0000898430-95-001635.txt : 19950817 0000898430-95-001635.hdr.sgml : 19950817 ACCESSION NUMBER: 0000898430-95-001635 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19950816 EFFECTIVENESS DATE: 19950904 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VARCO INTERNATIONAL INC CENTRAL INDEX KEY: 0000102993 STANDARD INDUSTRIAL CLASSIFICATION: OIL & GAS FILED MACHINERY & EQUIPMENT [3533] IRS NUMBER: 950472620 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 033-61861 FILM NUMBER: 95564733 BUSINESS ADDRESS: STREET 1: 743 N ECKHOFF ST CITY: ORANGE STATE: CA ZIP: 92668 BUSINESS PHONE: 7149781900 MAIL ADDRESS: STREET 1: 743 NO ECKHOFF STREET CITY: ORANGE STATE: CA ZIP: 92668 S-8 1 FORM S-8 As filed with the Securities and Exchange Commission on August 16, 1995 Registration No. 33- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-8 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 VARCO INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) California 95-0472620 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 743 North Eckhoff Street 92668 Orange, California (Zip Code) (Address of Principal Executive Offices)
The Varco 1980 Employee Stock Purchase Plan (Full title of the plan) RICHARD A. KERTSON Vice President-Finance and Chief Financial Officer 743 North Eckhoff Street Orange, California 92668 (Name and address of agent for service) (714) 978-1900 (Telephone number, including area code, of agent for service) The Commission is requested to send copies of all communications to: LARRY M. MEEKS, ESQ. Pircher, Nichols & Meeks 1999 Avenue of the Stars, Suite 2600 Los Angeles, California 90067 CALCULATION OF REGISTRATION FEE
====================================================================================================== Proposed Proposed maximum maximum Title of securities Amount offering price aggregate Amount of to be registered to be registered per unit offering price registration fee ------------------------------------------------------------------------------------------------------ Common Stock(1) 1,000,000 shares $10.9375(2) $10,937,500(2) $3,771.55 ======================================================================================================
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this Registration Statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plan described herein. (2) Calculated pursuant to Rule 457(c), based on the average of the high and low prices for the Common Stock on the New York Stock Exchange Composite Tape for August 14, 1995. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents which have heretofore been filed by Varco International, Inc. (the "Company") or The Varco 1980 Employee Stock Purchase Plan (the "Plan") with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 are incorporated by reference in this registration statement: (1) The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994. (2) The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995 and June 30, 1995. (3) The description of the Company's Common Stock contained in the Company's Form 8-A Registration Statement filed May 29, 1981, including any amendment or report filed for the purpose of updating such description. (4) The Plan's Annual Report on Form 11-K for the fiscal year ended March 31, 1995. In addition, all documents filed by the Company or the Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, after the date hereof and prior to the filing of a post-effective amendment to this Registration Statement which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from their respective dates of filing. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. The legality of the Common Stock registered pursuant to this Registration Statement has been passed upon for the Company by Pircher, Nichols & Meeks, of which Leo J. Pircher, a director of the Company, is a partner. Mr. Pircher owns, 1 and has options to purchase, Common Stock of the Company and is eligible to participate in the Company's 1994 Directors' Stock Option Plan. