Document:

exv10w2

 

Exhibit 10.2

EMPLOYMENT AGREEMENT

     This Employment Agreement (this “Agreement”) is entered into as of December 1, 2005 (the
“Effective Date”), by and between Weatherford International Ltd., a Bermuda exempted company (the
“Company”), and Hazel A. Brown (the “Executive”).

W I T N E S S E T H:

     Whereas, the Board has previously determined that it is in the best interests of the
Company and its shareholders to retain the Executive and to induce the employment of the Executive
for the long-term benefit of the Company;

     Whereas, the Company desires to employ the Executive on the terms set forth below to
provide services to the Company and its affiliated companies, and the Executive is willing to
accept such employment and provide such services on the terms set forth in this Agreement;

     Now, Therefore, in consideration of the foregoing and for other good and valuable
consideration, the parties hereto do hereby agree:

     1. Certain Definitions.

          (a) “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of
the Exchange Act.

          (b) “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act

          (c) “Board” shall mean the Board of Directors of the Company.

          (d) “Cause” shall mean:

               (i) the willful and continued failure of the Executive to substantially perform the
Executive’s duties with the Company (other than any such failure resulting from incapacity due to
physical or mental illness or anticipated failure after the issuance of a Notice of Termination for
Good Reason by the Executive pursuant to Section 4(d)), after a written demand for substantial
performance is delivered to the Executive by the Board which specifically identifies the manner in
which the Executive has not substantially performed the Executive’s duties, or

               (ii) the willful engaging by the Executive in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company.

          No act, or failure to act, on the part of the Executive shall be considered “willful”
unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable
belief that the Executive’s action or omission was in the best interests of the Company. Any act,
or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or
upon the instructions of the Chief Executive Officer or of a more senior officer of the Company or
based upon the advice of counsel for the Company (which may be the General Counsel or other counsel
employed by the Company or its subsidiaries) shall be conclusively presumed to be done, or omitted
to be done, by the Executive in good faith and in the best interests of the Company. The cessation
of employment of the Executive shall not be deemed to be for Cause

 

 

unless and until there shall
have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters of the entire membership of the Board at a meeting of the Board called
and held for such purpose (after reasonable notice is provided to the Executive, and the Executive
is given an opportunity, together with counsel, to be heard before the Board), finding that, in the
good faith opinion of the Board, the Executive is guilty of the conduct described in subparagraph
(i) or (ii) above, and specifying the particulars thereof in detail.

          (e) “Change of Control” shall be deemed to have occurred if the event set forth in any one of
the following paragraphs shall have occurred:

               (i) any Person is or becomes the Beneficial Owner, directly or indirectly, of 20
percent or more of either (A) the then outstanding common shares of the Company (the
“Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of directors
(the “Outstanding Company Voting Securities”), excluding any Person who becomes such a
Beneficial Owner in connection with a transaction that complies with clauses (A), (B) and
(C) of paragraph (iii) below;

               (ii) individuals, who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least two-thirds of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s shareholders, was approved by a vote
of at least two-thirds of the Incumbent Board shall be considered as though such individual
was a member of the Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the Board; or

               (iii) the consummation of a reorganization, merger, amalgamation, consolidation or
similar transaction of the Company or any of its subsidiaries or the sale, transfer or other
disposition of all or substantially all of the Company’s Assets (a “Corporate Transaction”),
unless, following such Corporate Transaction or series of related Corporate Transactions, as
the case may be, (A) all of the individuals and entities (which, for purposes of this
Agreement, shall include, without limitation, any corporation, partnership, association,
joint-stock company, limited liability company, trust, unincorporated organization or other
business entity) who were the beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate
Transaction beneficially own, directly or indirectly, more than 66 2/3 percent of,
respectively, the then outstanding common shares and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of directors (or
other governing body), as the case may be, of the entity resulting from such Corporate
Transaction (including, without limitation, an entity which as a result of such transaction
owns the Company or all or substantially all of the Company’s Assets either directly or
through one or more subsidiaries or entities) in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding any entity resulting from such Corporate Transaction or any employee
benefit plan (or related trust) of the Company or such entity resulting from such Corporate
Transaction) beneficially owns, directly or indirectly, 20 percent or more of, respectively,
the then outstanding shares of common stock of the entity resulting from such Corporate
Transaction or the combined voting power of the then outstanding voting securities of such
entity except to the extent that such ownership existed prior to the Corporate Transaction
and (C) at least two-thirds of the members of the board of directors (or other governing
body) of the entity resulting from such

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Corporate Transaction were members of the Incumbent
Board at the time of the approval of such Corporate Transaction; or

               (iv) Approval or adoption by the Board of Directors or the shareholders of the Company
of a plan or proposal which could result directly or indirectly in the liquidation,
transfer, sale or other disposal of all or substantially all of the Company’s Assets or the
dissolution of the Company.

          (f) “Company’s Assets” shall mean the assets (of any kind) owned by the Company, including,
without limitation, the securities of the Company’s direct and indirect subsidiaries and any of the
assets owned by such subsidiaries

          (g) “Disability” shall mean the absence of the Executive from performance of the Executive’s
duties with the Company on a substantial basis for 120 calendar days as a result of incapacity due
to mental or physical illness.

          (h) “Employment Period” shall mean the period commencing on the Effective Date and ending on
the third anniversary of the Effective Date; provided, however, that commencing on the date one
year after the Effective Date, and on each annual anniversary of such date (such date and each
annual anniversary thereof shall be hereinafter referred to as the “Renewal Date”), unless
previously terminated, the Employment Period shall be automatically extended so as to terminate
three years after such Renewal Date, unless at least 60 days prior to the Renewal Date the Company
shall give notice to the Executive that the Employment Period shall not be so extended.

          (i) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time.

