==========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 10-K
(Mark One)
_X_ ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1999
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ___________ to ___________.
Commission File No. 1-13729
R&B FALCON CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 76-0544217
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
901 Threadneedle, Houston, TX 77079
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 281-496-5000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of Each Exchange
Title of Each Class on Which Registered
--------------------------- ------------------------
Common Stock, $.01 par value New York Stock Exchange
Series A Junior Participating
Preferred Stock Purchase Rights New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes_X_ No___
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY
NONAFFILIATES ON MARCH 1, 2000 - $2,889,283,000
NUMBER OF SHARES OF COMMON STOCK OUTSTANDING
ON MARCH 1, 2000 - 193,850,422
DOCUMENTS INCORPORATED BY REFERENCE
1) Proxy Statement for Annual Meeting of Stockholders to be held on May
17, 2000 - Part III
==========================================================================
TABLE OF CONTENTS
PART I
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
PART III
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management
Item 13. Certain Relationships and Related Transactions
PART IV
Item 14. Exhibits, Financial Statements and Reports on Form 8-K
Signatures
________________________________________
FORWARD LOOKING STATEMENTS AND ASSUMPTIONS
This Annual Report on Form 10-K may contain or incorporate by reference
certain forward-looking statements, including by way of illustration and
not of limitation, statements relating to liquidity, revenues, expenses,
margins and contract rates and terms. The Company strongly encourages
readers to note that some or all of the assumptions, upon which such
forward-looking statements are based, are beyond the Company's ability to
control or estimate precisely, and may in some cases be subject to rapid
and material changes. Such assumptions include the contract status of the
Company's offshore units, general market conditions prevailing in the
marine drilling industry (including daily rates and utilization) and
various other trends affecting the marine drilling industry, including
world oil prices, the exploration and development programs of the Company's
customers, the actions of the Company's competitors and economic conditions
generally.
PART I
Item 1. Business and Item 2. Properties
The Company
R&B Falcon Corporation ("R&B Falcon"), a Delaware corporation, was
incorporated in July 1997. Prior to December 31, 1997, R&B Falcon did not
own any material assets or conduct any business. Effective on December 31,
1997, pursuant to an Agreement and Plan of Merger dated July 10, 1997,
Falcon Drilling Company, Inc. ("Falcon"), currently R&B Falcon Holdings,
Inc., a Delaware corporation incorporated in 1991, and Reading & Bates
Corporation ("R&B"), currently R&B Falcon (International and Deepwater)
Inc., a Delaware corporation incorporated in 1955, became wholly owned
subsidiaries of R&B Falcon (the "Merger"). On December 1, 1998, R&B Falcon
acquired all of the outstanding stock of Cliffs Drilling Company ("Cliffs
Drilling"), a Delaware corporation incorporated in 1988. Cliffs Drilling is
a contract drilling company which provides daywork and turnkey drilling
services, mobile offshore production units and well engineering and
management services. Unless the context otherwise indicates, the term
"Company" herein refers to the total business conducted by R&B Falcon and
its subsidiaries.
Business - General
The Company's primary business is providing marine contract drilling
and ancillary services on a worldwide basis.
The Company provides the equipment and personnel for drilling wells and
conducting workover operations on wells in marine environments and on land.
Drilling operations essentially involve the boring of a hole in the earth's
crust with the objective of locating hydrocarbon reservoirs. Workover
operations involve efforts to repair damage to, or stimulate production
from, an existing well. Drilling operations in general require heavier and
more powerful equipment due to the weight of the drillpipe and downhole
equipment involved and the potential pressures that may be encountered
while drilling through rock formations. Most of the Company's rigs are
capable of providing both drilling and workover services.
The Company owns and operates towing vessels and barges used to
transport and store equipment and material to support drilling operations.
These assets are deployed in the jack-up and barge rig businesses. The
Company also provides, to a minor extent, such equipment for ocean
transportation of materials and in connection with marine construction
projects.
In February 1996, the Company and Intec Engineering, Inc., formed a
joint venture named Total Offshore Production Systems (TOPS). In 1999, the
Company became the sole owner of TOPS. TOPS provides complete field
development engineering services on a turnkey basis.
The Company, primarily through its majority-owned subsidiary Reading &
Bates Development Co. ("Devco"), engages in exploration for oil and gas. In
March 1998, the Company decided to divest its oil and gas business, and in
the Company's financial statements previously filed with the SEC for the
three years ended December 31, 1997, 1996 and 1995 and the first three
quarters of 1998, the business was accounted for as a discontinued
operation. However in March 1999, the Company had not been able to divest
this business on terms it found acceptable and in accordance with generally
accepted accounting principles the Company reclassified its financial
statements as if this business had not been discontinued. See Notes O and
P of Notes to Consolidated Financial Statements.
Strategy
A major element of the Company's strategy since 1996 has been the
expansion of its deepwater fleet. The Company believes that the major oil
companies of the world will continue to increase their exploration efforts
in deepwater areas for two reasons. First, improvements in technology have
made production of hydrocarbons from these areas more economically viable.
Second, the number of significant reservoirs remaining undiscovered in
shallow waters continues to dwindle, leading operators to move into deeper
waters in their efforts to find hydrocarbon reserves. The Company's
deepwater fleet consists of 11 drillships, including three under
construction; 11 semisubmersibles, including one under construction and one
floating production vessel. The Company's focus on deepwater equipment also
allows it to obtain long-term contracts that serve as a balance to the
short-term contracts prevalent in the shallower water markets.
Another element of the Company's strategy is to expand in markets that
can benefit from consolidation and allow it to provide services related to
its core drilling business. The Company also remains willing to consider
business combinations that will expand its core drilling business and
enhance stockholder value. Pursuant to this strategy, the Company has
become the largest competitor in the worldwide shallow water and barge rig
markets and is also a leading competitor in the domestic offshore and
inland marine transportation markets.
Significant Developments During 1999 and Early 2000
The most significant development for the Company during 1999 was the
continued decline in demand for contract drilling services. Such decline
began in mid-1998 and continued throughout 1999. The decline has been
particularly dramatic in the domestic barge rig and jack-up markets, where
the Company is one of the largest contractors. In response to these
conditions, the Company has implemented cost-cutting measures, primarily
reducing its labor force and taking rigs off the market. In addition to
cost-cutting measures, the Company will try to expand its turnkey drilling
activities as a means of generating additional opportunities for its idle
rigs to be put to work.
The following are other significant developments that occurred in 1999 and
early 2000:
- The dynamically positioned drillship Deepwater Pathfinder was
delivered in September 1998 at a cost of approximately $277.0 million.
This drillship is leased by a limited liability company, which is
owned 50% by the Company and 50% by an affiliate of Conoco, Inc. The
Deepwater Pathfinder commenced its five-year drilling contract with an
affiliate of Conoco, Inc. in the first quarter of 1999. In October
1999, the Deepwater Pathfinder sustained damage when 20 joints of the
vessel's riser and its blowout prevention equipment fell to the seabed
in approximately 7,000 feet of water while preparing to continue
drilling operations in the U.S. Gulf. As a result, the drillship's top
drive and travelling equipment sustained damage, however the marine
integrity of the drillship was not affected. None of the personnel
aboard the drillship sustained any injury and no environmental damage
resulted from the incident. It was determined that the proximate cause
of the accident was a failure of the drawworks braking system caused
by an ingress of contaminants into the primary braking surfaces.
Physical damage and loss of revenue were fully insured with the
exception of the 21-day deductible on the loss of revenue and the
deductible on the physical damage. Such loss did not have a material
adverse impact on the Company's business or financial condition. The
Deepwater Pathfinder is expected to resume drilling operations in
early April 2000.
- The dynamically positioned drillship Deepwater Frontier was delivered
in March 1999 at a cost of approximately $271.0 million. This
drillship is leased by a limited liability company, which is owned 60%
by the Company and 40% by an affiliate of Conoco, Inc. During the
initial five years following delivery, the drillship is contracted to
an affiliate of Conoco, Inc. for an aggregate of 2.5 years and to the
Company for operations for its own account for the remaining 2.5
years. During 1999, both the affiliate of Conoco, Inc. and the Company
used the drillship to drill a well and in October 1999 under the
Company's direction, the Deepwater Frontier commenced a two-year
drilling contract offshore Brazil with Petrobras.
- The dynamically positioned drillship Deepwater Millennium was
delivered in May 1999 at a cost of approximately $275.0 million. The
drillship commenced its four-year drilling contract with Statoil in
the Gulf of Mexico in October 1999.
- The construction of the dynamically positioned drillship Deepwater
Discovery (formerly Deepwater IV) continued on schedule. The estimated
cost of the drillship is approximately $305.0 million. Immediately
following delivery of the drillship from the shipyard, which is
expected to be in the third quarter of 2000, the drillship is
contracted for three years to Texaco. This contract is a substitute
for the previously contracted Peregrine VIII (see below).
- The dynamically positioned drillship Deepwater Expedition (formerly
Peregrine IV) was delivered in July 1999 at a cost of approximately
$230.0 million. Significant delays and cost overruns were experienced
in the construction of the drillship. The original estimated delivery
date was the fourth quarter of 1998 and the original estimated cost
was $160.0 million. The Deepwater Expedition commenced its six-year
drilling contract with Petrobras offshore Brazil in October 1999.
- Significant delays and cost overruns have been experienced in the
upgrade and refurbishment of the dynamically positioned drillship
Deepwater Navigator (formerly Peregrine VII). It is currently
estimated that this vessel will cost approximately $320.0 million
(original estimate: $145.0 million) and will be delivered from the
shipyard in the first quarter of 2000 (original estimate: second
quarter of 1998). The drillship was contracted for three years (with
five one-year extensions) to BP Amoco. However, on April 15, 1999, BP
Amoco cancelled the contract in accordance with the contract's terms
because the drillship had not been delivered on time. The Company has
received a letter of intent from Petrobras for a three-year drilling
contract offshore Brazil.
- The semisubmersible rig Falcon 100 was delivered in July 1999 at a
cost of approximately $125.0 million. Significant delays and cost
overruns were experienced in the upgrade and refurbishment of the
semisubmersible. The upgrade and refurbishment was originally
estimated to cost approximately $60.0 million and the original
estimated delivery date was the fourth quarter of 1998. The Falcon
100 was contracted for four years to Petrobras. However, in May 1999,
Petrobras cancelled the drilling contract based on its interpretation
of the contract's cancellation provisions. The Company does not
believe that Petrobras has the right to cancel such contract. The
Company has engaged Brazilian counsel to determine the Company's
rights under the contract. The Company is currently marketing this rig
for work.
- The fifth-generation ultra deepwater moored semisubmersible, Deepwater
Nautilus (formerly RBS8M) was delivered in February 2000. On schedule
but over budget, the estimated cost of the unit is approximately
$350.0 million (original estimate: $275.0 million). The unit is
expected to arrive in the U.S. Gulf in the second quarter of 2000. It
will then commence its five-year drilling contract with Shell.
- Delays and cost overruns have been experienced in the construction of
the fifth-generation ultra deepwater moored semisubmersible, Deepwater
Horizon (formerly RBS8D). The estimated cost of the unit is
approximately $350.0 million (original estimate: $325.0 million).
Immediately following delivery of the unit from the shipyard, which is
expected to be in the first quarter of 2001 (original estimate: fourth
quarter of 2000), the unit is contracted for three years to Vastar
(with five one-year options).
- The construction of the dynamically positioned drillship Navis
Explorer I continued on schedule but moderately over budget. This
drillship is owned by Navis ASA ("Navis"), a Norwegian public company,
which is in turn owned approximately 38.6% by the Company. The
estimated cost of the drillship is approximately $310.0 million
(original estimate: $280.0 million) with a scheduled delivery in the
second quarter of 2000. A letter of intent has been received from a
major oil company for an approximate one-year commitment commencing
late in the second quarter of 2000. As of December 31, 1999, the
Company had contributed $45.2 million in cash and $17.7 million of
equipment and equipment purchase orders. Most of the equipment and
equipment purchase orders that have or will be contributed by the
Company were acquired by the Company in connection with the Peregrine
VI and Peregrine VIII projects and were no longer required for such
projects in light of their cancellation (see below).
- In the third quarter of 1998, the Company cancelled the Peregrine VI
and the Peregrine VIII drillship conversion projects due to continuing
uncertainty as to final cost and expected delivery dates. In addition,
in the fourth quarter of 1998, the Company cancelled two additional
drillship conversion projects that were in the preliminary phases. As
a result of the termination of these four drillship conversion
projects, the Company expensed $118.3 million in related costs in 1998
and $34.7 million in 1999. See Note H of Notes to Consolidated
Financial Statements.
The Company's Fleet
The following sets forth a brief description of the types and
capabilities of the rigs operated by the Company. Rigs described as
"operating" are under contract (including rigs being mobilized under
contract). Rigs described as "warm stacked" are ready for service and are
being actively marketed. Rigs described as "cold stacked" are not being
actively marketed but are capable of being returned to service with little
or no refurbishment unless otherwise noted.
Drillships. A drillship is a self-propelled ship specifically
outfitted for drilling operations. Many of the drillships built after 1975
feature a dynamic positioning system which allows the ship to position
itself over the well site through the use of thrusters controlled by a
satellite navigation system. The prior generation of drillships, often
called conventionally moored drillships, are anchored over the well site
and thus are generally more limited in terms of water depth than
dynamically positioned drillships. Drillships typically have greater load
capacity than semisubmersible drilling rigs. This enables them to carry
more supplies on board, which makes them better suited for drilling in
remote locations where resupply is more difficult. However, drillships are
limited to calmer water conditions than those in which semisubmersibles
can operate, and thus cannot compete with semisubmersibles in areas with
harsh environments, such as the North Sea.
The following table provides certain information regarding the
Company's drillship fleet as of February 29, 2000:
Year Water Drilling
Built or Depth Depth
Rig Name Converted Capability Capability Location Status
-------- --------- ---------- ---------- -------- ------
(expressed in feet)
PEREGRINE I 1996(1) 7,200 25,000 Brazil Operating
PEREGRINE II 1979 3,300 25,000 Malaysia Cold Stacked
PEREGRINE III 1976 4,200 25,000 U.S. Gulf Operating
FALCON DUCHESS 1975 1,500 20,000 Malaysia Cold Stacked
DEEPWATER
PATHFINDER (2) 1998 10,000 30,000 U.S. Gulf Under Repair
DEEPWATER
FRONTIER (3) 1999 10,000 30,000 Brazil Operating
DEEPWATER
MILLENNIUM 1999 10,000 30,000 U.S. Gulf Operating
DEEPWATER
DISCOVERY - 10,000 30,000 Korea Under Construction
DEEPWATER
EXPEDITION 1999 10,000 30,000 Brazil Operating
DEEPWATER
NAVIGATOR - 7,800 25,000 United Under Construction
Kingdom
NAVIS
EXPLORER I (4) - 10,000 30,000 Korea Under Construction
__________________________
(1) Although originally constructed in 1982, this unit was substantially
upgraded in 1996.
(2) Unit is leased by a limited liability company in which the Company
owns a 50% interest.
(3) Unit is leased by a limited liability company in which the Company
owns a 60% interest.
(4) Unit is being constructed for a company in which the Company owns an
approximate 38.6% interest.
Semisubmersible Rigs. Semisubmersible rigs are floating platforms
which, by means of a water ballasting system, can be submerged to a
predetermined depth so that the lower hulls, or pontoons, are below the
water surface during drilling operations. The rig is "semi-submerged",
remaining afloat, in a position in which the lower hull is about 60 to 80
feet below the water line and the upper deck protrudes well above the
surface. The upper deck is attached to the pontoons by columns. These
rigs maintain their position over the well through the use of an anchoring
system or computer controlled thruster system. Some semisubmersible rigs
are self-propelled and move between locations under their own power when
afloat on the pontoons; however, most are relocated with the assistance of
tugs.
Semisubmersibles are frequently classified into five generations, based
primarily on rig capabilities. The fourth-generation classification
generally refers to semisubmersibles that have been built since 1984, and
have large physical size, harsh environment capability, high variable
loads, top drive units, 15,000 psi blowout preventers and superior motion
characteristics. The fifth-generation classification is generally the same
as the fourth-generation with the exception of a water depth capacity of
7,000 feet or greater. These drilling units are the best choice for
operators in deepwater and/or harsh environments or for drilling that
requires larger variable loads and the ability to handle large pieces of
subsea equipment. There are limited markets for this type of drilling unit
and a relatively small group of users. The principal markets are the North
Sea/Norway, the Gulf of Mexico, the Far East and offshore Brazil.
The following table provides certain information regarding the
Company's semisubmersible fleet as of February 29, 2000:
Year Water Drilling
Built/ Depth Depth
Rig Name Upgraded Capability Capability Location Status
-------- -------- ---------- ---------- -------- ------
(expressed in feet)
Fifth-Generation Semisubmersibles
DEEPWATER NAUTILUS 2000 8,000 30,000 Enroute to U.S. Operating
Gulf from Korea
DEEPWATER HORIZON - 10,000 30,000 Korea Under
Construction
Fourth-Generation Semisubmersibles
JACK BATES 1986/97 6,000 30,000 United Kingdom Warm Stacked
HENRY
GOODRICH (1) 1985 2,000 30,000 Canada Operating
PAUL B. LOYD,
JR. (1) 1987 2,000 25,000 United Kingdom Operating
Third-Generation Semisubmersibles
JIM CUNNINGHAM 1982/95 5,000 25,000 Angola Operating
M. G.
HULME, JR. (2) 1983/96 5,000 25,000 Africa Operating
IOLAIR (3) 1982 2,000 - United Kingdom Warm Stacked
Second-Generation Semisubmersibles
C. KIRK
RHEIN, JR. 1976/97 3,300 25,000 U. S. Gulf Warm Stacked
J. W. McLEAN 1974/96 1,500 25,000 United Kingdom Warm Stacked
FALCON 100 1974/99 2,450 25,000 U. S. Gulf Warm Stacked
RIG 82 (4) 1975 1,500 - Norway Cold Stacked
________________________
(1) Unit is owned by Arcade Drilling AS ("Arcade"), a majority-owned
(approximately 74.4 %) subsidiary of the Company.
(2) The M. G. Hulme, Jr. is accounted for as an operating lease as a
result of the sale/lease-back in November 1995. See Note F of Notes to
Consolidated Financial Statements.
(3) The Iolair is designed for field support and living accommodations.
(4) Rig 82 was originally built as a drilling unit, but was converted to
an accommodation vessel in 1978.
Floating Production Vessels. Floating production vessels are equipped
for oil production, processing and storage. The Company currently owns
(90%) and operates one floating production storage and offloading vessel,
the Seillean (see Notes A and E of Notes to Consolidated Financial
Statements). The Seillean is currently operating in Brazil pursuant to a
long-term contract. In 1998, the Seillean was upgraded to work in 6,000
feet of water.
Drilling Tenders. Drilling tenders are usually non-self-propelled
barges or semisubmersibles which are moored alongside a platform and
contain the quarters, mud pits, mud pumps, power generation, etc. Drilling
tenders allow smaller, less costly platforms to be used for development
projects. Self-erecting tenders carry their own derrick equipment set and
have a crane capable of erecting it on the platform, thereby eliminating
the cost associated with a separate derrick barge and related equipment.
The following table provides certain information regarding the Company's
drilling tenders as of February 29, 2000:
Water Drilling
Year Depth Depth
Rig Name Built Capability Capability Location Status
-------- ----- ---------- ---------- -------- ------
(expressed in feet)
Self-Erecting Drilling Tenders
CHARLEY GRAVES 1975 400 20,000 Ivory Coast Cold Stacked
W. D. KENT 1977 400 20,000 Malaysia Operating
Jack-Up Rigs. Jack-up rigs are mobile self-elevating drilling platforms
equipped with legs which can be lowered to the ocean floor until a
foundation is established to support the drilling platform which is then
jacked further up the legs so it is above the highest expected waves. The
rig hull includes the drilling rig, jacking system, crew quarters, loading
and unloading facilities, storage areas for bulk and liquid materials,
helicopter landing deck and other related equipment. The rig legs may be
independent or may have a lower hull ("mat") attached to the bottom of them
in order to provide a more stable foundation in soft bottom areas.
Independent leg rigs are better suited for harder or uneven seabed
conditions while mat rigs are better suited for soft bottom conditions.
Jack-up rigs may be designed to operate in a maximum water depth of
approximately 400 feet (however, most jack-up rigs have a lesser water depth
capability). Some jack-up rigs may drill in water depths as shallow as ten
feet. A cantilever jack-up has a feature which allows the drill floor to be
extended out from the hull, allowing it to perform drilling or workover
operations over pre-existing platforms or structures. Certain cantilever
jack-up rigs have "skid-off" capability, which allows the derrick equipment
set to be skidded onto an adjacent platform, thereby increasing the
operational capability of the rig. Slot type jack-up rigs are configured
for the drilling operations to take place through a slot in the hull. Slot
type rigs are usually used for exploratory drilling, in that their
configuration makes them difficult to position over existing platforms or
structures.
The following table provides certain information regarding the Company's
jack-up fleet as of February 29, 2000:
Water Drilling
Year Depth Depth
Rig Name Rig Description Built Capability Capability Location Status
-------- --------------- ----- --------- ---------- -------- ------
(expressed in feet)
Cantilevered Independent Leg Jack-up Rigs
F. G. MLT 53-C 1975 300 25,000 Holland Cold Stacked
McCLINTOCK
RON TAPPMEYER MLT 116-C 1978 300 25,000 Australia Warm Stacked
C. E. MLT 53-C 1974 300 25,000 Italy Cold Stacked
THORNTON
RANDOLPH YOST MLT 116-C 1979 300 25,000 Ivory CoastCold Stacked
D. R. STEWART MLT 116-C 1980 300 25,000 Italy Operating
HARVEY H. F&G L780 1981 300 25,000 Malaysia Operating
WARD
ROGER W. F&G L780 1982 300 25,000 Indonesia Operating
MOWELL
GEORGE H. F&G L780 1985 300 25,000 U.S. Gulf Operating
GALLOWAY
J. T. ANGEL F&G L780 1982 300 25,000 India Operating
LaSALLE DMI 200-IC 1982 190 25,000 Qatar Cold Stacked
CLIFFS MLT 150-44-C 1979 150 20,000 U.S. Gulf Operating
DRILLING 150
CLIFFS BMC 150-H 1981 150 25,000 U.S. Gulf Cold Stacked
DRILLING 151
CLIFFS MLT 150-44-C 1979 150 20,000 U.S. Gulf Cold Stacked
DRILLING 154 (1)
CLIFFS Levingston 011- 1980 150 20,000 U.S. Gulf Operating
DRILLING 155 C
CLIFFS BMC 150-H 1983 150 25,000 U.S. Gulf Operating
DRILLING 156
CLIFFS BMC 150-IC 1980 160 20,000 Qatar Cold Stacked
DRILLING 160
Slot type Mat-Supported Jack-up Rigs
FALRIG 17 Bethlehem JU-250MS 1974 250 25,000 U.S. Gulf Operating
FALRIG 18 Bethlehem JU-250MS 1978 250 25,000 U.S. Gulf Operating
FALRIG 19 Bethlehem JU-250MS 1978 250 25,000 U.S. Gulf Cold Stacked
FALRIG 20 Bethlehem JU-250MS 1982 250 25,000 U.S. Gulf Operating
FALRIG 82 Baker Marine 1978 200 25,000 U.S. Gulf Cold Stacked
BMC 250
FALRIG 83 Bethlehem JU-250MS 1978 250 25,000 Ivory CoastCold Stacked
FALRIG 84 Bethlehem JU-250MS 1975 250 25,000 U.S. Gulf Cold Stacked
ACHILLES BMC 250-MS 1981 250 25,000 U.S. Gulf Cold Stacked
SEA HAWK Bethlehem JU-250MS 1976 250 25,000 U.S. Gulf Cold Stacked
TAURUS Bethlehem JU-250MS 1976 250 25,000 U.S. Gulf Cold Stacked
CLIFFS BMC 250-MS 1978 184 25,000 U.S. Gulf Cold Stacked
DRILLING 180
Cantilevered Mat-Supported Jack-up Rigs
PHOENIX I Bethlehem JU-200MC 1981 200 25,000 U.S. Gulf Operating
PHOENIX II Bethlehem JU-200MC 1982 200 25,000 U.S. Gulf Operating
PHOENIX III Bethlehem JU-200MC 1981 200 25,000 U.S. Gulf Operating
PHOENIX IV Bethlehem JU-200MC 1981 200 25,000 U.S. Gulf Operating
FALRIG 85 Bethlehem JU-200MC 1979 200 25,000 U.S. Gulf Warm Stacked
FALRIG 86 Bethlehem JU-200MC 1980 200 25,000 U.S. Gulf Operating
PHOENIX VI Bethlehem JU-200MC 1981 200 25,000 U.S. Gulf Cold Stacked
CLIFFS Bethlehem JU-100MC 1982 100 25,000 U.S. Gulf Cold Stacked
CLIFFS McDermott 87-C 1973 100 15,000 Trinidad Operating
DRILLING 101
CLIFFS Bethlehem JU-100MC 1982 110 25,000 Trinidad Operating
DRILLING 110
CLIFFS Bethlehem JU-150MC 1980 150 25,000 U.S. Gulf Operating
DRILLING 152
CLIFFS Bethlehem JU-150MC 1980 150 25,000 U.S. Gulf Operating
DRILLING 153
CLIFFS Bethlehem JU-200MC 1979 200 25,000 U.S. Gulf Operating
DRILLING 200
CLIFFS Bethlehem JU-200MC 1980 200 20,000 Brazil Operating
DRILLING 201
CLIFFS Bethlehem JU-200MC 1980 200 25,000 Venezuela Warm Stacked
DRILLING 202
__________________
(1) This rig is also in need of substantial refurbishment to be activated.
Submersible Rigs. Submersible rigs are similar in configuration to
semisubmersible rigs except that the lower hull of the rig rests on the sea
floor during drilling operations. A submersible rig is towed to the well
site where it is submerged by flooding its lower hull until it rests on the
sea floor, with the upper hull above the water surface. Submersible rigs
typically operate in water depths of 12 to 85 feet.
The following table provides certain information regarding the Company's
submersible rig fleet as of February 29, 2000:
Water Drilling
Year Depth Depth
Rig Name Rig Description Built Capability Capability Location Status
- -------- --------------- ----- ---------- ---------- -------- ------
(expressed in feet)
Rig 203 Pace 85G 1983 85 30,000 U.S. Gulf Cold Stacked
FALRIG 77 Donhaiser 1983 85 30,000 U.S. Gulf Cold Stacked
Marine DMI85
FALRIG 78 Donhaiser 1983 85 30,000 U.S. Gulf Cold Stacked
Marine DMI85
Mobile Offshore Production Units. MOPUs are mobile offshore drilling
units which have been converted from drilling operations to a production
application. Conversion from drilling to production mode normally requires
removal of the drilling package, leaving an open deck for placement of
production equipment.
The following table provides certain information regarding the
Company's mobile offshore production units as of February 29, 2000:
Water
Year Depth
Rig Name Built Capability Location Status
-------- ----- ---------- -------- -------
(expressed
in feet)
CLIFFS DRILLING 4 1967 150 U. S. Gulf Operating
LANGLEY 1965 150 Nigeria Operating
CLIFFS DRILLING 8 1977 250 U. S. Gulf Operating
CLIFFS DRILLING 10 1979 250 Qatar Cold Stacked
Platform Drilling Rigs. Platform drilling rigs are designed to be
placed on existing or newly built production platforms. The production
platform's crane is generally capable of lifting the modules that make up
the rig or lift the modularized rig crane that would set the rig modules.
The assembled rig has all the drilling, housing and support facilities
necessary for drilling multiple production wells but does not have many of
the marine systems that would be provided on a jack-up or semisubmersible
rig. The platform drilling rig requires a significantly larger platform
than a tender rig but is not as weather sensitive. Most platform drilling
rig contracts are for multiple wells and extended periods of time on the
same platform.
The following table provides certain information regarding the
Company's platform drilling rigs as of February 29, 2000:
Year Drilling
Built/ Depth
Rig Name Rebuilt Capability Location Status
-------- ------- ---------- -------- ------
(expressed
in feet)
CLIFFS DRILLING 1 1988/98 18,000 China Operating
CLIFFS DRILLING 3 1993/98 25,000 Trinidad Warm Stacked
CLIFFS DRILLING 17 1996 12,000 Brazil Operating
Domestic Barge Drilling Rigs. Barge drillings rigs are mobile drilling
platforms that are submersible and are built to work in eight to 20 feet of
water. They are towed by tugboats to the drill site with the derrick lying
down. The lower hull is then submerged by flooding until it rests on the
sea floor. The derrick is then raised and drilling operations are
conducted with the barge in this position. There are two basic types of
barge rigs, "conventional" and "posted". A posted barge is identical to a
conventional barge except that the hull and superstructure are separated by
ten to 14 foot columns, which increases the water depth capabilities of the
rig. The Company's barge rigs are generally rated for drilling to depths in
excess of 20,000 feet.
The following table provides certain information regarding the
Company's domestic barge drilling fleet as of February 29, 2000:
Drilling
Drilling Equipment/ Horsepower Year Depth
Rig Main Power Rating Built Capability Status
- --- ---------- ------ ----- ---------- -------
(expressed
in feet)
Conventional Barges
1 Skytop
Brewster/Caterpillar 2,000 1980 20,000 Operating
3 Mid-Continent/
Caterpillar (1) 3,000 1981 25,000 Cold Stacked
4 Oilwell/Caterpillar 3,000 1981 25,000 Cold Stacked (4)
6 Mid-Continent/
Caterpillar 3,000 1981 25,000 Cold Stacked (4)
11 Gardner Denver/
Caterpillar 3,000 1982 30,000 Operating
15 National/EMD 2,000 1981 25,000 Cold Stacked
18 Skytop Brewster/
Caterpillar (2) 1,000 1980 12,000 Cold Stacked
19 National/
Caterpillar (2) 1,000 1996 (3) 14,000 Operating
20 National/
Caterpillar (2) 1,000 1998 (3) 14,000 Operating
21 Oilwell/Caterpillar 1,500 1982 15,000 Cold Stacked
23 Mid-Continent/
Caterpillar (1)(2) 1,000 1995 (3) 14,000 Cold Stacked
24 National/
Caterpillar (1)(2) 1,500 1978 16,000 Cold Stacked
25 Continental
Emsco/Caterpillar 3,000 1976 25,000 Cold Stacked (4)
28 Continental
Emsco/Caterpillar 3,000 1979 30,000 Cold Stacked
29 Continental
Emsco/Caterpillar 3,000 1980 30,000 Operating
30 Continental
Emsco/Caterpillar 3,000 1981 30,000 Operating
31 Continental
Emsco/Caterpillar 3,000 1981 30,000 Cold Stacked
32 Continental
Emsco/Caterpillar 3,000 1982 30,000 Operating
37 National/EMD 3,000 1965 20,000 Cold Stacked (4)
38 National/EMD 3,000 1965 20,000 Cold Stacked (4)
74 National/EMD (1) 2,000 1981 25,000 Cold Stacked (4)
75 National/EMD (1) 3,000 1979 30,000 Cold Stacked (4)
Posted Barges
2 Skytop Brewster/
Caterpillar 2,000 1980 20,000 Cold Stacked (4)
5 National/Caterpillar 3,000 1981 25,000 Cold Stacked (4)
7 Oilwell/Caterpillar 2,000 1978 25,000 Cold Stacked
8 Oilwell/Caterpillar 2,000 1978 25,000 Cold Stacked (4)
9 Oilwell/Caterpillar 2,000 1981 25,000 Operating
10 Oilwell/Caterpillar 2,000 1981 25,000 Operating
17 National/EMD 3,000 1981 30,000 Operating
22 Skytop Brewster/
Caterpillar (2) 1,500 1978 16,000 Cold Stacked
27 Continental Emsco/
Caterpillar 3,000 1978 30,000 Operating
39 National/EMD 3,000 1970 30,000 Cold Stacked (4)
41 National/EMD 3,000 1981 30,000 Cold Stacked
44 Oilwell/Superior 3,000 1979 30,000 Cold Stacked (4)
45 Oilwell/Superior 3,000 1979 30,000 Cold Stacked (4)
46 Oilwell/EMD 3,000 1981 30,000 Cold Stacked
47 Oilwell/EMD 3,000 1982 30,000 Cold Stacked
48 Gardner Denver/
Caterpillar 3,000 1982 30,000 Cold Stacked
49 Oilwell/Caterpillar 3,000 1980 30,000 Cold Stacked
52 Oilwell/Caterpillar 2,000 1981 25,000 Cold Stacked
54 National/EMD 3,000 1970 30,000 Cold Stacked
55 Ideco/EMD 3,000 1981 30,000 Operating
56 National/Caterpillar 2,000 1973 25,000 Cold Stacked
57 National/Caterpillar 2,000 1975 25,000 Cold Stacked
61 Mid-Continent/EMD 3,000 1978 30,000 Cold Stacked
62 Mid-Continent/EMD 3,000 1978 30,000 Operating
63 Mid-Continent/EMD 3,000 1978 30,000 Cold Stacked
64 Mid-Continent/EMD 3,000 1979 30,000 Operating
_________________
(1) These rigs are leased to the Company.
(2) These rigs are also capable of performing workover operations.
(3) These rigs were reconstructed on the date indicated using an existing
hull.
(4) These rigs are also in need of substantial refurbishment to be
activated.
Lake Maracaibo Barge Rigs. Rigs designed to work in Lake Maracaibo,
Venezuela, require modification to work in a floating mode in up to 150
feet of water. The typical domestic barge is modified by widening the hull
to 100 feet, installing a mooring system and cantilevering the drill floor.
Three of the Company's barge rigs have been so modified and are currently
located in Lake Maracaibo, where they had been previously contracted to
PDVSA Exploration and Production. After such modifications, these rigs
generally are not suitable for deployment to other locations.
The following table provides certain information regarding the Company's
Lake Maracaibo barge rigs as of February 29, 2000:
Year Drilling
Drilling Equipment/ Horsepower Built/ Depth
Rig Main Power Rating Rebuilt Capability Status
--- ---------- ------ ------- ---------- ------
(expressed
in feet)
40 Oilwell/EMD 3,000 1980/94 25,000 Warm Stacked
42 National/EMD 3,000 1982/94 25,000 Warm Stacked
43 National/EMD 3,000 1982/94 25,000 Warm Stacked
Barge Workover Rigs. Barge workover rigs typically differ from barge
drilling rigs both in the size of the hull and the capability of the
drilling equipment. Because workover operations require less pulling power
and mud system capacity, a smaller, lower capacity unit can be used. In
addition, workover rigs, which are equipped with specialized pumps and
handling tools, do not require heavy duty drill pipe. Operating costs for
workover rigs are lower because the rigs require smaller crews, use less
fuel and require less repair and maintenance.
The following table provides certain information regarding the
Company's workover fleet as of February 29, 2000:
Mast Workover
Capacity Year Depth
Rig Drawworks (Pounds) Built Capability Status
--- --------- -------- ----- ---------- ------
(expressed
in feet)
R&B Falcon Rig 90 Ideco H-30 250,000 1990 (1) 15,000 Cold Stacked
R&B Falcon Rig 91 IRI 1287 250,000 1981 15,000 Cold Stacked
R&B Falcon Rig 92 IRI 2042 300,000 1981 15,000 Cold Stacked
R&B Falcon Rig 93 Ideco H-35 450,000 1978 20,000 Cold Stacked
R&B Falcon Rig 94 IRI 1287 250,000 1996 (1) 15,000 Cold Stacked
R&B Falcon Rig 95 Wilson 75 369,000 1991 (1) 20,000 Cold Stacked
R&B Falcon Rig 96 Wilson 75 400,000 1996 (1) 20,000 Cold Stacked
R&B Falcon Rig 97 Wilson 75 400,000 1997 (1) 20,000 Cold Stacked
R&B Falcon Rig 98 Mid-Continent
U36A 550,000 1979 25,000 Cold Stacked
R&B Falcon Rig 99 Gardner Denver
800 800,000 1972 25,000 Cold Stacked
____________
(1) These rigs were reconstructed on the date indicated using an
existing hull.
Inland Marine Vessels. In connection with barge drilling and workover
operations, it is necessary to utilize other types of vessels:
- Utility barges are barges generally 100 to 120 feet in length, which
are positioned alongside the barge rig and are used (i) to store
materials or (ii) as a container in which to dump cuttings from the
well bore, which cuttings then are transported elsewhere for disposal.
- Service tugs are ships approximately 50 to 60 feet in length, having
400 to 900 horsepower, which are used to move and position utility
barges and transport materials and personnel to and from the barge rig.
- Rig moving tugs are ships approximately 60 to 70 feet in length,
having 900 horsepower or greater, which are used to move barge rigs to
and from the drilling location. They can also be used to move and
position utility barges and move materials and personnel to and from
the barge rig.
A rig moving tug is typically used to move barge rigs and utility
barges to and from location, and is normally contracted by the hour. If
water conditions require a more powerful vessel or if no smaller vessels
are available, it may sometimes be used in a service tug capacity, in which
event it is normally contracted on a dayrate basis. Once a barge rig is on
location, the movement of utility barges, supplies and personnel can
normally be more economically handled with service tugs, which are on
contract throughout the operation, usually on a dayrate basis. During
drilling operations, anywhere from two to six utility barges may be in use
throughout the operation, as well as one to three service tugs. In a barge
rig operation, the Company's customer may contract directly for the utility
barges and tugs, or may ask the Company to provide them. As of February
29, 2000, the Company owned 108 tugs and 61 utility barges. Although the
Company expects that these assets will be used primarily in conjunction
with the Company's barge rig business, they may also be used in other
applications.
Land Drilling Rigs. Land drilling rigs are completely equipped to drill
oil and gas wells on land. These rigs are designed to be transported by
truck and assembled by crane. They require a firm, level area to be
erected and sometimes require foundation work to be performed to support
the drill floor and derrick. These rigs are equipped with living quarters.
The following table provides certain information regarding the
Company's land drilling rigs as of February 29, 2000:
Drilling
Rig Year Depth
Rig Name Description Built Capability Location Status
-------- ----------- ----- ---------- -------- ------
(express in feet)
CLIFFS DRILLING 34 National 1320 1977 25,000 Venezuela Warm Stacked
CLIFFS DRILLING 34 Oilwell E-2000 1980 18,000 Venezuela Operating
CLIFFS DRILLING 35 Oilwell E-2000 1980 18,000 Venezuela Warm Stacked
CLIFFS DRILLING 36 Oilwell E-2000 1982 18,000 Venezuela Warm Stacked
CLIFFS DRILLING 37 Oilwell E-2000 1982 18,000 Venezuela Operating
CLIFFS DRILLING 40 National 1320-UE 1980 25,000 Venezuela Warm Stacked
CLIFFS DRILLING 41 National 1320 1981 25,000 Venezuela Warm Stacked
CLIFFS DRILLING 42 National 1320-UE 1981 25,000 Venezuela Operating
CLIFFS DRILLING 43 National 1320-UE 1981 25,000 Venezuela Warm Stacked
CLIFFS DRILLING 54 National 1320-UE 1981 30,000 Venezuela Operating
CLIFFS DRILLING 55 National 1320-UE 1983 35,000 Venezuela Operating
Land Workover Rig. The Company has one land workover rig, Rig 89,
which is a Cabot 300 with a workover depth capability of 15,000 feet and it
is currently cold stacked in Louisiana.
Fleet Maintenance. The Company follows a policy of keeping its
equipment well maintained and technologically competitive. However, its
equipment could be made obsolete by the development of new techniques and
equipment. In addition, industry-wide shortages of supplies, services,
skilled personnel and equipment necessary to conduct the Company's business
have occurred in the past, and such shortages could occur again.
Almost all of the Company's rigs, like most of the rigs with which they
compete, were constructed during the last drilling boom, which ended about
1982. With increasing age, the likelihood that a rig will require major
repairs in order to remain operational increases. The Company expects that
repair and maintenance of its rigs will require increasing amounts of
capital, and will result in such rigs being unavailable for service from
time to time. During any such period of repair to a rig, the Company will
not earn revenues from such rig, but will continue to incur a substantial
portion of the costs that would be incurred while the rig is operating.
Oil & Gas Properties
The Company's oil and gas business is operated primarily through its
majority-owned subsidiary Reading & Bates Development Co. ("Devco") and, to
an insignificant extent, through its wholly-owned subsidiaries Raptor
Exploration Company, Inc. and Cliffs Oil and Gas Company.
Domestic Operations. In 1997, Devco earned an assignment of a 100%
record title interest in East Breaks Blocks 642, 643, 688 and 732
("Boomvang Project"), offshore U.S. Gulf of Mexico, pursuant to a farmout
from Shell Offshore, Inc. ("Shell"). Shell retained an overriding royalty
interest in the Boomvang Project and the option to either increase its
overriding royalty interest or convert to a working interest if specified
cumulative production levels are achieved. Later in 1997, Devco and its
partner, Norcen Explorer, Inc., drilled a discovery well at Boomvang. In
1998, Norcen's successor, Union Pacific Resources Corporation withdrew from
the project and reassigned all of its interest in Boomvang to Devco.
In March 1999, Devco entered into an Equity Participation Agreement
with Kerr-McGee Oil & Gas Corporation ("K-M") in which K-M agreed to assume
operations and pay 100% of the cost of an exploration well at Boomvang in
exchange for an assignment of a 50% record title interest. K-M also agreed
to pay Devco $5.0 million out of a portion of its share of production, if
any, from the project. Prior to drilling, K-M sold a 20% record title
interest in the project to Ocean Energy, Inc. ("OEI") thereby establishing
the current ownership as Devco 50%, K-M 30% and OEI 20%.
In 1999, the Boomvang partners drilled successful appraisal wells on
North Boomvang (EB 642/643) and a successful discovery well on West
Boomvang (EB 642). Additional delineation drilling is planned in 2000.
The partners have determined that sufficient proved and probable reserves
have been established to warrant studying development plans for the
Boomvang Project. It is anticipated that platform and facilities design
work will be finalized and commencement of fabrication will occur in 2000.
First production is anticipated in the last quarter of 2001 or first
quarter of 2002.
In December 1999, Devco, on behalf of its affiliate, R&B Falcon Subsea
Development Inc., re-entered and completed a gas well previously drilled by
Shell in Green Canyon Block 20 in the U.S Gulf of Mexico, earning Devco an
assignment of a 100% record title interest in the "Gyrfalcon Well" and
leasehold. Shell retained a net profits interest with the option to convert
to a 40% working interest in the project upon achieving specified
production levels. The Gyrfalcon gas well was completed subsea and tied
back at a distance of 2.8 miles to Shell's Boxer Platform for processing.
TOPS Gyrfalcon LLC, a limited liability company owned by affiliates of the
Company, managed all subsea engineering design and contracting. The well
is currently producing at a stabilized rate of approximately 10 MMcfd. The
Gyrfalcon Well is the world's first 15,000K subsea completion.
International Operations. In 1998, Devco completed a transaction with
Vanco Energy Company ("Vanco") and its subsidiary companies to acquire a
working interest in the Anton Marin and Astrid Marin Exploration and
Production Sharing Contracts covering 2,831,392 acres in deepwater offshore
Gabon, West Africa ("Gabon Project"). Vanco and Devco jointly presented
the Gabon Project to selected major oil companies in an effort to sell down
their interests. The negotiation process culminated in the signing of a
Participation Agreement on November 2, 1998. Subsidiaries of Total S.A.
(28%), as Operator, Unocal Corporation (25%), Kerr-McGee Corporation (14%),
as farminees, joined Vanco Energy Company (22%) and Devco (11%), as
farminors, to form the Vanco Gabon Group.
The Gabon Project farminees carried the full cost of shooting a 4,400
square kilometer 3-D seismic program in 1999. Processing of the seismic
commenced in the last quarter of 1999 and interpretation will continue
through 2000. An integrated project team staffed by representatives from
each of the farminees has been opened in Paris, France and an operations
office has been opened in Libreville, Gabon. It is anticipated that the
exploration drilling program, in which the farminees are fully carried for
a minimum of four wells, will commence in the last quarter of 2000.
In 1997, Devco acquired a 10% working interest in nine petroleum
licenses covering 854,200 acres in deepwater offshore Israel. The
assignment of the 10% working interest was made pursuant to a farmout with
an Israeli company at no out-of-pocket cost to Devco in return for
deepwater exploration assistance from the Devco technical team. A
subsidiary of Samedan Oil Corporation joined the Israel project as operator
and the Noa #1 initial test well, which was drilled in July 1999, resulted
in the first ever discovery of significant hydrocarbons offshore Israel.
After successfully drilling the Noa #1, Devco exercised its option to
increase its interest in the project to 15% by paying the unpromoted past
costs attributable to the additional 5% interest. The Noa License has now
qualified as a lease and two new licenses have been acquired from the
Israeli government. Additional exploratory and appraisal drilling will be
undertaken in 2000 and development planning will be initiated.
Other Properties
Real Property. The Company owns and leases real property in connection
with the conduct of its business. The Company owns (i) an office and yard
facility in Broussard, Louisiana; (ii) an office and yard facility in
Houma, Louisiana; (iii) an office building in New Iberia, Louisiana; (iv)
an office and yard facility in Macae, Brazil; (v) an office and yard
facility in Maturin, Venezuela and (vi) an office and yard facility and a
two story, 86,000 square foot office building that serves as its corporate
headquarters in Houston, Texas. In addition, the Company leases other
office space in Houston, Texas and facilities in most of the countries
where it conducts operations.
Industry Conditions and Competition
The financial performance of the marine contract drilling industry,
domestically and abroad, is dependent upon the exploration and production
programs of oil and gas companies. These programs are substantially
influenced by costs to find, develop and produce oil and gas; demand for
and price of oil and natural gas (which can fluctuate widely);
technological advancements, exploration success, restrictions and
incentives relative to exploration and production imposed by governmental
authorities and economic conditions in general.
A dramatic decline in demand for marine drilling services began in 1982
as a result of a precipitous decline in oil prices. This decline reflected
the effects of lower earnings of oil and gas producers and the unstable oil
and gas price environment. As a result, the entire marine drilling
industry experienced lower dayrates and associated earnings. Although there
were periods of improvements, the marine drilling industry remained
generally depressed from 1985 until 1995 when the industry began to see
improved dayrates and utilization. However in 1997, oil prices began to
decline and in 1998 natural gas prices began to decline. Since May 1998,
demand for marine drilling rigs has decreased significantly. As a result,
rig utilization and dayrates have also declined significantly, particularly
in the domestic jack-up and barge rig markets. In mid 1999, crude oil
prices began to recover, but there can be no assurance that demand for
drilling rigs and related services will increase. If crude oil prices
decline from current levels, or a weakness in crude oil prices continued
for an extended period, there could be a further deterioration in both rig
utilization and dayrates. A prolonged depression in the price of oil and
gas would have a material adverse effect on the Company.
Political and military events in the Middle East and in the former
Soviet Union are an example of the factors which can contribute to the
volatility of world oil and gas prices. Other factors which influence
demand for the Company's services include the ability of the Organization
of Petroleum Exporting Countries ("OPEC") to set and maintain production
targets, the level of production by non-OPEC countries, worldwide demand
for oil and gas, domestic production of natural gas, general economic and
political conditions, availability of new offshore oil and gas leases and
concessions to explore and develop, and governmental regulations.
Accordingly, there is and probably will continue to be uncertainty as to
the future level of demand for the Company's services and the timing and
duration of any increases or decreases in demand.
Drilling in these international markets is typically driven by
exploration for oil as opposed to gas. International markets frequently
offer a drilling contractor the opportunity to enter into longer term
contracts at higher operating margins than can be obtained domestically.
Offsetting these benefits can be the risk of political uncertainty,
currency fluctuations, and the increased overhead in establishing a foreign
base of operation.
The marine contract drilling industry is highly competitive and no one
competitor is dominant. Since 1982, the supply of rigs has generally
exceeded demand. The result has been a prolonged period of intense price
competition during which many drilling units have been idle for long
periods of time. Consequently, some drilling contractors have previously
gone out of business or consolidated with other contractors.
Notwithstanding these events, the industry remains fragmented and
competitive. The Company believes that strong competition for drilling
contracts will continue for the foreseeable future. While the quality of a
company's fleet, the experience, quality and reputation of its management
and employees, and customer relationships are factors in obtaining drilling
contracts, the over-whelming consideration is normally the price at which a
contractor is willing to provide drilling services.
Markets
General. Rigs can be moved from one region to another, and in this
sense the marine contract drilling market is one international market.
Because the cost of a rig move is significant and there is limited
availability of rig moving vessels, the demand/supply balance for rigs may
vary somewhat from region to region. However, significant variations
between regions tend not to exist on a long-term basis due to the ability
to move rigs. For this reason, in marketing its rigs, the Company tends to
divide the drilling market by general equipment types based on water depth
capability, rather than by region.
Deepwater. The deepwater market is serviced by the Company's
semisubmersibles and drillships. It begins in water depths of about 400
feet and extends to the maximum water depths in which rigs are currently
capable of drilling, being approximately 10,000 feet. In recent years,
there has been increased emphasis by oil companies on exploring for
hydrocarbons in deeper waters. This is, in part, due to technological
developments that have made it both more feasible and less expensive to
explore for and produce hydrocarbons in deeper waters. Deepwater drilling
is currently being conducted primarily in the North Sea, Gulf of Mexico,
Brazil and West Africa.
Shallow Water. The shallow water market is serviced by the Company's
jack-ups, submersibles and drilling tenders. It begins at the outer limit
of the transition zone and extends to water depths of about 400 feet. It
has been developed to a significantly greater degree than the deepwater
market, as technology required to explore for and produce hydrocarbons in
these water depths is not as demanding as in the deepwater markets, and
accordingly the costs are lower. Shallow water drilling is currently being
conducted primarily in the Gulf of Mexico, West Africa, the North Sea, the
Mediterranean, and Southeast Asia.
Transition Zone. The Company's barge rig fleet operates in marshes,
rivers, lakes and shallow bay and coastal water areas that are referred to
as the "transition zone". The Company's principal barge market is the
shallow-water areas of the U.S. Gulf Coast. This area historically has
been the world's largest market for barge rigs. International markets for
barge rigs include Venezuela, West Africa, Southeast Asia, and Tunisia.
Marine Transportation. The Company's marine transportation assets are
primarily deployed in the same market as its domestic barge rig fleet.
These assets are used mostly in conjunction with barge drilling operations,
but also are used in connection with other types of work, mostly energy
related (such as pipeline and well platform construction). Although such
assets can be deployed to other uses, any significant downturn in oil and
gas activity in the transition zone would have a negative impact on the
Company's marine transportation business that could not be fully offset by
deployment of such assets to other markets.
Engineering Services and Land Operations. Through its Cliffs Drilling
subsidiary, the Company conducts land rig operations in Venezuela.
Although the majority of the Company's contracts are daywork contracts, the
Company also conducts "turnkey" operations. Under turnkey drilling
contracts, the Company contracts to drill a well to a contract depth under
specified conditions for a fixed price. Prior to the acquisition of Cliffs
Drilling the cumulative net results of the Company's turnkey contracts had
been immaterial in total and insignificant as compared to the Company's
operating income from the traditional daywork contracts. However, as a
result of the acquisition of Cliffs Drilling, the Company now provides a
larger portion of its services under turnkey drilling contracts. In April
1998, Cliffs Drilling had entered into a turnkey contract which was
expected to utilize seven of the Company's land rigs over a three and one-
half year period. However, in December 1999, the contract was cancelled as
a result of the downturn in the market (see MD&A - Other). In addition,
because of the significant decline in the demand for contract drilling
services that began in mid 1998, the Company expects to pursue more turnkey
work as a way of increasing utilization of its rigs.
Contracts, Marketing and Customers
There are several factors that determine the type of rig most suitable
for a particular job, the most significant of which are the marine
environment, water depth and seabed conditions at the proposed drilling
location, whether the drilling or workover is being done over a platform or
other structure, and the intended well depth. Thus, there may be
considerable variation in utilization and dayrates for various drilling
units as a function of demand for their capabilities. The Company's rigs
all provide the same basic function, namely, drilling wells. However,
because of the varying marine conditions in which wells are drilled, there
is a wide variety of rig designs.
Drilling in the areas served by the Company ranges from shallow wells
(up to 12,000 feet) to deep wells (up to 25,000 feet). Deeper wells
generally take disproportionately longer to drill than shallower wells, due
primarily to more varied and difficult subsurface conditions and the
frequent need to run protective casing. The Company's drilling rigs are
competitive for all types of drilling, but are particularly designed to
drill to depths in excess of 12,000 feet.
