Exhibit 10.12

WEATHERFORD INTERNATIONAL INCORPORATED

NON-EMPLOYEE DIRECTOR RETIREMENT PLAN

 

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WEATHERFORD INTERNATIONAL INCORPORATED
NON-EMPLOYEE DIRECTOR RETIREMENT PLAN

TABLE OF CONTENTS

              Section  
ARTICLE I — DEFINITIONS
       
 
       
Accrued Benefit
    1.1  
Active Service
    1.2  
Affiliated Company
    1.3  
Beneficiary
    1.4  
Board of Directors
    1.5  
Code
    1.6  
Committee
    1.7  
Deferred Compensation Benefit
    1.8  
Non-Employee Director
    1.9  
Participant
    1.10  
Plan
    1.11  
Plan Year
    1.12  
Weatherford
    1.13  
 
       
ARTICLE II — ELIGIBILITY
       
 
       
ARTICLE III — DEFERRED COMPENSATION BENEFIT
       
 
       
Deferred Compensation Benefit
    3.1  
Payment of Deferred Compensation Benefit
    3.2  
 
       
ARTICLE IV — PROVISIONS RELATING TO ALL BENEFITS
       
 
       
Effect of this Article
    4.1  
Forfeiture For Cause
    4.2  
Forfeiture For Competition
    4.3  
Benefits Upon Reappointment to the Board of Directors
    4.4  
 
       
ARTICLE V — ADMINISTRATION
       
 
       
Committee Appointment
    5.1  
Committee Organization and Voting
    5.2  
Powers of the Committee
    5.3  
Committee Discretion
    5.4  
Reimbursement of Expenses
    5.5  
 
       
ARTICLE VI — AMENDMENT AND/OR TERMINATION
       
 
       
Amendment or Termination of the Plan
    6.1  
No Retroactive Effect on Awarded Benefits
    6.2  

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Effect of Termination
    6.3  
 
       
ARTICLE VII — PAYMENTS
       
 
       
Payments Under This Plan are the Obligation of the Company
    7.1  
Participants Must Rely Only on General Credit of the Company
    7.2  
 
       
ARTICLE VIII — MISCELLANEOUS
       
 
       
Responsibility for Distributions and Withholding of Taxes
    8.1  
Limitation of Rights
    8.2  
Distributions to Incompetents of Minors
    8.3  
Nonalienation of Benefits
    8.4  
Reliance Upon Information
    8.5  
Severability
    8.6  
Notice
    8.7  
Gender and Number
    8.8  
Governing Law
    8.9  
Effective Date
    8.10  

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WEATHERFORD INTERNATIONAL INCORPORATED
NON-EMPLOYEE DIRECTOR RETIREMENT PLAN

     WHEREAS, Weatherford International Incorporated (“Weatherford”) desires to
establish the Weatherford International Incorporated Non-Employee Director
Retirement Plan effective January 1, 1994, which provides a retirement benefit
to each member of the Board of Directors of Weatherford who is also not an
employee of Weatherford so as to retain loyalty and to offer a further incentive
to them to maintain and increase their standard of performance;

     NOW, THEREFORE, Weatherford adopts the Weatherford International
Incorporated Non-Employee Director Retirement Plan as follows:

 

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ARTICLE I

DEFINITIONS

     1.1 Accrued Benefit. “Accrued Benefit” means as of any given time the
Deferred Compensation Benefit which would be payable under the terms of this
Plan if a Participant no longer was a member of the Board of Directors.

     1.2 Active Service. “Active Service” means service as a Non-Employee
Director including service prior to the effective date of this Plan. Active
Service also includes previous service by a Non-Employee Director as a
non-employee director of the board of directors of an Affiliated Company or of a
company acquired by or merged into Weatherford or an Affiliated Company.

     1.3 Affiliated Company. “Affiliated Company” means a company which is a
member of the same controlled group of corporations within the meaning of
Section 414(b), (c), (m) or (o) of the Code with Weatherford.

     1.4 Beneficiary. “Beneficiary” means a person or entity designated by the
Participant under the terms of this Plan to receive any amounts distributed
under the Plan upon the death of the Participant. If no Beneficiary is named,
all amounts due shall be paid to the Participant’s spouse, if living, and if
not, to the Participant’s estate.

