SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (the "Agreement") made and entered into
effective as of December 21, 2001 (the "Effective Date"), by and between
Transocean Offshore Deepwater Drilling Inc. (the "Company") and W. Xxxxxx
Xxxxxxx (the "Executive");
W I T N E S S E T H:
-------------------
WHEREAS, the Executive is an officer of the Company; and
WHEREAS, the parties mutually desire to arrange for a separation from
the Company and its affiliates and subsidiaries under certain terms; and
WHEREAS, in consideration of the mutual promises contained herein, the
parties hereto are willing to enter into this Agreement upon the terms and
conditions herein set forth.
NOW, THERFORE, in consideration of the premises, the terms and
provisions set forth herein, the mutual benefits to be gained by the performance
thereof and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Resignation of Employment. Effective as of June 30, 2002 (the
-------------------------
"Retirement Date"), the Executive resigns his position as Executive Vice
President and Chief Operating Officer and director of the Company; and from any
other position, directorship or office relating to the affairs of the Company
and its subsidiaries or affiliates, including but not limited to Executive Vice
President and Chief Operating Officer of Transocean Sedco Forex Inc. ("TSF").
2. Consideration for Services and Prior Agreement. The Company
-------------------------------------------------
agrees to pay or provide, and the Executive agrees to accept, the benefits set
forth in this Section 2 in consideration for the Executive's service through the
Retirement Date, and in satisfaction of the existing obligations to the
Executive as described below.
A. Base Salary. The Executive shall continue to receive Base
------------
Salary through the Retirement Date at the rate in effect on the
Effective Date.
B. Payment Under Agreement. The Company agrees to pay a lump sum
-----------------------
cash payment of $2,541,320.05, on the later of the expiration of the
revocation period following execution of the initial Waiver and
Release set forth in Section 3 or January 2, 2002, to the Executive in
full satisfaction of the obligation of the Company under the Agreement
entered into between the Company and the Executive as of October 8,
2000 (the "2000 Agreement").
C. 2001 Performance Bonus. The Company agrees to pay to the
-------------------------
Executive a Performance Bonus pursuant to the Performance Award and
Cash
Bonus Plan (the "Performance Plan") for 2001 in an amount determined
by the Executive Compensation Committee of the Board of Directors of
TSF pursuant to the terms of the Performance Plan, with an "Individual
Performance" rating of 100%. Such payment shall be made at the time
bonus awards for 2001 are made to other similarly situated executives.
D. Supplemental Retirement Plan Benefit. The Company agrees to
--------------------------------------
pay a lump sum payment of $1,900,657.05 on July 23, 2002 in full
satisfaction of the Company's obligation under the Transocean Offshore
Inc. Supplemental Benefit Plan ("Supplemental Plan"), subject to the
Executive's continued service through the Retirement Date or
involuntary termination by the Company prior to the Retirement Date
for any reason other than "Cause" (as defined in the 2000 Agreement).
The Executive acknowledges that he has been provided satisfactory
documentation regarding the calculation of this benefit, and the
Executive specifically agrees and acknowledges that the payments set
forth in Sections 2.B and 3.D of this Agreement are not includable in
determining the amount payable under the Supplemental Plan.
3. Consideration for Execution of Agreement and Waiver and
--------------------------------------------------------------
Release. In consideration for (i) the Executive's execution of and compliance
with this Agreement including but not limited to the Non-Competition provisions
of Section 4(c) and the execution on two occasions of the Waiver and Release
attached hereto as Attachment A and (ii) his continued service through the
-------------
Retirement Date or involuntary termination by the Company prior to the
Retirement Date for any reason other than Cause, the Company shall provide the
consideration set forth below in this Section 3. This consideration is provided
subject to the binding execution, without revocation, by the Executive of the
attached Waiver and Release agreement, which must be executed initially on or
before the 21st day after the Effective Date, and which must be executed again
during the period beginning on the Retirement Date and ending on the 21st day
after the Retirement Date (the "Retirement Date Waiver"). The Company's
obligation to make any further payments otherwise due under Section 3 shall
cease in the event the Executive fails to comply with the terms of this
Agreement or his Waiver and Release, and no payment shall be made until
expiration of the revocation period following execution of the Retirement Date
Waiver (the "Effective Waiver Date").
