Transocean Inc ˇ 8-K ˇ For 2/10/04 ˇ EX-99.5
Filed On 3/2/04 9:15pm ET ˇ SEC File 333-75899 ˇ Accession Number 1015402-4-809
As Of Filer Filing As/For/On Docs:Pgs Issuer Agent
3/03/04 Transocean Inc 8-K{5,7} 2/10/04 7:174 Int'l Electronic..Inc/FA
Document/Exhibit Description Pages Size
1: 8-K Current Report 8 33K
2: EX-99.1 Miscellaneous Exhibit 1 9K
3: EX-99.2 Miscellaneous Exhibit 67 331K
4: EX-99.3 Miscellaneous Exhibit 40 159K
5: EX-99.4 Miscellaneous Exhibit 20 73K
6: EX-99.5 Miscellaneous Exhibit 18 81K
7: EX-99.6 Miscellaneous Exhibit 20 102K
EMPLOYEE MATTERS AGREEMENT
AMONG
TRANSOCEAN INC.,
TRANSOCEAN HOLDINGS INC.,
AND
TODCO
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CODE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
DOL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
FMLA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
IPO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
IPO CLOSING DATE. . . . . . . . . . . . . . . . . . . . . . . . 2
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PARTICIPATING COMPANY . . . . . . . . . . . . . . . . . . . . . 2
PERSON. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
R&B FALCON MANAGEMENT . . . . . . . . . . . . . . . . . . . . . 2
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SEPARATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SEPARATION AGREEMENT. . . . . . . . . . . . . . . . . . . . . . 2
SUBSIDIARY. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
TAX ALLOCATION AGREEMENT. . . . . . . . . . . . . . . . . . . . 3
TODCO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
TODCO BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . 3
TODCO CLASS A COMMON STOCK. . . . . . . . . . . . . . . . . . . 3
TODCO EMPLOYEE. . . . . . . . . . . . . . . . . . . . . . . . . 3
TODCO GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . 3
TODCO VOTING STOCK . . . . . . . . . . . . . . . . . . . . . . 3
TRANSFERRED EMPLOYEE. . . . . . . . . . . . . . . . . . . . . . 3
TRANSITION SERVICES AGREEMENT . . . . . . . . . . . . . . . . . 3
TRANSOCEAN. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
TRANSOCEAN BUSINESS . . . . . . . . . . . . . . . . . . . . . . 3
TRANSOCEAN GROUP. . . . . . . . . . . . . . . . . . . . . . . . 4
TRANSOCEAN HOLDINGS . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II. GENERAL PRINCIPLES . . . . . . . . . . . . . . . . . . . . . . . . 4
2.01 TODCO PLANS. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.02 TRANSOCEAN PLANS . . . . . . . . . . . . . . . . . . . . . . . . 5
2.03 SECONDED EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . 6
2.04 COAL COMPANY LIABILITIES . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III. DEFINED BENEFIT PLANS . . . . . . . . . . . . . . . . . . . . . . 6
3.01 TRANSOCEAN HOLDINGS' OBLIGATIONS . . . . . . . . . . . . . . . . 6
3.02 TODCO EMPLOYEES' PARTICIPATION . . . . . . . . . . . . . . . . . 7
-i-
ARTICLE IV. DEFINED CONTRIBUTION PLANS . . . . . . . . . . . . . . . . . . . . 7
4.01 ACKNOWLEDGEMENT OF PRIOR ACTIONS . . . . . . . . . . . . . . . . 7
4.02 COVENANT TO CONTRIBUTE . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE V. WELFARE PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.01 PARTICIPATION IN AND GENERAL ADMINISTRATION OF WELFARE PLANS . . 8
5.02 ADMINISTRATION AND AUDIT OF CERTAIN WELFARE PLANS. . . . . . . . 9
5.03 COBRA AND HIPAA. . . . . . . . . . . . . . . . . . . . . . . . . 9
5.04 LEAVE OF ABSENCE AND FMLA. . . . . . . . . . . . . . . . . . . .10
5.05 WORKERS' COMPENSATION. . . . . . . . . . . . . . . . . . . . . .10
ARTICLE VI. EQUITY AND OTHER COMPENSATION. . . . . . . . . . . . . . . . . . .10
6.01 OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
6.02 STOCK PURCHASE PLAN. . . . . . . . . . . . . . . . . . . . . . .11
ARTICLE VII. CERTAIN TRANSITION MATTERS. . . . . . . . . . . . . . . . . . . .11
7.01 TRANSITION SERVICES AGREEMENT. . . . . . . . . . . . . . . . . .11
7.02 REQUESTS FOR IRS AND DOL OPINIONS. . . . . . . . . . . . . . . .11
7.03 CONSENT OF THIRD PARTIES . . . . . . . . . . . . . . . . . . . .11
7.04 TAX COOPERATION. . . . . . . . . . . . . . . . . . . . . . . . .11
7.05 PLAN RETURNS . . . . . . . . . . . . . . . . . . . . . . . . . .11
ARTICLE VIII. EMPLOYMENT-RELATED MATTERS . . . . . . . . . . . . . . . . . . .12
8.01 TERMS OF TODCO EMPLOYMENT. . . . . . . . . . . . . . . . . . . .12
8.02 NON-TERMINATION OF EMPLOYMENT; NO THIRD-PARTY BENEFICIARIES. . .12
ARTICLE IX. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . .12
9.01 EFFECT IF IPO DOES NOT OCCUR . . . . . . . . . . . . . . . . . .12
9.02 LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . . . . .12
9.03 RELATIONSHIP OF PARTIES. . . . . . . . . . . . . . . . . . . . .13
9.04 INCORPORATION OF SEPARATION AGREEMENT PROVISIONS . . . . . . . .13
9.05 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . .13
9.06 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . .13
9.07 AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . .13
9.08 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . .14
9.09 CONFLICT . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
9.10 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . .14
-ii-
EMPLOYEE MATTERS AGREEMENT
This EMPLOYEE MATTERS AGREEMENT (this "Agreement") is entered into as
of February 4, 2004, among Transocean Inc., a company organized under the laws
of the Cayman Islands ("Transocean"), Transocean Holdings Inc., a Delaware
corporation ("Transocean Holdings"), and TODCO (formerly named R&B Falcon
Corporation), a Delaware corporation ("TODCO"). Capitalized terms used herein
and not otherwise defined shall have the meanings ascribed to such terms in
Article I hereof.
