EXHIBIT 10.2
AGREEMENT
THIS AGREEMENT is entered into this 29th day of July 2003 by and
between GLOBALSANTAFE CORPORATION, a Cayman Islands corporation (the "Company"),
and ________________ (the "Executive").
WHEREAS, the Company's Board of Directors (the "Board") has determined
that it is in the best interests of the Company and its shareholders to ensure
that the Company and its affiliates will have the continued dedication of the
Executive, notwithstanding the possibility, threat or occurrence of a
termination of the Executive's employment in certain circumstances, including
following a Change in Control as defined herein; and
WHEREAS, the Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened termination of the Executive's employment in
such circumstances and to provide the Executive with compensation and benefits
arrangements upon such a termination which ensure that the compensation and
benefits expectations of the Executive will be satisfied and which are
competitive with those of other corporations;
NOW, THEREFORE, in order to accomplish these objectives, the Board has
caused the Company to enter into this Agreement with the Executive, and it is
hereby agreed as follows:
1. Definitions. For purposes of this Agreement, the following terms will have
the following meanings unless otherwise expressly provided in this Agreement:
(a) Beneficiary. "Beneficiary" means any individual, trust or
other entity named by the Executive to receive the severance
payments and benefits payable hereunder in the event of the
death of the Executive during the Salary Continuation Period
or CIC Salary Continuation Period (both as defined hereunder).
Executive may designate a Beneficiary to receive such payments
and benefits by completing a form provided by the Company and
delivering it to the Company's Secretary. The Executive may
change the Executive's designated Beneficiary at any time
(without the consent of any prior Beneficiary) by completing
and delivering to the Company a new beneficiary designation
form. If a Beneficiary has not been designated by the
Executive, or if no designated Beneficiary survives the
Executive, then the payment and benefits provided under this
Agreement, if any, will be paid to the Executive's estate.
(b) Cause. "Cause" means an act or acts of misconduct harmful to
the Company or any of its affiliates, including without
limitation any violation of any policy regarding the use and
possession of alcohol, illegal drugs, firearms or dangerous
weapons that is applicable to the employees of the Company and
its affiliates generally, and will not mean inadequate
performance or incompetence.
(c) Change in Control. A "Change in Control" means the occurrence
of any of the following events:
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d) or 14(d) of the
U.S. Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange
Act) of 35% or more of either (A) the then
outstanding ordinary shares of the Company or of any
affiliate of the Company by which the Executive is
employed or which directly or indirectly owns or
controls any affiliate by which the Executive is
employed (the "Outstanding Company Ordinary Shares")
or (B) the combined voting power of the then
outstanding voting securities of the Company or of
any affiliate of the Company by which the Executive
is employed or which directly or indirectly owns or
controls any affiliate by which the Executive is
employed entitled to vote generally in the election
of directors (the "Outstanding Company Voting
Securities"); provided, however, that the following
acquisitions will not constitute a Change in Control:
(I) any acquisition by the Company or by any
affiliate of the Company that remains under the
Company's control, (II) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or by any affiliate
controlled by the Company, (III) the sale, exchange,
transfer or other disposition of substantially all of
the assets of the Company or of any affiliate of the
Company by which the Executive is employed or which
directly or indirectly owns or controls any affiliate
by which the Executive is employed to the Chief
Executive Officer of the Company or of any affiliate
of the Company by which the Executive is employed or
which directly or indirectly owns or controls any
affiliate by which the Executive is employed (the
"CEO"), alone or with other officers, or a merger,
consolidation or other reorganization involving the
Company or any affiliate of the Company by which the
Executive is employed or which directly or indirectly
owns or controls any affiliate by which the Executive
is employed and the CEO, alone or with other
officers, or any entity in which the CEO (alone or
with other officers) has, directly or indirectly, a
substantial equity or ownership interest, (IV) a
transaction otherwise commonly referred to as a
-2-
"management leveraged buyout," or (V) any acquisition
by any corporation pursuant to a reorganization,
merger or consolidation, if, following such
reorganization, merger or consolidation, the
conditions described in clauses (I), (II), (III), or
(IV) are satisfied; or
(ii) Individuals who, as of the date hereof, constitute
the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the
Board; provided, however, that any individual
