EXHIBIT 10(kk)
AMENDED AND RESTATED EXECUTIVE AGREEMENT
This Amended and Restated Executive Agreement is made and entered into as of
23rd day of June, 1993, between Tuboscope Vetco International Inc., a Texas
corporation (the "Company"), Tuboscope Vetco International Corporation, a
Delaware Corporation ("Tuboscope"), and _______________________ (the
"Executive"). The Company and Tuboscope are hereinafter sometimes jointly
referred to as "the Companies".
WHEREAS, the Executive is employed as an Executive Officer of Tuboscope and the
Company; and
WHEREAS, the Boards of Directors of the Companies have, by and through their
respective Executive Committees, authorized certain "Change of Control Severance
Protections" in order to retain and motivate management and to ensure continuity
of management thereby entering an Executive Agreement dated ______________,
________ (the "Agreement"); and,
WHEREAS, the Boards of Directors of the Companies have, by and through their
respective Executive Committees, authorized certain changes in the Agreement in
order to retain and further motivate the Executive and to further ensure
continuity of management and/or transition of the Companies; and,
WHEREAS, the parties wish to amend and restate the Agreement to reflect these
additional changes and thereby enter this Amended and Restated Executive
Agreement ("this Agreement");
NOW THEREFORE, in consideration of the premises and mutual promises contained
herein the sufficiency and receipt of which are hereby acknowledged the parties
agree as set forth below:
1. Definitions
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For the purposes of this Agreement, the following terms shall have the
following respective meanings:
(a) "Annual Base Salary" shall mean the Annual Base Salary being earned by
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the Executive on the date that the relevant Change of Control occurs.
(b) "Annual Incentive Compensation Opportunity" shall mean the maximum
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amount of cash bonus for which Executive could be eligible during the
fiscal year in which the relevant Change of Control occurs.
(c) "Cause" shall mean a willful and continued failure to substantially
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perform the duties of Executive's office or the willful engagement in
conduct which is materially injurious to either of the Companies.
(d) A "Change in Control" shall be deemed to have occurred if:
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(i) any "person", as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "1934
Act") (other than Tuboscope with respect to the Company) is,
becomes or enters a contract to become, the "beneficial owner",
as such term is used in Rule 13d-3 promulgated under the 1934
Act, directly or indirectly, of securities representing fifty
percent (50 %) or more of the common stock of Tuboscope or the
Company; or
(ii) all or substantially all of the business of either of the
Companies is disposed of, or a contract is entered to dispose of
all of the business of either of the Companies pursuant to a
merger, consolidation or other transaction in which (x) the
respective Company is not the surviving company, or (y) the
stockholders of the respective Company prior to the transaction
do not continue to own at least sixty percent (60%) of the
surviving corporation; or ,
(iii) either of the Companies is materially or completely liquidated;
or
(iv) any person (other than either of the Companies) purchases any
common stock of either of the Companies in a tender or exchange
offer with the intent, expressed or implied, of purchasing or
otherwise acquiring control of either of the Companies; or
(v) a majority of the board of directors of either of the Companies
is replaced over a two (2) year period unless such replacements
have been approved by at least two-thirds (2/3) of those
remaining directors who were directors at the beginning of such
two (2) year period.
(e) "Good Reason" shall mean:
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(i) a material reduction in Executive's authority, duties or
responsibilities (including status, offices, titles and reporting
requirements) from those of Executive at the time of the relevant
Change in Control on the basis of which Executive reasonably
determines that he can no longer carry out his job in the manner
contemplated prior to the Change in Control;
(ii) Executive is assigned any duties or responsibilities that are
inconsistent, in any material respect, with the scope of duties
and responsibilities associated with the Executive's position
immediately prior to the Change in Control;
(iii) any reduction in Executive's Annual Base Salary or Annual
Incentive Compensation Opportunity;
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(iv) any material reduction (in the aggregate) in Executive's employee
benefits;
(v) the Companies fail to obtain a written agreement satisfactory to
Executive from any successor or assigns of either of the
Companies to assume and perform this Agreement as provided in
paragraph 5;
(vi) either of Companies requires Executive to be based at any office
located more than thirty (30) miles from the Companies current
offices without Executive's consent;
(f) "Fair Value" shall mean the closing sales price (on a national
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securities exchange or automated quotation system) of the common stock
into which Executive's options can be exercised on the date of Change
in Control.
