Document:

Amendment and Restatement of Executive Retiree Medical Plan

  Exhibit 10.11
  AMENDMENT AND RESTATEMENT OF THE 
VARCO
INTERNATIONAL, INC.
 EXECUTIVE RETIREE MEDICAL PLAN
(Effective as of November 15, 2001)

   AMENDMENT AND RESTATEMENT OF THE 
VARCO INTERNATIONAL, INC.
 EXECUTIVE RETIREE MEDICAL PLAN
(Effective as of November
15, 2001)
  ARTICLE I
  PURPOSE AND DEFINITIONS
            1.01     Purpose.  The purpose of this VARCO INTERNATIONAL, INC. EXECUTIVE RETIREE MEDICAL PLAN (the “Plan”) is to
provide supplemental medical, dental, vision and prescription drug benefits to certain executive employees of VARCO INTERNATIONAL, INC., a Delaware corporation (the “Company”).  
            Pursuant to the Agreement and Plan of Merger, dated as of March 22, 2000, between Tuboscope Inc., a Delaware corporation (“Tuboscope”), and Varco
International, Inc., a California corporation (“Old Varco”), Old Varco was merged with and into Tuboscope effective as of May 30, 2000.  Effective upon the merger, Tuboscope, as successor to the merger, was renamed “Varco
International Inc.” and succeeded to the obligations of Old Varco under the Plan.  The “Company,” as used herein, refers to Varco International, Inc., a Delaware corporation and the surviving corporation in such merger on and
after May 30, 2000 and refers to Old Varco before May 30, 2000.
            The Plan is hereby amended and restated effective as of November 15,
2001 (the “Effective Date”).  The terms of the Plan, as so amended and restated, shall apply to each Participant (as defined below) who is an employee of the Company or one of its subsidiaries on or after the Effective Date and to
previous Participants in the Plan who were not employees of the Company as of the Effective Date, in each case and who is listed on Exhibit A attached hereto.

	  
 	 1.02
 	  
 	  Definitions.  The following terms have the meanings set forth below.
 
	  
 	  
 	  
 	  
 
	  
 	  (a)
 	  
 	  “Administrator” means the officer or officers to which administrative duties and responsibilities under the Plan may be delegated by the Committee under
Article V.
 
	  
 	  
 	  
 	  
 
	  
 	  (b)
 	  
 	  “Board” means the Board of Directors or governing body that has the authority to bind the Company.
 
	  
 	  
 	  
 	  
 
	  
 	  (c)
 	  
 	  “Change in Control” means (i) any person or persons acting in concert becoming the beneficial owner, directly or indirectly, of securities of the Company representing
forty (40%) percent or more of the total voting power of all of its then outstanding voting securities, (ii) a merger or consolidation of the Company in which (x) the voting securities of the Company immediately prior to the merger or consolidation
do not represent, or are not converted into, securities that represent, a majority of the voting power of all voting securities of the surviving entity immediately after the merger or consolidation or (y) individuals who were directors of the
Company immediately prior to the effectiveness of such merger or 
 

	  
 	  
 	  
 	 consolidation do not constitute a majority of the Board of Directors of the surviving entity immediately after the merger or consolidation, (iii) a sale of substantially all of
the assets of the Company (other than a sale to one or more subsidiaries of the Company), (iv) a liquidation or dissolution of the Company, or (v) individuals who, as of May 18, 2000, constituted the Board of Directors (the “Incumbent
Board”) cease (for any reason other than death) to constitute at least a majority of such Board; provided that any individual who becomes a director of the Company subsequent to May 18, 2000, whose election, or nomination for election by the
Company’s stockholders, was approved by the vote of at least a majority of the directors then in office shall be deemed a member of the Incumbent Board.
 
	  
 	  
 	  
 	  
 
	  
 	  (d)
 	  
 	  “Committee” means the Compensation Committee of the Board of Directors in charge of administering the Plan, as provided in Article V.
 
	  
 	  
 	  
 	  
 
	  
 	  (e)
 	  
 	  “Company” means Varco International, Inc., a Delaware corporation, and any successor entity.
 
	  
 	  
 	  
 	  
 
	  
 	 (f)
 	  
 	  “Dependent” means, with respect to a Participant, any dependent of such Participant as such term is used in the applicable medical, dental, vision or prescription drug
benefit plan or program of the Company.  The status of an individual as a “Dependent” of a Participant shall be determined as of the date such Participant first qualifies for receipt of benefits under Article III (i.e., upon
Retirement, death, Disability or terminated employment with fully vested Years of Service and 55 years of age or older).
 