becoming a director subsequent to the date hereof
whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at
least a majority of the directors then comprising the
Incumbent Board will 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
either an actual or threatened election contest
(meaning a solicitation of the type that would be
subject to Rule 14a-12(c) of Regulation 14A under the
Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf
of a Person other than the Board; or
(iii) Approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case
unless, following such reorganization, merger or
consolidation, (A) more than 50% of, respectively,
the then outstanding common or ordinary shares of the
corporation resulting from such reorganization,
merger or consolidation and the combined voting power
of the then outstanding voting securities of such
corporation entitled to vote generally in the
election of directors is then beneficially owned,
directly or indirectly, by all or substantially all
of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding
Company Ordinary Shares and Outstanding Company
Voting Securities immediately prior to such
reorganization, merger or consolidation in
substantially the same proportions as their
ownership, immediately prior to such reorganization,
merger or consolidation, of the Outstanding Company
Ordinary Shares and Outstanding Company Voting
Securities, as the case may be, (B) no Person
(excluding the Company, any affiliate of the Company
that remains under the Company's control, any
employee benefit plan (or related trust) sponsored or
maintained by the Company or by any affiliate
controlled by the Company or such corporation
resulting from such reorganization, merger or
consolidation, and any Person beneficially owning,
immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 35% or more of
the Outstanding Company Ordinary Shares or
Outstanding Company Voting Securities, as the case
may be)
-3-
beneficially owns, directly or indirectly, 35% or
more of, respectively, the then outstanding common or
ordinary shares of the corporation resulting from
such reorganization, merger or consolidation or the
combined voting power of the then outstanding voting
securities of such corporation entitled to vote
generally in the election of directors, and (C) at
least a majority of the members of the board of
directors of the corporation resulting from such
reorganization, merger or consolidation were members
of the Incumbent Board at the time of the execution
of the initial agreement providing for such
reorganization, merger or consolidation; or
(iv) Approval by the shareholders of the Company of any
plan or proposal which would result directly or
indirectly in (A) a complete liquidation or
dissolution of the Company or of any affiliate of the
Company by which the Executive is employed, or (B)
the liquidation, transfer, sale or other disposition
of all or substantially all of the assets of the
Company or of any affiliate of the Company by which
the Executive is employed or which directly or
indirectly owns or controls any affiliate by which
the Executive is employed, other than to a
corporation with respect to which following such sale
or other disposition (I) more than 50% of,
respectively, the then outstanding common or ordinary
shares of such corporation and the combined voting
power of the then outstanding voting securities of
such corporation entitled to vote generally in the
election of directors is then beneficially owned,
directly or indirectly, by all or substantially all
of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding
Company Ordinary Shares and Outstanding Company
Voting Securities immediately prior to such sale or
other disposition in substantially the same
proportions as their ownership, immediately prior to
such sale or other disposition, of the Outstanding
Company Ordinary Shares and Outstanding Company
Voting Securities, as the case may be, (II) no Person
(excluding the Company, any affiliate of the Company
that remains under the Company's control, any
employee benefit plan (or related trust) sponsored or
maintained by the Company or by any affiliate
controlled by the Company or such corporation, and
any Person beneficially owning, immediately prior to
such sale or other disposition, directly or
indirectly, 35% or more of the Outstanding Company
Ordinary Shares or Outstanding Company Voting
Securities, as the case may be) beneficially owns,
directly or indirectly, 35% or more of, respectively,
the then outstanding common or ordinary shares of
such corporation or the combined voting power of the
then outstanding voting securities of such
corporation entitled to vote generally in the
election of
-4-
directors, and (III) at least a majority of the
members of the board of directors of such corporation
were members of the Incumbent Board at the time of
the execution of the initial agreement or action of
the Board providing for such sale or other
disposition of assets.
(d) Disability. "Disability" means the Executive's total
disability as defined under the terms of the Company's
long-term disability plan in effect on the Date of
Termination.
(e) Effective Period. The "Effective Period" means the 36-month
period following any Change in Control.
