final prospectus or such amendment
or supplement, including all documents incorporated by reference therein, in
reliance upon and in conformity with written information furnished to WEI by or
on behalf of such Stockholder or Phantom Stockholder or a controlling Person
thereof specifically for use in the preparation thereof.
(b) In the event of any registration of the WEI Shares under
the Securities Act pursuant to this Agreement, each Stockholder and Phantom
Stockholder will indemnify and hold harmless WEI and each Person, if any, who
controls WEI within the meaning of Section 15 of the Securities Act, each
officer of WEI who signs the Registration Statement and each director of WEI,
against any and all such losses, claims, damages, liabilities or actions that
WEI or such officer, director or controlling Person may become subject under the
Securities Act or otherwise, and will reimburse WEI, each such officer, director
and controlling Person for any legal or any other expenses reasonably incurred
by such party in connection with investigating or defending any such loss,
claim, damage, liability or action, if (i) such loss, claim, damage, liability
or action in respect thereof arises out of or is based upon any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement or any such prospectus, or any amendment thereof or supplement
thereto, or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not
-23-
<PAGE> 28
misleading and such statement or omission of a material fact was made in
reliance upon and in conformity with information furnished to WEI by or on
behalf of such Stockholder or Phantom Stockholder specifically for use in
connection with the preparation of the Registration Statement or prospectus or
(ii) such loss, claim, damage, liability or action in respect thereof arises out
of or is based upon such Stockholder's or Phantom Stockholder's failure to
deliver any required prospectus or otherwise comply with applicable laws
regarding the same.
(c) Within five days after receipt by any indemnified Person
of notice of any claim or commencement of any action in respect of which
indemnity is to be sought against an indemnifying Person pursuant to this
Agreement, such indemnified Person shall notify the indemnifying Person in
writing of such claim or of the commencement of such action, and, subject to
provisions hereinafter stated, in case any such action shall be brought against
an indemnified Person and such indemnifying Person shall have been notified of
the same, such indemnifying Person shall be entitled to participate therein,
and, to the extent it shall desire, in its sole discretion, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
Person, and after notice from the indemnifying Person to such indemnified Person
of its election to assume the defense thereof, such indemnifying Person shall
not be liable to such indemnified Person in connection with the defense thereof;
provided, however, if there exists or will exist a conflict of interest that
would make it inappropriate in the reasonable judgment of the indemnified Person
for the same counsel to represent both the indemnified Person and such
indemnifying Person then such indemnifying Person shall be entitled to retain
its own counsel at the expense of such indemnifying Person; provided further,
however, the indemnifying Person shall not be required to pay for more than one
separate counsel for all of the indemnified Persons in addition to any local
counsel. Payment of any amounts due pursuant to this Section 12.3 shall be made
within ten Business Days after notice is sent by the indemnified Person.
12.4 TERMINATION. If Rule 144 or Rule 145 as promulgated under the
Securities Act or any successor or similar rule or statute shall permit the
public sale of the WEI Shares, the rights to registration provided for in this
Agreement as to the WEI Shares shall terminate immediately.
ARTICLE 13
MISCELLANEOUS
13.1 ENTIRE AGREEMENT. This Agreement and the other agreements
contemplated hereby constitute the sole understanding of the parties with
respect to the matters provided for herein and supersedes any previous
agreements and understandings between the parties with respect to the subject
matter hereof. No amendment, modification or alteration of the terms or
provisions of this Agreement shall be binding unless the same shall be in
writing and duly executed by WEI and the affected Stockholders or Phantom
Stockholder.
13.2 SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns. Prior to the Closing Date, this Agreement may
not be assigned by any party without the prior written consent of the other
party hereto, except that WEI may, at its election, assign its rights under this
Agreement to any direct or indirect wholly owned subsidiary or other Affiliate.
Notwithstanding the
-24-
<PAGE> 29
foregoing, no assignment of this Agreement or any of the rights or obligations
hereof by any party, as the case may be, shall relieve such party of its
obligations under this Agreement and, upon any such assignment occurring prior
to the Closing, the representations, warranties, covenants and agreements
contained in this Agreement shall be deemed to have been made by such party's
assignee as well as by such party.