	  
 	  
 	  
 	  
 
	  
 	  (g)
 	  
 	  “Disability” means a physical or mental condition sufficient to initially qualify the participant for benefits pursuant to the terms of the Company’s group
long-term disability insurance plans then in force and effect.
 
	  
 	  
 	  
 	  
 
	  
 	  (h)
 	  
 	  “Participant” means an employee who has met the participation requirements of Article II of this Plan.
 
	  
 	  
 	  
 	  
 
	  
 	 (i)
 	  
 	  “Plan” means the Varco International, Inc. Executive Retiree Medical Plan, as contained herein, as the same may be amended and/or restated from time to
time.
 
	  
 	  (j)
 	  
 	  “Retirement” means the date of Participant’s retirement from employment with, or other termination of Participant’s employment with, the Company and its
subsidiaries; provided, that as of such date, Participant has attained the age of 55 and Participant is fully vested in Years of Service as determined pursuant to Article IV.
 
	  
 	  
 	  
 	  
 
	  
 	  (k)
 	  
 	  “Spouse” means, with respect to a Participant, the person who is then the Participant’s spouse when benefits are provided hereunder, which person may change based
on any change in the marital status of the Participant.  Thus, any person who was a “Spouse” of the Participant at any time hereunder shall cease to be a “Spouse” hereunder once and so long as such person is no longer
married to the Participant; provided, however, that the person who is married to the 
 
	  
 	  
 	  
 	  
 

 3

	  
 	  
 	  
 	  Participant at the time of the Participant’s death shall qualify as the Participant’s Spouse for continuation of benefits as provided hereunder.
 
	  
 	  
 	  
 	  
 
	  
 	  (l)
 	  
 	  “Years of Service” means, with respect to a Participant, the number of calendar years in which such Participant completes 1,000 or more hours of service as an employee
with the Company and/or its subsidiaries.  For purposes of this subsection, a Participant’s employment with Tuboscope and its subsidiaries (and their predecessors), or a Participant’s employment with Old Varco and its subsidiaries
(and their predecessors) prior to May 30, 2000, shall be treated as employment with the Company and its subsidiaries.
 
	  
 	  
 	  
 	  
 

  ARTICLE II
  ELIGIBILITY AND PARTICIPATION
           2.01     Eligibility.  Each
employee who is an executive officer of the Company and is designated by the Board for eligibility in this Plan will be eligible to become a Participant with respect to the benefits provided under Article III.
            2.02     Participation.  Each employee who is eligible to become a Participant under Section 2.01 will become a Participant
at the time he is designated a Participant by the Board and such employee acknowledges the terms of such employee’s participation in the Plan in writing on a form provided by the Committee.  
            In addition, the employees who hold the following positions on the Effective Date shall become Participants effective as of the Effective Date:  Chairman and
Chief Executive Officer; President and Chief Operating Officer; Executive Vice President and Chief Financial Officer; President, Drilling Equipment; President, Services; Vice President and General Counsel; Vice President, Human Resources and
Administration; and Vice President, Corporate Development.  The employees who hold such positions as executive officers of the Company as of the Effective Date are listed on Exhibit A hereto, along with all other current Participants in
the Plan.
            2.03     Termination of Participation in the Plan.  A Participant’s participation
hereunder will terminate when all of the benefits payable under the Plan to such Participant and such Participant’s Spouse and Dependents have been paid in full.
  ARTICLE
III
  SUPPLEMENTAL MEDICAL, DENTAL,
 VISION, AND PRESCRIPTION DRUG BENEFITS
            3.01     Benefits Upon Retirement.  Upon Retirement of a Participant, such Participant (and such Participant’s Spouse and
Dependents) shall have a nonforfeitable right to receive the supplemental benefits described in Section 3.06, commencing immediately upon such Retirement.  
           3.02     Benefits in the Event of Termination of Employment Prior to Age 55.  Upon termination of employment of a Participant
prior to such Participant reaching age 55, and provided Participant is fully vested in Years of Services as of the date of such termination of 
  4