RECITALS
WHEREAS, TODCO is an indirect wholly owned Subsidiary of Transocean
and Transocean Holdings is a direct wholly owned Subsidiary of Transocean; and
WHEREAS, Transocean and TODCO currently contemplate that TODCO will
make an initial public offering ("IPO") of shares of TODCO Class A Common Stock
held by Transocean and its Subsidiaries pursuant to a registration statement on
Form S-1 filed pursuant to the Securities Act of 1933, as amended; and
WHEREAS, in connection with the IPO, the TODCO Group shall separate
from the Transocean Group and each Group will accordingly acquire certain assets
from and assume certain liabilities of the other Group; and
WHEREAS, in furtherance of the foregoing, Transocean, Transocean
Holdings and TODCO have agreed to enter into this Agreement to allocate among
them assets, liabilities and responsibilities with respect to certain employee
compensation, benefit plans and programs, and certain employment matters.
NOW, THEREFORE, in consideration of the foregoing and the covenants
and agreements set forth below, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Wherever used in this Agreement, the following terms shall have the
meanings indicated below, unless a different meaning is plainly required by the
context. The singular shall include the plural, unless the context indicates
otherwise. Headings of sections are used for convenience of reference only, and
in case of conflict, the text of this Agreement, rather than such headings,
shall control:
AGREEMENT. "Agreement" means this Employee Matters Agreement and all
amendments made hereto from time to time.
CODE. "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
DOL. "DOL" means the United States Department of Labor.
-1-
ERISA. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
FMLA. "FMLA" means the Family and Medical Leave Act of 1993, as
amended from time to time.
GROUP. "Group" shall have the meaning set forth in the Separation
Agreement.
IPO. "IPO" has the meaning set forth in the Recitals hereof, as the
same is further described in the Separation Agreement.
IPO CLOSING DATE. "IPO Closing Date" means the first date on which
the proceeds of any sale of TODCO Class A Common Stock to the underwriters in
the IPO are received.
IRS. "IRS" means the United States Internal Revenue Service.
PARTICIPATING COMPANY. "Participating Company" means: (a) Transocean;
(b) any Person (other than an individual) that Transocean has approved for
participation in, has accepted participation in, or which is participating in, a
Plan sponsored by Transocean; or (c) any Person (other than an individual) that,
by the terms of such a Plan, participates in such a Plan sponsored by Transocean
or any employees of which, by the terms of such a Plan, participate in a Plan.
PERSON. "Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.
PLAN. "Plan," depending on the context, may mean any plan, policy,
program, payroll practice, arrangement, contract, trust, insurance policy, or
any agreement or funding vehicle providing compensation or benefits to
employees, former employees or directors of Transocean, TODCO or any member of
the Transocean Group or the TODCO Group. "Plan," when immediately preceded by
"Transocean," means a Plan sponsored by Transocean or a member of the Transocean
Group. When immediately preceded by "TODCO," "Plan" means a Plan sponsored by
TODCO or a member of the TODCO Group.
R&B FALCON MANAGEMENT. "R&B Falcon Management" means R&B Falcon
Management Services Inc., a Delaware corporation.
SEC. "SEC" means the United States Securities and Exchange
Commission.
SEPARATION. "Separation" shall have the meaning set forth in the
Separation Agreement.
SEPARATION AGREEMENT. "Separation Agreement" means the Master
Separation Agreement among Transocean, Transocean Holdings and TODCO entered
into as of February 4, 2004.
-2-
SUBSIDIARY. "Subsidiary" shall have the meaning set forth in the
Separation Agreement.
TAX ALLOCATION AGREEMENT. "Tax Allocation Agreement" means the Tax
Allocation Agreement, which is attached as an exhibit to the Separation
Agreement.
