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EXHIBIT 10.3
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made on the 29th day of
September, 2005
BETWEEN:
WEATHERFORD INTERNATIONAL LTD., a company
incorporated under the laws of Bermuda
with its registered office located at
Clarendon House, 2 Church Street,
Hamilton, Bermuda (the "Company"); and
Andrew P. Becnel (the "Indemnitee").
WHEREAS the Indemnitee is an officer of the
Company;
WHEREAS highly skilled and competent
persons are becoming more reluctant to
serve public companies as directors or
officers unless they are provided with
adequate protection through insurance and
indemnification against inordinate
risks of claims and actions against them
arising out of their service to and
activities on behalf of such companies;
WHEREAS uncertainties relating to
indemnification increase the difficulty of
attracting and retaining such persons;
WHEREAS the Board has determined that an
inability to attract and retain such
persons is detrimental to the best
interests of the Company and that the Company
should act to assure such persons that
there will be increased certainty of such
protection in the future;
WHEREAS, it is reasonable, prudent and
necessary for the Company contractually
to obligate itself to indemnify Indemnitee
to the fullest extent permitted by
Bermuda law so that Indemnitee will serve
or continue to serve the Company free
from undue concern that Indemnitee will not
be so indemnified;
WHEREAS, Indemnitee is willing to serve,
continue to serve and to take on
additional service for or on behalf of the
Company on the condition that
Indemnitee be so indemnified;
NOW, THEREFORE, in consideration of the
premises and the covenants contained
herein, the Company and Indemnitee do
hereby covenant and agree as follows:
1.
INTERPRETATION
1.1 In this
Agreement unless the context otherwise requires, the following
words and expressions shall have the following meanings:
this "Agreement"
means this Indemnification Agreement;
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the "Board"
means the board of directors of the Company;
"Business Day"
means any day on which banks in Bermuda are
open for business;
the "Companies Act"
means the Companies Act 1981;
"Corporate Status"
means the status of a person who is or was
a director, officer, employee, agent, or
fiduciary of the Company or any other
Group Company, or is or was serving at the
request of the Company as a director,
officer, employee, agent or fiduciary of any
other company, corporation, partnership,
limited liability company, joint venture,
trust, employee benefit plan or other entity
or enterprise;
"the Court"
means the Supreme Court of Bermuda;
"Disinterested Director" means a director of the
Company who is not
or was not a party to a Proceeding in
respect of which indemnification is sought
by Indemnitee;
"Group Companies"
means the Company and each subsidiary of the
Company (wherever incorporated or
organized);
"Independent Counsel" means a
law firm or a member of a law firm
that neither is presently nor in the past
five years has been retained to represent:
(i) the Company or Indemnitee in any matter
material to either such party, or (ii) any
other party to the Proceeding giving rise to
a claim for indemnification hereunder.
Notwithstanding the foregoing, the term
"Independent Counsel" shall not include any
person who, under the applicable standards
of professional conduct then prevailing,
would have a conflict of interest in
representing either the Company or
Indemnitee in an action to determine
Indemnitee's right to indemnification under
this Agreement;
the "Parties"
means the parties to this Agreement
collectively, and "Party" means any one of
them; and
"Proceeding"
means any action, suit, arbitration,
alternate dispute resolution mechanism,
investigation, administrative hearing or any
other proceeding whether civil,
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criminal, administrative or investigative
and whether formal or informal;
1.2 In this
Agreement unless the context otherwise requires:
1.2.1
references to statutory provisions shall be construed as
references to those provisions as amended or re-enacted or as
their application is modified by other provisions from time to
time and shall include references to any provisions of which
they are re-enactments (whether with or without modification);
1.2.2
references to clauses and schedules are references to clauses
hereof and schedules hereto; references to sub-clauses or
paragraphs are, unless otherwise stated, references to
sub-clauses of the clause or paragraphs of the schedule in
which the reference appears;
1.2.3
references to the singular shall include the plural and vice
versa and references to the masculine shall include the
feminine and/or neuter and vice versa; and
1.2.4
references to persons shall include companies, partnerships,
associations and bodies of persons, whether incorporated or
unincorporated.
2.
AGREEMENT TO SERVE
Indemnitee agrees to continue to serve as an officer of the
Company.