   employment (as determined pursuant to Article IV), such Participant (and such Participant’s Spouse and Dependents) shall have a non-forfeitable right to receive the
supplemental benefits described in Section 3.06, commencing on the date such Participant becomes 55 years old.  
            3.03     Benefits following Death.  A Participant’s Spouse and Dependents shall have a non-forfeitable right to receive the
supplemental benefits described in Section 3.06 commencing on the date of such Participant’s death while employed by the Company or any of its subsidiaries.  
            3.04     Benefits following Disability.  Each Participant (and such Participant’s Spouse and Dependents) shall have a
non-forfeitable right to receive the supplemental benefits described in Section 3.06 commencing upon the Disability of such Participant.  If such Participant recovers from Disability, he will be treated as Retired on the date of his recovery
unless he returns to work with the Company or one of its subsidiaries at such time.
            3.05     Benefit upon
Termination of this Plan.  Each Participant (and such Participant’s Spouse and Dependents) shall have a non-forfeitable right to receive the supplemental benefits provided in this Article III without regard to whether this Plan has
been terminated prior to such Participant’s Retirement, termination of employment, death or Disability, as applicable.  
           3.06     Supplemental Benefits.  Subject to compliance with Section 3.07, each Participant (and such Participant’s Spouse
and Dependents) shall be provided the medical, dental, vision and prescription drug benefits that are provided to the eligible executive officers of the Company under substantially the same terms and conditions of the employee benefit plans and
programs of the Company as in effect from time to time throughout the period during which the Participant (and Spouse and Dependents) are to receive such benefits hereunder.
            Subject to compliance with Section 3.07, all benefits under this Section 3.06 shall be provided to (i) such Participant for his or her life, (ii) such
Participant’s Spouse for such Spouse’s life and (iii) such Participant’s Dependents for as long as the applicable benefit plan considers such individual a dependent of the Participant.  
            3.07     Monthly Contribution Required.  The Company’s obligation to provide the benefits set forth in Section 3.06 is
conditioned upon the Company’s receipt from, or on behalf of, Participant, Participant’s Spouse and Participant’s Dependents, as applicable, of a monthly cash contribution in an amount not greater than the monthly contribution paid by
then current executive employees of the Company and its subsidiaries for substantially similar benefits.  
            3.08     Medicare.  Upon a Participant becoming eligible for Medicare benefits (or any government sponsored successor program),
Medicare shall be considered the primary insurer and primary payor and the medical, dental, vision and prescription benefits provided under this Plan shall be considered the secondary issuer and secondary payor for such Participant. 

  ARTICLE IV
  VESTING
           4.01     Cliff Vesting After 10 Years of Service.  A Participant’s shall be considered fully vested in Years of Service
after such Participant has completed 10 or more Years of Service.
  5

             4.02     Accelerated Vesting in Connection with a Change in Control.  In the
event of a Change in Control, the Participant shall be and become 100% vested in Years of Service as of the date of such Change in Control.  
  ARTICLE V
  ADMINISTRATION
            5.01     Administrative
Powers and Duties.  The Committee shall administer the Plan.  The Committee may authorize one or more officers of the Company to act on behalf of the Committee with respect to administration of the Plan (the “Administrator”),
in coordination with and under the direction of the Committee. All policy and discretionary decisions will be the responsibility of the Committee, and the Administrator will act under the direction of the Committee.  The Committee and
Administrator will adopt rules that are consistent with Plan provisions.
            The Committee and/or the Administrator may retain auditors,
accountants, legal counsel, and any other counsel it selects.  A Committee member or Administrator may himself act in any such capacity, acting in a similar capacity for the Company, and may be an employee of the Company.  The opinion of
any such auditor, accountant, legal counsel, or other counsel will be full and complete authority, and the Committee and Administrator will be protected in respect to any action it takes or omits in good faith and in accordance with such opinion.

            The Board may assume any or all of the responsibilities and powers of the Committee under the Plan at any time and from time to
time.  If a Committee or Board member is a Participant, he will not be allowed to vote on any decision that applies only to him or his Plan benefits.
           5.02     Expenses.  The Company will pay or reimburse the Committee and/or Administrator, as applicable, for all reasonable
expenses incurred by the Committee and Administrator in the administration of the Plan, including the fees and compensation for the persons referred to in the second paragraph of Section 6.01.
  ARTICLE VI
  MISCELLANEOUS PROVISIONS
            6.01     Employment and Other Rights.  Nothing contained herein will require the Company to continue any Participant in its
employ, or require any Participant to continue in the employ of the Company, nor does the Plan create any rights of any Participant, Spouse or Dependent, nor any obligations on the part of the Company, other than those set forth herein.  The
benefits payable under this Plan will be independent of, and in addition to, any other agreements that may exist from time to time concerning any other compensation or benefits payable by the Company.
            6.02     Right to Benefits.  The sole interest of each Participant and each Spouse and Dependent of a Participant under the Plan
will be to receive the benefit provided herein as and when the same becomes due and payable in accordance with the terms hereof, and neither any Participant nor any Spouse nor Dependent of the Participant will have any right, title, or
interest
  6

