AGREEMENT
THIS AGREEMENT ("Agreement") is entered into between Transocean Offshore
Deepwater Drilling Inc. (the "Company") and Xxxxxx X. Xxxx ("Executive"), dated
as of May 9, 2002 (the "Effective Date").
WHEREAS, the Company, and Executive have previously entered into an
Employment Agreement dated effective September 17, 2000 ("Employment Agreement")
which replaced an employment agreement dated effective May 14, 1999 (the "Prior
Employment Agreement"); and
WHEREAS, in light of management changes and Executive's promotion to
President, Executive and Company wish to revoke 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
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Company agrees to pay to Executive an aggregate amount of $2,142,756
("the Principal Amount"), together with accrued interest. This amount
shall be paid in three installments, with one-third of the Principal
Amount, plus accrued interest, paid on the first business day
following each of June 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 Prior Employment
Agreement during the term of this Agreement, and the provisions of
Section 9 of the Prior Employment Agreement are hereby incorporated by
reference into this Agreement.
2. Forfeiture of Payment.
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a. Voluntary Termination. If Executive voluntarily terminates
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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
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for Cause prior to the Expiration Date, the Executive shall have
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no right to any further payments under Paragraph 1 and such
unpaid installments will be forfeited.
3. Involuntary Termination, Constructive Termination, Death and
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Disability. If Executive's employment is terminated prior to the
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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 Prior Employment Agreement.
4. Effect on Employment Agreement. From and after the Effective Date,
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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
the Employment Agreement shall have no further force or effect.
5. Confidential Information. Executive shall hold in a fiduciary capacity
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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 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.
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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.
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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.
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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:
If to Executive:
Xxxxxx X. Xxxx
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 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.
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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
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obligations arising under the Employment Agreement.
9. Certain Definitions.
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a. Cause. For purposes of this Agreement, "Cause" shall mean: (i)
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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
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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,
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or by Executive due to a Constructive Termination, shall be
communicated by Notice of Termination to Executive in 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,
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"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,
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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
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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
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Executive's duties with the TSF Group on a full-time basis for
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 the Company or its insurers
and acceptable to Executive or Executive's legal representatives.
f. Disability Effective Date. "Disability Effective Date" means the
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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/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
TRANSOCEAN OFFSHORE
DEEPWATER DRILLING INC.
/s/ J. Xxxxxxx Xxxxxxx
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By: J. Xxxxxxx Xxxxxxx
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