This Agreement does not create or otherwise establish any right on
the
part of Indemnitee to be and continue to be elected or appointed
an
officer of the Company or any other Group Company and does not
create
an employment contract between the Company and Indemnitee.
3.
INDEMNITY OF DIRECTOR/OFFICER
3.1 Subject to
clause 10, the Company shall indemnify Indemnitee if
Indemnitee is a party or is threatened to be made a party to
any
threatened, pending or completed Proceeding, including a
Proceeding
brought by or in the right of the Company, by reason of the fact
that
Indemnitee is or was a director, officer, employee, agent, or
fiduciary
of the Company or is or was serving at the request of the Company
as a
director, officer, employee, agent, or fiduciary of any other
company,
corporation, partnership, limited liability company, joint
venture,
trust, employee benefit plan or other entity or enterprise or by
reason
of anything done or not done by Indemnitee in any such
capacity.
Subject to clause 10, pursuant to this sub-clause 3.1 Indemnitee
shall
be indemnified against expenses (including attorneys' fees and
disbursements), judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee in
connection
with such Proceeding (including, but not limited to, the
investigation,
defense, settlement or appeal thereof).
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3.2
Notwithstanding any other provision of this Agreement other than
clause
10, Indemnitee shall be indemnified against all expenses
(including
attorneys' fees and disbursements) actually and reasonably incurred
by
Indemnitee or on Indemnitee's behalf in defending any
Proceedings
referred to in clause 3.1 in which judgement is given in his
favour, in
which he is acquitted, or in respect of which relief is granted to
him
by the Court under section 281 of the Companies Act.
3.3 Subject to
clause 10, the Company shall indemnify Indemnitee for such
portion of the expenses (including attorneys' fees), witness
fees,
damages, judgments, fines and amounts paid in settlement and any
other
amounts that Indemnitee becomes legally obligated to pay in
connection
with any Proceeding referred to in clause 3.1 in respect of
which
Indemnitee is entitled to indemnification hereunder, even if
Indemnitee
is not entitled to indemnification hereunder for the total
amount
thereof.
3.4 Without
limiting the scope of the indemnity provided under any other
provision of this Agreement, if the Indemnitee has reason to
apprehend
that any claim will or might be made against him in respect of
any
negligence, default, breach of duty or breach of trust, he may
apply to
the
Court for relief pursuant to section 281 of the Companies Act
and,
to the extent that the Court relieves him, either wholly or
partly,
from his liability in accordance with section 281 of the Companies
Act,
the Indemnitee shall be indemnified against any liability incurred
by
him in defending any Proceedings in accordance with paragraph
98(2)(b)
of the Companies Act.
4.
INDEMNIFICATION FOR EXPENSES OF A WITNESS
Subject to clause 10, to the extent that Indemnitee is, by reason
of
Indemnitee's Corporate Status, a witness in any proceeding,
Indemnitee
shall be indemnified by the Company against all expenses actually
and
reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith.
5.
DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION
5.1 The
Indemnitee shall request indemnification pursuant to this
Agreement
by notice in writing to the secretary of the Company. The
secretary
shall, promptly upon receipt of Indemnitee's request for
indemnification, advise in writing the Board or such other person
or
persons empowered to make the determination as provided in
sub-clause
5.2 that Indemnitee has made such request for indemnification.
Subject
to clause 10, upon making such request for indemnification,
Indemnitee
shall be presumed to be entitled to indemnification hereunder and
the
Company shall have the burden of proof in the making of any
determination contrary to such presumption.
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5.2 Upon
written request by Indemnitee for indemnification pursuant to
sub-clause 3.1, the entitlement of the Indemnitee to
indemnification
pursuant to the terms of this Agreement shall be determined by
the
following person or persons who shall be empowered to make such
determination:
5.2.1 the
Board, by a majority vote of the Disinterested Directors;
or
5.2.2 if
such vote is not obtainable or, even if obtainable, if such
Disinterested Directors so direct by majority vote, by
Independent Counsel in a written opinion to the Board, a copy
of which shall be delivered to Indemnitee; or
5.2.3 by a
majority vote of the shareholders.
5.3 For
purposes of sub-clause 5.2, Independent Counsel shall be
selected
by the Board and approved by Indemnitee. Upon failure of the Board
to
so select such I