TODCO. "TODCO" means TODCO (formerly known as R&B Falcon
Corporation), a Delaware corporation. In all such instances in which TODCO is
referred to in this Agreement, it shall also be deemed to include a reference to
each member of the TODCO Group, unless it specifically provides otherwise; TODCO
shall be solely responsible to Transocean for ensuring that each member of the
TODCO Group complies with the applicable terms of this Agreement.
TODCO BUSINESS. "TODCO Business" shall have the meaning set forth in
the Separation Agreement.
TODCO CLASS A COMMON STOCK. "TODCO Class A Common Stock" shall have the meaning
set forth in the Separation Agreement.
TODCO EMPLOYEE. "TODCO Employee" means any individual who is employed
in the TODCO Business during the relevant time period.
TODCO GROUP. "TODCO Group" shall have the meaning set forth in the
Separation Agreement.
TODCO VOTING STOCK. "TODCO Voting Stock" shall have the meaning set
forth in the Separation Agreement.
TRANSFERRED EMPLOYEE. "Transferred Employee" means any individual who
was previously employed in the Transocean Business and then was transferred to
work in the TODCO Business on or prior to the IPO Closing Date and remained
employed in the TODCO Business as of the IPO Closing Date or did not return to
work in the Transocean Business prior to the IPO Closing Date.
TRANSITION SERVICES AGREEMENT. "Transition Services Agreement" means
the Transition Services Agreement, which is attached as an exhibit to the
Separation Agreement.
TRANSOCEAN. "Transocean" means Transocean Inc., a company organized
under the laws of the Cayman Islands. In all such instances in which
"Transocean" is referred to in this Agreement, it shall also be deemed to
include a reference to each member of the Transocean Group, unless it
specifically provides otherwise.
TRANSOCEAN BUSINESS. "Transocean Business" shall have the meaning set
forth in the Separation Agreement.
-3-
TRANSOCEAN GROUP. "Transocean Group" shall have the meaning set forth
in the Separation Agreement.
TRANSOCEAN HOLDINGS. "Transocean Holdings" means Transocean Holdings
Inc., a Delaware corporation.
ARTICLE II.
GENERAL PRINCIPLES
2.01 TODCO PLANS.
(a) Non-Duplication of Benefits. With respect to the Plans that
TODCO establishes or maintains on or after the IPO Closing Date, the
separate TODCO Plans shall be, with respect to employees of the TODCO
Group, in all respects the successors in interest to, and shall not provide
benefits that duplicate benefits provided by, the corresponding Transocean
Plans. Transocean and TODCO shall mutually agree, if necessary, on methods
and procedures, including amending the respective Plan documents, to
prevent employees of the TODCO Group from receiving duplicate benefits from
the Transocean Plans and the TODCO Plans.
(b) Service Credit. Except as specified otherwise in this
Agreement or as required by applicable law, with respect to TODCO
Employees, each TODCO Plan in existence on the IPO Closing Date shall
provide that all service, all compensation and all other benefit-affecting
determinations that, as of the IPO Closing Date, were recognized under the
corresponding Transocean Plan shall, as of the IPO Closing Date, receive
full recognition and credit and be taken into account under such TODCO Plan
to the same extent as if such items occurred under such TODCO Plan, except
to the extent that duplication of benefits would result. The service
crediting provisions shall be subject to any respectively applicable
"service bridging," "break in service," "employment date" or "eligibility
date" rules under the TODCO Plans and the Transocean Plans.
(c) Beneficiary Designations. Subject to Section 7.03 of this
Agreement, all beneficiary designations made by the TODCO Employees for the
Transocean Plans shall be transferred to and be in full force and effect
under the corresponding TODCO Plans until such time, if ever, that any such
beneficiary designation is replaced or revoked by the TODCO Employee who
made the beneficiary designation.
(d) TODCO Under No Obligation to Maintain Plans. Except as
specified otherwise in this Agreement, nothing in this Agreement shall
preclude TODCO, at any time from amending, merging, modifying, terminating,
eliminating, reducing, or otherwise altering in any respect any TODCO Plan,
any benefit under any TODCO Plan or any trust, insurance policy or funding
vehicle related to any TODCO Plan (to the extent permitted by law).
-4-
2.02 TRANSOCEAN PLANS.
(a) TODCO's Participation in Transocean Plans. After the IPO
Closing Date, TODCO shall continue to be a Participating Company in the
Transocean U.S. Life Insurance Plan and the Transocean U.S. Long Term
Disability Plan for the period of time specified in this Agreement, subject
to the terms and conditions provided in said Plans and in Articles III and
IV of this Agreement. Except as otherwise provided in this Section 2.02(a)
or unless the prior written consent of Transocean is obtained, TODCO shall
not participate in any Transocean Plans.
(b) Transocean's General Obligations as Plan Sponsor.
Transocean or Transocean Holdings, whichever is applicable, shall continue
to administer, or cause to be administered, in accordance with their terms
and applicable law, the Transocean Plans specifically identified in Section
2.02(a), and shall have the sole and absolute discretion and authority to
interpret said Transocean Plans, as set forth therein, subject to the
specific arrangements provided in Articles III, IV and V of this Agreement.
Transocean shall not discriminate against TODCO Employees in favor of
employees employed by the Transocean Group with respect to the
administration and/or distribution of benefits under said Transocean Plans.
