EXHIBIT 10.7
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 ("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 (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 registered underwritten public offering
completed after the Effective Date to
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purchase common stock of RBF ("Common Stock") (the
"IPO"), the 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
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granting it consent and other rights not available to
other shareholders, (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 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 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 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 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 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 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 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 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 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 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
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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
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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
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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.
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(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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