(f) Good Reason. "Good Reason" means, unless the Executive has
consented in writing thereto, the occurrence of any of the
following:
(i) A reduction in the Executive's title, or one or more
reductions in the Executive's authority, duties or
responsibilities which when considered in the
aggregate are material, excluding for this purpose
any such reductions remedied by the Company or the
Executive's employer promptly after receipt of notice
thereof given by the Executive;
(ii) A reduction by the Company or the Executive's
employer in the Executive's base salary;
(iii) The relocation of the Executive's office to a
location more than 40 miles outside Houston, Texas;
(iv) Following a Change in Control, unless a plan
providing a substantially similar compensation or
benefit is substituted, (A) the failure by the
Company or any of its affiliates to continue in
effect any material fringe benefit or compensation
plan, retirement plan, life insurance plan, health
and accident plan or disability plan in which the
Executive is participating prior to the Change in
Control, or (B) the taking of any action by the
Company or any of its affiliates which would
adversely affect the Executive's participation in or
materially reduce the Executive's benefits under any
of such plans or deprive the Executive of any
material fringe benefit; or
(v) Following a Change in Control, the failure of the
Company or the affiliate of the Company by which the
Executive is employed, or any affiliate which
directly or indirectly owns or controls any affiliate
by which the Executive is employed, to obtain the
assumption in writing of the Company's obligation to
perform this Agreement by any successor to all or
substantially all of the assets of the
-5-
Company or such affiliate within 15 days after a
reorganization, merger, consolidation, sale or other
disposition of assets of the Company or such
affiliate.
2. Term. The term ("Term") of this Agreement will commence on the date first
above written (the "Commencement Date") and will end when the Executive is no
longer an employee of the Company and its affiliates and has received all
severance payments and benefits to which the Executive is entitled under this
Agreement.
3. Notice of Termination. Any termination of the Executive's employment by the
Company, or by any affiliate of the Company by which the Executive is employed,
for Cause, or by the Executive for Good Reason will be communicated by Notice of
Termination to the other party hereto given in accordance with Paragraph 12 of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (a) indicates the specific termination provision in this
Agreement relied upon, (b) 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 (c) if the Date
of Termination (as defined below) is other than the date of receipt of such
notice, specifies the employment termination date. The failure to set forth in
the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause will not waive any right of the party giving the
Notice of Termination hereunder or preclude such party from asserting such fact
or circumstance in enforcing its rights hereunder.
4. Date of Termination. "Date of Termination" means the date of receipt of the
Notice of Termination or any later date specified therein, or the Executive's
last date as an active employee of the Company and its affiliates before a
termination of employment due to death or disability, or a termination other
than for Cause, as the case may be.
5. Obligations of the Company Upon Termination of Executive's Employment.
(a) Termination of Employment for Good Reason or Other Than for
Cause. The Company will pay the following severance payments
and benefits to the Executive upon the termination of the
Executive's employment with the Company and its affiliates, by
the Company or by any affiliate of the Company by which the
Executive is employed, other than for Cause, or by the
Executive for Good Reason within six months following the
occurrence of any event constituting Good Reason:
(i) Cash in the amount of the Executive's annual base
salary through the Date of Termination to the extent
not theretofore paid;
-6-
(ii) Any and all compensation deferred under a deferred
compensation plan or program of the Company or any of
its affiliates in a lump sum cash payment;
(iii) Cash in an amount equal to the product of two times
the Executive's annual base salary at the rate in
effect at the time Notice of Termination is given,
payable in equal monthly installments over a period
of two years following the Date of Termination (the
"Salary Continuation Period");
(iv) If recommended specifically in the Executive's case
by the Company's Chief Executive Officer and approved
specifically in the Executive's case by the Board's
Compensation Committee, in their sole and absolute
discretion, a lump sum cash amount equal to the sum
of actual bonuses paid or payable, including any
amount deferred (whether mandatory or elective), to
the Executive in the two years immediately prior to
the Date of Termination, payable within 30 days after
the Date of Termination;
(v) The continuation of the provision of health
insurance, dental insurance and life insurance
benefits for the Salary Continuation Period to the
Executive and the Executive's family at least equal
to those which would have been provided to them in
accordance with the plans, programs, practices and
policies of the Company as in effect and applicable
generally to other peer executives and their families
during the 90-day period immediately preceding the
Date of Termination; provided, however, that if the
Executive becomes re-employed with another employer
and is eligible to receive medical or other welfare
benefits under another employer provided plan, the