          (j) “Good Reason” shall mean the occurrence of any of the following:

               (i) the assignment to the Executive of any position, authority, duties or
responsibilities that are not materially consistent with the Executive’s position (including
status, offices and titles), authority, duties or responsibilities as contemplated by
Section 3(a) of this Agreement, or any other action by the Company which results in a
diminution in such position, authority, duties or responsibilities, excluding for this
purpose any action not taken in bad faith and which is remedied by the Company after receipt
of notice thereof given by the Executive;

               (ii) any failure by the Company to comply with any of the provisions of this Agreement
(including, without limitation, its obligations under Section 3(a)), other than any failure
not occurring in bad faith and which is remedied by the Company after receipt of notice
thereof given by the Executive;

               (iii) any failure by the Company to continue to provide the Executive with benefits
currently enjoyed by the Executive under any of the Company’s compensation, bonus,
retirement, pension, savings, life insurance, medical, health and accident, or disability
plans, or the taking of any other action by the Company which would directly or indirectly
reduce any of such benefits or deprive the Executive of any fringe benefits or perquisites
currently enjoyed by the Executive;

               (iv) the Company’s requiring the Executive to be based at any office or location other
than as provided in Section 3(a)(i) hereof or the Company’s requiring the Executive to
travel on Company business to a substantially greater extent than required immediately prior
to the date hereof;

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               (v) any purported termination by the Company of the Executive’s employment;

               (vi) any failure by the Company to comply with and satisfy Section 10(b) of this
Agreement; or

               (vii) following a Change of Control, the giving of notice by the Company to the
Executive that the Employment Period shall not be extended.

     In the event of a Change of Control or other Corporate Transaction in which the Company’s
common shares cease to be publicly traded, “Good Reason” shall be deemed to exist upon the
occurrence of any of the events listed in clauses (i) — (vii) above and also in the event Executive
is assigned to any position (including status, offices, titles and reporting requirements),
authority, duties or responsibilities that are (A) not at or with the publicly-traded ultimate
parent company of the successor to the Company or the corporation or other entity surviving or
resulting from such Corporate Transaction or (B) inconsistent with the Executive’s position
(including status, offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 3(a).

     For purposes of this Agreement, any good faith determination of “Good Reason” made by the
Executive shall be conclusive.

          (k) “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the
Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily
holding securities pursuant to an offering by the Company of such securities, or (iv) a corporation
or other entity owned, directly or indirectly, by the shareholders of the Company in the same
proportions as their ownership of common shares of the Company.

          2. Employment Period. The Company hereby agrees that the Company will continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company
subject to the terms and conditions of this Agreement during the Employment Period. During the
Employment Period, the Executive may be seconded to the employment of Weatherford U.S., L.P. (or
such other affiliated entity) (the “Seconded Affiliate Company”), but without prejudice to the
Company’s obligations or the Executive’s rights under this Agreement. The Executive shall carry
out his/her duties as if they were duties to be performed on behalf of the Company. Each Seconded
Affiliate Company shall be subject to all of the obligations and agreements of the Company under
this Agreement and the Company shall be responsible for actions and inactions of the Seconded
Affiliate Company. Any breach or failure to abide by the terms and conditions of this Agreement by
a Seconded Affiliate Company shall be deemed to constitute a breach or failure to abide by the
Company.

          3. Terms of Employment.

          (a) Position and Duties.

               (i) During the Employment Period, the Executive’s position (including status, offices,
titles, authority, duties and responsibilities) shall be Vice President — Human Resources of
the Company.

               (ii) During the Employment Period, and excluding any periods of vacation and sick leave
to which the Executive is entitled, the Executive agrees to devote reasonable attention and
time during normal business hours to the business and affairs of the Company and, to the
extent necessary to discharge the responsibilities assigned to the Executive hereunder, to
use the Executive’s

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reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of this
Agreement for the Executive to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or teach at educational
institutions and (C) manage personal investments, so long as such activities in clause (A),
(B), and (C) together do not significantly interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this Agreement. It is
expressly understood and agreed that
to the extent that such activities have been conducted by the Executive prior to the
date hereof, the continued conduct of such activities (or the conduct of activities similar
in nature and scope thereto) subsequent to the date hereof shall not thereafter be deemed to
interfere with the performance of the Executive’s responsibilities to the Company.

          (b) Compensation.

               (i) Base Salary. During the Employment Period, the Executive shall receive an
annual base salary equal to the current base salary being received by the Executive (“Annual
Base Salary”), which shall be paid at a monthly rate. During the Employment Period, the
Annual Base Salary shall be reviewed no more than 12 months after the last salary increase
awarded to the Executive prior to the date hereof and thereafter at least annually;
provided, however, that a salary increase shall not necessarily be awarded as a result of
such review. Any increase in Annual Base Salary may not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced
after any such increase. The term Annual Base Salary as utilized in this Agreement shall
refer to Annual Base Salary as so increased.

               (ii) Annual Bonus. The Executive shall be eligible for an annual bonus for
each fiscal year ending during the Employment Period on the same basis as other executive
officers under the Company’s executive officer annual incentive program. Each such Annual
Bonus shall be paid no later than the end of the third month of the fiscal year next
following the fiscal year for which the Annual Bonus is awarded.

               (iii) Incentive, Savings and Retirement Plans. During the Employment Period,
the Executive shall be entitled to participate in all incentive, savings and retirement
plans, practices, policies and programs applicable generally to all executive officers of
the Company and its affiliated companies, but in no event shall such plans, practices,
policies and programs provide the Executive with incentive opportunities (measured with
respect to both regular and special incentive opportunities, to the extent, if any, that
such distinction is applicable), savings opportunities and retirement benefit opportunities,
in each case, less favorable, in the aggregate, than the most favorable of those provided by
the Company and its affiliated companies for the Executive under such plans, practices,
policies and programs as in effect on the date hereof. As used in this Agreement, the term
“affiliated companies” shall include any company controlled by, controlling or under common
control with the Company.

               (iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or
the Executive’s family, as the case may be, shall be eligible to participate in and shall
receive all benefits under welfare benefit and retirement plans, practices, policies and
programs provided by the Company and its affiliated companies (including, without
limitation, medical, prescription, dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and programs) to the extent
applicable generally to all executive officers of the Company and its affiliated companies,
but in no event shall such plans, practices, policies and programs provide the Executive
with benefits which are less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the Executive under than such
plans,

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practices, policies and programs of the Company and its affiliated companies in
effect for the Executive on the date hereof.

