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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): October 10, 2002
TRANSOCEAN INC.
(Exact name of registrant as specified in its charter)
CAYMAN ISLANDS 333-75899 66-0587307
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
4 GREENWAY PLAZA
HOUSTON, TEXAS 77046
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (713) 232-7500
ITEM 5. OTHER EVENTS.
On October 10, 2002, Transocean Inc. (the "Company") issued a press
release announcing among other things:
(1) that Robert L. Long had become President and Chief Executive
Officer of the Company and had been elected to the Company's
Board of Directors;
(2) that Michael L. Talbert had become Chairman of the Board of
Directors; and
(3) that Jean Cahuzac had become Chief Operating Officer of the
Company.
The press release is included as exhibit 99.1 to this Current Report
on Form 8-K and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibits are filed herewith:
99.1 Press Release dated October 10, 2002.
99.2 Agreement dated as of October 10, 2002 among the Company,
Transocean Deepwater Drilling Inc. and J. Michael Talbert.
99.3 Amendment dated as of October 10, 2002 to Consulting Agreement
between the Company and Victor E. Grijalva.
99.4 Agreement dated as of May 9, 2002 between Transocean Offshore
Deepwater Drilling Inc. and Robert L. Long.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRANSOCEAN INC.
Date: October 10, 2002 By: /s/ Eric B. Brown
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Eric B. Brown
Senior Vice President, General Counsel and
Corporate Secretary
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=========================
[GRAPHIC OMITTED] TRANSOCEAN INC.
Post Office Box 2765
Houston TX 77252 2765
================================================================================
ANALYST CONTACT: Jeffrey L. Chastain NEWS RELEASE
713 232 7551
MEDIA CONTACT: Guy A. Cantwell FOR RELEASE: October 10, 2002
713 232 7647
TRANSOCEAN INC. ANNOUNCES SENIOR MANAGEMENT APPOINTMENTS; ROBERT L. LONG TO
SUCCEED J. MICHAEL TALBERT AS CHIEF EXECUTIVE OFFICER
HOUSTON--Transocean Inc. (NYSE: RIG) today announced that its board of
directors has appointed Robert L. Long as President and Chief Executive Officer
of the company and elected him as a director, effective immediately. Mr. Long,
who previously held the title of President and Chief Operating Officer of
Transocean Inc., will succeed J. Michael Talbert, who has served as the
company's Chief Executive Officer since September 1994. Mr. Talbert will
continue to serve on the company's board of directors, assuming the title of
Chairman and replacing Victor E. Grijalva, who has served as Chairman of
Transocean Inc. since December 1999. Mr. Grijalva will continue to serve on the
company's board, chairing the Corporate Governance Committee. Mr. Talbert has
agreed to serve as Chairman of Transocean Inc. until October 2004.
Commenting on today's announcement, Mr. Grijalva stated, "These changes
reflect an orderly plan of succession and continuity within our senior
management and board of directors."
Addressing the appointment of Mr. Long to the position of President and
Chief Executive Officer, Mr. Talbert offered, "While serving more than 16 years
in executive management positions, Bob Long has demonstrated a solid
understanding of the financial and operational challenges inherent with the
offshore drilling business. He is uniquely qualified to lead Transocean Inc."
Mr. Long joined the company in 1975 and has held numerous operational and
financial roles over his 26-year career including Division Engineer, Division
Manager of the North Sea and Egypt and Chief Financial Officer. A 1968 graduate
of the U.S. Naval Academy, he attended the U.S. Naval Nuclear Power School and
in 1975 earned his M.B.A. in Finance from the Harvard Graduate School of
Business.
The company also announced that Jean P. Cahuzac has been named Executive
Vice President and Chief Operating Officer of Transocean Inc., effective
immediately. Mr. Cahuzac previously served as Executive Vice President of
Operations. He began his oilfield services career at Schlumberger, serving 20
years in various operational and technical positions around the world for
Schlumberger, including President of Sedco Forex. Following the December 1999
merger of Transocean Offshore Inc. and Sedco Forex, Mr. Cahuzac was named
Executive Vice President and President, Europe, the Middle East and Africa, for
the company. He holds a degree in mechanical engineering from Ecoles des Mines
(Saint-Etienne, France) and the French Petroleum Institute. Mr. Cahuzac is a
member of the board of directors of the International Association of Drilling
Contractors.