A. 2002 Performance Bonus. The Company shall pay a performance
------------------------
bonus to the Executive for 2002, prorated through June 30, 2002 and
payable at 80% of bonus opportunity, in an amount which the parties
agree to be equal to $112,800. The performance bonus for 2002 shall be
paid on the second business day following the Effective Waiver Date.
B. Additional Payment. The Company agrees to pay a lump sum
-------------------
payment of $1,056,571.99 on the later of the 2nd business day after
the Effective Waiver Date or July 30, 2002, which represents an amount
which the parties have agreed adequately reflects the additional
benefit which the Executive would have received under the Supplemental
Plan had his employment continued for three years after the Retirement
Date.
-2-
C. Options and Restricted Stock. The Company represents that TSF
----------------------------
has approved, subject to conditions that will be satisfied by the
execution and performance of this Agreement including but not limited
to the expiration of the revocation period following execution of the
Retirement Date Waiver, the vesting as of the Retirement Date of the
Executive's then unvested restricted stock, the acceleration on that
date of exercisability of the Executive's outstanding stock options
and the extension of exercisability of such options for their then
remaining term subject to Section 4.E.
D. Other Consideration. The Company agrees to pay a lump sum cash
-------------------
payment of $1,000,000 to the Executive, payable in two installments of
$500,000, with the first installment payable on the second business
day following the Effective Waiver Date, and the second installment
payable on July 1, 2003.
E. Dependent Medical Coverage. The Company agrees to provide
----------------------------
medical coverage to Xxxxxx Xxxxxxx under terms substantially
consistent with the dependent care medical coverage available to
retirees as of the Effective Date, through the date the Executive
attains age 61. Such medical coverage shall be secondary to any other
medical coverage available to Xxxxxx Xxxxxxx under any other medical
or hospitalization plan. The foregoing provisions of this Section 3.E.
shall not serve to limit the Executive's entitlement to coverage for
Xxxxxx Xxxxxxx as a dependent under any retiree medical plan or
program offered by the Company or its subsidiaries in the future.
F. Club Memberships. The Company agrees to use its best efforts
-----------------
to facilitate a transfer to the Executive of any club memberships in
Lakeside Country Club or The Houstonian which have been furnished to
the Executive; provided, however, that the Executive shall be
obligated to pay any costs associated with such transfer.
4. Restrictive Covenants. As a material inducement to Company to
----------------------
enter into this Agreement, Executive agrees to the provisions of this Section 4.
A. Confidentiality. The Executive recognizes and acknowledges
---------------
that in the course of his employment with the Company and as a result
of the position of trust he has held with the Company he has obtained
private or confidential information and proprietary data relating to
the Company including, without limitation, financial information,
customer lists, patent information and other data which are valuable
assets and property rights of the Company. All of such private or
confidential information and proprietary data is referred to herein as
"Confidential Information"; provided, however, that Confidential
Information will not include any information known generally to the
public (other than as a result of unauthorized disclosure by the
Executive). The Executive agrees that he will not at any time,
directly or indirectly, disclose or use Confidential Information
acquired during his employment with the Company except with the prior
written consent of the Chief Executive Officer of the Company.
-3-
B. Non-Solicitation. Except with the written consent of the Chief
----------------
Executive Officer of the Company, the Executive agrees that he will
not (i) for two years after the Retirement Date, in the Executive's
individual capacity or on behalf of another, hire or offer to hire any
of the officers, employees, directors or agents of the Company, or
persuade or attempt to persuade in any manner any officer, employees,
directors or agent of the Company to discontinue any relationship with
the Company or (ii) for one year after the Retirement Date, solicit or
divert or attempt to divert any customer or supplier of the Company.