Rigs are generally employed under individual contracts which extend
over a period of time covering either the drilling of a well or wells (a
"well-to-well contract") or a stated term (a "term contract"). Contracts
for the employment of rigs are most often awarded based on competitive
bidding; however, some contracts are the result of negotiations between the
drilling contractor and the customer. Contracts may provide for early
termination by the customer, either with or without penalty, and may
provide for extension options exercisable by the customer. The Company's
contracts generally provide for payment in U.S. dollars. The Company's
contracts typically provide for compensation on a "daywork" basis, under
which the Company receives a fixed amount per day that the rig is operating
under contract and the Company generally pays operating expenses of the
rig, including wages and the cost of incidental supplies. A contract may
allow the Company to recover some or all of its mobilization and
demobilization costs associated with moving a unit, depending on market
conditions then prevailing. The dayrate under such daywork contracts may
be lower or not payable when the drilling unit is under tow to or from the
drill site (other than field moves) or when operations are suspended
because of weather or mechanical problems.
Although the majority of the Company's contracts are daywork contracts,
the Company's use of "turnkey" contracts increased significantly in 1999 as
a result of the acquisition of Cliffs Drilling. In addition, because of
the significant decline in the demand for contract drilling services that
began in mid 1998, the Company expects to pursue more turnkey work as a way
of increasing utilization of its rigs. Under turnkey drilling contracts,
the Company contracts to drill a well to a contract depth under specified
conditions for a fixed price. The risks to the Company on a turnkey
drilling contract are substantially greater than on a well drilled on a
daywork basis because the Company assumes most of the risks associated with
drilling operations generally assumed by the operator in a daywork
contract, including risk of blowout, loss of hole, stuck drill stem, lost
production or damage to the reservoir, machinery breakdowns, abnormal
drilling conditions and risks associated with subcontractors' services,
supplies and personnel.
The Company maintains a decentralized organization, with regional
offices throughout the world. The Company's primary marketing efforts are
carried out through these regional offices and its Houston office.
When the Company's offshore units operate in foreign locations,
operations are often conducted in conjunction with local companies.
Representative of the offshore areas where the Company has arrangements
with local companies are Abu Dhabi, Brazil, Brunei, China, Egypt, India,
Indonesia, Italy, Korea, Malaysia and Nigeria. The purpose of these
arrangements is to draw on the marketing, technical, supply and government
relations assistance of local third parties and in some cases to comply
with local legal requirements. Typically, the financial terms of these
arrangements are such that the third party receives a stated percentage of
drilling revenues. Many of the Company's existing arrangements are with
third parties with which the Company has had a relationship for ten or more
years.
The Company has a base of customers which includes major and
independent foreign and domestic oil and gas companies, as well as foreign
state-owned oil companies. During 1999, the Company performed services for
approximately 185 different customers.
For the year ended December 31, 1999, revenues of approximately $175.1
million from PDVSA Exploration and Production and revenues of approximately
$119.5 million from British Petroleum and affiliates accounted for 19.0%
and 13.0%, respectively, of the Company's total operating revenues. For
the year ended December 31, 1998, revenues of approximately $116.1 million
from British Petroleum and affiliates accounted for 11.2% of the Company's
total operating revenues. For the year ended December 31, 1997, there were
no customers that individually accounted for 10.0% or more of the Company's
total operating revenues.
The loss of one of the Company's major customers could, at least on a
short-term basis, have a material adverse impact on the Company's business
or results of operations. However, the Company would have alternative
customers for its services in the event of the loss of any single customer.
The Company believes that the loss of any one customer would not have a
material adverse effect on the Company on a long-term basis.
Financial information by geographic area is furnished in Note M of
Notes to Consolidated Financial Statements.
Governmental Regulation and Environmental Matters
Many aspects of the Company's operations are affected by domestic and
foreign political developments and are subject to numerous domestic and
foreign governmental laws and regulations that may relate directly or
indirectly to the Company's business and operations, including, without
limitation, laws and regulations controlling the discharge of materials
into the environment, requiring removal and cleanup under certain
circumstances or otherwise relating to the protection of the environment,
and certification, licensing, safety and training and other requirements
imposed by treaties, laws, regulations and conventions in the jurisdictions
in which the Company operates. The contract drilling industry is dependent
on demand for services from the oil and gas exploration industry and,
accordingly, is affected by changing taxes, regulations and other laws
relating to the energy business generally. The Company does not believe
that governmental regulations have had any material adverse effect on its
capital expenditures, results of operations or competitive position, and
does not anticipate that any material expenditure will be required to
enable it to comply with existing laws and regulations. However, the
modification of existing laws and regulations or the adoption of new laws
and regulations curtailing or increasing the effective cost of exploratory
or developmental drilling for oil and gas for economic, environmental or
other reasons could have a material adverse effect on the Company's
operations. The Company cannot currently determine the extent to which
future earnings may be affected by new legislation or regulations or
compliance with new or existing regulations which may become applicable as
a result of rig relocation.
There is great concern, particularly in developed countries such as the
United States, over protection of the environment. Offshore drilling in
certain areas has been opposed by environmental groups and, in certain
areas, has been restricted. To the extent laws are enacted or other
governmental actions are taken that prohibit or restrict offshore drilling
or impose environmental protection requirements that result in increased
costs to the oil and gas industry in general and the offshore contract
drilling industry in particular, the business and prospects of the Company
could be adversely affected.
The Company's operations may involve the use or handling of materials
that may be classified as environmentally hazardous substances.
Environmental laws and regulations applicable in the United States and
other countries in which the Company conducts operations have generally
become more stringent, and may in certain circumstances impose "strict
liability", rendering a person liable for environmental damage without
regard to negligence or fault on the part of such person. Such laws and
regulations may expose the Company to liability for the conduct of or
conditions caused by others, or for acts of the Company which were in
compliance with all applicable laws at the time such acts were taken. The
Company does not believe that environmental regulations have had any
material adverse effect on its capital expenditures, results of operations
or competitive position, and does not anticipate that any material
expenditures will be required to enable it to comply with existing laws and
regulations. However, the modification of existing laws or regulations or
the adoption of new laws or regulations curtailing exploratory or
developmental drilling for oil and gas for economic, environmental or other
reasons could have a material adverse effect on the Company's operations.
The transition zone and shallow-water areas of the U.S. Gulf Coast are
ecologically sensitive. Environmental issues have led to higher drilling
costs, a more difficult and lengthy well permitting process and, in
general, have adversely affected decisions of the oil companies to drill in
these areas. U.S. laws and regulations applicable to the Company's
operations include those controlling the discharge of materials into the
environment, requiring removal and cleanup of materials that may harm the
environment, or otherwise relating to the protection of the environment.
For example, as an operator of drilling rigs in navigable U.S. waters and
certain offshore areas, the Company may be liable for damages and costs
incurred in connection with spills or discharges of oil or other substances
for which it is held responsible. The discharge of oil or other substances
in a wetland or inland waterway could produce substantial damage to the
environment, including wildlife and groundwater. Laws and regulations
protecting the environment have become more stringent in recent years, and
may, in certain circumstances, impose "strict liability," rendering a
person liable for environmental damage without regard to negligence or
fault on the part of such person. Such laws and regulations may expose the
Company to liability for the conduct of or conditions caused by others, or
for acts of the Company that were in compliance with all applicable laws at
the time such acts were performed. The application of these requirements
or the adoption of new requirements could have a material adverse effect on
the Company.
The Federal Water Pollution Control Act of 1972, commonly referred to
as the Clean Water Act ("CWA") prohibits the discharge of certain
substances into the navigable waters of the United Stated without a permit.
The regulations implementing the CWA require permits to be obtained by an
operator before certain exploration activities occur. Violations of
monitoring, reporting and permitting requirements can result in the
imposition of civil and criminal penalties. The provisions of the CWA can
also be enforced by citizen's groups.
The Oil Pollution Act of 1990 ("OPA '90") and regulations promulgated
pursuant thereto impose a variety of regulations on "responsible parties"
related to the prevention of oil spills and liability for damages resulting
from such spills. A "responsible party" includes the owner or operator of
a facility or vessel, or the lessee or permittee of the area in which an
offshore facility is located. OPA '90 assigns liability to each
responsible party for oil removal costs and a variety of public and private
damages. While liability limits apply in some circumstances, a party cannot
take advantage of liability limits if the spill was caused by gross
negligence or willful misconduct or resulted from violation of a federal
safety, construction or operating regulation. If the party fails to report
a spill or to cooperate fully in the cleanup, liability limits likewise do
not apply. Few defenses exist to the liability imposed by OPA '90. OPA '90
also imposes ongoing requirements on a responsible party. These include
proof of financial responsibility (to cover at least some costs in a
potential spill) and preparation of an oil spill contingency plan. A
failure to comply with ongoing requirements or inadequate cooperation in a
spill event may subject a responsible party to civil or criminal
enforcement action. In short, OPA '90 places a burden on drilling rig
owners or operators to conduct safe operations and take other measures to
prevent oil spills. If a spill occurs, OPA '90 then imposes liability for
resulting damages.
The Company generally seeks to obtain indemnity agreements whenever
possible from the Company's customers requiring such customers to hold the
Company harmless in the event of liability for pollution that originates
below the water surface, including, where applicable, liability under OPA
'90, and maintains marine liability insurance and contingent energy
exploration and development coverage (normal energy, exploration and
development coverage is maintained, to the extent of the Company's interest
in oil and gas properties, for operations of such properties) which affords
limited protection to the Company. There is no assurance that such
insurance or contractual indemnification will be sufficient or effective to
protect the Company from liability under OPA '90.
In addition, the Outer Continental Shelf Lands Act and regulations
promulgated pursuant thereto impose a variety of regulations relating to
safety and environmental protection applicable to lessees, permits and
other parties operating on the Outer Continental Shelf. Specific design
and operational standards may apply to Outer Continental Shelf vessels,
rigs, platforms, vehicles and structures. Violations of lease conditions
or regulations issued pursuant to the Outer Continental Shelf Lands Act can
result in substantial civil and criminal penalties as well as potential
court injunctions curtailing operations and the cancellation of leases.
Such enforcement liabilities can result from either governmental or citizen
prosecution.
The Company believes it is in material compliance with applicable
federal, state, local and foreign legislation and regulations relating to
environmental controls. However, the existence of such laws and
regulations has had and will continue to have a restrictive effect on the
Company and its customers.
Operating Risks and Insurance
The Company's operations are subject to many hazards. In the drilling
of oil and gas wells, especially exploratory wells where little is known of
the subsurface formations, there always exists a possibility of
encountering unexpected conditions of extreme pressure and temperature and
the risk of a blowout, cratering and fires that could cause injury or
death, damage to property, pollution, and suspension of drilling
operations. The Company's fleet is also subject to hazards inherent in
marine operations, either while on site or under tow, such as capsizing,
grounding, collision, damage from heavy weather or sea conditions and
unsound location. The Company may also be subject to liability for oil
spills, reservoir damage and other accidents that could cause substantial
damage. The Company maintains such insurance protection as it deems
prudent, including liability insurance and insurance against damage to or
loss of equipment. In addition, the Company generally seeks to obtain
indemnity agreements whenever possible from the Company's customers,
requiring such customers to hold the Company harmless in the event of loss
of production, reservoir damage or liability for pollution that originates
below the water surface. When obtained, such contractual indemnification
protection may not in all cases be supported by adequate insurance
maintained by the customer. There is no assurance that such insurance or
contractual indemnity protection will be sufficient or effective under all
circumstances or against all hazards to which the Company may be subject.
The principal hazards against which the Company may not be fully insured or
indemnified are environmental liabilities which may result from a blowout
or similar accident or a liability resulting from reservoir damage alleged
to be caused by the negligence or other legal fault of the Company.
Further, there is no assurance that the Company will be able to obtain
adequate insurance coverage at the rates it deems reasonable in the future.
Recognizing these risks, the Company has various programs that are designed
to promote a safe environment for its personnel and equipment.
At present, the Company intends generally to maintain business
interruption insurance with respect to its semisubmersibles and drillships,
but not with respect to the other rigs or vessels in its fleet.
The Company's foreign operations are also subject to certain political,
economic and other uncertainties, including, among others, risks of war,
expropriation, nationalization, renegotiation or nullification of existing
contracts, taxation policies, foreign exchange restrictions, changing
political conditions, international monetary fluctuations and other hazards
arising out of foreign governmental sovereignty over certain areas in which
the Company conducts operations. Currently, when conducting foreign
drilling operations in areas the Company perceives as politically unstable,
the Company may (i) negotiate contracts providing for indemnification
against expropriation and certain other political risks or (ii) purchase
insurance covering such risks, to the extent available at reasonable cost.
The Company believes it is adequately covered by insurance, but no
assurance can be given with respect to the availability of such insurance
at acceptable rates in the future. Since 1979, the Company has not
experienced any material losses associated with the above-described
political risks.
Employees
The Company emphasizes employee safety, training and retention. The
number of employees varies depending on the level of drilling activity. As
of February 29, 2000, the Company employed approximately 5,100 persons.
There are no collective bargaining contracts covering the Company's
domestic employees. As of February 29, 2000, the Company employed 235
local personnel in Venezuela, of which 170 are covered by the Collective
Labor Contract of the Venezuelan Petroleum Industry. The Company believes
its relations with its employees are good.
Item 3. Legal Proceedings
In November 1988, a lawsuit was filed in the U.S. District Court for
the Southern District of West Virginia against Reading & Bates Coal Co., a
wholly owned subsidiary of the Company, by SCW Associates, Inc. claiming
breach of an alleged agreement to purchase the stock of Belva Coal Company,
a wholly owned subsidiary of Reading & Bates Coal Co. with coal properties
in West Virginia. When those coal properties were sold in July 1989 as
part of the disposition of the Company's coal operations, the purchasing
joint venture indemnified Reading & Bates Coal Co. and the Company against
any liability Reading & Bates Coal Co. might incur as the result of this
litigation. A judgment for the plaintiff of $32,000 entered in February
1991 was satisfied and Reading & Bates Coal Co. was indemnified by the
purchasing joint venture. On October 31, 1990, SCW Associates, Inc., the
plaintiff in the above-referenced action, filed a separate ancillary action
in the Circuit Court, Kanawha County, West Virginia against the Company,
Caymen Coal, Inc. (former owner of the Company's West Virginia coal
properties), as well as the joint venture, Mr. William B. Sturgill
personally (former President of Reading & Bates Coal Co.), three other
companies in which the Company believes Mr. Sturgill holds an equity
interest, two employees of the joint venture, First National Bank of
Chicago and First Capital Corporation. The lawsuit seeks to recover
compensatory damages of $50.0 million and punitive damages of $50.0 million
for alleged tortious interference with the contractual rights of the
plaintiff and to impose a constructive trust on the proceeds of the use
and/or sale of the assets of Caymen Coal, Inc. as they existed on
October 15, 1988. The Company intends to defend its interests vigorously
and believes the damages alleged by the plaintiff in this action are highly
exaggerated. In any event, the Company believes that it has valid defenses
and that it will prevail in this litigation.
In January 1999, an action was filed by Mobil Exploration and Producing
U.S. Inc. and affiliates, St. Mary Land & Exploration Company and
affiliates and Samuel Geary and Associates, Inc. against Cliffs Drilling,
its underwriters and insurance broker in the 16th Judicial District Court
of St. Mary Parish, Louisiana. The plaintiffs alleged damages amounting to
in excess of $50.0 million in connection with the drilling of a turnkey
well in 1995 and 1996. The case was tried before a jury in January and
February 2000, and the jury returned a verdict of approximately $30.0
million in favor of the plaintiffs for excess drilling costs, loss of
insurance proceeds, loss of hydrocarbons and interest. However, the trial
court has not entered a judgment on the verdict, as there are a number of
matters to be ruled upon before doing so. If a judgment is entered on such
verdict, Cliffs Drilling intends to appeal and believes its efforts to do
so will be successful. The Company believes all but the portion of the
verdict representing excess drilling costs of approximately $4.7 million is
covered by relevant primary and excess liability insurance policies of
Cliffs Drilling; however, one insurer has denied coverage and the others
have reserved their rights. If necessary, Cliffs Drilling and the Company
intend to take appropriate legal action to enforce Cliffs Drilling's rights
with respect to such policies. At this time Cliffs Drilling and the
Company believe adequate reserves have been established to protect the
interests of Cliffs Drilling and the Company in this matter.
The Company is involved in various other legal actions arising in the
normal course of business. A substantial number of these actions involve
claims arising out of injuries to employees of the Company who work on the
Company's rigs and other vessels. After taking into consideration the
evaluation of such actions by counsel for the Company and the Company's
insurance coverage, management is of the opinion that outcome of all known
and potential claims and litigation will not have a material adverse effect
on the Company's consolidated financial position or results of operations.
See Note F of Notes to Consolidated Financial Statements.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters
The combination of Falcon and R&B became effective at 11:59 p.m. E.S.T.
on December 31, 1997. The common stock of R&B Falcon began trading on the
New York Stock Exchange ("NYSE") on January 2, 1998 under the symbol "FLC."
The following table sets forth, for the calendar periods indicated, the
high and low sales prices per share of R&B Falcon common stock as reported
by the NYSE Composite Tape for the periods indicated. R&B Falcon did not
declare any dividends on its common stock for the periods indicated.
1999 1998
------------------ ------------------
High Low High Low
-------- -------- -------- --------
First Quarter $ 9.250 $ 5.188 $ 35.375 $ 23.125
Second Quarter 11.750 6.625 34.188 20.500
Third Quarter 16.063 8.938 23.188 8.750
Fourth Quarter 15.000 10.688 16.500 6.750
There were approximately 3,607 holders of record of the Company's
common stock as of March 6, 2000.
In December 1997, the Company adopted a preferred share Rights
Agreement. See Note J of Notes to Consolidated Financial Statements.
Item 6. Selected Financial Data
R&B FALCON CORPORATION
AND SUBSIDIARIES
(in millions except per share amounts)
The following table includes the accounts of R&B and Falcon as a
result of the Merger and Cliffs Drilling effective December 1, 1998. See
Note B of Notes to Consolidated Financial Statements.
Years Ended December 31,
---------------------------------------------------
1999 1998 1997 1996 1995
--------- --------- --------- --------- -------
Operating revenues $ 918.8 $ 1,032.6 $ 933.0 $ 609.6 $ 390.3
========= ========= ========= ========= =======
Income (loss) from continuing
continuing operations
before extraordinary
gain (loss) $ (67.8) $ 91.0 $ 29.8 $ 106.7 $ 23.5
Income (loss) from
discontinued operations - 36.0 (36.0) - -
Extraordinary gain (loss)(1) (1.7) (24.2) - - 3.4
--------- --------- --------- --------- -------
Net income (loss) (69.5) 102.8 (6.2) 106.7 26.9
Dividends and accretion
on preferred stock (2) 33.7 - - 3.6 5.2
--------- --------- --------- --------- -------
Net income (loss) applicable
to common stockholders $ (103.2) $ 102.8 $ (6.2) $ 103.1 $ 21.7
========= ========= ========= ========= =======
Net income (loss) per common share:
Basic:
Continuing operations $ (.53) $ .54 $ .18 $ .70 $ .16
Discontinued operations - .21 (.22) - -
Extraordinary gain (loss) (.01) (.14) - - .03
--------- --------- --------- --------- -------
Net income (loss) $ (.54) $ .61 $ (.04) $ .70 $ .19
========= ========= ========= ========= =======
Diluted:
Continuing operations $ (.53) $ .54 $ .18 $ .67 $ .15
Discontinued operations - .21 (.22) - -
Extraordinary gain (loss) (.01) (.14) - - .03
--------- --------- --------- --------- -------
Net income (loss) $ (.54) $ .61 $ (.04) $ .67 $ .18
========= ========= ========= ========= =======
Total assets $ 4,916.1 $ 3,714.0 $ 2,011.4 $ 1,455.8 $ 946.8
========= ========= ========= ========= =======
Long-term obligations
(including current portion)
and redeemable stocks $ 3,229.5 $ 1,872.5 $ 827.4 $ 514.2 $ 296.7
========= ========= ========= ========= =======
Dividends on Common Stock $ - $ - $ - $ - $ -
========= ========= ========= ========= =======
_____________
(1) The extraordinary gain for 1995 and the extraordinary losses for 1998
and 1999 are all due to the extinguishment of debt obligations. The
extraordinary losses for 1998 and 1999 are net of a tax benefit of
$13.0 million and $.9 million, respectively.
(2) In 1995, Falcon's Series A Convertible Preferred Stock was converted
into approximately 15.6 million shares of common stock and in 1996,
R&B's $1.625 Convertible Preferred Stock was converted into
approximately 10.2 million shares of common stock.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Business Combinations
On July 10, 1997, Falcon Drilling Company, Inc. ("Falcon"), renamed as
R&B Falcon Holdings, Inc., and Reading & Bates Corporation ("R&B"), renamed
as R&B Falcon (International and Deepwater) Inc., announced that they had
agreed to combine their companies under a new company -- R&B Falcon
Corporation ("R&B Falcon") (the "Merger"). On December 23, 1997, the Merger
was approved by both companies' shareholders and on December 31, 1997, the
Merger was consummated. Each outstanding share of common stock of Falcon
was converted into one share of common stock of R&B Falcon and each
outstanding share of common stock of R&B was converted into 1.18 shares of
common stock of R&B Falcon. The Merger has been accounted for as a pooling
of interests and, accordingly, the consolidated financial statements for
the year ended December 31, 1997 have been restated to include the accounts
of R&B and Falcon.
On December 1, 1998, the Company acquired all of the outstanding stock
of Cliffs Drilling Company ("Cliffs Drilling"). Cliffs Drilling is a
provider of daywork and turnkey drilling services, mobile offshore
production units and well engineering and management services. Cliffs
Drilling's fleet consisted of 16 jack-up rigs, three self-contained
platform rigs, four mobile offshore production units and 11 land rigs. The
acquisition was effected pursuant to an Agreement and Plan of Merger dated
August 21, 1998, whereby each share of Cliffs Drilling's common stock was
converted into 1.7 shares of the Company's common stock and cash in lieu of
fractional shares. Total consideration for Cliffs Drilling was
approximately $405.1 million. The Company issued approximately 27.1 million
shares of its common stock valued at approximately $385.3 million. This
valuation was based upon a price of $14.2125 per share of the Company's
common stock, which was the average closing price per share of the
Company's common stock during the period in which the principal terms of
the merger were agreed upon and the merger was announced. In addition, the
Company assumed Cliffs Drilling's outstanding stock options valued at
approximately $6.2 million and the Company paid approximately $13.6 million
in acquisition costs. The acquisition of Cliffs Drilling was recorded using
the purchase method of accounting. The excess of the purchase price over
the estimated fair value of net assets acquired amounted to approximately
$86.8 million, which has been accounted for as goodwill and is being
amortized over 40 years using the straight-line method. The consolidated
financial statements include Cliffs Drilling since December 1, 1998.
Results of Operations
The Company reported a net loss for 1999 of $69.5 million ($.54 per
diluted share after dividends and accretion on preferred stock of $33.7
million) compared to net income of $102.8 million ($.61 per diluted share)
for 1998 and a net loss of $6.2 million ($.04 per diluted share) for 1997.
Included in the 1999 results was a $34.7 million expense related to the
drillship conversion projects that were cancelled in 1998 and an
extraordinary loss of $1.7 million due to the extinguishment of debt
obligations. Included in the 1998 results was a $118.3 million expense due
to the cancellation of four drillship conversion projects, an extraordinary
loss of $24.2 million due to the extinguishment of debt obligations, the
reversal of $8.0 million of merger expenses due to an Internal Revenue
Service ruling and the reversal of $36.0 million of accrued estimated
losses due to the accounting requirements for recontinuance of previously
discontinued oil and gas operations. Included in the 1997 results are
merger expenses of $66.4 million and accrued losses related to discontinued
operations of $36.0 million.
Operating Revenues
Years Ended December 31,
-----------------------------
Operating revenues (in millions) 1999 1998 1997
------- --------- -------
Deepwater $ 354.9 $ 392.5 $ 349.3
Shallow water 198.9 382.9 333.2
Inland water 121.7 244.3 249.9
Engineering services
and land operations 242.8 12.9 -
Development .5 - .6
------- --------- -------
Total $ 918.8 $ 1,032.6 $ 933.0
======= ========= =======
Operating revenues are primarily a function of dayrates and
utilization. Operating revenues decreased $113.8 million from 1998 to 1999
due to the following: The deepwater fleet revenues decreased $37.6 million
primarily due to a decrease in utilization, offset by the activation of the
Deepwater Millennium and Deepwater Expedition in the fourth quarter of
1999. The shallow water fleet revenues decreased $184.0 million despite the
increase in revenues generated from the purchase of Cliffs Drilling in
December 1998. Such decrease is primarily due to lower utilization and
dayrates. The inland water fleet revenues decreased $122.6 million also due
to lower utilization and dayrates. Engineering services and land operations
revenues increased $229.9 million due to the purchase of Cliffs Drilling in
December 1998.
Operating revenues increased $99.6 million from 1997 to 1998 due to the
following: The deepwater fleet revenues increased $43.2 million primarily
due to an increase in dayrates and due to the activation of the C. Kirk
Rhein, Jr. The shallow water fleet revenues increased $49.7 million
primarily due to an increase in dayrates for the international jack-up
fleet. Although the inland water fleet's revenues remained relatively
constant from 1997 to 1998, there was an increase in the marine
transportation fleet revenues primarily due to fleet additions offset by a
decrease in the barge fleet due to decreased utilization. The engineering
services and land operations revenues were attributable to the purchase of
Cliffs Drilling on December 1, 1998.
Operating Expenses
Years Ended December 31,
---------------------------
Operating expenses (in millions) 1999 1998 1997
------- ------- -------
Deepwater $ 174.1 $ 186.1 $ 140.2
Shallow water 152.6 161.5 158.7
Inland water 99.0 169.1 136.7
Engineering services
and land operations 181.7 11.1 -
Development 3.7 19.5 130.2
------- ------- -------
Total $ 611.1 $ 547.3 $ 565.8
======= ======= =======
Operating expenses do not necessarily fluctuate in proportion to
changes in operating revenues due to the continuation of personnel on board
and equipment maintenance when the Company's units are stacked. It is only
during prolonged stacked periods that the Company is able to significantly
reduce labor costs and equipment maintenance expense. Additionally, labor
costs fluctuate due to the geographic diversification of the Company's
units and the mix of labor between expatriates and nationals as stipulated
in the contracts. In general, labor costs increase primarily due to higher
salary levels and inflation. Equipment maintenance expenses fluctuate
depending upon the type of activity the unit is performing and the age and
condition of the equipment. Scheduled maintenance of equipment and
overhauls are performed on a basis of number of hours operated in
accordance with the Company's preventive maintenance program. Operating
expenses for an offshore unit are typically deferred or capitalized as
appropriate during periods of mobilization, contract preparation, major
upgrades or conversions unless corresponding mobilization revenue is
recognized, in which case such operating expenses are expensed as incurred.
Operating expenses increased $63.8 million from 1998 to 1999 due to the
following: Operating expenses increased primarily due to the increase in
the engineering services and land operations segment resulting from the
purchase of Cliffs Drilling in December 1998. Offsetting this increase were
lower operating expenses for the deepwater, shallow water and inland water
fleets despite the increase in expenses generated from the purchase of
Cliffs Drilling in December 1998. Such decrease is primarily due to lower
utilization fleetwide. Also included as a reduction of operating expenses
in 1999, in the inland water segment, is a gain of $16.1 million due to the
total loss of a drilling barge as a result of a blowout and fire and an
$8.3 million gain, in the shallow water segment, due to the settlement of
the W.D. Kent derrick equipment casualty. Such casualty occurred in the
third quarter of 1997 as a result of a blowout and fire.
Operating expenses decreased $18.5 million from 1997 to 1998 due to the
following: The development division expenses decreased $110.7 million due
to dryhole costs and impairment charges relating to oil and gas properties
in 1997. Offsetting this decrease was a $45.9 million increase in the
deepwater fleet expenses primarily due to the activation of the C. Kirk
Rhein, Jr. and increased wage rates, a $32.4 million increase in the inland
water fleet expenses primarily due to the additions to the marine
transportation fleet and a $11.1 million increase in engineering services
and land operations due to the purchase of Cliffs Drilling on December 1,
1998.
Cancellation of Conversion Projects
Cancellation of conversion projects expense of $118.3 million in 1998
and $34.7 million in 1999 is the result of the 1998 termination of the
Peregrine VI, Peregrine VIII and two other drillship conversion projects
that were in the preliminary phases. Such expense includes shipyard costs
(for services performed and in settlement of contract cancellation),
Company personnel and contractor costs, engineering costs, capitalized
interest, and write-down of surplus equipment and the vessels that were
purchased for conversion. Such projects were cancelled due to continuing
uncertainty as to the final cost and expected delivery dates. See Liquidity
and Capital Resources - Capital Expenditure Commitments.
Depreciation and Amortization
Years Ended December 31,
---------------------------
1999 1998 1997
------- ------- -------
Depreciation and
amortization (in millions) $ 158.0 $ 98.0 $ 84.7
======= ======= =======
The $60.0 million increase in depreciation and amortization expense in
1999 from 1998 is primarily due to the purchase of Cliffs Drilling in
December 1998, the purchase and/or significant upgrades of offshore and
inland marine vessels during 1998 and the activation of the Deepwater
Millennium, Deepwater Expedition and the Falcon 100 in the latter part of
1999.
Despite the reduction in depreciation expense for the year ended
December 31, 1998 of approximately $20.7 million due to the extension of
the expected useful lives of the Company's marine units effective January
1, 1998, depreciation expense increased $13.3 million in 1998 from 1997 due
to the purchase and/or significant upgrades of offshore and inland marine
vessels during 1998 and late 1997.
General and Administrative Expenses
Years Ended December 31,
---------------------------
1999 1998 1997
------- ------- -------
General and administrative
expenses (in millions) $ 69.9 $ 61.2 $ 55.7
======= ======= =======
General and administrative expenses increased $8.7 million in 1999
compared to 1998 primarily due to $6.6 million of executive termination
expense, $1.5 million of employee incentive compensation expense and the
purchase of Cliffs Drilling in December 1998. See Notes K and Q of Notes to
Consolidated Financial Statements.
General and administrative expenses increased $5.5 million in 1998
compared to 1997 primarily due to increases in payroll and related
expenses.
Merger Expenses
In connection with the Merger between R&B and Falcon, the Company
recorded $66.4 million of merger expenses in the fourth quarter of 1997.
Merger expenses consisted primarily of employment contract termination
payments associated with executives of R&B, the acceleration of unearned
compensation of certain stock grants previously awarded to certain R&B
employees, fees for investment bankers, attorneys, and accountants, and
printing and other related costs. In 1998, the Company recorded an $8.0
million reduction of merger expenses primarily due to an Internal Revenue
Service ruling received relating to taxes on executive termination
payments.
Interest Expense
Years Ended December 31,
---------------------------
1999 1998 1997
------- ------- -------
Interest expense, net of interest
capitalized (in millions) $ 169.8 $ 63.9 $ 41.6
======= ======= =======
The $105.9 million increase in interest expense in 1999 as compared to
1998 was primarily attributable to the issuance of $400.0 million of senior
notes in December 1998, $1.0 billion of senior notes in March 1999 and a
$250.0 million project financing in August 1999. This increase was
partially offset by a $35.0 million increase in capitalized interest
related to significant upgrade and new build projects. Noncash interest
expense attributable to amortization of discounts associated with the
Company's debt obligations for the year ended December 31, 1999 was $.7
million. See Liquidity and Capital Resources - Debt Issuance and Project
Financings.
The $22.3 million increase in interest expense in 1998 as compared to
1997 was primarily attributable to the issuance of $1.1 billion of senior
notes in April 1998. This increase was partially offset by increased
capitalized interest related to significant upgrade and new build projects.
Noncash interest expense attributable to amortization of discounts
associated with the Company's debt obligations for the year ended December
31, 1998 was $3.4 million.
Interest Income
Interest income increased in 1999 as compared to 1998 due to increased
cash and short-term investment balances during the period.
Income (loss) from equity investees plus related income
Income from equity investees plus related income increased in 1999 as
compared to 1998 primarily due to the Deepwater Pathfinder which commenced
operations in the latter part of the first quarter of 1999. See Note C of
Notes to Consolidated Financial Statements.
Income Tax Expense (Benefit)
Years Ended December 31,
---------------------------
1999 1998 1997
------- ------- -------
Income tax expense
(benefit) (in millions) $ (31.6) $ 58.9 $ 84.7
======= ======= =======
The $90.5 million decrease in income tax expense in 1999 as compared to
1998 is primarily due to the decrease in pre-tax income. The $25.8 million
decrease in income tax expense in 1998 as compared to 1997 was due to the
non-deductible merger expenses, which were incurred in 1997, and the tax
benefits related to the recontinued operations being fully reserved in
1997.
In 1998, the Company began recording income taxes at the full statutory
rates as future tax benefit carryforwards will no longer be reserved.
Minority Interest
Years Ended December 31,
---------------------------
1999 1998 1997
------- ------- -------
Minority interest (in millions) $ 12.3 $ 11.3 $ 9.4
======= ======= =======
Minority interest relates primarily to the results of Arcade Drilling
and the 25.6% attributable to stockholders other than the Company. Arcade
Drilling reported income in 1999, 1998 and 1997 of $46.9 million, $44.2
million and $36.9 million, respectively.
Extraordinary Loss
Extraordinary losses for 1999 of $1.7 million, net of a tax benefit of
$.9 million and 1998 of $24.2 million, net of a tax benefit of $13.0
million are both due to the extinguishment of debt obligations in
connection with the issuance of new debt obligations. See Notes A and E of
Notes to Consolidated Financial Statements.
Oil & Gas Activities
The Company's oil and gas business is operated primarily through its
majority-owned subsidiaries Reading & Bates Development Co. ("Devco"), and
to an insignificant extent, through its wholly-owned subsidiaries Raptor
Exploration Company, Inc. and Cliffs Oil and Gas Company.
In 1998, Devco incurred dryhole costs of $11.7 million and asset
impairment charges of $11.3 million. In 1997, Devco incurred dryhole costs
of $65.1 million and asset impairment charges of $42.8 million.
Liquidity and Capital Resources
Cash Flows
Net cash provided by operating activities was $198.6 million for 1999,
compared to $247.9 million and $330.1 million for 1998 and 1997,
respectively. Fluctuations between the years are primarily due to
increases and decreases in net income as a result of fluctuations in
dayrates and utilization, offset by the changes in the components of
working capital.
Net cash used in investing activities was $1,315.3 million for 1999,
compared to $1,061.6 million for 1998 and $703.6 million for 1997.
Increases between the years are primarily due to capital expenditures,
primarily related to the significant capital projects involving the
construction or upgrade of drilling units and rig and vessel acquisitions.
Also in 1999, purchase of short-term investments increased due to the
investment of a portion of the proceeds from debt and preferred stock
offerings (see below), and the increase in cash dedicated to capital
projects which will be used for capital expenditures and principal and
interest payments (see Note A of Notes to Consolidated Financial
Statements).
Net cash provided by financing activities was $1,194.4 million for
1999, compared to $935.6 million for 1998 and $301.2 million for 1997. The
increase in 1999 as compared to 1998 is due to proceeds received from a
$1.0 billion debt offering, $300.0 million preferred stock offering and the
$250.0 million financing for the construction of the Deepwater Nautilus,
offset by the repayment of certain existing debt obligations. The increase
in 1998 as compared to 1997 was primarily due to proceeds from two senior
note offerings totaling $1.5 billion during 1998, offset by the repayment
of certain existing debt obligations.
Debt Issuance
On March 26, 1999, the Company issued three series of senior notes with
an aggregate principal amount of $1.0 billion. The senior notes consisted
of $400.0 million of 11% senior secured notes due 2006, $400.0 million of
11.375% senior secured notes due 2009 and $200.0 million of 12.25% senior
notes due 2006 (collectively, the "Senior Notes"). The $800.0 million
senior secured notes are collateralized by ten of the Company's drilling
rigs. As a result, the Company received net proceeds of approximately
$970.6 million after deducting offering expenses. The Company used the
proceeds to repay existing indebtedness of approximately $556.0 million and
the remainder will be used to acquire, construct, repair and improve
drilling rigs and for general corporate purposes. See Note E of Notes to
Consolidated Financial Statements.
Preferred Stock Issuance
On April 22, 1999, the Company issued 300,000 shares of 13.875% Senior
Cumulative Redeemable Preferred Stock (the "Preferred Stock") and warrants
to purchase 10,500,000 shares of the Company's common stock at an exercise
price of $9.50 per share (the "Warrants"). The Company received net
proceeds of approximately $288.8 million from the issuance of the Preferred
Stock and Warrants. Each share of Preferred Stock has a liquidation
preference of $1,000 per share and one Warrant to purchase 35 shares of the
Company's common stock. The Warrants became exercisable on July 7, 1999.
The Warrants expire and the Preferred Stock is mandatorily redeemable at
its face value on May 1, 2009.
Dividends are paid quarterly which commenced on August 1, 1999 and at
the Company's option may be paid in cash or, on or before May 1, 2004, in
additional shares of Preferred Stock. Dividends paid through December 31,
1999 were $22.3 million and were paid by the issuance of additional shares
of Preferred Stock. Dividends accrued at December 31, 1999 were $7.4
million and are included in the recorded amount of the Preferred Stock. The
Warrants' initial fair value of $159.95 per Warrant, or approximately $48.0
million in total, was recorded as a discount to the Preferred Stock and an
addition to capital in excess of par. The Warrants' initial fair value and
Preferred Stock offering expenses of $9.7 million are being amortized on a
straight-line basis over the Warrants' ten year term. Amortization for the
year ended December 31, 1999 was $4.0 million. Preferred Stock dividends
and the amortization of the Warrants' initial value and Preferred Stock
offering expenses are deducted from net income to arrive at net income
applicable to common stockholders.
The Company may redeem the Preferred Stock beginning May 1, 2004. The
initial redemption price is 106.938% of the liquidation preference,
declining thereafter to 100% on or after May 1, 2007, in each case plus
accrued and unpaid dividends to the redemption date. In addition, on or
before May 1, 2002, the Company may redeem shares of the Preferred Stock
having an aggregate liquidation preference of up to $105.0 million at a
price equal to 113.875% of its liquidation preference, plus accrued and
unpaid dividends to the redemption date, with proceeds from one or more
public equity offerings.
Project Financings
In August 1999, a subsidiary of the Company completed a $250.0 million
project financing for the construction the Deepwater Nautilus in which such
subsidiary received net proceeds of approximately $245.2 million. The
financing consists of two five-year notes. The first note is for $200.0
million and bears interest at 7.31%, with monthly interest payments, which
commenced in September 1999, and monthly principal payments commencing in
June 2000. The second note is for $50.0 million and bears interest at
9.41%, with monthly interest payments, which commenced in September 1999,
and a balloon principal payment which is due at maturity of the loan in May
2005. Both notes are collateralized by the Deepwater Nautilus and drilling
contract revenues from such rig and are without recourse to the Company.
In September 1999, the limited liability company which operates the
Deepwater Frontier, which is owned 60% by the Company and 40% by Conoco
completed a $270.0 million project financing in the form of a synthetic
lease. The synthetic lease is collateralized by the drillship Deepwater
Frontier, drilling contract revenues from such drillship and a $50.0
million letter of credit which was secured by the Company (see Note A of
Notes to Consolidated Financial Statements). Proceeds of such financing
were used in part to repay advances of approximately $123.3 million which
the Company had made to the limited liability company.
Credit Facilities
The Company had four bank facilities, three of which were repaid in
March 1999 from proceeds from the Senior Notes and one that was terminated
on January 3, 2000. The first was a $350.0 million revolving credit
facility with a syndicate of banks, which had been fully drawn at the time
of repayment in March 1999. See Note E of Notes to Consolidated Financial
Statements.
The second bank facility was a $125.0 million interim construction
facility with a syndicate of banks for the construction of the Deepwater
Millennium, which had been fully drawn at the time of repayment in March
1999. See Note D of Notes to Consolidated Financial Statements.
The third bank facility was an interim construction facility with a
syndicate of banks for the construction of the Deepwater Frontier. This
interim loan was made to a limited liability company, which is owned 60% by
the Company and 40% by Conoco. The Company had guaranteed repayment of 60%
of this interim loan. At the time of repayment in March 1999, this credit
facility had been drawn to $135.0 million and $81.0 million, which
represents the Company's portion, was repaid.
The fourth bank facility was a $35.0 million revolving credit facility
maintained by Cliffs Drilling. At December 31, 1999, there were no amounts
outstanding and on January 3, 2000 such facility was terminated by the
Company. See Note E of Notes to Consolidated Financial Statements.
Capital Expenditure Commitments
The Company has numerous significant capital expenditure projects under
way involving the construction or upgrade of drilling units. The following
is a list of such projects:
Water Depth Estimated Contract Expenditures
Capability Delivery Term Estimated Made thru
(feet) Date (years) Cost December 31, 1999
------ ---- ------- -------- -----------------
Drillships: (in millions)
DEEPWATER
PATHFINDER(1) 10,000 Delivered 5 $ 277.0 $ 272.9
DEEPWATER
FRONTIER (2) 10,000 Delivered 2.5 $ 271.0 $ 262.9
DEEPWATER
MILLENNIUM 10,000 Delivered 4 (3) $ 275.0 $ 272.6
DEEPWATER
DISCOVERY 10,000 3rd quarter 2000 3 $ 305.0 $ 148.0
DEEPWATER
EXPEDITION 10,000 Delivered 6 $ 230.0 $ 221.4
DEEPWATER
NAVIGATOR (4) 7,200 1st quarter 2000 - $ 320.0 $ 290.3
Semisubmersibles:
FALCON 100 (5) 2,400 Delivered - $ 125.0 $ 124.8
DEEPWATER NAUTILUS 8,000 Delivered 5 $ 350.0 $ 311.2
DEEPWATER HORIZON 10,000 1st quarter 2001 3 $ 350.0 $ 72.5
-------- --------
$2,503.0 $1,976.6
======== ========
________________________
(1) The Company owns a 50% interest in the limited liability company that
operates this drillship.
(2) The Company owns a 60% interest in the limited liability company that
operates this drillship. Under the drilling contract for this
drillship, the Company and Conoco have each committed to use this rig
for two and one-half of the first five years after delivery. During
1999, both Conoco and the Company used the rig to drill a well and in
October 1999 under the Company's direction, the rig commenced a two-
year drilling contract offshore Brazil with Petrobras.
(3) Statoil will use this drillship for the first three years after
delivery, then the Company will alternate use of the rig with Statoil
every six months for the next two years.
(4) On April 15, 1999, BP Amoco cancelled the drilling contract for the
Deepwater Navigator in accordance with the contract's terms because
the drillship had not been delivered on time. The Company has
received a letter of intent from Petrobras for a three-year drilling
contract offshore Brazil.
(5) In May 1999, Petrobras cancelled the drilling contract for the Falcon
100 based on its interpretation of the cancellation provisions of the
contract. The Company does not believe that Petrobras has the right
to cancel such contract. The Company has engaged Brazilian counsel to
pursue the Company's rights under the contract. The Company is
currently marketing this rig for work.
In the third quarter of 1998, the Company cancelled the Peregrine VI
and the Peregrine VIII drillship conversion projects due to continuing
uncertainty as to final cost and expected delivery dates. As a result, the
drilling contract on the Peregrine VIII was terminated on September 24,
1998, and the drilling contract on the Peregrine VI was terminated on
January 1, 1999. Both terminations were without prejudice to the rights of
the oil companies. The Company believes that, based on provisions of the
contracts that preclude recovery of indirect or consequential damages and
projected rig availability in the offshore drilling industry, the Company
will not have any material liability under these drilling contracts as a
result of the termination thereof. The contracts with the shipyard for
conversion of the Peregrine VI and the Peregrine VIII were also cancelled.
In addition, in the fourth quarter of 1998, the Company cancelled two
additional drillship conversion projects (Peregrine IX and Peregrine X)
that were in the preliminary phases. As a result of the termination of
these four drillship conversion projects, the Company expensed $118.3
million in related costs in 1998.
In connection with the drillship conversion projects, the Company
purchased or committed to purchase drilling equipment with an aggregate
cost of approximately $285.0 million. The Company expected to use some of
the surplus equipment on other construction and/or upgrade projects and to
maintain the balance as inventory. A majority of the equipment originally
ordered was directed to other construction projects. However, the Company
determined that a portion of such surplus equipment was not usable for
other projects or as spare parts and as a result the Company expensed $25.6
million in the third quarter of 1999 to write-down such inventory to net
realizable value. As of December 31, 1999, the Company had approximately
$59.0 million remaining of such surplus drilling equipment. The Company is
continually reviewing the value and utility of such equipment and if in the
future it is determined the Company cannot realize the recorded value of
the surplus equipment, the Company could incur additional write-offs or
write-downs of such equipment.
Also in the third quarter of 1999, the Company sold the Peregrine X
(with the hull being the primary remaining asset) for approximately $5.8
million. As a result of the sale, the Company recorded a loss of $6.1
million that has been included in the cancellation of conversion projects
in the Consolidated Statement of Operations.
In the fourth quarter of 1999, the Company expensed $3.0 million in
connection with the final settlement with the shipyard and the write-down
of the Peregrine VI and Peregrine VIII hulls to estimated scrap value.
In September 1998, the Company and Navis ASA ("Navis"), a Norwegian
public company which is constructing a dynamically positioned drillship
(the Navis Explorer I), entered into an agreement pursuant to which the
Company agreed to make a capital contribution to Navis of $50.0 million in
exchange for stock in Navis. The Navis Explorer I is designed to drill in
10,000 feet of water and is being constructed at Samsung Heavy Industries
Co. Ltd. at an estimated cost of $310.0 million, with a scheduled delivery
in the second quarter of 2000. As of December 31, 1999, the Company had
contributed $45.2 million in cash and $17.7 million of equipment and
equipment purchase orders. As a result of such contributions, the Company's
ownership in Navis approximated 38.6%. Most of the equipment and equipment
purchase orders that were or will be contributed by the Company were
acquired by the Company in connection with the Peregrine VI and Peregrine
VIII projects and are no longer required for such projects in light of
their cancellation. Navis and the Company have entered into an agreement
pursuant to which the Company will supervise construction of the drillship
and manage it following its delivery.
The Deepwater Expedition, Falcon 100 and Deepwater Navigator were or
will be completed later than the required commencement dates under the
drilling contracts for such rigs and at costs significantly in excess of
original estimates. The customers for the Falcon 100 and Deepwater
Navigator have cancelled the drilling contracts for such rigs based on the
rigs not being delivered on time. The Company is currently marketing the
Falcon 100 for work and the Company has received a letter of intent from
Petrobras for the use of the Deepwater Navigator for a three-year drilling
contract offshore Brazil. The customer for the Deepwater Expedition did not
cancel its drilling contract and as of the date of this filing no late
penalties had been claimed. However, if late penalties are legally imposed
on the Deepwater Expedition, such amounts will be capitalized and amortized
over the term of the initial drilling contract, subject to a determination
of realizability.
The Company's construction and upgrade projects are subject to the
risks of delay and cost overruns inherent in any large construction
project, including shortages of equipment, unforeseen engineering problems,
work stoppages, weather interference, unanticipated cost increases and
shortages of materials or skilled labor. Significant cost overruns or
delays would adversely affect the Company's liquidity, financial condition
and results of operations. Delays could also result in penalties under, or
the termination of, the long-term contracts under which the Company plans
to operate these rigs.
Liquidity
Activity in the contract drilling industry and related oil service
businesses has deteriorated significantly in the past year due primarily to
decreased worldwide demand for drilling rigs and related services resulting
from a substantial decline in crude oil prices experienced in 1998 through
the first quarter of 1999. In mid 1999, crude oil prices began to recover ,
but there can be no assurance that demand for drilling rigs and related
services will recover proportionately. To date, demand for drilling rigs
has not recovered to the levels experienced in 1996-1998. Oil companies'
demand for offshore drilling services are a function of: 1) current and
projected oil and gas prices, 2) government taxation and concession/leasing
policies, 3) the oil company's lease inventory and existing drilling
commitments on leases held, 4) the oil company's free cash flow and general
funding availability, 5) the oil company's internal reserve replacement
requirements, 6) geopolitical factors (e.g., the drive for national
hydrocarbons self sufficiency). The first factor is by far the most
important. In particular, the domestic shallow water market tends to be
primarily driven by the price of natural gas. Changes in demand for
exploration and production services can impact the Company's liquidity as
supply and demand factors directly affect utilization and dayrates, which
are the primary determinants of cash flow from the Company's operations. In
late 1998 and early 1999, lower crude oil prices reduced exploration and
production spending, which led to significantly lower dayrates and
utilization for offshore drilling companies, particularly in the U.S. Gulf
of Mexico. Management believes such decline in demand also contributed to
terminated or renegotiated contracts for certain of the Company's deepwater
rigs. Crude oil and natural gas prices have continued to fluctuate over the
last several years. If crude oil prices decline or a weakness in crude oil
prices continued for an extended period, there could be a further
deterioration in both rig utilization and dayrates which could have a
material adverse affect on the Company's liquidity, financial position and
results of operations.
During 1999, the Company received net proceeds of approximately $1.3
billion from the issuance of senior notes and preferred stock, and a
subsidiary of the Company received approximately $245.2 million in project
financing for the construction of the Deepwater Nautilus. The proceeds were
used to repay existing indebtedness of approximately $556.0 million with
the remainder being used to acquire, construct, repair and improve drilling
rigs and for general corporate purposes. Also, the Company is considering
certain asset sales, including the Seillean and Iolair, and under the
Company's indenture covenants, the Company may enter into a revolving
credit facility up to approximately $180.0 million. As of December 31,
1999, the Company had $717.0 million of cash, cash equivalents, short-term
investments and cash dedicated to capital projects (see Note A of Notes to
Consolidated Financial Statements).
The Company has substantially completed or is currently constructing or
significantly upgrading nine deepwater drilling rigs. The Company estimates
its capital expenditure commitments on these projects and its other routine
capital expenditures for 2000 to total approximately $540.0 million.
The Company has limited ability under its indenture covenants to incur
additional recourse indebtedness. However, the Company believes its
projected level of cash flows from operations, which assumes an industry
recovery in 2000, cash on hand, potential asset sales and/or new financings
will be sufficient to satisfy the Company's short-term and long-term
working capital needs, planned investments, capital expenditures, debt,
lease and other payment obligations. If the Company were to build excess
cash balances, it will most likely use a portion of the excess to retire
debt and/or preferred obligations.
The impact of general economic inflation on the Company's operations
for the three years ended December 31, 1999 has not been material.
Year 2000
The Year 2000 issue ("Y2K") arose as a result of many computer systems
being affected in some way by the rollover of the two-digit year value to
00. The Company undertook a Y2K compliance program to assess, test,
implement and develop contingency plans for those systems potentially
affected by Y2K as well as contacting third parties with which the Company
has a substantial relationship to assess their status. The Company
completed its Y2K compliance program and made certain modifications to its
existing software and systems and/or conversions to new software. As of the
date of this filing, the Company has not experienced any disruption of its
operations due to Y2K. The total cost of the Company's Y2K compliance
program was approximately $3.0 million, which consisted primarily of the
replacement of accounting software for one of the Company's wholly owned
subsidiaries. The Company does not anticipate to incur any significant Y2K
related costs in 2000.
Other
On April 7, 1999, the Company announced that Mr. Steven Webster, the
Company's President and Chief Executive Officer, had agreed to resign from
these officer positions effective May 31, 1999. On May 19, 1999, Mr. Paul
B. Loyd, Jr., the Company's Chairman of the Board, was elected as the
Company's Chief Executive Officer, and Mr. Andrew Bakonyi was elected as
President and Chief Operating Officer. Mr. Webster remains a Director of
the Company.
As a result of Mr. Webster's resignation and the termination of certain
other executive officers, the Company incurred $6.6 million of expense in
the second quarter of 1999. Such expense is reported as general and
administrative expense in the Company's Consolidated Statement of
Operations. See Results of Operations above.
In June 1999, one of the Company's inland drilling barges was declared a
total loss as a result of a blowout and fire at a location in inland waters
approximately two miles southeast of Amelia, Louisiana. No injuries of
personnel were sustained. The Company's physical damage insurance covered
the loss of the barge and as a result the Company recorded a gain of
approximately $16.1 million in the third quarter of 1999. See Results of
Operations above.
In December 1998, Mobil North Sea Limited ("Mobil") purportedly
terminated its contract for use of the Company's Jack Bates semisubmersible
rig based on failure of two mooring lines while anchor recovery operations
at a Mobil well location had been suspended during heavy weather. The
contract provided for Mobil's use of the rig at a dayrate of approximately
$115,000 for the primary term through January 1999 and approximately
$200,000 for the extension term from February 1999 through December 2000.
The Company does not believe that Mobil had the right to terminate this
contract. The Company had recontracted the Jack Bates to Mobil for one
well at a dayrate of $156,000 and for another well at a dayrate of $69,000.
These contracts are without prejudice to either party's rights in the
dispute over the termination of the original contract. The Company has
filed a request for arbitration with the London Court of International
Arbitration, and the arbitration proceedings are continuing.
