EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") by and among R&B Falcon
Corporation, a Delaware corporation ("RBF"), R&B Falcon Management Services,
Inc., a wholly owned subsidiary of RBF (the "Company"), and Xxx Xxxx (the
"Executive"), dated this 15th day of July, 2002, but effective as of July 16,
2002 (the "Effective Date").
WHEREAS, RBF and the Company desire to induce the Executive to enter into
an employment arrangement with RBF and the Company in order to have the benefit
of the Executive's services from and after the Effective Date and the Company
has agreed to provide compensation and benefits to the Executive in
consideration of the Executive's agreement to become employed by the Company;
and
WHEREAS, the Executive desires to enter into an employment arrangement with
RBF and the Company and to perform services for the Company and serve as Chief
Executive Officer and President of RBF for the compensation and benefits
described herein; and
WHEREAS, it is anticipated that RBF will transfer its deep-water business
to one or more subsidiaries of Transocean Inc. and seek to effect a registered
public offering of common stock of RBF, in which it is currently expected that
Transocean Inc. and its subsidiaries will be the sole seller of shares; and
NOW, THEREFORE, in consideration of the promises, terms and provisions set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Employment Period
The Company hereby agrees to employ the Executive and the Executive hereby
accepts such employment, subject to the terms and conditions of this Agreement,
for the period commencing on the Effective Date and ending on the third
anniversary of the Effective Date (the "Initial Term"). The Initial Term (and
each subsequent Renewal Term (defined herein)) shall be extended automatically
for an additional one (1)-year period (a "Renewal Term") unless written notice
that this Agreement will not be renewed is given by either party to the other at
least six (6) months prior to the expiration of the Initial Term or any Renewal
Term (collectively, the Initial Term and any Renewal Term shall be referred to
as the "Employment Period").
2. Terms of Employment
(a) Duties. During the Employment Period, the Executive shall serve in the
capacity of Chief Executive Officer and President of RBF. 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 RBF and, to the extent
necessary to discharge the responsibilities assigned to the Executive
under this Agreement and reasonable duties, consistent with and normal
for the position, given to the Executive by the Board of Directors of
RBF (the "Board") from time to time, to use the Executive's 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 (i) serve on
corporate, civic or charitable boards or committees, provided that
such service has been approved by the Board, (ii) deliver lectures or
fulfill speaking engagements and (iii) manage personal investments, so
long as all such activities described in clauses (i), (ii) and (iii)
do not significantly interfere with the performance of the Executive's
responsibilities as the Chief Executive Officer and President in
accordance with this Agreement.
(b) Compensation. The Executive shall be entitled to receive the
compensation set forth below in consideration for his services during the
Employment Period.
(i) Base Salary. The Executive shall receive an annual base salary
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("Annual Base Salary"), of five hundred thirty thousand dollars
($530,000), which shall be paid to the Executive in equal
semi-monthly installments throughout the year, consistent with
normal payroll practices of the Company. During the Employment
Period, the Annual Base Salary shall be reviewed at least
annually. Any increase in Annual Base Salary shall 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, and the term Annual Base Salary as utilized in this
Agreement shall refer to Annual Base Salary as so increased.
(ii) Bonus. The Executive may receive an annual discretionary bonus
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(the "Bonus") that is (A) based on the terms and conditions of a
bonus plan adopted for similarly situated executives and (B)
subject to the attainment of certain performance objectives, such
performance objectives and their achievement to be determined
annually by the Board, in its sole discretion. The Bonus shall be
payable upon determination by the Board of Executive's percentage
achievement of the performance targets established by the Board.
The Bonus shall be calculated by multiplying the Executive's
percentage of attained objectives times an amount equal to a
percentage of the Executive's Annual Base Salary for the
respective year as established by the Board (the "Annual Target
Bonus"); provided that, for each year of the Initial Term, the
Annual Target Bonus shall be no less than seventy percent (70%)
of the Executive's Annual Base Salary. Notwithstanding the
foregoing, if the Executive is eligible for a Bonus for a partial
calendar year of employment, the amount of the Bonus shall be
prorated and calculated based on the Annual Base Salary actually
received by the Executive for such partial calendar year of
employment.
(iii) IPO Option. Effective as of the closing date of the first
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registered underwritten public offering completed after the
Effective Date to purchase common stock of RBF ("Common Stock")
(the "IPO"), the
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Executive shall, if he is then employed hereunder, receive a
non-qualified option to purchase two percent (2%) of the
aggregate number of the then outstanding shares of Common Stock
of all classes; provided that the option shall be solely to
purchase the same class of shares purchased by the public in the
IPO which currently is expected to be Class A Common Stock (the
"Public Common Stock") (it being understood that Transocean Inc.
and its subsidiaries are currently expected to hold Class B
Common Stock which will, among other things, be entitled to
voting rights at least five (5) times as great as the voting
rights of the Public Common Stock) (the "IPO Option"). The
exercise price of the IPO Option shall be equal to the price to
the public of the Public Common Stock sold (or other class sold)
in the IPO on the closing date of the IPO (the "IPO Date"). The
IPO Option shall be subject to (A) expiration on the tenth
anniversary of the IPO Date or, if earlier, 90 days after the
Executive's Date of Termination (as defined in Section 3(g) or
Section 4(b)) and (B) incremental exercisability of the IPO
Option at the rate of thirty-three and one-third percent
(33 1/3%) of the shares subject to the IPO Option per year on the
first (1st), second (2nd) and third (3rd) anniversaries of the
IPO Date so that cumulatively after the end of the third (3rd)
anniversary of the IPO Date, one hundred percent (100%) of the
IPO Option shall be exercisable. The Executive must be in
continuous employment with RBF and the Company from the IPO Date
through the date of exercisability of each installment in order
for the IPO Option to become exercisable with respect to
additional shares on each such date, except as otherwise provided
in this Agreement. The IPO Option shall be subject to (A) an
employee stock option plan to be adopted by RBF ("Stock Incentive
Plan"), (B) a stock option award document containing terms
consistent with the foregoing and (C) such other terms,
consistent with the foregoing, to be established by the
administrative committee of such Stock Incentive Plan, including,
but not limited to, any restrictions on the Executive's ability
to sell, transfer or dispose of shares of Public Common Stock
acquired upon exercise of the IPO Option following the IPO Date
or the date of any underwritten registration of the offering of
the Public Common Stock.