   in or to any of the specific assets of the Company.  All benefits hereunder will be paid solely from the general assets of the Company, and the Company will not maintain
any separate fund or other segregated assets to provide any benefits hereunder.  In no manner will any assets of the Company be deemed or construed through any of the provisions of this Plan to be held in trust for the benefit of any
Participant, Spouse or Dependent or to be collateral security for the performance of the obligations imposed by this Plan on the Company.  The rights of any Participant hereunder and any Spouse and Dependents of the Participant will be solely
those of a general unsecured creditor of the Company.
           6.03     Amendment and Termination.  While the
Company expects to continue this Plan indefinitely, the Plan may be amended, suspended, or terminated at any time by the Board or the Committee.  Notwithstanding the foregoing, no such amendment, suspension or termination of the Plan may in any
way adversely alter or impair any of the rights of the then existing Participants under the Plan. 
            6.04     No Duty to Mitigate.  No Participant shall be required to mitigate the amount of any benefit provided for in this Plan
by seeking other employment or otherwise, nor shall the amount of any benefit provided for in this Plan be reduced by any compensation earned or benefit received by a Participant as a result of employment, self-employment, retirement benefits or by
offset against any amount claimed to be owed by Participant to the Company or otherwise.  In the event Participant qualifies for medical and/or dental benefits from another employer, sponsor, the government or otherwise following termination of
employment with the Company, Participant may elect to receive such benefits from such other employer, sponsor, the government or otherwise or pursuant to the Plan, and Participant may change such election upon giving reasonable notice to the
Company.  Participant’s receipt or election to receive medical and/or dental benefits from such other employer, sponsor, the government or otherwise shall in no way prejudice Participant’s qualification for benefits under the Plan
thereafter.
            6.05     Waiver.  Each Participant (on behalf of himself, his Spouse and/or his
Dependents) shall have the right from time to time to waive the benefits to which such Participant, Spouse and/or Dependents may be entitled under this Plan for such period of time as may be determined in the sole discretion of the Participant, and
such Participant shall be entitled to terminate such waiver of benefits at any time.
  {Signature Page follows}
 7

   IN WITNESS WHEREOF, the Company has caused this amendment and restatement of the Plan to be signed by it duly authorized officer to be effective as of November 15,
2001.

	  
 	  VARCO INTERNATIONAL, INC.
 
	  
 	  
 
	  
 	  By:
 	 /s/  GEORGE BOYADJIEFF 
 
	  
 	  
 	 
 
	  
 	  
 	  George Boyadjieff,
 Chairman of the Board and Chief Executive Officer
 
	  
 	  
 	   
 
	  
 	  And:
 	  /s/  JOHN F. LAULETTA
 
	  
 	  
 	 
 
	  
 	  
 	  John F. Lauletta,
 President and Chief Operating Officer
 
	  
 	  
 	  
 

 8

  EXHIBIT A
 TOTAL PARTICIPANTS IN THE PLAN AS OF NOVEMBER 15, 2001

New Participants as of the Effective Date
 John F. Lauletta
 Joseph C. Winkler
 Michael W. Sutherlin
 Haynes B. Smith
 James F. Maroney, III
 Kenneth L. Nibling
 Clay C. Williams
 Previous and Continuing Participants
 George Boyadjieff
 Walter B. Reinhold
 Richard A. KerstonAgreement with George Boyadjieff dated November 29, 2002

  Exhibit 10.16
  AGREEMENT
            This Agreement (this “Agreement”) is made and entered into as of the 29th day of November, 2002 (the “Effective Date”) between Varco
International, Inc., a Delaware corporation, (“Varco”) and George Boyadjieff (the “Executive”).
            WHEREAS, the
Executive and Varco (as a result of a merger) are parties to an Executive Agreement with an Effective Date of March 22, 2000; and
            WHEREAS, pursuant to that Executive Agreement and pursuant to action by the Board of Directors of Varco, Executive has been nominated annually as a Director of
Varco and upon election by the shareholders has served as a Director of Varco; and
            WHEREAS, Executive currently serves as the
duly elected and appointed Chairman of the Board and Chief Executive Officer (“CEO”) of Varco; and
            WHEREAS, the Board
and Executive wish to provide for a transition to transfer the offices of Chairman and CEO from Executive to John F. Lauletta and to provide for Executive’s continued employment and affiliation with Varco after such transfer; and
 