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 204(a)(10) of the California General Corporation Law (the "GCL") permits a corporation, in its Articles of Incorporation, to eliminate or limit the personal liability of directors for monetary damages in an action brought by or in the right of the corporation (a "derivative action") for breach of a director's duties to the corporation provided, however, that such a provision may not eliminate or limit the liability of directors for (1) acts or omissions that involve intentional misconduct or a knowing and culpable violation of law; (2) acts or omissions that a director believes to be contrary to the best interests of the corporation or its shareholders or that involve the absence of good faith on the part of the director; (3) any transaction from which the director derived an improper personal benefit; (4) acts or omissions that show a reckless disregard for the director's duty to the corporation or its shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director's duties, of a risk of serious injury to the corporation or its shareholders; (5) acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director's duty to the corporation or its shareholders; (6) transactions between a corporation and its directors or corporations having interrelated directors under Section 310 of the GCL; or (7) improper distributions to shareholders, loans or guaranties under Section 316 of the GCL. Section 204(a)(11) of the GCL permits a corporation in its Articles of Incorporation to provide for indemnification of directors, officers, employees and other agents by bylaw, agreement or otherwise in excess of that expressly permitted by Section 317 of the GCL except that provision may not be made for indemnification which is expressly prohibited by Section 317 of the GCL or for acts or omissions from which a director may not be relieved of liability under Section 204(a)(10) of the GCL. Section 317(b) of the GCL permits a corporation to indemnify a director, officer, employee or other agent against expenses, judgments, fines, settlements and other amounts incurred in connection with any proceeding other than a derivative action if he acted in good faith and in a manner he reasonably believed to be in the best interests of the corporation and, in the case of a criminal proceeding, had no reasonable cause to believe that his conduct was unlawful. With respect to derivative actions, Section 317(c) of the GCL permits a corporation to indemnify a director, officer, employee or other agent against expenses incurred in connection with the defense or settlement of such an action if he acted in good faith and in a manner which he believed to be in the best 2 interests of the corporation and its shareholders. Under Section 317(c), indemnification in a derivative action is not permitted (1) with respect to any matter in which the person seeking indemnification is held to be liable to the corporation in the performance of his duties to the corporation and its shareholders unless and only to the extent that the court in which the proceeding was brought determines that, in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnification for expenses and then only to the extent that such court shall determine; (2) for any amount paid in settling or otherwise disposing of a pending action without court approval; or (3) for expenses incurred in defending a pending action which is settled or otherwise disposed of without court approval. Section 317(d) of the GCL requires a corporation to indemnify any director, officer, employee or other agent for all expenses actually and reasonably incurred by him in any proceeding to the extent that he is successful on the merits. The Company's Amended and Restated Articles of Incorporation (1) eliminate the liability of directors for monetary damages to the fullest extent permitted under California law and (2) permit the Company to provide indemnification to directors, officers, employees and other agents by bylaw provisions, agreements, vote of shareholders or disinterested directors, or otherwise, in excess of the indemnification otherwise permitted by Section 317 of the GCL subject only to the limits set forth in Section 204 of the GCL. The Bylaws of the Company generally require indemnification of any officer or director of the Company for all costs, charges, expenses, liabilities and losses (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) incurred in any action, suit or proceeding by reason of the fact that he is or was a director of the Company except to the extent that such indemnification would be expressly prohibited under California law or the Company's Amended and Restated Articles of Incorporation. The Company is a party to an Indemnity Agreement with each of its directors and executive officers which generally provides the indemnitee with a contractual right to indemnification for all Expenses (which is defined to include attorneys' fees and amounts paid in settlement), judgments, fines, penalties and ERISA excise taxes incurred in any action, suit or proceeding by reason of his position with the Company, except to the extent that such indemnification is prohibited by California law. The Company also maintains a liability insurance policy under which officers and directors are generally indemnified against losses and liability (including costs, expenses, settlements and judgments) incurred by them in such capacities, other than specified excluded losses. 