In January 1999, an action was filed by Mobil Exploration and Producing
U.S. Inc. and affiliates, St. Mary Land & Exploration Company and
affiliates and Samuel Geary and Associates, Inc. against Cliffs Drilling,
its underwriters and insurance broker in the 16th Judicial District Court
of St. Mary Parish, Louisiana. The plaintiffs alleged damages amounting to
in excess of $50.0 million in connection with the drilling of a turnkey
well in 1995 and 1996. The case was tried before a jury in January and
February 2000, and the jury returned a verdict of approximately $30.0
million in favor of the plaintiffs for excess drilling costs, loss of
insurance proceeds, loss of hydrocarbons and interest. However, the trial
court has not entered a judgment on the verdict, as there are a number of
matters to be ruled upon before doing so. If a judgment is entered on such
verdict, Cliffs Drilling intends to appeal and believes its efforts to do
so will be successful. The Company believes all but the portion of the
verdict representing excess drilling costs of approximately $4.7 million is
covered by relevant primary and excess liability insurance policies of
Cliffs Drilling; however, one insurer has denied coverage and the others
have reserved their rights. If necessary, Cliffs Drilling and the Company
intend to take appropriate legal action to enforce Cliffs Drilling's rights
with respect to such policies. At this time Cliffs Drilling and the
Company believe adequate reserves have been established to protect the
interests of Cliffs Drilling and the Company in this matter.
In April 1998, Cliffs Drilling was awarded a contract from PDVSA
Exploration and Production ("PDVSA") to drill 60 turnkey wells in
Venezuela. The drilling program commenced in March 1998 and the program was
expected to extend over approximately three and one-half years and was
expected to utilize seven of the Company's land drilling rigs in Venezuela.
However, during the first quarter of 1999, in response to the downturn in
the market, PDVSA and the Company renegotiated prices for the next 14 wells
to be drilled under this program. In the fourth quarter of 1999,
negotiations were completed for the following seven wells to be drilled
under this program at further reduced margins. As of December 31, 1999, the
Company had completed 29 wells with 6 wells remaining to be completed. Such
remaining wells are expected to be completed by the end of the first
quarter in 2000. In regards to the remaining 25 of the original 60 wells,
a contractual commitment no longer exists and no assurance can be given
that such wells will ultimately be drilled.
On February 15, 2000, the Company announced the election of Mr. R. A.
(Rich) Pattarozzi to the Company's Board of Directors effective
immediately. Mr. Pattarozzi recently retired from Shell Offshore Inc. after
a career with various Shell Oil Company affiliates beginning in 1966. Mr.
Pattarozzi served as President and Chief Executive Officer of Shell
Deepwater Development Inc. and President and Chief Executive Officer of
Shell Deepwater Production Inc. and was Vice President of Shell Offshore
Inc. where he had responsibility for Shell Deepwater Development Inc. and
Shell Deepwater Production Inc. He was responsible for the exploration,
development and production for Shell's Gulf of Mexico deepwater properties
and its shelf exploration and production business.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Company's earnings and cash flows are subject to fluctuations due to
changes in foreign currency exchange rates. The Company may enter into
forward exchange contracts to hedge specific commitments and anticipated
transactions but not for speculative or trading purposes. However, the
Company's contracts generally provide for payment in U.S. dollars and the
Company does not maintain significant foreign currency cash balances. See
Note A of Notes to Consolidated Financial Statements.
The Company is exposed to changes in interest rates with respect to its
debt obligations. The following table sets forth the average interest rate
for the scheduled maturity of the Company's debt obligations as of December
31, 1999 (dollars in millions):
Estimated
Fair Value
at
December 31,
2000 2001 2002 2003 2004 Thereafter Total 1999
------ ------ ------ ------ ------ ---------- ------- ---------
Fixed Rate Debt:
Amount $ 20.1 $ 41.5 $ 38.6 $591.6 $ 44.6 $2,219.7 $2,956.1 $2,891.9
Average
interest rate 7.324% 7.622% 7.310% 8.268% 7.310% 9.374% 9.056%
The Company is exposed to changes in the price of oil and natural gas.
The marine contract drilling industry is dependent upon the exploration and
production programs of oil and gas companies, which in turn are influenced
by the price of oil and natural gas.
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders
R&B Falcon Corporation
We have audited the accompanying consolidated balance sheets of R&B
Falcon Corporation (a Delaware corporation) and subsidiaries as of December
31, 1999 and 1998, and the related consolidated statements of operations,
cash flows and stockholders' equity for each of the three years in the
period ended December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
R&B Falcon Corporation and subsidiaries as of December 31, 1999 and 1998,
and the consolidated results of their operations and their cash flows for
each of the three years in the period ended December 31, 1999, in
conformity with generally accepted accounting principles in the United
States.
/s/Arthur Andersen LLP
Houston, Texas
February 22, 2000
R&B FALCON CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
December 31, 1999 and 1998
(in millions except share amounts)
1999 1998
--------- ---------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents, gross $ 415.5 $ 177.4
Less cash dedicated to capital projects (160.4) -
--------- ---------
Cash and cash equivalents, net 255.1 177.4
Short-term investments 301.5 -
Accounts receivable:
Trade, net 141.3 197.0
Other 86.0 73.5
Materials and supplies inventory 52.6 36.1
Drilling contracts in progress 16.7 29.5
Other current assets 13.9 25.0
--------- ---------
Total current assets 867.1 538.5
--------- ---------
INVESTMENTS IN AND ADVANCES TO
UNCONSOLIDATED INVESTEES 82.7 28.2
--------- ---------
PROPERTY AND EQUIPMENT:
Drilling 4,034.7 3,369.2
Other 262.5 181.1
--------- ---------
Total property and equipment 4,297.2 3,550.3
Accumulated depreciation (662.0) (519.4)
--------- ---------
Net property and equipment 3,635.2 3,030.9
--------- ---------
GOODWILL, NET OF ACCUMULATED AMORTIZATION 84.8 70.6
--------- ---------
DEFERRED CHARGES AND OTHER ASSETS 246.3 45.8
--------- ---------
TOTAL ASSETS $ 4,916.1 $ 3,714.0
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term obligations $ - $ 123.4
Long-term obligations due within one year 20.1 6.3
Accounts payable - trade 104.8 64.9
Accrued liabilities 227.9 158.6
--------- ---------
Total current liabilities 352.8 353.2
LONG-TERM OBLIGATIONS 2,933.4 1,866.2
OTHER NONCURRENT LIABILITIES 39.7 39.2
DEFERRED INCOME TAXES 53.2 142.4
--------- ---------
Total liabilities 3,379.1 2,401.0
--------- ---------
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST 56.6 62.8
--------- ---------
REDEEMABLE PREFERRED STOCK
322,250.188 shares issued and
outstanding at December 31, 1999 276.0 -
--------- ---------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 550,000,000
shares authorized, 193,743,778 shares
and 193,399,910 shares issued and
outstanding at December 31, 1999 and
1998, respectively 1.9 1.9
Capital in excess of par value 1,113.4 1,061.5
Retained earnings 95.9 199.1
Other (6.8) (12.3)
--------- ---------
Total stockholders' equity 1,204.4 1,250.2
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,916.1 $ 3,714.0
========= =========
The accompanying notes are an integral part of the consolidated financial
statements.
R&B FALCON CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in millions except per share amounts)
Years Ended December 31,
----------------------------
1999 1998 1997
-------- -------- --------
OPERATING REVENUES:
Deepwater $ 354.9 $ 392.5 $ 349.3
Shallow water 198.9 382.9 333.2
Inland water 121.7 244.3 249.9
Engineering services and land operations 242.8 12.9 -
Development .5 - .6
-------- -------- --------
Total operating revenues 918.8 1,032.6 933.0
-------- -------- --------
COSTS AND EXPENSES:
Deepwater 174.1 186.1 140.2
Shallow water 152.6 161.5 158.7
Inland water 99.0 169.1 136.7
Engineering services and land operations 181.7 11.1 -
Development 3.7 19.5 130.2
Cancellation of conversion projects 34.7 118.3 -
Depreciation and amortization 158.0 98.0 84.7
General and administrative 69.9 61.2 55.7
Merger expenses - ( 8.0) 66.4
-------- -------- --------
Total costs and expenses 873.7 816.8 772.6
-------- -------- --------
OPERATING INCOME 45.1 215.8 160.4
-------- -------- --------
OTHER INCOME (EXPENSE):
Interest expense, net of
capitalized interest (169.8) (63.9) (41.6)
Interest income 35.3 9.6 6.1
Income (loss) from equity investees
plus related income 3.5 (.2) -
Other, net (1.2) (.1) (1.0)
-------- -------- --------
Total other income (expense) (132.2) (54.6) (36.5)
-------- -------- --------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES, MINORITY INTEREST
AND EXTRAORDINARY LOSS (87.1) 161.2 123.9
-------- -------- --------
INCOME TAX EXPENSE (BENEFIT):
Current 48.3 38.5 39.3
Deferred (79.9) 20.4 45.4
-------- -------- --------
Total income tax expense (benefit) (31.6) 58.9 84.7
-------- -------- --------
MINORITY INTEREST (12.3) (11.3) (9.4)
-------- -------- --------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY LOSS (67.8) 91.0 29.8
INCOME (LOSS) FROM DISCONTINUED OPERATIONS - 36.0 (36.0)
EXTRAORDINARY LOSS, NET OF TAX BENEFIT (1.7) (24.2) -
-------- -------- --------
NET INCOME (LOSS) (69.5) 102.8 (6.2)
DIVIDENDS AND ACCRETION ON PREFERRED STOCK 33.7 - -
-------- -------- --------
NET INCOME (LOSS) APPLICABLE TO COMMON
STOCKHOLDERS $ (103.2) $ 102.8 $ (6.2)
======== ======== ========
NET INCOME (LOSS) PER COMMON SHARE:
Basic:
Continuing operations
after preferred stock dividends $ (.53) $ .54 $ .18
Discontinued operations - .21 (.22)
Extraordinary loss (.01) (.14) -
-------- -------- --------
Net income (loss) $ (.54) $ .61 $ (.04)
======== ======== ========
Diluted:
Continuing operations
after preferred stock dividends $ (.53) $ .54 $ .18
Discontinued operations - .21 (.22)
Extraordinary loss (.01) (.14) -
-------- -------- --------
Net income (loss) $ (.54) $ .61 $ (.04)
======== ======== ========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 192.7 167.5 164.1
======== ======== ========
Diluted 192.7 168.8 166.2
======== ======== ========
The accompanying notes are an integral part of the consolidated financial
statements.
R&B FALCON CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
Years Ended December 31,
----------------------------
1999 1998 1997
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (69.5) $ 102.8 $ (6.2)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 158.0 98.0 84.7
Gain on dispositions of property
and equipment (19.2) (9.0) (6.9)
Cancellation of conversion projects 34.7 118.3 -
Deferred income taxes (80.6) 20.4 47.4
Recognition of deferred expenses 15.6 12.2 7.1
Deferred compensation 5.0 1.1 17.8
Loss (income) from equity investees
plus related income (3.5) .2 -
Minority interest in income of
consolidated subsidiaries 12.3 11.3 9.4
Dryhole and exploration expenses
relating to oil and gas properties - 23.2 114.9
Loss (income) from discontinued operations - (36.0) 36.0
Extraordinary loss from extinguishment of
debt, net of tax benefit 1.7 24.2 -
Changes in assets and liabilities:
Accounts receivable, net 50.9 (28.1) (53.9)
Materials and supplies inventory (17.6) (9.9) (.8)
Drilling contracts in progress 13.5 (6.2) -
Deferred charges and other assets 12.0 (22.0) (17.3)
Accounts payable - trade 34.2 (17.9) 8.4
Accrued interest 33.9 (5.9) 7.1
Accrued liabilities 6.3 (21.8) 58.9
Income taxes 9.8 (4.4) 25.9
Other, net 1.1 (2.6) (2.4)
-------- -------- --------
Net cash provided by
operating activities 198.6 247.9 330.1
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Dispositions of property and equipment 28.1 43.0 10.4
Purchases of property and equipment,
exclusive of noncash items (830.4) (1,152.8) (682.3)
Increase in cash dedicated
to capital projects (160.4) - -
Purchase of Cliffs Drilling Company,
net of cash acquired - 28.0 -
Sale (purchase) of short-term investments (301.5) 45.4 (29.1)
Increase in investments in and advances to
unconsolidated investees (51.1) (25.2) (2.6)
-------- -------- --------
Net cash used in investing activities (1,315.3) (1,061.6) (703.6)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (payments on) short-term
obligations (123.4) 123.4 -
Net proceeds from (payments on) revolving
credit facilities (150.0) (332.0) 316.0
Proceeds from long-term obligations 1,215.8 1,494.0 38.0
Principal payments on long-term obligations (19.9) (323.2) (49.6)
Premium paid on debt extinguishment - (23.9) -
Net proceeds from issuance of preferred stock 288.8 - -
Distribution to minority shareholders of
consolidated subsidiaries,
net of contributions (18.6) (4.0) -
Other 1.7 1.3 (3.2)
-------- -------- --------
Net cash provided by financing activities 1,194.4 935.6 301.2
-------- -------- --------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 77.7 121.9 (72.3)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 177.4 55.5 127.8
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 255.1 $ 177.4 $ 55.5
======== ======== ========
Supplemental Cash Flow Disclosures:
Interest paid, net of capitalized interest $ 127.4 $ 105.6 $ 36.5
Income taxes paid $ 41.0 $ 36.5 $ 13.9
Noncash investing activities:
Purchase of Cliffs Drilling Company
in exchange for equity $ - $ 391.5 $ -
Other purchases of property and equipment
in exchange for equity, debt or other
noncurrent liabilities $ 9.3 $ 35.5 $ 8.0
The accompanying notes are an integral part of the consolidated financial
statements.
R&B FALCON CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the Three Years Ended December 31, 1999
(in millions)
Capital in Retained
Common Stock Excess of Earnings
Shares Amount(1) Par Value (Deficit) Other
------ --------- --------- --------- -------
Balances at December 31, 1996 163.4 $ 1.6 $ 630.8 $ 102.5 $ (18.2)
Net loss (6.2)
Activity in Company stock plans 1.2 8.9
Amortization of restricted
stock award .9 6.8
Acceleration of stock award (.3) (9.3) 10.1
Other .1
------ ------- -------- ------- -------
Balances at December 31, 1997 164.3 1.6 631.4 96.3 (1.3)
Net income 102.8
Purchase of assets 27.9 .3 416.4
Activity in Company stock plans .2 1.3
Restricted stock award, net of
amortization .9 12.3 (11.0)
Other .1 .1
------ ------- --------- ------- -------
Balances at December 31, 1998 193.4 1.9 1,061.5 199.1 (12.3)
Net loss (69.5)
Dividends and accretion on
preferred stock (33.7)
Purchase of assets .2 4.1
Contribution to employee
savings plans .1 1.1
Issuance of subsidiary stock to
employees .8
Activity in Company stock plans .8
Amortization of restricted
stock award (1.2) 5.5
Issuance of warrants 46.4
Other (.1)
------ ------ --------- ------- -------
Balances at December 31, 1999 193.7 $ 1.9 $ 1,113.4 $ 95.9 $ (6.8)
====== ====== ========= ======= =======
____________________
(1) Amounts less than one-tenth of a million are not shown.
The accompanying notes are an intregral part of the consolidated financial
statements.
R&B FALCON CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
______________
(A) INDUSTRY CONDITIONS, LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION - The consolidated financial statements include the
accounts of R&B Falcon Corporation ("R&B Falcon") and its subsidiaries
(collectively, the "Company"), including R&B Falcon (International &
Deepwater) Inc., formerly Reading & Bates Corporation ("R&B"); R&B Falcon
Holdings, Inc., formerly Falcon Drilling Company, Inc. ("Falcon"); Cliffs
Drilling Company ("Cliffs Drilling") effective December 1, 1998 and its
majority-owned subsidiaries Arcade Drilling AS ("Arcade") (approximately
74.4%) and Reading & Bates Development Company ("Devco") (approximately
86.1%). All significant intercompany balances and transactions have been
eliminated. The Company uses the equity method to account for
unconsolidated investees (see Note C).
INDUSTRY CONDITIONS/LIQUIDITY - Activity in the contract drilling
industry and related oil service businesses has deteriorated significantly
in the past year due primarily to decreased worldwide demand for drilling
rigs and related services resulting from a substantial decline in crude oil
prices experienced in 1998 through the first quarter of 1999. In mid 1999,
crude oil prices began to recover, but there can be no assurance that
demand for drilling rigs and related services will recover proportionately.
To date, demand for drilling rigs has not recovered to the levels
experienced in 1996-1998. Oil companies' demand for offshore drilling
services are a function of: 1) current and projected oil and gas prices,
2) government taxation and concession/leasing policies, 3) the oil
company's lease inventory and existing drilling commitments on leases held,
4) the oil company's free cash flow and general funding availability, 5)
the oil company's internal reserve replacement requirements, 6)
geopolitical factors (e.g., the drive for national hydrocarbons self
sufficiency). The first factor is by far the most important. In
particular, the domestic shallow water market tends to be primarily driven
by the price of natural gas. Changes in demand for exploration and
production services can impact the Company's liquidity as supply and demand
factors directly affect utilization and dayrates, which are the primary
determinants of cash flow from the Company's operations. In late 1998 and
early 1999, lower crude oil prices reduced exploration and production
spending, which led to significantly lower dayrates and utilization for
offshore drilling companies, particularly in the U.S. Gulf of Mexico.
Management believes such decline in demand also contributed to terminated
or renegotiated contracts for certain of the Company's deepwater rigs.
Crude oil and natural gas prices have continued to fluctuate over the last
several years. If crude oil prices decline or a weakness in crude oil
prices continued for an extended period, there could be a further
deterioration in both rig utilization and dayrates which could have a
material adverse affect on the Company's liquidity, financial position and
results of operations.
During 1999, the Company received net proceeds of approximately $1.3
billion from the issuance of senior notes and preferred stock, and a
subsidiary of the Company received approximately $245.2 million in project
financing for the construction of the Deepwater Nautilus. The proceeds were
used to repay existing indebtedness of approximately $556.0 million with
the remainder being used to acquire, construct, repair and improve drilling
rigs and for general corporate purposes. Also, the Company is considering
certain asset sales, including the Seillean and Iolair, and under the
Company's indenture covenants, the Company may enter into a revolving
credit facility up to approximately $180.0 million. As of December 31,
1999, the Company had $717.0 million of cash, cash equivalents, short-term
investments and cash dedicated to capital projects.
The Company has substantially completed or is currently constructing or
significantly upgrading nine deepwater drilling rigs. The Company estimates
its capital expenditure commitments on these projects and its other routine
capital expenditures for 2000 to total approximately $540.0 million.
The Company has limited ability under its indenture covenants to incur
additional recourse indebtedness. However, the Company believes its
projected level of cash flows from operations, which assumes an industry
recovery in 2000, cash on hand, potential asset sales and/or new financings
will be sufficient to satisfy the Company's short-term and long-term
working capital needs, planned investments, capital expenditures, debt,
lease and other payment obligations. If the Company were to build excess
cash balances, it will most likely use a portion of the excess to retire
debt and/or preferred obligations.
CASH AND CASH EQUIVALENTS - The Company considers all highly liquid
cash investments purchased with an original maturity of three months or
less to be cash equivalents. Arcade's cash and cash equivalents balance is
available to Arcade for all purposes subject to restrictions under the
Standstill Agreement dated as of August 31, 1991 among Arcade, Transocean
Offshore Inc. and R&B which restrictions preclude R&B from borrowing any
cash from Arcade unless (i) Transocean is offered a pro-rata loan (based on
stock ownership in Arcade) on similar terms and (ii) any such loan(s)
otherwise comply with applicable laws. At December 31, 1999, $36.9 million
of the cash and cash equivalents balance related to Arcade. Arcade
declared distributions of approximately $110.0 million in 1999, of which
the Company received approximately $78.8 million, net of applicable
withholding taxes and approximately $15.8 million in 1998, of which the
Company received approximately $11.8 million.
In the third quarter of 1999, the project financings for the Deepwater
Nautilus (see Note E) and the Deepwater Frontier (see Note C and E) were
completed and as a result $160.4 million of the Company's cash at December
31, 1999 was restricted as to use. Such amount consists of $110.4 million
related to the financing of the Deepwater Nautilus and will be used for
capital expenditures and certain principal and interest payments. The
remaining $50.0 million relates to the financing for the construction of
the Deepwater Frontier which collateralizes a five-year standby letter of
credit that the Company was required to secure for the limited liability
company to obtain such financing. As a result of the above, the cash
dedicated to these capital projects has been classified as Other Assets.
SHORT-TERM INVESTMENTS - Short-term investments consist of interest-
bearing deposits with a commercial bank with an original maturity greater
than three months but less than one year from the date of the investment.
MATERIALS AND SUPPLIES INVENTORY - Materials and supplies are stated at
the lower of average cost or market.
PROPERTY AND EQUIPMENT - Property and equipment are stated at cost or
market at the date of acquisition with respect to purchased property and
equipment. Drilling units and marine equipment are depreciated under the
straight-line method. Gain (loss) on disposal of properties is credited
(charged) to income. Estimated useful lives range from three to thirty
years. In the first quarter of 1998, the Company had an independent
appraiser evaluate the expected useful lives of its marine units and, based
on such appraisal, the Company extended the useful lives of its marine
units effective January 1, 1998. Such change in estimate resulted in an
approximate $20.7 million reduction in depreciation expense for the year
ended December 31, 1998.
Costs incurred for construction and significant upgrades of marine
equipment are accumulated in construction in progress with no depreciation
being recorded on such amounts until the construction or upgrade is
completed and the equipment is placed into service. The amount of
construction in progress included in drilling equipment at December 31,
1999 and 1998 was $1,609.8 million and $1,222.3 million, respectively.
Certain marine equipment is being held in non-operating status pending
modification and decisions regarding its deployment. Management believes
its market value approximates its net book value of $62.7 million at
December 31, 1999.
The Company's management periodically evaluates the carrying value of
its property and equipment based upon the estimated undiscounted future net
cash flows of the related asset compared to the carrying amount of that
asset.
GAIN ON DRILLING BARGE CASUALTY - In June 1999, one of the Company's
inland drilling barges was declared a total loss as a result of a blowout
and fire at a location in inland waters approximately two miles southeast
of Amelia, Louisiana. No injuries of personnel were sustained. The
Company's physical damage insurance covered the loss of the barge and as a
result the Company recorded a gain of approximately $16.1 million in the
third quarter of 1999. Such gain has been credited to operating expenses
in the inland water segment.
OIL AND GAS ACCOUNTING - The successful efforts method of accounting is
used for oil and gas exploration and production activities. Under this
method, acquisition costs for proved and unproved properties are
capitalized when incurred. Exploration costs, including geological and
geophysical costs and costs of carrying and retaining unproved properties,
are charged to expense as incurred. The costs of drilling exploratory
wells are capitalized pending determination of whether each well had
discovered proved reserves. If proved reserves are not discovered, such
drilling costs are charged to expense. Costs incurred to drill and equip
development wells, including unsuccessful development wells, are
capitalized. See Note P.
GOODWILL - Goodwill from the purchase of Cliffs Drilling (see Note B)
is amortized on a straight-line basis over 40 years. The Company's
management periodically evaluates recorded goodwill balances, net of
accumulated amortization, for impairment based on the undiscounted cash
flows associated with the asset compared to the carrying amount of that
asset. Management believes that there have been no events or circumstances
which warrant revision to the remaining useful life or affect the
recoverability of its recorded goodwill.
DEFERRED CHARGES AND OTHER ASSETS - Deferred charges and other assets
include cash dedicated to capital projects (see CASH AND CASH EQUIVALENTS
above), deferred financing costs and deferred rig mobilization and
preparation costs. Deferred charge amounts are stated net of accumulated
amortization costs and at net realizable value.
INCOME TAXES - Deferred income taxes are recognized for revenues and
expenses reported in different years for financial statement purposes and
income tax purposes.
REVENUE RECOGNITION - Revenues are recognized as they are earned.
Proceeds associated with the early termination of a contract are recorded
as deferred income and recognized as contract revenues over the remaining
term of the cancelled contract or until such time as the mobile offshore
unit begins a new contract. In the first quarter of 1999, a customer
terminated a drilling contract for one of the Company's third-generation
semisubmersibles and the Company received an early termination fee of $7.2
million. The semisubmersible was immediately contracted to another customer
and as a result the Company recognized the early termination fee as revenue
in the first quarter of 1999. There were no such amounts deferred at
December 31, 1999. In addition, when a unit's mobilization revenue exceeds
the cost of the mobilization by a significant amount, the Company
recognizes the excess as contract revenue during the contract preparation
and mobilization period on a dayrate basis. If there is revenue that has
not been recognized by the time the unit has arrived on location, the
remaining amount is recognized over the primary term of the contract.
Revenues and expenses related to turnkey drilling contracts are
recognized when all terms and conditions of the contract have been
fulfilled. Consequently, the costs related to in-progress turnkey drilling
contracts are deferred as drilling contracts in progress until the contract
is completed and revenue is realized. The amount of drilling contracts in
progress is dependent on the volume of contracts, the duration of the
contract at the end of the reporting period and the contract amount.
Provision for losses on incomplete contracts is made when such losses are
probable and estimable.
CAPITALIZED INTEREST - The Company capitalizes interest applicable to
the construction and significant upgrades of its marine equipment as a cost
of such assets. Interest capitalized for the years ended December 31,
1999, 1998 and 1997 was $74.1 million, $39.1 million and $13.7 million,
respectively and is included as a reduction of interest expense in the
Consolidated Statement of Operations.
FOREIGN CURRENCY TRANSACTIONS - The net gains and losses resulting from
foreign currency transactions included in determining net income (loss)
amounted to a net loss of $2.3 million in 1999, a net gain of $.2 million
in 1998 and a net loss of $.4 million in 1997. The loss in 1999 was
primarily due to the Company's operations in Venezuela. The Company may
enter into forward exchange contracts to hedge specific commitments and
anticipated transactions but not for speculative or trading purposes. At
December 31, 1999, the Company did not have any outstanding forward
exchange contracts.
MINORITY INTEREST - Minority interest relates primarily to the results
of Arcade and effective in the third quarter of 1999, the majority-owned
(90%) floating production vessel Seillean. The ownership percentage of
Arcade, which owns the drilling units Henry Goodrich and Paul B. Loyd, Jr.,
attributable to stockholders other than the Company was 25.6% for each of
the years ending December 31, 1999, 1998 and 1997. Arcade reported income
in 1999, 1998 and 1997 of $46.9 million, $44.2 million and $36.9 million,
respectively. The 10% minority ownership of the Seillean is the result of
Nissho Iwai Europe PLC ("NIC") exercising, in the third quarter of 1999,
its option to purchase up to 10% of the vessel (see Note E).
EXTRAORDINARY LOSSES - In the first quarter of 1999, the Company
incurred an extraordinary loss of $1.7 million, net of a tax benefit of $.9
million. In the second quarter of 1998, the Company incurred an
extraordinary loss of $22.0 million, net of a tax benefit of $11.9 million
and in the fourth quarter of 1998, the Company incurred an extraordinary
loss of $2.2 million, net of a tax benefit of $1.1 million. Such losses
were due to the early extinguishment of debt obligations and consisted of
premium payments and the write-off of unamortized debt issuance costs. See
Note E.
COMPREHENSIVE INCOME - For the years ended December 31, 1999, 1998 and
1997, the Company did not have any non-owner changes in equity.
CONCENTRATION OF CREDIT RISK - The Company maintains cash balances and
short-term investments with commercial banks throughout the world. The
Company's cash equivalents and short-term investments generally consist of
commercial paper, money-market mutual funds and interest-bearing deposits
with strong credit rated financial institutions, therefore, bearing minimal
risk. No losses were incurred during 1999, 1998 and 1997.
The Company's revenues were generated primarily from its drilling rigs.
Revenues can be generated from a relatively small number of customers,
which are primarily major and independent foreign and domestic oil and gas
companies, as well as foreign state-owned oil and gas companies. The
Company performs ongoing credit evaluations of its customers' financial
conditions and generally requires no collateral from its customers. The
Company's allowance for doubtful accounts at December 31, 1999 and 1998 was
$21.5 million and $11.9 million, respectively.
NEWLY ISSUED ACCOUNTING STANDARDS - In June 1998, Statement of
Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS 133") was issued. SFAS 133
establishes accounting and reporting standards requiring that every
derivative instrument be measured at its fair value, recorded in the
balance sheet as either an asset or liability and that changes in the
derivative's fair value be recognized currently in earnings. SFAS 133, as
amended, is effective for fiscal quarters of fiscal years beginning after
June 15, 2000. The Company has not yet quantified the impacts of adopting
SFAS 133 on its financial statements. The Company did not early adopt SFAS
133, therefore it will be adopted in 2001.
In November 1999, SEC Staff Accounting Bulletin: No. 100 - Restructuring
and Impairment Charges ("SAB 100") was issued. SAB 100 expresses views of
the staff regarding the accounting for and disclosure of certain expenses
commonly reported in connection with exit activities and business
combinations. The Company's accounting practices are consistent with this
rule.
In December 1999, SEC Staff Accounting Bulletin: No. 101 - Revenue
Recognition in Financial Statements ("SAB 101") was issued. SAB 101
summarizes certain of the staff's views in applying generally accepted
accounting principles to revenue recognition in financial statements. The
Company believes its accounting practices are consistent with this rule but
will complete its evaluation in the first quarter of 2000.
USE OF ESTIMATES - The preparation of the consolidated financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
RECLASSIFICATION - Certain prior period amounts in the consolidated
financial statements have been reclassified for comparative purposes. Such
reclassifications had no effect on the net income (loss) or the overall
financial condition of the Company.
(B) BUSINESS COMBINATIONS
On December 31, 1997, R&B and Falcon completed a business combination
(merger) whereby each outstanding share of common stock of Falcon was
converted into one share of R&B Falcon common stock and each outstanding
share of common stock of R&B was converted into 1.18 shares of R&B Falcon
common stock. The merger qualified as a tax-free exchange and has been
accounted for as a pooling of interests and, accordingly, the consolidated
financial statements for 1997 have been restated to include the accounts of
R&B and Falcon.
The results of operations for the separate companies and the combined
amounts presented in the consolidated financial statements for the year
ended December 31, 1997 is follows (in millions):
1997
-------
Operating revenues
R&B $ 424.2
Falcon 508.8
-------
Combined $ 933.0
=======
Net income (loss)
R&B $ (73.5)
Falcon 67.3
-------
Combined $ (6.2)
=======
In connection with the merger, the Company recorded $66.4 million of
expenses in the fourth quarter of 1997. Such expenses consist primarily of
employment contract termination fees associated with executives of R&B, the
acceleration of unearned compensation of certain stock grants previously
awarded to certain R&B employees, fees for investment bankers, attorneys,
and accountants, and printing and other related costs. In 1998, the
Company reversed $8.0 million of merger expenses primarily due to an
Internal Revenue Service ruling received relating to taxes on executive
termination fees.
On December 1, 1998, R&B Falcon acquired all of the outstanding stock
of Cliffs Drilling. Cliffs Drilling is a provider of daywork and turnkey
drilling services, mobile offshore production units and well engineering
and management services. Cliffs Drilling's fleet consisted of 16 jack-up
rigs, three self-contained platform rigs, four mobile offshore production
units and 11 land rigs. The acquisition was effected pursuant to an
Agreement and Plan of Merger dated August 21, 1998, whereby each share of
Cliffs Drilling's common stock was converted into 1.7 shares of R&B Falcon
common stock and cash in lieu of fractional shares. Total consideration for
Cliffs Drilling was approximately $405.1 million. The Company issued
approximately 27.1 million shares of its common stock valued at
approximately $385.3 million. This valuation was based upon a price of
$14.2125 per share of R&B Falcon common stock, which was the average
closing price per share of R&B Falcon's common stock during the period in
which the principal terms of the merger were agreed upon and the merger was
announced. In addition, the Company assumed Cliffs Drilling's outstanding
stock options valued at approximately $6.2 million and the Company paid
approximately $13.6 million in acquisition costs. The acquisition of Cliffs
Drilling was recorded using the purchase method of accounting, accordingly
Cliffs Drilling's results of operations are included with the Company's
results of operations since the acquisition date. The excess of the
purchase price over the estimated fair value of net assets acquired
amounted to approximately $86.8 million, which has been accounted for as
goodwill and is being amortized over 40 years using the straight-line
method. Goodwill has increased $16.1 million since December 31, 1998. Such
increase represents revisions to the estimate in the initial purchase price
allocation, primarily related to various contingencies, offset by $1.9
million of 1999 amortization.
Pro forma consolidated operating results of the Company and Cliffs
Drilling for the years ended December 31, 1998 and 1997, assuming the
Cliffs Drilling transaction occurred at the beginning of the respective
periods, are as follows:
Years Ended December 31,
------------------------
1998 1997
--------- ---------
(unaudited)
(in millions except
per share amounts)
Operating revenues $ 1,349.0 $ 1,218.2
Income from continuing operations
before extraordinary loss 138.5 71.0
Net income 150.3 35.0
Net income per common share:
Basic .78 .18
Diluted .78 .18
(C) UNCONSOLIDATED INVESTEES
Unconsolidated investees are accounted for using the equity method.
Investments in and advances to unconsolidated investees at December 31,
1999 and 1998 were as follows:
December 31,
---------------
Unconsolidated Investee 1999 1998
------ ------
(in millions)
Navis ASA $ 62.6 $ 20.0
Deepwater Drilling L.L.C. 8.3 .1
Deepwater Drilling II L.L.C. 3.6 -
Other 8.2 8.1
------ ------
$ 82.7 $ 28.2
====== ======
Income (loss) from equity investees plus related income for the years
ended December 31, 1999, 1998 and 1997 consisted of the following (in
millions):
Unconsolidated Investee 1999 1998 1997
------ ------ ------
Deepwater Drilling L.L.C. $ 4.6 $ (.2) $ -
Deepwater Drilling II L.L.C. (.2) - -
Navis ASA .5 - -
Other (1.4) - -
------ ------ ------
$ 3.5 $ (.2) $ -
====== ====== ======
Deepwater Drilling L.L.C. ("DDI") is owned 50% by the Company and 50%
by Conoco. DDI leases and operates the Deepwater Pathfinder which commenced
operations in the first quarter of 1999. See Note L.
Deepwater Drilling II L.L.C. ("DDII") is owned 60% by the Company and
40% by Conoco. DDII leases and operates the Deepwater Frontier which
commenced operations in the second quarter of 1999. See Note L.
Navis ASA ("Navis") is owned 38.6% by the Company. In September 1998,
the Company and Navis, a Norwegian public company which is constructing a
dynamically positioned drillship (the Navis Explorer I), entered into an
agreement pursuant to which the Company agreed to make a capital
contribution to Navis of $50.0 million in exchange for stock in Navis. The
Navis Explorer I is designed to drill in 10,000 feet of water and is being
constructed at Samsung Heavy Industries Co. Ltd. at an estimated cost of
$310.0 million, with a scheduled delivery in the second quarter of 2000. As
of December 31, 1999, the Company had contributed $45.2 million in cash and
$17.7 million of equipment and equipment purchase orders. Most of the
equipment and equipment purchase orders that were or will be contributed by
the Company were acquired by the Company in connection with the Peregrine
VI and Peregrine VIII projects and are no longer required for such projects
in light of their cancellation (see Note H). Navis and the Company have
entered into an agreement pursuant to which the Company will supervise
construction of the drillship and manage it following its delivery.
(D) SHORT-TERM OBLIGATIONS
In 1998, the Company entered into a $125.0 million short-term credit
facility for the construction of the Deepwater Millennium. The facility
bore interest at the London Interbank Offered Rate ("LIBOR") plus 1.25% and
was due on June 30, 1999. In March 1999, this credit facility which had
been fully drawn was terminated and repaid from proceeds from the issuance
of senior notes (see Note E).
(E) LONG-TERM OBLIGATIONS
Long-term obligations at December 31, 1999 and 1998 consisted of the
following (in millions):
1999 1998
-------- --------
9.75% Senior Notes, due January 2001
("9.75% Notes") (1)(10) $ 5.2 $ 5.2
6.5% Senior Notes, due April 2003 (2) 249.4 249.2
8.875% Senior Notes, due March 2003
("8.875% Notes") (3)(10) .4 .4
9.125% Senior Notes, due December 2003 (4) 100.0 100.0
10.25% Senior Notes, due May 2003 ("10.25% Notes") (5) 201.9 202.9
6.75% Senior Notes, due April 2005 (2) 348.4 348.1
11% Senior Secured Notes, due March 2006 (6) 400.0 -
12.25% Senior Notes, due March 2006 (6) 200.0 -
6.95% Senior Notes, due April 2008 (2) 249.3 249.2
9.5% Senior Notes, due December 2008 (4) 300.0 300.0
11.375% Senior Secured Notes, due March 2009 (6) 400.0 -
7.375% Senior Notes, due April 2018 (2) 248.1 248.0
Project financing (7) 250.0 -
Revolving credit facilities (8) - 150.0
NIC (9) - 18.7
Other debt obligations .8 .8
Total 2,953.5 1,872.5
Less long-term obligations due within one year (20.1) (6.3)
-------- --------
Long-term obligations $2,933.4 $1,866.2
======== ========
__________________________
(1) The 9.75% Notes were issued by Falcon pursuant to an offering in
January 1994 and originally consisted of a principal amount of
$110.0 million (see Note (10) below). Interest is payable
semiannually on January 15 and July 15. Certain of the Company's
subsidiaries guarantee the 9.75% Notes. The 9.75% Notes are
unsecured obligations of Falcon, ranking pari passu in right of
payment with all other senior indebtedness of Falcon, but are
effectively subordinated to any secured indebtedness of Falcon to
the extent of the collateral securing such secured indebtedness.
(2) In April 1998, the Company issued four series of senior notes with
an aggregate principal amount of $1.1 billion. As a result, the
Company received net proceeds of approximately $1,082.9 million
after deducting estimated offering related expenses. Interest on
these notes is payable semiannually on April 15 and October 15.
These notes are unsecured obligations of the Company, ranking pari
passu in right of payment with all other existing and future senior
unsecured indebtedness of the Company. The Company used the proceeds
to repay existing indebtedness of $874.4 million and the remainder
was used for planned capital expenditures, working capital and other
general corporate purposes. As a result of the repayment of existing
indebtedness, the Company incurred an extraordinary loss of $22.0
million, net of tax, in the second quarter of 1998. These notes were
issued at a discount of approximately $6.0 million which is being
amortized as interest expense over the term of the notes. The amount
of unamortized discount at December 31, 1999 was approximately $4.8
million and the amount of amortized discount for the years ended
December 31, 1999 and 1998 was approximately $.7 million and $.5
million, respectively.
(3) The 8.875% Notes were issued by Falcon pursuant to an offering in
March 1996 and originally consisted of a principal amount of $120.0
million (see Note (10) below). Interest is payable semiannually on
March 15 and September 15. The 8.875% Notes are unsecured
obligations of Falcon, ranking pari passu in right of payment with
all other senior indebtedness of Falcon. The 8.875% Notes are not
guaranteed by any of Falcon's subsidiaries, and thus are
structurally subordinated to the 9.75% Notes (described above) and
other indebtedness of the subsidiaries. Further, they are
effectively subordinated to any secured indebtedness of Falcon to
the extent of the collateral securing such secured indebtedness.
(4) In December 1998, the Company issued two series of senior notes with
an aggregate principal amount of $400.0 million. As a result, the
Company received net proceeds of approximately $392.3 million after
deducting estimated offering related expenses. Interest on these
notes is payable semiannually on June 15 and December 15. These
notes are unsecured obligations of the Company, ranking pari passu
in right of payment with all other existing and future senior
indebtedness of the Company. The Company used the proceeds to reduce
borrowings under an existing revolving credit facility. As a result
of such reduction, the Company incurred an extraordinary loss of
$2.2 million, net of tax, in the fourth quarter of 1998.
(5) The 10.25% Notes were issued by Cliffs Drilling pursuant to
offerings in 1996 and 1997. The 10.25% Notes originally consisted
of a principal amount of $200.0 million and interest is payable
semiannually on May 15 and November 15. These notes are senior
unsecured obligations of Cliffs Drilling, ranking pari passu in
right of payment with all other senior indebtedness and senior to
all subordinated indebtedness. These notes are unconditionally
guaranteed on a senior unsecured basis by certain subsidiaries of
Cliffs Drilling (the "Cliffs Drilling Subsidiary Guarantors"), which
guarantees rank pari passu in right of payment with all senior
indebtedness of the Cliffs Drilling Subsidiary Guarantors and senior
to all subordinated indebtedness of the Cliffs Drilling Subsidiary
Guarantors. The 10.25% Notes are publicly traded and are not
guaranteed by R&B Falcon or any other subsidiary of the Company,
accordingly, separate financial statements of Cliffs Drilling
Subsidiary Guarantors are not required to be included in these
financial statements.
On or after May 15, 2000, the 10.25% Notes are redeemable at the
option of Cliffs Drilling, in whole or in part, at a price of 105% of
principal if redeemed during the twelve months beginning May 15,
2000, at a price of 102.5% of principal if redeemed during the
twelve months beginning May 15, 2001, or at a price of 100% of
principal if redeemed after May 15, 2002, in each case together with
interest accrued to the redemption date.
The indenture under which the 10.25% Notes are issued imposes
significant operating and financial restrictions on Cliffs Drilling.
Such restrictions affect, and in many respects limit or prohibit,
among other things, the ability of Cliffs Drilling to incur
additional indebtedness, make capital expenditures, create liens
and sell assets.
As a result of the Company acquiring Cliffs Drilling, Cliffs Drilling
was required to offer to purchase for cash all of the outstanding
10.25% Notes at a purchase price equal to 101% of the principal
amount of each senior note, plus accrued and unpaid interest, to the
change of control payment date. On January 28, 1999, Cliffs Drilling
repurchased approximately $.3 million principal amount of the 10.25%
Notes that were tendered pursuant to this offer.
(6) In March 1999, the Company issued $200.0 million of 12.25% Senior
Notes due 2006 (the "12.25% Notes"). Also in March 1999, RBF Finance
Co., a limited purpose finance company and a consolidated affiliate
of the Company, issued $400.0 million of 11% Senior Secured Notes
due 2006 and $400.0 million of 11.375% Senior Secured Notes due 2009
(collectively the "Secured Notes"). The Company borrowed the
proceeds from the Secured Notes from RBF Finance Co. pursuant to ten
separate loan agreements, each of which is secured by one of the
Company's drilling rigs. The Company also guaranteed the payment of
the Secured Notes issued by RBF Finance Co. Interest is payable
semiannually on March 15 and September 15 on both the 12.25% Notes
and Secured Notes. As a result, the Company received net proceeds of
approximately $970.6 million after deducting offering expenses. The
Company used the proceeds to repay existing indebtedness of $350.0
million of long-term obligations, $125.0 million of short-term
obligations (see Note D) and the Company's portion ($81.0 million)
of an interim facility for the construction of the Deepwater
Frontier. Remaining proceeds will be used for planned capital
expenditures, working capital and other general corporate purposes.
As a result of the repayment of existing indebtedness, the Company
incurred an extraordinary loss of $1.7 million, net of tax, in the
first quarter of 1999 which consisted of the write-off of
unamortized debt issuance costs. The indentures under which the
12.25% Notes and the Secured Notes are issued impose certain
restrictions on the Company. Such restrictions include but are not
limited to, the ability of the Company to incur additional
indebtedness, pay dividends, repurchase stock, make payments on
subordinated indebtedness, sell assets, create liens, make
investments and merge or consolidate with other companies.
(7) In August 1999, a subsidiary of the Company completed a $250.0
million project financing for the construction the Deepwater
Nautilus in which such subsidiary received net proceeds of
approximately $245.2 million. The financing consists of two five-
year notes. The first note is for $200.0 million and bears interest
at 7.31%, with monthly interest payments, which commenced in
September 1999, and monthly principal payments commencing in June
2000. The second note is for $50.0 million and bears interest at
9.41%, with monthly interest payments, which commenced in September
1999, and a balloon principal payment which is due at maturity of
the loan in May 2005. Both notes are collateralized by the Deepwater
Nautilus and drilling contract revenues from such rig and are
without recourse to the Company.
(8) At December 31, 1998, the Company had two revolving credit
facilities outstanding which were subsequently terminated and
repaid.
The first was a $350.0 million revolving credit facility expiring on
January 24, 2002. At December 31, 1998, interest was accruing under
this revolving credit facility at LIBOR plus .75% for borrowings up
to $100.0 million and at LIBOR plus 1.375% for borrowings in excess
of $100.0 million. In addition, a commitment fee of .35% per annum
was paid on the total amount of the facility. The first $100.0
million of borrowing under this revolving credit facility was
secured by a pledge of the stock of one of the Company's three major
operating subsidiaries. The facility contained covenants which
required the Company to meet certain ratios and in many respects
limit or prohibit, among other things, the ability of the Company to
incur additional indebtedness, create liens and sell assets. At
December 31, 1998, $200.0 million was available under this facility.
In March 1999, this credit facility which had been fully drawn was
terminated and repaid from proceeds from the 12.25% Notes and
Secured Notes (see Note (6) above).
The second was a $35.0 million revolving credit facility expiring on
May 31, 2000. Interest accrued under this facility at .25% plus the
greater of the prevailing Federal Funds Rate plus .5% or a
referenced average prime; or at the adjusted LIBOR rate plus 2%. In
addition, a fee of 2% per annum was paid on outstanding letters of
credit and a commitment fee of .5% per annum was paid on the unused
portion of the facility. This facility was secured by accounts
receivable, certain rig inventory and equipment, certain oil and gas
properties and the stock of certain subsidiaries of Cliffs Drilling.
At December 31, 1998, $.4 million in letters of credit were
outstanding, thereby leaving $34.6 million available under this
facility. At December 31, 1999, there were no amounts outstanding
and on January 3, 2000 such facility was terminated by the Company.
(9) In April 1997, a wholly-owned subsidiary of the Company entered into
a five-year $38.0 million loan agreement with NIC. The loan was
collateralized by a vessel mortgage on the Seillean without recourse
to the Company and bore interest at LIBOR plus 2%. Principal
repayments were monthly based on the greater of the excess cash flow
of the Seillean or the outstanding principal balance divided by the
remaining monthly periods of the loan. In addition, NIC had the
option to purchase up to 10% of the ownership in the Seillean, any
time prior to April 25, 2000, at a minimum price of $4.2 million.
In the third quarter of 1999, NIC exercised its option and purchased
10% of the Seillean for $7.7 million. The $7.7 million was applied
to the outstanding balance of the loan and in the fourth quarter of
1999 the remaining balance was paid in full.
(10) The indentures pursuant to which the 8.875% Notes and 9.75% Notes
("Falcon Notes") were issued (i) provide that Falcon may redeem such
obligations at a premium at certain times prior to maturity, (ii)
require Falcon to offer to redeem such obligations at a premium if
there is a change of control of Falcon (see below), and (iii) impose
restrictions on certain actions by Falcon, including payment of
dividends, incurrence of debt, pledging of assets, sale of assets,
and making investments.
As a result of the merger between R&B and Falcon, Falcon was
required to offer to purchase for cash all of the Falcon Notes. On
January 28, 1998, Falcon made a purchase offer to each note holder
at a price equal to 101% of the aggregate principal amount
outstanding plus accrued interest. As a result, none of the notes
were tendered for redemption.
On March 23, 1998, the Company offered to redeem the Falcon Notes.
The aggregate principal amount of the outstanding Falcon Notes was
$230.0 million and on April 20, 1998, $224.4 million in principal
amount of Falcon Notes was repaid from proceeds from the sale of
senior notes (see Note (2) above).
As of December 31, 1999, the Company estimates the fair value of its
debt obligations to be $2,891.9 million compared to a book value of
$2,953.5 million.
Aggregate annual maturities of long-term obligations, (including the
current portion) for the next five years and thereafter are as follows (in
millions):
2000 $ 20.1
2001 41.5
2002 38.6
2003 591.6
2004 44.6
Thereafter 2,219.7
---------
2,956.1
Less the unamortized discount
and premium on senior notes (2.6)
---------
Total long-term obligations and long-
term obligations due within one year
at December 31, 1999 $ 2,953.5
=========
(F) COMMITMENTS AND CONTINGENCIES
GENERAL - In April 1998, Cliffs Drilling was awarded a contract from
PDVSA Exploration and Production ("PDVSA") to drill 60 turnkey wells in
Venezuela. The drilling program commenced in March 1998 and the program was
expected to extend over approximately three and one-half years and was
expected to utilize seven of the Company's land drilling rigs in Venezuela.
However, during the first quarter of 1999, in response to the downturn in
the market, PDVSA and the Company renegotiated prices for the next 14 wells
to be drilled under this program. In the fourth quarter of 1999,
negotiations were completed for the following seven wells to be drilled
under this program at further reduced margins. As of December 31, 1999, the
Company had completed 29 wells with six wells remaining to be completed.
Such remaining wells are expected to be completed by the end of the first
quarter in 2000. In regards to the remaining 25 of the original 60 wells,
a contractual commitment no longer exists and no assurance can be given
that such wells will ultimately be drilled.
The Deepwater Expedition, Falcon 100 and Deepwater Navigator were or
will be completed later than the required commencement dates under the
drilling contracts for such rigs and at costs significantly in excess of
original estimates. The customers for the Falcon 100 and Deepwater
Navigator have cancelled the drilling contracts for such rigs based on the
rigs not being delivered on time. The Company is currently marketing the
Falcon 100 for work and the Company has received a letter of intent from
Petrobras for the use of the Deepwater Navigator for a three-year drilling
contract offshore Brazil. The customer for the Deepwater Expedition did not
cancel its drilling contract and as of the date of this filing no late
penalties had been claimed. However, if late penalties are legally imposed
on the Deepwater Expedition, such amounts will be capitalized and amortized
over the term of the initial drilling contract, subject to a determination
of realizability.
The Company's construction and upgrade projects are subject to the risks
of delay and cost overruns inherent in any large construction project,
including shortages of equipment, unforeseen engineering problems, work
stoppages, weather interference, unanticipated cost increases and shortages
of materials or skilled labor. Significant cost overruns or delays would
adversely affect the Company's liquidity, financial condition and results
of operations. Delays could also result in penalties under, or the
termination of, the long-term contracts under which the Company plans to
operate these rigs.
CAPITAL EXPENDITURES - In 2000, the Company expects to spend
approximately $540.0 million to expand and upgrade its operating rig fleet,
primarily its deepwater rig fleet.
In September 1998, the Company and Navis ASA ("Navis"), a Norwegian
public company which is constructing a dynamically positioned drillship
(the Navis Explorer I), entered into an agreement pursuant to which the
Company agreed to make a capital contribution to Navis of $50.0 million in
exchange for stock in Navis. The Navis Explorer I is designed to drill in
10,000 feet of water and is being constructed at Samsung Heavy Industries
Co. Ltd. at an estimated cost of $310.0 million, with a scheduled delivery
in the second quarter of 2000. As of December 31, 1999, the Company had
contributed $45.2 million in cash and $17.7 million of equipment and
equipment purchase orders. As a result of such contributions, the Company's
ownership in Navis approximated 38.6%. Most of the equipment and equipment
purchase orders that were or will be contributed by the Company were
acquired by the Company in connection with the Peregrine VI and Peregrine
VIII projects and are no longer required for such projects in light of
their cancellation. Navis and the Company have entered into an agreement
pursuant to which the Company will supervise construction of the drillship
and manage it following its delivery.
EMPLOYMENT CONTRACTS - The Company has entered into employment
contracts with seven employees. Such employment contracts include certain
provisions which call for termination payments to the employee upon the
occurrence of certain events including change of control, which if incurred
at December 31, 1999 would have been approximately $13.2 million.
OPERATING LEASES - The Company has operating leases covering premises
and equipment. Certain operating leases contain renewal options and have
options to purchase the asset at fair market value at the end of the lease
term. Lease expense amounted to $45.3 million (1999), $44.5 million (1998)
and $42.0 million (1997). As of December 31, 1999, future minimum rental
payments relating to operating leases were as follows (in millions):
2000 2001 2002 2003 2004 Thereafter
------ ------ ------ ------ ------ ----------
Drilling units $ 16.4 $ 13.8 $ 13.0 $ 13.0 $ 13.0 $ 24.9
Other 2.9 1.8 1.5 .8 .6 .3
------ ------ ------ ------ ------ ------
Total $ 19.3 $ 15.6 $ 14.5 $ 13.8 $ 13.6 $ 25.2
====== ====== ====== ====== ====== ======
In November 1995, the Company entered into a sale/lease-back of the M.