2. Acceleration of Options And Cash Out
In the event of a Change of Control, all of Executive's unvested stock
options and other grants of long term incentives shall vest without further
action by either of the Companies or Executive and the Companies shall pay
to Executive, in cancellation of all of the options granted to Executive by
Tuboscope prior to the Change in Control and not previously exercised, cash
in an amount equal to the difference between (i) the Fair Value of the
common stock into which such options are exercisable and (ii) the exercise
price of such options.
3. Termination Payments After a Change in Control
If within twenty-four (24) months after a Change in Control, (a)
Executive's employment with the Companies is terminated for any reason
other than for Cause, death or disability or (b) Executive voluntarily
terminates his employment with the Companies for Good Reason, the Companies
shall, in lieu of any other severance obligation:
(a) pay to Executive two and one-half (2-1/2) times the sum of his (i)
Annual Base Salary and (ii) Annual Incentive Compensation Opportunity
then in effect; provided if the sum of Executive's (i) Annual Base
Salary and (ii) Annual Incentive Compensation Opportunity for either
of the two (2) years previous to the Change of Control is greater than
the Executive will be paid two and one-half (2-1/2) times the greater
amount;
(b) continue to provide to Executive basic health and life insurance
coverage substantially comparable to the coverage in effect upon the
date of Executive's termination (including coverage of Executive's
family) for thirty (30) months after such termination or until
Executive is re-employed and eligible for basic
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health and life insurance benefits from his employer which are equal
to or better than those provided by the Companies on the date of
termination, provided, however, that if Executive is not eligible for
coverage with any new employer for "preexisting conditions" and the
like, the Companies shall continue to provide coverage for such
conditions through the end of the thirty (30) month period; in
consideration for such coverage, Executive shall continue to pay an
amount equal to the amount paid by him for such coverage by the
Companies prior to his termination or such amount as other then
current executive employees of the Companies pay for such coverage;
(c) (i) permit Executive to participate in the Companies' 401(k) Plan for
thirty (30) months after the date of termination and continue to
contribute to his account an amount equal to three percent (3%) of
Executive's Annual Base Salary for each year or partial year of such
continuance or, (ii) pay to Executive an amount equal to two and one-
half (2-1/2) times three percent (3%) of Executive's Annual Base
Salary at the date of termination (2-1/2 x [Annual Base Salary x
.03]); in addition, if Executive is not fully vested in his 401 (k)
account on the date of termination, the Companies shall either fully
vest Executive in such account or pay Executive an amount equal to the
unvested portion of such account; any amounts payable pursuant to this
subparagraph 3(c) shall be grossed up so that the amount Executive
actually receives after payment of any federal and state taxes payable
on such amount, equals the amounts described above;
(d) either transfer to Executive ownership and title to the Executive's
company car or, if Executive receives a monthly car allowance in lieu
of a company car, pay Executive an amount equal to two and one-half
(2-1/2) times Executive's annual car allowance;
(e) pay Executive an amount such that after paying any federal or state
taxes on any payments to be received pursuant to subparagraph 3(c).
and 3(d) above and the amount payable pursuant to this subparagraph
3(e), the Executive shall retain an amount equal to the amounts
payable under subparagraphs 3(c) and 3(d);
(f) provide Executive with the full "Executive Plan" outplacement services
of Drake, Beam & ▇▇▇▇▇, or such other outplacement services as
reasonably acceptable to Executive;
(g) if it shall be determined that any payment to or for the benefit of
Executive pursuant to subparagraphs 3(a)-(g), (collectively, the
"payments") would be subject to the excise tax imposed by Section 4999
of the Internal Revenue Code (or any successor provision) or any
interest or penalties are incurred by Executive with respect to such
excise tax (such excise tax together with any
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such interest and penalties, the "Excise Tax"), pay Executive an
additional amount (a "Gross-Up Payment") such that after payment by
Executive of all taxes (including any interest or penalties imposed
with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, Executive will
retain an amount of the Gross-Up Payment equal to the Excise Tax on
the payments;
(h) all payments due pursuant to this paragraph 3. shall be made within
five (5) business days of the date of termination.
4. Term
This Agreement shall remain in full force and effect until such time as
(a) if prior to a Change of Control, Executive is no longer employed by
either of the Companies as an executive officer; or
(b) if subsequent to a Change of Control, all rights, benefits or payments
owing to Executive hereunder have been satisfied.
5. Assumption By Successor
The Companies will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of either of the Companies to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Companies would be required to perform if no
succession had taken place.
6. No Mitigation - No Offset
If Executive is terminated not for Cause or voluntarily terminates for Good
Reason, Executive shall be under no obligation to seek other employment and
there shall be no offset against amounts due Executive under this Agreement
on account of any remuneration attributable to any subsequent employment
Executive may obtain.