          WHEREAS, Varco and Executive wish to mutually terminate the Executive Agreement and enter this Agreement to provide for such transition and
continued employment; and
            WHEREAS, Varco believes it to be in the best interests of its stockholders that such transition take
place and that Executive continue as an employee of Varco after such transition.
           NOW, THEREFORE, in consideration of these
premises and Executive’s continued employment with Varco as further set out herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Varco and Executive agree as follows:

	  1.
 	  Term of Agreement.
 
	  
 	  
 
	  
 	  This Agreement shall commence on the Effective Date and shall continue in effect, unless terminated earlier as otherwise set forth herein through December 31,
2004 (except for Sections 2E and 2F, which shall continue through the end of the respective periods described therein, Section 7, which shall continue in perpetuity and Section 8 which shall remain in effect until December 31,
2006).
 
	  
 	  
 
	  2.
 	  Transition Period.
 
	  
 	  
 
	  
 	  A.
 	  
 	  The Transition Period shall be from January 1, 2003 until the Varco Annual Meeting of Stockholders in May 2003.  Executive shall no longer serve as CEO or as an
Executive Officer of Varco effective January 1, 2003.  From January 1, 2003 until December 31, 2004, unless terminated earlier pursuant to the terms of this Agreement, Executive shall be employed by Varco, with such duties and
responsibilities as determined by the Board of Directors or the new CEO, including advising on “technical” issues.
 
	  
 	  
 	  
 	  
 
	  
 	 B.
 	  
 	  Executive will continue to hold the office of Chairman of the Board through the Annual Meeting of Shareholders of Varco to be held in May, 2003.  As “Chairman”,
Executive will preside at the meetings of the Board of Directors.
 
	  
 	  
 	  
 	  
 

	  
 	  C.
 	  
 	  As long as Executive is employed by Varco and serves on the Board of Directors, Executive will be considered as an “Employee Director” and will not be eligible for
compensation provided for non-employee Directors.
 
	  
 	  
 	  
 	  
 
	  
 	  D.
 	  
 	  From January 1, 2003, through December 31, 2003, Executive is entitled to normal business expense reimbursement not to exceed Forty Five Thousand Dollars
($45,000.00).  From January 1, 2004 through December 31, 2004, the normal business expense reimbursement shall not exceed Twenty Five Thousand Dollars ($25,000).  Any expenditures exceeding these amounts must be pre-approved by
the CEO.  All such expense reimbursement must be approved by the Chairman of the Compensation Committee.
 
	  
 	  
 	  
 	  
 
	  
 	 E.
 	  
 	  Executive will be nominated by the Board for a seat on the Board of Directors of Varco to be submitted to the stockholders for election at the May 2003 Annual Stockholders
Meeting.
 
	  
 	  
 	  
 	  
 
	  
 	  F.
 	  
 	  During the term of his employment during the Transition Period, Executive’s compensation will consist of a base salary of Three Hundred Twenty Five Thousand Dollars
($325,000.00) per annum ($27,083.33 per month) with the then current benefits generally provided to executive officers of Varco.  Any incentive compensation will be solely at the discretion of the Compensation Committee.
 
	  
 	  
 	  
 	  
 
	  3.
 	  Employment After Transition Period.
 
	  
 	  
 
	  
 	  A.
 	  
 	  The Transition Period shall terminate on the date of the 2003 Annual Stockholder’s meeting to be held in May 2003.  Executive shall no longer serve as Chairman of
the Board effective as of the 2003 Annual Stockholders Meeting.
 
	  
 	  
 	  
 	  
 
	  
 	 B.
 	  
 	  Following the Transition Period Executive will be given the honorary title of “Chairman Emeritus” and will be so known as long as Executive sits on the Board of
Directors of Varco.
 
	  
 	  
 	  
 	  
 
	  
 	  C.
 	  
 	  During the term of his Employment after the Transition Period Executive will continue to be paid a base salary of Three Hundred Twenty Five Thousand Dollars ($325,000) per annum
($27,083.33 per month) along with the then current benefits generally provided to executive officers of Varco.  Any incentive compensation will be solely at the discretion of the Compensation Committee.
 
	  
 	  
 	  
 	  
 
	  
 	  D.
 	  
 	  In the event Executive is elected as a director of Varco at the May 2004 Stockholders Meeting, he will serve out the full term of his directorship (other than in the event of
his death or disability), even after the expiration of his employment provisions called for herein.  In such event, beginning January 1, 2005, Executive will serve as a non-employee director, with the commensurate non-employee director
remuneration pro-rated through the end of his term as a director.
 