G. Hulme, Jr. and agreed to lease the drilling unit for ten years. The
lease-back is accounted for as an operating lease and a deferred gain of
$7.4 million was recorded and is being amortized over the life of the lease
(see Note G).
LITIGATION - In November 1988, a lawsuit was filed in the U.S. District
Court for the Southern District of West Virginia against Reading & Bates
Coal Co., a wholly owned subsidiary of the Company, by SCW Associates, Inc.
claiming breach of an alleged agreement to purchase the stock of Belva Coal
Company, a wholly owned subsidiary of Reading & Bates Coal Co. with coal
properties in West Virginia. When those coal properties were sold in July
1989 as part of the disposition of the Company's coal operations, the
purchasing joint venture indemnified Reading & Bates Coal Co. and the
Company against any liability Reading & Bates Coal Co. might incur as the
result of this litigation. A judgment for the plaintiff of $32,000 entered
in February 1991 was satisfied and Reading & Bates Coal Co. was indemnified
by the purchasing joint venture. On October 31, 1990, SCW Associates,
Inc., the plaintiff in the above-referenced action, filed a separate
ancillary action in the Circuit Court, Kanawha County, West Virginia
against the Company, Caymen Coal, Inc. (former owner of the Company's West
Virginia coal properties), as well as the joint venture, Mr. William B.
Sturgill personally (former President of Reading & Bates Coal Co.), three
other companies in which the Company believes Mr. Sturgill holds an equity
interest, two employees of the joint venture, First National Bank of
Chicago and First Capital Corporation. The lawsuit seeks to recover
compensatory damages of $50.0 million and punitive damages of $50.0 million
for alleged tortious interference with the contractual rights of the
plaintiff and to impose a constructive trust on the proceeds of the use
and/or sale of the assets of Caymen Coal, Inc. as they existed on
October 15, 1988. The Company intends to defend its interests vigorously
and believes the damages alleged by the plaintiff in this action are highly
exaggerated. In any event, the Company believes that it has valid defenses
and that it will prevail in this litigation.
In December 1998, Mobil North Sea Limited ("Mobil") purportedly
terminated its contract for use of the Company's Jack Bates semisubmersible
rig based on failure of two mooring lines while anchor recovery operations
at a Mobil well location had been suspended during heavy weather. The
contract provided for Mobil's use of the rig at a dayrate of approximately
$115,000 for the primary term through January 1999 and approximately
$200,000 for the extension term from February 1999 through December 2000.
The Company does not believe that Mobil had the right to terminate this
contract. The Company recontracted the Jack Bates to Mobil in 1999 for one
well at a dayrate of $156,000 and for another well at a dayrate of $69,000.
These contracts are without prejudice to either party's rights in the
dispute over the termination of the original contract. The Company has
filed a request for arbitration with the London Court of International
Arbitration and the arbitration proceedings are continuing.
In May 1999, Petrobras cancelled the drilling contract for the Falcon
100 based on its interpretation of the cancellation provisions of the
contract. The Company does not believe that Petrobras has the right to
cancel such contract. The Company has engaged Brazilian counsel to pursue
the Company's rights under the contract. The Company is currently marketing
this rig for work.
In January 1999, an action was filed by Mobil Exploration and Producing
U.S. Inc. and affiliates, St. Mary Land & Exploration Company and
affiliates and Samuel Geary and Associates, Inc. against Cliffs Drilling,
its underwriters and insurance broker in the 16th Judicial District Court
of St. Mary Parish, Louisiana. The plaintiffs alleged damages amounting to
in excess of $50.0 million in connection with the drilling of a turnkey
well in 1995 and 1996. The case was tried before a jury in January and
February 2000, and the jury returned a verdict of approximately $30.0
million in favor of the plaintiffs for excess drilling costs, loss of
insurance proceeds, loss of hydrocarbons and interest. However, the trial
court has not entered a judgment on the verdict, as there are a number of
matters to be ruled upon before doing so. If a judgment is entered on such
verdict, Cliffs Drilling intends to appeal and believes its efforts to do
so will be successful. The Company believes all but the portion of the
verdict representing excess drilling costs of approximately $4.7 million is
covered by relevant primary and excess liability insurance policies of
Cliffs Drilling; however, one insurer has denied coverage and the others
have reserved their rights. If necessary, Cliffs Drilling and the Company
intend to take appropriate legal action to enforce Cliffs Drilling's rights
with respect to such policies. At this time Cliffs Drilling and the
Company believe adequate reserves have been established to protect the
interests of Cliffs Drilling and the Company in this matter.
The Company is involved in various other legal actions arising in the
normal course of business. A substantial number of these actions involve
claims arising out of injuries to employees of the Company who work on the
Company's rigs and power vessels. After taking into consideration the
evaluation of such actions by counsel for the Company and the Company's
insurance coverage, management is of the opinion that the outcome of all
known and potential claims and litigation will not have a material adverse
effect on the Company's consolidated financial position or results of
operations.
SELF INSURANCE - The Company is self-insured for the deductible portion
of its insurance coverage. In the opinion of management, adequate accruals
have been made based on known and estimated exposures up to the deductible
portion of the Company's insurance coverages. Management believes that
claims and liabilities in excess of the amounts accrued are adequately
insured.
LETTERS OF CREDIT - At December 31, 1999, the Company had letters of
credit outstanding and unused totaling $5.4 million and $4.6 million,
respectively.
(G) ACCRUED LIABILITIES AND OTHER NONCURRENT LIABILITIES
The components of "Accrued liabilities" at December 31, 1999 and 1998
were as follows (in millions):
1999 1998
------- -------
Expenses - general $ 112.0 $ 86.1
Taxes 33.0 23.7
Interest expense 54.3 20.3
Worker compensation claims 13.5 14.8
Payroll 10.1 9.5
Employee benefits 5.0 4.2
------- -------
Total $ 227.9 $ 158.6
======= =======
The components of "OTHER NONCURRENT LIABILITIES" at December 31, 1999
and 1998 were as follows (in millions):
1999 1998
------ ------
Postretirement benefit obligations $ 14.4 $ 14.9
Foreign income taxes 6.1 6.1
Pension obligations 4.2 3.5
Deferred gain on sale of
drilling unit (see Note F) 2.1 2.0
Other 12.9 12.7
------ ------
Total $ 39.7 $ 39.2
====== ======
(H) CANCELLATION OF CONVERSION PROJECTS
In the third quarter of 1998, the Company cancelled the Peregrine VI
and the Peregrine VIII drillship conversion projects due to continuing
uncertainty as to final cost and expected delivery dates. As a result, the
drilling contract on the Peregrine VIII was terminated on September 24,
1998, and the drilling contract on the Peregrine VI was terminated on
January 1, 1999. Both terminations were without prejudice to the rights of
the oil companies. The Company believes that, based on provisions of the
contracts that preclude recovery of indirect or consequential damages and
projected rig availability in the offshore drilling industry, the Company
will not have any material liability under these drilling contracts as a
result of the termination thereof. The contracts with the shipyard for
conversion of the Peregrine VI and the Peregrine VIII were also cancelled.
In addition, in the fourth quarter of 1998, the Company cancelled two
additional drillship conversion projects (Peregrine IX and Peregrine X)
that were in the preliminary phases. As a result of the termination of
these four drillship conversion projects, the Company expensed $118.3
million in related costs in 1998.
In connection with the drillship conversion projects, the Company
purchased or committed to purchase drilling equipment with an aggregate
cost of approximately $285.0 million. The Company expected to use some of
the surplus equipment on other construction and/or upgrade projects and to
maintain the balance as inventory. A majority of the equipment originally
ordered was directed to other construction projects. However, the Company
determined that a portion of such surplus equipment was not usable for
other projects or as spare parts and as a result the Company expensed $25.6
million in the third quarter of 1999 to write-down such inventory to net
realizable value. As of December 31, 1999, the Company had approximately
$59.0 million remaining of such surplus drilling equipment. The Company is
continually reviewing the value and utility of such equipment and if in the
future it is determined the Company cannot realize the recorded value of
the surplus equipment, the Company could incur additional write-offs or
write-downs of such equipment.
Also in the third quarter of 1999, the Company sold the Peregrine X
(with the hull being the primary remaining asset) for approximately $5.8
million. As a result of the sale, the Company recorded a loss of $6.1
million that has been included in the cancellation of conversion projects
in the Consolidated Statement of Operations.
In the fourth quarter of 1999, the Company expensed $3.0 million in
connection with the final settlement with the shipyard and the write-down
of the Peregrine VI and Peregrine VIII hulls to estimated scrap value.
(I) INCOME TAXES
Income tax expense (benefit) for the years ended December 31, 1999,
1998 and 1997 consisted of the following (in millions):
1999 1998 1997
------ ------ ------
Current:
Foreign $ 48.8 $ 28.1 $ 9.4
Federal (.8) 3.3 26.9
State .3 7.1 3.0
------ ------ ------
Total current 48.3 38.5 39.3
------ ------ ------
Deferred:
Foreign (.8) 4.9 17.9
Federal (82.9) 13.7 26.6
State 3.8 1.8 .9
------ ------ ------
Total deferred (79.9) 20.4 45.4
------ ------ ------
Total $(31.6) $ 58.9 $ 84.7
====== ====== ======
The domestic and foreign components of income (loss) from continuing
operations before income taxes, minority interest and extraordinary loss
for the years ended December 31, 1999, 1998 and 1997 were as follows (in
millions):
1999 1998 1997
------- ------- -------
Domestic $(294.9) $ (26.2) $ (95.0)
Foreign 207.8 187.4 218.9
------- ------- -------
Total $ (87.1) $ 161.2 $ 123.9
======= ======= =======
The effective tax rate, as computed on income (loss) from continuing
operations before income taxes, minority interest and extraordinary loss
differs from the statutory U.S. income tax rate for the years ended
December 31, 1999, 1998 and 1997 due to the following:
1999 1998 1997
------ ------ ------
Statutory tax rate (35)% 35% 35%
Use of previously reserved tax benefits (6) - -
Limitation on recognition of tax benefits - 2 10
Foreign tax expense (net of federal benefit) (1) (3) 2
State tax expense (net of federal benefit) 5 3 2
Non-deductible merger expenses - (2) 17
Other 1 2 2
------ ------ ------
Effective tax rate (36)% 37% 68%
====== ====== ======
Deferred income taxes result from those transactions which affect
financial and taxable income in different years. The nature of these
transactions (all of which were long-term) and the income tax effect of
each as of December 31, 1999 and 1998 were as follows (in millions):
1999 1998
------- -------
Deferred tax liabilities:
Depreciation $ 363.0 $ 214.4
Undistributed earnings 13.6 7.4
------- -------
Total deferred tax liabilities 376.6 221.8
------- -------
Deferred tax assets:
Postretirement benefits (5.3) (5.4)
Tax benefit carryforwards (352.0) (139.4)
Discontinued operations, net (2.2) (2.2)
Accrued expenses (4.6) (5.7)
Valuation allowance 52.0 75.7
Other (11.3) (2.4)
------- -------
Total deferred tax assets (323.4) (79.4)
------- -------
Net deferred tax liability $ 53.2 $ 142.4
======= =======
Valuation allowance reflects the possible expiration of tax benefits
(primarily foreign tax credit carryforwards) prior to their utilization.
In 1999, valuation allowance related to tax net operating loss
carryforwards were reversed as the Company foresees the ability to use
these loss carryforwards coupled with the recent change in tax law whereby
the carryforward period was increased from 15 years to 20 years. Also,
valuation allowances related to certain capital losses incurred in the past
were reversed as the Company has generated capital gains in excess of such
capital losses.
Recapitalizations of R&B in 1989 and 1991 resulted in ownership changes
for federal income tax purposes. As a result of these ownership changes,
the amount of tax benefit carryforwards generated prior to the ownership
changes which may be utilized to offset federal taxable income is limited
by the Internal Revenue Code to approximately $1.4 million annually plus
certain built-in gains that existed as of the date of such changes. United
States net tax operating loss carryforwards (NOL) not subject to the
ownership change limitation consist of the following (in millions):
Year U.S.
NOL NOL NOL
Year Expires Not Limited
---- ------- -----------
Pre-1991 2005 $ 6.8
1991 2006 2.1
1992 2007 3.7
1993 2008 12.5
1994 2009 14.0
1995 2010 -
1996 2011 11.6
1997 2017 75.1
1998 2018 37.6
1999 2019 388.3
-------
Totals $ 551.7
=======
(J) CAPITAL SHARES
RIGHTS - On December 31, 1997, the effective date of the merger between
R&B and Falcon (see Note B), each share of the Company's common stock
received one preferred share purchase right (a "Right"). Each Right
entitles the registered holder to purchase from the Company one one-
hundredth of a share of Series A Junior Participating Preferred Stock, (the
"Preferred Shares") of the Company at a price of $150, subject to
adjustment. The Rights will not become exercisable until 10 days after a
public announcement that a person or group has acquired 15% or more of the
Company's common stock (thereby becoming an "Acquiring Person") or the
commencement of a tender or exchange offer upon consummation of which such
person or group would own 15% or more of the Company's common stock (the
earlier of such dates being called the "Distribution Date"). Until the
Distribution Date, the Rights will be evidenced by the certificates
representing the Company's common stock and will be transferable only with
the Company's common stock. In the event that any person or group becomes
an Acquiring Person, each Right, other than Rights beneficially owned by
the Acquiring Person (which will thereafter be void), will thereafter
entitle its holder to purchase shares of the Company's common stock having
a market value of two times the exercise price of the Right. If after a
person or group has become an Acquiring Person, the Company is acquired in
a merger or other business combination transaction or 50% or more of its
assets or earning power are sold, each Right will entitle its holder to
purchase, at the Right's then current exercise price, that number of shares
of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right. The board of directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right at any time prior to
ten business days following a public announcement that a person or group
becomes an Acquiring Person. The Rights expire on November 1, 2007.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a preferential
quarterly dividend payment equal to the greater of $1 per share or 100
times the dividend declared per common share. Liquidation preference will
be equal to 100 times the par value per share plus an amount equal to
accrued and unpaid dividends and distributions to the date of such payment.
Each Preferred Share will have 100 votes, voting together with the common
stock, and certain rights to elect two directors during certain periods of
default in the payment of dividends on the Preferred Shares.
PREFERRED STOCK - On April 22, 1999, the Company issued 300,000 shares
of 13.875% Senior Cumulative Redeemable Preferred Stock (the "Preferred
Stock") and warrants to purchase 10,500,000 shares of the Company's common
stock at an exercise price of $9.50 per share (the "Warrants"). The Company
received net proceeds of approximately $288.8 million from the issuance of
the Preferred Stock and Warrants. Each share of Preferred Stock has a
liquidation preference of $1,000 per share and one Warrant to purchase 35
shares of the Company's common stock. The Warrants became exercisable on
July 7, 1999. The Warrants expire and the Preferred Stock is mandatorily
redeemable at its face value on May 1, 2009.
Dividends are paid quarterly which commenced on August 1, 1999 and at
the Company's option may be paid in cash or, on or before May 1, 2004, in
additional shares of Preferred Stock. Dividends paid through December 31,
1999 were $22.3 million and were paid by the issuance of additional shares
of Preferred Stock. Dividends accrued at December 31, 1999 were $7.4
million and are included in the recorded amount of the Preferred Stock. The
Warrants' initial fair value of $159.95 per Warrant, or approximately $48.0
million in total, was recorded as a discount to the Preferred Stock and an
addition to capital in excess of par. The Warrants' initial fair value and
Preferred Stock offering expenses of $9.7 million are being amortized on a
straight line basis over the Warrants' ten year term. Amortization for the
year ended December 31, 1999 was $4.0 million. Preferred Stock dividends
and the amortization of the Warrants' initial value and Preferred Stock
offering expenses are deducted from net income to arrive at net income
applicable to common stockholders.
The Company may redeem the Preferred Stock beginning May 1, 2004. The
initial redemption price is 106.938% of the liquidation preference,
declining thereafter to 100% on or after May 1, 2007, in each case plus
accrued and unpaid dividends to the redemption date. In addition, on or
before May 1, 2002, the Company may redeem shares of the Preferred Stock
having an aggregate liquidation preference of up to $105.0 million at a
price equal to 113.875% of its liquidation preference, plus accrued and
unpaid dividends to the redemption date, with proceeds from one or more
public equity offerings.
COMMON STOCK - During 1998 in a series of transactions, the Company
issued 763,680 shares of its common stock in partial consideration for the
acquisition of 25 tugs, five ocean going barges and six workover rigs.
On December 1, 1998, the Company issued approximately 27.1 million
shares of its common stock for the acquisition of Cliffs Drilling (see Note
B).
In 1999, the Company issued 206,250 shares of its common stock for the
acquisition of two tugs and 93,606 shares of its common stock for its
matching contribution to the employee savings plans.
As of December 31, 1999, 17,869,611 shares of authorized, unissued
shares of common stock were reserved for issuance under the Company's stock
plans (net of forfeitures), 11,278,756 shares of authorized, unissued
shares of common stock were reserved for issuance for the exercise of
Warrants and 296,000 shares of authorized, unissued shares of common stock
were reserved for issuance for contingent obligations relating to asset
purchases.
(K) EMPLOYEE BENEFIT PLANS
PENSION AND POSTRETIREMENT BENEFITS - The Company has three
noncontributory pension plans. Substantially all of the R&B Falcon
employees paid from a U.S. payroll are covered by one or more of these
plans. Effective January 1, 1998, substantially all of the Falcon
employees paid from a U.S. payroll began accruing benefit service although
they were not eligible to participate in the plans until January 1, 1999.
Effective April 1, 1999, substantially all of the Cliffs Drilling employees
paid from a U.S. payroll became eligible to participate. Plan benefits
are primarily based on years of service and average high 60-month average
compensation (changed from average high thirty-six months effective January
1, 1999).
The R&B Falcon U.S. Pension Plan (the "U.S. Pension Plan") is qualified
under the Employee Retirement Income Security Act (ERISA). It is the
Company's policy to fund this plan not less than the minimum required by
ERISA. It is the Company's policy to contribute to the R&B Falcon Non-U.S.
Pension Plan (the "Non-U.S. Pension Plan") an amount equal to the normal
cost plus amounts sufficient to amortize the initial unfunded actuarial
liability and subsequent unfunded liability caused by plan or assumption
changes over thirty years. The unfunded liability arising from actuarial
gains and losses is funded over fifteen years. The Non-U.S. Pension Plan
is a nonqualified plan and is not subject to ERISA funding requirements.
The U.S. and Non-U.S. Pension Plans invest in cash equivalents, fixed
income and equity securities.
The R&B Falcon Retirement Benefit Replacement Plan (the "Replacement
Plan") is a self-administered unfunded excess benefit plan. All members of
the U.S. Pension Plan and the Non-U.S. Pension Plan are potential
participants in the Replacement Plan.
Effective July 1, 1999, all three of the Company's noncontributory
pension plans were suspended. The suspension was designed to control
costs, but did not terminate the plans. The Company can elect to terminate
the plans or reactivate the plans at any point in the future. The
suspension impacts the participants as follows:
- - Vesting service will continue to accrue;
- - Benefit service will not accrue (suspended);
- - No compensation is accrued during the suspension, thus all compensation
determinations in calculating benefits will be based on periods prior
to July 1, 1999;
- - New participants will not be allowed to enter the plans during the
suspension;
- - All funding of the plans required by ERISA continues;
- - Benefits that have already accrued by active employees or deferred
vested participants continue to be payable upon request (in accordance
with normal plan provisions - generally as early as age 55);
- - Current retiree benefit payments continue unchanged;
- - Required audits, valuations and other plan administration will continue;
In addition to providing pension benefits, R&B Falcon provides certain
life and health care insurance benefits for its retired employees.
Effective January 1, 1999, the Company no longer provides a Retiree Life
Insurance plan to its current employees. Only those former employees who
retired prior to May 1, 1986 were eligible to retain their retiree life
insurance. Retiree life insurance benefits are provided through an
insurance company whose premiums are based on benefits paid during the
year. Retiree health coverage was also significantly restricted effective
January 1, 1999. As of this date, only those employees who had 10 or more
years of prior service with R&B, accumulate at least 25 years of service
(15 years prior to January 1, 1996) as of their retirement date and
continue to work for the Company until at least age 55 will qualify for
retiree health care coverage. Health care costs are paid as they are
incurred.
The following table includes the aggregate of the Company's three
pension plans and the Company's postretirement benefits plan. Only the
Replacement Plan has a projected benefit obligation in excess of plan
assets. Only the Replacement Plan has an accumulated benefit obligation in
excess of plan assets, and such accumulated benefit obligation was $5.2
million and $3.8 million as of December 31, 1999 and 1998, respectively.
There are no assets held in the Replacement Plan.
Pension Postretirement
--------------- ---------------
1999 1998 1999 1998
------ ------ ------ ------
(dollars in millions) (dollars in millions)
Change in projected benefit
obligation:
Projected benefit obligation
at beginning of year $ 91.5 $ 77.5 $ 12.5 $ 10.5
Service cost 3.5 2.0 .1 .1
Interest cost 5.7 5.5 .8 .8
Participant contributions - - .1 .1
Plan amendments 1.0 (2.1) (1.4) -
Curtailment (15.0) - - -
Actuarial (gain) loss 1.0 13.3 1.5 1.8
Benefits paid (4.8) (4.7) (.8) (.8)
------ ------ ------ ------
Projected benefit obligation
at end of year 82.9 91.5 12.8 12.5
------ ------ ------ ------
Change in plan assets:
Plan assets at fair value
at beginning of year 79.8 69.8 - -
Actual return on plan assets 15.4 8.6 - -
Employer contributions 6.8 6.1 .7 .7
Participant contributions - - .1 .1
Benefits paid (4.8) (4.7) (.8) (.8)
------ ------ ------ ------
Plan assets at fair value
at end of year 97.2 79.8 - -
------ ------ ------ ------
Funded status of plan 14.3 (11.7) (12.8) (12.5)
Unrecognized net (gain) loss 1.2 22.2 (.1) (1.6)
Unrecognized prior service cost (2.2) (3.8) (2.0) (1.3)
Unrecognized net
transition obligation (.7) .9 - -
------ ------ ------ ------
Prepaid (accrued) pension cost $ 12.6 $ 7.6 $(14.9) $(15.4)
====== ====== ====== ======
Weighted-average assumptions:
Discount rate 7.50% 6.75% 7.50% 6.75%
Long-term rate of return 10.00% 10.00% - -
Salary scale - 6.90% - 4.50%
Net benefit costs for the years ended December 31, 1999, 1998 and 1997
included the following (in millions):
Pension Postretirement
------------------- -------------------
1999 1998 1997 1999 1998 1997
----- ----- ----- ----- ----- -----
Service cost $ 3.5 $ 1.9 $ 1.6 $ .1 $ .2 $ .1
Interest cost 5.7 5.5 4.9 .8 .8 .7
Expected return on plan assets (7.8) (6.9) (10.2) - - -
Amortization of:
Unrecognized transition
obligation (.2) (.1) (.1) - - -
Unrecognized prior service cost (.4) (.3) (.3) (.3) (.4) (1.0)
Unrecognized actuarial
(gain)/loss .6 .4 .1 (.1) (.1) (.1)
Loss due to change in
attribution period - - - - .2 .2
Curtailment (gain)/loss .6 - - (.3) - -
Deferral of asset gain - - 4.4 - - -
----- ----- ----- ----- ----- -----
Net benefit costs $ 2.0 $ .5 $ .4 $ .2 $ .7 $ (.1)
===== ===== ===== ===== ===== =====
The health care cost trend rates used to measure the expected cost in
2000 for medical, dental and vision benefits were 9%, 5.5% and 5.5%,
respectively, each graded down to an ultimate trend rate of 5%, 4.5% and
4.5%, respectively, to be achieved in the year 2021.
A one-percentage-point change in assumed health care cost trend rates
would have the following effects (in millions):
1-Percentage- 1-Percentage-
Point Increase Point Decrease
-------------- --------------
Effect on total of service and
interest cost components $ .1 $ (.1)
Effect on postretirement
benefit obligation $ 1.4 $ (1.2)
SAVINGS PLANS - The Company has two savings plans, which allow an
employee to contribute up to 15% of their base salary (subject to certain
limitations). Effective January 1, 1999 the Reading & Bates Savings Plan
and the Falcon Drilling Company, Inc. Savings & Investment Plan were
merged, amended and restated to become the R&B Falcon U.S. Savings Plan
("U.S. Savings Plan"). In addition, the Reading & Bates Offshore Savings
Plan and the Falcon Drilling Company International Plan were merged,
amended and restated to become the R&B Falcon Non-U.S. Savings Plan ("Non-
U.S. Savings Plan"). The U.S. Savings Plan was subsequently amended
effective April 1, 1999 to allow the merger of the Cliffs Drilling Company
Savings Plan into the U.S. Savings Plan. Cliffs Drilling did not have a
non-U.S. savings plan.
Effective January 1, 1999, the U.S. Savings Plan was also restructured
to meet IRS Safe Harbor requirements. Accordingly, there is no longer a
vesting schedule for Company matching contributions, all contributions are
immediately 100% vested. The Company's Safe Harbor matching contributions
equal 100% on the 1st 3% of contributions and 50% on the 4th and 5th
percent of contributions. During 1999, the Company provided an additional
discretionary match of 50% on the 4th and 5th percent and 100% on the 6th
percent of contributions, for a total matching contribution in 1999 of 6%
on the 1st 6% of contributions. Effective July 1, 1999, the Company began
making its matching contributions in the form of issuing shares of R&B
Falcon common stock (see Note J). Employees may direct the investment of
their contributions into various plan investment options.
The Non-U.S. Savings Plan follows the same design structure with regard
to contributions, vesting and Company matching contributions as the U.S.
Savings Plan. Compensation costs under the plans amounted to $6.7 million
in 1999, $4.6 million in 1998 and $2.7 million in 1997.
STOCK PLANS - The Company has 16 stock plans which are intended to
provide an incentive that will allow the Company to retain persons of the
training, experience and ability necessary for the development and
financial success of the Company. Such plans provide for grants of stock
options, stock appreciation rights, stock awards and cash awards, which may
be granted singly, in combination or in tandem. All stock options awarded
under these plans expire ten years from the date of their grant and were
granted at the market price on the date of grant unless otherwise noted.
Four of these plans were originally adopted by Falcon, five by R&B, two by
Cliffs Drilling and five by the Company. As a result of the business
combination between R&B and Falcon, and R&B Falcon and Cliffs Drilling, all
of the R&B, Falcon and Cliffs Drilling plans were assumed by the Company,
and the options outstanding thereunder were converted to options to acquire
common stock of R&B Falcon (with appropriate adjustments to reflect the
exchange ratios).
The Company's Reading & Bates Corporation 1990 Stock Option Plan
authorized options with respect to approximately 2.3 million shares of
common stock to be granted to certain employees of R&B at an adjusted
option price of $6.25 per share. In 1991, options with respect to all 2.3
million shares were granted and vested over a four-year period. Such
grant's option price was less than the market price on the date of grant
and the difference was recorded as compensation expense during the vesting
period.
The Company's Reading & Bates Corporation 1992 Long-Term Incentive Plan
(the "1992 Incentive Plan") authorized 1,180,000 shares of common stock to
be available for awards. In 1992, restricted stock awards with respect to
354,000 shares were granted to certain officers of R&B. Such shares
awarded were restricted as to transfer until vested pursuant to a schedule
whereby 1/24th of the total number of shares vested per calendar quarter
from June 30, 1992 through March 31, 1998 (subject to certain conditions).
The market value at the date of grant of the common stock granted was
recorded as unearned compensation and was amortized to expense over the
periods during which the restrictions lapse or shares vested. In 1995,
stock options with respect to the remaining 826,000 shares were granted to
certain officers and employees of R&B at adjusted option prices ranging
from $7.627 to $11.759 per share. Such options become exercisable either
over a one or four year period from the date of grant. All stock awards
under the 1992 Incentive Plan vested on December 31, 1997 as a result of
the merger of R&B and Falcon (see Note B).
The Company's Reading & Bates Corporation 1995 Director Stock Option
Plan authorized 236,000 shares of common stock to be available for awards
of stock options to non-employee members of the board of directors. In
1995, R&B granted 141,600 options at an adjusted option price of $6.25 per
share. In 1999, stock options with respect to 94,400 shares were granted
at $7.031 per share. Such options become exercisable over a two year
period from the date of grant.
The Company's Reading & Bates Corporation 1995 Long-Term Incentive Plan
("1995 Incentive Plan") authorized 2,950,000 shares of common stock to be
available for awards. In 1995, stock options with respect to 708,000 shares
were granted to an officer of R&B at an adjusted option price of $11.759
per share. Such options became exercisable one year from the date of grant.
Also in 1995, restricted stock awards with respect to 642,156 shares were
granted to certain employees of R&B. Such shares awarded were restricted
as to transfer until fully vested three years from the date of grant. The
market value at the date of grant of the common stock granted was recorded
as unearned compensation and was amortized to expense over the period
during which the shares vested. In 1996, stock options with respect to
177,000 shares were granted to an officer of R&B at an adjusted option
price of $23.729 per share. Such options became exercisable over a three-
year period from the date of grant. Also in 1996, restricted stock awards
with respect to 489,228 shares were granted to certain employees of R&B.
Such shares awarded were restricted as to transfer until fully vested three
years from the date of grant. The market value at the date of grant of the
common stock granted was recorded as unearned compensation and was
amortized to expense over the period during which the shares vested. In
1997, stock options with respect to 902,582 shares were granted to officers
of R&B at an adjusted option price of $20.127 per share and in August 1997
R&B rescinded such option grants. Under the 1995 Incentive Plan, stock
options and restricted stock awards with respect to 868,700 shares vested
on December 31, 1997 as a result of the merger of R&B and Falcon (See Note
B). In 1999, stock options with respect to 889,118 shares were granted to
officers of the Company at option prices ranging from $6.25 to $7.031 per
share. Such options become exercisable either in six months or over a two
year period from the date of grant.
The Company's Reading & Bates Corporation 1997 Long-Term Incentive Plan
(the "1997 Incentive Plan") authorized 2,950,000 shares of common stock to
be available for awards. In 1997, restricted stock awards with respect to
33,866 shares were granted to certain employees of R&B. Such shares
awarded were restricted as to transfer until fully vested three years from
the date of grant. The market value at the date of grant of the common
stock granted was recorded as unearned compensation and was amortized to
expense over the period during which the shares vested. Also in 1997,
stock options with respect to 6,018 shares were granted to an officer of
R&B at an adjusted option price of $20.127 per share and in August 1997 R&B
rescinded such option grants. Under the 1997 Incentive Plan, restricted
stock awards with respect to 33,866 shares vested on December 31, 1997 as a
result of the merger of R&B and Falcon (see Note B). In 1999, stock
options with respect to 2,892,020 shares were granted to officers of the
Company at an option price of $7.031 per share. Such options become
exercisable over a two year period from the date of grant.
The Company's Falcon Drilling Company, Inc. 1992 Stock Option Plan
authorized options with respect to 1.0 million shares of common stock to be
granted to certain employees and directors of Falcon. In 1992, options with
respect to all 1.0 million shares were granted at adjusted option prices
ranging from $1.665 to $1.85 per share and vested immediately. No
compensation expense was recorded as a result of the option price being the
estimated market price of Falcon's common stock on the date of grant.
The Company's Falcon Drilling Company, Inc. 1994 Stock Option Plan
authorized options with respect to 570,000 shares of common stock to be
granted to certain employees and directors of Falcon. In 1994, options
with respect to all 570,000 shares were granted at an adjusted option price
of $5.00 per share, vesting ratably over three years. No compensation
expense was recorded as a result of the option price being the estimated
market price of Falcon's common stock on the date of grant.
The Company's Falcon Drilling Company, Inc. 1995 Stock Option Plan
authorized options with respect to 1.0 million shares of common stock to be
granted to certain employees and directors of Falcon. In 1995, options with
respect to 250,000 shares were granted at an adjusted option price of $5.00
per share, vesting ratably over three years. In 1996, options with respect
to 280,000 shares were granted at an adjusted option price of $6.065 per
share, vesting over two years and options with respect to 150,000 shares
were granted at an adjusted option price of $9.72 per share, vesting
ratably over five years. In February 1997, options with respect to 258,000
shares were granted at an adjusted option price of $12.50 per share and in
November 1997 Falcon rescinded such option grants. No compensation expense
was recorded as a result of the option price being the estimated market
price of Falcon's common stock on the date of grant.
The Company's Falcon Drilling Company, Inc. 1997 Stock Option Plan
authorized options with respect to 1.2 million shares of common stock to be
granted to certain employees and directors of Falcon. In July 1997, options
with respect to 3,000 shares were granted at an option price of $12.50 per
share and in November 1997 Falcon rescinded such option grants. In July
1997, options for 40,000 shares were granted at an option price of $29.00
per share, vesting ratably over three years. No compensation expense was
recorded as a result of the option price being the estimated market price
of Falcon's common stock on the date of grant.
The Company's Cliffs Drilling Company 1988 Incentive Equity Plan and
Cliffs Drilling Company 1998 Incentive Equity Plan were both assumed by the
Company on December 1, 1998 as a result of the purchase of Cliffs Drilling
(see Note B). Under these plans, the Company assumed outstanding options to
purchase 1,052,300 shares of common stock at adjusted option prices ranging
from $3.79 to $40.89 per share and expiring at dates ranging from 2000 to
2008. All such options vested on December 1, 1998 as a result of the
Company's purchase of Cliffs Drilling.
The Company's 1998 Employee Long-Term Incentive Plan authorized 3.2
million shares of common stock to be available for awards. In 1998, stock
options with respect to 100,000 shares were granted to an employee of the
Company at an option price of $22.375 per share and stock options with
respect to 1,830,500 shares were granted to certain employees of the
Company at an option price of $12.9375 per share. Such options become
exercisable over a three year period. Also in 1998, restricted stock
awards with respect to 941,500 shares were granted to certain employees
of the Company. Such shares awarded are restricted as to transfer until
fully vested three years from the date of grant. The market value at the
date of grant of the common stock granted was recorded as unearned
compensation and will be amortized to expense over the period during which
the shares vest. In 1999, stock options with respect to 396,568 shares
were granted to officers of the Company at an option price of $6.25
per share. Such options became exercisable six months from the date of
grant. Also in 1999, stock options with respect to 145,000 shares were
granted to four employees of the Company at an option price of $6.15625
per share and which vest equally over three years. Such options were not
granted from any of the Company's stock option plans but were granted
under the terms of the 1998 Employee Long-Term Incentive Plan.
The Company's 1998 Director Long-Term Incentive Plan authorized 250,000
shares of common stock to be available for awards to non-employee members
of the board of directors. In 1999, stock options with respect to 249,600
shares were granted an option price of $7.031 per share. Such options
become exercisable over a two year period from the date of grant.
The Company's 1998 Acquisition Option Plan authorized options with
respect to 1.0 million shares of common stock to be granted to certain
employees of Cliffs Drilling. On December 1, 1998, options with respect to
all 1.0 million shares were granted at an option price of $9.125 per share
and vest over a three year period.
The Company's 1999 Employee Long-Term Incentive Plan authorized 6.5
million shares of common stock to be available for awards. In 1999, stock
options with respect to 3,508,760 shares were granted to certain employees
of the Company at option prices ranging from $9.75 to $13.4688 per share.
Such options become exercisable over a three year period.
The Company's 1999 Director Long-Term Incentive Plan authorized .3
million shares of common stock to be available for awards. In 1999, stock
options with respect to 136,000 shares were granted at an option price of
$10.0625 per share. Such options become exercisable over a two year period.
Unearned compensation relating to the Company's restricted stock awards
is shown as a reduction of stockholders' equity. Compensation recognized
for the years ending December 31, 1999, 1998 and 1997 totaled approximately
$5.9 million, $1.1 million and $17.8 million, respectively.
Stock option transactions under the plans were as follows:
1999 1998 1997
------------------ ------------------ ------------------
Weighted Weighted Weighted
Number Average Number Average Number Average
of Options Price of Options Price of Options Price
---------- ----- ---------- ----- ---------- -----
Outstanding
at beginning of year 6,550,354 $12.61 2,794,101 $ 9.83 3,836,159 $ 8.20
Granted 8,311,466 8.29 2,930,500 11.96 40,000 29.00
Assumed from
Cliffs Drilling - - 1,052,300 20.41 - -
Exercised (113,260) 7.03 (226,547) 6.03 (1,073,562) 4.75
Forfeited (335,110) 15.21 - - (8,496) 7.63
---------- --------- ---------
Outstanding
at end of year 14,413,450 10.10 6,550,354 12.61 2,794,101 9.83
========== ========= =========
Exercisable at
end of year 8,216,401 10.22 3,503,187 12.69 2,377,433 9.98
Available for grant
at end of year 3,456,161 - 4,516,604 - 5,415,772 -
The Company accounts for these plans under APB Opinion No. 25, under
which no compensation cost has been recognized. Had compensation cost for
these plans been determined consistent with SFAS 123, the Company's net
income and earnings per share would have been reduced to the following pro
forma amounts (in millions except per share amounts):
1999 1998 1997
-------- ------- --------
Net income (loss) applicable
to common stockholders:
As reported $ (103.2) $ 102.8 $ (6.2)
Pro forma $ (121.5) $ 101.3 $ (10.0)
Basic EPS:
As reported $ (.54) $ .61 $ (.04)
Pro forma $ (.63) $ .60 $ (.06)
Diluted EPS:
As reported $ (.54) $ .61 $ (.04)
Pro forma $ (.63) $ .60 $ (.06)
The fair value of each grant since January 1, 1995 was estimated as of
the date of the grant using the Black-Scholes option pricing model. The
following weighted-average assumptions were used for the options granted
in 1999: risk-free interest rate of 5.9%, an expected life of 10 years and
expected volatility of 69.6%. The resulting fair value of such options
granted was $6.44.
Because the SFAS 123 method of accounting has not been applied to
options granted prior to January 1, 1995, the resulting pro forma
compensation cost may not be representative of that to be expected in
future years.
SUBSIDIARY STOCK AWARD - On April 1, 1999, Devco, a previously wholly-
owned indirect subsidiary of the Company made awards of restricted stock of
Devco to certain directors, officers and employees of the Company, as well
as awards of restricted stock to certain former directors of R&B who served
in such capacity prior to completion of the merger with Falcon in December
1997. Such award comprised of 1,650,000 shares of Devco's common stock or
approximately 13.9% of the outstanding common stock of Devco. The awards
vested upon issuance, but were subject to restrictions on sale or transfer
for a period of six months following the date of the award. As a result,
the Company incurred $1.5 million of expense in the second quarter of 1999
which has been included in general and administrative expenses.
(L) RELATED PARTY TRANSACTIONS
In 1999, the Company entered into rig management agreements with DDI
and DDII for the management of the Deepwater Pathfinder and Deepwater
Frontier, respectively. DDI and DDII are unconsolidated investees accounted
for on the equity method (see Note C). For the year ended December 31,
1999, DDI and DDII paid to the Company $1.4 million and $1.1 million,
respectively, for such management services. Such revenue amounts are
included in "Income (loss) from equity investees plus related income" in
the Consolidated Statement of Operations. At December 31, 1999, the Company
had receivables from DDI and DDII of $6.3 million and $1.8 million,
respectively, which are included in "Accounts Receivable: Other".
In 1999, the Company entered into an agreement pursuant to which the
Company will supervise the construction of the drillship Navis Explorer I
and manage it following its delivery (see Note C). For the year ended
December 31, 1999, Navis paid to the Company $.7 million for such services.
At December 31, 1999, the Company had a receivable from Navis of $.8
million.
The former owners of a company acquired by the Company in 1992, who
currently are employees of the Company and were officers of Falcon, lease
crewboats, tugboats and supply barges and other vessels to Falcon at a
contracted bareboat rate of $100 per day for crewboats and tugboats and $60
per day for other vessels, with Falcon responsible for drydocking, painting
and repairs. The former owners received revenues of $1.1 million, $.9
million and $.9 million for the years ended December 31, 1999, 1998 and
1997, respectively.
William R. Ziegler, a Director and stockholder of the Company, is a
partner in a law firm which provided legal services to the Company and
certain of its affiliated entities. Fees paid by the Company to this law
firm were $.1 million and $.2 million for the years ended December 31,
1998, and 1997, respectively.
Michael E. Porter, a Director and stockholder of the Company, who
provided consulting services to the Company, received $.4 million in the
year ended December 31, 1998.
Steven A. Webster, a Director and stockholder of the Company, who
provided consulting services to the Company, received $.2 million in the
year ended December 31, 1999.
In June 1994, the Company entered into an agreement with Eilert-Olsen
Investments, Inc. (Eilert-Olsen), to buy the equity interest in Eilert-
Olsen for a nominal purchase price. In June 1994, Eilert-Olsen acquired
three barge drilling rigs for a cost of approximately $2.8 million
consisting of cash of approximately $.9 million and the assumption of debt
of approximately $1.9 million secured by the three barge drilling rigs.
The Company advanced $.9 million to Eilert-Olsen in June 1994 and has
subsequently advanced approximately $.2 million, $.5 million and $.5
million for the years ended December 31, 1999, 1998, and 1997,
respectively, to pay principal and interest due on this debt. Due to the
Company's affiliation with Eilert-Olsen, the financial statements of Eilert-
Olsen and the option to purchase Eilert-Olsen from inception have been
consolidated with the financial statements of the Company and, accordingly,
the accounts and transactions between the Company and Eilert-Olsen have
been eliminated in consolidation.
In 1997, the Company paid $.4 million to Bantam Services, Inc. under a
contract pursuant to which Bantam is to supply, at cost, groceries and
supplies to be used on certain of the Company's rigs. Bantam is entitled
under the contract to bill third parties for meals and lodging supplied to
their personnel on such rigs. In the absence of such contract, the Company
would be entitled to bill the third parties for the food and lodging
provided. Bantam is owned by an officer of Falcon Workover Company, Inc.,
a wholly-owned subsidiary of the Company.
(M) SEGMENT INFORMATION
The Company's revenues are generated primarily from its marine drilling
rigs. The Company's management has organized these rigs by general
equipment types based on water depth capability. Any rig capable of
drilling in water depths greater than 400 feet is considered deepwater. In
addition, as a result of the purchase of Cliffs Drilling, the Company
provides turnkey drilling services and land drilling operations both of
which are included in the engineering services and land operations segment.
The Company's development segment primarily consists of the Company's oil
and gas operations (see Note P).
Operating revenues and income by segment for the years ended December
31, 1999, 1998 and 1997 is as follows (in millions):
1999 1998 1997
------- ------- -------
Operating revenues by segment:
Deepwater $ 359.4 $ 392.5 $ 349.3
Shallow water 202.9 382.9 333.2
Inland water 122.5 244.9 249.9
Engineering services and
land operations 260.8 12.9 -
Development .5 - .6
Intersegment (27.3) (.6) -
------- ------- -------
Operating revenues 918.8 1,032.6 933.0
------- ------- -------
Operating income (loss) by
segment:
Deepwater 87.8 42.3 170.4
Shallow water (10.4) 194.4 145.6
Inland water (6.5) 52.4 96.5
Engineering services and
land operations 56.6 1.3 -
Development (3.6) (20.2) (129.6)
Profit elimination (4.5) (.2) -
------- ------- -------
119.4 270.0 282.9
Unallocated depreciation
and amortization (4.4) (1.0) (.4)
Unallocated general
and administrative (69.9) (61.2) (55.7)
Unallocated merger expenses - 8.0 (66.4)
------- ------- -------
Operating income $ 45.1 $ 215.8 $ 160.4
======= ======= =======
Total assets by segment at December 31, 1999, 1998 and 1997 were as
follows (in millions):
1999 1998 1997
--------- --------- ---------
Deepwater $ 2,942.5 $ 2,101.7 $ 1,256.1
Shallow water 1,263.5 1,038.5 445.2
Inland water 227.7 251.2 228.0
Engineering services
and land operations 166.7 159.3 -
Development 49.5 11.6 71.4
Corporate 266.2 151.7 10.7
--------- --------- ---------
Total $ 4,916.1 $ 3,714.0 $ 2,011.4
========= ========= =========
Geographic information about the Company's operations for the three
years ended December 31, 1999 is as follows (in millions):
1999 1998 1997
--------- --------- ---------
Operating revenues: (1)
United States $ 276.8 $ 453.0 $ 451.2
Europe 198.8 251.9 247.3
West Africa 80.8 126.5 69.9
Southeast Asia 60.2 83.4 82.4
South America 279.2 75.2 50.9
Australia 14.9 26.2 23.4
Mediterranean-
Middle East 8.1 16.4 7.9
Corporate - - -
--------- --------- ---------
Total $ 918.8 $ 1,032.6 $ 933.0
========= ========= =========
Identifiable assets:
United States $ 2,012.6 $ 1,133.3 $ 933.3
Europe 781.2 922.4 535.2
Southeast Asia 992.8 659.3 92.7
South America 566.1 499.1 175.1
West Africa 227.1 247.9 190.3
Mediterranean-
Middle East 51.5 76.3 52.2
Australia 18.6 24.0 21.9
Corporate 266.2 151.7 10.7
--------- --------- ---------
Total $ 4,916.1 $ 3,714.0 $ 2,011.4
========= ========= =========
_____________
(1) Revenues are shown by countries in which the Company's marine and
drilling units operated.
For the year ended December 31, 1999, revenues from PDVSA Exploration
and Production of approximately $175.1 million ($160.1 million reported in
the engineering services and land operations segment and $15.0 million
reported in the shallow water segment) accounted for 19.0% of the Company's
total operating revenues and revenues from British Petroleum and affiliates
of approximately $119.5 million ($113.8 million reported in the deepwater
segment and $5.7 million reported in the shallow water segment) accounted
for 13.0% of the Company's total operating revenues. For the year ended
December 31, 1998, revenues from British Petroleum and affiliates of
approximately $116.1 million, reported in the deepwater segment, accounted
for 11.2% of the Company's total operating revenues. For the year ended
December 31, 1997, there were no customers that individually accounted for
10.0% or more of the Company's total operating revenues.
(N) EARNINGS PER SHARE
Basic net income (loss) per common share is computed by dividing net
income (loss), after deducting the preferred stock dividend, by the
weighted average number of common shares outstanding during the period.
Diluted net income (loss) per common share is the same as basic and assumes
the exercise of outstanding stock options and the issuance of restricted
stock both computed using the treasury stock method.
The following table reconciles the numerators and denominators of the
basic and diluted per common share computations for income (loss) from
continuing operations before extraordinary loss for the three years ended
December 31, 1999, 1998 and 1997 as follows (in millions except per share
amounts):
1999 1998 1997
-------- ------- --------
Numerator:
Income (loss) from continuing operations
before extraordinary loss $ (67.8) $ 91.0 $ 29.8
Dividends and accretion on
preferred stock 33.7 - -
-------- ------- --------
Income (loss) from continuing operations
before extraordinary loss
- basic and diluted $ (101.5) $ 91.0 $ 29.8
======== ======= ========
Denominator:
Weighted average common shares
outstanding - basic 192.7 167.5 164.1
Outstanding stock options and
restricted stock - 1.3 2.1
-------- ------- --------
Weighted average common shares
outstanding and assumed
conversions - diluted 192.7 168.8 166.2
======== ======= =======
Earnings per share:
Income (loss) from continuing operations
before extraordinary loss:
Basic $ (.53) $ .54 $ .18
Diluted $ (.53) $ .54 $ .18
(O) DISCONTINUED OPERATIONS
In March 1998, the Company decided to divest its oil and gas segment,
and in the Company's financial statements previously filed with the SEC for
the three years ended December 31, 1997, 1996 and 1995 and the first three
quarters of 1998, the segment was accounted for as a discontinued
operation. However in March 1999, the Company had not been able to divest
this segment on terms it found acceptable and in accordance with generally
accepted accounting principles the Company reclassified its financial
statements as if this segment had not been discontinued. In 1997, a $36.0
million reserve for estimated losses from operations until disposal had
been recorded and in 1998 it was reversed in accordance with the Company
reclassifying the oil and gas segment as if it had not been discontinued.
(P) OIL AND GAS OPERATIONS
The Company, primarily through its majority-owned subsidiary Devco and,
to an insignificant extent through its wholly-owned subsidiaries Raptor
Exploration Company, Inc. and Cliffs Oil and Gas Company, engages in oil
and gas exploration activities. Devco engages primarily in the acquisition
of working interests in offshore oil and gas properties pursuant to which
it shares in reservoir and oil and gas price risks and thus profits and
losses from such properties.
In 1998, Devco incurred dryhole costs of $11.7 million and asset
impairment charges of $11.3 million. In 1997, Devco incurred dryhole costs
of $65.1 million and asset impairment charges of $42.8 million. The
Company's oil and gas operations are not significant; therefore, applicable
disclosures are not required at December 31, 1999 and 1998 or for the years
ended December 31, 1999, 1998 and 1997.
(Q) RESTRUCTURING EXPENSES
On April 7, 1999, the Company announced that Mr. Steven Webster, the
Company's President and Chief Executive Officer, had agreed to resign from
these officer positions effective May 31, 1999. On May 19, 1999, Mr. Paul
B. Loyd, Jr., the Company's Chairman of the Board, was elected as the
Company's Chief Executive Officer, and Mr. Andrew Bakonyi was elected as
President and Chief Operating Officer. Mr. Webster remains a Director of
the Company.
As a result of Mr. Webster's resignation and the termination of certain
other executive officers, the Company incurred $6.6 million of expense in
the second quarter of 1999. Such expense is reported as general and
administrative expense in the Company's Consolidated Statement of
Operations.
As a result of the termination of Mr. Douglas E. Swanson as President
and Chief Executive Officer of Cliffs Drilling, the Company entered into a
termination agreement and a non-competition agreement contract with Mr.
Swanson. The related termination contract expense of $2.6 million will be
amortized over three years. Amortization for 1999 amounted to $.4 million
and is included in "Other, net" per the Consolidated Statement of
Operations. Mr. Swanson remains a Director of the Company.
(R) QUARTERLY FINANCIAL DATA (unaudited)
Summarized quarterly financial data for the two years ended December
31, 1999, are as follows (in millions except for per share amounts):
Quarter
-------------------------------------------
First Second Third Fourth Total
------- ------- ------- ------- -------
1999:
Operating revenues $ 243.8 $ 226.5 $ 214.2 $ 234.3 $ 918.8
Gross income (1) $ 48.2 $ 34.2 $ 49.0 $ 17.1 $ 148.5
Income (loss) from continuing
operations before
extraordinary loss (2) $ 3.3 $ (14.2) $ (22.4) $ (34.5) $ (67.8)
Extraordinary loss (3) $ (1.7) $ - $ - $ - $ (1.7)
Net income (loss) $ 1.6 $ (14.2) $ (22.4) $ (34.5) $ (69.5)
Net income (loss) per
common share:
Basic:
Income (loss) from
operations $ .02 $ (.12) $ (.18) $ (.24) $ (.53)
Extraordinary loss (.01) - - - (.01)
------- ------- ------- ------- --------
Net income (loss) $ .01 $ (.12) $ (.18) $ (.24) $ (.54)
======= ======= ======= ======= ========
Diluted:
Income (loss) from
operations $ .02 $ (.12) $ (.18) $ (.24) $ (.53)
Extraordinary loss (.01) - - - (.01)
------- ------- ------- ------- --------
Net income (loss) $ .01 $ (.12) $ (.18) $ (.24) $ (.54)
======= ======= ======= ======= ========
1998(4):
Operating revenues $ 279.3 $ 281.1 $ 243.5 $ 228.7 $1,032.6
Gross income (1) $ 130.0 $ 126.4 $ 77.3 $ 53.5 $ 387.2
Income (loss) from continuing
operations before
extraordinary loss (2) $ 61.5 $ 59.9 $ (28.2) $ (2.2) $ 91.0
Income from discontinued
operations $ 8.3 $ .5 $ 7.7 $ 19.5 $ 36.0
Extraordinary loss (3) $ - $ (22.0) $ - $ (2.2) $ (24.2)
Net income (loss) $ 69.8 $ 38.4 $ (20.5) $ 15.1 $ 102.8
Net income (loss)
per common share:
Basic:
Continuing operations $ .37 $ .36 $ (.17) $ (.01) $ .54
Discontinued operations .05 .01 .05 .11 .21
Extraordinary loss - (.13) - (.01) (.14)
------- ------- ------- ------- --------
Net income (loss) $ .42 $ .24 $ (.12) $ .09 $ .61
======= ======= ======= ======= ========
Diluted:
Continuing operations $ .37 $ .36 $ (.17) $ (.01) $ .54
Discontinued operations .05 - .05 .11 .21
Extraordinary loss - (.13) - (.01) (.14)
------- ------- ------- ------- --------
Net income (loss) $ .42 $ .23 $ (.12) $ .09 $ .61
======= ======= ======= ======= ========
________________________
(1) Gross income represents operating revenues less operating expenses,
depreciation and amortization, and other, net.