               (v) Fringe Benefits. During the Employment Period, the Executive shall be
entitled to (A) a monthly car allowance and (B) such other fringe benefits (including,
without limitation, payment of club dues, certain housing expenses, financial planning
services, cellular telephone, mobile email, annual physical examinations, payment of
professional fees and professional taxes and payment of related expenses, as appropriate) in
accordance with the most favorable plans, practices, programs and policies of the Company
and its affiliated companies in effect for the Executive on the date hereof.

               (vi) Expenses. During the Employment Period, the Executive shall be entitled
to receive prompt reimbursement for all reasonable expenses incurred by the Executive in
accordance with the most favorable policies, practices and procedures of the Company and its
affiliated companies in effect for the Executive on the date hereof.

               (vii) Vacation. During the Employment Period, the Executive shall be entitled
to at least three weeks paid vacation or such greater amount of paid vacation as may be
applicable to the executive officers of the Company and its affiliated companies.

               (viii) Deferred Compensation Plan. During the Employment Period, the Executive
shall be entitled to continue to participate in any deferred compensation or similar plans
in which executive officers of the Company and its affiliated companies participate.

          (c) Termination of Prior Agreements. The Executive acknowledges and agrees that this
Agreement is being executed in replacement of any and all Employment Agreements existing between
the Executive and Weatherford International, Inc. or its affiliates (the “Prior Agreements”). As a
result, the Executive and the Company agree that any and all Prior Agreements are hereby terminated
and of no further force and effect.

     4. Termination of Employment.

          (a) Death or Disability. The Executive’s employment shall terminate automatically
upon the Executive’s death during the Employment Period. If the Company determines in good faith
that the Disability of the Executive has occurred during the Employment Period, it may provide the
Executive with written notice in accordance with Section 11(b) of this Agreement of its intention
to terminate the Executive’s employment. In such event, the Executive’s employment with the
Company shall terminate effective 30 days after receipt of such notice by the Executive (the
“Disability Effective Date”), provided that within the 30-day period after such receipt, the
Executive shall not have returned to full-time performance of the Executive’s duties. In
addition, if a physician selected by the Executive determines that the Disability of the Executive
has occurred, the Executive (or his representative) may provide the Company with written notice in
accordance with Section 11(b) of this Agreement of the Executive’s intention to terminate his
employment. In such event, the Disability Effective Date shall be 30 days after receipt of such
notice by the Company.

          (b) Cause. The Company may terminate the Executive’s employment during the Employment
Period for Cause.

          (c) Good Reason. The Executive’s employment may be terminated by the Executive at any
time during the Employment Period for Good Reason.

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          (d) Notice of Termination. Any termination during the Employment Period by the
Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 11(b) of the Agreement. For
purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) to the extent applicable,
sets forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice, specifies the
termination date (which date, in the case of a notice by the Company, shall be not more than 30
days after the giving of such notice). The failure by the Executive or the Company to set forth in
the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or
Cause shall not waive any right of the Executive
or the Company, respectively, from asserting such fact or circumstance in enforcing the
Executive’s or the Company’s rights hereunder.

          (e) Date of Termination. “Date of Termination” shall mean:

               (i) if the Executive’s employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or any later
date specified therein, as the case may be;

               (ii) if the Executive’s employment is terminated by the Company other than for Cause,
the Date of Termination shall be the date on which the Executive receives notice of such
termination; and

               (iii) if the Executive’s employment is terminated by reason of death or Disability, the
Date of Termination shall be the date of death of the Executive or the Disability Effective
Date, as the case may be.

     5. Obligations of the Company Upon Termination.

          (a) Death, Disability, Good Reason or Other than For Cause. If, during the Employment
Period, the Executive’s employment is terminated by reason of the Executive’s death or Disability,
by the Company for any reason other than for Cause or by the Executive for Good Reason:

               (i) The Company shall pay to the Executive (or Executive’s heirs, beneficiaries or
representatives as applicable) in a lump sum in cash within 30 days after the Date of
Termination the aggregate of the following amounts:

               (A) the sum of (1) the Executive’s Annual Base Salary through the Date of
Termination to the extent not theretofore paid, (2) the product of (x) the higher of
(I) the highest Annual Bonus received by the Executive in the preceding five
calendar years and (II) the Annual Bonus that would be payable in respect of the
current fiscal year (and annualized for any fiscal year consisting of less than 12
months) (such higher amount being referred to as the “Highest Annual Bonus”) and (y)
a fraction, the numerator of which is the number of days in the current fiscal year
through the Date of Termination, and the denominator of which is 365, and (3) any
compensation previously deferred by the Executive under any deferred compensation
plan sponsored by the Company (together with any accrued interest or earnings
thereon), and any accrued vacation pay, in each case to the extent not theretofore
paid (the sum of the amounts described in clauses (1), (2) and (3) shall be
hereinafter referred to as the “Accrued Obligations”);

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               (B) an amount equal to two times the sum of (i) the highest Annual Base Salary
received by the Executive in the last five years ended prior to the Termination Date
and (ii) the Highest Annual Bonus;

               (C) an amount equal to the total of the employer basic and matching
contributions credited to the Executive under the Company’s 401(k) Savings Plan (the
“401(k) Plan”) and any other deferred compensation plan (excluding the Company’s ERP
(as defined below)) during the 12-month period immediately preceding the month of
the Executive’s Date of Termination multiplied by two, such amount to be grossed up
so that the amount the Executive actually receives after payment of any federal or
state taxes payable thereon equals the amount first described above; and

               (D) the total value of all fringe benefits received by the Executive on an
annualized basis multiplied by two.