     1.5 Board of Directors. “Board of Directors” means the Board of Directors
of Weatherford.

     1.6 Code. “Code” means the Internal Revenue Code of 1986, as amended from
time to time.

     1.7 Committee. “Committee” means the persons who are from time to time
serving as members of the committee administering this Plan.

     1.8 Deferred Compensation Benefit. “Deferred Compensation Benefit” means
the benefit payable to a Participant under the terms of this Plan.

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     1.9 Non-Employee Director. “Non-Employee Director” means a member of the
Board of Directors who is not an employee of Weatherford or an Affiliated
Company.

     1.10 Participant. “Participant” means a Non-Employee Director who is
eligible for and is participating in the Plan.

     1.11 Plan. “Plan” means the Weatherford International Incorporated
Non-Employee Director Retirement Plan set forth in this document, as amended
from time to time.

     1.12 Plan Year. “Plan Year” means the calendar year.

     1.13 Weatherford. “Weatherford” means Weatherford International
Incorporated, the sponsor of this Plan.

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ARTICLE II

ELIGIBILITY

     Each Non-Employee Director who has completed five years or more of Active
Service as a Non-Employee Director will become a Participant in this Plan.

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ARTICLE III

DEFERRED COMPENSATION BENEFIT

     3.1 Deferred Compensation Benefit. The annual Deferred Compensation Benefit
payable to a Participant under the terms of this Plan shall equal 50% of the
annual cash retainer fee paid to the Participant by Weatherford during the Plan
Year in which the Participant ceases to be a member of the Board of Directors.
The annual Deferred Compensation Benefit shall increase 10% each year, not to
exceed 100%, for each 12-month period of Active Service that the Participant is
a Non-Employee Director. The Deferred Compensation Benefit shall be paid to the
Participant for the lesser of the number of months of Active Service the
Participant has as a Non-Employee Director or 120 months.

     3.2 Payment of Deferred Compensation Benefit. The Deferred Compensation
Benefit shall be payable to the Participant by Weatherford in monthly
installments computed to the nearest whole cent. The monthly benefit will begin
on the first day of the month coincident with or next following the date that
the Participant is no longer a member of the Board of Directors and will stop
after the lesser of the number of months the Participant served as a
Non-Employee Director or 120 months. If the Participant dies while a member of
the Board of Directors or after the Participant is no longer a member of the
Board of Directors but prior to the receipt of the number of monthly payments to
which the Participant would have been entitled under the terms of this Plan, the
payments or remaining payments to which the Participant would have been entitled
under the terms of this Plan shall be made to the Participant’s Beneficiary.

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ARTICLE IV

PROVISIONS RELATING TO ALL BENEFITS

     4.1 Effect of This Article. The provisions of this Article shall control
over all other provisions of this Plan.

     4.2 Forfeiture For Cause. If the Committee finds, after full consideration
of the facts presented on behalf of both Weatherford and a former Participant,
that the Participant was removed by the Board of Directors for fraud,
embezzlement, theft, commission of a felony, proven dishonesty or for disclosing
trade secrets of Weatherford, the Accrued Benefit otherwise due to the
Participant and/or his Beneficiary shall be forfeited. The decision of the
Committee as to the cause of a former Participant’s discharge and the damage
done to Weatherford shall be final. No decision of the Committee shall affect
the finality of the discharge of the Participant by the Board of Directors in
any manner.

     4.3 Forfeiture for Competition. If at the time a distribution is being made
or is to be made to a Participant or former Participant, the Committee finds,
after full consideration of the facts presented on behalf of Weatherford and the
Participant or former Participant, that the Participant or former Participant at
any time within two years after the date the member ceased to be a member of the
Board of Directors and without written consent of Weatherford, directly or
indirectly owns, operates, manages, controls or participates in the ownership,
management, operation or control of, or is employed by, or is paid as a
consultant or other independent contractor by, a business which competes or at
any time did compete with Weatherford or an Affiliated Company and if the
Participant or former Participant continues to be so engaged 60 days after
written notice has been given to him by the Committee, the Accrued Benefit
otherwise due to the Participant or former Participant and/or his Beneficiary
shall be forfeited.