Transocean Inc. is the world's largest offshore drilling contractor with
more than 150 full or partially owned and managed mobile offshore drilling
units, inland drilling barges and other assets utilized in the support of
offshore drilling activities worldwide. The company's mobile offshore drilling
fleet is considered one of the most modern and versatile in the world with 31
high-specification semisubmersibles and drillships, 27 other semisubmersibles
and one drillship, and 52 jackup drilling rigs. Transocean Inc. specializes in
technically demanding segments of the offshore drilling business, including
industry-leading positions in deepwater and harsh environment drilling services.
With a current equity market capitalization in excess of $6.9 billion, the
company's ordinary shares are traded on the New York Stock Exchange under the
symbol "RIG."
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AGREEMENT
THIS AGREEMENT ("Agreement") is entered into between Transocean Inc.
("Parent"), Transocean Offshore Deepwater Drilling Inc. (the "Company") and J.
Michael Talbert (the "Executive"), dated as of October 10, 2002 (the "Effective
Date").
WHEREAS, the Company, and The Executive have previously entered into an
Employment Agreement dated effective September 22, 2000 ("Employment Agreement")
which replaced an employment agreement dated effective May 14, 1999 (the "Prior
Employment Agreement"); and
WHEREAS, after approval and action by the Board of Directors of Transocean
Inc. and in light of management changes and the Executive's change in employment
duties, the 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. CHANGE IN POSITION. Effective as of the date of this Agreement, the
--------------------
Executive agrees to resign as Chief Executive Officer of Transocean
Inc. and assume the title and duties of Chairman of the Board of
Directors of Transocean Inc. The Executive agrees to remain as
Chairman of the Board until the earlier of (a) any regularly scheduled
meeting of the Board held in October 2004, or (b) October 16, 2004, at
which time the Executive shall tender the Executive's resignation as
Chairman for action by the Board.
2. EMPLOYMENT STATUS. Unless terminated for Cause, the Executive agrees
------------------
to continue as an employee of Company until October 16, 2004, at which
time the Executive shall take Early Retirement under the terms of
Company's qualified defined benefit retirement plan (the "Retirement
Plan"). Company retains the right, however, to terminate the
Executive's employment at any time and for any reason provided that in
the event that the Executive is terminated by Company for other than
Cause or Executive terminates his employment due to a Constructive
Termination, then Company agrees to make a lump sum cash payment equal
to the excess of (a) the actuarial equivalent of the benefit under the
Retirement Plan (utilizing actuarial assumptions no less favorable to
the Executive than those in effect under Company's Supplemental
Retirement Plan immediately prior to termination and assuming benefits
commence on October 16, 2004), and any excess or supplemental
retirement plan in which the Executive participates (together, the
"SERP") which the Executive would receive if the Executive's
employment continued until October 16, 2004 assuming for this purpose
that all accrued benefits are fully vested and assuming that the
Executive's compensation is as set forth in Section 3 herein over (b)
the actuarial equivalent of the Executive's actual benefit (paid or
payable), if any, under the Retirement Plan and the SERP as of the
date of termination.
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3. BENEFIT PLANS. While employed by Company, the Executive shall remain
--------------
eligible to participate in any of the incentive, savings and
retirement plans, practices and programs and/or welfare benefit plans,
practices, policies and programs offered to other senior executives of
Company with the exception that the Executive shall not receive any
further equity awards under the Transocean Long Term Incentive Plan.
Furthermore, effective as of October 16, 2002, the Executive's salary
shall be reduced to $475,000 per year and the Executive's target bonus
opportunity reduced to 45%. Accordingly, the Executive's bonus for
2002 will thus be proportionately adjusted based upon these changes.
It is understood that the Executive's new duties will occupy no more
than 50% of the Executive's available time. The Executive's
compensation shall be reviewed each May and December and adjusted as
deemed appropriate by the Executive Compensation Committee of
Transocean Inc. in its sole discretion.