3 ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. 4.1 Amended and Restated Articles of Incorporation of the Company, incorporated by reference to Exhibit 3 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995. *4.2 The Varco 1980 Employee Stock Purchase Plan, as amended through February 16, 1995. *5 Opinion of Pircher, Nichols & Meeks. *23.1 Consent of Ernst & Young LLP. *23.2 Consent of Pircher, Nichols & Meeks (included in Exhibit 5). *24 Power of Attorney. _____________ *Filed herewith. ITEM 9. UNDERTAKINGS. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment hereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement. 4 (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) of Section 15(d) of the Securities Exchange Act of 1934 (and each filing of the annual report of the Plan pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceedings) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Orange, State of California, on August 16, 1995. VARCO INTERNATIONAL, INC. By: /s/ Richard A. Kertson ------------------------------------- Richard A. Kertson Vice President-Finance Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- President and Chief Executive Officer and Director *GEORGE BOYADJIEFF (Principal Executive ------------------------------------ Officer) August 16, 1995 George Boyadjieff Vice President-Finance and Chief Financial Officer /s/Richard A. Kertson (Principal Financial ------------------------------------ Officer) August 16, 1995 Richard A. Kertson Controller-Treasurer and Chief Accounting Officer /s/Donald L. Stichler (Principal Accounting ------------------------------------ Officer) August 16, 1995 Donald L. Stichler *WALTER B. REINHOLD Director August 16, 1995 ------------------------------------ Walter B. Reinhold
6 *TALTON R. EMBRY Director August 16, 1995 ------------------------------------ Talton R. Embry *ANDRE R. HORN Director August 16, 1995 ------------------------------------ Andre R. Horn *MAURICE E. JACQUES Director August 16, 1995 ------------------------------------ Maurice E. Jacques *JACK W. KNOWLTON Director August 16, 1995 ------------------------------------ Jack W. Knowlton *LEO J. PIRCHER Director August 16, 1995 ------------------------------------ Leo J. Pircher *CARROLL W. SUGGS Director August 16, 1995 ------------------------------------ Carroll W. Suggs *ROBERT A. TEITSWORTH Director August 16, 1995 ------------------------------------ Robert A. Teitsworth *EUGENE R. WHITE Director August 16, 1995 ------------------------------------ Eugene R. White *JAMES D. WOODS Director August 16, 1995 ------------------------------------ James D. Woods *By /s/Richard A. Kertson ------------------------------------ Richard A. Kertson Attorney-in-fact
7 Pursuant to the requirements of the Securities Act of 1933, the Plan has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Orange, State of California, on August 16, 1995. THE VARCO 1980 EMPLOYEE STOCK PURCHASE PLAN By *JACK W. KNOWLTON ------------------------------ Jack W. Knowlton, Member of the Compensation Committee, Administrator of the Plan By *ROBERT A. TEITSWORTH ------------------------------ Robert A. Teitsworth, Member of the Compensation Committee, Administrator of the Plan By *JAMES D. WOODS ------------------------------ James D. Woods, Member of the Compensation Committee, Administrator of the Plan *By /s/Richard A. Kertson ------------------------------------- Richard A. Kertson Attorney-in-fact 8 EXHIBIT INDEX
Exhibit Page ------- ---- 4.1 Amended and Restated Articles of Incorporation of the Company, incorporated by reference to Exhibit 3 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995. 4.2 The Varco 1980 Employee Stock Purchase Plan, as amended through February 16, 1995. 5 Opinion of Pircher, Nichols & Meeks. 23.1 Consent of Ernst & Young LLP. 23.2 Consent of Pircher, Nichols & Meeks (included in Exhibit 5). 24 Power of Attorney.