(2) Cancellation of conversion project expense is included in the following
quarters: $31.7 million in the third quarter of 1999, $3.0 million in
the fourth quarter of 1999, $85.8 million in the third quarter of 1998
and $32.5 million in the fourth quarter of 1998.
(3) The extraordinary losses incurred in the first quarter of 1999 and the
second and fourth quarters of 1998 are shown net of a tax benefit of $.9
million, $11.9 million and $1.1 million, respectively.
(4) The quarterly financial data for 1998 has been adjusted to reflect the
recontinuance of the Company's oil and gas operations (see Note O).
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
Not applicable.
PART III
The information called for by Part III of Form 10-K is incorporated by
reference from the Registrant's Proxy Statement relating to its annual
meeting of Stockholders to be held May 17, 2000, which will be filed
by the Registrant with the Securities and Exchange Commission no later
than 120 days after the close of the fiscal year.
PART IV
Item 14. Exhibits, Financial Statements and Reports on Form 8-K
(a)Financial Statements and Exhibits
1.Financial Statements:
Report of Independent Public Accountants
Consolidated Balance Sheet as of December 31, 1999 and 1998
Consolidated Statement of Operations for the years ended
December 31, 1999, 1998 and 1997
Consolidated Statement of Cash Flows for the years ended
December 31, 1999, 1998 and 1997
Consolidated Statement of Stockholders' Equity for the years
ended December 31, 1999, 1998 and 1997
Notes to Consolidated Financial Statements
2. Exhibits:
2.1 - Agreement and Plan of Merger, dated July 10, 1997, among
R&B Falcon, FDC Acquisition Corp., Reading & Bates
Acquisition Corp., Falcon and R&B. (Filed as Exhibit 2.1
to R&B Falcon's Registration Statement on Form S-4 dated
November 20, 1997 and incorporated herein by reference.)
2.2 - Agreement and Plan of Merger, dated August 21, 1998 by and
among Cliffs Drilling Company, R&B Falcon Corporation and
RBF Cliffs Drilling Acquisition Corp. (Filed as Exhibit 2
to R&B Falcon's Registration Statement No. 333-63471 on
Form S-4 dated September 15, 1998 and incorporated herein
by reference.)
3.1 - Amended and Restated Certificate of Incorporation of R&B
Falcon. (Filed as Exhibit 3.1 to R&B Falcon's Annual
Report on Form 10-K for 1997 and incorporated herein by
reference.)
3.2 - Amended and Restated Bylaws of R&B Falcon. (Filed as
Exhibit 3.2 to R&B Falcon's Annual Report on Form 10-K for
1997 and incorporated herein by reference.)
4.1 - Form of R&B Falcon's Common Stock Certificate. (Filed as
Exhibit 4.1 to R&B Falcon's Annual Report on Form 10-K for
1997 and incorporated herein by reference.)
4.2 - Rights Agreement dated as of December 23, 1997 between R&B
Falcon and American Stock Transfer and Trust Company.
(Filed as Exhibit 4.2 to R&B Falcon's Annual Report on
Form 10-K for 1997 and incorporated herein by reference.)
4.3 - Registration Rights Agreement dated January 1, 1998 among
the Company and the Stockholders of BSI Workover and
Drilling, Inc. (Filed as Exhibit 4.1 to R&B Falcon's
Quarterly Report on Form 10-Q for the First Quarter of
1998 and incorporated herein by reference.)
4.4 - Registration Rights Agreement dated as of April 8, 1998
among R&B Falcon Corporation and Credit Suisse First
Boston, Chase Securities, Inc., Donaldson, Lufkin &
Jenrette Securities Corporation and Morgan Stanley Dean
Witter. (Filed as Exhibit 4.2 to R&B Falcon's
Registration Statement No. 333-56821 on Form S-4 dated
June 15, 1998 and incorporated herein by reference.)
4.5 - Registration Rights Agreement dated July 1, 1998 by and
between R&B Falcon Corporation, Kenneth Stage, T. George
Delsa, Vial J. LeBlanc and Dr. William T. Barfield. (Filed
as Exhibit 4 to R&B Falcon's Quarterly Report on Form 10-Q
for the Third Quarter of 1998 and incorporated herein by
reference.)
4.6 - Registration Rights Agreement dated December 17, 1998
among R&B Falcon Corporation, Credit Suisse First Boston
Corporation, Nations Banc Montgomery Securities LLC, and
Paribas Corporation. (Filed as Exhibit 4.6 to R&B Falcon's
Annual Report on Form 10-K for 1998 and incorporated
herein by reference.)
4.7 - Indenture relating to R&B's 8% Senior Subordinated
Convertible Debentures due 1998 dated as of August 29,
1989, between R&B and IBJ Schroder Bank & Trust Company,
as Trustee. (Filed as Exhibit 4.1 to R&B's Annual Report
on Form 10-K for 1989 and incorporated herein by
reference.)
4.8 - Form of R&B's registered 8% Senior Subordinated
Convertible Debentures due 1998. (Filed as Exhibit 4.2 to
R&B's Registration No. 33-28580 and incorporated herein by
reference.)
4.9 - Form of R&B's bearer 8% Senior Subordinated Convertible
Debentures due 1998. (Filed as Exhibit 4.3 to R&B's
Registration No. 33-28580 and incorporated herein by
reference.)
4.10 - First Supplemental Indenture dated as of December 23, 1997
among the Company, R&B and IBJ Schroder Bank & Trust
Company. (Filed as Exhibit 4.6 to R&B Falcon's Annual
Report on Form 10-K for 1997 and incorporated herein by
reference.)
4.11 - Indenture dated as of January 15, 1994, between Falcon and
Texas Commerce Bank National Association, including a form
of Note. (Filed as an exhibit to Falcon's Registration
Statement on Form S-4, filed on April 29, 1994,
Registration No. 33-78369 and incorporated herein by
reference.)
4.12 - Supplemental Indenture dated as of June 3, 1994, pursuant
to which Falcon Workover Company, Inc., became a
Guarantor. (Filed as an exhibit to Falcon's Registration
Statement on Form S-4, Amendment No.1, filed on June 30,
1994, Registration No. 33-78360 and incorporated herein by
reference.)
4.13 - Supplemental Indenture dated as of June 28, 1994, pursuant
to which Raptor Exploration Company, Inc. and FALRIG
Offshore (USA), L.P., and FALRIG Offshore Partners became
Guarantors. (Filed as an exhibit to Falcon's Registration
Statement on Form S-4, Amendment No.1, filed on June 30,
1994, Registration No. 33-78360 and incorporated herein by
reference.)
4.14 - Supplemental Indenture dated as of December 30, 1994,
pursuant to which Falcon Inland, Inc., Falcon Services
Company, Inc. and FALRIG de Venezuela, Inc. became
Guarantors. (Filed as an exhibit to Falcon's Annual Report
on form 10-K for the year ended December 31, 1994 and
incorporated herein by reference.)
4.15 - Joinder Agreement dated as of June 3, 1994, pursuant to
which Falcon Workover Company, Inc. became a Guarantor.
(Filed as an exhibit to Falcon's Registration Statement of
Form S-1, Amendment No. 3, filed on July 19, 1995,
Registration No. 33-84582 and incorporated herein by
reference.)
4.16 - Joinder Agreement dated as of June 28, 1994, pursuant to
which Raptor Exploration Company, Inc., FALRIG Offshore
(USA), L.P., and FALRIG Offshore partners became
Guarantors. (Filed as an exhibit to Falcon's Registration
Statement of Form S-1, Amendment No. 3, filed on July 19,
1995, Registration No. 33-84582 and incorporated herein by
reference.)
4.17 - Joinder Agreement dated as of December 30, 1994, pursuant
to which Falcon Inland, Inc., Falcon Services Company,
Inc. and FALRIG de Venezuela, Inc. became Guarantors.
(Filed as an exhibit to Falcon's Registration Statement of
Form S-1, Amendment No. 3, filed on July 19, 1995,
Registration No. 33-84582 and incorporated herein by
reference.)
4.18 - Joinder Agreement dated as of March 1, 1996, pursuant to
which Falcon Atlantic, Ltd., Falcon Drilling do Brasil,
Ltda., Falcon Drilling de Venezuela, Inc. and
perforaciones FALRIG de Venezuela, C.A. became Guarantors.
(Filed as an exhibit to Falcon's Annual Report on Form 10-
K for the year ended December 31, 1995 and incorporated
herein by reference.)
4.19 - Indenture dated as of March 1, 1996, between Falcon and
Bank One, Texas, N. A., including a form of Note. (Filed
as an exhibit to Falcon's Registration Statement on Form S-
4, filed on March 8, 1996, Registration No. 333-2114 and
incorporated herein by reference.)
4.20 - Indenture dated as of April 14, 1998, between R&B Falcon
Corporation, as Issuer, and Chase Bank of Texas, National
Association, as Trustee, with respect to Series A and
Series B of each of $250,000,000 6 1/2% Senior Notes due
2003, $350,000,000 6 _% Senior Notes due 2005,
$250,000,000 6.95% Senior Notes due 2008, and $250,000,000
7 3/8% Senior Notes due 2018. (Filed as Exhibit 4.1 to R&B
Falcon's Registration Statement No. 333-56821 on Form S-4
dated June 15, 1998 and incorporated herein by reference.)
4.21 - Indenture dated as of December 22, 1998, between R&B
Falcon Corporation, as Issuer and Chase Bank of Texas,
National Association, as Trustee, with respect to
$400,000,000 Series A and Series B 9 1/8% Senior notes due
2003, and 9 1/2% Senior Notes due 2008. (Filed as
Exhibit 4.21 to R&B Falcon's Annual Report on Form 10-K
for 1998 and incorporated herein by reference.)
4.22 - Indenture dated as of March 26, 1999, between RBF Finance
Co., as Issuer, and United States Trust Company of New
York, as Trustee, with respect to $400,000,000 11% Senior
Secured Notes due 2006 and $400,000,000 11 3/8% Senior
Secured Notes due 2009. (Filed as Exhibit 4.1 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1999 and incorporated herein by reference.)
4.23 - Indenture dated as of March 26, 1999, between R&B Falcon
Corporation, as Issuer, and U.S. Trust Company of Texas,
National Association, as Trustee, with respect to 12 1/4%
Senior Notes due 2006. (Filed as Exhibit 4.2 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1999 and incorporated herein by reference.)
4.24 - Registration Rights Agreement dated March 26, 1999 among
RBF Finance Co., R&B Falcon Corporation and Donaldson,
Lufkin & Jenrette Securities Corporation. (Filed as
Exhibit 4.3 to R&B Falcon's Quarterly Report on Form 10-Q
for the First Quarter of 1999 and incorporated herein by
reference.)
4.25 - Registration Rights Agreement dated March 26, 1999 among
R&B Falcon Corporation and Donaldson, Lufkin & Jenrette
Securities Corporation. (Filed as Exhibit 4.4 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1999 and incorporated herein by reference.)
4.26 - Certificate of Designation of R&B Falcon Corporation filed
with the Secretary of State of the State of Delaware on
April 22, 1999. (Filed as Exhibit 4.3 to R&B Falcon's
Registration Statement No. 333-81179 on Form S-4 dated
June 21, 1999 and incorporated herein by reference.)
4.27 - Form of Registrant's 13-7/8% Senior Cumulative Redeemable
Preferred Stock Certificate. (Filed as Exhibit 4 to R&B
Falcon's Quarterly Report on Form 10-Q for the Third
Quarter of 1999 and incorporated herein by reference.)
4.28 - Form of Indenture between R&B Falcon Corporation, as
Issuer, and U.S. Trust Company, N.A., as Trustee, with
respect to 13 7/8% Senior Subordinated Debentures due
2009. (Filed as Exhibit 4.1 to R&B Falcon's Registration
Statement No. 333-81179 on Form S-4 dated June 21, 1999
and incorporated herein by reference.)
4.29 - Registration Rights Agreement dated as of April 22, 1999
among R&B Falcon Corporation and Donaldson, Lufkin &
Jenrette Securities Corporation. (Filed as Exhibit 4.2 to
R&B Falcon's Registration Statement No. 333-81179 on Form
S-4 dated June 21, 1999 and incorporated herein by
reference.)
4.30 - Warrant Agreement, including form of Warrant dated April
22, 1999 between R&B Falcon and American Stock Transfer &
Trust Company. (Filed as Exhibit 4.1 to R&B Falcon's
Registration Statement No. 333-81181 on Form S-3 dated
June 21, 1999 and incorporated herein by reference.)
9.1 - Voting Trust Agreement dated as of November 12, 1991,
between Lydia Richardson and Linda Webster as common
stockholders and Steven A. Webster as voting trustee.
(Filed as an exhibit to Falcon's Registration Statement on
Form S-4, filed on April 29, 1994, Registration No. 33-
78369 and incorporated herein by reference.)
9.2 - Amendment to Voting Trust Agreement dated as of November
1, 1995. (Filed as an exhibit to Falcon's Annual Report on
Form 10-K for the year ended December 31, 1995 and
incorporated herein by reference.)
9.3 - Voting Trust Agreement dated as of November 21, 1989,
between Lydia Richardson and Linda Webster as common
stockholders and Steven A. Webster as voting trustee.
(Filed as an exhibit to Falcon's Registration Statement on
Form S-1, Amendment No.2, filed on July 6, 1995,
Registration No. 33-84582 and incorporated herein by
reference.)
9.4 - Voting Trust Agreement dated as of May 30, 1990, between
Lydia Richardson and Linda Webster as common stockholders
and Steven A. Webster as voting trustee. (Filed as an
exhibit to Falcon's Registration Statement on Form S-1,
Amendment No.2, filed on July 6, 1995, Registration No. 33-
84582 and incorporated herein by reference.)
10.1* - Reading & Bates 1990 Stock Option Plan. (Filed as
Appendix A to R&B's Proxy Statement dated April 26, 1993
and incorporated herein by reference.)
10.2* - 1992 Long-Term Incentive Plan of Reading & Bates
Corporation. (Filed as Exhibit B to R&B's Proxy Statement
dated April 27, 1992 and incorporated herein by
reference.)
10.3* - 1995 Long-Term Incentive Plan of Reading & Bates
Corporation. (Filed as Exhibit 99.A to R&B's Proxy
Statement dated March 29, 1995 and incorporated herein by
reference.)
10.4* - 1995 Director Stock Option Plan of Reading & Bates
Corporation. (Filed as Exhibit 99.B to R&B's Proxy
Statement dated March 29, 1995 and incorporated herein by
reference.)
10.5* - 1996 Director Restricted Stock Award Plan of Reading &
Bates Corporation. (Filed as Exhibit 99.B to R&B's Proxy
Statement dated March 28, 1997 and incorporated herein by
reference.)
10.6* - 1997 Long-Term Incentive Plan of Reading & Bates
Corporation. (Filed as Exhibit 99.A to R & B's Proxy
Statement dated March 18, 1997 and incorporated herein by
reference.)
10.7* - 1992 Stock Option Plan of Falcon. (Filed as an exhibit to
Falcon's Registration Statement on Form S-4, filed on
April 29, 1994, Registration No. 33-78369 and incorporated
herein by reference.)
10.8* - 1994 Stock Option Plan of Falcon. (Filed as an exhibit to
Falcon's Annual Report on form 10-K for the year ended
December 31, 1994 and incorporated herein by reference.)
10.9* - 1995 Stock Option Plan of Falcon. (Filed as an exhibit to
Falcon's Annual Report on form 10-K for the year ended
December 31, 1994 and incorporated herein by reference.)
10.10* - 1998 Employee Long-Term Incentive Plan of R&B Falcon
Corporation. (Filed as Exhibit 99.A to the Company's Proxy
Statement dated April 23,1998 and incorporated by
reference.)
10.11* - 1998 Director Long-Term Incentive Plan of R&B Falcon
Corporation. (Filed as Exhibit 99.B to the Company's Proxy
Statement dated April 23,1998 and incorporated by
reference.)
10.12* - Cliffs Drilling Company 1988 Incentive Equity Plan.
(Filed as Exhibit 10.8 to Cliffs Drilling Registration
Statement on Form S-1, Registration No. 33-23508 and
incorporated herein by reference.)
10.13* - Amendment No. 1 dated May 17, 1990 to the Cliffs Drilling
Company 1988 Incentive Equity Plan (Filed as Exhibit
10.7.1 to Cliffs Drilling Annual Report on Form 10-K for
1993 and incorporated herein by reference.)
10.14* - Amendment No. 2 dated May 20, 1993 to the Cliffs Drilling
Company 1988 Incentive Equity Plan (Filed as Exhibit
10.7.2 to Cliffs Drilling Annual Report on Form 10-K for
1993 and incorporated herein by reference.)
10.15* - Amendment No. 3 dated May 22, 1996 to the Cliffs Drilling
Company 1988 Incentive Equity Plan (Filed as Exhibit
10.7.3 to Cliffs Drilling Annual Report on Form 10-K for
1996 and incorporated herein by reference.)
10.16* - Cliffs Drilling Company 1998 Incentive Equity Plan. (Filed
under Cliffs Drilling Proxy Statement dated April 8, 1998
and incorporated herein by reference.)
10.17* - Stock Option Agreement dated as of February 7, 1995
between A.L. Chavkin and R&B. (Filed as Exhibit 10.40 to
R&B's Annual Report on Form 10-K for 1995 and incorporated
herein by reference.)
10.18* - Stock Option Agreement dated as of February 7, 1995
between Willem Cordia and R&B. (Filed as Exhibit 10.41 to
R&B's Annual Report on Form 10-K for 1995 and incorporated
herein by reference.)
10.19* - Stock Option Agreement dated as of February 7, 1995
between C.A. Donabedian and R&B. (Filed as Exhibit 10.42
to R&B's Annual Report on Form 10-K for 1995 and
incorporated herein by reference.)
10.20* - Stock Option Agreement dated as of February 7, 1995
between Ted Kalborg and R&B. (Filed as Exhibit 10.43 to
R&B's Annual Report on Form 10-K for 1995 and incorporated
herein by reference.)
10.21* - Stock Option Agreement dated as of February 7, 1995
between J.W. McLean and R&B. (Filed as Exhibit 10.44 to
R&B's Annual Report on Form 10-K for 1995 and incorporated
herein by reference.)
10.22* - Stock Option Agreement dated as of February 7, 1995
between R.L. Sandmeyer and R&B. (Filed as Exhibit 10.45
to R&B's Annual Report on Form 10-K for 1995 and
incorporated herein by reference.)
10.23* - Stock Option Agreement dated as of February 7, 1995
between S.A. Webster and R&B. (Filed as Exhibit 10.46 to
R&B's Annual Report on Form 10-K for 1995 and incorporated
herein by reference.)
10.24* - Stock Option Agreement dated as of April 19, 1995 between
M.A.E. Lacqueur and R&B. (Filed as Exhibit 10.47 to R&B's
Annual Report on Form 10-K for 1995 and incorporated
herein by reference.)
10.25* - Stock Option Agreement with respect to the 1995 Long-Term
Incentive Plan dated February 6, 1996 between R&B and Paul
B. Loyd, Jr. (Filed as Exhibit 10.48 to R&B's Annual
Report on Form 10-K for 1995 and incorporated herein by
reference.)
10.26* - Amendment No. 1, dated as of December 3, 1996 to Stock
Option Agreement with respect to the 1995 Long-Term
Incentive Plan between R&B and Paul B. Loyd, Jr. (Filed
as Exhibit 10.22 to R&B's Annual Report on Form 10-K for
1996 and incorporated herein by reference.)
10.27* - Stock Option Agreement with respect to the 1992 Long-Term
Incentive Plan dated February 6, 1996 between R&B and Paul
B. Loyd, Jr. (Filed as Exhibit 10.49 to R&B's Annual
Report on Form 10-K for 1995 and incorporated herein by
reference.)
10.28* - Amendment No. 1, dated as of December 3, 1996 to Stock
Option Agreement with respect to the 1992 Long-Term
Incentive Plan between R&B and Paul B. Loyd, Jr. (Filed
as Exhibit 10.24 to R&B's Annual Report on Form 10-K for
1996 and incorporated herein by reference.)
10.29* - Employment Agreement dated as of November 1, 1991 between
R&B and T. W. Nagle. (Filed as Exhibit 10.35 to R&B's
Annual Report on Form 10-K for 1991 and incorporated
herein by reference.)
10.30* - Amendment No. 1, dated as of October 1, 1993, to the
Employment Agreement dated as of November 1, 1991 between
R&B and T.W. Nagle. (Filed as Exhibit 10.24 to R&B's
Annual Report on Form 10-K for 1993 and incorporated
herein by reference.)
10.31* - Employment Agreement dated March 25, 1998 between the
Company and Tim W. Nagle. (Filed as Exhibit 10.9 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1998 and incorporated herein by reference.)
10.32* - Employment Agreement dated as of November 1, 1991 between
R&B and C. R. Ofner. (Filed as Exhibit 10.36 to R&B's
Annual Report on Form 10-K for 1991 and incorporated
herein by reference.)
10.33* - Amendment No. 1, dated as of October 1, 1993, to the
Employment Agreement dated as of November 1, 1991 between
R&B and C. R. Ofner. (Filed as Exhibit 10.24 to R&B's
Annual Report on Form 10-K for 1993 and incorporated
herein by reference.)
10.34* - Employment Agreement dated March 25, 1998 between the
Company and Charles R. Ofner. (Filed as Exhibit 10.12 to
R&B Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1998 and incorporated herein by reference.)
10.35* - Employment Agreement dated as of November 1, 1991 between
R&B and D. L. McIntire. (Filed as Exhibit 10.37 to R&B's
Annual Report on Form 10-K for 1991 and incorporated
herein by reference.)
10.36* - Amendment No. 1, dated as of October 1, 1993, to the
Employment Agreement dated as of November 1, 1991 between
R&B and D. L. McIntire. (Filed as Exhibit 10.28 to R&B's
Annual Report on Form 10-K for 1993 and incorporated
herein by reference.)
10.37* - Employment Agreement dated as of November 1, 1991 between
R&B and W. K. Hillin. (Filed as Exhibit 10.38 to R&B's
Annual Report on Form 10-K for 1991 and incorporated
herein by reference.)
10.38* - Amendment No. 1, dated as of October 1, 1993, to the
Employment Agreement dated as of November 1, 1991 between
R&B and W. K. Hillin. (Filed as Exhibit 10.30 to R&B's
Annual Report on Form 10-K for 1993 and incorporated
herein by reference.)
10.39* - Employment Agreement dated March 25, 1998 between the
Company and Wayne K. Hillin. (Filed as Exhibit 10.10 to
R&B Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1998 and incorporated herein by reference.)
10.40* - Employment Agreement dated as of January 1, 1992 between
R&B and Paul B. Loyd, Jr. (Filed as Exhibit 10.42 to
Registration No. 33-51120 and incorporated herein by
reference.)
10.41* - Amendment No. 1, dated as of October 1, 1993, to the
Employment Agreement dated as of January 1, 1992 between
R&B and Paul B. Loyd, Jr. (Filed as Exhibit 10.32 to
R&B's Annual Report on Form 10-K for 1993 and incorporated
herein by reference.)
10.42* - Employment Agreement dated March 25, 1998 between the
Company and Paul B. Loyd, Jr. (Filed as Exhibit 10.4 to
R&B Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1998 and incorporated herein by reference.)
10.43* - Employment Agreement dated March 25, 1998 between the
Company and Steve A. Webster. (Filed as Exhibit 10.5 to
R&B Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1998 and incorporated herein by reference.)
10.44* - Employment Agreement dated March 25, 1998 between the
Company and Andrew Bakonyi. (Filed as Exhibit 10.6 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1998 and incorporated herein by reference.)
10.45* - Employment Agreement dated March 25, 1998 between the
Company and Bernie Stewart. (Filed as Exhibit 10.7 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1998 and incorporated herein by reference.)
10.46* - Employment Agreement dated March 25, 1998 between the
Company and Robert F. Fulton. (Filed as Exhibit 10.8 to
R&B Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1998 and incorporated herein by reference.)
10.47* - Employment Agreement dated March 25, 1998 between the
Company and Leighton E. Moss. (Filed as Exhibit 10.11 to
R&B Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1998 and incorporated herein by reference.)
10.48* - Restricted Stock Award Agreement dated December 5, 1995
under the 1995 Long-Term Incentive Plan between T. W.
Nagle and R&B. (Filed as Exhibit 10.42 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.49* - Restricted Stock Award Agreement dated December 5, 1995
under the 1995 Long-Term Incentive Plan between C. R.
Ofner and R&B. (Filed as Exhibit 10.43 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.50* - Restricted Stock Award Agreement dated December 5, 1995
under the 1995 Long-Term Incentive Plan between D. L.
McIntire and R&B. (Filed as Exhibit 10.44 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.51* - Restricted Stock Award Agreement dated December 5, 1995
under the 1995 Long-Term Incentive Plan between W. K.
Hillin and R&B. (Filed as Exhibit 10.45 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.52* - Restricted Stock Award Agreement dated December 3, 1996
under the 1996 Director Restricted Stock Award Plan
between A. L. Chavkin and R&B. (Filed as Exhibit 10.46 to
R&B's Annual Report on Form 10-K for 1996 and incorporated
herein by reference.)
10.53* - Restricted Stock Award Agreement dated December 3, 1996
under the 1996 Director Restricted Stock Award Plan
between C. A. Donabedian and R&B. (Filed as Exhibit 10.47
to R&B's Annual Report on Form 10-K for 1996 and
incorporated herein by reference.)
10.54* - Restricted Stock Award Agreement dated December 3, 1996
under the 1996 Director Restricted Stock Award Plan
between M. A. E. Laqueur and R&B. (Filed as Exhibit 10.49
to R&B's Annual Report on Form 10-K for 1996 and
incorporated herein by reference.)
10.55* - Restricted Stock Award Agreement dated December 3, 1996
under the 1996 Director Restricted Stock Award Plan
between R. L. Sandmeyer and R&B. (Filed as Exhibit 10.51
to R&B's Annual Report on Form 10-K for 1996 and
incorporated herein by reference.)
10.56* - Restricted Stock Award Agreement dated December 3, 1996
under the 1995 Long-Term Incentive Plan between Paul B.
Loyd, Jr. and R&B. (Filed as Exhibit 10.52 to R&B's
Annual Report on Form 10-K for 1996 and incorporated
herein by reference.)
10.57* - Stock Option Agreement dated December 3, 1996 under the
1995 Long-Term Incentive Plan between T. W. Nagle and R&B.
(Filed as Exhibit 10.53 to R&B's Annual Report on Form 10-
K for 1996 and incorporated herein by reference.)
10.58* - Restricted Stock Award Agreement dated December 3, 1996
under the 1995 Long-Term Incentive Plan between C. R.
Ofner and R&B. (Filed as Exhibit 10.54 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.59* - Restricted Stock Award Agreement dated December 3, 1996
under the 1995 Long-Term Incentive Plan between D. L.
McIntire and R&B. (Filed as Exhibit 10.55 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.60* - Restricted Stock Award Agreement dated December 3, 1996
under the 1995 Long-Term Incentive Plan between W. K.
Hillin and R&B. (Filed as Exhibit 10.56 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.61* - Stock Option Agreement dated as of April 24, 1997 between
R&B and P.B. Loyd, Jr. under R&B's 1995 Long-Term
Incentive Plan. (Filed as Exhibit 10.53 to R&B Falcon's
Annual Report on Form 10-K for 1997 and incorporated
herein by reference.)
10.62* - Stock Option Agreement dated as of April 24, 1997 between
R&B and T. W. Nagle under R&B's 1995 Long-Term Incentive
Plan. (Filed as Exhibit 10.54 to R&B Falcon's Annual
Report on Form 10-K for 1997 and incorporated herein by
reference.)
10.63* - Stock Option Agreement dated as of April 24, 1997 between
R&B and C. R. Ofner under R&B's 1995 Long-Term Incentive
Plan. (Filed as Exhibit 10.55 to R&B Falcon's Annual
Report on Form 10-K for 1997 and incorporated herein by
reference.)
10.64* - Stock Option Agreement dated as of April 24, 1997 between
R&B and D.L. McIntire under R&B's 1995 Long-Term Incentive
Plan. (Filed as Exhibit 10.56 to R&B Falcon's Annual
Report on Form 10-K for 1997 and incorporated herein by
reference.)
10.65* - Stock Option Agreement dated as of April 24, 1997 between
R&B and W. K. Hillin under R&B's 1995 Long-Term Incentive
Plan. (Filed as Exhibit 10.57 to R&B Falcon's Annual
Report on Form 10-K for 1997 and incorporated herein by
reference.)
10.66* - Stock Option Agreement dated as of April 24, 1997 between
R&B and W.K. Hillin under R&B's 1997 Long-Term Incentive
Plan. (Filed as Exhibit 10.58 to R&B Falcon's Annual
Report on Form 10-K for 1997 and incorporated herein by
reference.)
10.67* - Amended and Restated Stock Option Agreement dated as of
February 16, 1995 between Falcon and Robert F. Fulton.
(Filed as Exhibit 10.59 to R&B Falcon's Annual Report on
Form 10-K for 1997 and incorporated herein by reference.)
10.68* - Amended and Restated Stock Option Agreement dated as of
January 23, 1996 between Falcon and Steven A. Webster.
(Filed as Exhibit 10.60 to R&B Falcon's Annual Report on
Form 10-K for 1997 and incorporated herein by reference.)
10.69* - Stock Option Agreement dated as of April 15, 1996 between
Falcon and Bernie W. Stewart. (Filed as Exhibit 10.61 to
R&B Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.70* - Rescission Agreement dated August 5, 1997 between R&B and
P.B. Loyd, Jr. (Filed as Exhibit 10.62 to R&B Falcon's
Annual Report on Form 10-K for 1997 and incorporated
herein by reference.)
10.71* - Rescission Agreement dated August 5, 1997 between R&B and
T. W. Nagle. (Filed as Exhibit 10.63 to R&B Falcon's
Annual Report on Form 10-K for 1997 and incorporated
herein by reference.)
10.72* - Rescission Agreement dated August 5, 1997 between R&B and
C. R. Ofner. (Filed as Exhibit 10.64 to R&B Falcon's
Annual Report on Form 10-K for 1997 and incorporated
herein by reference.)
10.73* - Rescission Agreement dated August 5, 1997 between R&B and
D. L. McIntire. (Filed as Exhibit 10.65 to R&B Falcon's
Annual Report on Form 10-K for 1997 and incorporated
herein by reference.)
10.74* - Rescission Agreement dated August 5, 1997 between R&B and
W. K. Hillin. (Filed as Exhibit 10.66 to R&B Falcon's
Annual Report on Form 10-K for 1997 and incorporated
herein by reference.)
10.75* - Stock Option Agreement dated February 11, 1999 between R&B
Falcon Corporation and Paul B. Loyd, Jr. under R&B Falcon
Corporation 1998 Employee Long-Term Incentive Plan. (Filed
as Exhibit 10.75 to R&B Falcon's Annual Report on Form 10-
K for 1998 and incorporated herein by reference.)
10.76* - Stock Option Agreement dated February 11, 1999 between R&B
Falcon Corporation and Steven A. Webster under R&B Falcon
Corporation 1998 Employee Long-Term Incentive Plan. (Filed
as Exhibit 10.76 to R&B Falcon's Annual Report on Form 10-
K for 1998 and incorporated herein by reference.)
10.77* - Stock Option Agreement dated February 11, 1999 between R&B
Falcon Corporation and T. W. Nagle under R&B Falcon
Corporation 1998 Employee Long-Term Incentive Plan. (Filed
as Exhibit 10.77 to R&B Falcon's Annual Report on Form 10-
K for 1998 and incorporated herein by reference.)
10.78* - Stock Option Agreement dated February 11, 1999 between R&B
Falcon Corporation and Robert F. Fulton under R&B Falcon
Corporation 1998 Employee Long-Term Incentive Plan. (Filed
as Exhibit 10.78 to R&B Falcon's Annual Report on Form 10-
K for 1998 and incorporated herein by reference.)
10.79* - Stock Option Agreement dated February 11, 1999 between R&B
Falcon Corporation and Andrew Bakonyi under R&B Falcon
Corporation 1998 Employee Long-Term Incentive Plan. (Filed
as Exhibit 10.79 to R&B Falcon's Annual Report on Form 10-
K for 1998 and incorporated herein by reference.)
10.80* - Stock Option Agreement dated February 11, 1999 between R&B
Falcon Corporation and Bernie Stewart under R&B Falcon
Corporation 1998 Employee Long-Term Incentive Plan. (Filed
as Exhibit 10.80 to R&B Falcon's Annual Report on Form 10-
K for 1998 and incorporated herein by reference.)
10.81* - Stock Option Agreement dated February 11, 1999 between R&B
Falcon Corporation and W. K. Hillin under R&B Falcon
Corporation 1998 Employee Long-Term Incentive Plan. (Filed
as Exhibit 10.81 to R&B Falcon's Annual Report on Form 10-
K for 1998 and incorporated herein by reference.)
10.82* - Stock Option Agreement dated February 11, 1999 between R&B
Falcon Corporation and L. E. Moss under R&B Falcon
Corporation 1998 Employee Long-Term Incentive Plan. (Filed
as Exhibit 10.82 to R&B Falcon's Annual Report on Form 10-
K for 1998 and incorporated herein by reference.)
10.83* - Stock Option Agreement dated February 11, 1999 between R&B
Falcon Corporation and C. R. Ofner under R&B Falcon
Corporation 1998 Employee Long-Term Incentive Plan. (Filed
as Exhibit 10.83 to R&B Falcon's Annual Report on Form 10-
K for 1998 and incorporated herein by reference.)
10.84* - Affiliate Agreement effective December 31, 1997 between
R&B and P. B. Loyd, Jr. (Filed as Exhibit 10.67 to R&B
Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.85* - Affiliate Agreement effective December 31, 1997 between
R&B and A. L. Chavkin. (Filed as Exhibit 10.68 to R&B
Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.86* - Affiliate Agreement effective December 31, 1997 between
R&B and C. A. Donabedian. (Filed as Exhibit 10.69 to R&B
Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.87* - Affiliate Agreement effective December 31, 1997 between
R&B and M. A. E. Laqueur. (Filed as Exhibit 10.70 to R&B
Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.88* - Affiliate Agreement effective December 31, 1997 between
R&B and R. L. Sandmeyer. (Filed as Exhibit 10.71 to R&B
Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.89* - Affiliate Agreement effective December 31, 1997 between
R&B and T. W. Nagle. (Filed as Exhibit 10.72 to R&B
Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.90* - Affiliate Agreement effective December 31, 1997 between
R&B and C. R. Ofner. (Filed as Exhibit 10.73 to R&B
Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.91* - Affiliate Agreement effective December 31, 1997 between
R&B and D. L. McIntire. (Filed as Exhibit 10.74 to R&B
Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.92* - Affiliate Agreement effective December 31, 1997 between
R&B and W. K. Hillin. (Filed as Exhibit 10.75 to R&B
Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.93* - Affiliate Agreement effective December 31, 1997 between
Falcon and Steven A. Webster. (Filed as Exhibit 10.76 to
R&B Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.94* - Affiliate Agreement effective December 31, 1997 between
Falcon and Bernie W. Stewart. (Filed as Exhibit 10.77 to
R&B Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.95* - Affiliate Agreement effective December 31, 1997 between
Falcon and Robert F. Fulton. (Filed as Exhibit 10.78 to
R&B Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.96* - Affiliate Agreement effective December 31, 1997 between
Falcon and Leighton E. Moss. (Filed as Exhibit 10.79 to
R&B Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.97* - Affiliate Agreement effective December 31, 1997 between
Falcon and Rodney W. Meisetschlaeger. (Filed as
Exhibit 10.80 to R&B Falcon's Annual Report on Form 10-K
for 1997 and incorporated herein by reference.)
10.98* - Affiliate Agreement effective December 31, 1997 between
Falcon and Steven R. Meheen. (Filed as Exhibit 10.81 to
R&B Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.99* - Affiliate Agreement effective December 31, 1997 between
Falcon and Douglas A.P. Hamilton. (Filed as Exhibit 10.82
to R&B Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.100* - Affiliate Agreement effective December 31, 1997 between
Falcon and Michael Porter. (Filed as Exhibit 10.83 to R&B
Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.101* - Affiliate Agreement effective December 31, 1997 between
Falcon and William R. Ziegler. (Filed as Exhibit 10.84 to
R&B Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.102* - Affiliate Agreement effective December 31, 1997 between
Falcon and Don P. Rodney. (Filed as Exhibit 10.85 to R&B
Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.103 - Reading & Bates Stock Option Agreement dated as of July
10, 1997 between R&B and Falcon. (Filed as Annex E to R&B
Falcon's Registration Statement on Form S-4 dated November
20, 1997 and incorporated herein by reference.)
10.104 - Falcon Stock Option Agreement dated as of July 10, 1997
between Falcon and R&B. (Filed as Annex D to R&B Falcon's
Registration Statement on Form S-4 dated November 20, 1997
and incorporate herein by reference.)
10.105 - Agreement dated as of August 31, 1991 among R&B, Arcade
Shipping AS and Sonat Offshore Drilling Inc. (Filed as
Exhibit 10.40 to R&B's Annual Report on Form 10-K for 1991
and incorporated herein by reference.)
10.106 - Facility Agreement dated February 21, 1991 between Arcade
Drilling AS, Chase Investment Bank Limited, The Chase
Manhattan Bank, N.A. and others. (Filed as Exhibit 10.51
to Registration No. 33-51120 and incorporated herein by
reference.)
10.107 - Amendment Agreement dated November 30, 1995 to Facility
Agreement dated February 21, 1991 between Arcade Drilling
AS, Chase Investment Bank Limited, The Chase Manhattan
Bank, N.A. and others. (Filed as Exhibit 10.71 to R&B's
Annual Report on Form 10-K for 1995 and incorporated
herein by reference.)
10.108 - Second Amendment Agreement dated October, 1996 between
Arcade Drilling AS, Chase Investment Bank Limited, The
Chase Manhattan Bank, N.A. and others. (Filed as Exhibit
10.60 to R&B's Annual Report on Form 10-K for 1996 and
incorporated herein by reference.)
10.109 - Agreement for the sale and purchase of Semi-Submersible
Emergency Support Vessel Iolair dated September 8, 1995
between BP Exploration Operating Company Limited and
Reading & Bates (Caledonia) Limited, a subsidiary of R&B.
(Filed as Exhibit 10.3 to R&B's Quarterly Report on Form
10-Q for the Third Quarter of 1995 and incorporated herein
by reference.)
10.110 - Mortgage of a Ship dated September 8, 1995 between Reading
& Bates (Caledonia) Limited, a subsidiary of R&B, and BP
Exploration Operating Company Limited. (Filed as Exhibit
10.4 to R&B's Quarterly Report on Form 10-Q for the Third
Quarter of 1995 and incorporated herein by reference.)
10.111 - Mortgage of a Ship dated September 8, 1995 between Reading
& Bates (Caledonia) Limited, a subsidiary of R&B, and
Britoil plc. (Filed as Exhibit 10.5 to R&B's Quarterly
Report on Form 10-Q for the Third Quarter of 1995 and
incorporated herein by reference.)
10.112 - Deed of Covenant dated September 8, 1995 between Reading &
Bates (Caledonia) Limited, a subsidiary of R&B, and BP
Exploration Operating Company Limited. (Filed as Exhibit
10.6 to R&B's Quarterly Report on Form 10-Q for the Third
Quarter of 1995 and incorporated herein by reference.)
10.113 - Deed of Covenant dated September 8, 1995 between Reading &
Bates (Caledonia) Limited, a subsidiary of R&B, and
Britoil Public Limited Company. (Filed as Exhibit 10.7 to
R&B's Quarterly Report on Form 10-Q for the Third Quarter
of 1995 and incorporated herein by reference.)
10.114 - Performance Guarantee dated September 8, 1995 by R&B in
favour of BP Exploration Operating Company Limited.
(Filed as Exhibit 10.8 to R&B's Quarterly Report on Form
10-Q for the Third Quarter of 1995 and incorporated herein
by reference.)
10.115 - Performance Guarantee dated September 8, 1995 by R&B in
favour of Britoil plc. (Filed as Exhibit 10.9 to R&B's
Quarterly Report on Form 10-Q for the Third Quarter of
1995 and incorporated herein by reference.)
10.116 - Initial Services Agreement dated September 8, 1995 between
Britoil Public Limited Company and Reading & Bates
(Caledonia) Limited, a subsidiary of R&B. (Filed as
Exhibit 10.10 to R&B's Quarterly Report on Form 10-Q for
the Third Quarter of 1995 and incorporated herein by
reference.)
10.117 - Heads of Agreement for the provision of Vessel Services
dated September 8, 1995 between Britoil Public Limited
Company, Reading & Bates (Caledonia) Limited, a subsidiary
of R&B, and R&B. (Filed as Exhibit 10.11 to R&B's
Quarterly Report on Form 10-Q for the Third Quarter of
1995 and incorporated herein by reference.)
10.118 - Credit Agreement dated as of April 30, 1996 among R&B,
Reading & Bates Drilling Co., certain lending institutions
named therein, Credit Lyonnais New York Branch, as co-
agent, and Christiana Bank og Kreditkasse, New York
Branch, as agent. (Filed as Exhibit 10.85 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.119 - Security Agreement dated as of April 30, 1996 among
Reading & Bates Drilling Co., Reading & Bates Exploration
Co., Reading & Bates (A) Pty. Ltd., Reading and Bates
Borneo Drilling Co., Ltd, and Christiana Bank og
Kreditkasse, New York Branch, as collateral agent. (Filed
as Exhibit 10.86 to R&B's Annual Report on Form 10-K for
1996 and incorporated herein by reference.)
10.120 - Subsidiary Guaranty dated as of April 30, 1996 by Reading
& Bates Exploration Co., Reading & Bates (A) Pty. Ltd.,
and Reading and Bates Borneo Drilling Co., Ltd. (Filed as
Exhibit 10.87 to R&B's Annual Report on Form 10-K for 1996
and incorporated herein by reference.)
10.121 - First Preferred Mortgage on the D. R. Stewart dated April
30, 1996 between Reading & Bates Exploration Co. in favor
of Wilmington Trust Company, as trustee. (Filed as
Exhibit 10.88 to R&B's Annual Report on Form 10-K for 1996
and incorporated herein by reference.)
10.122 - First Preferred Mortgage on the Jack Bates dated April 30,
1996 between Reading & Bates Drilling Co. in favor of
Wilmington Trust Company, as trustee. (Filed as Exhibit
10.89 to R&B's Annual Report on Form 10-K for 1996 and
incorporated herein by reference.)
10.123 - First Preferred Mortgage on the W. D. Kent dated April 30,
1996 between Reading & Bates Exploration Co. in favor of
Wilmington Trust Company, as trustee. (Filed as Exhibit
10.90 to R&B's Annual Report on Form 10-K for 1996 and
incorporated herein by reference.)
10.124 - Indenture of First Naval Mortgage on the Charley Graves
dated April 30, 1996 between Reading and Bates Borneo
Drilling Co. Ltd. and Christiana Bank og Kreditkasse, New
York Branch, as mortgagee. (Filed as Exhibit 10.91 to
R&B's Annual Report on Form 10-K for 1996 and incorporated
herein by reference.)
10.125 - First Priority Mortgage on the Ron Tappmeyer dated April
30, 1996 between Reading & Bates (A) Pty. Ltd. and
Christiana Bank og Kreditkasse, New York Branch, as
mortgagee. (Filed as Exhibit 10.92 to R&B's Annual Report
on Form 10-K for 1996 and incorporated herein by
reference.)
10.126 - Deed of Covenant on the J. W. McLean dated April 30, 1996
between Reading & Bates Drilling Co. and Christiana Bank
og Kreditkasse, New York Branch, as mortgagee. (Filed as
Exhibit 10.93 to R&B's Annual Report on Form 10-K for 1996
and incorporated herein by reference.)
10.127 - Indenture of Trust dated as of April 30, 1996 among
Reading & Bates Drilling Co., Reading & Bates Exploration
Co., and Wilmington Trust Company, as trustee. (Filed as
Exhibit 10.94 to R&B's Annual Report on Form 10-K for 1996
and incorporated herein by reference.)
10.128 - Collateral Assignment of Insurance dated April 30, 1996
with respect to the Jack Bates between Reading & Bates
Drilling Co. and Wilmington Trust Company, as trustee.
(Filed as Exhibit 10.95 to R&B's Annual Report on Form 10-
K for 1996 and incorporated herein by reference.)
10.129 - Collateral Assignment of Insurance dated April 30, 1996
with respect to the D. R. Stewart between Reading & Bates
Exploration Co. and Wilmington Trust Company, as trustee.
(Filed as Exhibit 10.96 to R&B's Annual Report on Form 10-
K for 1996 and incorporated herein by reference.)
10.130 - Collateral Assignment of Insurance dated April 30, 1996
with respect to the W. D. Kent between Reading & Bates
Exploration Co. and Wilmington Trust Company, as trustee.
(Filed as Exhibit 10.97 to R&B's Annual Report on Form 10-
K for 1996 and incorporated herein by reference.)
10.131 - Collateral Assignment of Insurance dated April 30, 1996
with respect to the Charley Graves between Reading and
Bates Borneo Drilling Co., Ltd. and Christiana Bank og
Kreditkasse, New York Branch, as agent. (Filed as Exhibit
10.98 to R&B's Annual Report on Form 10-K for 1996 and
incorporated herein by reference.)
10.132 - Collateral Assignment of Insurance dated April 30, 1996
with respect to the Ron Tappmeyer between Reading and
Bates (A) Pty. Ltd. and Christiana Bank og Kreditkasse,
New York Branch, as agent. (Filed as Exhibit 10.99 to
R&B's Annual Report on Form 10-K for 1996 and incorporated
herein by reference.)
10.133 - Collateral Assignment of Insurance dated April 30, 1996
with respect to the J. W. McLean between Reading and Bates
Borneo Drilling Co., Ltd. and Christiana Bank og
Kreditkasse, New York Branch, as agent. (Filed as Exhibit
10.100 to R&B's Annual Report on Form 10-K for 1996 and
incorporated herein by reference.)
10.134 - First Amendment dated as of July 9, 1996 to Credit
Agreement dated as of April 30, 1996 among R&B, Reading &
Bates Drilling Co., certain lending institutions named
therein, Credit Lyonnais New York Branch, as co-agent, and
Christiana Bank og Kreditkasse, New York Branch, as agent.
(Filed as Exhibit 10.101 to R&B's Annual Report on Form 10-
K for 1996 and incorporated herein by reference.)
10.135 - Subsidiary Assumption Agreement dated as of July 9, 1996
by RB Drilling Co. and HRB Rig Corporation. (Filed as
Exhibit 10.102 to R&B's Annual Report on Form 10-K for
1996 and incorporated herein by reference.)
10.136 - Indenture of First Naval Mortgage on the J. W. McLean
dated July 9, 1996 by Reading & Bates Drilling Co. in
favor of Christiana Bank og Kreditkasse, New York Branch,
as mortgagee. (Filed as Exhibit 10.103 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.137 - First Preferred Mortgage on the Harvey H. Ward dated July
9, 1996 by HRB Rig Corporation in favor of Wilmington
Trust Company, as trustee. (Filed as Exhibit 10.104 to
R&B's Annual Report on Form 10-K for 1996 and incorporated
herein by reference.)
10.138 - Amendment No. 1 to Indenture of First Naval Mortgage on
the Charley Graves dated July 9, 1996 by Reading and Bates
Borneo Drilling Co., Ltd. in favor of Christiana Bank og
Kreditkasse, New York Branch, as mortgagee. (Filed as
Exhibit 10.105 to R&B's Annual Report on Form 10-K for
1996 and incorporated herein by reference.)
10.139 - Amendment to First Preferred Mortgage on the Jack Bates
dated July 9, 1996 by Reading & Bates Drilling Co. in
favor of Wilmington Trust Company, as trustee. (Filed as
Exhibit 10.106 to R&B's Annual Report on Form 10-K for
1996 and incorporated herein by reference.)
10.140 - Amendment to First Preferred Mortgage on the D. R. Stewart
dated July 9, 1996 by Reading & Bates Exploration Co. in
favor of Wilmington Trust Company, as trustee. (Filed as
Exhibit 10.107 to R&B's Annual Report on Form 10-K for
1996 and incorporated herein by reference.)
10.141 - Amendment to First Preferred Mortgage on the W. D. Kent
dated July 9, 1996 by Reading & Bates Exploration Co. in
favor of Wilmington Trust Company, as trustee. (Filed as
Exhibit 10.108 to R&B's Annual Report on Form 10-K for
1996 and incorporated herein by reference.)
10.142 - Collateral Assignment of Insurance dated July 9, 1996 with
respect to the Harvey H. Ward between HRB Rig Corporation
and Wilmington Trust Company, as trustee. (Filed as
Exhibit 10.109 to R&B's Annual Report on Form 10-K for
1996 and incorporated herein by reference.)
10.143 - Collateral Assignment of Insurance dated July 9, 1996 with
respect to the Rig 41 between RB Drilling Co. and
Christiana Bank og Kreditkasse, New York Branch, as agent.
(Filed as Exhibit 10.110 to R&B's Annual Report on Form 10-
K for 1996 and incorporated herein by reference.)
10.144 - Amended and Restated Indenture of Trust dated as of July
9, 1996 among Reading & Bates Drilling Co., Reading &
Bates Exploration Co., HRB Rig Corporation and Wilmington
Trust Company, as trustee. (Filed as Exhibit 10.111 to
R&B's Annual Report on Form 10-K for 1996 and incorporated
herein by reference.)
10.145 - Second Amendment dated as of August 30, 1996 to Credit
Agreement dated as of April 30, 1996 among R&B, Reading &
Bates Drilling Co., certain lending institutions named
therein, Credit Lyonnais New York Branch, as co-agent, and
Christiana Bank og Kreditkasse, New York Branch, as agent.
(Filed as Exhibit 10.112 to R&B's Annual Report on Form 10-
K for 1996 and incorporated herein by reference.)
10.146 - Subsidiary Assumption Agreement dated as of August 30,
1996 by Reading & Bates Development Co. (Filed as Exhibit
10.113 to R&B's Annual Report on Form 10-K for 1996 and
incorporated herein by reference.)
10.147 - Subsidiary Guaranty dated as of August 30, 1996 by Reading
& Bates Development Co. (Filed as Exhibit 10.114 to R&B's
Annual Report on Form 10-K for 1996 and incorporated
herein by reference.)
10.148 - Indenture of First Naval Mortgage on Seillean dated August
30, 1996 by Reading & Bates Development Co. in favor of
Christiana Bank og Kreditkasse, New York Branch, as
mortgagee. (Filed as Exhibit 10.115 to R&B's Annual Report
on Form 10-K for 1996 and incorporated herein by
reference.)
10.149 - Collateral Assignment of Insurance dated August 30, 1996
with respect to the Seillean between Reading & Bates
Development Co. and Christiana Bank og Kreditkasse, New
York Branch, as agent. (Filed as Exhibit 10.116 to R&B's
Annual Report on Form 10-K for 1996 and incorporated
herein by reference.)
10.150 - Credit Agreement dated as of November 13, 1996 among R&B,
Reading & Bates Drilling Co., certain lending institutions
named therein, Banque Indosuez, as documentation agent,
Credit Lyonnais New York Branch, as documentation agent,
and Christiana Bank og Kreditkasse, New York Branch, as
administrative agent, arranger and security trustee.
(Filed as Exhibit 10.117 to R&B's Annual Report on Form 10-
K for 1996 and incorporated herein by reference.)
10.151 - Security Agreement dated as of November 13, 1996 among
Reading & Bates Drilling Co., Reading & Bates Exploration
Co., Reading & Bates Offshore, Limited, HRB Rig
Corporation, Reading & Bates (A) Pty. Ltd., Reading and
Bates Borneo Drilling Co., Ltd, and Christiana Bank og
Kreditkasse, New York Branch, as collateral agent. (Filed
as Exhibit 10.118 to R&B's Annual Report on Form 10-K for
1996 and incorporated herein by reference.)
10.152 - Subsidiary Guaranty dated as of November 13, 1996 by
Reading & Bates Exploration Co., Reading & Bates (A) Pty.
Ltd., Reading and Bates Borneo Drilling Co., Ltd., Reading
& Bates Offshore, Limited and HRB Rig Corporation. (Filed
as Exhibit 10.119 to R&B's Annual Report on Form 10-K for
1996 and incorporated herein by reference.)
10.153 - First Preferred Mortgage on the D. R. Stewart dated
November 13, 1996 between Reading & Bates Exploration Co.
in favor of Christiana Bank og Kreditkasse, New York
Branch, as security trustee. (Filed as Exhibit 10.120 to
R&B's Annual Report on Form 10-K for 1996 and incorporated
herein by reference.)
10.154 - First Preferred Mortgage on the Jack Bates dated November
13, 1996 between Reading & Bates Drilling Co. in favor of
Christiana Bank og Kreditkasse, New York Branch, as
security trustee. (Filed as Exhibit 10.121 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.155 - First Preferred Mortgage on the W. D. Kent dated November
13, 1996 between Reading & Bates Exploration Co. in favor
of Christiana Bank og Kreditkasse, as security trustee.
