EXHIBIT 10.21.1
TERMINATION AGREEMENT
This Termination Agreement (the "Agreement"), entered into and
effective as of July 31, 1999 (the "Effective Date"), is between Xxxxxxx
X. Xxxxxxx ("Xxxxxxx") and Cliffs Drilling Company ("CDC").
In consideration of the mutual obligations set out below and in that
agreement of the same effective date between Xxxxxxx and CDC and
substantially in the form attached as Exhibit "A" hereto (the "Non-
Compete Agreement"), the parties agree as follows:
1. As of the Effective Date Xxxxxxx tenders his resignation as
President, Chief Executive Officer and Director of CDC and as a
director, officer and/or employee of all direct and indirect
subsidiaries and affiliated companies of CDC [other than R&B
Falcon Corporation ("RBF") of which Xxxxxxx shall continue to
be a director], as the case may be, which CDC accepts on its
behalf and on behalf of RBF, such subsidiaries and affiliated
companies.
2. Upon execution of this Agreement and subject to the payment and
other obligations of CDC and RBF set out in this Agreement and
in the Non-Compete Agreement, this Agreement and the Non-
Compete Agreement constitute full satisfaction of all
obligations of CDC under and pursuant to Section 4 of that
Employment Agreement dated as of December 1, 1998 between
Xxxxxxx and CDC (the "Employment Agreement").
3. Notwithstanding anything to the contrary in (i) this Agreement,
(ii) Section 7 of the Employment Agreement, or (iii) the Non-
Compete Agreement, Xxxxxxx shall not be entitled to, and CDC
shall have no obligation to make to Xxxxxxx, any Gross-Up
Payment (as defined in Section 7 of the Employment Agreement)
with respect to any Excise Tax (as defined in Section 7 of the
Employment Agreement) imposed on or with respect to the stock
options held by Xxxxxxx under the Stock Option Agreements,
which are referred to in Section 4 of the Non-Compete Agreement,
provided, however, the remaining obligations of CDC in Section
7 of the Employment Agreement shall continue to be in full
force and effect.
4. Xxxxxxx shall have the option, exercisable if at all only by
written notice to CDC given within 60 days following the
Effective Date, to acquire full ownership of those certain
split dollar insurance policies, being Policy No. 13905796
dated January 1, 1997 and Policy No. 13347465 dated January 1,
1995, each issued by The Northwestern Mutual Life Insurance
Company, together with a release of the collateral assignments
granted in favor of CDC under and pursuant to the two Split
Dollar Insurance Agreements dated January 1, 1995 between
Xxxxxxx and CDC (the "Insurance Agreements"), upon payment by
Xxxxxxx of the Company's Policy Interest (as defined in the
Insurance Agreements). If such option is exercised and upon
payment of the sum referred in the preceding sentence by
Xxxxxxx and release of the collateral assignments by CDC,
neither Xxxxxxx nor the Company shall thereafter have any
obligation to the other under the Insurance Agreements.
For purposes of this Section 4, such notice, if given, shall be
addressed as follows and sent via registered or certified mail:
Cliffs Drilling Company
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxx X. Xxxx, Xx.
5. The Agreement shall be binding upon and shall inure to the
benefit of the parties, their respective representatives,
agents, attorneys, successors and assigns, and, in particular,
without limiting the generality of the foregoing, to CDC's
directors, officers and employees and to Xxxxxxx'x heirs,
executors, administrators, legal and personal representatives
and assigns.
6. This Agreement shall be deemed to be a contract made under and
governed by, the laws of the State of Texas, without reference
to principles of conflicts of law.
7. This Agreement and the Non-Compete Agreement constitutes the
complete and entire agreement between the parties. Subject to
Sections 4, 5 and 7 (as modified by Section 3 of this
Agreement) of the Employment Agreement, this Agreement
supersedes and cancels all prior or contemporaneous
representations, promises or agreements between the parties.
This Agreement cannot be amended or modified except by written
agreement signed by each of the parties hereto.
8. The provisions of this Agreement are severable. If a court or
other tribunal of competent jurisdiction rules any provision
of this Agreement is invalid or unenforceable, such ruling
will not affect the validity or enforceability of any other
provision of the Agreement, and this Agreement shall be deemed
to be modified and amended so as to be enforceable to the
extent permitted by law.
This Agreement is signed in Houston, Texas on July , 1999.
________________________________
Xxxxxxx X. Xxxxxxx
CLIFFS DRILLING COMPANY
By:_____________________________
Its duly authorized
officer
EXHIBIT "A"
AGREEMENT
This Agreement (the "Agreement"), entered into and effective as of July
31, 1999 (the "Effective Date"), is among Xxxxxxx X. Xxxxxxx ("Xxxxxxx"),
Cliffs Drilling Company ("CDC") and R&B Falcon Corporation ("RBF").