13.3 ARBITRATION.
(a) In the event there shall exist any dispute or controversy
between the parties hereto with respect to this Agreement or any matter relating
hereto or the transactions contemplated hereby, the parties hereto agree to seek
to resolve such dispute or controversy by mutual agreement. If such dispute or
controversy is unable to be resolved by agreement within 60 days following
notice of the nature of such dispute or controversy setting forth in reasonable
detail the circumstances and basis of such dispute or controversy, any party
hereto, as the case may be, may require that such dispute or controversy be
resolved by binding arbitration pursuant to the provisions of this Section 13.3.
If a party elects to submit such matter to arbitration, such party shall provide
notice to the other party of its election to do so, which notice shall name one
arbitrator. Within 10 days after the receipt of such notice, the other party
shall name a second arbitrator. The two arbitrators so appointed shall name a
third arbitrator, or failing to do so, a third arbitrator shall be appointed
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association. Each arbitrator selected to act hereunder shall be qualified by
education and experience to pass on the particular question in dispute. The
arbitrators shall resolve all disputes in controversy in accordance with the
applicable substantive law. All statutes of limitations that would otherwise be
applicable shall apply to any arbitration proceeding.
(b) The arbitrators appointed pursuant to this Section 13.3
shall promptly hear and determine (after due notice and hearing and giving the
parties reasonable opportunity to be heard) the questions submitted, and shall
render their decision within 60 days after appointment of the third arbitrator
or as soon as practical thereafter. If within such period a decision is not
rendered by the board or a majority thereof, new arbitrators may be named and
shall act hereunder at the election of either party in like manner as if none
had previously been named. The decision of the arbitrators, or a majority
thereof, made in writing, shall absent manifest error be final and binding upon
the parties hereto as to the questions submitted, and each party shall abide by
such decision.
(c) All expenses of arbitration, including reasonable
compensation to the arbitrators, shall be borne equally by the disputing parties
(collectively), as the case may be, except each party shall bear the
compensation and expenses of its own counsel, witnesses and employees.
(d) Nothing contained herein shall prohibit any party from
seeking injunctive or other equitable relief pending any decision in arbitration
or from enforcing any order or decision by the arbitrators in any court or other
appropriate forum. For purposes of injunctive relief, orders in aid of
arbitration and entry of the arbitrator's award:
(i) each of the parties hereto irrevocably consents
to the non-exclusive jurisdiction of, and venue in, any state
court located in Harris County, Texas or any federal court
sitting in the Southern District of Texas in any suit, action
or proceeding
-25-
<PAGE> 30
seeking injunctive relief, arising out of or relating to this
Agreement or any of the other agreements contemplated hereby
and any other court in which a matter that may result in a
claim for indemnification hereunder by an Indemnitee may be
brought with respect to any claim for indemnification by an
Indemnitee; and
(ii) each of the parties hereto waives, to the
fullest extent permitted by law, any objection that it may now
or hereafter have to the laying of venue of any suit, action
or proceeding seeking injunctive relief, orders in aid of
arbitration or entry of an arbitration arising out of or
relating to this Agreement or any of the other agreements
contemplated hereby brought in any state court located in
Harris County, Texas or any federal court sitting in the
Southern District of Texas or any other court in which a
matter that may result in a claim for indemnification
hereunder by an Indemnitee may be brought with respect to any
claim for indemnification by an Indemnitee, and further
irrevocably waive any claim that any such suit, action or
proceeding brought in any such court has been brought in an
inconvenient forum.
13.4 EXPENSES. Whether or not the transactions contemplated by this
Agreement are consummated, other than as expressly provided for herein, each of
the parties hereto shall pay the fees and expenses of its respective counsel,
accountants and other experts, and all other expenses incurred by such party
incident to the negotiation, preparation and execution of this Agreement and
consummation of the transactions contemplated hereby.
13.5 EFFECT OF DUE DILIGENCE. No investigation by the parties hereto or
their respective Affiliates, agents or advisers shall diminish in any way the
effect of any representations or warranties made by any party in this Agreement
or shall relieve any party of any of their respective obligations under this
Agreement.
13.6 TAKING OF NECESSARY ACTION. Subject to the terms and conditions of
this Agreement, each of the parties hereto agrees, subject to applicable laws,
to use all reasonable best efforts promptly to take or cause to be taken all
action and to promptly do or cause to be done all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement. Each party shall cooperate with
the others in good faith to help the others satisfy their obligations hereunder.