medical and other welfare benefits described herein
will be secondary to those provided under such other
plan during such applicable period of eligibility;
(vi) The continued accrual of years of service under any
and all defined benefit retirement plans sponsored or
maintained by the Company or by any affiliate
controlled by the Company in effect on and in which
the Executive was a participant on the Date of
Termination, in each case for the Salary Continuation
Period, but in no event beyond the date the Executive
or Executive's spouse begins to receive a benefit
under any such plan; and
(vii) The immediate vesting of benefits under the Company's
Executive Supplemental Retirement Plan as amended and
in effect at the Date of Termination, as if the
Executive had attained at least age 55 and at least 5
years of service, thereby entitling the Executive to
-7-
Normal Retirement Benefits commencing at any time on
or after the Executive's Normal Retirement Date or
Early Retirement Benefits commencing at any time on
or after the Executive attains or would have attained
age 55, in each case as such term is defined in said
plan; and, to the extent permitted by applicable
governmental laws and regulations, immediate
eligibility for any and all non-pension
post-retirement benefits under any and all plans and
policies of the Company or any affiliate of the
Company, as amended and in effect at the Date of
Termination, as if the Executive had attained at
least age 55 and regardless of whether or not the
Executive actually retires under any pension or
retirement plan, provided, however, that the
Executive must also meet any and all other
requirements under such plans and policies in order
to participate in such benefits.
(b) Termination of Employment Following a Change in Control. If,
during the Effective Period, the Company or any affiliate of
the Company by which the Executive is employed terminates the
Executive's employment, other than for Cause, or any event
constituting Good Reason occurs and the Executive terminates
employment with the Company for Good Reason within six months
after such occurrence, the Company will pay the following to
the Executive:
(i) Cash in the amount of the Executive's annual base
salary through the Date of Termination to the extent
not theretofore paid;
(ii) Any and all compensation deferred under a deferred
compensation plan or program of the Company or any of
its affiliates in a lump sum cash payment;
(iii) Cash in an amount equal to the product of three times
the Executive's annual base salary at the greater of
(A) the rate in effect at the time Notice of
Termination is given or (B) the rate in effect
immediately preceding the Change in Control, payable
in equal monthly installments over a period of three
years following the Date of Termination (the "CIC
Salary Continuation Period");
(iv) A lump sum cash amount equal to the product of three
times the highest total bonus paid or payable in any
one year, including any amounts deferred (whether
mandatory or elective), to the Executive in the three
years immediately prior to the Date of Termination;
(v) The continuation of the provision of health
insurance, dental insurance and life insurance
benefits for the CIC Salary Continuation Period to
the Executive and the Executive's family at
-8-
least equal to those which would have been provided
to them in accordance with the plans, programs,
practices and policies of the Company as in effect
and applicable generally to other peer executives and
their families during the 90-day period immediately
preceding the Effective Period or on the Date of
Termination, at the election of the Executive;
provided, however, that if the Executive becomes
re-employed with another employer and is eligible to
receive medical or other welfare benefits under
another employer provided plan, the medical and other
welfare benefits described herein will be secondary
to those provided under such other plan during such
applicable period of eligibility;
(vi) The continued accrual of years of service under any
and all defined benefit retirement plans sponsored or
maintained by the Company or by any affiliate
controlled by the Company in effect on and in which
the Executive was a Participant on the Date of
Termination, in each case for the CIC Salary
Continuation Period, but in no event beyond the date
the Executive or Executive's spouse begins to receive
a benefit under any such plan; and
(vii) The immediate vesting of benefits under the Company's
Executive Supplemental Retirement Plan as amended and
in effect at either the Date of Termination or
immediately preceding the Change in Control, at the
election of the Executive, as if the Executive had
attained at least age 55 and at least 5 years of
service, thereby entitling the Executive to Normal
Retirement Benefits commencing at any time on or
after the Executive's Normal Retirement Date or Early
Retirement Benefits commencing at any time on or
after the Executive attains or would have attained
age 55, in each case as such term is defined in said
plan; and, to the extent permitted by applicable
governmental laws and regulations, immediate
eligibility for any and all non-pension
post-retirement benefits under any and all plans and
policies of the Company or any affiliate of the
Company, as amended and in effect at either the Date
of Termination or immediately preceding the Change in
Control, at the election of the Executive, as if the
Executive had attained at least age 55 and regardless
of whether or not the Executive actually retires
under any pension or retirement plan, provided,
however, that the Executive must also meet any and
all other requirements under such plans and policies
in order to participate in such benefits.