EX-4.2 2 EXHIBIT 4.2 EXHIBIT 4.2 THE VARCO 1980 EMPLOYEE STOCK PURCHASE PLAN AS AMENDED THROUGH FEBRUARY 16, 1995 1. ESTABLISHMENT OF THE PLAN. These thirteen numbered Sections shall constitute and be known as "The Varco 1980 Employee Stock Purchase Plan" (hereinafter, the "Plan"). The Company has established this Plan to afford Employees of the Company a convenient means for regular and systematic purchases of Stock through payroll deductions. The purpose of the Plan is to attract and retain Employees of outstanding abilities and to motivate eligible Employees to dedicate their maximum productive efforts on behalf of the Company and its stockholders by providing a method whereby they voluntarily may purchase the Stock at a favorable price and upon favorable terms. Under the Plan, Stock will be purchased at a price less than the fair market value of the Stock at the time of purchase. Purchases under the Plan will not involve the payment of any brokerage fees or commissions and exercise of rights under the Plan (the "Rights") will be automatic, without inconvenience to Participants. For a further explanation of these matters, see "4.2 Election to Participate in the Plan" and "6.3 Exercise of Rights and Delivery of Share Certificates Under the Plan" below. 2. DEFINITIONS. Unless otherwise indicated, the following terms shall have the following meanings: 2.1 "Company" means Varco International, Inc., a California corporation, or any successor in interest to it resulting from merger, consolidation or transfer of assets substantially as a whole, which successor in interest expressly agrees in writing to continue the Plan. 2.2 "Employee" means a Regular Full-time Employee of the Company or of a Participating Subsidiary, including, without limitation, directors, trustees or officers. 2.3 "Participant" means any Employee who participates in the Plan. 2.4 "Participating Subsidiary" means any corporation in which the Company owns 50% or more of the capital stock having voting power under 1 ordinary circumstances, which has been designated as a "Participating Subsidiary" by the Board of Directors of the Company. In addition, "Participating Subsidiary" includes any "subsidiary corporation" as such term is defined in Section 425 of the Internal Revenue Code of 1954, as amended (the "Code"). 2.5 "Purchase Period" means the six-month period commencing on April 1 and October 1 in each year during which the Plan is in effect. 2.6 "Regular Full-Time Employee" means an Employee whose customary employment is more than 20 hours per week or more than five months in any calendar year. 2.7 "Stock" means the common stock of the Company. 3. EFFECTIVE DATE AND TERM. 3.1 Effective Date of the Plan. The Plan is being adopted by the Board of Directors as of this 13th day of December 1979, and will become effective on April 1, 1980. 3.2 Term of the Plan. The Plan shall remain in force for a period of twenty- five years following its effective date unless it is sooner terminated by a resolution adopted by the Company's Board of Directors. Termination of the Plan by action of the Board of Directors shall not diminish the Rights of any existing Participant, nor shall it impair the Company's obligations under any outstanding Rights. 4. PARTICIPATION OF EMPLOYEES. 4.1 Eligibility to Participate in the Plan. Subject to the exceptions and limitations set forth herein, all Regular Full-Time Employees shall be eligible to participate in the Plan. However, no employee shall be eligible to participate in the Plan unless he or she has completed at least three months as a continuous full-time employee. Furthermore, an employee may not participate if in doing so he or she would own stock (as defined by Sections 423(b)(3) and 425(d) of the Code) possessing 5% or more of the total combined voting power or value of all classes of the Company's or any subsidiary's stock. 4.2 Election to Participate in the Plan. Participation in the Plan is entirely voluntary. Each eligible employee may become a Participant in the Plan by delivering a payroll deduction authorization (the "Authorization") in the manner prescribed by the Compensation Committee of the Company's Board of Directors 2 (the "Committee"). Use of the Authorization as herein provided is the exclusive means by which an Employee may participate in the Plan; the Authorization must be delivered to the Company during the calendar month preceding commencement of a Purchase Period. Participants may enroll in the Plan only in the thirty day period prior to the first day of each Purchase Period in each year during which the Plan is in effect. 