EXHIBIT 10.5
AGREEMENT
THIS AGREEMENT ("Agreement") is entered into between Transocean Offshore
Deepwater Drilling Inc. (the "Company") and W. Xxxxxx Xxxxxxx ("Executive"),
dated as of October 8, 2000 (the "Effective Date").
WHEREAS, the Company, and Executive have previously entered into an
Employment Agreement dated effective May 14, 1999 (the "Employment Agreement");
and
WHEREAS, Transocean Offshore Inc., a Cayman Islands exempted company
limited by shares (predecessor to Transocean Sedco Forex Inc.) (the "Parent"),
agreed to guarantee the obligations of the Company under the Employment
Agreement; and
WHEREAS, a "Change of Control" (within the meaning of the Employment
Agreement) of Parent occurred on December 31, 1999 as a result of the
transactions contemplated by the Agreement and Plan of Merger among Schlumberger
Limited, Sedco Forex Holdings Limited and the Parent dated as of July 12, 1999
(the "Merger"); and
WHEREAS, such a "Change of Control" gives Executive certain rights under
the terms of the Employment Agreement; and
WHEREAS, the Company and Executive mutually agree to the revocation of
Executive's rights under the Employment Agreement in exchange for the
consideration set forth herein.
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. PAYMENT TO EXECUTIVE. Subject to the terms of this Agreement, the Company
agrees to pay to Executive an aggregate amount of $2,370,587 ("the Principal
Amount"), together with accrued interest. This amount shall be paid in three
annual installments, with one-third of the Principal Amount, plus accrued
interest, paid on the first business day following each of January 1, 2002,
January 1, 2003 and January 1, 2004. Interest shall accrue on the outstanding
balance from January 1, 2001, through the date of each payment, at 120% of the
short-term Applicable Federal Rate for January, 2001, compounded semi-annually,
as published by the Internal Revenue Service for purposes of Section 1274(d) of
the Internal Revenue Code of 1986. The Company agrees that Executive shall
continue to have the protection of Section 9 of the Employment Agreement during
the term of this Agreement, and the provisions of Section 9 of the Employment
Agreement are hereby incorporated by reference into this Agreement.
2. FORFEITURE OF PAYMENT.
a. Voluntary Termination. If Executive voluntarily terminates employment with
the Company and all companies controlled by, controlling or under common control
with the Company (the "TSF Group"), for any reason other than Disability or
Constructive Termination, prior to the first business day following January 1,
2004 (the "Expiration Date"), the Executive shall have no right to any further
payments under Paragraph 1 and such unpaid installments will be forfeited.
b. Cause. If Executive's employment with the TSF Group is terminated for Cause
prior to the Expiration Date, the Executive shall have no right to any further
payments under Paragraph 1 and such unpaid installments will be forfeited.
3. INVOLUNTARY TERMINATION, CONSTRUCTIVE TERMINATION, DEATH AND DISABILITY. If
Executive's employment is terminated prior to the Expiration Date (i) by the TSF
Group for any reason other than Cause, (ii) by Executive due to a Constructive
Termination, or (iii) by reason of Executive's Disability or death, the Company
shall pay to Executive, within 30 days after the Date of Termination, a lump sum
cash payment equal to the unpaid Principal Amount, plus accrued interest to the
date of payment, as determined pursuant to Paragraph 1. The Company shall also
pay any amounts due pursuant to Section 9 of the Employment Agreement.
4. EFFECT ON EMPLOYMENT AGREEMENT. From and after the Effective Date, this
Agreement shall supersede any other agreement between the parties with respect
to the subject matter hereof, in particular, the Employment Agreement previously
entered into between the parties, and except as specifically set forth in
Paragraphs 1 and 3, the Employment Agreement shall have no further force or
effect.
5. CONFIDENTIAL INFORMATION. Executive shall hold in a fiduciary capacity for
the benefit of the TSF Group all secret or confidential information, knowledge
or data relating to the TSF Group, and their respective businesses, which shall
have been obtained by Executive during Executive's employment by the TSF Group
and which shall not be or become public knowledge (other than by acts by
Executive or representatives of Executive in violation of this Agreement).
After termination of Executive's employment with the TSF Group, Executive shall
not, without the prior written consent of the Company or as may otherwise be
required by law or legal process, communicate or divulge any
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such information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Paragraph 5 constitute a basis for deferring or withholding any amounts
otherwise payable to Executive under this Agreement.
6. SUCCESSORS.
a. This Agreement is personal to Executive and without the prior written
consent of the Company shall not be assignable by Executive otherwise than by
will or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by Executive's legal representatives.
b. This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.
c. The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and any
respective successor to its business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
7. MISCELLANEOUS.
a. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE, 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:
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If to Executive:
W. Xxxxxx Xxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
If to the Company:
Transocean Offshore Deepwater Drilling Inc.