Further, without limiting the generality of any other provision
hereof, nothing in this Agreement shall limit or restrict RBF
from (A) taking any action in connection with the separation of
its shallow-water from its deep-water business on the terms
determined by Transocean Inc. (including, without limitation, the
dividend or other transfer of deep-water related assets from
RBF), (B) entering into any arrangement (including separation
arrangements, corporate governance arrangements, tax sharing
arrangements, registration rights agreements, transition services
agreements, all of which may be on the terms specified by
Transocean Inc.), (C) amending the Charter, Bylaws and other
governing documents to provide for, among other things,
protections for Transocean Inc. and granting it consent and other
rights not available to other shareholders,
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(D) effecting the sale of securities to Transocean Inc. on terms
that Transocean Inc. determines, (E) varying the terms of the IPO
from those described herein, or (F) restricting the ability of
RBF to compete with Transocean Inc., it being specifically
understood by the parties hereto that any of such actions or
other actions taken by RBF in connection with any IPO (including
the decision not to effect the IPO), restructuring, any
disposition transactions or otherwise shall not constitute Good
Reason, as defined in Section 4(b), or otherwise a breach of this
Agreement.
(iv) IPO Restricted Stock. If the Executive is employed on the IPO
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Date he shall receive as of that date a number of restricted
shares of Public Common Stock (the "IPO Restricted Stock") equal
to the quotient obtained by dividing the Incentive Amount by the
IPO Price Per Share.
The IPO Restricted Stock shall contain forfeiture restrictions
that shall lapse on the third anniversary of the IPO Date,
subject to the Executive's continuous employment with RBF and the
Company through that date. The Restricted Stock shall be awarded
subject to (A) the Stock Incentive Plan, (B) a restricted stock
award document containing terms consistent with the foregoing,
and (C) such other terms, consistent with the foregoing, to be
established by the administrative committee of such Stock
Incentive Plan.
For purposes of this Agreement, the following terms shall have
the meanings indicated:
"Estimate Date" shall mean the first to occur of (A) the IPO
Date, (B) the closing date of a Whole Company Sale (C) the date
the Executive gives notice of an Approved Termination pursuant to
Section 3(a)(i), or (D) 90 days after the Date of Termination
without Cause pursuant to Section 3(e).
"Incentive Amount" shall mean the excess, if any, of (A)
$9,387,000 multiplied by the Adjustment Ratio, over (B)
$1,043,000.
"IPO Price Per Share" shall mean the price to the public of the
Public Common Stock sold in the IPO on the IPO Date.
"Adjustment Ratio" shall mean the quotient (calculated to the
nearest five decimal places) obtained by dividing (A) the excess,
if any of (I) the Index Value as of the Estimate Date over (II)
the Index Value as of Effective Date by (B) the Index Value as of
the Effective Date.
"Applicable Stock" shall mean the common stock (or equivalent in
the event of a noncorporate entity) of each of the following:
Pride International, Inc., Ensco International Incorporated,
Xxxxxxxxx-UTI
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Energy, Inc., Rowan Companies, Inc. and Grey Wolf, Inc. (each of
such companies being referred to as an "Issuer").
"Market Capitalization" on any day shall mean, with respect to
any Applicable Stock, the product obtained by multiplying (a) the
Market Value of such Applicable Stock on such day by (b) the
number of outstanding shares of all Applicable Stock as last
reported in a filing with the Securities and Exchange Commission.
"Index Value" on any day shall mean the sum of the Market
Capitalization of the Applicable Stocks on such day (i.e., the
sum of the Market Capitalization of the common stock of Pride
International, Inc., plus the Market Capitalization of the common
stock of Ensco International Incorporated, plus the Market
Capitalization of the common stock of Xxxxxxxxx-UTI Energy, Inc.,
plus the Market Capitalization of the common stock of Rowan
Companies, Inc., plus the Market Capitalization of the common
stock of Grey Wolf, Inc.) divided by the sum of the number of
outstanding shares of all Applicable Stock as last reported in a
filing with the Securities and Exchange Commission.