5. EMPLOYEE CONTRIBUTIONS, TERMINATION OF PARTICIPATION AND WITHDRAWAL FROM THE PLAN. 5.1 Amount of Contribution to the Plan. The Authorization discussed in paragraph 4.2 above shall designate a stated amount to be deducted from the Employee's compensation on each payday and paid into the Plan for the Employee's account. The "stated amount" may not be less than a sum which will result in the payment into the Plan of at least $5.00 each payday. The "stated amount" herein may not exceed either (i) 10% of the amount of "Eligible Compensation" (which is the regular rate of pay on the date of a grant under the Plan, excluding incentives, bonuses, overtime, extended work-week premiums, or other special payments, fees or allowances) from which the deduction is made; or (ii) an amount which, under the Plan or under any similar Company Plan or that of any of its subsidiaries or related corporations, would result in the Employee purchasing shares at a rate exceeding $25,000 in fair market value (determined as of the date participation commences) for each calendar year in which Rights are granted. 5.2 Changes in Amount of Contribution to the Plan. The Authorizations may not be altered as to the amount of the Participant's contribution during each Purchase Period. 5.3 Termination of Contributions to the Plan and Withdrawal Therefrom. Any Participant may terminate further contributions and withdraw in whole from the Plan at any time. A Participant who wishes to withdraw from the Plan must deliver to the Company a notice of withdrawal (the "Notice") in a form prepared by the Company. Promptly following delivery of the Notice, the balance of funds in the Participant's account under the Plan will be returned in cash or by check and the Participant's interest in the Plan shall terminate. A Participant withdrawing from the Plan shall be eligible to participate again upon expiration of the Purchase Period during which he withdrew. 5.4 Effect of Employment Termination Other Than by Retirement or Death on Plan Rights. If a Participant's employment terminates other than by retirement or death, the Participant's Rights in the Plan automatically terminate. In such event, the Company promptly will refund to the Participant the balance in the 3 Participant's account under the Plan, and thereupon the Participant's interest in the Plan shall terminate. 5.5 Retirement and the Plan. A Participant retiring on the Participant's normal retirement date, or earlier or later with the consent of the Company, may, at the Participant's election, either (i) by written notice to the Company exercise his or her rights under the Plan to apply the balance in the Participant's account under the Plan to the "Purchase Plan Price" (as such quoted term is hereinafter defined) of whole shares of the Company's Stock, refunding the excess, if any, or (ii) by written notice to the Company request payment of the balance in his or her account, in which event the Company shall make such payment, terminating any further interest of the Participant in the Plan. If the Participant elects to exercise his or her rights under the Plan, the date of retirement shall be deemed to be the date of exercise for purposes of computing the Purchase Plan Price of the Company's Stock. 5.6 Effect of the Employee's Death on Plan Rights. If a Participant's employment is terminated by death, the executor of the Participant's will or the administrator of the Participant's estate may by written notice to the Company either (i) exercise the Participant's Rights as of the date of his or her death, in which event the Company shall apply the balance in the Participant's account to the purchase at the Purchase Plan Price of whole shares of the Company's Stock, refunding the excess, if any, or (ii) request payment of the balance in the Participant's account under the Plan, in which event the Company promptly shall make such payment, terminating the Participant's interest in the Plan. If Rights are exercised, the Participant's date of death shall be deemed the date of exercise for purposes of computing the Purchase Plan Price of the Company's Stock. If the Company does not receive such notice within 90 days of the Participant's death, the Participant's representative shall be conclusively presumed to have elected alternative (ii) above. 6. EXERCISE OF RIGHTS. 6.1 Shares Subject to the Plan. Subject to the provisions in Section 9 (relating to adjustment upon changes in the Company's capitalization), shares of stock sold pursuant to Rights existing under the Plan shall not exceed, in the aggregate, 2,000,000 shares of the Company's authorized Stock. These shares may be unissued or reacquired shares, or shares purchased on the market for purposes of the Plan. 6.2 Shares Subject to Rights Under the Plan. Subject to the requirements of paragraph 4.1 above, following the effective date of the Plan and continuing while the Plan remains in force, the Company will offer Rights under the Plan to all 4 eligible Employees to purchase shares of Stock. The number of shares subject to each Right shall be the quotient of the total payroll deductions authorized during the Purchase Period divided by the Purchase Plan Price per share, excluding all fractions in the calculation of the quotient. 