               (ii) For a period of two years from the Executive’s Date of Termination, or such longer
period as may be provided by the terms of the appropriate plan, program, practice or policy,
the Company shall continue benefits to the Executive and the Executive’s family equal to
those which would have been provided to them in accordance with the plans, programs,
practices and policies described in Section 3(b)(iv) of this Agreement if the Executive’s
employment had not been terminated; provided, however, that with respect to any of such
plans, programs, practices or policies requiring an employee contribution, the Executive (or
Executive’s heirs or beneficiaries as applicable) shall continue to pay the monthly employee
contribution for same, and provided further, that if the Executive becomes re-employed by
another employer and is eligible to receive medical or other welfare benefits under another
employer provided plan, the medical and other welfare benefits described herein shall be
secondary to those provided under such other plan during such applicable period of
eligibility. To the extent that the Executive or the Executive’s family is precluded from
continuing participation in any of the foregoing plans, programs, practices or policies for
any portion of such two year period, the Executive shall be provided with the after-tax
economic equivalent of the benefits that would have been provided under such plans,
programs, practices and policies for the portion of such two year period in which the
Executive or Executive’s family is unable to participate for the full period of two years.

               (iii) All benefits and amounts under the Company’s deferred compensation plan and all
other benefit plans (except as specifically provided for in Section 6(b) below), including
all stock options, restricted stock or other stock-based awards held by the Executive, not
already vested shall become immediately 100% vested and fully exercisable as of the Date of
Termination.

               (iv) To the extent not theretofore paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to be paid or provided or
which the Executive is eligible to receive under any plan, program, policy or practice or
contract or agreement of the Company and its affiliated companies (collectively, the “Other
Benefits”).

               (v) If the Executive’s employment is terminated by reason of the Executive’s death,
then Other Benefits (as defined in this Section) shall also include, without limitation, and
the Executive’s estate and/or beneficiaries shall be entitled to receive, benefits at least
equal to the most favorable benefits provided by the Company and its affiliated companies to
the estates and beneficiaries of the executive officers of the Company and such affiliated
companies under such plans, programs, practices and policies relating to death benefits, if
any, in effect on the date hereof or, if more favorable, those in effect on the date of the
Executive’s death.

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               (vi) If the Executive’s employment is terminated by reason of the Executive’s
Disability, then Other Benefits (as defined in this Section) shall also include, without
limitation, and the Executive shall be entitled after the Disability Effective Date to
receive, disability and other benefits at least equal to the most favorable benefits
generally provided by the Company and its affiliated companies to the Executive’s disabled
peer executive officers and/or their families in accordance with such plans, programs,
practices and policies relating to disability, if any, in effect generally on the date
hereof or, if more favorable, those in effect at the time of the Disability

          (b) Cause. If the Executive’s employment is terminated for Cause during the
Employment Period, this Agreement shall terminate without further obligations to the Executive,
other than the obligation to pay to the Executive (x) his Annual Base Salary through the Date of
Termination, (y) the amount of any
compensation previously deferred by the Executive and (z) Other Benefits, in each case to the
extent theretofore unpaid.

          (c) Termination by Executive Other Than for Good Reason. If the Executive voluntarily
terminates his employment during the Employment Period for any reason other than for Good Reason,
the Executive’s employment shall terminate without further obligations to the Executive, other than
for payment of Accrued Obligations and Other Benefits and the rights provided in Section 6. In
such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30
days after the Date of Termination subject to such other options or restrictions as provided by
law.

     6. Other Rights.

          (a) Except as provided herein, nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any plan, program, policy or practice provided by
the Company or any of its affiliated companies and for which the Executive may qualify, nor shall
anything herein limit or otherwise affect such rights as the Executive may have under any contract
or agreement with the Company or any of its affiliated companies. Except as otherwise provided
herein, amounts which are vested benefits, which vest according to the terms of this Agreement or
which the Executive is otherwise entitled to receive under any plan, policy, practice or program of
or any contract or agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan, policy, practice or
program or contract or agreement. If the Executive has any other employment or similar agreement
with the Company at the Date of Termination, the Executive agrees that he shall have the right to
receive all of the benefits provided under this Agreement or such other agreement, whichever one,
in its entirety, the Executive chooses, but not both agreements, and when the Executive has made
such election, the other agreement shall be superseded in its entirety and shall be of no further
force and effect. The Executive also agrees that to the extent he may be eligible for any
severance pay or similar benefit under any laws providing for severance or termination benefits,
such other severance pay or similar benefit shall be coordinated with the benefits owed hereunder,
such that the Executive shall not receive duplicate benefits.

          (b) With respect solely to the Company’s Nonqualified Executive Retirement Plan (“ERP”), if
the Executive’s employment is terminated for any reason whatsoever, with or without Cause, and no
Change of Control has occurred or is pending, any ERP benefits payable shall only be those that are
payable, if any, under the terms of the ERP as of the Date of Termination.

     7. Full Settlement.

          (a) No Rights of Offset. The Company’s obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may
have against the Executive or others.

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          (b) No Mitigation Required. The Company agrees that, if the Executive’s employment
with the Company terminates, the Executive is not required to seek other employment or to attempt
in any way to reduce any amounts payable to the Executive by the Company pursuant to this
Agreement. Further, the amount of any payment or benefit provided for in this Agreement shall not
be reduced by any compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive
to the Company, or otherwise.

          (c) Legal Fees. The Company agrees to pay as incurred, to the full extent permitted
by law, all legal fees and expenses which the Executive may reasonably incur as a result of any
contest (regardless of the outcome thereof) by the Company or the Executive of the validity or
enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance thereto (including as a result of
any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the “Code”).