4. OPTIONS. Unless the Executive is terminated for Cause, if the
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Executive is no longer employed by Transocean for any reason including
but not limited to voluntary termination, then all options outstanding
at the time of such termination shall become immediately exercisable
and shall remain exercisable for the remainder of their terms. If the
Executive is terminated for Cause, then the provisions of the grants
shall remain unchanged and operate accordingly.
5. PAYMENT TO THE EXECUTIVE.
---------------------------
a. Subject to the terms of this Agreement, the Company agrees to pay
to the Executive an aggregate amount of $4,877,593 ("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 October 15, 2002, October 15, 2003
and October 15, 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 Executive specifically agrees and
acknowledges that the payments set forth in Section 5 of this
Agreement are not includable in determining the amount payable
under the Company's Retirement Plan and/or Supplemental
Retirement Plan.
b. 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, the Parent and
any affiliated company 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 Section 4999 of the Code or any interest or penalties
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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(b), if
it shall be determined that the Executive is entitled to a
Gross-Up Payment, but that the Payments do not exceed 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.
c. Subject to the provisions of Section 5(d), all determinations
required to be made under this Section 5(b)-(e), 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 both to the Company and
the Executive within 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 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 days of the
receipt of the Accounting Firm's determination. Any determination
by the Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application of
Section 4999 of the Code 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 the Company
exhausts its remedies pursuant to Section 5(d) 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.
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d. The Executive shall notify 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 business days after the Executive is informed in writing
of such claim and shall apprise 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 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If
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 the Company any information reasonably requested by the
Company relating to such claim;
(ii) Take such action in connection with contesting such claim as
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 the Company;
(iii) Cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) Permit 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(d), 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 sue 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 the Company shall determine; provided, however, that
if the Company directs the Executive to pay such claim and sue
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
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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, 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.
e. If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 5(d), the Executive becomes
entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company's complying with the
requirements of Section 5(d)) 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(d), a determination is made that the
Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to
the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be 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. OTHER PAYMENT PROVISIONS.
--------------------------
a. Termination. If (i) the Executive voluntarily terminates
-----------
employment with the Company and all companies controlled by,
controlling or under common control with the Company (the "TSF
Group") for any reason or (ii) Executive is terminated by Company
for other than Cause or (iii) Executive leaves as a result of
Death or Disability prior to the first business day following
October 15, 2004 (the "Expiration Date"), the Executive shall
nevertheless receive a lump sum cash payment equal to the unpaid
Principal Amount, plus accrued interest to the date of payment,
as determined in accordance with Section 5(a). The Company shall
also pay any amounts due pursuant to Section 5(b)-(e) of this
Agreement.
b. Cause. If the Executive's employment with the TSF Group is
-----
terminated for Cause prior to the Expiration Date, the Executive
shall have no right to any further payments under Section 5 and
such unpaid installments will be forfeited.
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7. EFFECT ON EMPLOYMENT AGREEMENT. From and after the Effective Date,
---------------------------------
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.
8. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary
--------------------------
capacity 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 the Executive
during the Executive's employment by the TSF Group 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 the TSF Group,
the 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 Section 8
constitute a basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement.
9. SUCCESSORS.
-----------
a. This Agreement is personal to the Executive and without the prior
written consent of the Company and Parent 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.
b. This Agreement shall inure to the benefit of and be binding upon
the Company and Parent and their successors and assigns.
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.
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10. MISCELLANEOUS.
-------------
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 the Executive:
J. Michael Talbert
4 Greenway Plaza
Houston, Texas 77046
If to the Company or Parent:
Transocean Offshore Deepwater Drilling Inc.
4 Greenway Plaza
Houston, Texas 77046
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.
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. The Executive's, the Company's or Parent's failure to insist upon
strict compliance with any provision of this Agreement or the
failure to assert any right the Executive, the Company or Parent
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
the Executive and the Company, the employment of the Executive by
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the Company is "at will" and the Executive's employment may be
terminated by either the Executive or the Company at any time.