(c) TODCO's General Obligations as Participating Company. TODCO
shall perform with respect to its participation in the Transocean Plans
identified in Section 2.02(a) above, the duties of a Participating Company
as set forth in each such Plan or any procedures adopted pursuant thereto,
including (without limitation): (i) assisting in the administration of
claims, to the extent requested by the claims administrator of the
applicable Transocean Plan; (ii) cooperating fully with Transocean Plan
auditors, benefit personnel and benefit vendors; (iii) preserving the
confidentiality of all financial arrangements Transocean has or may have
with any vendors, claims administrators, trustees or any other entity or
individual with whom Transocean has entered into an agreement relating to
the Transocean Plans; and (iv) preserving the confidentiality of
participant information (including, without limitation, personal health
information) to the extent not specified otherwise in this Agreement. In
addition, TODCO shall provide, or cause to be provided, all participant
information that is necessary or appropriate for the efficient and accurate
administration of each Transocean Plans identified in Section 2.02(a)
during the respective periods applicable to such Plans. Transocean and its
respective authorized agents shall, subject to applicable laws of
confidentiality and data protection, be given reasonable and timely access
to, and may make copies of, all information relating to the subjects of
this Agreement in the custody of the other party or its agents, to the
extent necessary or appropriate for the administration of said Plans.
(d) Reporting and Disclosing Communications to Participants.
While TODCO is a Participating Company in the Transocean Plans, Transocean
or Transocean Holdings, whichever is applicable, shall take, or cause to be
taken, all actions necessary or appropriate to facilitate the distribution
of all Transocean Plan-related communications and materials to
participating TODCO Employees and their beneficiaries, including (without
limitation) summary plan descriptions and related summaries of material
-5-
modification(s), summary annual reports, investment information,
prospectuses, notices and enrollment material for the Transocean Plans.
TODCO shall provide all information needed by Transocean to facilitate such
Transocean Plan-related communications. TODCO shall take, or cause to be
taken, all actions necessary or appropriate to facilitate the distribution
of all TODCO Plan-related communications and materials to participating
TODCO Employees and their beneficiaries. TODCO shall assist, and TODCO
shall cause each other applicable member of the TODCO Group to assist,
Transocean in complying with all reporting and disclosure requirements of
ERISA, including the preparation of Form Series 5500 annual reports, for
the Transocean Plans, where applicable.
2.03 SECONDED EMPLOYEES . Certain employees of Transocean Holdings may
be, or may have been from time to time, seconded to work in the TODCO Business
("Seconded Employees"). Effective as of December 31, 2002, the Seconded
Employees ceased to participate in any Transocean Plans. Effective as of
January 1, 2003, such employees commenced to participate in and receive coverage
under the TODCO Plans, subject to the eligibility provisions of each such Plan.
TODCO hereby acknowledges that TODCO shall indemnify and hold Transocean and the
Transocean Group and their directors, officers and employees harmless from and
against all liability, loss, expense, cost or claims of whatsoever nature,
arising out of any acts or omissions of the Seconded Employees who are, at the
time of such action or omission, acting in the course and scope of performing
services for the benefit of TODCO, except to the extent that such liability
arises under the Transocean Plans or is otherwise attributable to services
performed for Transocean or any member of the Transocean Group.
2.04 COAL COMPANY LIABILITIES . Transocean shall continue to
administer the group life and health insurance for retired employees who are
eligible for such coverage as a result of their employment with Reading & Bates
Coal Co. or any of its subsidiaries that conducted coal production activities
(each referred to as a "Coal Company"), and be responsible for the costs of such
liabilities and the related premium payments for such retired employees in
accordance with past practices and the terms and conditions of the applicable
plan established, maintained or sponsored by a Coal Company. In addition,
Transocean shall continue to administer the occupational injury and disease
claims, if any, for employees who were employed by a Coal Company and be
responsible for the costs of such liabilities. TODCO shall provide Transocean
with any assistance, data or information that is reasonably necessary or
appropriate for the efficient and accurate administration of such retiree life
and medical coverage and occupational injury and disease claims.
ARTICLE III.
DEFINED BENEFIT PLANS
3.01 TRANSOCEAN HOLDINGS' OBLIGATIONS . Transocean Holdings hereby
affirmatively covenants that, to the extent permitted by law, the Transocean
Holdings U.S. Pension Plan shall provide that, effective as of the date on which
TODCO is no longer a member of the "controlled group" of corporations of
Transocean (as defined in section 414(b) of the Code), a participant in said
Plan who is employed in the TODCO Business shall be deemed to have terminated
his or her employment under said Plan and, if otherwise eligible under said
Plan,
-6-
shall be eligible to receive a distribution of benefits in accordance with the
terms and conditions of Section 4.18 of said Plan. In addition, Transocean
Holdings hereby affirmatively covenants that the Transocean Holdings U.S.
Pension Plan shall provide that, effective as of the date on which TODCO is no
longer a member of the "controlled group" of corporations of Transocean (as
defined in section 414(b) of the Code), affected employees who participate in
the Transocean Holdings U.S. Pension Plan shall be entitled to defer the receipt
of their accrued benefits under said Plan, to roll over their accrued benefit
amount under said Plan to another eligible retirement plan, or to receive a
distribution under said Plan, all subject to the terms and conditions of said
Plan and to any taxation and early withdrawal penalties.