In consideration of the mutual obligations set out below, Xxxxxxx, CDC and
RBF agree as follows:
1. Within two business days following the execution of this
Agreement CDC agrees to pay to Xxxxxxx a lump sum in cash, less
deductions required by law, of $2,587,500.
2. From the Effective Date and continuing until December 1, 2001
CDC agrees to provide Xxxxxxx and his family, at the expense of
CDC, all benefits under (or substantially equivalent benefits
to) RBF's welfare benefit plans, practices, policies and
programs (including, without limitation, medical, prescription,
dental, vision, disability, salary continuance, group life and
supplemental group life and accidental death insurance plans and
programs), to the extent generally applicable to other RBF
executives.
3. For a period of three (3) years following the Effective Date
(the "Restricted Period") Xxxxxxx agrees:
(a) Not to engage in Competition with CDC. For purposes of this
Section 3(a), "Competition" shall mean Xxxxxxx engaging in
or otherwise being a director, officer, employee,
principal, agent, stockholder, member, owner or partner of,
or permitting his name to be used in connection with the
activities of any corporation or other business
organization in the offshore contract drilling industry in
direct or indirect competition with CDC, its parent,
subsidiary or affiliated companies, but shall not preclude
Xxxxxxx from being or becoming the registered or beneficial
owner of up to five (5%) of any class of capital voting
stock (or equivalent voting interest) of any corporation or
other business organization in the offshore contract
drilling industry, provided Xxxxxxx does not participate
actively in such business until the end of the Restricted
Period.
(b) Not to disclose to any third party not a member of the
Company Group (as hereinafter defined), its or their legal
counsel or independent auditors, Confidential Information
(as hereinafter defined) or Trade Secrets (as hereinafter
defined), except any of the Confidential Information or
Trade Secrets which shall be or become in the public domain
other than by breach by Xxxxxxx of his obligations set out
in this Section 3(b) or shall be required to be disclosed
by applicable laws or regulations, any judicial or admin-
istrative authority or stock exchange rule or regulation.
For purposes of this Section 3(b): "Company Group" shall
mean CDC, its parent corporation, subsidiaries and affil-
iates; "Confidential Information" shall mean (r) internal
policies and procedures, (s) financial information, (t)
marketing strategies, (u) secret discoveries, inventions,
formulae, designs, methods, processes and know-how not con-
stituting Trade Secrets, and (v) other non-public inform-
ation relating to the Company Group's business, the
disclosure of which would materially adversely affect the
Company Group's business or financial condition; and "Trade
Secrets" shall mean all secret discoveries, inventions,
formulae, designs, methods, processes and know-how entitled
to protection as trade secrets under the laws of the state
of Texas.
4. (a) The Stock Option Agreements between Xxxxxxx and CDC
referred to below are respectively amended: (i) to revise
the number of option shares covered by each such agreement
and to revise the option exercise price per share to
reflect the adjustments necessary to take into account the
conversion of CDC shares to shares of RBF effected as a
result of the merger transaction between CDC and RBF
concluded December 1,1998, and (ii) to extend the period of
time within which Xxxxxxx shall be entitled to exercise the
outstanding stock options granted to him thereunder,
notwithstanding the provisions of such Stock Option
Agreements, as follows:
Option
Date of Agreement No. of Options Exercise Price Period of Time
(per share) to Exercise
May 22, 1996 47,600 $ 8.24 May 21, 2006
May 21, 1997 34,000 19.27 May 20, 2007
May 13, 1998 85,000 29.71 May 12, 2008
(b) The Stock Option Agreement between Xxxxxxx and RBF dated
December 1, 1998 is amended to remove the restrictions on
vesting and extend the period of time within which Xxxxxxx
shall be entitled to exercise the outstanding stock options
granted to him thereunder to December 1, 2008, notwith-
standing the provisions of such Stock Option Agreement.
5. The Agreement shall be binding upon and shall inure to the
benefit of the parties, their respective representatives, agents,
attorneys, successors and assigns, and, in particular, without
limiting the generality of the foregoing, to CDC's and RBF's
directors, officers and employees and to Xxxxxxx'x heirs,
executors, administrators, legal and personal representatives
and assigns.
6. This Agreement shall be deemed to be a contract made under and
governed by, the laws of the State of Texas, without reference
to principles of conflicts of law.
7. The provisions of this Agreement are severable. If a court or
other tribunal of competent jurisdiction rules any provision of
this Agreement is invalid or unenforceable, such ruling will not
affect the validity or enforceability of any other provision of
the Agreement, and this Agreement shall be deemed to be modified
and amended so as to be enforceable to the extent permitted by
law.
This Agreement is signed in Houston, Texas on July , 1999.
__________________________________
Xxxxxxx X. Xxxxxxx
CLIFFS DRILLING COMPANY
By:_______________________________
Its duly authorized
officer
R&B FALCON CORPORATION
By:_______________________________
Its duly authorized
officer
