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EXHIBIT 10.23
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of December 1, 1998, between CLIFFS DRILLING
COMPANY, a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxx (the
"Executive").
R&B Falcon Corporation ("Parent") has acquired the Company, and Parent
and Company desire that the Company employ the Executive and the Executive
desires to remain in the employ of the Company, on the terms and conditions of
this Agreement.
Accordingly, the parties agree as follows:
1. Employment Duties and Acceptance.
1.1 Employment by the Company: Duties. The Company hereby agrees to
employ the Executive for a term (the "Term") commencing on December 1, 1998 and
expiring on November 30, 2000 (the "Termination Date"), unless earlier
terminated as provided in Section 4. During the Term, the Executive shall at
all times serve in the capacity of Vice President - Finance and Chief Financial
Officer of Company and shall also serve in those offices and directorships of
subsidiary corporations or entities of the Parent to which he may from time to
time be appointed or elected. During the Term, the Executive shall devote his
best efforts on a full time basis in fulfillment of his employment hereunder,
subject to the direction of the Board of Directors of the Company. The
Executive may engage in commercial pursuits and in charitable and civic
activities that do not interfere with the performance of his duties hereunder.
1.2 Acceptance of Employment by the Executive. The Executive hereby
accepts such employment and shall render the services and perform the duties
described above.
2. Compensation and Other Benefits.
2.1 Annual Salary. The Company shall pay to the Executive an annual
salary at a rate of not less than $200,000 (the "Annual Salary"), prorated for
any partial calendar year, subject to increase at the sole discretion of the
Board. The Annual Salary shall be payable in accordance with the payroll
policies of the Company as from time to time in effect, but in no event less
frequently than once each month, less such deductions as shall be required to
be withheld by applicable law and regulations.
2.2 Bonuses. The Executive may receive, at the sole discretion of the
Board, bonuses.
2.3 Participation in Employee Benefit Plans. The Company agrees to
permit the Executive during the Term, if and to the extent eligible, to
participate in any group life, hospitalization or disability insurance plan,
health program, pension plan, similar benefit plan or other so-called "fringe
benefits" of the Parent and its affiliated companies (collectively, "Benefits")
which may be available to other comparable executives of the Parent and its
affiliated companies on terms no less favorable to the Executive than the terms
offered to such other executives. Notwithstanding the foregoing, to
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the extent provided in the Agreement And Plan of Merger dated August 21, 1998
among Parent, RBF Cliffs Acquisition Corp., and Company (the "Merger
Agreement"). Executive shall be covered by Company benefit plans in existence
as of the date hereof until such plans are merged into the plans of Parent, and
Executive shall be entitled to all benefits to be provided to Company employees
pursuant to the Merger Agreement.
2.4 General Business Expenses. The Company shall pay or reimburse the
Executive for all expenses reasonably and necessarily incurred by the Executive
during the Term in the performance of the Executive's services under this
Agreement. Such payment shall be made upon presentation of such documentation
as the Company customarily requires of its senior executive employees prior to
making such payments or reimbursements.
3. Proprietary Matters.
3.1 Confidential Information; Personal Relationships. The Executive
acknowledges that the Company has a legitimate and continuing proprietary
interest in the protection of its confidential information and that it has
invested substantial sums and will continue to invest substantial sums to
develop, maintain and protect confidential information. The Executive agrees
that the Executive shall keep secret and retain in strictest confidence, and
shall not use for the benefit of himself or others all confidential matters
directly relating to the Company and its business, including without
limitation, financial information, trade secrets, customer lists, details of
client or consultant contracts, pricing policies, operational methods,
marketing plans or strategies, product development techniques or plans,
business acquisition plans, new personnel acquisition plans, technical
processes, designs and design projects, inventions and research projects of the
Company, its affiliates, or any entity which may hereafter become an affiliate
thereof.
3.2 Property of the Company. All memoranda, notes, lists, records,
engineering drawings, technical specifications and related documents and other
documents or papers (and all copies thereof) relating to the Company, including
such items stored in computer memories, microfiche or by any other means, made
or compiled by or on behalf of the Executive after the date hereof, or made
available to the Executive after the date hereof relating to the Company, its
affiliates or any entity which may hereafter become an affiliate thereof, shall
be the property of the Company, and shall be delivered to the Company promptly
upon the termination of the Executive's employment with the Company or at any
other time upon request; provided, however, that Executive's address books,
diaries and rolodex files shall be deemed to be property of the Executive.
3.3 Original Material. The Executive agrees that any inventions,
discoveries, improvements, ideas, concepts or original works of authorship
relating directly to the business of the Company, including without limitation
computer systems, programs and manufacturing techniques, whether or not
protectable by patent or copyright, that have been originated, developed or
reduced to practice by the Executive alone or jointly with others during the
Executive's employment with the Company shall be the property of and belong
exclusively to the Company. The Executive shall promptly and fully disclose to
the Company the origination or development by the Executive of any such
material and shall provide the Company with any information that it may
reasonably request about such material.
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4. Termination.
4.1 Termination upon Death. If the Executive dies during the Term,
this Employment Agreement shall terminate, except that the Executive's legal
representatives shall be entitled to receive the Annual Salary and bonuses, if
any, earned up to the date of the Executive's death, plus any Benefits accrued
up to the date of Executive's death.