(c) Termination of Employment Upon Executive's Disability. In the
event of the termination of the Executive's employment with
the Company and its affiliates due to the Executive's
Disability, the Company will pay to the
-9-
Executive the severance payments and benefits listed in
paragraph 5(a) of this Agreement; provided, however, that the
amounts that the Executive would otherwise be entitled to
receive under this Agreement in the amount of or otherwise in
respect of the Executive's annual base salary will be reduced
by the amount of any disability payments received by the
Executive that have been funded or insured wholly or in part
at the expense of the Company or any affiliate of the Company.
(d) Effect of Death. In the event of the Executive's death during
the Salary Continuation Period or the CIC Salary Continuation
Period, the severance payments and benefits listed in
paragraphs 5(a) or 5(b) of this Agreement, as applicable, will
be paid to the Executive's Beneficiary for remainder of the
Salary Continuation Period or the CIC Salary Continuation
Period, as the case may be.
(e) "Basic Earnings" Under Retirement Plans. Any and all amounts
paid under this Agreement in the amount of or otherwise in
respect of the Executive's annual base salary and bonuses,
whether or not deferred under a deferred compensation plan or
program, are intended to be and will be "Basic Earnings" for
purposes of determining Basic Earnings under any and all
retirement plans sponsored or maintained by the Company or by
any affiliate controlled by the Company.
6. Acceleration of Restricted Stock Awards Upon a Change in Control. Upon a
Change in Control, all conditions, contingencies and other restrictions will be
removed from the full number of shares of stock subject to any and all
performance stock and other restricted stock grants, if any, that have been
awarded to the Executive under any and all stock plans of the Company, and said
full number of shares will immediately vest and be issued and delivered to the
Executive free of any and all conditions, contingencies and other restrictions.
7. Effect of Retirement or Attainment of Age 65. In the event the Executive or
the Executive's spouse begins to receive a benefit under one or more retirement
plans sponsored or maintained by the Company or by any affiliate of the Company
before the Executive becomes or would have become eligible for Normal Retirement
under any such plan at age 65, the amounts that the Executive or the Executive's
spouse would otherwise be entitled to receive under this Agreement in the amount
of or otherwise in respect of the Executive's annual base salary will be reduced
by the amount of any payments received by the Executive or the Executive's
spouse under such plan or plans. Furthermore, in no event will the severance
payments or benefits provided for under this Agreement be paid or otherwise
provided to the Executive, the Executive's spouse, or the Beneficiary beyond the
date the Executive becomes or would have become eligible for normal retirement
at age 65 under one or more of the retirement plans sponsored or maintained by
the Company or any affiliate of the Company.
-10-
8. Mitigation of Damages. The Executive will not be required to mitigate damages
or the amount of any payment provided for under this Agreement by seeking other
employment or otherwise. Except as otherwise specifically provided in this
Agreement, the amount of any payment provided for under this Agreement will not
be reduced by any compensation earned by the Executive as the result of
self-employment or employment by another employer or otherwise.
9. Tax Effect.
(a) If the Company's independent accounting firm determines that
any payment or distribution by the Company or 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, and whether paid or payable or
distributed or distributable in cash, stock or any other form)
(a "Payment") constitutes a "parachute payment" as defined in
Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code") (or any successor provision thereto) ("Parachute
Payment") which would be subject to the excise tax imposed by
Section 4999 of the Code, 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
"Basic Excise Tax"), then the Executive will be entitled to
receive an additional payment (a "Gross-Up Payment") in an
amount which is sufficient to cover any and all federal, state
and local income taxes and Medicare tax applicable to the
Gross-Up Payment, including, without limitation, any further
excise tax imposed by Section 4999 of the Code on or with
respect to the Gross-Up Payment, plus payment of the Basic
Excise Tax.