     8. Certain Additional Payments by the Company.

          (a) Anything in this Agreement to the contrary notwithstanding, if it shall be determined that
any payment or distribution by the Company to or for the benefit of the Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section 8) (a “Payment”)
would be subject to the excise tax or other tax imposed by Section 4999 of the Code (and any
successor provisions or sections to Section 4999) or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Executive shall
be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after
payment by the 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, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

          (b) Subject to the provisions of Section 8(c), all determinations required to be made under
this Section 8, including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such determination shall be made
by PricewaterhouseCoopers or, as provided below, such other certified public accounting firm as may
be designated by the Executive (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days after the receipt of
notice from the Executive that there has been a Payment, or such earlier time as is requested by
the Company. In the event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Executive shall appoint another
nationally recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses
of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 8, shall be paid by the Company to the Executive within five days after
the receipt of the Accounting Firm’s determination. Any determination by the Accounting Firm,
absent manifest error, shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been
made by the Company should have been made (“Underpayment”), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its remedies pursuant to
Section 8(c) and the Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has

10

 

occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

          (c) The Executive shall notify the Company in writing of any claim by the Internal Revenue
Service (the “IRS”) that, if successful, would require the payment by the Company of the Gross-Up
Payment (or an additional Gross-Up Payment) in the event the IRS seeks higher payment. Such
notification shall be given as soon as practicable, but no later than ten business days after the
Executive is informed in writing of such claim, and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive shall not pay such
claim prior to the expiration of the 30-day period following the date on which he gives such notice
to the Company (or such shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Executive in writing prior to the expiration of
such period that it desires to contest such claim, the Executive shall:

               (i) give the Company any information reasonably requested by the Company relating to
such claim,

               (ii) take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including without limitation, accepting
legal representation with respect to such claim by an attorney reasonably selected by the
Company,

               (iii) cooperate with the Company in good faith in order to effectively contest such
claim, and

               (iv) permit the Company to participate in any proceedings relating to such claims;

provided, however, that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such costs and shall indemnify and
hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing provisions of this Section 8(c), the
Company shall control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such payment to the
Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with respect to which such contested amount
is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s
control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any
other issues raised by the IRS or any other taxing authority.

          (d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to
Section 8(c), the Executive becomes entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company’s complying with the requirements of Section 8(c)) promptly
pay to the Company the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section

11

 

8(c), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

          (e) Any provision in this Agreement or any other plan or agreement to the contrary
notwithstanding, if the Company is required to pay a Gross-Up Payment pursuant to the provisions of
this Agreement and pursuant to the provisions of another plan or agreement, then the Company shall
pay the greater of the amount determined pursuant to this Agreement or the amount determined
pursuant to the provisions of such other plan or agreement, but in no event shall the Company pay
amounts pursuant to both provisions.

     9. Confidential Information. The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or data relating to the
Company or any of its affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the
Executive’s employment by the Company or any of its affiliated companies, provided that it
shall not apply to information which is or shall become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement), information that is
developed by the Executive independently of such information, or knowledge or data or information
that is disclosed to the Executive by a third party under no obligation of confidentiality to the
Company. After termination of the Executive’s employment with the Company, the Executive shall
not, without the prior written consent of the Company or as may otherwise be required by law or
legal process, communicate or divulge any such information, knowledge or data to anyone other than
the Company and those designated by it. In no event shall an asserted violation of the provision
of this Section 9 constitute a basis for deferring or withholding any amounts otherwise payable to
the Executive under this Agreement.

     10. Successors.

          (a) This Agreement is personal to the Executive and shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.

          (b) In addition to any obligations imposed by law upon any successor to the Company, the
Company will require any successor (whether direct or indirect, by purchase, merger, consolidation,
amalgamation, operation of law or otherwise (including any purchase, merger, amalgamation,
Corporate Transaction or other transaction involving the Company or any subsidiary or Affiliate of
the Company), to all or substantially all of the Company’s business and/or the Company’s Assets to
expressly assume and agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle the Executive to compensation from the
Company in the same amount and on the same terms as the Executive would be entitled to hereunder if
the Executive were to terminate the Executive’s employment for Good Reason after a Change of
Control, except that, for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. As used in this Agreement,
“Company” shall mean the Company as hereinbefore defined and any successor to its business and/or
assets as provided above.

12

 

     11. Miscellaneous.

          (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

          (b) All notices and other communications hereunder shall be in writing and shall be given by
hand delivery to the other party or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

	 	 	 	 	 
	 

	 	If to the Executive:
	 	Hazel A. Brown
	 

	 	 	 	515 Post Oak Blvd., Suite 600
	 

	 	 	 	Houston, Texas 77027
	 
	 	 	 	 
	 

	 	If to the Company:
	 	Weatherford International Ltd.
	 

	 	 	 	515 Post Oak Blvd., Suite 600
	 

	 	 	 	Houston, Texas 77027
	 

	 	 	 	Attention: General Counsel

or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notices and communications shall be effective when actually received by the addressee.

          (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.

          (d) The Company may withhold from any amounts payable under this Agreement such Federal,
state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or
regulation.

          (e) The Executive’s or the Company’s failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right to the Executive or the Company may
have hereunder, including without limitation, the right of the Executive to terminate employment
for Good Reason shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.

          (f) This Agreement constitutes the entire agreement and understanding between the parties
relating to the subject matter hereof and supersedes all prior agreements between the parties
relating to the subject matter hereof, including, without limitation, the Prior Agreements.

13

 

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the
authorization from its Board of Directors, the Company has caused these presents to be executed in
its name and on its behalf, all as of the day and year first above written.

	 	 	 	 	 
	 	 	 
	 	                    /s/ Hazel A. Brown
 	 
	 	               Hazel A. Brown 	 
	 	 	 
	 

	 	 	 	 	 
	 	Weatherford International Ltd.

 	 
	 	By:  	               /s/ Bernard J. Duroc-Danner
 	 
	 	 	               Bernard J. Duroc-Danner 	 
	 	 	Chairman, President & Chief Executive Officer 	 
	 

14<PAGE>
                                                                [EXHIBIT (4)(o)]

                      MERRILL LYNCH LIFE INSURANCE COMPANY

              GUARANTEED MINIMUM WITHDRAWAL BENEFIT ("GMWB") RIDER

This Rider is part of the Contract to which it is attached (the "Base Contract")
and is subject to all the terms and conditions of the Base Contract. The
provisions of this Rider control over any contrary provisions of the Base
Contract.

This Rider is available only if, on the GMWB Effective Date, the Owner (and
Co-Owner, if any) is not younger than the Minimum Age for GMWB Rider and is not
older than the Maximum Age for GMWB Rider. The GMWB Effective Date and the
Minimum Age and Maximum Age for the GMWB Rider are shown on the GMWB Rider page
of the Contract Schedule ("GMWB Rider Schedule").