4.2 Termination By Company With Cause. The Company has the right, at
any time, subject to all of the provisions hereof, exercisable by serving
notice, effective on or after the date of service of such notice as specified
therein, to terminate the Executive's employment under this Agreement and
discharge the Executive with Cause. As used in this Section 4.2, the term
"Cause" shall mean and include (i) chronic alcoholism or controlled substance
abuse as determined by a doctor mutually acceptable to the Company and the
Executive, (ii) an act of proven fraud or dishonesty on the part of the
Executive with respect to the Company or its subsidiaries; (iii) knowing and
material failure by the Executive to comply with material applicable laws and
regulations relating to the business of the Company or its subsidiaries; (iv)
the Executive's material and continuing failure to perform (as opposed to
unsatisfactory performance) his duties hereunder or a material breach by the
Executive of this Agreement except, in each case, where such failure or breach
is caused by the illness or other similar incapacity or disability of the
Executive; or (v) conviction of a misdemeanor involving moral turpitude or a
felony. Prior to the effectiveness of termination for Cause under subclause
(i), (ii), (iii) or (iv) above, the Executive shall be given 30 days' prior
notice from the Board specifically identifying the reasons which are alleged to
constitute cause for any termination hereunder and an opportunity to be heard
by the Board in the event Executive disputes such allegations. If Executive is
terminated for Cause, the Company's obligation to the Executive shall be
limited solely to the payment of unpaid Annual Salary accrued, bonuses earned,
if any, and any Benefits vested up to the effective date specified in the
Company's notice of termination.
4.3 Termination By Company Without Cause. The Company may terminate
Executive's employment without Cause; provided, in the event of termination by
the Company without Cause, the Company shall be obligated (but shall only be
obligated) to Executive for the payment, at the times and upon the terms
provided for herein, of the Executive's Annual Salary for the number of full
months remaining in the Term of this Agreement had the Executive not been so
terminated, based on the Annual Salary of the Executive in effect on the date
of termination (or, if the Company has reduced the Executive's Annual Salary in
breach of this Agreement, the Executive's Annual Salary before such reduction),
and assuming such Annual Salary would remain in effect for the full Term
together with all Benefits awarded or accrued and bonuses earned, if any, up to
the date of termination.
4.4 Termination By Executive. Any termination by Executive of his
employment by the Company (i) shall entitle the Company to discontinue payment
of all Annual Salary, bonuses, if any, and Benefits accruing from and after the
date of such termination, and (ii) shall not terminate the obligations of
Executive under Section 3 or the rights of the Company under Section 3.
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4.5 Suspension upon Disability. If during the Term the Executive
becomes physically or mentally disabled, whether totally or partially, as
evidenced by the written statement of a competent physician licensed to
practice medicine in the United States who is mutually acceptable to the
Company and the Executive or his closest relative if he is not then able to
make such a choice, so that the Executive is unable substantially to perform
his services hereunder for (i) a period of sixty days, or (ii) for shorter
periods aggregating sixty days during any twelve-month period, the Company may
at any time thereafter, by written notice to the Executive, suspend the Term of
the Executive's employment hereunder and discontinue payments of the Annual
Salary for the duration of the disability. The Executive shall be entitled to
the full compensation payable to him hereunder for periods of disability
shorter than the periods specified in clauses (i) and (ii) of the sentence.
Nothing contained in this Section 4.5 shall be deemed to extend the Term or to
constitute a breach of this Agreement.
5. Insurance. The Company may, from time to time, apply for and take out, in
its own name and at its own expense, naming itself or others as the designated
beneficiary (which it may change from time to time), policies for life, health,
accident, disability or other insurance upon the Executive in any amount or
amounts that it may deem necessary or appropriate to protect its interest. The
Executive agrees to aid the Company in procuring such insurance by submitting
to medical examinations and by filling out, executing and delivering such
applications and other instruments in writing as may reasonably be required by
an insurance company or companies to which any application or applications for
insurance may be made by or for the Company.
6. Other Provisions.
6.1 Certain Definitions. As used in this Agreement, the following
terms have the following meanings unless the context otherwise requires:
(i) "affiliate" with respect to the Company means any other person
controlled by or under common control with the Company but shall not include
any stockholder or director of the Company, as such.
(ii) "person" means any individual, corporation, partnership, firm,
joint Company, association, joint-stock company, trust, unincorporated
organization, governmental or regulatory body or other entity.
6.2 Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission
or, if mailed, on the date of actual receipt thereof, as follows:
(i) if to the Company, to:
Cliffs Drilling Company
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0000 Xxxxx Xxxxxx, Xxxxx 000
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Xxxxxxx, Xxxxx 00000
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Attention: Chief Executive Officer
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(ii) if to the Executive, to:
Xxxxxx X. Xxxxxxx
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00000 Xxxxxx Xxx Xxxxx
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Xxxxxxx, XX 00000
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Any party may change its address for notice hereunder by notice to the other
party hereto.
6.3 Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior agreements, written or oral, with respect thereto.
6.4 Waivers and Amendments. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms and conditions hereof may be
waived, only by a written instrument signed by the parties or, in the case of a
waiver, by the party waiving compliance. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right, power
or privilege hereunder, nor any single or partial exercise of any right, power
or privilege hereunder, preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.
6.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas (without giving effect to the
choice of law provisions thereof).
6.6 Assignment. This Agreement, and any rights and obligations
hereunder, may not be assigned by the Executive and may be assigned by the
Company only to a successor by merger or purchasers of substantially all of the
assets of the Company.
6.7 Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
6.8 Headings. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
6.9 Affiliates. For purposes of this Agreement, the term "Company"
shall include the direct and indirect wholly owned subsidiaries of R&B Falcon
Corporation and their successors, it being understood that R&B Falcon
Corporation conducts its activities primarily through subsidiaries.
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Executed to be effective as of the date hereof.
CLIFFS DRILLING COMPANY
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. Xxxxxxx
Title: President
/s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
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