C. Non-Competition. The Executive acknowledges that his
---------------
employment with the Company has provided him with specialized
knowledge concerning the business of the Company ("Company Business")
which, if used in competition with the Company could cause serious
harm to the Company, and the covenants contained in this Agreement are
essential to protect the business and goodwill of the Company.
Accordingly, the Executive agrees that for a period of one year after
the Retirement Date, the Executive will not in the United States or
any other country where the Company conducts operations related to the
Company Business, directly or indirectly, either as an individual,
proprietor, stockholder (other than as a holder of up to one (1%)
percent of the outstanding shares of a corporation whose shares are
listed on a stock exchange or traded in accordance with the automated
quotation system of the National Association of Securities Dealers),
partner, officer, employee, director or otherwise, work for, become an
employee of, invest in, provide consulting services or in any way
engage in the offshore drilling contractor business.
D. Nondisparagement. The Executive agrees that he will not for
----------------
one year after the Retirement Date (i) publicly criticize or disparage
the Company or any affiliate, or privately criticize or disparage the
Company or any affiliate in a manner intended or reasonably calculated
to result in public embarrassment to, or injury to the reputation of,
the Company or any affiliate in any community in which the Company or
any affiliate is engaged in business; (ii) directly or indirectly,
acting alone or acting in concert with others, institute or prosecute,
or assist any person in any manner in instituting or prosecuting, any
legal proceedings of any nature against the Company or any affiliate;
(iii) commit damage to the property of the Company or any affiliate or
otherwise engage in any misconduct which is injurious to the business
or reputation of the Company or any affiliate; or (iv) take any other
action, or assist any person in taking any other action, that is
adverse to the interests of the Company or any affiliate or
inconsistent with fostering the goodwill of the Company or any
affiliate; provided, however, that the Executive will not be in breach
of the covenant contained in (ii) above solely by reason of his
testimony which is compelled by process of law. As used in Section
4.D. of this Agreement, the term "affiliate" means the Company, any
subsidiary, any officer, director or executive of the Company or any
subsidiary, and any former officer, director or executive of the
Company or any subsidiary.
-4-
E. Enforcement. The Executive hereby agrees that a violation of
-----------
the provisions of Section 4 would cause substantial injury to the
Company and its affiliates, which would be difficult to quantify.
Accordingly, the Executive agrees that in the event of violation of
this Section 4 the Company would be entitled to: (a) cancel and
terminate any options whose vesting was accelerated at the separation
date; (b) obtain by way of damages all profit generated as a result of
the exercise of any options whose vesting was accelerated and (c)
cease all further payments due under Section 3 and obtain a refund of
all amounts previously paid to the Executive under that Section. The
Company further specifically retains the right to seek injunctive
relief from a court having jurisdiction for any actual or threatened
breach of this Section 4. Any such injunctive relief shall be in
addition to any other remedies to which the Company may be entitled at
law or in equity or otherwise.
F. Interpretation. If any provision of Section 4 is found by a
--------------
court of competent jurisdiction to be unreasonably broad, oppressive
or unenforceable, such court (i) shall narrow the scope of the
Agreement in order to ensure that the application thereof is not
unreasonably broad, oppressive or unenforceable and (ii) to the
fullest extent permitted by law, shall enforce such Agreement as
though reformed.
G. Company. As used in this Section 4, the term "Company"
-------
includes the Company, TSF and any direct or indirect subsidiary of
TSF.
5. Assistance with Litigation. The Executive agrees that for a
----------------------------
period of five years after the Retirement Date, the Executive will furnish such
information and proper assistance as may be reasonably necessary in connection
with any litigation in which the Company or any affiliate or subsidiary is then
or may become involved.
6. Death of the Executive. In the event of the death of the
-------------------------
Executive prior to the Retirement Date, this Agreement shall be null and void.