(b) Subject to the provisions of paragraph 9(d) below, all
determinations required to be made under this paragraph 9,
including whether and when a Gross-Up Payment is required, the
amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determinations, will be made by
the Company's independent accounting firm, which will provide
detailed supporting calculations both to the Company and the
Executive within 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 the Company. All fees and
disbursements of the Company's independent accounting firm
will be paid by the Company.
(c) Any Gross-Up Payment will be paid by the Company to the
Executive within five days of the Company's receipt of the
determination of the Company's independent accounting firm. If
such firm determines that no Basic Excise Tax is payable by
the Executive, it will furnish the Executive with a written
opinion that the Executive has substantial authority not to
report any Basic Excise Tax on the Executive's Federal income
tax return.
-11-
If the Executive is subsequently required to make a payment of
any Basic Excise Tax, then the Company's independent
accounting firm will determine the amount of the corresponding
Gross-Up Payment, and any such Gross-Up Payment will be
promptly paid by the Company to or for the benefit of the
Executive. The fees and disbursements of the Company's
independent accounting firm will be paid by the Company.
(d) The Executive will notify the Company in writing within 15
days of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of a
Gross-Up Payment. If the Company notifies the Executive in
writing that it desires to contest such claim and that it will
bear the costs and provide the indemnification as required by
this paragraph, the Executive will:
(i) give the Company any information reasonably requested
by the Company relating to such claim,
(ii) take such action in connection with contesting such
claim as the Company reasonably requests in writing
from time to time, including, without limitation,
accepting legal representation with respect to such
claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in order to
effectively contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the
Company will bear and pay directly all costs and
expenses (including additional interest and
penalties) incurred in connection with such contest
and will indemnify and hold the Executive harmless,
on an after-tax basis, for any Basic 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. The
Company will control all proceedings taken in
connection with such contest; provided, however, that
if the Company directs the Executive to pay such
claim and xxx for a refund, the Company will advance
the amount of such payment to the Executive, on an
interest-free basis, and will indemnify and hold the
Executive harmless, on an after-tax basis, from any
Basic 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.
-12-
(e) If, after the receipt by the Executive of an amount advanced
by the Company pursuant to paragraph 9(d)(iv), the Executive
becomes entitled to receive any refund with respect to such
claim, the Executive will, within 10 days of receipt thereof,
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 paragraph 9(d)(iv), a
determination is made that the Executive will not be entitled
to any refund with respect to such claim and the Company does
not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after
such determination, then such advance will be forgiven and
will not be required to be repaid and the amount of such
advance will offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
10. Confidential Information; Non-solicitation. During all periods while the
Executive is an employee of the Company or any of its affiliates and during any
Salary Continuation Period or CIC Salary Continuation Period, the Executive
covenants and agrees as follows:
(a) to hold in a fiduciary capacity for the benefit of the Company
and its affiliates all secret, proprietary or confidential
material, knowledge, data or any other information relating to
the Company or any of its affiliated companies and their
respective businesses ("Confidential Information"), which has
been obtained by the Executive during the Executive's
employment by the Company or any of its affiliated companies
and that has not been, is not now and hereafter does not
become public knowledge (other than by acts by the Executive
or representatives of the Executive in violation of this
Agreement), and will not, without the prior written consent of
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 the Company and those
designated by it; the Executive further agrees to return to
the Company any and all records and documents (and all copies
thereof) and all other property belonging to the Company or
relating to the Company, its affiliates or their businesses,
upon termination of Executive's employment with the Company
and its affiliates; and,
(b) not to solicit or entice any other employee of the Company or
its affiliates to leave the Company or its affiliates to go to
work for any other business or organization which is in direct
or indirect competition with the Company or any of its
affiliates, nor request or advise a customer or client of the
Company or its affiliates to curtail or cancel such customer's
business relationship with the Company or its affiliates.