0 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
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 invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement.
d. 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.
e. Executive's or the Company's failure to insist upon strict compliance with
any provision of this Agreement or the failure to assert any right Executive 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.
f. Executive and the Company acknowledge that, except as may otherwise be
provided under any other written agreement between Executive and the Company,
the employment of Executive by the Company is "at will" and Executive's
employment may be terminated by either Executive or the Company at any time.
8. RELEASE. Executive hereby releases the Parent from any and all obligations
arising under the Employment Agreement.
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9. CERTAIN DEFINITIONS.
a. Cause. For purposes of this Agreement, "Cause" shall mean: (i) the willful
and continued failure of Executive to perform substantially the Executive's
duties with the Company or one of its affiliates (other than any such failure
resulting from incapacity due to physical or mental illness), after a written
demand for substantial performance is delivered to Executive by the Parent Board
(as defined herein) or the Chief Executive Officer of the Company which
specifically identifies the manner in which the Parent Board or the Chief
Executive Officer of the Company believes that Executive has not substantially
performed Executive's duties; or (ii) the willful engaging by Executive in
illegal conduct or gross misconduct which is materially and demonstrably
injurious to the Parent Group. For purposes of this provision, no act or
failure to act, on the part of Executive shall be considered "willful" unless it
is done, or omitted to be done, by Executive in bad faith or without reasonable
belief that Executive's action or omission was in the best interests of the
Parent Group. 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 or a senior officer of Parent or the Company or based
upon the advice of counsel for Parent or the Company shall be conclusively
presumed to be done, or omitted to be done, by Executive, in good faith and in
the best interests of the Parent Group. The cessation of employment of
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to 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 Executive and 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, Executive is guilty
of the conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail. As used in this Paragraph, "Parent Board" means
the board of directors of the Parent, except that in the event that the Parent
no longer owns 50% of the outstanding voting securities of the Company, then the
Parent Board shall mean the Board of Directors of the Company.
b. Notice of Termination. Any termination by the Company for Cause, or by
Executive due to a Constructive Termination, shall be communicated by Notice of
Termination to Executive in
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accordance with Paragraph 7.b. of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i) indicates
the specific termination provision of 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 Executive's employment under the
provision so indicated and (iii) if the Date of Termination is other than the
date of receipt of such notice, specifies the termination date (which date shall
not be more than thirty days after the giving of such notice). The failure by
the Company or Executive to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Constructive Termination or Cause
shall not waive any right of the Company hereunder or preclude Executive or the
Company from asserting such fact or circumstance in enforcing Executive's or the
Company's rights hereunder.
c. Constructive Termination. For purposes of this Agreement, "Constructive
Termination" shall mean a voluntary termination of employment by Executive that
occurs within 60 days after (i) a substantial diminution in Executive's
position, authority, duties and responsibilities, taken as a whole, excluding
for this purpose changes in office, title and/or reporting requirements which
are determined by the Chief Executive Officer of Parent to be primarily
attributable to reorganization of responsibilities following significant
corporate events, or (ii) any reduction in Executive's base salary as in effect
on the Effective Date, excluding for this purpose any across-the-board
reductions that similarly affect officers of the Company.
d. Date of Termination. "Date of Termination" means (i) if Executive's
employment is terminated by the TSF Group for Cause, or by Executive due to a
Constructive Termination, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if Executive's
employment is terminated by the TSF Group other than for Cause or Disability,
the Date of Termination shall be the date on which the Company notifies
Executive of such termination, (iii) if Executive's employment is terminated by
reason of death or Disability, the Date of Termination shall be the date of
death of Executive or the Disability Effective Date, as the case may be.
e. Disability. "Disability" means the absence of Executive from Executive's
duties with the TSF Group on a full-time basis for 180
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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
the Company or its insurers and acceptable to Executive or Executive's legal
representatives.
f. Disability Effective Date. "Disability Effective Date" means the 30th day
after the Executive receives notice from any member of the TSF Group of his
termination of employment due to Disability.
IN WITNESS WHEREOF, the parties hereto have evidenced their consent to the
terms of this Agreement, as set forth below.
EXECUTIVE
/s/ W. XXXXXX XXXXXXX
-------------------------------
W. Xxxxxx Xxxxxxx
TRANSOCEAN OFFSHORE
DEEPWATER DRILLING INC.
/s/ J. XXXXXXX XXXXXXX
---------------------------
By J. Xxxxxxx Xxxxxxx
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