	  
 	  
 	  
 	  
 
	  
 	 E.
 	  
 	  Executive agrees that after the expiration of his employment hereunder, but during the term of the “Restricted Period” as set out in Section 8 hereof, Executive
will make himself reasonably available to Varco and its affiliates on consultation regarding any patents or patent applications for which he might be a named inventor or have knowledge or experience with, for the purpose of prosecuting or defending
any U.S. or foreign patent or patent applications.
 
	  
 	  
 	  
 	  
 

	  4.
 	  Termination of Executive Agreement.
 
	  
 	  
 
	  
 	  The Executive Agreement previously entered into as of the 22nd day of March 2000 between Varco International, Inc., a California corporation,
predecessor in interest to Varco International, Inc., a Delaware corporation, (via merger) is hereby mutually terminated in its entirety and is, as of the Effective Date hereof, of no further force or effect as to any provision whatsoever.  For
as long as Executive continues to serve as a director of Varco, nothing herein shall have any effect upon that certain Indemnity Agreement entered May 31, 2000 between Executive and Varco, and it shall remain in full force and
effect.
 
	  
 	  
 
	 5.
 	  Termination.
 
	  
 	  
 
	  
 	  Executive’s employment by Varco pursuant hereto is subject to termination as follows:
 
	  
 	  
 
	  
 	  A.
 	  
 	  Term.  Unless terminated earlier pursuant to this Agreement, Executive’s employment shall terminate December 31, 2004 (The “Employment
Term”).
 
	  
 	  
 	  
 	  
 
	  
 	  B.
 	  
 	  Death.  Executive’s employment shall terminate upon his death.
 
	  
 	  
 	  
 	  
 
	  
 	  C.
 	  
 	  Disability.  Varco may, by written notice to Executive, terminate Executive’s employment if as a result of Executive’s incapacity due to physical or mental
illness, Executive shall have been absent from his duties hereunder on a full time basis for sixty (60) consecutive days.
 
	  
 	  
 	  
 	  
 
	  
 	 D.
 	  
 	  Termination for Cause.  Varco may terminate Executive’s employment at any time by written notice to Executive for Cause (as hereafter defined).  Termination
by Varco of Executive’s employment for “Cause” shall mean termination upon (i) the willful failure by the Executive to substantially perform his duties hereunder (other than any such failure resulting from the Executive’s
incapacity due to physical or mental illness), (ii) the willful engagement by Executive in conduct which is intended to be demonstrably and materially injurious to Varco, monetarily or otherwise, (iii) Executive is convicted of a felony or
a misdemeanor or civil offense involving fraud or moral turpitude that could reasonably be expected to adversely effect the business or operations of Varco, or (iv) a willful violation of Section 7 or Section 8 of this
Agreement.  For purposes of this Section D, an act, or failure to act, on Executive’s part shall not be considered “willful” if done, or omitted to be done, by Executive in good faith and with a reasonable belief that his
action or omission was in the best interests of Varco.
 
	  
 	  
 	  
 	  
 
	  
 	  E.
 	  
 	  Executive’s Termination.  Executive may terminate employment hereunder voluntarily at any time by written notice to Varco.
 
	  
 	  
 	  
 	  
 
	  
 	 F.
 	  
 	  Effect of Termination.  If Executive’s employment hereunder is terminated, all duties and obligations of the parties hereunder shall cease, except as provided in
Section 1.  Additionally, if Executive’s employment hereunder is terminated pursuant to Section 5D, Varco shall be under no obligation or liability to Executive or his estate, as the case may be, subsequent to such
termination.  In the event Executive’s employment is terminated pursuant to section 5A or 5E, Executive shall be deemed to have retired as of such termination date for purposes of determining Executive’s rights under any Varco benefit
plan.  Notwithstanding a termination of Executive’s employment hereunder for any reason (other than, with respect to Section 8, death), Executive shall continue to be obligated to perform the provisions of Section 7 and
Section 8 of this Agreement.  The
 
	  
 	  
 	  
 	  
 

	  
 	  
 	  
 	  date on which a termination pursuant to this Section 5 becomes effective (the “Date of Termination”) shall be, in the case of a termination pursuant to
Section 5C, 5D or 5E hereof, the date on which the party terminating this Agreement gives the other party written notice thereof.  In the case of a termination pursuant to Section 5B hereof, the late of Termination shall be the date
of death of Executive.
 
