EXHIBIT 10.16
TERMINATION AGREEMENT
This Termination Agreement (the "Agreement"), entered into and
effective as of July 31, 1999 (the "Effective Date"), is between
Xxxxxxx X. Xxxxxxx ("Xxxxxxx") and Cliffs Drilling Company
("CDC").
In consideration of the mutual obligations set out below and in
that agreement of the same effective date between Xxxxxxx and CDC
and substantially in the form attached as Exhibit "A" hereto (the
"Non-Compete Agreement"), the parties agree as follows:
1. As of the Effective Date Xxxxxxx tenders his
resignation as President, Chief Executive Officer and
Director of CDC and as a director, officer and/or
employee of all direct and indirect subsidiaries and
affiliated companies of CDC [other than R&B Falcon
Corporation ("RBF") of which Xxxxxxx shall continue to
be a director], as the case may be, which CDC accepts
on its behalf and on behalf of RBF, such subsidiaries
and affiliated companies.
2. Upon execution of this Agreement and subject to the
payment and other obligations of CDC and RBF set out in
this Agreement and in the Non-Compete Agreement, this
Agreement and the Non-Compete Agreement constitute full
satisfaction of all obligations of CDC under and
pursuant to Section 4 of that Employment Agreement
dated as of December 1, 1998 between Xxxxxxx and CDC
(the "Employment Agreement").
3. Notwithstanding anything to the contrary in (i) this
Agreement, (ii) Section 7 of the Employment Agreement,
or (iii) the Non-Compete Agreement, Xxxxxxx shall not
be entitled to, and CDC shall have no obligation to
make to Xxxxxxx, any Xxxxx-Up Payment (as defined in
Section 7 of the Employment Agreement) with respect to
any Excise Tax (as defined in Section 7 of the
Employment Agreement) imposed on or with respect to the
stock options held by Xxxxxxx under the Stock Option
Agreements, which are referred to in Section 4 of the
Non-Compete Agreement, provided, however, the remaining
obligations of CDC in Section 7 of the Employment
Agreement shall continue to be in full force and
effect.
4. Xxxxxxx shall have the option, exercisable if at all
only by written notice to CDC given within 60 days
following the Effective Date, to acquire full ownership
of those certain split dollar insurance policies, being
Policy No. 13905796 dated January 1, 1997 and Policy
No. 13347465 dated January 1, 1995, each issued by The
Northwestern Mutual Life Insurance Company, together
with a release of the collateral assignments granted in
favor of CDC under and pursuant to the two Split Dollar
Insurance Agreements dated January 1, 1995 between
Xxxxxxx and CDC (the "Insurance Agreements"), upon
payment by Xxxxxxx of the Company's Policy Interest (as
defined in the Insurance Agreements). If such option
is exercised and upon payment of the sum referred in
the preceding sentence by Xxxxxxx and release of the
collateral assignments by CDC, neither Xxxxxxx nor the
Company shall thereafter have any obligation to the
other under the Insurance Agreements.
For purposes of this Section 4, such notice, if given,
shall be addressed as follows and sent via registered
or certified mail:
Cliffs Drilling Company
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxx X. Xxxx, Xx.
5. The Agreement shall be binding upon and shall inure to
the benefit of the parties, their respective
representatives, agents, attorneys, successors and
assigns, and, in particular, without limiting the
generality of the foregoing, to CDC's directors,
officers and employees and to Xxxxxxx'x heirs,
executors, administrators, legal and personal
representatives and assigns.
6. This Agreement shall be deemed to be a contract made
under and governed by, the laws of the State of Texas,
without reference to principles of conflicts of law.
7. This Agreement and the Non-Compete Agreement
constitutes the complete and entire agreement between
the parties. Subject to Sections 4, 5 and 7 (as
modified by Section 3 of this Agreement) of the
Employment Agreement, this Agreement supersedes and
cancels all prior or contemporaneous representations,
promises or agreements between the parties. This
Agreement cannot be amended or modified except by
written agreement signed by each of the parties hereto.
8. The provisions of this Agreement are severable. If a
court or other tribunal of competent jurisdiction rules
any provision of this Agreement is invalid or
unenforceable, such ruling will not affect the validity
or enforceability of any other provision of the
Agreement, and this Agreement shall be deemed to be
modified and amended so as to be enforceable to the
extent permitted by law.
This Agreement is signed in Houston, Texas on July , 1999.
Xxxxxxx X. Xxxxxxx
CLIFFS DRILLING COMPANY
By:
Its duly authorized
officer
EXHIBIT "A"
AGREEMENT
This Agreement (the "Agreement"), entered into and effective as
of July 31, 1999 (the "Effective Date"), is among Xxxxxxx X.
Xxxxxxx ("Xxxxxxx"), Cliffs Drilling Company ("CDC") and R&B
Falcon Corporation ("RBF").