If the Owner is a non-natural person, all references to Owner shall mean
Annuitant. As described on the GMWB Rider Schedule, restrictions may apply to
Owners and Annuitants.

RIGHT TO CANCEL RIDER: As described on the GMWB Rider Schedule, You may cancel
this Rider to be effective on any of the Allowable GMWB Cancellation Dates by
notification acceptable to Us.

RIGHT TO ADD RIDER: As described on the GMWB Rider Schedule, if this Rider has
been cancelled, You may re-elect it to be effective on any of the subsequent
Allowable GMWB Addition Dates by notification acceptable to Us. Availability of
this Rider and its provisions are subject to the terms and conditions in effect
at the time of each subsequent Allowable GMWB Addition Date.

WAIVER OF CONTRACT PROVISIONS: As described on the GMWB Rider Schedule, certain
Contract provisions will be waived while this Rider is in effect.

ALLOCATION GUIDELINES AND RESTRICTIONS: As described on the GMWB Rider Schedule,
Allocation Guidelines and Restrictions will apply and We may periodically
rebalance Your Account Value while this Rider is in effect.

GUARANTEED LIFETIME AMOUNT (GLA): This Rider guarantees that You may receive up
to the GLA each year during Your lifetime (or, if there are Co-Owners, until the
death of the second Owner).

Your GLA is determined by multiplying the applicable Lifetime Income Percentage
by the GMWB Base. The Lifetime Income Percentage and GMWB Base and how each is
determined are described on the GMWB Rider Schedule

Withdrawals which cause the cumulative amount withdrawn in any Contract Year to
be greater than the GLA will reduce the GMWB Base, possibly to zero.

If the Account Value is reduced to zero as a result of either a withdrawal or
the deduction of fees and/or charges and the resulting GMWB Base is greater than
zero, then an Annuity Date will be established and GLA payments will be made
each year as described under GMWB Settlement on the GMWB Rider Schedule.

Any Ownership change that does not result in termination of this Rider may
result in a change to the Lifetime Income Percentage. Any change in the Lifetime
Income Percentage or the GMWB Base will result in a corresponding change to Your
GLA.

                                      -1-

<PAGE>
WAIVER OF SURRENDER CHARGE: As described on the GMWB Rider Schedule, any
Surrender Charge that would otherwise apply to all or a portion of a withdrawal
made while this Rider is in effect may be waived.

PREMIUM LIMITATION: As described on the GMWB Rider Schedule, We may limit or not
accept additional Premiums while this Rider is in effect.

BENEFIT AVAILABLE ON MATURITY DATE: As described on the GMWB Rider Schedule, if
the Maturity Date occurs while this Rider is in effect, We will make the GLA
available each year through lifetime annuity payments as described on the GMWB
Rider Schedule.

GMWB CHARGE: The current and maximum GMWB Charge Percentage, how the charge is
determined, and when and how it is collected are described on the GMWB Rider
Schedule. The current GMWB Charge may change but it will never exceed the
maximum GMWB Charge.

TERMINATION:  This Rider will terminate upon the earliest of:

  (i)   a withdrawal that reduces the GMWB Base to zero; or
  (ii)  a change of Owner resulting in termination as described under Change
        of Owner on the GMWB Rider Schedule; or
  (iii) cancellation of this Rider in accordance with the Right to Cancel
        Rider provision; or
  (iv)  establishment of an Annuity Date when the Account Value has been
        reduced to zero and the GMWB Base is greater than zero as described
        under Guaranteed Lifetime Amount; or
  (v)   application of all of the Annuity Value to an Annuity Option on the
        Annuity Date; or
  (vi)  receipt of Due Proof of Death of the Owner (the first Owner to die if
        this Contract has Co-Owners) unless at that time this Rider is
        available under the Base Contract and an Eligible Spousal Beneficiary
        continues the Base Contract and qualifies for continuation of this
        Rider; or
 (vii)  termination of the Base Contract.

All benefits and charges associated with this Rider will cease after the
effective date of termination.

                             MERRILL LYNCH LIFE INSURANCE COMPANY

                             By:       /s/ Lori M. Salvo
                                 --------------------------------
                                            Secretary

                                      -2-

<PAGE>

                          CONTRACT SCHEDULE (CONTINUED)
                                            Contract Number:     [%999999999]

GMWB RIDER SCHEDULE

GMWB EFFECTIVE DATE:                   [October 1, 2005]

MINIMUM AGE FOR GMWB RIDER:             [60]

MAXIMUM AGE FOR GMWB RIDER:             [80]

ALLOWABLE GMWB CANCELLATION DATES:      each 3rd Contract Anniversary, provided
                                        We receive written notification at Our
                                        Service Center no earlier than 90 days
                                        but at least 3 days prior to such GMWB
                                        Cancellation Date.

ALLOWABLE GMWB ADDITION DATES:          each 3rd Contract Anniversary, provided
                                        We receive written notification at Our
                                        Service Center no earlier than 90 days
                                        but at least 3 days prior to such GMWB
                                        Addition Date.

RESTRICTIONS ON OWNERS:
                Only spouses may be Co-Owners. If there are Co-Owners, they also
                must be Joint Annuitants.

RESTRICTIONS ON ANNUITANTS:
                If the Owner is an individual natural person, then the Annuitant
                must be the Owner. Only spouses may be Joint Annuitants. If
                there are Joint Annuitants, they also must be Co-Owners.

WAIVER OF CONTRACT PROVISIONS:
                The following Contract Provisions are waived while this Rider is
                in effect:

                    1.   the Inactive Contract provision in the General
                         Provisions section of the Base Contract; and

                    2.   the Minimum Surrender Value after a partial
                         withdrawal requirement in the Withdrawals
                         Requirements and Limitations section of the
                         Contract Schedule, except if You request a
                         withdrawal resulting in an Excess Withdrawal (as
                         described in the GMWB Base section of the GMWB
                         Rider Schedule).