The applicable parties shall take all such necessary action.
13.7 INVALIDITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic and legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
-26-
<PAGE> 31
13.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
13.9 HEADINGS. The headings of the Sections and paragraphs of this
Agreement are included for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
13.10 CONSTRUCTION AND REFERENCES. Words used in this Agreement,
regardless of the number or gender specifically used, shall be deemed and
construed to include any other number, singular or plural, and any other gender,
masculine, feminine or neuter, as the context shall require. Unless otherwise
specified, all references in this Agreement to Sections, paragraphs or clauses
are deemed references to the corresponding Sections, paragraphs or clauses in
this Agreement, and all references in this Agreement to Schedules or Exhibits
are references to the corresponding Schedules or Exhibits attached to this
Agreement.
13.11 MODIFICATION AND WAIVER. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is entitled to
the benefits thereof. No waiver of any of the provisions of this Agreement shall
be deemed to or shall constitute a waiver of any other provisions hereof
(whether or not similar).
13.12 NOTICES. Any notice, request, instruction or other document to be
given hereunder by any party hereto to any other party shall be in writing and
delivered personally, via telecopy (with receipt confirmed) or sent by
registered or certified mail, postage prepaid to the following addresses (or
other addresses as designated in writing by the applicable party):
if to the Stockholders or Phantom Stockholder, to the
addresses set forth on Annex A hereto
with copies to:
Byron L. Willeford
Chamberlain, Hrdlicka, White, Williams & Martin
1200 Smith Street, Suite 1200
Houston, Texas 77002
Facsimile: (713) 658-2553
Telephone: (713) 658-2564
if to WEI, SubTech or Sub, to:
Weatherford International, Inc.
515 Post Oak Blvd., Suite 600
Houston, Texas 77027
Attention: Curtis W. Huff
Facsimile: (713) 693-4484
Telephone: (713) 693-4102
-27-
<PAGE> 32
or at such other address for a party as shall be specified by like written
notice. Any notice which is delivered personally in the manner provided herein
shall be deemed to have been duly given to the party to whom it is directed upon
actual receipt by such party (or its agent for notices hereunder). Any notice
which is addressed and mailed in the manner herein provided shall be
conclusively presumed to have been duly given to the party to which it is
addressed at the close of business, local time of the recipient, on the third
day after the day it is so placed in the mail.
13.13 PUBLIC ANNOUNCEMENTS. None of the Stockholders or Phantom
Stockholder (nor any of their Affiliates) shall make any public statements,
including, without limitation, any press releases, with respect to this
Agreement and the transactions contemplated hereby without the prior written
consent of the other party (which consent may not be unreasonably withheld),
except as may be required by any Legal Requirement.
13.14 GOVERNING LAW; INTERPRETATION. This Agreement shall be construed
in accordance with and governed by the laws of Texas (without regard to laws
relating to conflict of laws).
13.15 INCORPORATION BY REFERENCE. The Schedules and Annexes identified
in this Agreement are incorporated herein by reference and made a part hereof.
SIGNATURES BEGIN ON FOLLOWING PAGE.
-28-
<PAGE> 33
IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be executed on its behalf on the 3rd day of February, 2000.
WEI: WEATHERFORD INTERNATIONAL, INC.
By: /s/ CURTIS W. HUFF
-------------------------------------
Curtis W. Huff
Senior Vice President
SUB: SUBTECH ACQUISITION CORP.
By: /s/ CURTIS W. HUFF
-------------------------------------
Curtis W. Huff
Senior Vice President
SUBTECH: SUBTECH INTERNATIONAL, INC.
By: /s/ MARK S. CRAWFORD
-------------------------------------
Mark S. Crawford
President
STOCKHOLDERS: /s/ JOHN M. BIRCKHEAD
---------------------------------------
John M. Birckhead
/s/ HARRY C. EHLERT
---------------------------------------
Harry C. Ehlert, individually and on
behalf of Harry C. Ehlert IRA
*By: /s/ HARRY C. EHLERT */s/ Robert E. Ehlert
------------------- ---------------------------------------
Harry C. Ehlert, attorney-in-fact Robert E. Ehlert
pursuant to Special Power of Attorney
**By: /s/ JOHN M. BIRCKHEAD **/s/ David M. Graham
--------------------- ---------------------------------------
John M. Birckhead, attorney-in- David M. Graham
fact pursuant to Special Power
of Attorney
<PAGE> 34
CRAWFORD ESTATE, Ltd.