(Filed as Exhibit 10.122 to R&B's Annual Report on Form 10-
K for 1996 and incorporated herein by reference.)
10.156 - First Preferred Mortgage on the Randolph Yost dated
November 13, 1996 between Reading & Bates Drilling Co. in
favor of Christiana Bank og Kreditkasse, as security
trustee. (Filed as Exhibit 10.123 to R&B's Annual Report
on Form 10-K for 1996 and incorporated herein by
reference.)
10.157 - First Preferred Mortgage on the George H. Galloway dated
November 13, 1996 between Reading & Bates Offshore,
Limited in favor of Christiana Bank og Kreditkasse, as
security trustee. (Filed as Exhibit 10.124 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.158 - First Preferred Mortgage on the F. G. McClintock dated
November 13, 1996 between Reading & Bates Offshore,
Limited in favor of Christiana Bank og Kreditkasse, as
security trustee. (Filed as Exhibit 10.125 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.159 - First Preferred Mortgage on the J. T. Angel dated November
13, 1996 between Reading & Bates Drilling Co. in favor of
Christiana Bank og Kreditkasse, as security trustee.
(Filed as Exhibit 10.126 to R&B's Annual Report on Form 10-
K for 1996 and incorporated herein by reference.)
10.160 - First Preferred Mortgage on the Roger W. Mowell dated
November 13, 1996 between Reading & Bates Drilling Co. in
favor of Christiana Bank og Kreditkasse, as security
trustee. (Filed as Exhibit 10.127 to R&B's Annual Report
on Form 10-K for 1996 and incorporated herein by
reference.)
10.161 - First Preferred Mortgage on the Harvey H. Ward dated
November 13, 1996 between HRB Rig Corporation in favor of
Christiana Bank og Kreditkasse, as security trustee.
(Filed as Exhibit 10.128 to R&B's Annual Report on Form 10-
K for 1996 and incorporated herein by reference.)
10.162 - Indenture of First Naval Mortgage on the Charley Graves
dated November 13, 1996 between Reading and Bates Borneo
Drilling Co. Ltd. and Christiana Bank og Kreditkasse, New
York Branch, as mortgagee. (Filed as Exhibit 10.129 to
R&B's Annual Report on Form 10-K for 1996 and incorporated
herein by reference.)
10.163 - Indenture of First Naval Mortgage on the J. W. McLean
dated November 13, 1996 between Reading & Bates Drilling
Co. and Christiana Bank og Kreditkasse, New York Branch,
as mortgagee. (Filed as Exhibit 10.130 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.164 - Indenture of First Naval Mortgage on the Rig 41 dated
November 13, 1996 between Reading and Bates Borneo
Drilling Co. Ltd. and Christiana Bank og Kreditkasse, New
York Branch, as mortgagee. (Filed as Exhibit 10.131 to
R&B's Annual Report on Form 10-K for 1996 and incorporated
herein by reference.)
10.165 - First Priority Mortgage on the Ron Tappmeyer dated
November 13, 1996 between Reading & Bates (A) Pty. Ltd.
and Christiana Bank og Kreditkasse, New York Branch, as
mortgagee. (Filed as Exhibit 10.132 to R&B's Annual Report
on Form 10-K for 1996 and incorporated herein by
reference.)
10.166 - Pledge Agreement dated as of November 13, 1996 between R&B
and Christiana Bank og Kreditkasse, New York Branch, as
collateral agent. (Filed as Exhibit 10.133 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.167 - Amended and Restated Credit Agreement dated as of November
13, 1996 and amended and restated as of July 3, 1997 among
R&B, Reading & Bates Drilling Co., certain lending
institutions named therein, Credit Agricole Indosuez, as
documentation agent, Credit Lyonnais New York Branch, as
documentation agent, and Christiana Bank og Kreditkasse,
New York Branch, as administrative agent, arranger and
security trustee. (Filed as Exhibit 10.150 to R&B Falcon's
Annual Report on Form 10-K for 1997 and incorporated
herein by reference.)
10.168 - Letter of Credit Agreement dated as of December 30, 1996
between R&B, Reading & Bates Drilling Co., and Christiana
Bank og Kreditkasse, New York Branch. (Filed as Exhibit
10.134 to R&B's Annual Report on Form 10-K for 1996 and
incorporated herein by reference.)
10.169 - First Amendment to Letter of Credit Agreement, dated April
24, 1998, among R&B Falcon Corporation, R&B Falcon
Drilling (International & Deepwater) Inc., Reading & Bates
Drilling Co. and Christiania Bank OG Kreditkasse, New York
Branch, amending Letter of Credit Agreement dated December
30, 1996. (Filed as Exhibit 10.3 to R&B Falcon's Quarterly
Report on Form 10-Q for the Second Quarter of 1998 and
incorporated herein by reference.)
10.170 - Second Amendment to Letter of Credit Agreement, dated
October 22, 1998, among R&B Falcon Corporation, R&B Falcon
Drilling (International & Deepwater) Inc., Reading & Bates
Drilling Co. and Christiania Bank OG Kreditkasse, New York
Branch, amending Letter of Credit Agreement dated December
30, 1996. (Filed as Exhibit 10.170 to R&B Falcon's Annual
Report on Form 10-K for 1998 and incorporated herein by
reference.)
10.171 - Third Amendment to Letter of Credit Agreement, dated
October 22, 1998, among R&B Falcon Corporation, R&B Falcon
Drilling (International & Deepwater) Inc., Reading & Bates
Drilling Co. and Christiania Bank OG Kreditkasse, New York
Branch, amending Letter of Credit Agreement dated December
30, 1996. (Filed as Exhibit 10.171 to R&B Falcon's Annual
Report on Form 10-K for 1998 and incorporated herein by
reference.)
10.172 - Fourth Amendment to Letter of Credit Agreement, dated
January 21, 1999, among R&B Falcon Corporation, R&B Falcon
Drilling (International & Deepwater) Inc., Reading & Bates
Drilling Co. and Christiania Bank OG Kreditkasse, New York
Branch, amending Letter of Credit Agreement dated December
30, 1996. (Filed as Exhibit 10.172 to R&B Falcon's Annual
Report on Form 10-K for 1998 and incorporated herein by
reference.)
10.173 - Fifth Amendment to Letter of Credit Agreement, dated
February 22, 1999, among R&B Falcon Corporation, R&B
Falcon Drilling (International & Deepwater) Inc., Reading
& Bates Drilling Co. and Christiania Bank OG Kreditkasse,
New York Branch, amending Letter of Credit Agreement dated
December 30, 1996. (Filed as Exhibit 10.173 to R&B
Falcon's Annual Report on Form 10-K for 1998 and
incorporated herein by reference.)
10.174 - Memorandum of Agreement dated November 28, 1995 between
Reading and Bates, Inc., a subsidiary of R&B, and Deep Sea
Investors, L.L.C. (Filed as Exhibit 10.110 to R&B's
Annual Report on Form 10-K for 1995 and incorporated
herein by reference.)
10.175 - Bareboat Charter M. G. Hulme, Jr. dated November 28, 1995
between Deep Sea Investors, L.L.C. and Reading & Bates
Drilling Co., a subsidiary of R&B. (Filed as Exhibit
10.111 to R&B's Annual Report on Form 10-K for 1995 and
incorporated herein by reference.)
10.176 - Amended and Restated Bareboat Charter dated July 23, 1997
to Bareboat Charter M. G. Hulme, Jr. dated November 28,
1995 between Deep Sea Investors, L.L.C. and Reading &
Bates Drilling Co., a subsidiary of R&B. (Filed as
Exhibit 10.176 to R&B Falcon's Annual Report on Form 10-K
for 1998 and incorporated herein by reference.)
10.177 - Amended and Restated Bareboat Charter dated July 1, 1998
to Bareboat Charter M. G. Hulme, Jr. dated November 28,
1995 between Deep Sea Investors, L.L.C. and Reading &
Bates Drilling Co., a subsidiary of R&B. (Filed as
Exhibit 10.177 to R&B Falcon's Annual Report on Form 10-K
for 1998 and incorporated herein by reference.)
10.178 - Purchase and Sale Agreement dated October 18, 1995 between
Enserch Exploration, Inc. and Reading & Bates Development
Co., a subsidiary of R&B. (Filed as Exhibit 10.112 to
R&B's Annual Report on Form 10-K for 1995 and incorporated
herein by reference.)
10.179 - Operating Agreement made effective as of May 1, 1995 among
Enserch Exploration, Inc., Mobil Oil Corporation, Mobil
Oil exploration & Producing Southeast Inc. and Reading &
Bates Development Co., a subsidiary of R&B. (Filed as
Exhibit 10.125 to R&B's Annual Report on Form 10-K for
1995 and incorporated herein by reference.)
10.180 - Participation Agreement dated December 4, 1996 between
Santa Fe Energy Resources, Inc. and Reading & Bates
Development Co. (Filed as Exhibit 10.152 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.181 - Joint Venture Agreement dated December 16, 1996 among
Shell Deepwater Development Inc., SOI Finance Inc. and
Reading & Bates Development Co. (Filed as Exhibit 10.161
to R&B's Annual Report on Form 10-K for 1996 and
incorporated herein by reference.)
10.182 - Limited Liability Company Agreement dated October 28, 1996
between Conoco Development Company and RB Deepwater
Exploration Inc. (Filed as Exhibit 10.162 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.183 - Amendment No. 1 dated February 7, 1997 to Limited
Liability Company Agreement dated October 28, 1996 between
Conoco Development Company and RB Deepwater Exploration
Inc. (Filed as Exhibit 10.183 to R&B Falcon's Annual
Report on Form 10-K for 1998 and incorporated herein by
reference.)
10.184 - Amendment No. 2 dated April 30, 1997 to Limited Liability
Company Agreement dated October 28, 1996 between Conoco
Development Company and RB Deepwater Exploration Inc.
(Filed as Exhibit 10.184 to R&B Falcon's Annual Report on
Form 10-K for 1998 and incorporated herein by reference.)
10.185 - Amendment No. 3 dated April 24, 1998 to Limited Liability
Company Agreement dated October 28, 1996 between Conoco
Development Company and RB Deepwater Exploration Inc.
(Filed as Exhibit 10.185 to R&B Falcon's Annual Report on
Form 10-K for 1998 and incorporated herein by reference.)
10.186 - Amendment No. 4 dated August 7, 1998 to Limited Liability
Company Agreement dated October 28, 1996 between Conoco
Development Company and RB Deepwater Exploration Inc.
(Filed as Exhibit 10.186 to R&B Falcon's Annual Report on
Form 10-K for 1998 and incorporated herein by reference.)
10.187 - Limited Liability Company Agreement dated April 30, 1997
between Conoco Development II Inc. and RB Deepwater
Exploration II Inc. (Filed as Exhibit 10.159 to R&B
Falcon's Annual Report on Form 10-K for 1997 and
incorporated herein by reference.)
10.188 - Amendment No. 1 dated April 24, 1998 to Limited Liability
Company Agreement dated April 30, 1997 between Conoco
Development II Inc. and RB Deepwater Exploration II Inc.
(Filed as Exhibit 10.188 to R&B Falcon's Annual Report on
Form 10-K for 1998 and incorporated herein by reference.)
10.189 - Joint Venture Agreement dated February 22, 1996 between
INTEC Engineering, Inc. and Reading & Bates Development
Co. (Filed as Exhibit 10.163 to R&B's Annual Report on
Form 10-K for 1996 and incorporated herein by reference.)
10.190 - Loan Agreement dated as of December 14, 1996 among TRB
Holding Corporation, Reading & Bates (U.K.) Limited and
Nissho Iwai Europe PLC. (Filed as Exhibit 10.164 to R&B's
Annual Report on Form 10-K for 1996 and incorporated
herein by reference.)
10.191 - First Amendment dated April 21, 1997 to Loan Agreement
dated as of December 14, 1996 among TRB Holding
Corporation, Reading & Bates (U.K.) Limited and Nissho
Iwai Europe PLC. (Filed as Exhibit 10.191 to R&B Falcon's
Annual Report on Form 10-K for 1998 and incorporated
herein by reference.)
10.192 - First Naval Mortgage on the Seillean dated December 14,
1996 between TRB Holding Corporation in favor of Nissho
Iwai Europe PLC. (Filed as Exhibit 10.165 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.193 - First Amendment dated April 21, 1997 to First Naval
Mortgage on the Seillean dated December 14, 1996 between
TRB Holding Corporation in favor of Nissho Iwai Europe
PLC. (Filed as Exhibit 10.193 to R&B Falcon's Annual
Report on Form 10-K for 1998 and incorporated herein by
reference.)
10.194 - Second Amendment dated April 25, 1997 to First Naval
Mortgage on the Seillean dated December 14, 1996 between
TRB Holding Corporation in favor of Nissho Iwai Europe
PLC. (Filed as Exhibit 10.194 to R&B Falcon's Annual
Report on Form 10-K for 1998 and incorporated herein by
reference.)
10.195 - Collateral Assignment of Deposit Account, Pledge and
Security Agreement dated December 14, 1996 with respect to
the Seillean between TRB Holding Corporation and Nissho
Iwai Europe PLC. (Filed as Exhibit 10.166 to R&B's Annual
Report on Form 10-K for 1996 and incorporated herein by
reference.)
10.196 - Assignment of Insurances dated December 14, 1996 with
respect to the Seillean between TRB Holding Corporation
and Reading & Bates (U.K.) Limited and Nissho Iwai Europe
PLC. (Filed as Exhibit 10.167 to R&B's Annual Report on
Form 10-K for 1996 and incorporated herein by reference.)
10.197 - Contract dated November 14, 1997 for Construction and Sale
of Vessel (Hull No. HRBS6) between Hyundai Heavy
Industries Co., Ltd., Hyundai Corporation and RB
Exploration Co. (Filed as Exhibit 10.165 to R&B Falcon's
Annual Report on Form 10-K for 1997 and incorporated
herein by reference.)
10.198 - Contract dated December 16, 1998 for Construction and Sale
of Vessel (Hull No. HRB8-D) between Hyundai Heavy
Industries Co., Ltd., Hyundai Corporation and R&B Falcon
Drilling Co. (Filed as Exhibit 10.198 to R&B Falcon's
Annual Report on Form 10-K for 1998 and incorporated
herein by reference.)
10.199 - Contract dated September 5, 1997 for Construction and Sale
of a 103,000 Metric Tons Displacement Drillship (Hull No.
1255) between Samsung Heavy Industries Co., Ltd., Samsung
Corporation and Reading & Bates Drilling Co. (Filed as
Exhibit 10.166 to R&B Falcon's Annual Report on Form 10-K
for 1997 and incorporated herein by reference.)
10.200 - Contract dated October 14, 1998 for Construction and Sale
of a 98,000 Metric Tons Displacement Drillship (Hull No.
1300) between Samsung Heavy Industries Co., Ltd. and R&B
Falcon Drilling Co. (Filed as Exhibit 10.200 to R&B
Falcon's Annual Report on Form 10-K for 1998 and
incorporated herein by reference.)
10.201 - Registration Rights Agreement dated August 15, 1995,
between Falcon and Blake Holding Co., Inc. (Filed as an
exhibit to Falcon's Annual Report on Form 10-K for the
year ended December 31, 1995 and incorporated herein by
reference.)
10.202 - First Amendment to Credit Agreement, dated October 3,
1997, among Falcon, Bank Paribas, Arab Banking Corporation
(B.S.C.), and ING (U.S.) Capital Corporation, amending
Credit Agreement dated November 12, 1996 relating to a $40
million facility, increasing such facility to $60 million.
(Filed as Exhibit 10.178 to R&B Falcon's Annual Report on
Form 10-K for 1997 and incorporated herein by reference.)
10.203 - Credit Agreement dated as of October 3, 1997, among
Falcon, Banque Paribas, Arab Banking Corporation (B.S.C.),
and ING (U.S.) Capital Corporation relating to an $80
million facility. (Filed as Exhibit 10.179 to R&B Falcon's
Annual Report on Form 10-K for 1997 and incorporated
herein by reference.)
10.204 - First Amendment to Credit Agreement, dated December 22,
1997, among Falcon, Bank Paribas, Arab Banking Corporation
(B.S.C.), and ING (U.S.) Capital Corporation, amending
Credit Agreement dated October 3, 1997 relating to an $80
million facility, increasing such facility to $130
million. (Filed as Exhibit 10.180 to R&B Falcon's Annual
Report on Form 10-K for 1997 and incorporated herein by
reference.)
10.205 - Participation Agreement made effective August 28, 1997,
between Reading & Bates Development Co., a subsidiary of
R&B, British-Borneo Petroleum, Inc. and British-Borneo
Exploration, Inc. (Filed as Exhibit 10.182 to R&B Falcon's
Annual Report on Form 10-K for 1997 and incorporated
herein by reference.)
10.206 - Purchase and Sale and Acreage Exchange Agreement made
effective August 28, 1997 between Enserch Exploration,
Inc., and Reading & Bates Development Co., a subsidiary of
R&B. (Filed as Exhibit 10.183 to R&B Falcon's Annual
Report on Form 10-K for 1997 and incorporated herein by
reference.)
10.207 - Dealer Manager and Solicitation Agent Agreement dated
March 23, 1998 between the Company and Credit Suisse First
Boston Corporation. (Filed as Exhibit 10.1 to R&B Falcon's
Quarterly Report on Form 10-Q for the First Quarter of
1998 and incorporated herein by reference.)
10.208 - Credit Agreement dated as of November 10, 1997 among
Deepwater Drilling II L.L.C., Bank of America National
Trust and Savings Association, as Administrative Agent,
National Westminster Bank Plc, New York Branch, as
Documentation Agent and other financial institutions.
(Filed as Exhibit 10.13 to R&B Falcon's Quarterly Report
on Form 10-Q for the First Quarter of 1998 and
incorporated herein by reference.)
10.209 - Guaranty Agreement dated November 10,1997 by Reading &
Bates Corporation, Reading & Bates Drilling Co., Reading &
Bates Exploration Co., Reading & Bates (A) Pty. Ltd.,
Reading & Bates Borneo Drilling Co., Ltd., Reading & Bates
Offshore, Limited and RB Rig Corporation in favor of Bank
of America National Trust and Savings Association. (Filed
as Exhibit 10.14 to R&B Falcon's Quarterly Report on Form
10-Q for the First Quarter of 1998 and incorporated herein
by reference.)
10.210 - First Amendment and Release of Guaranty dated April 24,
1998 to Credit Agreement dated as of November 10, 1997
among Deepwater Drilling II L.L.C., Bank of America
National Trust and Savings Association, National
Westminster Bank Plc, and other financial institutions.
(Filed as Exhibit 10.15 to R&B Falcon's Quarterly Report
on Form 10-Q for the First Quarter of 1998 and
incorporated herein by reference.)
10.211 - Guaranty Agreement dated April 24, 1998 by R&B Falcon
Corporation in favor of Bank of America National Trust and
Savings Association. (Filed as Exhibit 10.16 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1998 and incorporated herein by reference.)
10.212 - Second Amendment to Credit Agreement and Release of
Guaranty dated November 9, 1998 to Credit Agreement dated
as of November 10, 1997 among Deepwater Drilling II
L.L.C., Bank of America National Trust and Savings
Association, National Westminster Bank Plc, and other
financial institutions. (Filed as Exhibit 10.212 to R&B
Falcon's Annual Report on Form 10-K for 1998 and
incorporated herein by reference.)
10.213 - Assignment and Acceptance Agreement dated as of November
9, 1998 between Great-West & Annuity Life Insurance
Company and Bank of America National Trust and Savings
Association. (Filed as Exhibit 10.213 to R&B Falcon's
Annual Report on Form 10-K for 1998 and incorporated
herein by reference.)
10.214 - Third Amendment dated January 29, 1999 to Credit Agreement
dated as of November 10, 1997 among Deepwater Drilling II
L.L.C., Bank of America National Trust and Savings
Association, National Westminster Bank Plc, and other
financial institutions. (Filed as Exhibit 10.214 to R&B
Falcon's Annual Report on Form 10-K for 1998 and
incorporated herein by reference.)
10.215 - Credit Agreement, dated February 24, 1998, among Reading &
Bates Corporation, Reading & Bates Drilling Co., various
subsidiaries of Reading & Bates Drilling Co., RB Deepwater
Exploration III, Inc., various lending institutions,
Credit Lyonnais New York Branch and Christiania Bank OG
Kreditkasse, New York Branch. (Filed as Exhibit 10.1 to
R&B Falcon's Quarterly Report on Form 10-Q for the Second
Quarter of 1998 and incorporated herein by reference.)
10.216 - First Amendment to Credit Agreement, dated April 24, 1998,
among R&B Falcon Corporation, R&B Falcon Drilling
(International & Deepwater) Inc., Reading & Bates Drilling
Co., RB Deepwater Exploration III, Credit Lyonnais New
York Branch and Christiania Bank OG Kreditkasse, New York
Branch, amending Credit Agreement dated February 24, 1998
relating to a $150 million facility. (Filed as Exhibit
10.2 to R&B Falcon's Quarterly Report on Form 10-Q for the
Second Quarter of 1998 and incorporated herein by
reference.)
10.217 - Second Amendment to Credit Agreement dated October 22,
1998 to Credit Agreement dated February 24, 1998 among R&B
Falcon Corporation, RBF Deepwater Exploration III Inc.,
Credit Lyonnais New York Branch, Christiania Bank OG
Kreditkasse, New York Branch and various other lending
institutions. (Filed as Exhibit 10.217 to R&B Falcon's
Annual Report on Form 10-K for 1998 and incorporated
herein by reference.)
10.218 - Third Amendment to Credit Agreement dated December 9, 1998
to Credit Agreement dated February 24, 1998 among R&B
Falcon Corporation, RBF Deepwater Exploration III Inc.,
Credit Lyonnais New York Branch, Christiania Bank OG
Kreditkasse, New York Branch and various other lending
institutions. (Filed as Exhibit 10.218 to R&B Falcon's
Annual Report on Form 10-K for 1998 and incorporated
herein by reference.)
10.219 - Fourth Consent and Amendment to Credit Agreement dated
December 18, 1998 to Credit Agreement dated February 24,
1998 among R&B Falcon Corporation, RBF Deepwater
Exploration III Inc., Credit Lyonnais New York Branch,
Christiania Bank OG Kreditkasse, New York Branch and
various other lending institutions. (Filed as
Exhibit 10.219 to R&B Falcon's Annual Report on Form 10-K
for 1998 and incorporated herein by reference.)
10.220 - Fifth Amendment to Credit Agreement dated January 21, 1999
to Credit Agreement dated February 24, 1998 among R&B
Falcon Corporation, RBF Deepwater Exploration III Inc.,
Credit Lyonnais New York Branch, Christiania Bank OG
Kreditkasse, New York Branch and various other lending
institutions. (Filed as Exhibit 10.220 to R&B Falcon's
Annual Report on Form 10-K for 1998 and incorporated
herein by reference.)
10.221 - Sixth Amendment to Credit Agreement dated February 22,
1999 to Credit Agreement dated February 24, 1998 among R&B
Falcon Corporation, RBF Deepwater Exploration III Inc.,
Credit Lyonnais New York Branch, Christiania Bank OG
Kreditkasse, New York Branch and various other lending
institutions. (Filed as Exhibit 10.221 to R&B Falcon's
Annual Report on Form 10-K for 1998 and incorporated
herein by reference.)
10.222 - Guaranty, dated as of July 30, 1998, made by Registrant in
favor of the Deepwater Investment Trust 1998-A, Wilmington
Trust FSB, not in its individual capacity, but solely as
Investment Trustee, Wilmington Trust Company, not in its
individual capacity, except as specified herein, but
solely as Charter Trustee, BA Leasing & Capital
Corporation, as Documentation Agent, ABN Amro Bank N.V.,
as Administrative Agent, The Bank of Nova Scotia, as
Syndication Agent, BA Leasing & Capital Corporation, ABN
Amro Bank N.V., Bank Austria Aktiengesellschaft New York
Branch, The Bank of Nova Scotia, Bayerische Vereinsbank AG
New York Branch, Commerzbank Aktiengesellschaft, Atlanta
Agency, Credit Lyonnais New York Branch, Great-West Life
and Annuity Insurance Company, Mees Pierson Capital
Corporation, Westdeutsche Landesbank Girozentrale, New
York Branch, as Certificate Purchasers, and ABN Amro
Bank, N.V., Bank of America National Trust and Savings
Association and The Bank of Nova Scotia, New York Branch,
as Swap Counterparties, and the other parties named
therein. (Filed as Exhibit 10.1 to R&B Falcon's Quarterly
Report on Form 10-Q for the Third Quarter of 1998 and
incorporated herein by reference.)
10.223 - Letter agreement dated as of August 7, 1998 between RBF
Deepwater Exploration Inc., an indirect subsidiary of the
Registrant, and Conoco Development Company and
Acknowledgment by Conoco Inc. and the Registrant. (Filed
as Exhibit 10.2 to R&B Falcon's Quarterly Report on Form
10-Q for the Third Quarter of 1998 and incorporated herein
by reference.)
10.224 - Letter agreement dated as of August 7, 1998 between RBF
Deepwater Exploration Inc., an indirect subsidiary of the
Registrant, and Conoco Development Company and
Acknowledgment by Conoco Inc. and the Registrant. (Filed
as Exhibit 10.3 to R&B Falcon's Quarterly Report on Form
10-Q for the Third Quarter of 1998 and incorporated herein
by reference.)
10.225 - Purchase Agreement dated April 8, 1998 among R&B Falcon
Corporation, Credit Suisse First Boston Corporation, Chase
Securities Inc., Donaldson, Lufkin & Jenrette Securities
Corporation, and Morgan Stanley & Co., Incorporated.
(Filed as Exhibit 10.1 to R&B Falcon's Registration
Statement No. 333-56821 on Form S-4 dated June 15, 1998
and incorporated herein by reference.)
10.226 - $500,000,000 Credit Agreement dated as of April 24, 1998
among R&B Falcon Corporation, the lender parties thereto,
and The Chase Manhattan Bank, as Administrative Agent.
(Filed as Exhibit 10.2 to R&B Falcon's Registration
Statement No. 333-56821 on Form S-4 dated June 15, 1998
and incorporated herein by reference.)
10.227 - First Amendment to $500,000,000 Credit Agreement, dated
November 13, 1998. (Filed as Exhibit 10.227 to R&B
Falcon's Annual Report on Form 10-K for 1998 and
incorporated herein by reference.)
10.228 - Second Amendment to $500,000,000 Credit Agreement, dated
as of the Second Amendment Effective Date. (Filed as
Exhibit 10.228 to R&B Falcon's Annual Report on Form 10-K
for 1998 and incorporated herein by reference.)
10.229 - Third Amendment to $500,000,000 Credit Agreement, dated
January 19, 1999. (Filed as Exhibit 10.229 to R&B Falcon's
Annual Report on Form 10-K for 1998 and incorporated
herein by reference.)
10.230 - Senior Secured Loan Agreement, Harvey Ward, dated March
26, 1999 between R&B Falcon Corporation, as Borrower, and
RBF Finance Co., as Lender. (Filed as Exhibit 10.1 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1999 and incorporated herein by reference.)
10.231 - Senior Secured Loan Agreement, Peregrine II, dated March
26, 1999 between R&B Falcon Corporation, as Borrower, and
RBF Finance Co., as Lender. (Filed as Exhibit 10.2 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1999 and incorporated herein by reference.)
10.232 - Senior Secured Loan Agreement, Peregrine I, dated March
26, 1999 between R&B Falcon Corporation, as Borrower, and
RBF Finance Co., as Lender. (Filed as Exhibit 10.3 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1999 and incorporated herein by reference.)
10.233 - Senior Secured Loan Agreement, Deepwater IV, dated March
26, 1999 between R&B Falcon Corporation, as Borrower, and
RBF Finance Co., as Lender. (Filed as Exhibit 10.4 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1999 and incorporated herein by reference.)
10.234 - Senior Secured Loan Agreement, Falrig 82, dated March 26,
1999 between R&B Falcon Corporation, as Borrower, and RBF
Finance Co., as Lender. (Filed as Exhibit 10.5 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1999 and incorporated herein by reference.)
10.235 - Senior Secured Loan Agreement, Peregrine IV, dated March
26, 1999 between R&B Falcon Corporation, as Borrower, and
RBF Finance Co., as Lender. (Filed as Exhibit 10.6 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1999 and incorporated herein by reference.)
10.236 - Senior Secured Loan Agreement, Peregrine VII, dated March
26, 1999 between R&B Falcon Corporation, as Borrower, and
RBF Finance Co., as Lender. (Filed as Exhibit 10.7 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1999 and incorporated herein by reference.)
10.237 - Senior Secured Loan Agreement, Falcon 100, dated March 26,
1999 between R&B Falcon Corporation, as Borrower, and RBF
Finance Co., as Lender. (Filed as Exhibit 10.8 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1999 and incorporated herein by reference.)
10.238 - Senior Secured Loan Agreement, W.D. Kent, dated March 26,
1999 between R&B Falcon Corporation, as Borrower, and RBF
Finance Co., as Lender. (Filed as Exhibit 10.9 to R&B
Falcon's Quarterly Report on Form 10-Q for the First
Quarter of 1999 and incorporated herein by reference.)
10.239 - Senior Secured Loan Agreement, Deepwater Millennium, dated
March 26, 1999 between R&B Falcon Corporation, as
Borrower, and RBF Finance Co., as Lender. (Filed as
Exhibit 10.10 to R&B Falcon's Quarterly Report on Form 10-
Q for the First Quarter of 1999 and incorporated herein by
reference.)
10.240* - Termination Agreement dated as of May 31, 1999 between
Steven A. Webster and Registrant. (Filed as Exhibit 10.1
to R&B Falcon's Quarterly Report on Form 10-Q for the
Second Quarter of 1999 and incorporated herein by
reference.)
10.241* - Termination Agreement dated as of May 31, 1999 between
Robert F. Fulton and Registrant. (Filed as Exhibit 10.2 to
R&B Falcon's Quarterly Report on Form 10-Q for the Second
Quarter of 1999 and incorporated herein by reference.)
10.242* - Termination Agreement dated as of June 30, 1999 between
Leighton E. Moss and Registrant. (Filed as Exhibit 10.3 to
R&B Falcon's Quarterly Report on Form 10-Q for the Second
Quarter of 1999 and incorporated herein by reference.)
10.243* - Termination Agreement dated as of July 31, 1999 between
Douglas E. Swanson and Cliffs Drilling Company. (Filed as
Exhibit 10.4 to R&B Falcon's Quarterly Report on Form 10-Q
for the Second Quarter of 1999 and incorporated herein by
reference.)
10.244 - Construction Supervisory Agreement dated as of August 12,
1999 among RBF Exploration Co., as Owner and RBF
Exploration II Inc., as Construction Supervisor. (Filed as
Exhibit 10.1 to R&B Falcon's Quarterly Report on Form 10-Q
for the Third Quarter of 1999 and incorporated herein by
reference.)
10.245 - Note Purchase Agreement, Deepwater Nautilus, dated as of
August 12, 1999, RBF Exploration Co. (Filed as Exhibit
10.2 to R&B Falcon's Quarterly Report on Form 10-Q for the
Third Quarter of 1999 and incorporated herein by
reference.)
10.246 - First Amendment dated February 1, 2000 to Note Purchase
Agreement dated as of August 12, 1999 between RBF
Exploration Co. and Victory Receivables Corporation,
Anchor National Life Insurance Company, First Sun America
Life Insurance Company, and Parthenon Receivables Funding,
L.L.C.
10.247 - Operation and Maintenance Agreement executed as of August
12, 1999 by and between R&B Falcon Corporation and RBF
Exploration Co. (Filed as Exhibit 10.3 to R&B Falcon's
Quarterly Report on Form 10-Q for the Third Quarter of
1999 and incorporated herein by reference.)
10.248 - Performance Guarantee dated as of August 12, 1999 made by
R&B Falcon Corporation in favor of RBF Exploration Co.,
Travelers Casualty and Surety Company of America, American
Home Assurance Company, and Chase Bank of Texas, National
Association, as Trustee. (Filed as Exhibit 10.4 to R&B
Falcon's Quarterly Report on Form 10-Q for the Third
Quarter of 1999 and incorporated herein by reference.)
10.249 - First Preferred Ship Mortgage, Deepwater Nautilus, made by
RBF Exploration Co. in favor of Chase Bank of Texas,
National Association, as Indenture Trustee. (Filed as
Exhibit 10.5 to R&B Falcon's Quarterly Report on Form 10-Q
for the Third Quarter of 1999 and incorporated herein by
reference.)
10.250 - Trust Indenture and Security Agreement dated as of August
12, 1999, between RBF Exploration Co., a Nevada
corporation, and Chase Bank of Texas, National Association
as Trustee. (Filed as Exhibit 10.6 to R&B Falcon's
Quarterly Report on Form 10-Q for the Third Quarter of
1999 and incorporated herein by reference.)
10.251 - Supplemental Indenture and Agreement dated as of February
1, 2000 to the Trust Indenture and Security Agreement
dated as of August 12, 1999 among RBF Exploration Co., BTM
Capital Corporation and Chase Bank of Texas, National
Association, as trustee.
10.252 - Assignment of Drilling Contract dated as of August 12,
1999, by RBF Exploration Co. to Chase Bank of Texas,
National Association, as trustee. (Filed as Exhibit 10.7
to R&B Falcon's Quarterly Report on Form 10-Q for the
Third Quarter of 1999 and incorporated herein by
reference.)
10.253 - R&B Falcon Guaranty from R&B Falcon Corporation dated as
of August 31, 1999. (Filed as Exhibit 10.8 to R&B Falcon's
Quarterly Report on Form 10-Q for the Third Quarter of
1999 and incorporated herein by reference.)
10.254 - Participation Agreement dated as of August 31, 1999 among
Deepwater Drilling II L.L.C., Deepwater Investment Trust
1999-A, Wilmington Trust FSB, Wilmington Trust Company, BA
Leasing & Capital Corporation, and other Financial
Institutions, as Certified Purchasers, solely with respect
to Section 2.15, 6.9, 9.4(a) and 12.13(b) R&B Falcon
Corporation and Conoco Inc., and solely with respect to
Sections 5.2 and 6.4, RBF Deepwater Exploration II Inc.
and Conoco Development II Inc. (Filed as Exhibit 10.9 to
R&B Falcon's Quarterly Report on Form 10-Q for the Third
Quarter of 1999 and incorporated herein by reference.)
10.255 - Appendix 1 to Participation Agreement dated as of August
31, 1999. (Filed as Exhibit 10.10 to R&B Falcon's
Quarterly Report on Form 10-Q for the Third Quarter of
1999 and incorporated herein by reference.)
10.256 - Bank One Application and Agreement for Irrevocable Standby
Letter of Credit dated August 30, 1999. (Filed as Exhibit
10.11 to R&B Falcon's Quarterly Report on Form 10-Q for
the Third Quarter of 1999 and incorporated herein by
reference.)
10.257 - Pledge Agreement dated as of August 30, 1999, by R&B
Falcon Corporation in favor of Bank One, Louisiana,
National Association. (Filed as Exhibit 10.12 to R&B
Falcon's Quarterly Report on Form 10-Q for the Third
Quarter of 1999 and incorporated herein by reference.)
10.258* - Employment and Change of Control Agreement dated August
25, 1999 between R&B Falcon Corporation and Paul B. Loyd,
Jr. (Filed as Exhibit 10.13 to R&B Falcon's Quarterly
Report on Form 10-Q for the Third Quarter of 1999 and
incorporated herein by reference.)
10.259* - Employment and Change of Control Agreement dated August
25, 1999 between R&B Falcon Corporation and Charles R.
Ofner. (Filed as Exhibit 10.14 to R&B Falcon's Quarterly
Report on Form 10-Q for the Third Quarter of 1999 and
incorporated herein by reference.)
10.260* - Employment and Change of Control Agreement dated August
25, 1999 between R&B Falcon Corporation and Ron Toufeeq.
(Filed as Exhibit 10.15 to R&B Falcon's Quarterly Report
on Form 10-Q for the Third Quarter of 1999 and
incorporated herein by reference.)
10.261* - Employment and Change of Control Agreement dated August
25, 1999 between R&B Falcon Corporation and Bernie W.
Stewart. (Filed as Exhibit 10.16 to R&B Falcon's Quarterly
Report on Form 10-Q for the Third Quarter of 1999 and
incorporated herein by reference.)
10.262* - Employment and Change of Control Agreement dated August
25, 1999 between R&B Falcon Corporation and Wayne K.
Hillin. (Filed as Exhibit 10.17 to R&B Falcon's Quarterly
Report on Form 10-Q for the Third Quarter of 1999 and
incorporated herein by reference.)
10.263* - Employment and Change of Control Agreement dated August
25, 1999 between R&B Falcon Corporation and Andrew
Bakonyi. (Filed as Exhibit 10.18 to R&B Falcon's Quarterly
Report on Form 10-Q for the Third Quarter of 1999 and
incorporated herein by reference.)
10.264* - Employment and change of Control Agreement dated August
25, 1999 between R&B Falcon Corporation and Tim W. Nagle.
10.265 - Purchase Agreement dated March 19, 1999 among R&B Falcon
Corporation and Donaldson, Lufkin & Jenrette Securities
Corporation, with respect to $400,000,000 11% Senior
Secured Notes due 2006 and $400,000,000 11 3/8% Senior
Secured Notes due 2009. (Filed as Exhibit 10.1 to R&B
Falcon's Registration Statement No. 333-79245 on Form S-4
dated May 25, 1999 and incorporated herein by reference.)
10.266 - Issuer Loan Escrow Agreement dated March 26, 1999 among
United States Trust Company of New York, R&B Falcon
Corporation and RBF Finance Co. (Filed as Exhibit 10.2 to
R&B Falcon's Registration Statement No. 333-79363 on Form
S-4 dated May 26, 1999 and incorporated herein by
reference.)
10.267 - Senior Secured Note Escrow Agreement dated March 26, 1999
among United States Trust Company of New York and RBF
Finance Co. (Filed as Exhibit 10.3 to R&B Falcon's
Registration Statement No. 333-79363 on Form S-4 dated May
26, 1999 and incorporated herein by reference.)
10.268 - Security Agreement dated as of March 26, 1999 from R&B
Falcon Corporation to RBF Finance Co. (Deepwater
Millenium). (Filed as Exhibit 10.14 to R&B Falcon's
Registration Statement No. 333-79363 on Form S-4 dated May
26, 1999 and incorporated herein by reference.)
10.269 - Security Agreement dated as of March 26, 1999 from R&B
Falcon Corporation to RBF Finance Co. (Deepwater IV).
(Filed as Exhibit 10.15 to R&B Falcon's Registration
Statement No. 333-79363 on Form S-4 dated May 26, 1999 and
incorporated herein by reference.)
10.270 - Senior Secured Note Security and Pledge Agreement dated as
of March 26, 1999 by RBF Finance Co. in favor of United
States Trust Company. (Filed as Exhibit 10.16 to R&B
Falcon's Registration Statement No. 333-79363 on Form S-4
dated May 26, 1999 and incorporated herein by reference.)
10.271 - First Preferred Ship Mortgage made March 26, 1999 by R&B
Falcon Corporation and RBF Finance Co. (Peregrine IV).
(Filed as Exhibit 10.17 to R&B Falcon's Registration
Statement No. 333-79363 on Form S-4 dated May 26, 1999 and
incorporated herein by reference.)
10.272 - First Preferred Ship Mortgage made March 26, 1999 by R&B
Falcon Corporation and RBF Finance Co. (Peregrine VII).
(Filed as Exhibit 10.18 to R&B Falcon's Registration
Statement No. 333-79363 on Form S-4 dated May 26, 1999 and
incorporated herein by reference.)
10.273 - First Preferred Ship Mortgage made March 26, 1999 by R&B
Falcon Corporation and RBF Finance Co. (Falcon 100).
(Filed as Exhibit 10.19 to R&B Falcon's Registration
Statement No. 333-79363 on Form S-4 dated May 26, 1999 and
incorporated herein by reference.)
10.274 - Deed of Covenants dated March 26, 1999 by and between R&B
Falcon Corporation and R&B Finance Co. (Peregrine I).
(Filed as Exhibit 10.20 to R&B Falcon's Registration
Statement No. 333-79363 on Form S-4 dated May 26, 1999 and
incorporated herein by reference.)
10.275 - Deed of Covenants dated March 26, 1999 by and between R&B
Falcon Corporation and R&B Finance Co. (Peregrine II).
(Filed as Exhibit 10.21 to R&B Falcon's Registration
Statement No. 333-79363 on Form S-4 dated May 26, 1999 and
incorporated herein by reference.)
10.276 - First Naval Mortgage dated April 12, 1999 by R&B Falcon
Corporation to R&B Finance Co. (Harvey Ward). (Filed as
Exhibit 10.22 to R&B Falcon's Registration Statement No.
333-79363 on Form S-4 dated May 26, 1999 and incorporated
herein by reference.)
10.277 - First Naval Mortgage dated April 12, 1999 by R&B Falcon
Corporation to R&B Finance Co. (W.D. Kent). (Filed as
Exhibit 10.23 to R&B Falcon's Registration Statement No.
333-79363 on Form S-4 dated May 26, 1999 and incorporated
herein by reference.)
10.278 - First Preferred Ship Mortgage made March 26, 1999 by R&B
Falcon Corporation and R&B Finance Co. (Falrig 82). (Filed
as Exhibit 10.24 to R&B Falcon's Registration Statement
No. 333-79363 on Form S-4 dated May 26, 1999 and
incorporated herein by reference.)
10.279 - Purchase Agreement dated April 15, 1999 among R&B Falcon
Corporation and Donaldson, Lufkin & Jenrette Securities
Corporation with respect to 300,000 shares of 13 7/8%
Senior Cumulative Redeemable Preferred Stock and Warrants
to Purchase 10,500,000 shares of Common Stock. (Filed as
Exhibit 10.1 to R&B Falcon's Registration Statement No.
333-81179 on Form S-4 dated June 21, 1999 and incorporated
herein by reference.)
10.280* - 1999 Employee Long-Term Incentive Plan of R&B Falcon
Corporation. (Filed as Exhibit 99.A to R&B Falcon's Proxy
Statement dated April 13, 1999 and incorporated herein by
reference.)
10.281* - 1999 Director Long-Term Incentive Plan of R&B Falcon
Corporation. (Filed as Exhibit 99.B to R&B Falcon's Proxy
Statement dated April 13, 1999 and incorporated herein by
reference.)
10.282* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Paul B. Loyd, Jr. under R&B
Falcon Corporation 1997 Employee Long-Term Incentive Plan.
10.283* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Steven A. Webster under R&B
Falcon Corporation 1997 Employee Long-Term Incentive Plan.
10.284* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Andrew Bakonyi under R&B Falcon
Corporation 1995 Employee Long-Term Incentive Plan.
10.285* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Tim W. Nagle under R&B Falcon
Corporation 1995 Employee Long-Term Incentive Plan.
10.286* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Robert F. Fulton under R&B
Falcon Corporation 1997 Employee Long-Term Incentive Plan.
10.287* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Bernie Stewart under R&B Falcon
Corporation 1997 Employee Long-Term Incentive Plan.
10.288* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Charles R. Ofner under R&B
Falcon Corporation 1997 Employee Long-Term Incentive Plan.
10.289* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Leighton Moss under R&B Falcon
Corporation 1997 Employee Long-Term Incentive Plan.
10.290* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Wayne K. Hillin under R&B
Falcon Corporation 1997 Employee Long-Term Incentive Plan.
10.291* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and P. Chatterjee under R&B Falcon
Corporation 1998 Director Long-Term Incentive Plan.
10.292* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Arnie F. Chavkin under R&B
Falcon Corporation 1995 Director Long-Term Incentive Plan.
10.293* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Charles A. Donabedian under R&B
Falcon Corporation 1998 Director Long-Term Incentive Plan.
10.294* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Douglas A. P. Hamilton under
R&B Falcon Corporation 1998 Director Long-Term Incentive
Plan.
10.295* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Macko Laqueur under R&B Falcon
Corporation 1995 Director Long-Term Incentive Plan.
10.296* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Michael E. Porter under R&B
Falcon Corporation 1998 Director Long-Term Incentive Plan.
10.297* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Robert L. Sandmeyer under R&B
Falcon Corporation 1998 Director Long-Term Incentive Plan.
10.298* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and Robert L. Sandmeyer under R&B
Falcon Corporation 1995 Director Long-Term Incentive Plan.
10.299* - Stock Option Agreement dated as of April 7, 1999 between
R&B Falcon Corporation and William R. Ziegler under R&B
Falcon Corporation 1998 Director Long-Term Incentive Plan.
10.300* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and Paul B. Loyd, Jr. under R&B
Falcon Corporation 1999 Employee Long-Term Incentive Plan.
10.301* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and Steven A. Webster under R&B
Falcon Corporation 1999 Employee Long-Term Incentive Plan.
10.302* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and Andrew Bakonyi under R&B Falcon
Corporation 1999 Employee Long-Term Incentive Plan.
10.303* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and Tim W. Nagle under R&B Falcon
Corporation 1999 Employee Long-Term Incentive Plan.
10.304* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and Robert F. Fulton under R&B
Falcon Corporation 1999 Employee Long-Term Incentive Plan.
10.305* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and Bernie Stewart under R&B Falcon
Corporation 1999 Employee Long-Term Incentive Plan.
10.306* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and Charles R. Ofner under R&B
Falcon Corporation 1999 Employee Long-Term Incentive Plan.
10.307* - Stock Option Agreement dated as of May19, 1999 between R&B
Falcon Corporation and Leighton Moss under R&B Falcon
Corporation 1999 Employee Long-Term Incentive Plan.
10.308* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and Wayne K. Hillin under R&B
Falcon Corporation 1999 Employee Long-Term Incentive Plan.
10.309* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and P. Chatterjee under R&B Falcon
Corporation 1999 Director Long-Term Incentive Plan.
10.310* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and Arnie F. Chavkin under R&B
Falcon Corporation 1999 Director Long-Term Incentive Plan.
10.311* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and Charles A. Donabedian under R&B
Falcon Corporation 1999 Director Long-Term Incentive Plan.
10.312* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and Douglas A. P. Hamilton under
R&B Falcon Corporation 1999 Director Long-Term Incentive
Plan.
10.313* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and Macko Laqueur under R&B Falcon
Corporation 1999 Director Long-Term Incentive Plan.
10.314* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and Michael E. Porter under R&B
Falcon Corporation 1999 Director Long-Term Incentive Plan.
10.315* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and Robert L. Sandmeyer under R&B
Falcon Corporation 1999 Director Long-Term Incentive Plan.
10.316* - Stock Option Agreement dated as of May 19, 1999 between
R&B Falcon Corporation and William R. Ziegler under R&B
Falcon Corporation 1999 Director Long-Term Incentive Plan.
10.317 - Performance Bond dated January 31, 2000 from Travelers
Casualty and Surety Company of America and American Home
Assurance Company, RBF Exploration II Inc., as principal
unto BTM Capital Corporation and Chase Bank of Texas,
National Association, as trustee.
10.318 - Indemnity Agreement dated as of January 31, 2000 from R&B
Falcon Corporation and RBF Exploration II Inc. in favor of
Travelers Casualty and Surety Company of America and
American Home Assurance Company.
10.319 - First Naval Mortgage dated February 2, 2000 made by BTM
Capital Corporation in favor of Chase Bank of Texas,
National Association., as indenture trustee.
10.320 - Construction Supervisory Agreement dated as of February 1,
2000 among BTM Capital Corporation, RBF Exploration Co.
and RBF Exploration II Inc.
10.321 - Equipment Sale and Funding Agreement dated 1 February 2000
between RBF Exploration Co. and BTM Capital Corporation.
10.322 - Novation Agreement dated 1 February 2000 among Hyundai
Corporation, Hyundai Heavy Industries Co., Ltd., RBF
Exploration Co. and BTM Capital Corporation.
10.323 - Acknowledgment of Rig Ownership and Ratification of
Operation and Maintenance Agreement dated as of February
1, 2000 among R&B Falcon Corporation, RBF Exploration Co.
and BTM Capital Corporation.
10.324 - Performance Guarantee dated as of February 1, 2000 made by
R&B Falcon Corporation in favor of RBF Exploration Co.,
BTM Capital Corporation, Travelers Casualty and Surety
Company of America, American Home Assurance Company and
Chase Bank of Texas, National Association, as indenture
trustee.
10.325 - Bill of Sale dated February 1, 2000 from RBF Exploration
Co. to BTM Capital Corporation.
10.326 - Acknowledgment of Independent Transaction dated as of
February 1, 2000 among RBF Exploration Co., BTM Capital
Corporation, Chase Bank of Texas, National Association, as
trustee, Victory Receivables Corporation, Anchor National
Life Insurance Company, First SunAmerica Life Insurance
Company and Parthenon Receivables Funding, L.L.C.
21 - Schedule of Subsidiaries of the Company
23 - Consent of Arthur Andersen LLP
27 - Financial Data Schedule. (Exhibit 27 is being submitted
as an exhibit only in the electronic format of this Annual
Report on Form 10-K being submitted to the Securities and
Exchange Commission.)
99 - Annual Report on Form 11-K with respect to R&B Falcon U.S.
Savings Plan. (To be filed by amendment to the Annual
Report on Form 10-K.)
Instruments with respect to certain long-term obligations
of the Company are not being filed as exhibits hereto as the
securities authorized thereunder do not exceed 10% of the
Company's total assets. The Company agrees to furnish a copy
of each such instrument to the Securities and Exchange
Commission upon its request.
*Management contract or compensatory plan or arrangement
required to be filed as an exhibit pursuant to the
requirements of Item 14(c) of Form 10-K.
(b) Reports on Form 8-K
There were no Current Reports on Form 8-K filed during the
three months ended December 31, 1999.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 on March
13, 2000.
R&B FALCON CORPORATION
By /s/ Paul B. Loyd, Jr.
------------------------------
Paul B. Loyd, Jr.
Chief Executive Officer,
Chairman of the Board and Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant in the capacities indicated on March 13, 2000.
By /s/ Paul B. Loyd, Jr. By /s/ Tim W. Nagle
----------------------------- ---------------------------
Paul B. Loyd, Jr. Tim W. Nagle
Chief Executive Officer, Chairman Executive Vice President and
of the Board and Director Chief Financial Officer
By By /s/ Michael E. Porter
----------------------------- ---------------------------
Purnendu Chatterjee Michael E. Porter
Director Director
By /s/ Arnold L. Chavkin By /s/ Robert L. Sandmeyer
----------------------------- ---------------------------
Arnold L. Chavkin Robert L. Sandmeyer
Director Director
By /s/ Charles A. Donabedian By /s/ Douglas E. Swanson
----------------------------- ---------------------------
Charles A. Donabedian Douglas E. Swanson
Director Director
By By /s/ Steven A. Webster
----------------------------- ---------------------------
Douglas A. P. Hamilton Steven A. Webster
Director Director
By By /s/ William R. Ziegler
----------------------------- ---------------------------
Macko A. E. Laqueur William R. Ziegler
Director Director
By /s/ Rich A. Pattarozzi
------------------------------
Rich A. Pattarozzi
Director
EXHIBIT 10.246
FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT
This First Amendment to Note Purchase Agreement (this "First
Amendment") is made and entered into as of this 1st day of February, 2000
between RBF EXPLORATION CO., a Nevada corporation (the "Company") and the
PURCHASER which is a signatory hereto (the "Purchaser").
In consideration of the mutual covenants and agreements herein
contained and subject to the satisfaction of the conditions set out in
Article 3 below, the Purchaser and the Company agree that the Note Purchase
Agreement, as hereinafter defined, pursuant to Section 9.1 thereof (with
the consent of Chase Bank of Texas, National Association, as Trustee,
Travelers Casualty and Surety Company of America, a Connecticut
corporation, and American Home Assurance Company, a New York corporation),
is hereby amended as follows:
ARTICLE 1
Section 1.01 Specific Terms Defined . As used in this First
Amendment, the term "Note Purchase Agreement" shall mean the Note Purchase
Agreement (Deepwater Nautilus) dated as of August 12, 1999 among the
Company and the Purchaser, as the same may from time to time be further
amended, modified or supplemented, and the term "Transaction Documents"
shall have the meaning set forth in the Supplemental Indenture.
Section 1.02 Other Terms Defined . Capitalized terms used, but not
defined, in this First Amendment shall have the same meaning as set forth
in the Note Purchase Agreement.
Section 1.03 Amended Definitions. The following definitions
contained in Schedule B of the Note Purchase Agreement are hereby amended
and restated in its entirety to read as follows:
"First Preferred Ship Mortgage" means the First Naval Mortgage of the
Drilling Rig, in the form of Exhibit A to the First Amendment, to be dated
on the Rig Acceptance Date, from the Independent Owner to the Trustee.