"Market Value" of any Applicable Stock on any day shall mean the
average of the high and low reported sales prices regular way of
a share of such Applicable Stock on such day (if such day is a
Trading Day, and if such day is not a Trading Day, on the Trading
Day immediately preceding such day) or, in case no such reported
sale takes place on such Trading Day, the average of the reported
closing bid and asked prices regular way of a share of such
Applicable Stock on such Trading Day, in either case on the New
York Stock Exchange or, if the shares of such Applicable Stock
are not quoted on the New York Stock Exchange on such Trading
Day, on the Nasdaq National Market, or if the shares of such
Applicable Stock are not quoted on the Nasdaq National Market on
such Trading Day, the average of the closing bid and asked prices
of a share of such Applicable Stock in the over-the-counter
market on such Trading Day as furnished by any New York Stock
Exchange member firm selected by RBF, or if such closing bid and
asked prices are not made available by any such New York Stock
Exchange member firm on such Trading Day (including without
limitation because such Applicable Stock is not publicly held
(whether because an Issuer of such Applicable Stock has been
acquired by a third party in an acquisition (an "Issuer
Acquisition") or otherwise) or because such Applicable Stock has
been reclassified, converted or exchanged into cash, securities
or other property), the market value of a share of such
Applicable Stock as determined by the Board of Directors of the
Company; provided that (a) the "Market Value" of any share of
Applicable Stock on any day prior to the "ex" date or any similar
date for any dividend or distribution paid or to be paid with
respect to the Applicable Stock shall be reduced by the fair
market value of the per share
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amount of such dividend or distribution as determined by the
Board of Directors of the Company and (b) the "Market Value" of
any share of Applicable Stock on any day prior to (i) the
effective date of any subdivision (by stock split or otherwise)
or combination (by reverse stock split or otherwise) of
outstanding shares of Applicable Stock or (ii) the "ex" date or
any similar date for any dividend or distribution with respect to
the Applicable Stock in shares of the Applicable Stock shall be
appropriately adjusted as determined by the Board of Directors of
the Company to reflect such subdivision, combination, dividend or
distribution. In the case of an Issuer Acquisition such Issuer's
Applicable Stock shall be removed from the determination of
Market Value for both the Effective Date and the Estimate Date;
provided, however, that if there occurs an aggregate of two or
more of any combination of Issuer Acquisitions (excluding an
Issuer Acquisition in which an Issuer is acquired by another
Issuer) or Issuer Bankruptcies (as defined herein), then the
parties shall retain the remaining Applicable Stock in the
determination of Market Value for both the Effective Date and the
Estimate Date but shall add any additional companies as Issuers
as shall be determined by Xxxxxxx & Company International (or if
Xxxxxxx & Company International does not accept such assignment,
as determined by a mutually agreeable investment banking firm
with experience in the oilfield service industry). In making such
determination, Xxxxxxx & Company International shall seek to
choose companies to be included as Issuers in order to have the
calculation of Market Value as most appropriately as possible
reflect the U.S. Gulf of Mexico shallow-water and inland barge
drilling business. Any number of additional Issuers (including
zero) may be included by Xxxxxxx & Company International, but the
total number of Issuers, including Issuers already determined
hereunder, may not exceed five. The costs of Xxxxxxx & Company
International shall be paid by the Company. An Issuer shall be
deleted from the determination of Market Value for all periods if
such Issuer declares bankruptcy under applicable federal
bankruptcy laws (an "Issuer Bankruptcy"). In addition, the Board
may make other changes to the determination of Market Value not
inconsistent with the foregoing that it deems fair and equitable
under the circumstances.
"Trading Day" shall mean each weekday other than any day on which
securities are not traded on the New York Stock Exchange or the
Nasdaq National Market or in the over-the-counter market.
(v) Whole Company Sale. If during the Initial Term, but prior to the
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occurrence of an IPO or notice of an Approved Termination, either
90% of the stock of RBF is sold to an unrelated third party (or
merger or other business combination that results in less than
90% of the stock of RBF not being beneficially owned by
Transocean) or at least 90% (by number of rigs) of the RBF
jackups and barges that are currently in the U.S. Gulf of
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Mexico and which currently are included in Transocean's Gulf of
Mexico Shallow and Inland Water Segment are sold to an unrelated
third party (a "Whole Company Sale") while the Executive is
employed hereunder, the Executive shall be entitled to a cash
payment equal to the greater of (A) 0.25% of the proceeds (net of
all expenses directly associated with the sale) of the sale of
those assets and liabilities expected by Transocean on the date
hereof to be included in RBF at the IPO Date (the "Hypothetical
IPO Company"), or (B) the Incentive Amount. The assets and
liabilities of the Hypothetical IPO Company shall include the
assets and liabilities of Transocean's Gulf of Mexico Shallow and
Inland Water Segment as constituted on the date hereof together
with any corporate level assets or liabilities expected by
Transocean to be allocated to the Hypothetical IPO Company as
adjusted to take into account the results of operations of the
Hypothetical IPO Company through the date of such sale, including
acquisitions of assets and the incurrence of liabilities. In the
event the consideration for a Whole Company Sale is not cash,
then the value of such consideration shall be determined in good
faith by the Board. The amount due under this Section 2(b)(v)
shall be paid within forty-five (45) days after the closing of
the Whole Company Sale. In the event of a Whole Company Sale, the
provisions of Sections 2(b)(iii) and 2(b)(iv) shall no longer
apply, other than for purposes of using the necessary definitions
to determine the Incentive Payment.
(vi) Stock Options. The Executive shall be eligible to receive stock
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option awards, in the discretion of the Board, pursuant to the
terms of the Stock Incentive Plan. The Board shall review the
Executive's eligibility to receive awards at least annually.
(vii) Incentive, Savings and Retirement Plans. The Executive shall be
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entitled to participate in all incentive, savings and retirement
plans, practices, policies and programs applicable generally to
other senior executives of the Company; provided, however, that
the Executive shall not be eligible to participate in plans
covering senior executives of Transocean and its affiliates other
than RBF and the Company.
(viii) Welfare Benefit Plans. The Executive and/or the Executive's
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family, as the case may be, shall be eligible for participation
in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company
(including, without limitation, supplemental disability and
supplemental life insurance plans and programs) to the extent
applicable generally to other senior executives of the Company.
(ix) Club Membership. The Company shall pay for, or reimburse the
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Executive for the payment of, monthly dues for a club membership
as selected by the Executive.
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(x) Office and Support Staff. The Executive shall be entitled to an
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office or offices of a size and with furnishings and other
appointments, and to exclusive personal secretarial and other
assistance, at least equal to the most favorable of the foregoing
provided to other senior executives of the Company.
(xi) Vacation. The Executive shall be entitled to paid vacation in
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accordance with the most favorable plans, policies, programs and
practices of the Company as in effect for other senior executives
of the Company, provided that the Executive shall be entitled to
at least six (6) weeks of paid vacation each twelve (12)-month
period.
