INDEMNIFICATION
AGREEMENT
This
INDEMNIFICATION AGREEMENT made and entered into effective as of
September 4, 2002, (“Agreement”), by and between
WEATHERFORD INTERNATIONAL, INC., a Delaware corporation
(“Company”), and James M. Hudgins
(“Indemnitee”).
WHEREAS, highly
skilled and competent persons are becoming more reluctant to serve
public corporations 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 the corporation; and
WHEREAS,
uncertainties relating to indemnification have increased the
difficulty of attracting and retaining such persons; and
WHEREAS, the Board
of Directors has determined that the inability to attract and
retain such persons is detrimental to the best interests of the
Company’s stockholders and that the Company should act to
assure such persons that there will be increased certainty of such
protection in the future; and
WHEREAS, it is
reasonable, prudent and necessary for the Company contractually to
obligate itself to indemnify Indemnitee to the fullest extent
permitted by applicable law so that Indemnitee will serve or
continue to serve the Company free from undue concern that
Indemnitee will not be so indemnified; and
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:
Section 1.
Services by Indemnitee . Indemnitee agrees to continue to
serve as a director and/or 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 nominated to be a director
and/or officer of the Company and does not create an employment
contract between the Company and Indemnitee.
Section 2.
Indemnification . The Company shall indemnify Indemnitee to
the fullest extent permitted by applicable law in effect on the
date hereof or as such laws may from time to time be amended.
Without diminishing the scope of the indemnification provided by
this Section 2, the rights of indemnification of Indemnitee
provided hereunder shall include but shall not be limited to those
rights, except to the extent expressly prohibited by applicable
law.
Section 3.
Action or Proceeding Other Than an Action by or in the Right of
the Company . Indemnitee shall be entitled to the
indemnification rights provided in this Section 3 if
Indemnitee is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative in nature,
other
than an action
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 entity or by reason of anything done or not done by him
or her in any such capacity. Pursuant to this Section 3,
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 action, suit or
proceeding (including, but not limited to, the investigation,
defense or appeal thereof), if Indemnitee acted in good faith and
in a manner Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful.
Section 4.
Actions by or in the Right of the Company . Indemnitee shall
be entitled to the indemnification rights provided in this
Section 4 if Indemnitee was or is made a party or is
threatened to be made a party to any threatened, pending or
completed action or suit brought by or in the right of the Company
to procure a judgment in its favor 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 entity by reason of anything done or not done by
Indemnitee in any such capacity. Pursuant to this Section 4
Indemnitee shall be indemnified against expenses (including
attorneys’ fees and disbursements) actually and reasonably
incurred by Indemnitee in connection with such action or suit
(including, but not limited to, the investigation, defense,
settlement or appeal thereof) if Indemnitee acted in good faith and
in a manner Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company; provided, however, that no
such indemnification shall be made in respect of any claim, issue
or matter as to which applicable law expressly prohibits such
indemnification by reason of an adjudication of liability of
Indemnitee to the Company, unless, and only to the extent that, the
Court of Chancery of the State of Delaware or the court in which
such action or suit was brought shall determine upon application
that, despite such adjudication of liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnification for such expenses as such court shall
deem proper.
Section 5.
Indemnification for Expenses of Successful Party .
Notwithstanding the other provisions of this Agreement, to the
extent that Indemnitee has been successful on the merits or
otherwise, including, without limitation, the dismissal of an
action without prejudice, in defense of any action, suit or
proceeding referred to in Section 4 hereof, or in defense of
any claim, issue or matter therein, Indemnitee shall be indemnified
against all expenses (including attorneys’ fees and
disbursements) actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection therewith.
Section 6.
Indemnification for Expenses of a Witness . To the extent
that Indemnitee is, by reason of Indemnitee’s Corporate
Status (as hereinafter defined), 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.
Section 7.
Partial Indemnification . If Indemnitee is only partially
successful in the defense, investigation, settlement or appeal of
any action, suit, investigation or proceeding
-2-
described in
Section 4 hereof, and as a result is not entitled under
Section 5 hereof to indemnification by the Company for the
total amount of the expenses (including attorneys’ fees and
disbursements), judgments, penalties, fines, and amounts paid in
settlement actually and reasonably incurred by Indemnitee, the
Company shall nevertheless indemnify Indemnitee, as a matter of
right pursuant to Section 5 hereof, to the extent Indemnitee
has been partially successful.
Section 8.
Determination of Entitlement to Indemnification . Upon
written request by Indemnitee for indemnification pursuant to
Section 3 or 4 hereof, 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: (a) the Board of
Directors of the Company by a majority vote of the Disinterested
Directors (as hereinafter defined) even if less than a quorum; or
(b) if such vote is not obtainable or, even if obtainable, if
such Disinterested Directors so direct by majority vote, by
Independent Counsel (as hereinafter defined) in a written opinion
to the Board of Directors, a copy of which shall be delivered to
Indemnitee; or (c) by the stockholder or stockholders of the
Company. Such Independent Counsel shall be selected by the Board of
Directors and approved by Indemnitee. Upon failure of the Board to
so select such Independent Counsel or upon failure of Indemnitee to
so approve, such Independent Counsel shall be selected by the
Chancellor of the State of Delaware or such other Person as such
Chancellor shall designate to make such selection. Such
determination of entitlement to indemnification shall be made not
later than 60 days after receipt by the Company of a written
request for indemnification. Such request shall include
documentation or information which is necessary for such
determination and which is reasonably available to Indemnitee. Any
expenses (including attorneys’ fees) incurred by Indemnitee
in connection with Indemnitee’s request for indemnification
hereunder shall be borne by the Company. The Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom
irrespective of the outcome of the determination of
Indemnitee’s entitlement to indemnification. If the Person
making such determination shall determine that Indemnitee is
entitled to indemnification as to part (but not all) of the
application for indemnification, such Person shall reasonably
prorate such partial indemnification among such claims, issues or
matters.
Section 9.
Presumptions and Effect of Certain Proceedings . The
Secretary of the Company shall, promptly upon receipt of
Indemnitee’s request for indemnification, advise in writing
the Board of Directors or such other Person or Persons empowered to
make the determination as provided in Section 8 that
Indemnitee has made such request for indemnification. 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. If the Person or Persons so empowered to make
such determination shall have failed to make the requested
indemnification within 60 days after receipt by the Company of
such request,
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