3.02 TODCO EMPLOYEES' PARTICIPATION . Effective as of July 1, 1999,
the Transocean Holdings U.S. Pension Plan was frozen and TODCO Employees were no
longer eligible to first become an active participant in said Plan. In
addition, effective as of such date, TODCO Employees who have accrued benefits
under said Plan were no longer eligible to actively participate in said Plan and
receive credit for benefit service or average monthly compensation for any
purpose under said Plan. A TODCO Employee who participates in the Transocean
Holdings U.S. Pension Plan shall not be deemed to be a deferred vested
participant under the Transocean Holdings U.S. Pension Plan, provided that such
employee was eligible to retire on January 1, 2003, and commences his or her
benefits under such Plan when he or she terminates employment with TODCO.
ARTICLE IV.
DEFINED CONTRIBUTION PLANS
4.01 ACKNOWLEDGEMENT OF PRIOR ACTIONS . Prior to November 1, 2002,
Transferred Employees on the U.S. payroll and employees who were employed in the
TODCO Business were eligible to participate in the Transocean U.S. Savings Plan.
Effective as of November 1, 2002, employees who were employed in the TODCO
Business were no longer eligible to participate in the Transocean U.S. Savings
Plan, and said Plan was amended to eliminate participation by such employees as
of November 1, 2002. Effective as of November 1, 2002, employees who were
employed in the TODCO Business resumed participation in the TODCO Savings Plan
(which previously had been frozen). On or about January 1, 2003, liabilities
for the account balances under the Transocean U.S. Savings Plan for existing
employees who were employed in the TODCO Business, and assets associated with
those liabilities, were transferred to the TODCO Savings Plan, and liabilities
for the account balances under the TODCO Savings Plan for existing employees who
were employed in the Transocean Business, and assets associated with those
liabilities, were transferred to the Transocean U.S. Savings Plan.
4.02 COVENANT TO CONTRIBUTE . TODCO hereby affirmatively covenants to
make an additional annual employer contribution to the TODCO Savings Plan on
behalf of those participants who are employed in the TODCO Business in the
amount of 1 % of each such employee's base pay. TODCO further acknowledges that
such additional annual employer contribution shall be made during the period
commencing on November 1, 2002, and ending on the date on which TODCO is no
longer a member of the "controlled group" of corporations of
-7-
Transocean (as defined in section 414(b) of the Code) or such other date that
TODCO and Transocean mutually agree otherwise.
ARTICLE V.
WELFARE PLANS
5.01 PARTICIPATION IN AND GENERAL ADMINISTRATION OF WELFARE PLANS .
(a) Medical and Dental Plan. Effective as of August 1, 2002,
Transocean transferred sponsorship of the Transocean Shallow-Water Group
Medical and Dental Plan to TODCO, and said Plan has been renamed the TODCO
Medical and Dental Benefits Plan.
(b) Retiree Medical.
(i) Effective as of August 1, 2002, Transocean Holdings
assumed the obligations, liabilities and costs of retiree medical
coverage for employees who retired from TODCO and who were
participants in the Transocean Holdings Medical and Dental Benefits
Plan as of such date. Transocean Holdings shall continue to
administer, or cause to be administered, in accordance with their
terms and applicable law, said Plan, and shall have sole and absolute
discretion and authority to interpret said Plan or amend or terminate
said Plan, as set forth therein. Except as otherwise expressly
provided above, no other employee of any member of the TODCO Group
shall be entitled to benefits under the Transocean Holdings Medical
and Dental Benefits Plan. TODCO shall have no obligation to establish,
maintain or sponsor a medical benefits plan for retired employees.
(ii) Transferred Employees who were eligible to commence
retiree medical coverage under the Transocean Holdings Medical and
Dental Benefits Plan as of January 1, 2003 shall remain eligible to
receive retiree medical coverage under said Plan, even after they
transfer to work in the TODCO Business; provided, however, that such
coverage shall be received by such Transferred Employees only to the
extent that other employees of the Transocean Group on the U.S.
payroll who are similarly situated as to age, length of service and
retiree medical commencement date are covered under said Plan on
similar terms. Such Transferred Employees shall be required to contact
Transocean's benefits department no later than 60 days after the date
of their retirement in order to commence the retiree medical coverage
available to them upon their retirement from the TODCO Business.
Notwithstanding the foregoing, such Transferred Employees ceased to
accrue additional service under the Transocean Holdings Medical and
Dental Benefits Plan as of December 31, 2002.
(c) Life Insurance and Long Term Disability. Transocean sponsors
the Transocean U.S. Life Insurance Plan and the Transocean U.S. Long Term
Disability Plan. In connection with said Plans, Transocean has a guaranteed
rate under the group
-8-
life insurance policy and the long term disability insurance policy with
Hartford Life & Accident Insurance Company, a Delaware corporation
("Hartford"), until January 1, 2005. Transocean hereby affirmatively
covenants to use reasonable efforts to retain such policies until the first
to occur of January 1, 2005 or the date on which Transocean no longer owns
shares representing at least a majority of the voting power of all of the
outstanding shares of TODCO Voting Stock. In addition, Transocean
affirmatively covenants to use reasonable efforts to obtain a separate
premium reporting structure from Hartford for such policies, to be
effective as of the IPO Closing Date, provided that such continued coverage
does not result in an increased premium rate under the relevant policy. If
Transocean is unable to obtain a separate premium reporting structure for a
policy, Transocean shall allocate the premium owed to Hartford and
attributable to coverage for TODCO Employees based on past practices.