7. Nonassignability. Neither this Agreement nor any right or
----------------
interest hereunder shall be subject, in any manner, to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge, whether voluntary or
involuntary, by operation of law or otherwise, any attempt at such shall be
void; and further provided, that any such benefit shall not in any way be
subject to the debts, contract, liabilities, engagements or torts of the
Executive, nor shall it be subject to attachment or legal process for or against
the Executive.
8. Amendment of Agreement. This Agreement may not be modified or
-----------------------
amended except by an instrument in writing signed by the parties hereto.
9. Waiver. No term or condition of this Agreement shall be deemed
------
to have been waived, nor shall there be an estoppel against the enforcement of
any provision of this Agreement, except by written instrument of the party
charged with such waiver or estoppel.
10. Notices. All notices or communications hereunder shall be in
-------
writing, addressed as follows:
-5-
To the Company:
Transocean Offshore Deepwater Drilling Inc.
0 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx
Senior Vice President, General Counsel
To the Executive:
X. X. Xxxxxxx
0000 Xxxxxxx
Xxxxxxx, Xxxxx 00000
All such notices shall be conclusively deemed to be received and shall be
effective; (i) if sent by hand delivery, upon receipt, (ii) if sent by telecopy
or facsimile transmission, upon confirmation of receipt by the sender of such
transmission or (iii) if sent by registered or certified mail, on the fifth day
after the day on which such notice is mailed.
11. Federal Income Tax Withholding. The Company may withhold from
------------------------------
any benefits payable under this Agreement all federal, state, city or other
taxes that will be required pursuant to any law or governmental regulation or
ruling.
12. Severability. If any provision of this Agreement is held to
------------
be invalid, illegal or unenforceable, in whole or part, such invalidity will not
affect any otherwise valid provision, and all other valid provisions will remain
in full force and effect.
13. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which will be deemed an original, and all of which
together will constitute one document.
14. Titles. The titles and headings preceding the text of the
-------
paragraphs and subparagraphs of this Agreement have been inserted solely for
convenience of reference and do not constitute a part of this Agreement or
affect its meaning, interpretation or effect.
15. Governing Law. This Agreement will be construed and enforced
--------------
in accordance with the laws of the State of Texas.
16. Venue. Any suit, action or other legal proceeding arising out
-----
of this Agreement shall be brought in the United States District Court for the
Southern District of Texas, Houston Division, or, if such court does not have
jurisdiction or will not accept jurisdiction, in any court of general
jurisdiction in Xxxxxx County, Texas. Each of the Executive and the Company
consents to the jurisdiction of any such court in any such suit, action, or
proceeding and waives any objection that it may have to the laying of venue of
any such suit, action, or proceeding in any such court.
-6-
IN WITNESS WHEREOF, the parties have executed this Agreement in
multiple counterparts, all of which shall constitute one agreement, on December
21, 2001, but effective as of the date and year first above written.
TRANSOCEAN OFFSHORE DEEPWATER DRILLING INC.
By: /s/ J. XXXXXXX XXXXXXX
--------------------------------------
J. Xxxxxxx Xxxxxxx
Chief Executive Officer
W. XXXXXX XXXXXXX
/s/ W. XXXXXX XXXXXXX
-------------------------------------------
-7-
Attachment A
------------
[TO BE EXECUTED ON TWO OCCASIONS PURSUANT TO SECTION 3 OF THE SEPARATION
AGREEMENT]
Dated: ______________
WAIVER AND RELEASE
In exchange for the consideration offered under the Separation
Agreement between me and Transocean Offshore Deepwater Drilling Inc. (the
"Company"), dated effective ____________ (the "Agreement"), I hereby waive all
of my claims and release the Company, Transocean Sedco Forex Inc., their
affiliates, their subsidiaries and each of their directors and officers,
executives and agents, and executive benefit plans and the fiduciaries and
agents of said plans (collectively referred to as the "Corporate Group") from
any and all claims, demands, actions, liabilities and damages.