"Rig Acceptance Date" means the date the Drilling Rig is accepted for
delivery by the Independent Owner pursuant to the Construction Contract.
Section 1.04 Deleted Definitions. The following definition is
deleted from Schedule B of the Note Purchase Agreement:
"Majority Holders" shall have the meaning set forth in the Trust
Indenture.
Section 1.05 New Definitions . The following definitions are added
to Schedule B of the Note Purchase Agreement:
"First Amendment" means the First Amendment to Note Purchase Agreement
between the Company and the Purchaser thereto dated as of February 1, 2000.
"Independent Owner" shall have the meaning set forth in the
Supplemental Indenture.
"Supplemental Indenture" means the Supplemental Indenture and
Amendment dated as of February 1, 2000 among the Company, the Independent
Owner and the Trustee.
ARTICLE 2
Section 2.01 Representations and Warranties. Section 5.25(b) of the
Note Purchase Agreement is hereby deleted in its entirety and replaced with
the following Section 5.25(b):
"On the Rig Acceptance Date, (a) the Drilling Rig will
be provisionally registered in the name of the Independent Owner
under the laws of the Republic of Panama, and no other filing,
recordation or registration of any other document or instrument
will be necessary in order to establish the Independent Owner's
good and valid title to the Drilling Rig; provided that, within
six months of the Rig Acceptance Date, title to the Drilling Rig
must be permanently registered in the Public Registry Office of
the Republic of Panama and (b) all filings necessary or desirable
to perfect the first Lien and security interest of the Trustee
under the Trust Indenture and the First Preferred Ship Mortgage
in the Trust Estate as against creditors of and purchasers from
the Independent Owner will have been duly made, and the Trust
Indenture and the First Preferred Ship Mortgage will create valid
and perfected first priority liens and security interests in the
Trust Estate, effective as against creditors of and purchasers
from the Independent Owner, securing all obligations secured
thereby; provided that within six months of the Rig Acceptance
Date, such ship mortgage must be permanently registered at the
Public Registry Office of the Republic of Panama."
ARTICLE 3
Section 3.01 Conditions . This First Amendment shall be effective
as against the Purchaser upon receipt by the Trustee of the following
documents and the satisfaction of the other conditions provided in this
Section 3.01, each of which shall be reasonably satisfactory to the
Purchaser in form and substance:
(A) Representations and Warranties.
The representations and warranties of each of the RBF Parties and
of the Independent Owner in Article 5 of the Note Purchase Agreement
(except for Sections 5.13 and 5.14 thereof) and the other Transaction
Documents are correct in all material respects and are true and
correct as if made on the date hereof.
(B) Performance; No Default .
Each of the RBF Parties and the Independent Owner shall have
performed and complied with and shall continue to be in compliance
with all agreements and conditions contained in this First Amendment,
the Supplemental Indenture, any other Transaction Documents, the Note
Purchase Agreement, the Trust Indenture and the other Project
Documents, as amended, required to be performed or complied with by
the date hereof and no Indenture Default or Indenture Event of Default
shall have occurred and be continuing.
(C) The Parent .
(i) The Transaction Documents shall have been executed by
all parties thereto and delivered to the Trustee, with a copy to
the Purchaser, each of which shall be in full force and effect.
(ii) The Parent shall have executed and delivered to the
Trustee, the Sureties and the Purchaser a letter certifying that
since June 30, 1999, there has been no change in the financial
condition, operations, business or properties of the Parent and
its Subsidiaries except changes that individually or in the
aggregate would not reasonably be expected to have a Material
Adverse Effect.
(D) Compliance Certificates .
(i) The Company shall have delivered to the Purchaser, the
Sureties and the Trustee an Officer's Certificate dated as of the
date hereof certifying that the conditions specified in this
Article 3 have been fulfilled.
(ii) The Parent shall have delivered to the Purchaser, the
Sureties and the Trustee an Officer's Certificate dated as of the
date hereof certifying that the conditions specified in this
Article 3 with respect to it have been fulfilled.
(iii) Each of the RBF Parties and the Independent Owner
shall have delivered to the Purchaser, the Sureties and the
Trustee (a) a certified copy of its certificate of incorporation
or articles of association, (b) a certificate of its secretary or
an assistant secretary certifying (1) the absence of any
amendments to its certificate of incorporation or articles of
association since the date of such certified copy, (2) its
bylaws, (3) the due adoption or approval by its board of
directors of resolutions attached to such certificate relating to
the transactions contemplated hereby and (4) the incumbency of
each of its officers who has executed any of the Project
Documents, and (c) a good standing certificate from its state of
incorporation.
(iv) The Trustee shall have delivered to the Purchaser a
certificate of its vice president, secretary or an assistant
secretary certifying (a) as to resolutions or other authority to
act as Trustee and (b) the incumbency of each of its officers who
has executed any of the Project Documents.
(E) Opinions of Counsel .
The Purchaser shall have received an opinion dated as of the date
hereof (i) from Gardere Wynne Sewell & Riggs, L.L.P., counsel for the
RBF Parties substantially in the form of Exhibit B hereto, (ii) from
Arias, Fabrega & Fabrega, Panamanian counsel for the RBF Parties
substantially in the form of Exhibit C hereto, (iii) from the general
counsel and internal counsel for each of the Sureties substantially in
the form of Exhibit D hereto, (iv) from senior internal counsel for
the Independent Owner substantially in the form of Exhibit E hereto
and (v) from Dewey Ballantine, outside counsel to the Independent
Owner, in the form of Exhibit F hereto.
(F) Payment of Special Counsel Fees .
The Company shall have paid on or before the date hereof the
reasonable fees, charges and disbursements of special counsel to each
of the holders of the Class A1 Notes, Class A2 Notes, Credit Support
Parties and Trustees; provided that the holders of the Class A1 Notes
shall all use the same counsel, the holders of the Class A2 Notes
shall all use the same counsel, the Credit Support Parties shall all
use the same counsel and the Trustees shall use the same counsel, and
to the extent reflected in a statement of each such counsel rendered
to the Company at least one Business Day prior to the date hereof.
(G) Proceedings and Documents .
All corporate and other proceedings in connection with the
transactions contemplated by this First Amendment and all other
Transaction Documents and instruments incident to such Transaction
Documents shall be reasonably satisfactory to the Purchaser and the
Purchaser's special counsel, and the Purchaser and the Purchaser's
special counsel shall have received all such counterpart originals or
certified or other copies of such documents as the Purchaser or they
may reasonably request.
(H) Notes - Rating
Standard and Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc. ("S&P") shall have reaffirmed, giving effect to
the Transaction Documents, its AA rating of the Class A1 Notes, and
Duff & Phelps Credit Rating Co. (together with S&P, the "Rating
Agencies") shall have reaffirmed, giving effect to the Transaction
Documents, its AA rating of the Class A1 Notes and its BBB+ rating of
the Class A2 Notes.
(I) Insurance
The Company shall have delivered to the Purchaser, the Sureties,
the Rating Agencies and the Trustee evidence of insurance as required
by the First Preferred Ship Mortgage and the Construction Supervisory
Agreement, as appropriate.
(J) Filing of Mortgage
The Company shall have delivered to the Purchaser, the Sureties,
the Rating Agencies and the Trustee confirmation certificates
evidencing the provisional filing of the First Preferred Ship Mortgage
with the Public Registry of the Republic of Panama.
(K) Documentation
The Company shall have delivered to the Purchaser, the Sureties,
the Rating Agencies and the Trustee evidence that the provisional
patente has been issued by the Republic of Panama documenting the
Drilling Rig in the name of the Independent Owner.
(L) Consent of Liquidity Providers
The Purchaser shall have received written consent from the
liquidity providers (to the extent such consent is required by the
Liquidity Documents) to the execution and delivery of this First
Amendment, any other document referred to herein or contemplated
hereby and any amendment, supplement or novation of any of the Project
Documents; with such consent to be in form and substance satisfactory
to the Purchasers and their counsel.
ARTICLE 4
Section 4.01 Amended Agreement . Except as specifically amended
above, the Note Purchase Agreement shall remain in full force and effect in
accordance with its terms following the effectiveness of this First
Amendment. The Company hereby ratifies and affirms its obligations and
continued liability under the Note Purchase Agreement, the Trust Indenture
and the Notes.
Section 4.02 Governing Law. THIS FIRST AMENDMENT (INCLUDING, BUT
NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
OTHER THAN CONFLICT OF LAWS RULES THEREOF THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
Section 4.03 Counterparts . The parties may sign any number of
copies of this First Amendment. Each signed copy shall be an original, but
all of such executed copies together shall represent the same agreement.
[signature pages follow]
IN WITNESS WHEREOF, the following parties hereto have caused this
First Amendment to be duly executed as of the date first above mentioned,
and by such execution, the Purchaser consents, to the extent required by
any of the Project Documents, to the amendment of such Project Document in
connection with this First Amendment.
COMPANY:
RBF EXPLORATION CO.
By:________________________
Name:
Title:
PURCHASER:
VICTORY RECEIVABLES CORPORATION
By:________________________
Name:
Title:
IN WITNESS WHEREOF, the following parties hereto have caused this
First Amendment to be duly executed as of the date first above mentioned,
and by such execution, the Purchaser consents, to the extent required by
any of the Project Documents, to the amendment of such Project Document in
connection with this First Amendment.
COMPANY:
RBF EXPLORATION CO.
By:________________________
Name:
Title:
PURCHASER:
ANCHOR NATIONAL LIFE INSURANCE COMPANY
By:________________________
Christopher F. Ochs
Authorized Agent
IN WITNESS WHEREOF, the following parties hereto have caused this
First Amendment to be duly executed as of the date first above mentioned,
and by such execution, the Purchaser consents, to the extent required by
any of the Project Documents, to the amendment of such Project Document in
connection with this First Amendment.
COMPANY:
RBF EXPLORATION CO.
By:________________________
Name:
Title:
PURCHASER:
FIRST SUNAMERICA LIFE INSURANCE COMPANY
By:________________________
Christopher F. Ochs
Authorized Agent
IN WITNESS WHEREOF, the following parties hereto have caused this
First Amendment to be duly executed as of the date first above mentioned,
and by such execution, the Purchaser consents, to the extent required by
any of the Project Documents, to the amendment of such Project Document in
connection with this First Amendment.
COMPANY:
RBF EXPLORATION CO.
By:________________________
Name:
Title:
PURCHASER:
PARTHENON RECEIVABLES FUNDING, LLC
By: Parthenon Receivables Funding
Corporation, its sole member
By:________________________
Name:
Title:
EXHIBIT 10.251
===========================================================================
RBF EXPLORATION CO.
________________________________________
$200,000,000 SENIOR SECURED CLASS A1 NOTES
$50,000,000 SENIOR SECURED CLASS A2 NOTES
________________________________________
___________________
SUPPLEMENTAL INDENTURE
AND AMENDMENT
DATED AS OF February 1, 2000
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
Trustee
___________________
===========================================================================
This SUPPLEMENTAL INDENTURE AND AMENDMENT, dated as of February 1,
2000, is among RBF Exploration Co., a Nevada corporation (the "Issuer"),
BTM Capital Corporation, a Delaware corporation (the "Independent Owner")
and Chase Bank of Texas, National Association, as Trustee (the "Trustee").
RECITALS
WHEREAS, the Issuer and the Trustee entered into a Trust Indenture and
Security Agreement, dated as of August 12, 1999 (the "Indenture"), pursuant
to which the Issuer has originally issued $200,000,000 in principal amount
of Senior Secured Class A1 Notes and $50,000,000 in principal amount of
Senior Secured Class A2 Notes (collectively, the "Notes") to the Note
Holders (as defined in the Indenture); and
WHEREAS, Section 13.8 of the Indenture provides that the Issuer and
the Trustee may amend or supplement the Indenture subject to the provisions
of Article 11 thereof; and
WHEREAS, the Issuer and the Independent Owner contemporaneously with
the execution hereof have entered into that certain Equipment Sale and
Funding Agreement of even date herewith (the "Sale and Funding Agreement")
pursuant to which Issuer conveyed certain property and equipment to the
Independent Owner and entered into related financing arrangements; and
WHEREAS, the Issuer, Hyundai Corporation and Hyundai Heavy Industries
Co., Ltd. (collectively "Hyundai") entered into that certain Contract for
Construction and Sale of Vessel (Hull No. HRBS6) (and also described by the
Issuer as RBS-8M and to be named the Deepwater Nautilus) dated November 14,
1997 (the "Construction Contract"), and whereas the Issuer, the Independent
Owner and Hyundai contemporaneously with the execution hereof have entered
into that certain Novation Agreement (the "Novation Agreement") of even
date herewith (the Construction Contract, as modified by such Novation
Agreement, being referred to as the "New Construction Contract"); and
WHEREAS, the Issuer and RBF Exploration II Inc., a Nevada corporation
("RBF II") entered into that certain Construction Supervisory Agreement
dated as of August 12, 1999 (the "Construction Supervisory Agreement"), and
whereas the Independent Owner, Issuer and RBF II contemporaneously with the
execution hereof have entered into that certain Construction Supervisory
Agreement of even date herewith (the "New Construction Supervisory
Agreement"); and
WHEREAS, R&B Falcon Corporation, a Delaware corporation ("Parent")
entered into that certain Performance Guarantee in favor of the Issuer, the
Sureties and the Trustee dated as of August 12, 1999 (the "Performance
Guarantee") and whereas contemporaneously with the execution hereof the
Parent has entered into that certain Performance Guarantee in favor of the
Issuer, the Independent Owner, the Sureties and the Trustee of even date
herewith (the "New Performance Guarantee"); and
WHEREAS, RBF II, Travelers Casualty and Surety Company of America and
American Home Assurance Company (both, the "Sureties") entered into that
certain Performance Bond dated August 18, 1999 (the "Original Performance
Bond"), and whereas in replacement of the Original Performance Bond, the
Independent Owner, RBF II, Trustee, Issuer and the Sureties have entered
into a new Performance Bond dated February 1, 2000 (the "New Performance
Bond"); and
WHEREAS, the Issuer entered into that certain Note Purchase Agreement
with the purchasers of notes identified therein dated as of August 12,
1999, and whereas contemporaneously with the execution hereof the Issuer
has entered into certain First Amendment to Note Purchase Agreements of
even date herewith (the "Amendment to Note Purchase Agreements"); and
WHEREAS, pursuant to Section 11.2 of the Indenture, the Note Holders
and the Sureties (as defined in the Indenture) have consented to the
Trustee entering into this Supplemental Indenture; and
WHEREAS, the Issuer and the Trustee now desire to amend and supplement
the Indenture to consent to and provide for the transactions above
described and to allow for and make the Independent Owner a party thereto;
NOW, THEREFORE, to comply with the provisions of the Indenture and in
consideration of the above premises, the Issuer, the Independent Owner and
the Trustee covenant and agree for the equal and proportionate benefit of
the respective Note Holders as follows:
ARTICLE 1
GENERAL
Section 1.01. This Supplemental Indenture is supplemental to the
Indenture and does and shall be deemed to form a part of, and shall be
construed in connection with and as part of, the Indenture for any and all
purposes. From this date, in accordance with Section 13.8 and Article 11
of the Indenture, and by executing this Supplemental Indenture, the parties
whose signatures appear below are subject to all of the provisions of the
Indenture and this Supplemental Indenture.
Section 1.02. This Supplemental Indenture shall become effective
immediately upon its execution and delivery by each of the Issuer, the
Independent Owner and the Trustee.
Section 1.03. Capitalized terms not otherwise defined herein shall
have the respective meaning ascribed thereto in the Indenture.
ARTICLE 2
TRUSTEE CONSENTS
Section 2.01. In accordance with the requirements of Section 8.3(c)
of the Indenture and with the consent of the Required Holders, the Trustee
hereby consents to the novation and replacement of the Construction
Contract with the New Construction Contract under the Indenture. As of the
date hereof, the Construction Contract, as defined in the Indenture, shall
be the New Construction Contract and the definition of Construction
Contract under the Indenture shall be replaced in its entirety with the
definition of New Construction Contract as defined above.
Section 2.02. In accordance with the requirements of Section
8.3(f)(ii) of the Indenture and at the direction of the Required Holders,
the Trustee hereby consents to the novation and replacement of (a) the
Construction Supervisory Agreement with the New Construction Supervisory
Agreement, (b) the Performance Guarantee with the New Performance Guarantee
and (c) the Performance Bond with the New Performance Bond. As of the date
hereof, the Construction Supervisory Agreement, Performance Guarantee and
Performance Bond, as defined in the Indenture, shall be respectively the
New Construction Supervisory Agreement, the New Performance Guarantee and
New Performance Bond and the definition of Construction Supervisory
Agreement, Performance Guarantee and Performance Bond under the Indenture
shall be replaced in their entirety with the definition of New Construction
Supervisory Agreement, New Performance Guarantee and New Performance Bond
as defined above respectively.
Section 2.03. The Trustee does hereby
(a) release the security interest and lien granted by the Issuer
under the Indenture upon the Equipment (as defined in the Sale and
Funding Agreement) in consideration for this simultaneous grant by the
Independent Owner pursuant to Article 3 hereof of a security interest
and lien upon the same Equipment, provided that this clause (a) does
not constitute a release of the security interest and lien granted by
the Issuer under the Indenture upon any other part of the Trust
Estate;
(b) consent to the execution and delivery of the Sale and
Funding Agreement and the Amendment to Note Purchase Agreements; and
(c) consent to the exercise by the Independent Owner of its
rights under clause 10 (Put Option) of the Sale and Funding Agreement
(the "Put Option") to sell the Drilling Rig and Equipment, subject to
the security interest granted by the Independent Owner in favor of the
Indenture Trustee in Article 3 hereof and the First Preferred Ship
Mortgage granted by the Independent Owner in favor of the Indenture
Trustee and the terms and conditions of such section; provided that at
the time of such transfer, the Trustee is furnished with the
following, in form and substance satisfactory to the Trustee and the
Rating Agencies:
(i) an assumption of the First Preferred Ship Mortgage or the
execution and delivery of a new mortgage executed by the
purchaser under the Put Option in substantially the same
form as the First Preferred Ship Mortgage,
(ii) (x) an amendment to the Indenture pursuant to which the
purchaser under the Put Option grants to the Trustee a
security interest in the Equipment on substantially the
same terms as the security interest granted under the
Indenture on the date hereof together with appropriate
financing statements to properly perfect such security
interest and (y) if at the time of such transfer, the New
Performance Bond is still outstanding, a substitute
Performance Bond in substantially the same form as the New
Performance Bond;
(iii) appropriate UCC searches establishing that the security
interest granted under (ii) above is first priority,
(iv) opinions of counsel for the Issuer and, as appropriate,
the Sureties, satisfactory to the Trustee and the Rating
Agencies with respect to the documents provided under
clauses (i) and (ii) above in substantially the same form
as the opinions delivered by Gardere, Wynne, Sewell &
Riggs L.L.P., Arias, Fabrega & Fabrega and the Sureties'
counsel pursuant to Section 3.01(E) of the Amendment to
Note Purchase Agreements, and
(v) a certificate or certificates from appropriate insurance
brokers that all required insurance remains in full force
and effect with the purchaser under the Put Option as the
new owner of the Drilling Rig and Equipment.
Section 2.04. The Trustee hereby consents, to the extent required by
the Indenture, to the execution and delivery of any other documents
incidental to or required by the documents described in Sections 2.01, 2.02
and 2.03 hereof (all of such documents including, without limitation, the
documents described in Sections 2.01, 2.02 and 2.03 hereof and any Project
Document, together with this Supplemental Indenture, in each case as any of
the foregoing items may be amended, supplemented or modified from time to
time , the "Transaction Documents").
ARTICLE 3
INDEPENDENT OWNER SECURITY INTEREST
Section 3.01. To secure the prompt and complete payment of the
principal of, and interest and any applicable Make-Whole Amount on, all of
the Notes issued and delivered and Outstanding, the payment of all other
sums owing under the Indenture and under all other Project Documents (the
"Project Indebtedness") and the performance of the covenants contained in
the Indenture and in all other Project Documents, and in consideration of
the premises and of the covenants contained herein and the sum of One
Dollar ($1.00) paid by the Trustee to the Independent Owner at or before
the delivery hereof, the receipt and sufficiency whereof are hereby
acknowledged, the Independent Owner has hereby granted, bargained, sold,
conveyed, assigned, transferred, mortgaged, affected, pledged, set over,
confirmed, granted a continuing security interest in, and hypothecated and
does hereby grant, bargain, sell, convey, assign, transfer, mortgage,
affect, pledge, set over, confirm, grant a continuing security interest to
the Trustee and to any co-trustee or separate trustee hereafter acting
pursuant to the Indenture, and to their respective successors and assigns
in trust forever (subject to Section 12.1 of the Indenture), all of its
right, title and interest in, to and under the following described
Properties whether now owned, existing or hereafter acquired or arising
(all of such Properties, including without limitation all properties
hereafter specifically subjected to the liens of the Indenture by any
indenture supplemental thereto to which the Independent Owner has consented
in writing, being hereinafter collectively referred to as the "Additional
Trust Estate"):
(a) the Equipment and the Drilling Rig;
(b) all payments under and all accounts and General Intangibles
generated from or arising out of the New Construction Contract, the
New Construction Supervisory Agreement, the New Performance Guarantee,
the Operation and Maintenance Agreement, the Sale and Funding
Agreement and the New Performance Bond together with any amendments or
modifications to any of the foregoing, excluding the rights of the
Independent Owner and any other BTM Indemnitee to be indemnified as
provided under Article VII of the New Construction Supervisory
Agreement and to the extent it stands behind such indemnity, the New
Performance Guarantee (provided such exclusion does not impair the
rights of the Trustee or other parties now or hereafter entitled to
the benefits of such indemnity and the New Performance Guarantee), and
the right of the Independent Owner to exercise the Put Option as
provided by Section 2.03(c) above (provided the grant of this security
interest shall not prevent the Independent Owner from enforcing the
obligations of the Construction Supervisor (and the corresponding
obligations under the New Performance Guarantee) under Section 2.5(x)
or (y) of the Construction Supervisory Agreement);
(c) any insurance proceeds (other than insurance proceeds
payable to the Independent Owner under liability policies for tort,
environmental and similar liabilities), condemnation proceeds and the
accounts, issues, profits, products, revenues and other income of and
from the Drilling Rig and/or the Equipment and all the estate, right,
title and interest of every nature whatsoever of the Independent Owner
in and to the same and every part thereof; and
(d) all proceeds and products of any of the foregoing.
This security interest is granted under and pursuant to the Indenture
and all of the Additional Trust Estate is and shall be considered a part of
the Collateral and the Trust Estate under and pursuant to the Indenture and
this Supplemental Indenture for all intents and purposes. Subject to the
provisions of Section 4.02 and Article 6 hereof, all of the terms and
conditions of the Indenture with respect to the Collateral and the Trust
Estate shall apply to the Additional Trust Estate. Specifically and in
this connection the provisions of Sections 7.4 through and including 7.12
apply to the Additional Trust Estate and, subject to the terms and
provisions of Article 6 hereof, the provisions of such Sections with
respect to the "Issuer" apply equally to the Independent Owner.
ARTICLE 4
INDEPENDENT OWNER COVENANTS
Section 4.01. Notwithstanding any of the foregoing consents or any
other terms hereof, the Independent Owner covenants and agrees that it will
not assign or transfer any of its rights or obligations under any of the
Transaction Documents and it will not assign or transfer the ownership of
any interest in the Property that is part of the Additional Trust Estate
(including, without limitation, any interest in the Drilling Rig) to any
other Person (including, without limitation, any transfer pursuant to
clause 8 or clause 10.3 of the Novation Agreement or clause 9 of the Sale
and Funding Agreement) without (i) the prior express written consent of the
Note Holders and (ii) prior written notice to each Rating Agency; provided,
however, the Independent Owner shall have the right, without consent of the
Note Holders or the Trustee, to exercise the Put Option as provided by
Section 2.03(c) above.
Section 4.02. Subject to the terms and provisions of Article 6
hereof, the Independent Owner covenants and agrees that until payment is
made in full of all of the Notes and all other amounts payable by the
Issuer under the Indenture or secured thereby, the Independent Owner shall:
(a) comply with and perform the following:
A. The Independent Owner will promptly give the Trustee
and the Sureties notice of any litigation or proceeding
against or adversely affecting the Additional Trust
Estate or any part thereof (including, without
limitation, any attachment, arrest, levy or other
detention of the Drilling Rig) and of all claims,
judgments, Liens or other encumbrances affecting the
Additional Trust Estate if the aggregate value of such
claims, judgments, Liens or other encumbrances
affecting such Property shall exceed $1,000,000, of
which a Responsible Officer of the Independent Owner
has actual knowledge.
B. The Independent Owner will promptly notify the Trustee
in writing of any threatened action, investigation or
inquiry by any Governmental Authority of which a
Responsible Officer of the Independent Owner has actual
knowledge in connection with any Environmental Laws
with respect to the maintenance, use or operation of
the Drilling Rig, excluding routine testing,
inspections and corrective action.
C. Provided the Independent Owner is provided with notice,
documents and instruments as provided in Section
6.01(a)(A) hereof, the Independent Owner will execute
such documents and instruments as required to promptly
cure any defects in the creation, execution and
delivery of any of the Transaction Documents to which
it is a party and all such other documents, agreements
(including, without limitation, account control
agreements) and instruments to comply with or
accomplish the covenants and agreements of the Issuer
or the Independent Owner in the Transaction Documents
or to further evidence or more fully describe the
Additional Trust Estate or to correct any omissions in
the Transaction Documents, or to state more fully the
security obligations set out herein or in any of the
other Transaction Documents, or to perfect, protect or
preserve any Liens created pursuant hereto or any of
the other Transaction Documents, or to make any
recordings or obtain any consents as may be necessary
or appropriate in connection therewith. Further, upon
being furnished with notice, documents and instruments,
from time to time, as provided in Section 6.01(a)(A)
hereof, the Independent Owner will promptly execute and
deliver or cause to be executed or delivered all
further instruments and documents and take all further
action that may be necessary or desirable or that the
Trustee may request in order to (a) perfect and protect
the Liens and other rights created or purported to be
created hereby and by the other Transaction Documents
and the first priority of such Liens and other rights;
(b) enable the Trustee to exercise and enforce its
rights and remedies hereunder in respect of the
Collateral; or (c) otherwise effect the purposes of the
Indenture, including, without limitation: executing and
filing such supplements to the Indenture and such
financing or continuation statements (or amendments
thereto) as may be necessary or desirable or that the
Trustee may reasonably request in order to perfect and
preserve the Liens created or purported to be created
hereby or thereby; and
D. The Independent Owner will not create, incur or suffer
to exist any Owner Lien upon any of the Trust Estate.
E. In the event any of the Trust Estate becomes subject to
any Owner Lien, it will promptly, at its expense, cause
such Owner Lien or Owner Liens to be completely
released, discharged and removed. Further, in
connection herewith in the event a Responsible Officer
of the Independent Owner has actual knowledge of any
event or circumstance, including without limitation,
any circumstance involving any Plan sponsored,
maintained or contributed to by the Independent Owner
or any ERISA Affiliate thereof, including, without
limitation, any ERISA Event with respect to the
Independent Owner or any ERISA Affiliate thereof which
event or circumstance could reasonably be expected to
cause an Owner Lien to attach to any of the Trust
Estate, it will give prompt notice thereof to the
Trustee. In the event an Owner Lien attaches to any
part of the Trust Estate and such Lien is not removed
by the Independent Owner as required by this clause E,
within 5 Business Days following receipt by the
Independent Owner of notice thereof from the Issuer or
the Indenture Trustee, the Issuer and the Indenture
Trustee shall each have the right to take all necessary
action to cause such Owner Lien to be removed and the
Independent Owner shall promptly reimburse the Issuer
and/or Trustee for all costs and expenses incurred by
them in connection with such action.
F. Solely with respect to the Additional Trust Estate in-
cluding, without limitation, the Drilling Rig, the
Construction Contract, Refundment Guaranty, Construct-
ion Supervisory Agreement, Performance Guaranty and
Performance Bond, the Independent Owner will comply
with and perform the covenants of the Issuer as if
references to the Issuer were references to the
Independent Owner under Sections 9.5, 9.7 and 9.11 of
the Indenture. For this purpose, the term "Issuer" in
Sections 9.5, 9.7 and 9.11 shall be deemed to mean
"Independent Owner".
G. The Independent Owner will comply with and perform the
covenants of the Issuer under Sections 9.12, 9.18,
9.19 and 9.20 of the Indenture as if the references
therein to the "Issuer" were references to the
"Independent Owner".
H. The Independent Owner will comply with and perform the
covenants of the Issuer under Section 9.16 of the
Indenture as if references therein to the "Issuer" were
references to the "Independent Owner" except that the
Independent Owner shall not be required to notify the
Note Holders under such Section.
(b) enter into the Sale and Funding Agreement, the New
Construction Contract, the New Construction Supervisory Agreement, the
New Performance Guarantee and the New Performance Bond and shall not
agree to any amendments, modifications or waivers of the terms thereof
without express written consent of the Trustee;
(c) execute and deliver the First Preferred Ship Mortgage
immediately upon delivery of the Drilling Rig pursuant to the terms of
the New Construction Contract and, in this connection, RBFE will
present the Independent Owner with the First Preferred Ship Mortgage
document for execution.
Notwithstanding the foregoing, to the extent that any of the
covenants in this Section 4.02 requires the Independent Owner to
execute documents and instruments presented to it by the Issuer or the
Indenture Trustee (which documents or instruments by their nature
require the signature thereto of the owner of the Drilling Rig and/or
the Equipment and may not be signed, whether or not a power of
attorney has been granted by the owner of the Drilling Rig and/or the
Equipment, by the Issuer or any other person or entity on behalf of
the Independent Owner), the Independent Owner's obligation to execute
any such document or an instrument is conditional upon the Issuer, the
Construction Supervisor or the Indenture Trustee having given prior
notice in writing to the Independent Owner to execute the same,
accompanied by such document or instrument.
Section 4.03. The Independent Owner agrees that it will not take any
action (i) which it knows to be contrary to covenants and other terms and
provisions of the Indenture, the First Preferred Ship Mortgage or any other
Transaction Document or (ii) which it knows will inhibit the performance of
such covenants, terms and provisions by the Issuer or otherwise.
Section 4.04. Subject to the terms and provisions of Article 6
hereof, to the extent any action on the part of the Independent Owner is
required for the Issuer's compliance with any covenant or other term or
provision of the Indenture, First Preferred Ship Mortgage or any other
Transaction Document, the Independent Owner will take such action at the
direction of the Issuer or the Trustee and at the expense of the Issuer.
Section 4.05. Subject to Article 6 hereof, the Independent Owner
hereby assumes and agrees to pay as and when due the Project Indebtedness.
The Independent Owner agrees that any and all payments and other proceeds
paid or payable from or under the Additional Trust Estate shall be paid
into the Collection Account established under Section 4.3 of the Indenture
and applied as provided therein. Notwithstanding the foregoing, the Issuer
remains fully and completely liable to pay the Project Indebtedness as and
when due.
Section 4.06 The Independent Owner agrees that it will not,
otherwise than pursuant to its rights under the Transaction Documents or
which may exist under applicable law (and then subject to any restrictions
on the exercise of those rights under the Transaction Documents), and
except as may be required by law, interfere with the quiet use, possession
and quiet enjoyment of the Drilling Rig by SDDI, the Issuer or any of its
or their Affiliates.
ARTICLE 5
AMENDMENTS TO INDENTURE
Section 5.01. The Granting Clause of the Indenture is hereby amended
by deleting the last word "and" from clause (f), by deleting all of clause
(b) and clause (g) and by adding new clauses (b), (g) and (h) as follows:
"(b) All accounts, General Intangibles (including, without
limitation, the Construction Contract, the SDDI Contract, the
Construction Supervisory Agreement, the Operation and Maintenance
Agreement, the Performance Guarantee, the Refundment Guarantee, the
Sale and Funding Agreement and the Performance Bond), instruments,
chattel paper and documents, deposit accounts and investment property
(including, without limitation, all Permitted Investments) now owned
or hereafter acquired;
(g) Any and all security interests, express or implied by
operation of law, that the Issuer receives or is deemed to have,
securing the obligations of the Independent Owner under the Sale and
Funding Agreement and any and all other documents executed or assumed
by the Independent Owner in connection therewith (the "Independent
Owner Security"); and
(h) All proceeds and products of the foregoing."
Section 5.02. (a) Section 1.1 of the Indenture is hereby amended by
adding the following new definitions where alphabetically appropriate,
which read in their entirety as follows:
Equipment has the meaning set out in the Sale and Funding
Agreement and the term Equipment to include, without limitation, all
equipment, inventory, fixtures and other goods in all forms, whether
now or hereafter existing which are on or used in connection with the
Drilling Rig, and all parts thereof, all accessions thereto and all
replacements and substitutions therefor.
Independent Owner shall mean BTM Capital Corporation, and its
successors and permitted assigns, as owner of the Equipment,
Construction Contract and Drilling Rig.
Independent Owner Security has the meaning set out in clause (g)
of the Granting Clause hereof.
Owner Lien means any Lien on or with respect to the Additional
Trust Estate which is not permitted by the terms of the Transaction
Documents and which results from (i) nonpayment by Independent Owner
or any shareholder of Independent Owner or any Affiliate of any of the
foregoing (the "Owner Parties"), of any tax, assessment or like charge
imposed on any Owner Party, other than any tax, assessment or like
charge the payment of which is the obligation of Issuer or any
Affiliate of Issuer under this Supplemental Indenture or any other
Transaction Documents; (ii) claims against or acts and omissions of
any Owner Party arising out of events or conditions that are not
related to the transactions contemplated by the Transaction Documents
or are in violation of any of the obligations of Independent Owner
under any of the terms of the Transaction Documents; (iii) claims
against any Owner Party arising out of any transfer (whether voluntary
or involuntary) by such Owner Party of any portion of its interest in
the Additional Trust Estate or its rights under the Transaction
Documents that is neither permitted under the Transaction Documents
nor consented to in writing by the Trustee; or (iv) any other act of,
claim against or lien created by any Owner Party including, without
limitation, any lien attaching by reason of the Independent Owner's
participation in any Multiemployer Employee Benefit Plan, or any
Person claiming by, through or under any Owner Party, that is neither
permitted under the terms of the Transaction Documents nor consented
to in writing by the Indenture Trustee.
Sale and Funding Agreement has the meaning set out in the
Supplemental Indenture.
Supplemental Indenture shall mean that certain Supplemental
Indenture and Amendment dated as of February 1, 2000, executed by the
Issuer, the Independent Owner and the Trustee.
Transaction Documents has the meaning set out in the Supplemental
Indenture."
(b) The definition of "Note Purchase Agreement in Section 1.1 of
the Indenture is amended by the addition at the end of such definition
of the words "as amended by First Amendment to Note Purchase Agreement
dated February 1, 2000 and as the same may be further amended,
supplemented or modified from time to time."
(c) The definition of "Project Documents" in Section 1.1 of the
Indenture is amended by (i) the addition of the words "Sale and
Funding Agreement" after the phrase "(as defined in the Note Purchase
Agreement)," and (ii) the addition of the words "as any of such
Project Documents may be amended, supplemented or modified from time
to time" at the end of such definition.
(d) The definition of "Governmental Authority" is amended by
inserting the words ", Independent Owner" after the word "Parent" in
the last line thereof.
Section 5.03. Clauses (j) and (o) of Section 7.1 of the Indenture are
hereby amended to hereafter read in their entirety as follows:
" (j) Parent, SDDI, Royal Dutch Shell, RBF II, Independent
Owner (but only with respect to (d), (e) or (f)) or, prior to
satisfaction of the Operational Period Conditions Precedent, one of
the Sureties takes, suffers or permits to exist with respect to itself
any of the events or conditions of the type referred to in paragraphs
(d), (e), (f) or (i) hereof; or
(o) The Issuer or the Independent Owner, whichever is the
registered owner of the Drilling Rig, shall fail to execute, or, in
the case of the Issuer (or the Issuer on behalf of the Independent
Owner), deliver and permanently record the First Preferred Ship
Mortgage and the Issuer shall fail to deliver the opinion of Issuer's
counsel in the form of Annex E hereto upon delivery of the Drilling
Rig by Hyundai under the Construction Contract; or"
Section 5.04. The period at the end of clause (p) to Section 7.1 of
the Indenture is changed to "; or", and a new clause (q) is hereby added to
Section 7.1 of the Indenture to hereafter read as follows:
" (q) Any default occurs in the covenants or obligations of the
Independent Owner under the Supplemental Indenture or the First
Preferred Ship Mortgage or the Trustee receives a notice from the
Independent Owner pursuant to the second sentence of Section
4.02(a)(E) of the Supplemental Indenture."
Section 5.05 The occurrence and existence of any Event of Default
hereunder or under any other Transaction Document by or on behalf of the
Independent Owner shall not prevent the Independent Owner from exercising
its Put Option under the Sale and Funding Agreement or limit, restrict or
condition its rights to the Put Option as permitted herein in any way
whatsoever subject in each case to compliance with Section 2.03(c) above.
Section 5.06. Section 8.3(d) of the Indenture is amended by deletion
of the words "United States of America" therein and replacing those words
with "Republic of Panama" and by deletion of the words "U.S. Coast Guard
National Vessel Documentation Center" and replacing those words with the
words "Public Registry of the Republic of Panama".
Section 5.07 A new Section 9.21 is hereby added to read as follows:
"9.21 Issuer Action Regarding Independent Owner Security.
The Issuer shall not take any action under the Independent Owner
Security without the written consent of the Trustee."
Section 5.08 Annex E to the Indenture is amended and replaced in its
entirety by Annex E hereto.
Section 5.09. Section 13.3 of the Indenture is amended by adding the
following notice provision following the mail address of the Trustee:
If to the Independent Owner:
If by mail:
BTM Capital Corporation
125 Summer Street
Boston, MA 02110
Attention: Senior Vice President - Administration
ARTICLE 6
LIABILITY OF INDEPENDENT OWNER LIMITED
Section 6.01. Notwithstanding any of the other terms and provisions
hereof or under the Indenture, it is understood and agreed as follows:
(a) Without limitation of any other provision of this Section
6.01, and notwithstanding any provision of any Transaction Document to
which the Independent Owner is a party which may be to the contrary or
otherwise inconsistent herewith, all obligations and duties of the
Independent Owner under the Indenture (including, without limitation,
this Supplemental Indenture), the First Preferred Ship Mortgage, the
New Construction Contract, the New Construction Supervisory Agreement,
and all other Transaction Documents to which the Independent Owner is
a party, other than the Sale and Funding Agreement (all of which are
the "Assumed Obligations") shall, without releasing the Independent
Owner from its obligations and duties, be performed on behalf of the
Independent Owner by the Issuer (or an Affiliate of the Issuer,
designated from time to time by the Issuer) (in reference to the
Assumed Obligations, the "Assuming Party").
The Assumed Obligations shall include, without limitation, all
obligations with respect to the construction, maintenance, operation,
insurance, compliance with law, inspection, preservation, protection
and transfer or other disposition of the Drilling Rig and any
component or part thereof and any monetary obligations with respect to
any of the foregoing.
Notwithstanding the Assuming Party's obligation to perform the
Assumed Obligations, the Independent Owner shall be obligated to
itself perform the following:
(A) The execution and delivery with reasonable promptness
to the Assuming Party or the Trustee, at the sole cost and
expense of the Assuming Party, such documents and instruments as
the Assuming Party or the Trustee may reasonably request in order
for the Assuming Party to fully perform the Assumed Obligations
on behalf of the Independent Owner, provided that the Assuming
Party or the Trustee has provided the Independent Owner with at
least 10 Business Days prior notice of such request and the
documents and instruments or form of instruments to be so
executed, and provided further that the Independent Owner's
execution and delivery of the same, either alone or in connection
with any other action relating thereto to be taken by the
Assuming Party or another person or entity, will not have the
effect of increasing the liability of the Independent Owner.
(B) The making of the following payments to the Trustee, to
the extent Independent Owner has actually received funds with
respect thereto, for deposit into the Collection Account or such
other account as RBF Exploration Co. and the Trustee shall
jointly direct:
I. Payments which are part of or proceeds from the
Additional Trust Estate;
II. Payments made to the Independent Owner which the
Independent Owner and Trustee or the Independent Owner and
the Issuer and the Trustee jointly determine should,
instead, under one or more Transaction Documents, be made to
the Trustee or another entity designated jointly by the
Issuer and the Trustee; and
III. Such other payments as may be due and owing under
one or more of the Transaction Documents, but only from and
to the extent of such funds have been received by or as have
been made available to the Independent Owner for such
purpose by the Issuer or any other Person, provided that the
Independent Owner shall have no other responsibility with
respect to such payment or the monetary obligation to which
it relates, nor any obligation to reimburse the Assuming
Party in respect thereof, provided, however, nothing herein
shall limit or affect the enforceability of the liens and
security interests granted pursuant to Article 3 hereof and
granted or to be granted under the First Preferred Ship
Mortgage or any other Transaction Document.
(C) Performance of the covenants under Article 4 hereof and
Section 8.8 of the New Construction Supervisory Agreement.
(D) Taking such other actions as may reasonably be
requested by RBF Exploration Co. or the Indenture Trustee which
are not referred to above in this clause (a) but which meet all
of the following conditions: they are necessary to be performed
by the Independent Owner pursuant to the Transaction Documents,
by their nature they may not legally be delegated by the
Independent Owner to the Assuming Party, they are of a routine
and administrative nature, they do not involve substantial
additional undertakings by the Independent Owner, and they do not
involve costs as to which the Independent Owner is not secured to
its reasonable satisfaction.
(b) Neither the Trustee, any Note Holder nor any other party to
a Transaction Document nor any of their successors or assigns, shall
have any claim, remedy or right to proceed against the Independent
Owner for payment of any deficiency or any other sum owing on account
of the indebtedness evidenced by any Note or for the payment of any
other unpaid obligation hereunder or thereunder or for the payment of
any liability resulting from the breach of any representation,
covenant, agreement or warranty of any nature whatsoever in the
Indenture, this Supplemental Indenture or in any other Transaction
Document or in any instrument or certificate executed by the
Independent Owner in connection herewith or therewith, from any source
other than the Trust Estate including, without limitation, the
Drilling Rig and the income and proceeds (including, without
limitation, insurance and condemnation proceeds) thereof; and the
Issuer, the Trustee, each Note Holder and each other party to any
Transaction Document shall be entitled to look solely to the Trust
Estate including, without limitation, the Drilling Rig and the income
and proceeds (including, without limitation, insurance and
condemnation proceeds) thereof, and waive and release any personal
liability of the Independent Owner, for and on account of any such
deficiency, indebtedness, unpaid obligations or any such liability,
provided, however, that nothing herein contained shall limit, restrict
or impair the Indenture Trustee's or the Note Holders' right to
accelerate the maturity of the Notes upon an Indenture Event of
Default, to bring suit and obtain a judgment against the Independent
Owner provided execution thereof shall be limited to the Trust Estate
including, without limitation, the Drilling Rig and any income and
proceeds (including, without limitation, insurance and condemnation
proceeds) in respect thereof or to exercise all rights and remedies
provided under each Note or under the Transaction Documents or to
otherwise realize upon the Trust Estate, including, without
limitation, the Drilling Rig and provided further, nothing herein
shall limit the liability of the Independent Owner for the following:
1. To the extent that there has been an express judicial
determination of a court having jurisdiction over the
Independent Owner and the relevant subject matter, or the
Independent Owner has expressly admitted in writing, that
any resulting losses or damages have been caused by the
gross negligence or willful misconduct of the Independent
Owner or any other Owner Party such judgment being final
and being or having become subject to no further appeals
therefrom (provided that if such court is the U.S. District
Court for the Southern District of New York, a final
judgment of such court even though such judgment is subject
to appeal, it being understood that if such judgment is
reversed or vacated on such appeal, gross negligence or
willful misconduct shall be deemed not to have been adjudged
by such District Court).
2. breach of Section 4.02(a)(D) or (H) or any reimbursement
obligation under Section 4.02(E),
3. breach of Section 4.06,
4. failure of an Independent Owner representation under clause
(d) of this Section 6.01, or
5. default by the Independent Owner in its obligations to
execute and deliver any documents conveying or granting
interests in the Additional Trust Estate in accordance with
Sections 6.01 and 7.01 hereof or any other Transaction
Document.
(c) No party (other than the Independent Owner itself) to this
Supplemental Indenture or the other Transaction Documents to which the
Independent Owner is a party shall have any claim, remedy or right to
proceed against any incorporator or any past, present or future
subscriber to the capital stock of, or stockholder, officer or
director of, the Independent Owner (each such person being a
"Protected Person") with respect to any obligations under any of the
Transaction Documents, whether by virtue of any constitutional
provision, statute or rule of law or by enforcement of any penalty or
assessment or otherwise, in respect of any claim it might have against
the Independent Owner or in respect of any act or omission of a
Protected Person, and any such Protected Person may rely on this
Section 6.01(c) to that extent.
(d) The Independent Owner shall not be responsible for any
recitals in the Indenture, this Supplemental Indenture or any other
Transaction Document, nor shall it be bound to ascertain or inquire as
to the performance or observance of any covenants or agreements
contained herein or therein (other than those of the Independent
Owner), or for the satisfaction of any condition in any contract to
which it is not a party (including, without limitation, the SDDI
Contract). Except as expressly provided in this Supplemental
Indenture, the Independent Owner shall be under no obligation to take
any action to protect, preserve or enforce any rights with respect to
the Additional Trust Estate nor to take any action which may involve
pecuniary loss, liability or expense unless it shall have been
provided with reasonable security or indemnity reasonably satisfactory
to the Independent Owner against the same. The Independent Owner
makes no representation or warranty as to the sufficiency or
enforceability of the Indenture, this Supplemental Indenture or any
other Transaction Document (except that the Independent Owner
represents and warrants that it has taken such corporate action as may
be necessary to duly authorize, execute and deliver such of the
foregoing as to which it is a party insofar as the internal laws of
the states of New York and of its jurisdiction of incorporation are
concerned), or as to the title (except that the Independent Owner
represents and warrants that it has duly executed such instruments as
the Issuer has provided to it purporting to convey title to the
Drilling Rig and any other portion of the Additional Trust Estate to
or from the Independent Owner, as the case may be), operation,
merchantability or fitness for use or purpose, value, compliance with
specifications, condition, design, quantity, durability or otherwise
with respect to the Drilling Rig or any other portion of the
Additional Trust Estate or any substitute therefor. The Independent
Owner may consult with counsel, appraisers, engineers, accountants and
other skilled persons to be selected by the Independent Owner, and the
written advice of any thereof shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon.
(e) The obligations of the Independent Owner hereunder shall
cease upon the transfer of its interest in the Trust Estate,
including, without limitation, the Drilling Rig pursuant to the Put
Option, except for any liabilities which may have accrued prior to
such date pursuant to Section 6.01(b), provided however, such transfer
shall not terminate or impair the liens and security interests granted
by Article 3 hereof and by the First Preferred Ship Mortgage and any
other Transaction Document.
ARTICLE 7
CERTAIN ADDITIONAL AGREEMENTS
Section 7.01 The Independent Owner and the Issuer agree that in the
event one or more of the option trigger events under Section 10 of the Sale
and Funding Agreement have occurred and the Independent Owner has not for
any reason exercised the Put Option pursuant to clause 10.2 thereof within
30 days thereafter, the Independent Owner upon receipt of a written demand
that the Put Option be exercised ("Trustee Put Option Demand"), executed by
the Trustee, acting upon the request of any Note Holder, shall sell the
Drilling Rig to the Issuer and the Issuer shall purchase the Drilling Rig
from the Independent Owner pursuant to Sections 10.4 and 10.5 of the Sale
and Funding Agreement, such Trustee Put Option Demand to specify a date
(the "Put Date") not less than 5 days and not more than 30 days after the
date of such demand upon which the transfer under clause 10.4 of the Sale
and Funding Agreement is to be effected. In connection with any exercise
of the Put Option, the Issuer will take or cause to be taken all action and
execute or cause to be executed such assumptions, mortgages, security
agreements and other documents and cause the delivery of the other items
required pursuant to Section 2.03(c) above and Section 10 of the Sale and
Funding Agreement as may be required to consummate the sale of the Drilling
Rig pursuant to the exercise of the Put Option.
Section 7.02. Nothing in Article 4 or elsewhere in this Supplemental
Indenture shall relieve the Issuer from any of the covenants and
obligations of the Issuer under and pursuant to the Indenture as amended
and supplemented hereby and notwithstanding the ownership of the Drilling
Rig by the Independent Owner, the Issuer remains fully responsible and
liable (including, without limitation, as if it was the owner of the
Drilling Rig) for the performance and compliance with all covenants and
obligations of the Issuer under the Indenture as amended and supplemented
hereby and the First Preferred Ship Mortgage. Further, the Issuer hereby
covenants and agrees to perform all of the Assumed Obligations (as defined
in Article 6 hereof) and all other obligations of the Independent Owner
under the Indenture as supplemented and amended hereby, the First Preferred
Ship Mortgage and under all other Transaction Documents.
Section 7.03. The Issuer agrees that it will not assign any of its
rights or interests in and to the Sale and Funding Agreement (except for
the security interest granted to the Trustee pursuant to the Indenture as
amended hereby) or agree to any amendment, modification or waiver of the
terms thereof without express written consent of the Trustee.
Section 7.04. Concurrently with the delivery of this Supplemental
Indenture, the Independent Owner has delivered to the Trustee in escrow and
the Trustee acknowledges receipt of a Bill of Sale in the form of Exhibit A
attached hereto, executed on behalf of the Independent Owner (the "Bill of
Sale"). The Trustee is hereby authorized to deliver the Bill of Sale to
the Issuer 5 Business Days after written notice to the Trustee and the
Independent Owner from a Responsible Officer of the Issuer certifying that
the Issuer requires the Bill of Sale to effect a sale contemplated by the
Sale and Funding Agreement and that such sale is being effected in
compliance with the terms and conditions of the Sale and Funding Agreement.
The Trustee shall have no duty or responsibility to determine the accuracy
or appropriateness of the Issuer's notice as aforesaid nor any liability as
a consequence of compliance therewith.
ARTICLE 8
MISCELLANEOUS PROVISIONS
Section 8.01. Except as expressly amended and supplemented hereby,
the Indenture is in all respects ratified and confirmed and all the terms,
conditions and provisions thereof shall remain in full force and effect.
This Supplemental Indenture shall form a part of the Indenture for all
purposes, and every Note Holder heretofore or hereafter authenticated and
delivered under the Indenture shall be bound hereby and all terms and
conditions of both shall be read together as though they constitute a
single instrument, except that in the case of conflict the provisions of
this Supplemental Indenture shall control.
Section 8.02. Except as otherwise expressly provided herein, no
duties, responsibilities or liabilities are assumed, or shall be construed
to be assumed, by the Trustee by reason of this Supplemental Indenture.
This Supplemental Indenture is executed and accepted by the Trustee subject
to all the terms and conditions set forth in the Indenture with the same
force and effect as if those terms and conditions were repeated at length
herein and made applicable to the Trustee with respect hereto.
Section 8.03. THE GOVERNING LAW PROVISIONS OF THE INDENTURE,
INCLUDING BUT NOT LIMITED TO THE APPLICATION OF THE LAWS OF THE STATE OF
NEW YORK, SHALL ALSO GOVERN AND BE USED TO CONSTRUE AND ENFORCE THIS
SUPPLEMENTAL INDENTURE.
Section 8.04. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of
such executed copies together shall represent the same agreement.
[NEXT PAGE IS SIGNATURE PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.
ATTEST: RBF EXPLORATION CO.
By_________________________
Name:_____________________ Name:______________________
Title:____________________ Title:_____________________
ATTEST: BTM CAPITAL CORPORATION
By_________________________
Name:_____________________ Name:______________________
Title:____________________ Title:_____________________
ATTEST: CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By_________________________
Name:_____________________ Name:______________________
Title:____________________ Title:_____________________
- ---------------------------------------------------------------------------
EXHIBIT A
Bill of Sale
[to come]
- ---------------------------------------------------------------------------
ANNEX E
[Opinion of Panamanian Counsel]
EXHIBIT 10.264
===========================================================================
Employment and Change in Control
Agreement
R&B Falcon Corporation
August 25, 1999
===========================================================================
Contents
Section 1. Term of Employment 1
Section 2. Position and Responsibilities 2
Section 3. Standard of Care 2
Section 4. Compensation 3
Section 5. Expenses 5
Section 6. Employment Terminations 5
Section 7. Change in Control 10
Section 8. Confidentiality and Noncompetition 13
Section 9. Indemnification 14
Section 10. Outplacement Assistance 14
Section 11. Assignment 14
Section 12. Dispute Resolution and Notice 15
Section 13. Miscellaneous 15
Section 14. Governing Law 16
R&B Falcon Corporation
Employment and Change in Control Agreement
This EMPLOYMENT AND CHANGE IN CONTROL AGREEMENT ("Agreement") is made,
entered into, and is effective as of this 25th day of August, 1999
(hereinafter referred to as the "Effective Date"), by and between R&B
Falcon Corporation (hereinafter referred to as the "Company"), a Delaware
corporation having its principal offices at Houston, Texas, and Tim W.