6.3 Exercise of Rights and Delivery of Share Certificates Under the Plan. Each Participant in the Plan automatically will be deemed to have exercised his or her Rights on each date of exercise (the last day of the six-month period following the date on which Rights are granted) to the extent that the balance then in the Participant's account under the Plan is sufficient to purchase at the Purchase Plan Price whole shares of the Company's Stock. The "Purchase Plan Price" per share to be paid by each Participant on each exercise of his or her Rights under the Plan shall be a sum equal to 85% of the fair market value of the Stock subject to the Plan on the date of exercise or on the date the Participant commenced participation in the Plan, whichever amount is less. Fair market value for purposes hereof shall be either (i) the mean between the "bid" and "ask" prices of the Stock on the National Over-The-Counter Market or, (ii) in the event the Stock is hereafter listed for pricing on a national securities exchange, the per share price of the last sale of such Stock on such exchange. Any balance remaining in the Participant's account after payment of the total Purchase Plan Price shall be refunded promptly. The Company will deliver to each Participant a certificate issued in the Participant's name for the number of shares purchased under the Plan as soon as practicable following the date of exercise. In the event the Company is required to obtain from any commission or agency authority to issue any share certificate, the Company will seek such authority. Inability to obtain such authorization (deemed necessary by the Company's counsel for the lawful issuance of any share certificate) shall relieve the Company from liability to any Participant in the Plan except for return of the amount in the Participant's account. Amounts withheld under an Authorization will be reported no less than monthly with the transmittal of the Participant's payroll check. The number of shares acquired by a Participant during each Purchase Period will be reported at least once annually. 7. RIGHTS IN SHARES PRIOR TO EXERCISE OF RIGHTS UNDER THE PLAN. A participant shall not have the rights and privileges of a shareholder until certificates are issued following exercise of Rights under the Plan. 8. RESTRICTIONS UPON ASSIGNMENTS. Rights under the Plan shall not be transferable otherwise than by will or the laws of descent and distribution, and are exercisable during the Participant's 5 lifetime only by the Participant. The Company will not recognize any purported assignment by a Participant of rights under the Plan. 9. EFFECT OF CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. Whenever any change is made in the Stock subject to the Plan, or subject to Rights outstanding under the Plan, by reason of stock dividend, subdivision, combinations, or reclassification of shares, appropriate action will be taken by the Committee to adjust accordingly the number of shares subject to the Plan and the Purchase Plan Price of the shares. 10. ADMINISTRATION OF THE PLAN. The Plan is being administered by the Committee, which shall be composed of not less than three directors of the Company, none of whom shall be eligible to serve on the Committee unless he or she is then a "disinterested person" within the meaning of paragraph (b) of Rule 16b-3 (which has been adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934) if and as the Rule is then in effect. Each member shall serve a term commencing on a date specified by the Board and continuing until death, resignation or removal from office by the Board or from the Board by the shareholders. The Committee shall have the power to enact, amend and repeal rules and regulations for the interpretation and administration of the Plan. 11. AMENDMENT OF THE PLAN. The Board may amend the Plan at any time and from time to time, subject to the required approval by holders of more than 50% of the outstanding shares of the Company entitled to vote for amendment of the Plan (i) to change the number of shares reserved for Rights under the Plan, or (ii) to decrease the Purchase Plan Price. 12. MISCELLANEOUS. 12.1 Participation in the Plan While on a Leave of Absence. During a leave of absence approved by the Company and meeting the requirements of Regulation 1.421-7(h)(2) of the Revenue Code Regulations, a Participant may continue participation in the Plan by cash payments to the Company on normal paydays equal to the reduction in Plan payroll deductions caused by the absence. 