In consideration of the mutual obligations set out below,
Xxxxxxx, CDC and RBF agree as follows:
1. Within two business days following the execution of
this Agreement CDC agrees to pay to Xxxxxxx a lump sum
in cash, less deductions required by law, of
$2,587,500.
2. From the Effective Date and continuing until December
1, 2001 CDC agrees to provide Xxxxxxx and his family,
at the expense of CDC, all benefits under (or
substantially equivalent benefits to) RBF's welfare
benefit plans, practices, policies and programs
(including, without limitation, medical, prescription,
dental, vision, disability, salary continuance, group
life and supplemental group life and accidental death
insurance plans and programs), to the extent generally
applicable to other RBF executives.
3. For a period of three (3) years following the Effective
Date (the "Restricted Period") Xxxxxxx agrees:
(a) Not to engage in Competition with CDC. For
purposes of this Section 3(a), "Competition" shall
mean Xxxxxxx engaging in or otherwise being a
director, officer, employee, principal, agent,
stockholder, member, owner or partner of, or
permitting his name to be used in connection with
the activities of any corporation or other
business organization in the offshore contract
drilling industry in direct or indirect
competition with CDC, its parent, subsidiary or
affiliated companies, but shall not preclude
Xxxxxxx from being or becoming the registered or
beneficial owner of up to five (5%) of any class
of capital voting stock (or equivalent voting
interest) of any corporation or other business
organization in the offshore contract drilling
industry, provided Xxxxxxx does not participate
actively in such business until the end of the
Restricted Period.
(b) Not to disclose to any third party not a member of
the Company Group (as hereinafter defined), its or
their legal counsel or independent auditors,
Confidential Information (as hereinafter defined)
or Trade Secrets (as hereinafter defined), except
any of the Confidential Information or Trade
Secrets which shall be or become in the public
domain other than by breach by Xxxxxxx of his
obligations set out in this Section 3(b) or shall
be required to be disclosed by applicable laws or
regulations, any judicial or administrative
authority or stock exchange rule or regulation.
For purposes of this Section 3(b): "Company
Group" shall mean CDC, its parent corporation,
subsidiaries and affiliates; "Confidential In-
formation" shall mean (r) internal policies and
procedures, (s) financial information, (t)
marketing strategies, (u) secret discoveries,
inventions, formulae, designs, methods, processes
and know-how not constituting Trade Secrets, and
(v) other non-public information relating to the
Company Group's business, the disclosure of which
would materially adversely affect the Company
Group's business or financial condition; and
"Trade Secrets" shall mean all secret discoveries,
inventions, formulae, designs, methods, processes
and know-how entitled to protection as trade
secrets under the laws of the state of Texas.
4. (a) The Stock Option Agreements between Xxxxxxx
and CDC referred to below are respectively
amended: (i) to revise the number of option
shares covered by each such agreement and to
revise the option exercise price per share to
reflect the adjustments necessary to take into
account the conversion of CDC shares to shares of
RBF effected as a result of the merger transaction
between CDC and RBF concluded December 1,1998, and
(ii) to extend the period of time within which
Xxxxxxx shall be entitled to exercise the
outstanding stock options granted to him
thereunder, notwithstanding the provisions of such
Stock Option Agreements, as follows:
Option
Date of Agreement No. of Options Exercise Price Period of Time
(per share) to Exercise
May 22, 1996 47,600 $ 8.24 May 21, 2006
May 21, 1997 34,000 19.27 May 20, 2007
May 13, 1998 85,000 29.71 May 12, 2008
(b) The Stock Option Agreement between Xxxxxxx and RBF
dated December 1, 1998 is amended to remove the
restrictions on vesting and extend the period of
time within which Xxxxxxx shall be entitled to
exercise the outstanding stock options granted to
him thereunder to December 1, 2008,
notwithstanding the provisions of such Stock
Option Agreement.
5. The Agreement shall be binding upon and shall inure to
the benefit of the parties, their respective
representatives, agents, attorneys, successors and
assigns, and, in particular, without limiting the
generality of the foregoing, to CDC's and RBF's
directors, officers and employees and to Xxxxxxx'x
heirs, executors, administrators, legal and personal
representatives and assigns.
6. This Agreement shall be deemed to be a contract made
under and governed by, the laws of the State of Texas,
without reference to principles of conflicts of law.
7. The provisions of this Agreement are severable. If a
court or other tribunal of competent jurisdiction rules
any provision of this Agreement is invalid or
unenforceable, such ruling will not affect the validity
or enforceability of any other provision of the
Agreement, and this Agreement shall be deemed to be
modified and amended so as to be enforceable to the
extent permitted by law.
This Agreement is signed in Houston, Texas on July ,
1999.
Xxxxxxx X. Xxxxxxx
CLIFFS DRILLING COMPANY
By:
Its duly authorized
officer
R&B FALCON CORPORATION
By:
Its duly authorized
officer