	  
 	  
 	  
 	  
 
	 6.
 	  Successors; Binding Agreement.
 
	  
 	  
 
	  
 	 This Agreement shall inure to the benefit of and be enforceable by any assignees or successors in interest of Varco (including by way of merger), and by the
Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributes, devisees and legatees to the extent any obligations are outstanding by Varco hereunder.  This Agreement is personal to the Executive
and may not be assigned by him.
 
	  
 	   
 
 
	  
 	  
 
	  7.
 	  Confidential Information.
 
	  
 	  
 
	  
 	  A.
 	  
 	  Executive recognizes that the services that he has previously performed for Varco and to be performed by him hereunder are special, unique and extraordinary and that, by reason of
his past and continued employment with Varco, he has or may acquire Confidential Information (as hereinafter defined) concerning the operation of Varco, the use or disclosure of which would cause Varco substantial loss and damages which could not be
readily calculated and for which no remedy at law would be adequate.  Accordingly, Executive agrees that he will not (directly or indirectly) at any time, whether during or after the Employment Term, directly or indirectly (i) use for an
improper personal benefit any Confidential Information that he may learn or has learned by reason of his employment with Varco or (ii) disclose any such Confidential Information to any person except (a) in the performance of his
obligations to Varco hereunder, (b) as required by applicable law, (c) in connection with the enforcement of his rights under this Employment Agreement or (d) with the prior consent of Varco.  As used herein, “Confidential
Information” includes information with respect to Varco’s and its affiliates’ respective facilities, operations and methods, trade secrets and other intellectual property, systems, patents and patent applications, procedures, manuals,
confidential reports, financial information, business plans, prospects or opportunities, personnel information and lists of customers and suppliers; provided, however, that such term shall not include any information that (x) is or becomes
generally known or available publicly other than as a result of a disclosure by Executive, (y) is or becomes known or available to Executive on a non-confidential basis from a source (other than Varco) which, to Executive’s knowledge, is not
prohibited from disclosing such information to Executive by a legal, contractual, fiduciary or other obligation to Varco, or (z) Varco discloses to others without obtaining an agreement of confidentiality.
 
	  
 	  
 	  
 	  
 
	  
 	 B.
 	  
 	  Executive confirms that all Confidential Information is the exclusive property of Varco.  All business records, papers and documents kept or made by Executive relating to the
business of Varco which comprise Confidential Information shall be and remain the property of Varco during the Employment Term and all times thereafter.  Upon the termination of his employment with Varco or upon the request of Varco at any
time, Executive shall promptly deliver to Varco, and shall retain no copies of, any written or electronic materials, records and documents made by Executive or coming into his possession concerning the business or affairs of Varco and which comprise
Confidential Information, other than personal notes or correspondence of Executive not containing Confidential Information.
 
	  
 	  
 	  
 	  
 

	  
 	  C.
 	  
 	  Executive agrees that the restrictions set forth in this Section 7 shall also apply equally to any Confidential Information Executive acquired while an employee of Varco
International, Inc., a California corporation, or of Varco.
 
	  
 	  
 	  
 	  
 
	 8.
 	  Non-Competition.
 
	  
 	  
 
	  
 	  A.
 	  
 	  In consideration of the premises of this Agreement, Executive agrees that, for the term of this Agreement and until and including December 31, 2006 (the “Restricted
Period”), Executive shall not, directly or indirectly, for his own account or for the account of others, as an officer, director, stockholder, owner, partner, employee, promoter, consultant, manager or otherwise, participate in the promotion,
financing, ownership, operation or management of, or assist in or carry on through a proprietorship, corporation, partnership, limited liability company or other form of business entity or otherwise, any business or business endeavor in the areas of
oil field services or products as set forth in Exhibit “A” hereof, which is attached hereto and for all purposes made a part hereof, which Exhibit is acknowledged to be an excerpt from Varco’s most recent SEC Form 10-K filing (the
“Business”), within the United States of America, the State of California, any of the counties in the State of California, Canada or any of the provinces in Canada (the “Restricted Territory”).  The Business shall also
include any future products or services, which are described in a future SEC Form 10-K of Varco which is filed while Executive is serving as a director of Varco.
 
	  
 	  
 	  
 	  
 
	  
 	  B.
 	  