(d) Short Term Disability. TODCO hereby acknowledges that TODCO
has been and shall continue to be responsible for and administer all
liabilities (if any) for TODCO Employees who are on nonoccupational medical
leaves of absence.
5.02 ADMINISTRATION AND AUDIT OF CERTAIN WELFARE PLANS .
(a) Life Insurance and Long Term Disability. Transocean
continued to calculate the premiums attributable to TODCO Employees under
the Transocean U.S. Life Insurance Plan and the Transocean U.S. Long Term
Disability Plan until July 1, 2003. After July 1, 2003, TODCO shall provide
Transocean with the premium report and/or the data used for premium
calculations for TODCO Employees and the premium payments owed for such
TODCO Employees no later than the 10th day of each month. Notwithstanding
the foregoing, if the rates guaranteed under the policies with Hartford
cease to apply for any reason prior to December 31, 2004, TODCO retains the
right to cease to be a Participating Company in the Transocean U.S. Life
Insurance Plan and the Transocean U.S. Long Term Disability Plan, whichever
is applicable.
(b) Audits. Transocean shall have the right to conduct an audit
of TODCO's participant information relating to the TODCO Medical and Dental
Benefits Plan coverage through the period ending December 31, 2003.
Transocean shall also have the right to conduct an audit of the premium
report and the data used for premium calculations for TODCO Employees under
the Transocean U.S. Life Insurance Plan, the Transocean U.S. Long Term
Disability Plan and the Transocean Accidental Death & Dismemberment Plan at
any time, and if TODCO fails to cooperate with such audit, Transocean
retains the right to cause TODCO to cease to be a Participating Company in
said Plans. TODCO shall continue to make available in connection with the
audit all documents and other information that Transocean reasonably
requires. Transocean shall determine, in its sole discretion, the
performance standards, audit methodology, auditing policy and quality
measures and reporting requirements.
5.03 COBRA AND HIPAA . Until December 31, 2003, BPI continued to
administer the TODCO Medical and Dental Benefits Plan and, in turn, the
compliance with the health care continuation coverage requirements for "group
health plans" under Title X of the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended ("COBRA"), and the portability
-9-
requirements under Health Insurance Portability and Accountability Act of 1996
("HIPAA"), with respect to TODCO Employees and their qualified beneficiaries (as
such term is defined under COBRA) whose coverage under said Plan terminates,
subject to TODCO's cooperation with participant data request and payment of
administrative costs attributable to TODCO Employees and the terms and
conditions of the Administrative Agreement. TODCO hereby acknowledges that TODCO
shall be solely responsible for administering compliance with the health care
continuation coverage requirements for "group health plans" under Title X of
COBRA, and the portability requirements under HIPAA, (a) on and after January 1,
2004, with respect to TODCO Employees and their qualified beneficiaries (as such
term is defined under COBRA) whose coverage under the TODCO Medical and Dental
Benefits Plan terminates, and (b) with respect to TODCO Employees and their
qualified beneficiaries (as such term is defined under COBRA) whose coverage
under any other Transocean Plans and TODCO Plans terminates, regardless of
whether such termination takes place prior to, on or subsequent to the IPO
Closing Date. Notwithstanding the foregoing, the payment or funding of any claim
of a TODCO Employee under COBRA or HIPAA shall be the sole responsibility of
TODCO.
5.04 LEAVE OF ABSENCE AND FMLA . TODCO hereby acknowledges that TODCO
shall be responsible for administering leaves of absence and complying with FMLA
with respect to TODCO Employees. Transocean shall have the right to conduct an
audit of TODCO's compliance with FMLA at any time prior to the date on which
TODCO is no longer a member of the "controlled group" of corporations of
Transocean (as defined in section 414(b) of the Code). TODCO shall continue to
make available in connection with the audit all documents and other information
that Transocean reasonably requires. Transocean shall determine, in its sole
discretion, the performance standards, audit methodology, auditing policy and
quality measures and reporting requirements.
5.05 WORKERS' COMPENSATION . TODCO hereby acknowledges that TODCO has
been and shall continue to be responsible for the administration, costs and
funding of workers' compensation claims for TODCO Employees.
ARTICLE VI.
EQUITY AND OTHER COMPENSATION
6.01 OPTIONS . Certain TODCO Employees have been granted options under
the Long-Term Incentive Plan of Transocean Inc. Transocean agrees that service
with TODCO shall be considered to be service with a "subsidiary" as defined in
the Long-Term Incentive Plan for so long as Transocean continues to own shares
representing at least a majority of the voting power of all of the outstanding
shares of TODCO Voting Stock. If the TODCO Employee is employed by TODCO as of
the date on which Transocean ceases to own shares representing at least a
majority of the voting power of all of the outstanding shares of TODCO Voting
Stock, then (i) such TODCO Employee shall no longer be considered employed by
Transocean or one of its subsidiaries under said Plan and, in turn, shall be
considered terminated for purposes of determining the TODCO Employee's rights
with respect to such option and (ii) such termination shall be considered a
termination for the convenience of Transocean under said Plan.