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     4.4 Benefits Upon Reappointment to the Board of Directors. If a former
Participant who is receiving benefit payments under this Plan is reappointed to
the Board of Directors, the payment of the benefit shall continue during this
period. The former Participant’s benefit shall not be changed as a result of his
reappointment and the reappointed member shall not be entitled to participate in
the Plan.

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ARTICLE V

ADMINISTRATION

     5.1 Committee Appointment. The Committee shall be appointed by the Board of
Directors. Each Committee member shall serve until his resignation or removal.
The Board of Directors shall have the sole discretion to remove any one or more
Committee members and appoint one or more replacement or additional Committee
members from time to time.

     5.2 Committee Organization and Voting. The Committee will select from among
its members a chairman who will preside at all of its meetings and will elect a
secretary without regard to whether that person is a member of the Committee.
The secretary will keep all records, documents and data pertaining to the
Committee’s supervision and administration of this Plan. A majority of the
members of the Committee shall constitute a quorum for the transaction of
business and the vote of a majority of the members present at any meeting will
decide any question brought before the meeting. In addition, the Committee may
decide any question by vote, taken without a meeting, of a majority of its
members. A member of the Committee who is also a Participant will not vote or
act on any matter relating solely to himself.

     5.3 Powers of the Committee. The Committee shall have the exclusive
responsibility for the general administration of this Plan according to the
terms and provisions of this Plan and shall have all powers necessary to
accomplish those purposes, including but not by way of limitation the right,
power and authority:

     (a) to make rules and regulations for the administration of this Plan;

     (b) to construe all terms, provisions, conditions and limitations of this
Plan;

     (c) to correct any defect, supply any omission or reconcile any
inconsistency that may appear in this Plan in the manner and to the extent it
deems expedient to carry this Plan into effect for the greatest benefit of all
parties at interest;

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     (d) to determine all controversies relating to the administration of this
Plan, including but not limited to:

     (1) differences of opinion arising between Weatherford and a Participant;
and

     (2) any question it deems advisable to determine in order to promote the
uniform administration of this Plan for the benefit of all parties at interest;
and

     (e) to delegate by written notice those clerical and recordation duties of
the Committee, as it deems necessary or advisable for the proper and efficient
administration of this Plan.

     5.4 Committee Discretion. The Committee in exercising any power or
authority granted under this Plan or in making any determination under this Plan
shall perform or refrain from performing those acts using its sole discretion
and judgment. Any decision made by the Committee, or any refraining to act, or
any act taken by the Committee in good faith shall be final and binding on all
parties. The Committee’s decision shall never be subject to de novo review.

     5.5 Reimbursement of Expenses. The Committee shall serve without
compensation for their services but shall be reimbursed by Weatherford for all
expenses properly and actually incurred in the performance of their duties under
this Plan.

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ARTICLE VI

AMENDMENT AND/OR TERMINATION

     6.1 Amendment or Termination of the Plan. The Board of Directors may amend
or terminate this Plan at any time by resolution or consent.

     6.2 No Retroactive Effect on Awarded Benefits. No amendment shall affect
the rights of any Participant to the Accrued Benefit without the Participant’s
consent. However, the Board of Directors shall retain the right at any time to
change in any manner or to discontinue all Deferred Compensation Benefits
provided by this Plan, but only as to accruals after the date of the amendment.

     6.3 Effect of Termination. If this Plan is terminated, no further Deferred
Compensation Benefits shall accrue. The Deferred Compensation Benefit accrued to
the date of termination shall be payable under the conditions, at the time and
in the form then provided in this Plan.

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ARTICLE VII

PAYMENTS

     7.1 Payments Under This Plan are the Obligation of Weatherford. Weatherford
shall pay the benefits due the Participants under this Plan.