ALLOCATION GUIDELINES AND RESTRICTIONS:

                You must participate in a quarterly Rebalancing Program and
                provide Us with written instructions that comply with the
                following:

                    (1)  You must allocate at least [40%], but not more than
                         [70%] of Your total allocations among subaccounts
                         in the following Investment Categories:

                               Large Cap
                               Mid Cap
                               Small Cap
                               International

                    (2)  You must allocate no more than [40%] of Your total
                         allocations among the following Investment
                         Categories:

                               Small Cap
                               International
                               Alternative
                               Money Market

                                      -3-
<PAGE>
                          CONTRACT SCHEDULE (CONTINUED)
                                            Contract Number:     [%999999999]

GMWB RIDER SCHEDULE (CONTINUED)

                    (3)  You must allocate the remaining amounts among the
                         other Investment Categories so Your total
                         allocations equal 100%.

                    (4)  You must choose a periodic Rebalancing Date from
                         the 1st through the 28th day of the month.

                    (5)  You must  schedule  Your first  Rebalancing  Date
                         to begin within 95 days from the GMWB  Effective
                         Date.

                    (6)  You agree to furnish new allocation instructions
                         that comply with (1) - (3) above prior to any
                         future closure or elimination of a subaccount in
                         which You are invested.

                You may request to change Your instructions while this Rider is
                in effect provided that each request complies with (1) - (4)
                above.

                On a GMWB Addition Date and on each quarterly Rebalancing Date
                thereafter, We automatically reallocate Your Account Value to
                maintain the percentage allocation among the subaccounts that
                You have selected.

                You must allocate any additional Premiums in accordance with the
                subaccounts and percentages You have selected.

                You may request to transfer among subaccounts while this Rider
                is in effect provided that each request results in an allocation
                of Your Account Value that complies with (1) and (2) above as of
                the end of the last Valuation Period preceding receipt of Your
                request.

                Only pro-rata withdrawal requests affecting all subaccounts in
                which You are invested will be accepted while this Rider is in
                effect.

LIFETIME INCOME PERCENTAGE:
                The initial Lifetime Income Percentage set forth below is based
                upon the age of the Owner (or the younger Owner if there are
                Co-Owners) on the date of the first withdrawal on or after the
                GMWB Effective Date.

<TABLE>
<CAPTION>
                           Age of (Younger) Owner when              Lifetime
                         First Withdrawal is taken on or             Income
                            after GMWB Effective Date              Percentage
                         -------------------------------           ----------
<S>                      <C>                                       <C>
                                    60 - 64                          [4.5%]
                                    65 - 69                          [5.0%]
                                    70 - 74                          [5.5%]
                                    75 - 79                          [6.0%]
                                      80+                            [7.0%]
</TABLE>

                The Lifetime Income Percentage will be redetermined on the
                effective date of a change of Owner acceptable to Us, in
                accordance with the percentages then in effect.

                                      -4-
<PAGE>
                          CONTRACT SCHEDULE (CONTINUED)
                                            Contract Number:     [%999999999]

GMWB RIDER SCHEDULE (CONTINUED)

GMWB BASE:

                THE GMWB BASE IS USED SOLELY TO DETERMINE THE GUARANTEED
                LIFETIME AMOUNT (GLA) AND THE GMWB CHARGE. THE GMWB BASE DOES
                NOT ESTABLISH OR GUARANTEE AN ACCOUNT VALUE, SURRENDER VALUE,
                MINIMUM DEATH BENEFIT OR MINIMUM RETURN FOR ANY INVESTMENT
                OPTION.

                (1) ON THE GMWB EFFECTIVE DATE:

                    If the GMWB Effective Date is the Contract Date, the GMWB
                    BASE is the Initial Premium. If the GMWB Effective Date is
                    an Allowable GMWB Addition Date, the GMWB BASE is the
                    Contract Value on the GMWB Effective Date.

                (2) PRIOR TO THE FIRST WITHDRAWAL AFTER THE GMWB EFFECTIVE DATE:

                    The GMWB BASE is equal to GMWB Maximum Anniversary Value
                    (MAV) Base.

                              GMWB MAV BASE: The GMWB MAV Base is equal to the
                              greatest of the anniversary values. An anniversary
                              value is equal to the sum of (i) plus (ii) where:

                                   (i)  is the GMWB Base on the GMWB Effective
                                        Date and is the Contract Value on each
                                        Contract Anniversary thereafter; and
                                   (ii) is the sum of all Additional Premiums
                                        since that date.

                             We will calculate an anniversary value on the GMWB
                             Effective Date and on each Contract Anniversary
                             thereafter through the earlier of the date You make
                             Your first withdrawal on or after the GMWB
                             Effective Date, and the [10th] Contract Anniversary
                             after the GMWB Effective Date. No additional
                             anniversary values will be calculated thereafter
                             for purposes of the GMWB MAV Base.

                (3) ON AND AFTER THE FIRST WITHDRAWAL AFTER THE GMWB EFFECTIVE
                    DATE:

                    (a)    When the cumulative withdrawals during the Contract
                           Year, including the most recent withdrawal, are not
                           in excess of the GLA, the GMWB BASE will equal the
                           GMWB Base immediately prior to such withdrawal.

                    (b)    When an Excess Withdrawal applies during the
                           Contract Year, the GMWB BASE will equal the lesser
                           of:
                           (i)  the GMWB Base immediately prior to such
                                withdrawal less the Adjusted Excess Withdrawal;
                                or
                           (ii) the Account Value after the withdrawal.

                                      -5-
<PAGE>
                          CONTRACT SCHEDULE (CONTINUED)
                                            Contract Number:     [%999999999]

GMWB RIDER SCHEDULE (CONTINUED)

                EXCESS WITHDRAWAL:

                    (1)    If cumulative withdrawals in a Contract Year have
                           already exceeded the GLA in effect at the time of a
                           withdrawal request, then the entire amount of that
                           withdrawal is an Excess Withdrawal.

                    (2)    If a withdrawal causes the total amount withdrawn
                           during a Contract Year to exceed the GLA in effect
                           at the time of the withdrawal request, then the
                           amount that the cumulative withdrawals are in
                           excess of the GLA is an Excess Withdrawal.