By: MC Holding Company, L.L.C.,
as General Partner
By: /s/ MARK S. CRAWFORD
------------------------------------
Mark S. Crawford
Manager
***/s/ Iyke Ejizu
------------------------------------
Iyke Ejizu
***/s/ Gregory B. Ford
------------------------------------
Gregory B. Ford
***/s/ Harold Ford, Jr.
------------------------------------
Harold Ford, Jr.
***/s/ Kerry D. Jernigan
------------------------------------
Kerry D. Jernigan
***By: /s/ MARK S. CRAWFORD ***/s/ James Troy Packard
-------------------- ------------------------------------
Mark S. Crawford, attorney-in- James Troy Packard
fact pursuant to Special Power
of Attorney
/s/ HENNING HANSEN
------------------------------------
Henning Hansen
/s/ FRODE KALAND
------------------------------------
Frode Kaland
PHANTOM STOCKHOLDER: /s/ PAULO S. TUBEL
------------------------------------
Paulo S. Tubel
<PAGE> 35
ANNEX A
ADDRESS NOTICES & DOMICILES
STOCKHOLDER NAME AND ADDRESS RESIDENCE/DOMICILE
Henning Hansen Randeberg, Norway
Kvernkallen 8
N-4070 Randeberg
Norway
Facsimile: 011-47-51-48-2636
Confirm: 011-47-51-41-7882
Frode Kaland Stavanger, Norway
Niels Juels Gate 59
N-4008 Stavanger
Norway
Facsimile: 011-47-51-48-2636
Confirm: 011-47-51-52-1331
Harry C. Ehlert IRA Houston, Texas
Oppenheimer & Co., Inc.
5223 Caversham
Houston, Texas 77096
Facsimile: (281) 589-7474
Confirm: (281) 589-7373
John M. Birckhead Spring, Texas
16027 Rudgewick
Spring, Texas 77379
Facsimile: (281) 589-7474
Confirm: (281) 589-7373
Robert E. Ehlert Houston, Texas
7802 Bellaire Boulevard
Houston, Texas 77036
Facsimile: (281) 589-7474
Confirm: (281) 589-7373
David M. Graham Spring, Texas
16027 Rudgewick
Spring, Texas 77379
Facsimile: (281) 589-7474
Confirm: (281) 589-7373
Crawford Estate, Ltd. Texas
c/o MC Holding Company, L.L.C General Partner
5107 Graystone Drive
Houston, Texas 77069
Facsimile: (713) 983-6128
Confirm: (281) 440-9906
A-1
<PAGE> 36
Iyke Ejizu PAI
1664 Oyin Jolayem #400 Lagos, Nigeria
P. O. Box 72468
Victoria Island Annex
Lagos, Nigeria
Facsimile: 011-234-1-262-4477
Confirm: 011-234-1-262-4904
Gregory B. Ford Aberdeen, Scotland
7 Bailleswells TRC
Bieldside
Aberdeen, Scotland
Facsimile: 011-44-1224-867-330
Confirm: 011-44-1224-861-978
Harold Ford Jr. Singapore
Bredero Price International B.V.
400 Orchard Road
#12-08109 Orchard Towers
Singapore 238875
Facsimile: 011-65-732-9073
Confirm: 011-65-732-2355
Kerry D. Jernigan Houston, Texas
11407 Monteverde
Houston, Texas 77099
Facsimile: (281) 983-6128
Confirm: (281) 879-9392
James Troy Packard Houston, Texas
c/o Mark S. Crawford
11391-A Meadowglen Lane
Houston, Texas 77082
Facsimile: (281) 589-7474
Confirm: (281) 589-7373
Paulo S. Tubel The Woodlands, Texas
118 East Placid Hill
The Woodlands, Texas 77381
Facsimile: (281) 589-7474
Confirm: (281) 589-7373
A-2
<PAGE> 37
SCHEDULE 5.5
OWNERSHIP OF SUBTECH COMMON STOCK
STOCKHOLDER NO. SHARES
----------- ----------
Henning Hansen 49,000
Frode Kaland 49,000
Harry C. Ehlert IRA, 96,911
Oppenheimer & Co., Inc.