-10-
6.02 STOCK PURCHASE PLAN . Effective as of January 1, 2003, R&B Falcon
Management ceased to be a Participating Company in the Transocean Employee Stock
Purchase Plan, and TODCO Employees were no longer eligible to participate in
said Plan.
ARTICLE VII.
CERTAIN TRANSITION MATTERS
7.01 TRANSITION SERVICES AGREEMENT . On or about the date hereof,
Transocean Holdings and TODCO shall enter into the Transition Services Agreement
covering the provisions of various services to be provided by Transocean
Holdings and its affiliates to TODCO. The provisions of this Agreement shall be
subject to the provisions of such Transition Services Agreement and to the
extent that any provision in this Agreement is inconsistent with a provision in
the Transition Services Agreement the provision in the Transition Services
Agreement shall control.
7.02 REQUESTS FOR IRS AND DOL OPINIONS . Transocean, Transocean
Holdings and TODCO shall make such applications to regulatory agencies,
including the IRS and the DOL, as may be necessary or appropriate. TODCO and
Transocean shall cooperate fully with one another on any issue relating to the
transactions contemplated by this Agreement for which Transocean and/or TODCO
elects to seek a determination letter or private letter ruling from the IRS or
an advisory opinion from the DOL.
7.03 CONSENT OF THIRD PARTIES . If any provision of this Agreement is
dependent on the consent of any third party (such as a vendor) and such consent
is withheld, Transocean, Transocean Holdings and TODCO shall use their
commercially reasonable best efforts to implement the applicable provisions of
this Agreement. If any provision of this Agreement cannot be implemented due to
the failure of such third party to consent, Transocean, Transocean Holdings and
TODCO shall negotiate in good faith to implement the provision in a mutually
satisfactory manner.
7.04 TAX COOPERATION . In connection with the interpretation and
administration of this Agreement, Transocean, Transocean Holdings and TODCO
shall take into account the agreements and policies established pursuant to the
Separation Agreement and the Tax Allocation Agreement.
7.05 PLAN RETURNS . Plan Returns shall be filed or caused to be filed
by Transocean, Transocean Holdings or TODCO, as the case may be, in accordance
with the principles established in the Tax Allocation Agreement. For purposes
of this Section 7.05, "Plan Returns" means any return, report, certificate, form
or similar statement or document required to be filed with a government agency
with respect to an employee benefit plan governed by the ERISA, or a program
governed by section 6039D of the Code.
-11-
ARTICLE VIII.
EMPLOYMENT-RELATED MATTERS
8.01 TERMS OF TODCO EMPLOYMENT . Employees of the TODCO Group may be
required to execute a new agreement regarding confidential information and
proprietary developments in a form approved by TODCO. In addition, nothing in
this Agreement, the Separation Agreement, the Transition Services Agreement or
the Tax Allocation Agreement should be construed to change the at-will status of
any of the employees of any member of the Transocean Group or the TODCO Group.
8.02 NON-TERMINATION OF EMPLOYMENT; NO THIRD-PARTY BENEFICIARIES . No
provision of this Agreement shall be construed to create any right, or
accelerate entitlement, to any compensation or benefit whatsoever on the part of
any TODCO Employee or other future, present or former employee of Transocean,
TODCO, the Transocean Group or the TODCO Group under any Transocean Plan or
TODCO Plan or otherwise. Without limiting the generality of the foregoing: (a)
except as otherwise provided in this Agreement or applicable provisions of the
Plans, neither the IPO, the Separation nor the termination of the Participating
Company status of TODCO or any member of the TODCO Group shall cause any
employee to be deemed to have incurred a termination of employment; and (b)
except as otherwise provided in this Agreement, no transfer of employment
between the Transocean Group and the TODCO Group before the IPO Closing Date
shall be deemed a termination of employment for any purpose hereunder.
ARTICLE IX.
GENERAL PROVISIONS
9.01 EFFECT IF IPO DOES NOT OCCUR . Subject to Section 9.08, if the
IPO does not occur, then all actions and events that are, under this Agreement,
to be taken or occur effective as of the IPO Closing Date, or otherwise in
connection with the IPO, shall not be taken or occur except to the extent
specifically agreed by the parties.