(xii) Tax Preparation. Company shall pay for, or reimburse the
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Executive for, the cost of preparation of his annual Federal
income tax return.
(xiii) Right to Change Plans. The Company shall not be obligated to
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institute, maintain or refrain from changing, amending or
discontinuing any benefit plan, program or fringe benefit, so
long as such changes are similarly applicable to senior
executives of the Company generally.
3. TERMINATION OF EMPLOYMENT
(a) Nonoccurrence of the IPO.
(i) If during the eighteen (18) month period after the Effective Date
(the "Waiting Period") neither an IPO nor a Whole Company Sale
occurs (the "IPO Nonoccurrence"), then the Executive may
voluntarily terminate his employment for any reason during the
ninety (90)-day period immediately following the expiration of
the Waiting Period ("Approved Termination").
(ii) In the event of an Approved Termination, the Executive shall
receive (A) the Incentive Amount payable in cash within
forty-five (45) days of the Date of Termination as defined in
Section 3(g), (B) if Section 4 is not applicable, continued
payment of the Annual Base Salary, at the rate then in effect,
through the expiration of the Initial Term, and (C) all other
benefits to which the Executive has a vested right at the time,
according to the provisions of the governing plan or program. The
Company agrees that, if Section 4 is not applicable, the
Incentive Amount payable under this Section 3(a)(ii) shall not be
less than the amount necessary to cause the Incentive Amount plus
the aggregate Annual Base Salary under clause (B) of the
preceding sentence to total one million dollars ($1,000,000).
(b) Death or Disability.
(i) The Executive's employment shall terminate automatically upon the
Executive's death during the Employment Period. If the Board
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determines, in good faith, that a Disability of the Executive has
occurred during the Employment Period (pursuant to the definition
of Disability set forth below), it may give to the Executive
written notice in accordance with Section 12(b) of this Agreement
of its intention to terminate the Executive's employment. In such
event, the Executive's employment with RBF and the Company shall
terminate effective on the thirtieth (30th) day after receipt of
such notice by the Executive (the "Disability Effective Date"),
provided that, within the thirty (30) days after such receipt,
the Executive shall not have returned to full-time performance of
the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the
Executive's duties with RBF on a full-time basis for one hundred
eighty (180) consecutive business days as a result of incapacity
due to mental or physical illness, which is determined to be
total and permanent by a physician selected by RBF or the Company
or their insurers and acceptable to the Executive or the
Executive's legal representative.
(ii) In the event of a termination due to death or Disability, the
Executive shall receive (A) upon the Date of Termination, the
unpaid Annual Base Salary, at the rate then in effect, accrued
through the Date of Termination, (B) any Bonus to which the
Executive is entitled, payable after the Board determines whether
the performance objectives have been met for the relevant
calendar year, and (C) all other benefits to which the Executive
has a vested right at the time, according to the provision of the
governing plan or program. In addition, any IPO Option shall
become fully exercisable as of the Date of Termination and remain
exercisable for its term and any IPO Restricted Stock shall
become fully vested as of the Date of Termination. The
Executive's beneficiaries shall be entitled to participate in all
applicable benefit plans and programs in accordance with the
eligibility provisions thereof.
(c) Voluntary Termination by Executive.
(i) The Executive may voluntarily terminate his employment during the
Employment Period at any time by giving the Board ninety (90)
days' advance Notice of Termination, as defined in Section 3(f)
of this Agreement.
(ii) In the event of a voluntary termination by the Executive (other
than a Qualifying Termination within eighteen (18) months of a
Change in Control (as provided in Section 4) or a termination
pursuant to Section 3(a)), the Executive shall receive (A) upon
the Date of Termination, the unpaid Annual Base Salary, at the
rate then in effect, accrued through the Date of Termination, (B)
any Bonus to which the Executive is entitled, payable after the
Board determines whether the performance objectives have been met
for the relevant calendar year, and (C) all other benefits to
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which the Executive has a vested right at the time, according to
the provision of the governing plan or program. The Executive
must provide a Notice of Termination at least ninety (90) days
prior to the Date of Termination in order to receive the Bonus
under this Section 3(c)(ii).
(d) Termination for Cause.
(i) The Board may terminate the Executive's employment at any time
during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:
A. The willful and continued failure of the Executive to
perform substantially the Executive's duties, typical for
the position, with RBF and the Company (other than any such
failure resulting from incapacity due to physical or mental
illness) or any reasonable duties assigned or reasonable
orders given to the Executive by the Board from time to
time, after a written demand for performance is delivered to
the Executive by the Board, which specifically identifies
the manner in which the Board of Directors believes that the
Executive has not substantially performed the Executive's
duties;
B. The willful engagement by the Executive in illegal conduct,
gross misconduct, dishonesty or self-dealing with the
Company, RBF or any of RBF's affiliates, which results from
a willful act or omission or from gross negligence and that
is materially and demonstrably injurious or reasonably
likely to become materially injurious to the Company, RBF or
any of RBF's affiliates;
C. The conviction of the Executive by a court of competent
jurisdiction of any felony or a crime involving moral
turpitude; or
D. The Executive's breach of the confidentiality or
noncompetition provisions of this Agreement or any other
material breach of the Executive's obligations hereunder.
For purposes of this provision, 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 Parent Board or upon the instructions of the Chief
Executive Officer of Transocean or based upon the advice of
counsel for the Company or Parent 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, RBF and RBF's
affiliates. The cessation of
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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
Parent Board at a meeting of the Parent 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 Parent Board), finding that,
in the good faith opinion of the Parent Board, the Executive is
guilty of the conduct described above, and specifying the
particulars thereof in detail. As used in this Section, "Parent
Board" means the board of directors of Transocean, except that in
the event that an IPO occurs or Transocean no longer owns 50% or
more of the Outstanding RBF Voting Securities (as defined in
Section 4(c)(i)), then Parent Board shall mean the Board of
Directors of RBF.
