CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement"), by and between
Transocean Offshore Inc., a Cayman Islands corporation (the "Company"), and
Xxxxxx X. Xxxxxxxx (the "Consultant"), is dated as of December 13, 1999.
WHEREAS, pursuant to the terms of that certain Agreement and Plan of
Merger dated as of July 12, 1999 (the "Merger Agreement"), by and among the
Company, Sedco Forex Holdings Limited, a British Virgin Islands corporation
("Sedco Forex"), and Schlumberger Limited, a Netherlands Antilles corporation
("Schlumberger"), the Consultant is to become the Chairman of the Board of
Directors of the Company upon completion of the merger provided for in the
Merger Agreement; and
WHEREAS, it is a condition to the Consultant's appointment as Chairman
of the Board of Directors that he enter into a consulting agreement with the
Company;
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, it is
hereby agreed as follows:
1. Definitions. Capitalized terms used herein without definition
-----------
shall have the meanings assigned to them in the Merger Agreement.
2. Post-Merger Services.
---------------------
(a) In connection with the Merger, the Company shall cause the
Consultant to be nominated to its Board of Directors (the "Board") beginning as
of the Effective Time to serve as Chairman thereof for a term or terms extending
until the date of his sixty-fifth (65th) birthday ("Resignation Date"). On the
Resignation Date, the Consultant shall tender to the Board his resignation, such
tender of resignation to be acted upon in the discretion of the Board (without
participation by the Consultant in the deliberation or vote with respect
thereto).
(b) From the Effective Time through the Resignation Date, or such
shorter period as may be provided pursuant to Section 4(a), (b), or (c) below
(the "Engagement Period"), in consideration for the compensation provided for
below, the Consultant shall make himself available to the Company, at mutually
convenient times and places, for such consulting services as may be requested by
the Chief Executive Officer or the Board of the Company, in connection with
long-range planning, strategic direction, integration and rationalization and
other matters following the Merger, including work with the Chief Executive
Officer and, as may be requested by the Chief Executive Officer, other senior
management of the Company with respect to matters to be presented to the Board.
3. Compensation and Benefits.
---------------------------
(a) The Company shall pay the Consultant a fee (the "Fee") of $400,000
per annum, payable monthly in advance in prorated one-twelfth (1/12) portions,
during the Engagement Period. In addition, during the Engagement Period, the
Consultant shall be entitled
to cost reimbursement (including travel expense reimbursement) as in effect for
its non-employee members of the Board in accordance with the Company's policies.
(b) The Consultant shall receive the same compensation and benefits,
other than cash director fees, as other non-employee members of the Board in
accordance with the Company's policies.
(c) The Consultant's status hereunder during the Engagement Period
shall be that of an independent contractor and not, for any purpose, that of an
employee or agent with authority to bind the Company in any respect. All
payments and other consideration made or provided to the Consultant under this
Section 3 shall be made or provided without withholding or deduction of any
kind, and the Consultant shall assume sole responsibility for discharging all
tax or other obligations associated therewith, unless the Consultant and the
Company shall otherwise agree.
4. Termination.
-----------
(a) If the Consultant should die or become Permanently Disabled
before the Resignation Date, the Engagement Period shall end on the date of such
death or Permanent Disability, and the Company shall pay to the Consultant's
estate or to the Consultant or his legal guardian, as applicable, any portion of
the Fee that has accrued but remains unpaid. For purposes of this Agreement,
"Permanently Disabled" or "Permanent Disability" shall mean entitlement to
benefits under the long-term disability plan sponsored by the Company.
(b) The Company (by a vote of the Board of Directors other than the
Consultant, which vote must include the vote of at least one person serving as a
member of the Board of Directors by designation of Schlumberger pursuant to the
Merger Agreement) may terminate the Engagement Period for Cause, in which event
no further payments of the Fee (other than any portion of the Fee that has
accrued but remains unpaid) shall be made. For purposes of this Agreement,
"Cause" shall mean (i) any material breach of Consultant's duty of loyalty to
the Company or its shareholders, (ii) acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law or (iii) any
transaction from which the Consultant derived a material improper personal
benefit. Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by the
Consultant in good faith and in the best interests of the Company and its
subsidiaries.
(c) If the Consultant should resign or otherwise leave the Board
prior to the Resignation Date, the Engagement Period shall end as of the date of
such resignation or the date Consultant leaves the Board, in which event no
further payments of the Fee (other than any portion of the Fee that has accrued
but remains unpaid) shall be made.
(d) This Agreement shall terminate at the end of the Engagement
Period.
5. Indemnification. The Company shall indemnify the Consultant and
---------------
his estate, heirs and personal representatives, in connection with the
Consultant's services hereunder, as and to the full extent provided in the
Company's Articles of Association. In addition, the Consultant shall be covered
by the Company's Directors and Officers' liability insurance program.
2
6. Successors.
----------
(a) This Agreement is personal to the Consultant and shall not be
assignable without the written consent of the Company.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its respective successors and assigns.
7. Miscellaneous.
-------------
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, 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 permitted successors and assigns.
(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 the Consultant:
Xxxxxx X. Xxxxxxxx
c/o Schlumberger Limited
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Company:
Transocean Sedco Forex Inc.
0 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision (or portion
thereof) of this Agreement shall not affect the validity or enforceability of
any other provision (or portion thereof) of this Agreement.
(d) From and after the Effective Time, this Agreement shall supersede
any other agreement between the parties with respect to the subject matter
hereof. This Agreement shall be null and void, ab initio, and of no further
effect if the Merger Agreement is terminated before the Effective Time.
3
(e) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.
4
IN WITNESS WHEREOF, the Consultant has hereunto set the Consultant's
hand and, pursuant to the authorization from its Board of Directors, the Company
has caused this Agreement to be executed in its name on its behalf, all as of
the day and year first above written.
/s/ XXXXXX X. XXXXXXXX
----------------------------------------
Xxxxxx X. Xxxxxxxx
TRANSOCEAN OFFSHORE INC.
By /s/ J. XXXXXXX XXXXXXX
------------------------------------
Name:
Title:
5