9.02 LIMITATION OF LIABILITY . TO THE EXTENT THAT TRANSOCEAN OR ANY
MEMBER OF THE TRANSOCEAN GROUP PROVIDES SERVICES UNDER THIS AGREEMENT TO TODCO,
AND SUCH SERVICES ARE NOT OTHERWISE ADDRESSED IN THE TRANSITION SERVICES
AGREEMENT, SUCH SERVICES SHALL BE PERFORMED WITH THE SAME GENERAL DEGREE OF CARE
AS WHEN PERFORMED WITHIN THE TRANSOCEAN ORGANIZATION. TODCO HEREBY EXPRESSLY
WAIVES ANY RIGHT TODCO MAY OTHERWISE HAVE FOR ANY LOSSES, TO ENFORCE SPECIFIC
PERFORMANCE OR TO PURSUE ANY OTHER REMEDY AVAILABLE IN CONTRACT, AT LAW, OR IN
EQUITY IN THE EVENT OF ANY NON-PERFORMANCE, INADEQUATE PERFORMANCE, FAULTY
PERFORMANCE OR OTHER FAILURE OR BREACH BY TRANSOCEAN OR ANY MEMBER OF THE
TRANSOCEAN GROUP UNDER OR RELATING TO THIS AGREEMENT, NOTWITHSTANDING THE
NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE) OR GROSS
NEGLIGENCE OF TRANSOCEAN OR ANY
-12-
MEMBER OF THE TRANSOCEAN GROUP OR ANY OTHER PERSON OR ENTITY INVOLVED IN THE
PROVISION OF SERVICES AND WHETHER DAMAGES ARE ASSERTED IN CONTRACT OR TORT,
UNDER FEDERAL, STATE OR FOREIGN LAWS OR OTHER STATUTE OR OTHERWISE.
9.03 RELATIONSHIP OF PARTIES . Nothing in this Agreement shall be
deemed or construed by the parties or any third party as creating a fiduciary
relationship, a relationship of principal and agent, partnership or joint
venture between the parties, the understanding and agreement being that no
provision contained herein, and no act of the parties, shall be deemed to create
any relationship between the parties other than the relationship set forth
herein. This Agreement shall be binding upon and inure solely to the benefit of
and be enforceable by each party and its respective successors and permitted
assigns. Nothing in this Agreement, express or implied, is intended to or shall
confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
9.04 INCORPORATION OF SEPARATION AGREEMENT PROVISIONS . If a dispute,
claim or controversy results from or arises out of or in connection with this
Agreement, the parties agree to use the procedures set forth in Article VI of
the Separation Agreement in lieu of other available remedies, to resolve same.
The provisions of Sections 8.1 (Limitation of Liability) and 8.5 (Notices) of
the Separation Agreement are hereby incorporated herein by reference, and unless
otherwise expressly specified herein, such provisions shall apply as if fully
set forth herein (references in this Section 9.04 to an "Article" or a "Section"
shall mean Articles or Sections of the Separation Agreement, and, except as
expressly set forth herein, references in the material incorporated herein by
reference shall be references to the Separation Agreement).
9.05 GOVERNING LAW . To the extent not preempted by applicable federal
law, this Agreement shall be governed by, construed and interpreted in
accordance with the laws of the State of Texas, irrespective of the choice of
law principles of the State of Texas, as to all matters, including matters of
validity, construction, effect, performance and remedies.
9.06 SEVERABILITY . If any term or other provision of this Agreement
is determined to be invalid, illegal or incapable of being enforced by any rule
of law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to either party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible and in an
acceptable manner to the end that transactions contemplated hereby are fulfilled
to the fullest possible extent.
9.07 AMENDMENT . Transocean, Transocean Holdings and TODCO may
mutually agree to amend the provisions of this Agreement at any time or times,
either prospectively or retroactively, to such extent and in such manner as the
Boards mutually deem advisable. Each Board may delegate its amendment power, in
whole or in part, to one or more Persons or committees as it deems advisable.
-13-
9.08 TERMINATION . This Agreement may be terminated at any time prior
to the IPO Closing Date by Transocean in its sole discretion (without the
approval of TODCO). This Agreement may be terminated at any time after the IPO
Closing Date by mutual consent of Transocean, Transocean Holdings and TODCO. In
the event of termination pursuant to this Section, no party shall have any
liability of any kind under this Agreement to the other party.
9.09 CONFLICT . In the event of any conflict between the provisions of
this Agreement and the Separation Agreement or any Plan, the provisions of this
Agreement shall control. In the event of any conflict between the provisions of
this Agreement and the Transition Services Agreement, the provisions of the
Transition Services Agreement shall control.
9.10 COUNTERPARTS . This Agreement may be executed in two or more
counterparts each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same Agreement.
-14-
IN WITNESS WHEREOF, each of the parties has caused this Employee
Matters Agreement to be executed on its behalf by its officers thereunto duly
authorized on the day and year first above written.
TRANSOCEAN INC.
By: /s/ Gregory L. Cauthen
------------------------------------
Name: Gregory L. Cauthen
Title: Senior Vice President and
Chief Financial Officer
TRANSOCEAN HOLDINGS INC.
By: /s/ Eric B. Brown
------------------------------------
Name: Eric B. Brown
Title: Vice President and Secretary
TODCO
By: /s/ Randall A. Stafford
------------------------------------
Name: Randall A. Stafford
Title: Vice President, General Counsel
and Secretary
-15-
Dates Referenced Herein and Documents Incorporated By Reference
Filing Submission - Alternative Formats (Word / Rich Text, HTML, Plain Text, SGML, XML, et al.)
Copyright © 2009 Fran Finnegan & Company. All Rights Reserved.
About – Privacy – Redactions – Help —
Sat, 21 Nov 03:53:56.0 GMT 