 	  In consideration of the premises of this Agreement, the Executive agrees that during the Restricted Period, the Executive shall not, whether for his own account or for the account
of any other person (excluding Varco), (i) solicit or contact in an effort to do business with any person who was a customer of Varco during the term of this Agreement, or any affiliate of any such person, if such solicitation or contact is in
competition with the Business, (ii) solicit or induce any Varco employees to leave their employment with Varco or accept employment with anyone else, if such solicitation or inducement is in competition with Varco (iii) interfere in a
similar manner with the Business or (iv) disparage the Company, its products, business or management either directly or indirectly, whether orally, in print or otherwise.  Nothing herein shall prohibit or preclude the Executive from
performing any other types of services that are not precluded by Section 8A for any other person.
 
	  
 	  
 	  
 	  
 
	  
 	 C.
 	  
 	  Executive has carefully read and considered the provisions of this Section 8 and, having done so, agrees that the restrictions set forth in this Section 8 (including the
Restricted Period, scope of activity to be restrained and the geographical scope) are fair and reasonable and are reasonably required for the protection of the interests of Varco, its officers, directors, employees, creditors, partners and
affiliates.  Executive acknowledges that (x) the business of Varco and its affiliates is international in scope, (y) its products and services are marketed throughout the Restricted Territory, and (z) Varco and its affiliates compete with
other businesses that are or could be located in any part of the Restricted Territory.  In the event that any court determines that the duration or the geographic scope, or both, are unreasonable and that such provision is to that extent
unenforceable, the parties hereto agree that the provision shall remain in full force and effect for the greatest time period and in the greatest area that would not render it unenforceable.  Executive understands that the restrictions
contained in this Section 8 may limit his ability to engage in a business similar to Varco’s business, but acknowledges that he will receive sufficiently high remuneration and other benefits from Varco hereunder to justify such
restrictions.
 
	  
 	  
 	  
 	  
 

	  9.
 	  Breach of Section 7 and Section 8.
 
	  
 	  
 
	  
 	 Executive acknowledges that a breach of any of the covenants contained in Section 7 and Section 8 hereof may result in material, irreparable injury to Varco
for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach, any payments remaining under the terms of this Agreement or otherwise payable by Varco
shall cease and Varco shall be entitled to obtain a temporary restraining order and/or a preliminary or permanent injunction restraining Executive from engaging in activities prohibited by Section 7 and Section 8 hereof and such other
relief as may be required to enforce any of the covenants contained in Section 7 and Section 8 hereof.
 
	  
 	  
 
	  10.
 	  Notice.
 
	  
 	  
 
	  
 	  For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed as follows:
 
	  
 	  
 
	  
 	  
 	  If to the Executive:
 
	  
 	  
 	  
 
	  
 	  
 	 George Boyadjieff
 18772 Colony Circle
 Villa Park, California 92861
 
	  
 	  
 	  
 
	  
 	  
 	  If to Varco:
 
	  
 	  
 	  
 
	  
 	  
 	  Varco International, Inc.
 One Briarlake Plaza
 2000 West Sam Houston Parkway South, Suite 1700
 Houston, Texas 77042
 Atten: Office of the General Counsel

	  
 	  
 	  
 
	  
 	  Notices may also be sent to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
 
	  
 	  
 
	  11.
 	  Miscellaneous.
 
	  
 	  
 
	  
 	 No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive
and an executive officer of Varco (excluding the Executive).  No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision, of this Agreement to be performed by such
other party shall be deemed a waiver or similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter
hereof, have been made by either party which are not expressly set forth in this Agreement.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Texas.
 
	  
 	  
 

	  12.
 	  Arbitration.
 
	  
 	  
 
	  
 	  Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Harris County, Texas in accordance with the riles of
the American Arbitration Association then in effect and judgment may be entered on the arbitrator’s award in any court having jurisdiction thereof.  Any such arbitration shall be before three (3) arbitrators, one (1) each appointed by the
parties and one (1) appointed by those two arbitrators.
 
	  
 	  
 
	 13.
 	  Validity.
 
	  
 	  
 
	  
 	  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain
in full force and effect.
 
	  
 	  
 
	  14.
 	  Counterparts.
 
	  
 	  
 
	  
 	  This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same
instrument.
 
	  
 	  
 

  IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first
above written.

	  
 	  VARCO INTERNATIONAL, INC. 
 
	  
 	  
 
	  
 	  By:
 	  /s/  JOHN F. LAULETTA
 
	  
 	  
 	 
 
	  
 	 Name:
 	  John F. Lauletta
 
	  
 	  
 	 
 
	  
 	 Title:
 	  President & COO
 
	  
 	  
 	 
 
	  
 	  George Boyadjieff
 
	  
 	 
 
	  
 	 GEORGE BOYADJIEFF

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