-13-
11. Rights and Remedies Upon Breach. If the Executive breaches, or threatens to
commit a breach of, any of the provisions contained in paragraph 10 of this
Agreement (the "Restrictive Covenants"), the Company will have the following
rights and remedies, each of which rights and remedies will be independent of
the others and severally enforceable, and each of which is in addition to, and
not in lieu of, any other rights and remedies available to the Company under law
or in equity:
(a) Specific Performance. The right and remedy to have the
Restrictive Covenants specifically enforced by any court of
competent jurisdiction, it being agreed that any breach or
threatened breach of the Restrictive Covenants would cause
irreparable injury to the Company and that money damages would
not provide an adequate remedy to the Company.
(b) Accounting. The right and remedy to require the Executive to
account for and pay over to the Company all compensation,
profits, monies, accruals, increments or other benefits
derived or received by the Executive as the result of any
action constituting a breach of the Restrictive Covenants.
(c) Cessation of Severance Benefits. The right and remedy to cease
any further severance, benefit or other compensation payments
under this Agreement to the Executive or the Beneficiary from
and after the commencement of such breach by the Executive.
The Executive hereby acknowledges and agrees that the Restrictive Covenants are
reasonable and valid in duration and in all other respects. If any court
determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive Covenants will not
thereby be affected and will be given full effect without regard to the invalid
portions.
12. Notices. Any notice provided for in this Agreement will be given in writing
and will be delivered personally, telegraphed, telexed, sent by facsimile
transmission or sent by certified, registered or express mail, postage prepaid.
Any such notice will be deemed given when so delivered personally, telegraphed,
telexed or sent by facsimile transmission, or, if mailed, on the date of actual
receipt thereof. Notices will be properly addressed to the parties at their
respective addresses set forth below or to such other address as either party
may later specify by notice to the other in accordance with the provisions of
this paragraph:
If to the Company:
GlobalSantaFe Corporation
00000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: General Counsel
-14-
If to the Executive:
--------------------------------
--------------------------------
--------------------------------
13. 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, including, without
limitation, any and all prior employment or severance agreements and related
amendments entered into between the Company and the Executive. Furthermore, the
severance payments and benefits provided for under this Agreement are separate
and apart from and, to the extent they are actually paid, will be in lieu of any
payment under any plan or policy of the Company or any of its affiliates
regarding severance payments generally.
14. 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 hereto 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 will operate as a waiver thereof, nor
will 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.
15. Governing Law. This Agreement will 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), where the employment of the Executive will be
deemed, in part, to be performed, and enforcement of this Agreement or any
action taken or held with respect to this Agreement will be taken in the courts
of appropriate jurisdiction in Houston, Texas.
16. 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 any
successor in interest, whether by merger, consolidation, acquisition or the
like, or to purchasers of substantially all of the assets of the Company.
17. Binding Agreement. This Agreement will inure to the benefit of and be
binding upon the Company and its respective successors and assigns and the
Executive and the Executive's legal representatives.
18. Counterparts. This Agreement may be executed in separate counterparts, each
of which when so executed and delivered will be deemed an original, but all of
which together will constitute one and the same instrument.
-15-
19. Headings. The headings in this Agreement are for reference purposes only and
will not in any way affect the meaning or interpretation of this Agreement.
20. Authorization. The Company represents and warrants that the Board of
Directors of the Company has authorized the execution of this Agreement.
21. Validity. The invalidity or unenforceability of any provisions of this
Agreement will not affect the validity or enforceability of any other provisions
of this Agreement, which will remain in full force and effect.
22. Tax Withholding. The Company will have the right to deduct from all benefits
and/or payments made under this Agreement to the Executive any and all taxes
required by law to be paid or withheld with respect to such benefits or
payments.
23. No Contract of Employment. Nothing contained in this Agreement will be
construed as a contract of employment between the Company or any of its
affiliates and the Executive, as a right of the Executive to be continued in the
employment of the Company or any of its affiliates, or as a limitation of the
right of the Company or any of its affiliates to discharge the Executive with or
without cause.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
The Company The Executive
GLOBALSANTAFE CORPORATION
-----------------------------------
By: [Name]
-------------------------------
[Name]
[Title]
-16-