(ii) For purposes of this Agreement, RBF's affiliates shall include
any company controlled by, controlling or under common control
with RBF.
(iii) In the event of termination for Cause, the Executive shall
receive the unpaid Annual Base Salary, at the rate then in
effect, accrued through the Date of Termination, and the
Executive shall immediately thereafter forfeit all rights and
benefits (other than vested benefits) he would otherwise have
been entitled to receive under this Agreement. The Executive will
lose any right to supplemental benefits provided by RBF and the
Company, including, but not limited to, retirement benefits. RBF
and the Company thereafter shall have no further obligations
under this Agreement.
(e) Involuntary Termination other than for Cause.
(i) The Company may terminate the Executive's employment other than
for Cause at any time during the Employment Period.
(ii) In the event of involuntary termination other than for Cause,
upon the Date of Termination, the Executive shall receive (A) the
unpaid Annual Base Salary otherwise payable to the Executive for
the remaining Employment Period, (B) any Bonus to which the
Executive is entitled, payable after the Board determines whether
the performance objectives have been met for the relevant
calendar year, (C) if the date of termination precedes both the
IPO Date and the closing date of a Whole Company Sale, a cash
payment equal to the Incentive Amount; provided, however, that if
a binding agreement to effect a Whole Company Sale is in effect
on the Date of Termination or at any time within ninety (90) days
thereafter, and if the Whole Company Sale occurs pursuant to such
binding agreement, the Executive shall receive the amount
calculated under Section 2(v), and the amount payable under this
clause (C) shall be paid
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within forty-five (45) days after the closing of a Whole Company
Sale or cancellation or revocation of a binding agreement or, if
no binding agreement for a Whole Company Sale applies, then the
amount shall be paid within ninety-five (95) days after the Date
of Termination pursuant to Section 3(g), (D) immediate vesting of
any IPO Option and continued exercisability of such IPO Option
through the full term of the option, (E) immediate vesting of any
IPO Restricted Stock, and (F) all other benefits to which the
Executive has a vested right at the time, according to the
provisions of the governing plan or program.
(f) Notice of Termination. Any voluntary termination by the Executive or
termination by RBF for Cause shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section
12(b) of this 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 in Section 3(g)) is other than the
date of receipt of such notice, specifies the termination date. The
failure by RBF to set forth in the Notice of Termination any fact or
circumstance that contributes to a showing of Cause shall not waive
any right of RBF hereunder or preclude RBF from asserting such fact or
circumstance in enforcing its rights hereunder.
(g) Date of Termination. "Date of Termination" means (i) if the Executive
voluntarily terminates his employment, the date specified in the
notice; (ii) if the Executive's employment is terminated by RBF for
Cause, the date of receipt of the Notice of Termination or any later
date specified therein, as the case may be; (iii) if the Executive's
employment is terminated by RBF other than for Cause or by the
Executive for the nonoccurrence of the IPO within the waiting period,
the Executive's last day as an active employee of RBF and the Company;
or (iv) if the Executive's employment is terminated by reason of death
or Disability, the date of death of the Executive or the Disability
Effective Date, as the case may be.
4. CHANGE IN CONTROL
(a) Employment Termination in Connection with a Change in Control. In the
event of a Qualifying Termination (as defined below) within the
eighteen (18)-month period immediately following a Change in Control
(as defined in Section 4(c)), in lieu of all other benefits provided
to the Executive under the provisions of this Agreement, the Executive
shall receive the following severance benefits (hereinafter referred
to as the "Severance Benefits"):
(i) An amount equal to three (3) times the Executive's "annual
compensation" for the year of termination. For purposes of this
Section 4(a)(i), "annual compensation" means the sum of (A) the
Executive's
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Annual Base Salary in effect as of the Date of Termination and
(B) the Executive's Annual Target Bonus for the year of
termination, or, if greater, the highest Bonus paid to the
Executive under this Agreement during the most recent thirty-six
(36) month period;
(ii) Any Bonus to which the Executive is entitled, payable after the
Board determines whether the performance objectives have been met
for the relevant calendar year;
(iii) A continuation of the welfare benefits of medical insurance,
dental insurance, disability insurance and life insurance for
three (3) full years after the Date of Termination. These
benefits shall be provided to the Executive at the same premium
cost and at the same coverage level, as in effect as of the Date
of Termination. However, in the event the premium cost and/or
level of coverage shall change for all employees of RBF and the
Company, the cost and/or coverage level, likewise, shall change
for the Executive in a corresponding manner.
The continuation of these welfare benefits shall be discontinued
prior to the end of the three (3) year period in the event the
Executive has available substantially similar benefits from a
subsequent employer, as determined by the Board or its designee.
Upon the termination of these welfare benefits, the Executive
shall be provided a COBRA continuation election under RBF's or
the Company's group health plans;
(iv) Immediate vesting of any IPO Option and continued exercisability
of such IPO Option through the full term of the option; and
(v) Immediate vesting of any IPO Restricted Stock.
For purposes of this Agreement, a Qualifying Termination shall
mean a termination of the Executive's employment by RBF other
than for Cause (as provided in Section 3(e) herein) or by the
Executive for Good Reason (as defined in Section 4(b)).
(b) Definition of "Good Reason." For purposes of this Agreement, "Good
Reason" shall mean:
(i) The removal of the Executive from the position of Chief Executive
Officer and President or the assignment to the Executive of any
duties materially inconsistent with the Executive's position with
RBF and the Company;
(ii) The relocation of the Executive's principal place of employment
to a location more than fifty (50) miles from the Executive's
principal place of employment as of the date immediately
preceding the relocation; or
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(iii) A reduction by RBF and the Company in the Executive's Annual
Base Salary, as in effect on the Effective Date or as the same
may be increased from time to time, in the amount of twenty-five
percent (25%) or more.