11. CERTAIN DEFINITIONS.
--------------------
a. Cause. For purposes of this Agreement, "Cause" shall mean: (i)
the willful and continued failure of the 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 the 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 the Executive has not substantially
performed the Executive's duties; or (ii) the willful engaging by
the Executive in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the TSF Group. 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 TSF 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 presumed to be done, or omitted to be done, by
the Executive, in good faith and in the best interests of the TSF
Group. The cessation of 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 in
subparagraph (i) or (ii) above, and specifying the particulars
thereof in detail. As used in this Section, "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,
-----------------------
or by the Executive due to a Constructive Termination, shall be
communicated by Notice of Termination to the Executive in
accordance with Section 10.b. of this Agreement. For purposes of
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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 the 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 the 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 the Executive or the
Company from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
c. Constructive Termination. For purposes of this Agreement,
-------------------------
"Constructive Termination" shall mean a voluntary termination of
employment by the Executive that occurs within 60 days after (i)
a substantial diminution in the 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) a substantial
reduction in Executive's base salary as in effect on the
Effective Date excluding for this purpose any across-the-board
reductions that similarly affect officers of the Company and
taking into account the scope of the Executive's duties from time
to time.
d. Date of Termination. "Date of Termination" means (i) if the
---------------------
Executive's employment is terminated by the TSF Group for Cause,
or by the 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 the 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 the Executive of such termination, (iii) if
the Executive's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Effective Date, as the case may
be.
e. Disability. "Disability" means the absence of the Executive from
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the 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 the Executive or the Executive's legal
representatives.
-9-
f. Disability Effective Date. "Disability Effective Date" means the
--------------------------
30th day after the Executive receives notice from any member of
the TSF Group of the Executive's 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/ J. Michael Talbert
---------------------------------
J. Michael Talbert
TRANSOCEAN OFFSHORE
DEEPWATER DRILLING INC.
/s/ Eric B. Brown
---------------------------------
By: Eric B. Brown
TRANSOCEAN INC.
/s/ Eric B. Brown
---------------------------------
By: Eric B. Brown
-10-
J. MICHAEL TALBERT
CHIEF EXECUTIVE OFFICER
October 10, 2002
Victor E. Grijalva
277 Park Avenue
New York, New York 10172-0266
Re: Amendment to Consulting Agreement between Transocean Offshore Inc. (now
known as Transocean Inc.) and Victor E. Grijalva (the "Agreement")
Dear Mr. Grijalva:
In light of the management changes within Transocean Inc. (the "Company") and
your desire to serve in another capacity on the board of the Company, both sides
wish to amend the Agreement to make certain changes. In consideration of the
following and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, you and the Company agree as follows:
1. Section 2(a) of the Agreement is deleted in its entirety and replaced with
the following: "Effective as of October 10, 2002, Consultant shall resign
as Chairman of the Board of the Company but shall remain as a member of the
Board until the earliest to occur of his resignation, removal, retirement
or the expiration of his current term as a director of the Company unless
re-elected to the Board. Consultant agrees to resign as Consultant no later
than the date of his sixty-fifth (65th) birthday ("Resignation Date)."
2. Section 3(b) shall be amended to add the following sentence: "If Consultant
remains on the Board after the end of the Engagement Period, he shall be
entitled to the same compensation and benefits (including any pro-rated
cash director fees) as other non-employee members of the Board in
accordance with the Company's policies."
3. Except as amended herein, the Agreement shall continue in full force and
effect.
Very truly yours,
Transocean Inc.
J. Michael Talbert
Agreed and accepted this 10th day of October 2002
/s/ Victor E. Grijalva
-------------------------------------------------
Victor E. Grijalva
AGREEMENT
THIS AGREEMENT ("Agreement") is entered into between Transocean Offshore
Deepwater Drilling Inc. (the "Company") and Robert L. Long ("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
----------------------
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.
-----------------------
a. Voluntary Termination. If Executive voluntarily terminates
----------------------
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
-----
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,
---------------------------------
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
------------------------
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:
Robert L. Long
4950 Tilbury Drive
Houston, Texas 77056
If to the Company:
Transocean Offshore Deepwater Drilling Inc.
4 Greenway Plaza
Houston, Texas 77046
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.
--------------------
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,
----------------------
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,
-------------------------
"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
---------------------
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
--------------------------
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/ Robert L. Long
-----------------------------------
Robert L. Long
TRANSOCEAN OFFSHORE
DEEPWATER DRILLING INC.
/s/ J. Michael Talbert
-----------------------------------
By: J. Michael Talbert
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