                ADJUSTED EXCESS WITHDRAWAL: An Adjusted Excess Withdrawal is
                equal to the Excess Withdrawal multiplied by an adjustment
                factor. The adjustment factor is calculated by dividing the GMWB
                Base by the Account Value, where both values are determined just
                prior to such withdrawal.

                REQUIRED MINIMUM DISTRIBUTION (RMD): If you are required to make
                withdrawals from Your Contract to satisfy the RMD rules under
                Section 401(a)(9) of the Internal Revenue Code You must notify
                us in writing.

                If We receive such written notification and if We determine that
                the RMD for Your Contract is greater than Your GLA, then any
                reduction to the GMWB Base may be limited as follows:

                    (1)    Notwithstanding section (3)(b) above, if cumulative
                           withdrawals for that Contract Year, including the
                           requested withdrawal, do not exceed the RMD, then
                           We will limit any adjustment factor to not exceed
                           1.0, and the GMWB Base will equal (3)(b)(i) above.

                    (2)    If a withdrawal causes cumulative withdrawals for
                           that Contract Year to exceed the RMD, then We will
                           limit the adjustment factor for a portion of the
                           Excess Withdrawal (equal to the Excess Withdrawal
                           less the amount by which cumulative withdrawals
                           exceed the RMD) to not exceed 1.0. The adjustment
                           factor for the remaining portion of the Excess
                           Withdrawal will be determined as described in the
                           ADJUSTED EXCESS WITHDRAWAL section of the GMWB
                           Rider Schedule.

                AUTOMATIC STEP-UP: On each [3rd] Contract Anniversary after the
                first withdrawal, if the Contract Value is greater than the GMWB
                Base, the GMWB Base will be increased to equal the Contract
                Value.

GMWB SETTLEMENT:
                On any date the Account Value is reduced to zero, the following
                will occur:

                    (1)    any remaining GLA not yet withdrawn in the current
                           Contract Year will be paid in a lump sum in
                           accordance with applicable legal requirements; and
                    (2)    an Annuity Date no earlier than the next Contract
                           Anniversary will be established and monthly annuity
                           payments equal to the GLA divided by 12, payable
                           until the death of the [second] Annuitant, will
                           start on that date; and

                                      -6-
<PAGE>
                          CONTRACT SCHEDULE (CONTINUED)
                                            Contract Number:     [%999999999]

GMWB RIDER SCHEDULE (CONTINUED)

                    (3)    all riders attached to the Base Contract will
                           terminate.

                Different payment intervals or other lifetime annuity payments
                acceptable to Us may be used, but will result in an actuarially
                reduced annuity payment.

CHANGE OF OWNER:

                If there is a change of Owner or an assignment (in states where
                applicable) of this Contract, this Rider will terminate unless
                the Owner is changed under any of the circumstances described
                below:

                    (1)    a spouse of the current Owner is added as an Owner
                           and was neither younger than the minimum age for
                           GMWB Rider nor older than the Maximum Age for GMWB
                           Rider on the GMWB Effective Date; or

                    (2)    a spouse of the current Owner is removed as an
                           Owner; or

                    (3)    as the result of the creation or termination of a
                           trust, the life (or lives) upon which GLA payments
                           under this Rider are based has not changed; or

                    (4)    an Eligible Spousal Beneficiary becomes the Owner
                           while this Rider is still available and on the
                           GMWB Effective Date was not younger than the
                           Minimum Age for GMWB Rider.

SPOUSAL CONTINUATION:
                If the Spousal Continuation Option is elected or is
                automatically applied and this Rider is still available, [the
                GMWB Base will be reset to equal the greater of the Contract
                Value and the GMWB Base, and] the Lifetime Income Percentage
                will be based on the age of the spouse on the Spousal
                Continuation Date subject to the terms and conditions in effect
                at that time.

WAIVER OF SURRENDER CHARGE:
                Any Surrender Charge that would otherwise apply to the portion
                of a withdrawal that is not an Excess Withdrawal will be waived.

PREMIUM LIMITATION:
                No additional Premiums can be paid on or after the date You make
                Your first withdrawal on or after the GMWB Effective Date.

BENEFIT AVAILABLE ON MATURITY DATE:

                The Benefit Available on Maturity Date will provide monthly
                annuity payments equal to the GLA divided by 12 until the death
                of the [second] Annuitant.

                We must receive written notification of Your election of such
                Benefit Available on Maturity Date no earlier than 90 days but
                at least 3 days prior to the Maturity Date.

                Different payment intervals or other lifetime annuity payments
                acceptable to Us may be used, but will result in an actuarially
                reduced annuity payment.

                                      -7-
<PAGE>
                          CONTRACT SCHEDULE (CONTINUED)
                                            Contract Number:     [%999999999]

GMWB RIDER SCHEDULE (CONTINUED)

GMWB CHARGE:
                                           Current              Maximum
                                           -------              -------

                GMWB Charge Percentage:    [0.75% annually]     1.50% annually

                The   GMWB Charge is calculated on each Monthaversary as
                      follows:

                    (1)  the GMWB Base is determined on the Monthaversary;

                    (2)  that amount is multiplied by the current GMWB
                         Charge Percentage;

                    (3)  the resulting amount is divided by 12.

                The sum of the GMWB Charges calculated on each of the three
                preceding Monthaversaries is deducted from the Contract Value on
                each Quarterversary.

                If the Contract Date falls on the 29th, 30th or 31st, We will
                use the last day of the month for any month that does not have a
                corresponding Monthaversary or Quarterversary for purposes of
                calculating and deducting GMWB Charges.

                If the GMWB Rider is terminated other than on a Quarterversary,
                We will deduct from the Contract Value the pro-rata portion of
                any GMWB Charges calculated on any prior Monthaversary but not
                yet collected.

                The GMWB Charge is deducted from each subaccount in the ratio of
                Your interest in each subaccount to Your Account Value on the
                date the charge is collected.

                The Contract Value and Surrender Value are reduced by any GMWB
                Charges calculated but not yet collected.

                                      -8-

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