John M. Birckhead 96,911
Robert E. Ehlert 1,089
David M. Graham 1,089
Crawford Estate Ltd. 44,194
Iyke Ejizu 18,763
Gregory B. Ford 53,594
Harold Ford, Jr. 67,973
Kerry D. Jernigan 692
James Troy Packard 2,977
<PAGE> 38
SCHEDULE 10.5
AGREEMENTS BETWEEN SUBTECH AND THE STOCKHOLDERS
AND PHANTOM STOCKHOLDERS
1. SubTech Exchange Agreement
2. Employment Agreements dated November 4, 1998, between SubTech and each
of the following:
a. Mark S. Crawford
b. John M. Birckhead
c. Harry C. Ehlert
d. Kerry D. Jernigan
3. Employment Contracts dated November 4, 1998, between Subsurface
Technology AS and each of Henning Hansen and Frode Kaland.
<PAGE> 1
EXHIBIT 5.1
[WEATHERFORD INTERNATIONAL, INC. LETTERHEAD]
March 6, 2000
Weatherford International, Inc.
515 Post Oak Boulevard, Suite 600
Houston, Texas 77027
Ladies and Gentlemen:
I am Executive Vice President, Chief Financial Officer and General
Counsel of Weatherford International, Inc., a Delaware corporation (the
"Company"), and have acted as counsel for the Company in connection with the
registration under the Securities Act of 1933 of 125,941 shares of the
Company's common stock, $1.00 par value (the "Shares"), to be offered by
certain selling stockholders of the Company (the "Selling Stockholders") upon
the terms and subject to the conditions set forth in the Company's Registration
Statement on Form S-3 covering the Shares (the "Registration Statement") filed
with the Securities and Exchange Commission.
In connection therewith, I have examined the Registration Statement,
originals or copies certified or otherwise identified to my satisfaction of the
Amended and Restated Certificate of Incorporation, as amended, of the Company,
the amended By-laws of the Company, the corporate proceedings with respect to
the offering of the Shares and such other documents and instruments as I have
deemed necessary or appropriate for the expression of the opinions contained
herein.
I have assumed the authenticity and completeness of all records,
certificates and other instruments submitted to me as originals, the conformity
to original documents of all records, certificates and other instruments
submitted to me as copies, the authenticity and completeness of the originals
of those records, certificates and other instruments submitted to me as copies
and the correctness of all statements of fact contained in all records,
certificates and other instruments that I have examined.
Based on the foregoing, and having regard for such legal
considerations as I have deemed relevant, I am of the opinion that the Shares
proposed to be offered by the Selling Stockholders have been duly and validly
authorized for issuance and are duly and validly issued, fully paid and
nonassessable.
The opinions expressed herein relate solely to, are based solely upon
and are limited exclusively to the General Corporation Law of the State of
Delaware and the federal laws of the United States of America, to the extent
applicable, and I am expressing no opinion as to the effect of the laws of any
other jurisdiction.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of my name under the caption "Legal
Matters" in the Prospectus included as part of the Registration Statement.
Very truly yours,
/s/ Curtis W. Huff
Curtis W. Huff
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of our report dated
February 17, 1999 (except with respect to the matter discussed in Note 2, as to
which the date is October 22, 1999) included in the Weatherford International,
Inc.'s Current Report on Form 8-K dated October 22, 1999, and to all references
to our Firm included in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP
Houston, Texas
March 6, 2000
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of Weatherford
International, Inc. for the registration of 125,941 shares of its common stock
and to the incorporation by reference therein of our report dated March 29,
1999, with respect to the consolidated balance sheets of Dailey International
Inc. as of December 31, 1998 and 1997, and the related consolidated statements
of operations, stockholders' equity, and cash flows for the year ended December
31, 1998, the eight month period ended December 31, 1997 and for each of the two
years in the period ended April 30,1997, included in Weatherford International,
Inc.'s Form 8-K dated May 21, 1999 and incorporated by reference in Weatherford
International, Inc.'s Form 8-K dated August 31, 1999.
/s/ ERNST & YOUNG LLP
Ernst & Young LLP
Houston, Texas
March 1, 2000