The foregoing notwithstanding, the parties hereto agree that the
failure of the IPO to occur shall not constitute Good Reason (as
defined in this Section 4(b)). With respect to a termination by
the Executive for Good Reason, the "Date of Termination" means
the Executive's last day as an active employee of RBF and the
Company.
(c) Definition of "Change in Control." A Change in Control of RBF shall be
deemed to have occurred as of the first (1st) day any one or more of
the following conditions shall have been satisfied:
(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of shares representing
20% or more of the combined voting power of the then outstanding
voting securities of RBF entitled to vote generally in the
election of directors (the "Outstanding RBF Voting Securities");
provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change in Control:
(A) any acquisition directly from RBF, (B) any acquisition by RBF
(it being understood that an acquisition by an acquiror of
greater than 20% of the Outstanding RBF Voting Securities
directly from RBF shall not prevent such acquiror from causing a
subsequent Change in Control if it thereafter acquires an
additional 20% of the Outstanding RBF Voting Securities in a
transaction that would otherwise constitute a Change of Control),
(C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by RBF or any corporation or other
entity controlled by RBF, (D) any acquisition by any corporation
or other entity pursuant to a transaction which complies with
clauses (A), (B) and (C) of Section 4(c)(iii), (E) an acquisition
of securities effected in connection with a distribution of any
class of Common Stock of RBF to shareholders of Transocean Inc.
in a transaction (including any distribution in exchange for
shares of capital stock or other securities of Transocean Inc.)
intended to qualify as a tax-free distribution under Section 355
of the Internal Revenue Code of 1986, as amended (the "Code"), or
any successor provision (a "Tax-Free Spin-Off"), (F) any
acquisition by Transocean Inc. or any of its affiliates excluding
RBF and its subsidiaries (collectively, "Transocean"), (G) any
acquisition from Transocean pursuant to a public offering of
securities registered under a registration statement filed with
the Securities and Exchange Commission, or (H) any acquisition
immediately following which Transocean has beneficial ownership
of at least 50% or more of the Outstanding RBF Voting Securities;
provided that any such acquisition
-14-
that, but for this clause (H), would otherwise constitute a
Change of Control under this Section 4(c)(i) shall be deemed to
be a Change in Control at the time that Transocean no longer has
beneficial ownership of at least 50% or more of the Outstanding
RBF Voting Securities, if such individual, entity or group that
made such acquisition continues to own 20% or more of the
Outstanding RBF Voting Securities following such time that
Transocean no longer has such beneficial ownership;
(ii) Individuals who, as of the date hereof, are members of the Board
(the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that for
purposes of this Section 4, any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by RBF's shareholders, was approved by either (A) a vote
of at least a majority of the directors then comprising the
Incumbent Board or (B) Transocean, shall be considered as though
such individual were 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
either Transocean or the Board;
(iii) Consummation of a reorganization, merger, conversion or
consolidation or sale or other disposition of all or
substantially all of the assets of RBF (a "Business
Combination"), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding RBF Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly,
more than fifty percent (50%) of the then outstanding combined
voting power of the then outstanding voting securities entitled
to vote generally in the election of directors of the corporation
or other entity resulting from such Business Combination
(including, without limitation, a corporation or other entity
which as a result of such transaction owns RBF or all or
substantially all of RBF's assets either directly or through one
or more subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business Combination
of the Outstanding RBF Voting Securities, (B) no Person
(excluding Transocean and any corporation or other entity
resulting from such Business Combination or any employee benefit
plan (or related trust) of RBF or such corporation or other
entity resulting from such Business Combination) beneficially
owns, directly or indirectly, twenty percent (20%) or more of the
combined voting power of the then outstanding voting securities
of the corporation or other entity resulting from such Business
Combination except to the extent that such ownership existed
prior to the Business Combination and (C) at least a majority of
the members of the board of directors of the corporation or other
entity
-15-
resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such
Business Combination;
(iv) Approval by the shareholders of RBF of a complete liquidation or
dissolution of RBF other than in connection with the transfer of
all or substantially all of the assets of RBF to Transocean or to
an affiliate or a subsidiary of RBF and in connection with such
transfer the Executive is offered the opportunity to continue his
employment on substantially the same terms as provided in this
Agreement including, without limitation, the Change in Control
provisions of this Section 4; or
(v) A "Change of Control" of Transocean, as defined in Section 6.10
of the Long-Term Incentive Plan of Transocean, as amended and
restated as of January 1, 2000, which occurs while Transocean
owns 50% or more of the Outstanding RBF Voting Securities.
Notwithstanding the foregoing, no Business Combination between
Transocean and RBF and its subsidiaries or between RBF and its own
subsidiaries shall constitute a Change in Control under Section 4(c)
of this Agreement.
5. CERTAIN ADDITIONAL PAYMENTS
(a) Anything in this Agreement to the contrary notwithstanding and except
as set forth below, in the event it shall be determined that any
payment or distribution by the Company, RBF or any of its affiliates,
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 5) (a "Payment") would be subject to the
excise tax imposed by Code 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. Notwithstanding the foregoing provisions of
this Section 5(a), if it shall be determined that the Executive is
entitled to a Gross-Up Payment, but that the Payments do not exceed
one hundred and ten percent (110%) of the greatest amount (the
"Reduced Amount") that could be paid to the Executive such that the
receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Executive and the Payments, in
the aggregate, shall be reduced to the Reduced Amount.