I UNDERSTAND THAT SIGNING THIS WAIVER AND RELEASE IS AN IMPORTANT
LEGAL ACT. I ACKNOWLEDGE THAT THE COMPANY HAS ADVISED ME IN WRITING TO CONSULT
AN ATTORNEY BEFORE SIGNING THIS WAIVER AND RELEASE. I UNDERSTAND THAT I HAVE
UNTIL 21 CALENDAR DAYS AFTER THE DATE SHOWN ABOVE TO CONSIDER WHETHER TO SIGN
AND RETURN THIS WAIVER AND RELEASE TO THE COMPANY BY FIRST-CLASS MAIL OR BY HAND
DELIVERY IN ORDER FOR IT TO BE EFFECTIVE.
In exchange for the consideration offered to me by the Agreement,
which I acknowledge provides consideration to which I would not otherwise be
entitled, I agree not to xxx or file any charges of discrimination, or any other
action or proceeding with any local, state and/or federal agency or court
regarding or relating in any way to the Company, and I knowingly and voluntarily
waive all claims and release the Corporate Group from any and all claims,
demands, actions, liabilities, and damages, whether known or unknown, arising
out of or relating in any way to the Corporate Group, except with respect to
rights under the Agreement, rights under employee benefit plans or programs
other than those specifically addressed in the Agreement, and such rights or
claims as may arise after the date this Waiver and Release is executed. This
Waiver and Release includes, but is not limited to, claims and causes of action
under: Title VII of the Civil Rights Act of 1964, as amended; the Age
Discrimination in Employment Act of 1967, as amended; the Civil Rights Act of
1866, as amended; the Civil Rights Act of 1991; the Americans with Disabilities
Act of 1990; the Older Workers Benefit Protection Act of 1990; the Executive
Retirement Income Security Act of 1974, as amended; the Family and Medical Leave
Act of 1993; and/or contract, tort, defamation, slander, wrongful termination or
other claims or any other state or federal statutory or common law.
Should any of the provisions set forth in this Waiver and Release be
determined to be invalid by a court, agency or other tribunal of competent
jurisdiction, it is agreed that such determination shall not affect the
enforceability of other provisions of this Waiver and Release.
I acknowledge that this Waiver and Release and the Agreement set forth
the entire understanding and agreement between me and the Company or any other
member of the Corporate Group concerning the subject matter of this Waiver and
Release and supersede any
-8-
prior or contemporaneous oral and/or written agreements or representations, if
any, between me and the Company or any other member of the Corporate Group.
I understand that for a period of seven (7) calendar days following my
signing this Waiver and Release (the "Waiver Revocation Period"), I may revoke
my acceptance of the offer by delivering a written statement to the Company by
hand or by registered mail, addressed to the address for the Company specified
in the Agreement, in which case the Waiver and Release will not become
effective. In the event I revoke my acceptance of this offer, the Company shall
have no obligation to provide me the consideration offered under the Agreement
to which I would not otherwise have been entitled. I understand that failure to
revoke my acceptance of the offer within the Waiver Revocation Period will
result in this Waiver and Release being permanent and irrevocable.
I acknowledge that I have read this Waiver and Release, have had an
opportunity to ask questions and have it explained to me and that I understand
that this Waiver and Release will have the effect of knowingly and voluntarily
waiving any action I might pursue, including breach of contract, personal
injury, retaliation, discrimination on the basis of race, age, sex, national
origin or disability and any other claims arising prior to the date of this
Waiver and Release.
By execution of this document, I do not waive or release or otherwise
relinquish any legal rights I may have which are attributable to or arise out of
acts, omissions or events of the Company or any other member of the Corporate
Group which occur after the date of execution of this Waiver and Release.
AGREED TO AND ACCEPTED this
______ day of _________, ______.
--------------------------------
EXECUTIVE
-9-