6 12.2 Use of Funds Paid into the Plan. All funds received or held by the Company under the Plan will be included in the general funds of the Company free of any trust or other restrictions, and may be used for any corporate purpose. 12.3 No Interest on Funds Paid into the Plan. No interest will be paid to any Participant or credited to the Participant's account under the Plan. 13. ACKNOWLEDGMENT. The execution of this instrument by the Secretary or any Assistant Secretary of the Company shall acknowledge the adoption of this plan by the Board of Directors of the Company. 7 EX-5 3 EXHIBIT 5 EXHIBIT 5 PIRCHER, NICHOLS & MEEKS Attorneys at Law 1999 Avenue of the Stars Suite 2600 Los Angeles, California 90067 (310) 201-8900 FAX (310) 201-8922 August 16, 1995 Varco International, Inc. 743 North Eckhoff Street Orange, California 92668 Ladies & Gentlemen: We have acted as counsel to Varco International, Inc. (the "Company") in connection with the preparation and filing by the Company of a Registration Statement on Form S-8 (the "Registration Statement"), relating to 1,000,000 shares of the Company's Common Stock authorized for sale under The Varco 1980 Employee Stock Purchase Plan, as amended (the "Plan"). We have reviewed originals or copies, certified or otherwise identified to our satisfaction, of the Registration Statement and such certificates of public officials and of officers of the Company and such other documents, corporate records or other instruments as we have deemed necessary or appropriate for the purposes of this opinion. We have assumed that all signatures on all documents examined by us are genuine, all documents submitted to us as originals are authentic, and all documents submitted to us as copies conform with the original executed documents. Based upon the foregoing, we are of the opinion that: 1. The Company is validly organized and existing under the laws of the State of California. 2. Any shares of the Common Stock of the Company issued and sold by the Company in accordance with the terms and provisions of the Plan will constitute validly authorized and issued Common Stock of the Company and will be fully paid and nonassessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement referred to above. Very truly yours, /s/ PIRCHER, NICHOLS & MEEKS EX-23.1 4 EXHIBIT 23.1 EXHIBIT 23.1 Consent of Independent Auditors We consent to the incorporation by reference in this Registration Statement on Form S-8 pertaining to The Varco 1980 Employee Stock Purchase Plan of Varco International, Inc. of our reports (a) dated February 17, 1995, (1) with respect to the consolidated financial statements of Varco International, Inc. incorporated by reference in its Annual Report (Form 10-K) for the year ended December 31, 1994 and (2) with respect to the schedule included therein, filed as an exhibit thereto (b) dated May 25, 1995, with respect to the financial statements of The Varco 1980 Employee Stock Purchase Plan included in the Plan's Annual Report (Form 11-K) for the year ended March 31, 1995, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP Orange County, California August 16, 1995 EX-24 5 EXHIBIT 24 EXHIBIT 24 POWER OF ATTORNEY Each person whose signature appears below hereby constitutes and appoints RICHARD A. KERTSON his or her true and lawful attorney-in-fact, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to execute a Registration Statement on Form S-8 of Varco International, Inc. (the "Company") relating to the registration under the Securities Act of 1933, as amended, of 1,000,000 additional shares of the Common Stock of the Company issuable pursuant to The Varco 1980 Employee Stock Purchase Plan, as amended, and any and all amendments or post-effective amendments to said Registration Statement and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission. /s/ George Boyadjieff /s/ Walter B. Reinhold ------------------------ ------------------------------ GEORGE BOYADJIEFF WALTER B. REINHOLD /s/ Talton R. Embry /s/ Carroll W. Suggs ------------------------ ------------------------------- TALTON R. EMBRY CARROLL W. SUGGS /s/ Andre R. Horn /s/ Robert A. Teitsworth ------------------------ -------------------------------- ANDRE R. HORN ROBERT A. TEITSWORTH /s/ Maurice E. Jacques /s/ Eugene R. White ------------------------ -------------------------------- MAURICE E. JACQUES EUGENE R. WHITE /s/ Jack W. Knowlton /s/ James D. Woods ------------------------ -------------------------------- JACK W. KNOWLTON JAMES D. WOODS /s/ Leo J. Pircher ------------------------ LEO J. PIRCHER Dated: May 18, 1995