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(b) Subject to the provisions of Section 5(c), all determinations required
to be made under this Section 5, 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 Ernst & Young, L.L.P. or such other certified public
accounting firm as may be designated by the Executive (the "Accounting
Firm") which shall provide detailed supporting calculations to RBF,
the Company and the Executive within fifteen (15) business days of the
receipt of notice from the Executive that there has been a Payment, or
such earlier time as is requested by RBF or the Company. 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 5, shall
be paid by the Company to the Executive within five (5) days of the
receipt of the Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon RBF, the Company and the
Executive. As a result of the uncertainty in the application of Code
Section 4999 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 RBF or the Company exhausts its remedies
pursuant to Section 5(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 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 RBF and the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification
shall be given as soon as practicable but no later than ten (10)
business days after the Executive is informed in writing of such claim
and shall apprise RBF and 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 thirty
(30)-day period following the date on which it gives such notice to
RBF and the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If RBF or 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 RBF and the Company any information reasonably requested by
RBF and the Company relating to such claim;
(ii) Take such action in connection with contesting such claim as RBF
or 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 RBF or the Company;
-17-
(iii) Cooperate with RBF and the Company in good faith in order
effectively to contest such claim; and
(iv) Permit RBF and the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest 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 5(c), RBF and the Company shall control all proceedings taken
in connection with such contest and, at its sole option, may pursue or
forgo 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 xxx for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as RBF or
the Company shall determine; provided, however, that if RBF or the
Company directs the Executive to pay such claim and xxx 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, RBF's and 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 issue raised by the
Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 5(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall
(subject to RBF's or the Company's complying with the requirements of
Section 5(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 5(c), a
determination is made that the Executive shall not be entitled to any
refund with respect to such claim and RBF or the Company does not
notify the Executive in writing of its intent to contest such denial
of refund prior to the expiration of thirty (30) days after such
determination, then such advance shall be forgiven and shall not be
-18-
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.
6. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any plan, program, policy
or practice provided by RBF or the Company and for which the Executive may
qualify, nor, subject to Section 12(h), shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement
with the Company, RBF or any of RBF's affiliates. Amounts that are vested
benefits or that the Executive is otherwise entitled to receive under any plan,
policy, practice or program of, or any contract or agreement with the Company,
RBF or any of RBF's affiliates at or subsequent to the Date of Termination shall
be payable in accordance with such plan, policy, practice or program, or
contract or agreement except as explicitly modified by this Agreement.
7. NONCOMPETITION.
(a) The Executive shall not for a period (the "Restricted Period") of (i)
one (1) year after the Date of Termination for a termination of
employment described in Section 3 of this Agreement or (ii) eighteen
(18) months after the Date of Termination for a Qualifying Termination
that occurs within the eighteen (18)-month period immediately
following a Change in Control, engage in Competition with the Company,
RBF, or any of RBF's affiliates. For purposes of this Section 7,
"Competition" shall mean the Executive's engaging in or otherwise
being a director, officer, employee, principal, agent, shareholder,
member, investor, consultant, associate, owner or partner of, or
permitting his name to be used in connection with the activities of
any business or organization that is primarily engaged in the offshore
or inland marine contract drilling industry in direct competition with
the Company, RBF or any of RBF's affiliates, but shall not preclude
the Executive's becoming the registered or beneficial owner of up to
two percent (2%) of any class of capital stock of any such corporation
which is registered under the Securities Exchange Act of 1934, as
amended, provided the Executive does not actively participate in the
business of such corporation until the end of the Restricted Period.
(b) The Executive acknowledges that he will derive significant value from
RBF's and the Company's agreement in Section 9 to provide the
Executive with that confidential information to enable the Executive
to optimize the performance of the Executive's duties to RBF. The
Executive further acknowledges that his fulfillment of the obligations
contained in this Agreement, including, but not limited to, the
Executive's obligation neither to disclose nor to use RBF's and the
Company's confidential information other than for RBF's and the
Company's exclusive benefit and the Executive's obligation not to
compete contained in clause (a) above, is necessary to protect RBF's
and the Company's confidential information and, consequently, to
preserve the value and goodwill of RBF and the Company. The Executive
further understands that the foregoing restrictions may limit his
ability to engage in certain businesses anywhere in the world during
the
-19-
period provided for in clause (a), but acknowledges that the Executive
will receive sufficiently high remuneration and other benefits under
this Agreement to justify such restrictions. The Executive
acknowledges the time, geographic and scope limitations of the
Executive's obligations under clause (a) above are reasonable,
especially in light of RBF's and the Company's desire to protect its
confidential information, and that the Executive will not be precluded
from gainful employment if the Executive is obligated not to compete
with RBF, any of RBF's affiliates and the Company during the period as
described above.
It is expressly understood and agreed that RBF, the Company and the Executive
consider the restrictions contained in this Section 7 to be reasonable and
necessary to protect the proprietary information of RBF and the Company.
Nevertheless, if any of the aforesaid restrictions are found by a court having
jurisdiction to be unreasonable, or overly broad as to geographic area or time,
or otherwise unenforceable, the parties intend for the restrictions therein set
forth to be modified by such court so as to be reasonable and enforceable and,
as so modified by the court, to be fully enforced.
8. NONSOLICITATION. The Executive shall not for a period of (i) one (1) year
after the Date of Termination for a termination of employment described in
Section 3 of this Agreement or (ii) eighteen (18) months after the Date of
Termination for a Qualifying Termination that occurs within the eighteen
(18)-month period immediately following a Change in Control solicit for
employment or employ any employee of the Company, RBF or any of RBF's
affiliates.
9. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary capacity
for the benefit of the Company, RBF and RBF's affiliates, all secret or
confidential information, knowledge or data relating to the Company, RBF or any
of RBF's affiliates, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the Company, RBF
or any of RBF's affiliates and which shall not be or become public knowledge
(other than by acts by the Executive or representatives of the Executive in
violation of this Agreement). After termination of the Executive's employment
with RBF and the Company, the Executive shall not, without the prior written
consent of RBF and 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 RBF, the Company and those designated by them. The parties
hereto agree and acknowledge that, as of the Effective Date, RBF and the Company
have provided the Executive with secret or confidential information, knowledge
or data described in this Section 9, and that RBF and the Company will continue
to provide such information, knowledge or data during the Employment Period.
10. ENFORCEMENT AND REMEDIES.
(a) The Executive acknowledges that money damages would not be sufficient
remedy for any breach of Sections 7, 8 and 9 by the Executive, and
that RBF and the Company shall be entitled to enforce the provisions
of such Sections 7, 8, and 9 by terminating any payments then owing to
the Executive under this Agreement and/or to specific performance and
injunctive relief as remedies for such breach or
-20-
any threatened breach. Such remedies shall not be deemed the exclusive
remedies for a breach of Sections 7, 8 and 9, but shall be in addition
to all remedies available at law or in equity to RBF and the Company,
including without limitation, the recovery of damages from the
Executive and the Executive's agents involved in such breach and
remedies available to RBF and the Company pursuant to this and other
agreements with the Executive.
(b) Any controversy or claim arising out of or relating to this Agreement
or breach of this Agreement, other than claims entitling the claimant
to injunctive relief or claims or disputes arising from a violation or
alleged violation by the Executive of the provisions of Sections 7, 8,
or 9 shall be settled exclusively by final and binding arbitration in
Houston, Texas, in accordance with the Employment Arbitration Rules of
the American Arbitration Association (the "AAA"), and judgment on the
award rendered by the arbitrator may be entered in any court having
jurisdiction. The arbitrator shall be selected by mutual agreement of
the parties, if possible. If the parties fail to reach agreement upon
appointment of an arbitrator within thirty (30) days following receipt
by one party of the other party's notice of desire to arbitrate, the
arbitrator shall be selected from a panel or panels of persons
submitted by the AAA. The selection process shall be that which is set
forth in the AAA Employment Arbitration Rules then prevailing, except
that, if the parties fail to select an arbitrator from one or more
panels, the AAA shall not have the power to make an appointment but
shall continue to submit additional panels until an arbitrator has
been selected. The costs of the arbitrator shall be borne by both
parties equally. Notwithstanding the foregoing, the arbitrator may
require attorney expenses to be paid by the nonprevailing party.
Either party may appeal the arbitration award and judgment thereon
and, in actions seeking to vacate an award, the standard of review to
be applied to the arbitrator's findings of fact and conclusions of law
will be the same as that applied by an appellate court reviewing a
decision of a trial court sitting without a jury. This agreement to
arbitrate shall not preclude the parties from engaging in voluntary,
non-binding settlement efforts including mediation.
(c) 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 or its affiliated companies
may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement and such amounts shall
not be reduced whether or not the Executive obtains other employment.
With respect to claims which arise from and after the date of a Change
in Control, 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, the Executive or others of the validity or
enforceability of, or liability under this Agreement (including, but
not limited to, as a result of any contest by the Executive about the
amount of any payment
-21-
pursuant to Section 4 or 5 of this Agreement), plus in each case
interest on any delayed payment at the applicable Federal short-term
rate provided for in Section 7872(f)(2)(A) of the Code.
11. SUCCESSORS.
(a) This Agreement is assignable by RBF and the Company, without the
consent of the Executive, to any affiliate of Transocean Inc. in the
event that RBF determines to conduct its shallow-water or inland barge
business in or through an entity other than RBF.
(b) This Agreement is personal to the Executive and without the prior
written consent of RBF or the Company 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 legal representatives.
(c) This Agreement shall inure to the benefit of and be binding upon RBF
and the Company and its respective successors and assigns.
(d) As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any respective successor to its business
and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
12. 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 RBF:
R&B Falcon Corporation
0 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
-22-
If to the Company:
R&B Falcon Management Services, Inc.
0 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
If to the Executive:
Xxx Xxxx
0 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
(c) The Executive hereby represents and warrants that the execution and
performance of this Agreement is not in violation of any existing
agreement to which he is a party.
(d) RBF hereby absolutely, irrevocably and unconditionally guarantees the
full payment and performance of all obligations of the Company under
this Agreement as the same may be hereafter amended from time to time
by RBF, the Company, and the Executive. RBF's guarantee and
undertakings hereunder shall continue in force until all of the
Company's obligations under this Agreement and all of RBF's
obligations have been duly performed.
(e) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision
of this Agreement.
(f) RBF and 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.
(g) The Executive's, RBF's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to
assert any right the Executive, RBF or the Company may have hereunder,
shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.
(h) The Executive, RBF and the Company acknowledge that this Agreement
supersedes any prior agreements or understandings, oral or written,
between the Executive, RBF and the Company, with respect to the
subject matter hereof and constitutes the entire agreement of the
parties with respect thereto.
-23-
(i) This Agreement shall not be varied, altered, modified, canceled,
changed or in any way amended except by mutual agreement of the
parties in a written instrument executed by the parties hereto or
their legal representatives.
-24-
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and
RBF and the Company have caused these presents to be executed in its name on its
behalf, all as of this 15th day of July, 2002, but effective as of the Effective
Date.
/s/ Xxx Xxxx
---------------------------------------------
Xxx Xxxx
R&B FALCON CORPORATION
By: /s/ Xxxx Xxxxx
------------------------------------------
Xxxx Xxxxx
Vice President
R&B FALCON MANAGEMENT SERVICES, INC.
By: /s/ Xxxx Xxxxxxx
------------------------------------------
Xxxx Xxxxxxx
Vice President
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