     7.2 Participants Must Rely Only on General Credit of Weatherford. It is
specifically recognized by both Weatherford and the Participants that this Plan
is only a general corporate commitment and that each Participant must rely upon
the general credit of Weatherford for the fulfillment of its obligations under
this Plan. Under all circumstances the rights of Participants to any asset held
by Weatherford shall be no greater than the rights expressed in this Plan.
Nothing contained in this Plan shall constitute a guarantee by Weatherford that
the assets of Weatherford shall be sufficient to pay any benefits under this
Plan or would place the Participant in a secured position ahead of general
creditors of Weatherford. No specific asset of Weatherford has been or will be
set aside, or will in any way be transferred to a trust or will be pledged in
any way for the performance of Weatherford’s obligations under this Plan which
would remove the asset from being subject to the general creditors of
Weatherford.

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ARTICLE VIII

MISCELLANEOUS

     8.1 Responsibility for Distributions and Withholding of Taxes. The
Committee will furnish information to Weatherford concerning the amount of
distribution to any Participant entitled to a distribution so that Weatherford
may make the distribution required. Each Participant shall be responsible for
all taxes owed on distributions, and Weatherford will not withhold any taxes
from same.

     8.2 Limitation of Rights. Nothing in this Plan shall be construed:

     (a) to give a Participant any right with respect to any benefit except in
accordance with the terms of this Plan;

     (b) to limit in any way the right of the Board of Directors to remove a
Participant from the Board of Directors at any time;

     (c) to evidence any agreement or understanding, expressed or implied, that
the Board of Directors will retain the Participant as a member of the Board of
Directors; or

     (d) to give a Participant or any other person claiming through him any
interest or right under this Plan other than that of any unsecured general
creditor of Weatherford.

     8.3 Distributions to Incompetents or Minors. Should a Participant become
incompetent or should a Beneficiary be a minor or incompetent, the Committee is
authorized to pay the funds due to the parent of the minor or to the guardian of
the minor or incompetent or directly to the minor or to apply those funds for
the benefit of the minor or incompetent in any manner the Committee determines
in its sole discretion.

     8.4 Nonalienation of Benefits. No right or benefit provided in this Plan
shall be transferable by the Participant. No right or benefit under this Plan
shall be subject to anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, and any attempt to anticipate, alienate, sell, assign,
pledge, encumber or charge the same shall be void. No right or benefit under
this Plan shall in any manner be liable for or subject to any debts, contracts,
liabilities or torts of the person entitled to such

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benefits. If any Participant or any Beneficiary becomes bankrupt or attempts to
anticipate, alienate, sell, assign, pledge, encumber or charge any right or
benefit under this Plan, that right or benefit shall, in the discretion of the
Committee, cease. In that event, the Committee may have the Company hold or
apply the right or benefit or any part of it to the benefit of the Participant
or Beneficiary, his or her spouse, children or other dependents or any of them
in any manner and in any proportion the Committee believes to be proper in its
sole and absolute discretion, but is not required to do so.

     8.5 Reliance Upon Information. The Committee shall not be liable for any
decision or action taken in good faith in connection with the administration of
this Plan. Without limiting the generality of the foregoing, any decision or
action taken by the Committee when it relies upon information supplied it by any
officer of Weatherford, its legal counsel, actuary, independent accountants or
other advisors in connection with the administration of this Plan shall be
deemed to have been taken in good faith.

     8.6 Severability. If any term, provision, covenant or condition of this
Plan is held to be invalid, void or otherwise unenforceable, the rest of this
Plan shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.

     8.7 Notice. Any notice or filing required or permitted to be given to the
Committee or a Participant shall be sufficient if in writing and hand delivered
or sent by U.S. mail to the principal office of Weatherford or to the
residential mailing address of the Participant. Notice shall be deemed to be
given as of the date of hand delivery or if delivery is by mail, as of the date
shown on the postmark.

     8.8 Gender and Number. If the context requires it, words of one gender when
used in this Plan shall include the other genders, and words used in the
singular or plural shall include the other.

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     8.9 Governing Law. The Plan shall be construed, administered and governed
in all respects by the laws of the State of Texas.

     8.10 Effective Date. This Plan shall be operative and effective as of
January 1, 1994.

     IN WITNESS WHEREOF, Weatherford has executed this document on this 18th day
of March, 1994, as authorized by the Board of Directors of Weatherford on
December 9, 1993.

            WEATHERFORD INTERNATIONAL

INCORPORATED
      By   /s/ Philip Burguieres                    

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