7. Attorney's Fees
If Executive reasonably determines that it is necessary to initiate any
legal action (including any arbitration proceeding as described in
paragraph 8) to obtain any payments, benefits or rights provided by this
Agreement to him, the Companies shall reimburse Executive for all
attorneys' fees, arbitrator's fees, costs and other related expenses
incurred by him to the extent Executive is awarded any relief in said
action.
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8. Dispute Resolution
If any dispute arises out of this Agreement, the "complaining party" shall
give the "other party" written notice of such dispute. The other party
shall have ten (10) business days to resolve the dispute to the complaining
party's satisfaction. If the dispute is not resolved by the end of such
period, the complaining party may by written notice (the "Notice") demand
arbitration of the dispute as set out below, and each party hereto
expressly agrees to submit to, and be bound by, such arbitration.
(a) Each party, will, within ten (10) business days of the Notice,
nominate an arbitrator. Each nominated arbitrator must be someone
experienced in dispute resolution and of good character without moral
turpitude and not within the employ or direct or indirect influence of
the nominating party. The two nominated arbitrators will, within ten
(10) business days of nomination, agree upon a third arbitrator. If
two (2) appointed arbitrators can not agree on a third arbitrator
within such period, the parties may seek such an appointment through
any permitted court proceeding or by the American Arbitration
Association ("AAA"). The three arbitrators will set the Rules and
timing of the arbitration, but will generally follow the Rules of the
AAA and this Agreement where same are applicable and shall provide for
written fact findings.
(b) The arbitration hearing will in no event take place more than ninety
(90) days after the appointment of the third arbitrator.
(c) The arbitration will take place in Houston, Texas unless otherwise
unanimously agreed to by the parties.
(d) The results of the arbitration and the decision of the arbitrators
will be final and binding on the parties and each party agrees and
acknowledges that these results shall be enforceable in a court of
law.
9. This Agreement will be governed by and construed in accordance with the
internal substantive laws, and not the choice of law rules, of the State of
Texas.
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IN WITNESS WHEREOF, the Company, Tuboscope and the Executive have executed this
Agreement on the 23rd day of June, 1993.
EXECUTIVE TUBOSCOPE VETCO INTERNATIONAL INC.,
a Texas Corporation
______________________________ By: ______________________________
TUBOSCOPE VETCO INTERNATIONAL
CORPORATION, a Delaware Corporation
By: _______________________________
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FIRST AMENDMENT TO AMENDED AND RESTATED EXECUTIVE AGREEMENT
Tuboscope Vetco International Inc., a Texas corporation (the "Company"),
Tuboscope Vetco International Corporation, a Delaware corporation (the
"Corporation"), and ______________________ (the "Executive") have previously
entered into an Executive Agreement dated as of ________, ______ as amended June
23, 1993 (the "Amended Agreement"). The Company and the Corporation are
hereinafter sometimes jointly referred to as "the Companies".
WHEREAS, the Companies are contemplating a transaction pursuant to which the
Companies would combine their business enterprises with those of another
company; (the contemplated transaction hereinafter referred to as the
"Transaction"); and
WHEREAS, the Companies and Executive wish to modify the Amended Agreement in
certain respects generally and in particular respects in contemplation of the
Transaction;
NOW, THEREFORE, in consideration of the premises and mutual promises contained
herein the sufficiency and receipt of which are hereby acknowledged the parties
agree as set forth below:
1.1 Paragraph 2 of the Amended Agreement is amended to read hereafter as
follows:
"In the event of Change of Control, all of Executive's unvested stock
options shall vest without further action by either of the Companies or
Executive. Notwithstanding anything to the contrary contained in the
agreements covering such stock options, such stock options shall be
exercisable for the two (2) full calendar years following the Executive's
termination of employment with the Companies pursuant to the other terms of
the Amended and Restated Stock Option Plan for Key Employees and Directors
of Tuboscope Vetco International Corporation."
2. Subparagraph 3(g) of the Amended Agreement is amended by inserting
"paragraph 2 and" immediately prior to "subparagraphs 3(a)-(g)" in the
second line.
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IN WITNESS WHEREOF, the Company, the Corporation, and the Executive have
executed this Agreement on this 3rd day of January, 1996.
EXECUTIVE TUBOSCOPE VETCO INTERNATIONAL, INC.
________________________________ By: _______________________________
TUBOSCOPE VETCO INTERNATIONAL
CORPORATION
By: _______________________________