Nagle (hereinafter referred to as the "Executive").
WHEREAS, the Executive is presently employed by the Company in the
capacity of Executive Vice President and Chief Financial Officer; and
WHEREAS, the Executive previously entered into an employment agreement
with the Company dated as of March 25, 1998 and it is now in the best
interest of the Company and the Executive to enter into this new Agreement;
and
WHEREAS, the Executive possesses considerable experience and an
intimate knowledge of the business and affairs of the Company, its
policies, methods, personnel, and operations; and
WHEREAS, the Company recognizes that the Executive's contribution has
been substantial and meritorious and, as such, the Executive has
demonstrated unique qualifications to act in an executive capacity for the
Company; and
WHEREAS, the Company is desirous of assuring the continued employment
of the Executive in the above stated capacity, and Executive is desirous of
having such assurance.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements of the parties set forth in this Agreement, and of
other good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
Section 1. Term of Employment
The Company hereby agrees to employ the Executive and the Executive
hereby agrees to continue to serve the Company, in accordance with the
terms and conditions set forth herein, for an initial period of three (3)
years, commencing as of the Effective Date of this Agreement, as indicated
above; subject, however, to earlier termination as expressly provided in
Section 6 herein.
The initial three (3) year Employment Term (as defined below) of this
Agreement shall be extended automatically for one (1) additional month
beginning with the first day of the twenty-third (23rd) month of the
initial three (3) year term, and on the first day of each month thereafter
the Employment Term of this Agreement automatically shall be extended one
additional month; provided, however, either party may give the other party
written notice that, beginning with the first of the month that is at
ninety (90) days after the date of the notice, the Employment Term shall
cease to be extended with respect to any termination of the Executive's
employment other than a termination occurring during the Window Period (as
defined in Section 6.7 herein).
In the event such notice of intent not to renew is properly delivered
by either party, then the Employment Term of this Agreement, along with all
corresponding rights, duties, and covenants with respect thereto, shall
automatically expire ninety (90) days following the end of the later of the
initial three-year Employment Term or, if applicable, the extended
Employment Term then in effect; provided, however, that notwithstanding the
termination of the Employment Term (i) the provisions contained in
Section 8 herein shall survive such expiration and (ii) the provisions and
protections of this Agreement concerning a Change in Control of the Company
(as defined in Section 7 herein), including, without limitation, a Change
in Control that occurs after the termination of the Employment Term, shall
continue without interruption or change.
This Agreement provides (x) for the employment of the Executive for an
initial fixed term, which may be extended, (such term, as it may be
extended, is referred to herein as the "Employment Term"), and (y)
separately, whether or not the Employment Term has expired before a Change
in Control of the Company occurs, for Change in Control employment
protection for the Executive for as long as the Executive remains an
employee of the Company (or any parent or subsidiary), and also with
respect to certain terminations of the Executive's employment occurring
during the Window Period prior to a Change in Control.
Further, notwithstanding anything in this Agreement to the contrary,
termination of this Agreement shall not alter or impair any rights or
benefits of the Executive (or the Executive's beneficiaries) that have
arisen (contingently or otherwise) under this Agreement on or prior to such
termination.
Section 2. Position and Responsibilities
During the term of this Agreement, the Executive agrees to serve as the
Executive Vice President and Chief Financial Officer of the Company. In his
capacity as the Executive Vice President and Chief Financial Officer of the
Company, the Executive shall report directly to the Chairman and Chief
Executive Officer, and shall maintain the level of duties and
responsibilities as in effect as of the Effective Date, as set forth on
Appendix A, or such higher level of duties and responsibilities as he may
be assigned during the term of this Agreement. The Executive shall have the
same status, privileges, and responsibilities normally inherent in such
capacities in corporations of similar size and character.
Section 3. Standard of Care
During the term of this Agreement, the Executive agrees to devote
substantially his full time, attention, and energies to the Company's
business and shall not be engaged in any other business activity, whether
or not such business activity is pursued for gain, profit, or other
pecuniary advantage; provided, however, subject to the restrictions of
Section 8, the Executive may serve as a director of other companies so long
as such service is not injurious to the Company, may continue the conduct
of the business activities listed on Appendix B (to the extent conducted
before the Effective Date), and may engage in the conduct of such other
business activities that are substantially similar in nature and scope to
those listed on Appendix B, provided that such other business activities do
not materially interfere with the Executive's duties and obligations under
this Agreement. The Executive covenants, warrants, and represents that he
shall:
(a) Devote his full and best efforts to the fulfillment of his
employment obligations; and
(b) Act in the same manner as a competent executive in a comparable
company.
This Section 3 shall not be construed as preventing the Executive from
investing assets in such form or manner as will not require his services in
the daily operations of the affairs of the companies in which such
investments are made.
Section 4. Compensation
As remuneration for all services to be rendered by the Executive during
the term of this Agreement, and as consideration for complying with the
covenants herein, the Company shall pay and provide to the Executive the
following:
4.1 Base Salary. The Company shall pay the Executive a Base Salary in an
amount which shall be established from time to time by the Board of
Directors of the Company or the Board's designee; provided, however, that
the Executive's Base Salary may be decreased by the Board (other than
during a Window Period) as part of a program that is applicable equally (as
a percentage of base salary) to all executives of the Company and is
determined by the Board to be necessary and appropriate in light of the
Company's then financial condition. Base Salary shall be paid to the
Executive in equal semi-monthly installments throughout the year,
consistent with the normal payroll practices of the Company.
The annual Base Salary shall be reviewed at least annually following
the Effective Date of this Agreement, while this Agreement is in force, to
ascertain whether, in the judgment of the Board or the Board's designee,
such Base Salary should be increased, based primarily on the performance of
the Executive during the year and on the then current rate of inflation. If
so increased, the Base Salary as stated above shall, likewise, be increased
for all purposes of this Agreement.
4.2 Annual Bonus. The Company shall provide the Executive with the
opportunity to earn an annual bonus, at a level which is commensurate with
the opportunity typically offered to executives having the same or similar
duties and responsibilities as the Executive at companies similar in size
and character to the Company. The Executive shall be notified in writing
by the Company prior to the beginning of each fiscal year as to what the
Executive's target bonus will be for such fiscal year.
Nothing in this section shall be construed as obligating the Company to
refrain from changing and/or amending any annual incentive plan so long as
such changes are similarly applicable to all executives generally.
4.3 Long-Term Incentives. The Company shall provide the Executive the
opportunity to earn long-term incentive awards, at a level which is
commensurate with the opportunity typically offered to executives having
the same or similar duties and responsibilities as the Executive at
companies similar in size and in character to the Company.
Nothing in this section shall be construed as obligating the Company to
refrain from changing, and/or amending any long-term incentive plan, so
long as such changes are similarly applicable to all executives generally.
4.4 Retirement Benefits. The Company shall provide to the Executive
participation in all Company qualified defined benefit and defined
contribution retirement plans, subject to the eligibility and participation
requirements of such plans. In addition, the Company shall provide to the
Executive participation in all other nonqualified retirement and welfare
programs typically offered by companies similar in size and character to
the Company to executives having the same or similar duties and
responsibilities including any supplemental retirement plans.
Nothing in this section shall be construed as obligating the Company to
refrain from changing, and/or amending the nonqualified programs, so long
as such changes are similarly applicable to all executives generally.
4.5 Supplemental Life Insurance. The Company, at its cost, shall provide
the Executive with supplemental life insurance in the face amount of
$100,000 per child for each child under age 21(twenty-one) years old.
4.6 Employee Benefits. During the term of this Agreement, and as
otherwise provided within the provisions of each of the respective plans,
the Company shall provide to the Executive all benefits to which other
executives and employees of the Company are entitled to receive, as
commensurate with the Executive's position. Such benefits shall include,
but not be limited to, group term life insurance, comprehensive health and
major medical insurance, dental insurance, vision insurance, and short-term
and long-term disability.
The Executive shall be entitled to paid vacation in accordance with the
standard written policy of the Company with regard to vacations of
employees.
The Executive shall likewise participate in any additional benefit as
may be established during the term of this Agreement, by standard written
policy of the Company.
4.7 Perquisites. The Company shall provide to the Executive, at the
Company's cost, all perquisites to which other executives of the Company
are entitled to receive and such other perquisites which are suitable to
the character of Executive's position with the Company and adequate for the
performance of his duties hereunder.
4.8 Right to Change Plans. By reason of Sections 4.5 and 4.6 herein, the
Company shall not be obligated to institute, maintain, or refrain from
changing, amending, or discontinuing any benefit plan, program, or
perquisite, so long as such changes are similarly applicable to executive
employees generally.
4.9 Physical Exams. The Executive shall be entitled to an annual
physical exam paid for by the Company.
Section 5. Expenses
The Company shall pay, or reimburse the Executive, for all ordinary and
necessary expenses, in a reasonable amount, which the Executive incurs in
performing his duties under this Agreement including, but not limited to,
travel, entertainment, professional dues and subscriptions, and all dues,
fees, and expenses associated with membership in various professional,
business, social, and civic clubs, associations and societies of which the
Executive's participation is in the best interest of the Company.
Section 6. Employment Terminations
6.1 Termination Due to Retirement. In the event the Executive's
employment is terminated during the Employment Term or Window Period by
reason of retirement, the Executive's benefits shall be determined in
accordance with the Company's qualified retirement, supplemental
retirement, survivor's benefits, insurance, and other applicable programs
of the Company then in effect.
Upon the effective date of such termination, the Company will pay the
Executive a pro rata portion of his Highest Annual Bonus (as defined below
in Section 7.1) and the Executive will be immediately vested in all long-
term incentive awards. Further, upon the effective date of the termination,
the Company's obligation to pay and provide to the Executive any future
Base Salary, annual bonus, and long-term incentive awards (as provided in
Sections 4.1, 4.2, and 4.3 herein, respectively) shall immediately expire.
However, the Executive shall receive all rights and benefits that he is
vested in pursuant to other plans and programs of the Company, including,
but not limited to, the retirement benefits as described in Section 4.4
herein.
6.2 Termination Due to Death. In the event of the death of the Executive
during the Employment Term or Window Period, or during any period of
Disability during which he is receiving compensation pursuant to Section
6.3 herein, the Company shall (i) pay to the Executive's surviving spouse,
or other beneficiary as so designated by the Executive during his lifetime,
or to the Executive's estate, as appropriate, a lump sum amount equal to
the sum of the Executive's (x) Base Salary otherwise payable for the
remaining Employment Term and (y) an amount equal to the sum of the Highest
Annual Bonus for each fiscal year ending during the remaining Employment
Term, plus for the fiscal year in which the remaining Employment Term would
expire, a prorata portion of the Highest Annual Bonus for such partial
fiscal year, (ii) vest all long-term incentive awards of the Executive, and
(iii) continue, at the Company's cost, all health and welfare benefits for
the Executive's spouse and dependents for the remaining term of this
Agreement.
Further, the Company shall pay and provide all other benefits to which
the Executive has a vested right at the time, according to the provisions
of the governing plan or program. The Company thereafter shall have no
further obligations under this Agreement.
6.3 Suspension Due to Disability. In the event that the Executive
becomes disabled during the Employment Term or Window Period and is,
therefore, unable to perform his duties herein for a period of more than
one hundred-eighty (180) calendar days in the aggregate during any period
of twelve (12) consecutive months, or in the event of the Board's
reasonable expectation that the Executive's Disability will exist for more
than a period of one hundred-eighty (180) calendar days, the Company shall
have the right to suspend the Executive's active employment as provided in
this Agreement and place him on Disability. However, the Board shall
deliver written notice to the Executive of the Company's intent to suspend
for Disability at least thirty (30) calendar days prior to the effective
date of such suspension.
A suspension for Disability shall become effective upon the end of the
thirty (30) day notice period. Upon such effective date, the Company will
pay the Executive any Base Salary through the effective date of the
suspension for Disability, a pro rata portion of the Highest Annual Bonus
for the fiscal year in which such suspension occurs, and the Executive will
be immediately vested in all long-term incentive awards, provided however,
that if the Executive's Disability is due to alcohol or drug dependence, he
will vest ratably in any long-term incentive awards. Further, upon the
effective date of the suspension, the Company's obligation to pay and
provide to the Executive any future Base Salary, annual bonus, and long-
term incentive awards (as provided in Sections 4.1, 4.2, and 4.3,
respectively) shall immediately be suspended. However, the Executive shall
receive all rights and benefits that he is vested in, pursuant to other
plans and programs of the Company, including, but not limited to, short-
and long-term disability benefits, and retirement benefits as described in
Section 4.4.
Under no circumstance will the Executive, if suspended due to
Disability, receive less than 60% of his Base Salary in effect at the time
of his suspension for Disability through age 65. The Company agrees to make
such payments to the Executive in the event that the benefit is not
available for any reason.
The term "Disability" shall mean, for all purposes of this Agreement,
the incapacity of the Executive, due to injury, illness, disease, alcohol
or drug dependency, or bodily or mental infirmity, to engage in the
performance of substantially all of the usual duties of employment with the
Company as contemplated by Section 2 herein, such Disability to be
determined by the Board of Directors of the Company upon receipt and in
reliance on competent medical advice from one or more individuals, selected
by the Board, who are qualified to give such professional medical advice.
If the Executive and the Company shall not be in agreement as to
whether the Executive has suffered a Disability for the purposes of this
Agreement, the matter shall be referred to a panel of three medical
doctors, one of which shall be selected by the Executive, one of which
shall be selected by the Company, and one of which shall be selected by the
two doctors as so selected, and the decision of a majority of the panel
with respect to the question of whether the Executive has suffered a
Disability shall be binding upon the Executive and the Company. The
expenses of any such referral shall be borne by the Company. The Executive
may be required by the Company to submit to medical examination at any time
during the period of his employment hereunder, but not more often than
quarter-annually, to determine whether a Disability exists for the purposes
of this Agreement.
It is expressly understood that the Disability of the Executive for a
period of one hundred-eighty (180) calendar days or less in the aggregate
during any period of twelve (12) consecutive months, in the absence of any
reasonable expectation that his Disability will exist for more than such a
period of time, shall not constitute a failure by him to perform his duties
hereunder and shall not be deemed a breach or default and the Executive
shall receive full compensation and benefits for any such period of
Disability or for any other temporary illness or incapacity during the term
of this Agreement. If the Executive recovers from any Disability, his
suspension shall terminate and the Executive shall resume his duties with
full compensation and benefits.
6.4 Voluntary Termination by the Executive. The Executive may terminate
this Agreement at any time by giving the Board of Directors of the Company
written notice of intent to terminate, delivered at least thirty (30)
calendar days prior to the effective date of such termination (such period
not to include vacation). The termination automatically shall become
effective upon the expiration of the thirty (30) day notice period.
Upon the effective date of such termination, the Company shall pay to
the Executive his full Base Salary, at the rate then in effect as provided
in Section 4.1 herein, through the effective date of termination, plus all
other benefits, including long-term incentive awards, to which the
Executive has a vested right to at that time including, but not limited to,
accrued vacation pay. The Company also shall provide to the Executive the
vested retirement benefits described in Section 4.4 herein. With the
exception of the covenants contained in Section 8 herein (which shall
survive such termination), the Company and the Executive thereafter shall
have no further obligations under this Agreement.
6.5 Involuntary Termination by the Company Without Cause. At all times
during the Employment Term and outside the Window Period, the Board may
terminate the Executive's employment, as provided under this Agreement, at
any time for reasons other than a suspension for Disability or a
termination for Cause, by notifying the Executive in writing of the
Company's intent to terminate, at least thirty (30) calendar days prior the
effective date of such termination.
Upon the effective date of such termination, following the expiration
of the thirty (30) day notice period, the Company shall (i) pay the
Executive a lump sum amount equal to the sum of (x) the Executive's Base
Salary otherwise payable for the remaining Employment Term and (y) an
amount equal to the sum of the Highest Annual Bonus for each fiscal year
ending during the remaining Employment Term plus for the fiscal year in
which the remaining Employment Term would expire, a prorata portion of the
Highest Annual Bonus for such partial fiscal year, (ii) vest all long-term
incentive awards of the Executive, and (iii) continue, at the Company's
cost, all health and welfare benefits for the Executive's spouse and
dependents for the remaining Employment Term.
Further, the Company shall pay the Executive all other benefits to
which the Executive has a vested right at the time, according to the
provisions of the governing plan or program. The Company will also provide
outplacement services or will reimburse the Executive for the cost of such
services as described in Section 10 herein. The Company and the Executive
thereafter shall have no further obligations under this Agreement.
If the Executive's employment is terminated during the Window Period by
the Board for reasons other than a suspension for Disability or a
termination for Cause, the Executive shall be entitled to receive the
benefits provided in Section 7.1 herein in lieu of the benefits set forth
in this Section 6.5.
6.6 Termination For Cause. Nothing in this Agreement shall be construed
to prevent the Board from terminating the Executive's employment under this
Agreement for "Cause."
"Cause" means the Executive's:
(a) deliberate act of proven fraud having a material
adverse impact on the business or consolidated financial
condition or results of operations of the Company and its
subsidiaries;
(b) deliberate and continuing failure to comply with
applicable laws and regulations having a material adverse
impact on the business or consolidated financial condition or
results of operations of the Company and its subsidiaries; or
(c) conviction of a criminal offense constituting a felony.
For purposes of this Section 6.6, no act or omission by the
Executive shall be considered "willful" unless it is done or omitted in bad
faith or without reasonable belief that the Executive's action or omission
was in the best interests of the Company. Any act or failure to act based
upon (i) authority given pursuant to a resolution duly adopted by the
Board, or (ii) advice of counsel for 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 Company. For purposes of subsections (a)
and (b) above, the Executive shall not be deemed to be terminated 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 the
entire membership to the Board at a meeting 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 Board) finding that in the good faith opinion of the Board (x)
the Executive is guilty of the conduct described in subsection (a) or (b)
above, (y) the Executive has been provided a 30-day period in which to
"cure" such specified violation following a detailed written notice from
the Board of the Executive's violation of subsection (a) or (b) above and
(z) the Executive has failed to "cure" such violation, specifying the
particulars thereof in detail. The Executive, if a member of the Board,
will be not be counted for purposes of such a vote.
In the event this Agreement is terminated by the Board for Cause,
the Company shall pay the Executive his Base Salary through the effective
date of the employment termination and the Executive shall immediately
thereafter forfeit all rights and benefits (other than vested benefits) he
would otherwise have been entitled to receive under this Agreement. The
Executive will lose any right to supplemental retirement benefits provided
by the Company. The Company and the Executive thereafter shall have no
further obligations under this Agreement.
During the Window Period, as described herein, if any litigation
arises out of a termination for Cause, to the extent permitted by law, the
Company shall pay all legal fees, costs of litigation, prejudgment interest
and other expenses incurred in good faith by the Executive.
6.7 Termination for Good Reason. At any time during the Employment Term
or Window Period, the Executive may terminate this Agreement for Good
Reason (as defined below) by giving the Board of Directors of the Company
thirty (30) calendar days written notice of intent to terminate, which
notice sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for such termination.
Upon the expiration of the thirty (30) day notice period, the Good
Reason termination shall become effective, and the Company shall pay, in a
lump sum, and provide to the Executive the benefits set forth in this
Section 6.7 (or, in the event of termination for Good Reason during the
Window Period, the benefits set forth in Section 7.1 herein).
Good Reason shall mean, without the Executive's express written
consent, the occurrence of any one or more of the following:
(a) The assignment of the Executive to duties materially inconsistent
with the Executive's authorities, duties, responsibilities, and
status (including offices, titles, and reporting relationships) as
an officer of the Company, or a reduction or alteration in the
nature or status of the Executive's authorities, duties, or
responsibilities from those in effect during the immediately
preceding fiscal year;
(b) The Company's requiring the Executive to be based at a location
which is at least fifty (50) miles further from the Executive's
current primary residence than is such residence from the Company's
current headquarters, except for required travel on the Company's
business to an extent substantially consistent with the Executive's
business obligations as of the Effective Date;
(c) A reduction by the Company in the Executive's Base Salary except as
permitted in Section 4.1;
(d) A material reduction in the Executive's level of participation in
any of the Company's short- and/or long-term incentive compensation
plans, or employee benefit or retirement plans, policies,
practices, or arrangements in which the Executive participates as
of the Effective Date; provided, however, that reductions in the
levels of participation in any such plans shall not be deemed to be
"Good Reason" if the Executive's reduced level of participation in
each such program remains substantially consistent with the average
level of participation of other executives who have positions
commensurate with the Executive's position; or
(e) The failure of the Company to obtain a satisfactory agreement from
any successor to the Company to assume and agree to perform this
Agreement, as contemplated in Section 11.1 herein.
Upon a termination of the Executive's employment for Good Reason at any
time during the Employment Term, other than during the Window Period, with
the "Window Period" being (x) the twelve (12) full calendar month period
prior to the effective date of a Change in Control that occurs during the
initial three (3) year term of the Employment Term, (y) the six (6) full
calendar month period prior to the effective date of a Change in Control
that occurs after the initial three (3) year Employment Term, and (z) the
twenty-four (24) month period beginning on the effective date of a Change
in Control, the Executive shall be entitled to receive the same payments
and benefits as he is entitled to receive following an involuntary
termination of his employment by the Company during the Employment Term
without Cause, as specified in Section 6.5 herein. Upon a termination of
the Executive's employment for Good Reason within the Window Period,
regardless of whether the Change in Control occurs during the Employment
Term, the Executive shall be entitled to receive the payments and benefits
set forth in Section 7.1 herein in lieu of those set forth in this
Section 6.7.
The Executive's right to terminate employment for Good Reason shall not
be affected by the Executive's incapacity due to physical or mental
illness; provided, however, the Executive may not terminate for Good Reason
during any period that the Executive's employment is suspended due to
Disability.
The Executive's continued employment shall not constitute consent to,
or a waiver of rights with respect to, any circumstance constituting Good
Reason herein.
Section 7. Change in Control
7.1 Employment Terminations in Connection with a Change in Control. In
the event of a Qualifying Termination (as defined below) within the Window
Period, then in lieu of all other benefits provided to the Executive under
the provisions of this Agreement, the Company shall pay to the Executive in
a lump sum amount, and provide him with the following severance benefits
(hereinafter referred to as the "Severance Benefits"):
(a) An amount equal to three (3) times the highest rate of the
Executive's annualized Base Salary rate in effect at any time up to
and including the effective date of termination;
(b) An amount equal to three (3) times the "Highest Annual Bonus",
which shall mean the greater of (i) Executive's highest annual
bonus earned over the fiscal years, beginning with the 1998 fiscal
year, prior to the Change in Control (with respect to the 1998
fiscal year, the Executive received a bonus of $198,857) and (ii)
the Executive's targeted annual bonus for such fiscal year of
termination;
(c) An amount equal to the Executive's unpaid Base Salary and accrued
vacation pay through the effective date of termination;
(d) An amount equal to the Executive's Highest Annual Bonus multiplied
by a fraction, the numerator of which is the number of completed
days in the then-existing fiscal year through the effective date of
termination, and the denominator of which is three hundred
sixty-five (365);
(e) A continuation of the welfare benefits of medical insurance, dental
insurance, and group term life insurance for three (3) full years
after the effective date of termination. These benefits shall be
provided to the Executive at the same premium cost, and at the same
coverage level, as in effect as of the Executive's effective date
of termination. However, in the event the premium cost and/or level
of coverage shall change for all employees of the Company, the cost
and/or coverage level, likewise, shall change for the Executive in
a corresponding manner.
The continuation of these welfare benefits shall be discontinued
prior to the end of the three (3) year period in the event the
Executive has available substantially similar benefits from a
subsequent employer, as determined by the Company's Board of
Directors or the Board's designee.
Upon the termination of these welfare benefits, the Executive shall
be provided a COBRA continuation election under the Company's group
health plans;
(f) A lump-sum cash payment of the actuarial present value equivalent
(as determined pursuant to Section 417 of the Internal Revenue
Code) of the aggregate benefits accrued by the Executive as of the
effective date of termination under the terms of any and all
supplemental retirement plans in which the Executive participates.
For this purpose, such benefits shall be calculated under the
assumption that the Executive's employment continued following the
effective date of termination for three (3) full years (i.e., three
(3) additional years of service credits shall be added); provided,
however, that for purposes of determining "final average pay" under
such programs, the Executive's actual pay history as of the
effective date of termination shall be used;
(g) Reimbursement for outplacement services costs (as provided in
Section 10 herein); and
(h) Immediate vesting of all outstanding long-term incentive awards.
For purposes of this Section 7, a Qualifying Termination shall mean any
termination of the Executive's employment other than: (1) by the Company
for Cause (as provided in Section 6.6 herein); (2) by reason of death or
suspension for Disability (as provided in Section 6.2 herein); or (3) by
the Executive without Good Reason (as provided in Section 6.7 herein).
7.2 Definition of "Change in Control." A Change in Control of the
Company shall be deemed to have occurred as of the first day any one or
more of the following conditions shall have been satisfied:
(a) Any individual, corporation (other than the Company), partnership,
trust, association, pool, syndicate, or any other entity or any
group of persons acting in concert becomes the beneficial owner, as
that concept is defined in Rule 13d-3 promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934,
of securities of the Company possessing twenty-five percent (25%)
or more of the voting power for the election of directors of the
Company;
(b) There shall be consummated any consolidation, merger, or other
business combination involving the Company or the securities of the
Company in which holders of voting securities of the Company
immediately prior to such consummation own, as a group, immediately
after such consummation, voting securities of the Company (or, if
the Company does not survive such transaction, voting securities of
the corporation surviving such transaction) having less than sixty
percent (60%) of the total voting power in an election of directors
of the Company (or such other surviving corporation);
(c) During any period of two (2) consecutive years, individuals who at
the beginning of such period constitute the directors of the
Company cease for any reason to constitute at least a majority
thereof unless the election, or the nomination for election by the
Company's shareholders, of each new director of the Company was
approved by a vote of at least two-thirds (2/3) of the directors of
the Company then still in office who were directors of the Company
at the beginning of any such period; or
(d) There shall be consummated any sale, lease, exchange, or other
transfer (in one transaction or a series of related transactions)
of all, or substantially all, of the assets of the Company (on a
consolidated basis) to a party which is not controlled by or under
common control with the Company.
7.3 Excise Tax Equalization Payment. In the event that the Executive
becomes entitled to Severance Benefits or any other payment or
benefit under this Agreement, or under any other agreement with or
plan of the Company (in the aggregate, the "Total Payments"), if
any of the Total Payments will be subject to the tax (the "Excise
Tax") imposed by Section 4999 of the Code (or any similar tax that
may hereafter be imposed), the Company shall pay to the Executive
in cash an additional amount (the "Gross-Up Payment") such that the
net amount retained by the Executive after deduction of any Excise
Tax upon the Total Payments and any federal, state and local income
tax and Excise Tax upon the Gross-Up Payment provided for by this
Section 7.3 (including FICA and FUTA), shall be equal to the Total
Payments. Such payment shall be made by the Company to the
Executive as soon as practical following the effective date of
termination, but in no event beyond thirty (30) days from such
date.
7.4 Tax Computation. For purposes of determining whether any of the
Total Payments will be subject to the Excise Tax and the amounts of
such Excise Tax:
(a) Any other payments or benefits received or to be received by the
Executive in connection with a Change in Control of the Company or
the Executive's termination of employment (whether pursuant to the
terms of this Plan or any other plan, arrangement, or agreement
with the Company, or with any person (which shall have the meaning
set forth in Section 3(a)(9) of the Securities Exchange Act of
1934, including a "group" as defined in Section 13(d) therein)
whose actions result in a Change in Control of the Company or any
person affiliated with the Company or such persons) shall be
treated as "parachute payments" within the meaning of
Section 280G(b)(2) of the Code, and all "excess parachute payments"
within the meaning of Section 280G(b)(1) shall be treated as
subject to the Excise Tax, unless in the opinion of tax counsel as
supported by the Company's independent auditors and acceptable to
the Executive, such other payments or benefits (in whole or in
part) do not constitute parachute payments, or unless such excess
parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code in excess of the base amount within
the meaning of Section 280G(b)(3) of the Code, or are otherwise not
subject to the Excise Tax;
(b) The amount of the Total Payments which shall be treated as subject
to the Excise Tax shall be equal to the lesser of: (i) the total
amount of the Total Payments; or (ii) the amount of excess
parachute payments within the meaning of Section 280G(b)(1) (after
applying clause (a) above); and
(c) The value of any noncash benefits or any deferred payment or
benefit shall be determined by the Company's independent auditors
in accordance with the principles of Sections 280G(d)(3) and (4) of
the Code.
For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income taxes at the highest
marginal rate of Federal income taxation in the calendar year in which the
Gross-Up Payment is to be made, and state and local income taxes at the
highest marginal rate of taxation in the state and locality of the
Executive's residence on the effective date of termination, net of the
maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes.
7.5 Subsequent Recalculation. In the event the Internal Revenue Service
adjusts the computation of the Company under Section 7.4 herein so that the
Executive did not receive the greatest net benefit, the Company shall
reimburse the Executive for the full amount necessary to make the Executive
whole, plus a market rate of interest, as determined by the Committee.
7.6 Payment of Legal Fees. To the extent permitted by law, the Company
shall pay all legal fees, costs of litigation, prejudgment interest, and
other expenses incurred in good faith by the Executive as a result of the
Company's refusal to provide the severance benefits under this Section 7 to
which the Executive becomes entitled under this Agreement, or as a result
of the Company's contesting the validity, enforceability, or interpretation
of this Agreement, or as a result of any conflict (including conflicts
related to the calculation of parachute payments) between the parties
pertaining to this Agreement.
Section 8. Confidentiality and Noncompetition
8.1 Confidentiality. During the term of this Agreement and thereafter in
perpetuity, the Executive will not directly or indirectly disclose to any
third party not a member of the Company Group, its or their legal counsel
or independent accountants, Confidential Information and Trade Secrets of
the Company and its subsidiaries and affiliates (collectively, the "Company
Group"), except as to any of the Confidential Information or Trade Secrets
which shall be or become in the public domain other than by breach by the
Executive of his obligations set out in this Section 8.1 or shall be
required to be disclosed by applicable laws or regulations, any judicial or
administrative authority or stock exchange rule or regulation. For the
purposes of this Section 8.1 "Confidential Information" shall mean: (i)
internal policies and procedures, (ii) financial information, (iii)
marketing strategies, (iv) secret discoveries, inventions, formulae,
designs and know-how not constituting Trade Secrets, and (v) other non-
public information relating to the Company Group's business, the disclosure
of which would materially adversely affect the Company Group's business or
financial condition. For the purposes of this Section 8.1 "Trade Secrets"
shall mean all secret discoveries, inventions, formulae, designs, methods,
processes and know-how entitled to protection as trade secrets under the
laws of the state of Texas.
8.2 Noncompetition. In the event the Executive breaches his obligations
under Section 8.1 of this Agreement during the one (1) year period
following the Executive's termination of employment, during the remainder
of such one (1) year period (the "Restricted Period") the Executive shall
not engage in Competition with the Company. For purposes of this Section
8.2, "Competition" shall mean the Executive engaging in or otherwise being
a director, officer, employee, principal, agent, stockholder, member, owner
or partner of, or permitting his name to be used in connection with the
activities of any business or organization in the international offshore
contract drilling industry in direct competition with the Company Group,
but shall not preclude the Executive becoming the registered or beneficial
owner of up to two percent (2%) of any class of capital stock of any such
corporation which is registered under the Securities Exchange Act of 1934,
as amended, provided the Executive does not actively participate in the
business of such corporation until the end of the Restricted Period.
Section 9. Indemnification
The Company hereby covenants and agrees to indemnify and hold harmless
the Executive fully, completely, and absolutely against and in respect to
any and all actions, suits, proceedings, claims, demands, judgments, costs,
expenses (including attorney's fees), losses, and damages resulting from
the Executive's good faith performance of his duties and obligations under
the terms of this Agreement.
Section 10. Outplacement Assistance
Following a termination of the Executive's employment as described in
Sections 6.5, 6.7, or 7.1 herein, the Executive shall be reimbursed by the
Company for the costs of all outplacement services obtained by the
Executive within the two (2) year period after the effective date of
termination; provided, however, that the total reimbursement shall be
limited to an amount equal to fifteen percent (15%) of the Executive's Base
Salary as of the effective date of termination.
Section 11. Assignment
11.1. Assignment by Company. This Agreement may and shall be assigned
or transferred to, and shall be binding upon and shall inure to the benefit
of, any successor of the Company, and any such successor shall be deemed
substituted for all purposes of the "Company" under the terms of this
Agreement. As used in this Agreement, the term "successor" shall mean any
person, firm, corporation, or business entity that at any time, causes a
Change in Control as described in Section 7.2. Notwithstanding such
assignment, the Company shall remain, with such successor, jointly and
severally liable for all its obligations hereunder.
Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement
and shall immediately entitle the Executive to compensation from the
Company in the same amount and on the same terms as the Executive would be
entitled in the event of an involuntary termination by the Company, as
provided in Section 7.1 herein. Notice of such agreement shall be provided
to the Executive within thirty (30) days after a Change in Control.
Except as herein provided, the Company may not otherwise assign this
Agreement.
11.2 Assignment by Executive. This Agreement shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, and administrators, successors, heirs,
distributees, devisees, and legatees. If the Executive should die while any
amounts payable to the Executive hereunder remain outstanding, all such
amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee, or other
designee or, in the absence of such designee, to the Executive's estate.
This Agreement is not otherwise assignable by the Executive.
Section 12. Dispute Resolution and Notice
12.1 Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled by arbitration, conducted
before a panel of three (3) arbitrators sitting in a location selected by
the Executive within fifty (50) miles from the location of his employment
with the Company, in accordance with the rules of the American Arbitration
Association then in effect.
Judgment may be entered on the award of the arbitrator in any court
having proper jurisdiction. All expenses of such arbitration, including the
fees and expenses of the counsel for the Executive, shall be borne by the
Company, exclusive of Section 7.6.
12.2. Notice. Any notices, requests, demands, or other communications
provided for by this Agreement shall be sufficient if in writing and if
sent by registered or certified mail to the Executive at the last address
he has filed in writing with the Company or, in the case of the Company, at
its principal offices.
Section 13. Miscellaneous
13.1. Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine;
the plural shall include the singular and the singular shall include the
plural.
13.2. Entire Agreement. This Agreement supersedes any prior agreements
or understandings, oral or written, between the parties hereto or between
the Executive and the Company, with respect to the subject matter hereof
and constitutes the entire Agreement of the parties with respect thereto.
13.3. Modification. This Agreement shall not be varied, altered,
modified, canceled, changed, or in any way amended except by mutual
agreement of the parties in a written instrument executed by the parties
hereto or their legal representatives.
13.4. Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect.
13.5. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of
which together will constitute one and the same Agreement.
13.6. Tax Withholding. The Company may withhold from any benefits
payable under this Agreement all federal, state, city, or other taxes as
may be required pursuant to any law or govern-mental regulation or ruling.
13.7. Beneficiaries. The Executive may designate one or more persons or
entities as the primary and/or contingent beneficiaries of any amounts to
be received under this Agreement. Such designation must be in the form of a
signed writing acceptable to the Board or the Board's designee. The
Executive may make or change such designation at any time.
Section 14. Governing Law
To the extent not preempted by federal law, the provisions of this
Agreement shall be construed and enforced in accordance with the laws of
the state of Texas.
IN WITNESS WHEREOF, the Executive and the Company (pursuant to a
resolution adopted at a duly constituted meeting of its Board of Directors)
have executed this Agreement, as of the day and year first above written.
Executive:
___________________________
ATTEST R&B Falcon Corporation:
____________________________ ___________________________
- -------------------------------------------------------------------------
APPENDIX A
R&B Falcon Corporation
Job Description
Job Title: Executive Vice President and
Chief Financial Officer
Reports to: Chairman & Chief Executive Officer
Location: Houston
Basic Function
Responsible for planning and directing all corporate financial and
administrative functions including accounting, financial planning and
financial management and financings, assessment and reporting, budgeting,
cash and investment management, and human resources. Also has
responsibility for information systems, internal audit, and all of the
company's administrative functions. Primary contact for the Corporation
with lending institutions, investment bankers and the financial community.
Responsibilities and Duties
1. Oversees and exclusively directs finance, treasury, budgeting, audit,
tax, accounting, compensation and benefits, and long range forecasting for
the organization, including preparation of the Company's annual business
plan. Executives and managers directly responsible for these functions,
without exception, report directly to the EVP/CFO. Serves as the Company's
Principal Accounting Officer and Principal Financial Officer for SEC
reporting purposes.
2. Directs the controller in providing and directing procedures and
computer application systems necessary to maintain proper records and to
afford adequate accounting controls and services.
3. Directly responsible for all financing activities of the Corporation.
Directs the treasury department in activities such as custodian of funds,
securities, and assets of the organization.
4. Appraises the organization's financial position and issues periodic
reports on organization's financial stability, liquidity, and growth.
5. Directs and coordinates the establishment of budget programs.
6. Coordinates tax reporting programs. Assists with investor relations
activities.
7. Analyzes operational issues impacting functional groups and the whole
institution, and determines their financial impact.
8. Manages the compensation and benefits function in the corporation.
9. Establishes and maintains contacts with stockholders, financial
institutions, and the investment community.
Education
Four year degree and MBA.
Experience
Typically requires 10 - 15 years experience.
Supervision
Direct 7
Indirect 101
Total 108
EXHIBIT 10.282
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Paul B. Loyd, Jr.
("Optionee") as of April 7, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1997 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on April 7, 2009 ("Option Period")
to purchase from the Company 920,000 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $7.031 per share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On October 7, 1999, this Option shall be exercisable for any
number of shares up to and including, but not in excess of, 33-
1/3% of the aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On April 7, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before May 7, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 7th day of April,
1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By:
Tim W. Nagle - Executive Vice President
OPTIONEE
_________________________
Paul B. Loyd, Jr.
EXHIBIT 10.283
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Steven A. Webster
("Optionee") as of April 7, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1997 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on April 7, 2009 ("Option Period")
to purchase from the Company 993,600 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $7.031 per share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On October 7, 1999, this Option shall be exercisable for any
number of shares up to and including, but not in excess of, 33-
1/3% of the aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On April 7, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before May 7, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 7th day of April,
1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Steven A. Webster
EXHIBIT 10.284
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Andrew Bakonyi
("Optionee") as of April 7, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1995 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on April 7, 2009 ("Option Period")
to purchase from the Company 276,000 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $7.031 per share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On October 7, 1999, this Option shall be exercisable for any
number of shares up to and including, but not in excess of, 33-
1/3% of the aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On April 7, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before May 7, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 7th day of April,
1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Andrew Bakonyi
EXHIBIT 10.285
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Tim W. Nagle
("Optionee") as of April 7, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1995 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on April 7, 2009 ("Option Period")
to purchase from the Company 207,000 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $7.031 per share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On October 7, 1999, this Option shall be exercisable for any
number of shares up to and including, but not in excess of, 33-
1/3% of the aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On April 7, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before May 7, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 7th day of April,
1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Tim W. Nagle
EXHIBIT 10.286
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Robert F. Fulton
("Optionee") as of April 7, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1997 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on April 7, 2009 ("Option Period")
to purchase from the Company 207,000 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $7.031 per share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On October 7, 1999, this Option shall be exercisable for any
number of shares up to and including, but not in excess of, 33-
1/3% of the aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On April 7, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before May 7, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 7th day of April,
1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Robert F. Fulton
EXHIBIT 10.287
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Bernie Stewart
("Optionee") as of April 7, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1997 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on April 7, 2009 ("Option Period")
to purchase from the Company 241,500 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $7.031 per share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On October 7, 1999, this Option shall be exercisable for any
number of shares up to and including, but not in excess of, 33-
1/3% of the aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On April 7, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before May 7, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 7th day of April,
1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Bernie Stewart
EXHIBIT 10.288
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Charles R. Ofner
("Optionee") as of April 7, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1997 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on April 7, 2009 ("Option Period")
to purchase from the Company 149,040 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $7.031 per share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On October 7, 1999, this Option shall be exercisable for any
number of shares up to and including, but not in excess of, 33-
1/3% of the aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On April 7, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before May 7, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 7th day of April,
1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Charles R. Ofner
EXHIBIT 10.289
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Leighton E. Moss
("Optionee") as of April 7, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1997 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on April 7, 2009 ("Option Period")
to purchase from the Company 190,440 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $7.031 per share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On October 7, 1999, this Option shall be exercisable for any
number of shares up to and including, but not in excess of, 33-
1/3% of the aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On April 7, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before May 7, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 7th day of April,
1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Leighton E. Moss
EXHIBIT 10.290
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Wayne K. Hillin
("Optionee") as of April 7, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1997 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on April 7, 2009 ("Option Period")
to purchase from the Company 190,440 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $7.031 per share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On October 7, 1999, this Option shall be exercisable for any
number of shares up to and including, but not in excess of, 33-
1/3% of the aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On April 7, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before May 7, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 7th day of April,
1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Wayne K. Hillin
EXHIBIT 10.291
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and Dr. P.C.
Chatterjee ("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member
of the Board of Directors of the Company, is entitled to receive
a non-qualified stock option award under the Company's 1998
Director Long-Term Incentive Plan ("Plan"), as an incentive to
the Optionee to remain a director of the Company and contribute
to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises,
it is hereby agreed as follows:
1. The Option is issued in accordance with and subject to
all of the terms, conditions and provisions of the Plan
and administrative interpretations thereunder, if any,
which have been adopted by the Committee and are in
effect on the date hereof. Capitalized terms used (but
not otherwise defined herein) shall have the meanings
assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained
herein, the Committee hereby grants to the Optionee an
option ("Option") for a term of ten years ending on
April 7, 2009 ("Option Period") to purchase from the
Company 43,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $7.031 per
share.
3. This Option shall not be exercisable until after 6
months immediately following the Effective Date, and
thereafter shall be exercisable for Common Stock as
follows:
(a) On October 7, 1999, this Option shall be
exercisable for any number of shares up to and
including, but not in excess of, 33-1/3% of the
aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable
for any number of shares up to and including, but
not in excess of, 66-2/3% of the aggregate number
of shares subject to this Option; and
(c) On April 7, 2001, this Option shall be exercisable
for any number of shares of Common Stock up to and
including, but not in excess of, 100% of the
aggregate number of shares subject to this Option;
provided the number of shares as to which this
Option becomes exercisable shall, in each case, be
reduced by the number of shares theretofore
purchased pursuant to the terms hereof.
4. The Option herein granted may be exercised by the
Optionee by giving written notice to the Secretary of
the Company setting forth the number of Option Shares
with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased
and any appropriate withholding taxes, and specifying
the address to which the certificate for such shares is
to be mailed. Payment shall be by means of cash,
certified check, bank draft or postal money order
payable to the order of the Company. As promptly as
practicable after receipt of such written notification
and payment, the Company shall deliver to the Optionee
certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to
which the Option herein granted is exercised by
tendering to the Company other shares of Common Stock
at the time of the exercise or partial exercise hereof.
The certificates representing such other shares of
Common Stock must be accompanied by a stock power duly
executed with signature guaranteed. The value of the
Common Stock so tendered shall be its Fair Market
Value.
6. The Option herein granted shall not be transferable by
the Optionee otherwise than as permitted by Section 13
of the Plan. During the lifetime of the Optionee, such
Option shall be exercisable only by him. No transfer of
the Option herein granted shall be effective to bind
the Company unless the Company shall have been
furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to
establish the validity of the transfer and the
acceptance by the transferee or transferees of the
terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with
respect to any Option Shares until the date of issuance
of a certificate for Option Shares purchased pursuant
to this Agreement. Until such time, the Optionee shall
not be entitled to dividends or to vote at meetings of
the stockholders of the Company.
8. The Company may make such provisions as it may deem
appropriate for the withholding of any taxes which it
determines is required in connection with the option
herein granted. The Optionee may pay all or any
portion of the taxes required to be withheld by the
Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein
granted by electing to have the Company withhold shares
of Common Stock, or by delivering previously owned
shares of Common Stock, having a Fair Market Value
equal to the amount required to be withheld or paid.
The Optionee must make the foregoing election on or
before the date that the amount of tax to be withheld
is determined ("Tax Date"). Any such election is
irrevocable and subject to disapproval by the
Committee. If the Optionee is subject to the short-
swing profits recapture provisions of Section 16(b) of
the Exchange Act, any such election shall be subject to
the following additional restrictions:
(a) Such election may not be made within six months of
the grant of this option, provided that this
limitation shall not apply in the event of death
or disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other
time as may be consistent with Section 16(b)(3) of
the Exchange Act. Where the Tax Date in respect
of the exercise of all or any portion of this
Option is deferred until after such exercise and
the Optionee elects stock withholding, the full
amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this
Option, but the Optionee shall be unconditionally
obligated to tender back to the Company on the Tax
Date the number of shares necessary to discharge
with respect to such Option exercise the greater
of (i) the Company's withholding obligation and
(ii) all or any portion of the holder's federal
and state tax obligation attributable to the
Option exercise. An Election Window is any period
commencing on the third business day following the
Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the
twelfth business day following such release.
9. Upon the acquisition of any shares pursuant to the
exercise of the Option herein granted, the Optionee
will enter into such written representations,
warranties and agreements as the Company may reasonably
request in order to comply with applicable securities
laws or with this Agreement.
10. The certificates representing the Option Shares
purchased by exercise of an option will be stamped or
otherwise imprinted with a legend in such form as the
Company or its counsel may require with respect to any
applicable restrictions on sale or transfer, and the
stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to
such shares.
11. Unless otherwise provided herein, every notice
hereunder shall be in writing and shall be given by
registered or certified mail. All notices of the
exercise by the Optionee of any option hereunder shall
be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its
principal office. Any notice given by the Company to
the Optionee directed to him at his address on file
with the Company shall be effective to bind any other
person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of
any of the Optionee's rights hereunder and the Optionee
shall be deemed to have familiarized himself with all
matters contained herein and in the Plan which may
affect any of the Optionee's rights or privileges
hereunder.
12. Whenever the term "Optionee" is used herein under
circumstances applicable to any other person or persons
to whom this Award, in accordance with the provisions
of Paragraph 6, may be transferred, the word "Optionee"
shall be deemed to include such person or persons.
References to the masculine gender herein also include
the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the
Optionee agrees that he will not exercise the option
herein granted, and that the Company will not be
obligated to issue any shares pursuant to this
Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would
constitute a violation by the Optionee or by the
Company of any provision of any law or regulation of
any governmental authority or any national securities
exchange.
IN WITNESS WHEREOF, this Agreement is executed this 7th day
of April, 1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_______________________
Dr. P.C. Chatterjee
EXHIBIT 10.292
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and A.L. Chavkin
("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member
of the Board of Directors of the Company, is entitled to receive
a non-qualified stock option award under the Company's 1995
Director Long-Term Incentive Plan ("Plan"), as an incentive to
the Optionee to remain a director of the Company and contribute
to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises,
it is hereby agreed as follows:
1. The Option is issued in accordance with and subject to
all of the terms, conditions and provisions of the Plan
and administrative interpretations thereunder, if any,
which have been adopted by the Committee and are in
effect on the date hereof. Capitalized terms used (but
not otherwise defined herein) shall have the meanings
assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained
herein, the Committee hereby grants to the Optionee an
option ("Option") for a term of ten years ending on
April 7, 2009 ("Option Period") to purchase from the
Company 43,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $7.031 per
share.
3. This Option shall not be exercisable until after 6
months immediately following the Effective Date, and
thereafter shall be exercisable for Common Stock as
follows:
(a) On October 7, 1999, this Option shall be
exercisable for any number of shares up to and
including, but not in excess of, 33-1/3% of the
aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable
for any number of shares up to and including, but
not in excess of, 66-2/3% of the aggregate number
of shares subject to this Option; and
(c) On April 7, 2001, this Option shall be exercisable
for any number of shares of Common Stock up to and
including, but not in excess of, 100% of the
aggregate number of shares subject to this Option;
provided the number of shares as to which this
Option becomes exercisable shall, in each case, be
reduced by the number of shares theretofore
purchased pursuant to the terms hereof.
4. The Option herein granted may be exercised by the
Optionee by giving written notice to the Secretary of
the Company setting forth the number of Option Shares
with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased
and any appropriate withholding taxes, and specifying
the address to which the certificate for such shares is
to be mailed. Payment shall be by means of cash,
certified check, bank draft or postal money order
payable to the order of the Company. As promptly as
practicable after receipt of such written notification
and payment, the Company shall deliver to the Optionee
certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to
which the Option herein granted is exercised by
tendering to the Company other shares of Common Stock
at the time of the exercise or partial exercise hereof.
The certificates representing such other shares of
Common Stock must be accompanied by a stock power duly
executed with signature guaranteed. The value of the
Common Stock so tendered shall be its Fair Market
Value.
6. The Option herein granted shall not be transferable by
the Optionee otherwise than as permitted by Section 13
of the Plan. During the lifetime of the Optionee, such
Option shall be exercisable only by him. No transfer of
the Option herein granted shall be effective to bind
the Company unless the Company shall have been
furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to
establish the validity of the transfer and the
acceptance by the transferee or transferees of the
terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with
respect to any Option Shares until the date of issuance
of a certificate for Option Shares purchased pursuant
to this Agreement. Until such time, the Optionee shall
not be entitled to dividends or to vote at meetings of
the stockholders of the Company.
8. The Company may make such provisions as it may deem
appropriate for the withholding of any taxes which it
determines is required in connection with the option
herein granted. The Optionee may pay all or any
portion of the taxes required to be withheld by the
Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein
granted by electing to have the Company withhold shares
of Common Stock, or by delivering previously owned
shares of Common Stock, having a Fair Market Value
equal to the amount required to be withheld or paid.
The Optionee must make the foregoing election on or
before the date that the amount of tax to be withheld
is determined ("Tax Date"). Any such election is
irrevocable and subject to disapproval by the
Committee. If the Optionee is subject to the short-
swing profits recapture provisions of Section 16(b) of
the Exchange Act, any such election shall be subject to
the following additional restrictions:
(a) Such election may not be made within six months of
the grant of this option, provided that this
limitation shall not apply in the event of death
or disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other
time as may be consistent with Section 16(b)(3) of
the Exchange Act. Where the Tax Date in respect
of the exercise of all or any portion of this
Option is deferred until after such exercise and
the Optionee elects stock withholding, the full
amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this
Option, but the Optionee shall be unconditionally
obligated to tender back to the Company on the Tax
Date the number of shares necessary to discharge
with respect to such Option exercise the greater
of (i) the Company's withholding obligation and
(ii) all or any portion of the holder's federal
and state tax obligation attributable to the
Option exercise. An Election Window is any period
commencing on the third business day following the
Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the
twelfth business day following such release.
9. Upon the acquisition of any shares pursuant to the
exercise of the Option herein granted, the Optionee
will enter into such written representations,
warranties and agreements as the Company may reasonably
request in order to comply with applicable securities
laws or with this Agreement.
10. The certificates representing the Option Shares
purchased by exercise of an option will be stamped or
otherwise imprinted with a legend in such form as the
Company or its counsel may require with respect to any
applicable restrictions on sale or transfer, and the
stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to
such shares.
11. Unless otherwise provided herein, every notice
hereunder shall be in writing and shall be given by
registered or certified mail. All notices of the
exercise by the Optionee of any option hereunder shall
be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its
principal office. Any notice given by the Company to
the Optionee directed to him at his address on file
with the Company shall be effective to bind any other
person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of
any of the Optionee's rights hereunder and the Optionee
shall be deemed to have familiarized himself with all
matters contained herein and in the Plan which may
affect any of the Optionee's rights or privileges
hereunder.
12. Whenever the term "Optionee" is used herein under
circumstances applicable to any other person or persons
to whom this Award, in accordance with the provisions
of Paragraph 6, may be transferred, the word "Optionee"
shall be deemed to include such person or persons.
References to the masculine gender herein also include
the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the
Optionee agrees that he will not exercise the option
herein granted, and that the Company will not be
obligated to issue any shares pursuant to this
Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would
constitute a violation by the Optionee or by the
Company of any provision of any law or regulation of
any governmental authority or any national securities
exchange.
IN WITNESS WHEREOF, this Agreement is executed this 7th day
of April, 1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
______________________
A.L. Chavkin
EXHIBIT 10.293
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and Charles A.
Donabedian ("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member
of the Board of Directors of the Company, is entitled to receive
a non-qualified stock option award under the Company's 1998
Director Long-Term Incentive Plan ("Plan"), as an incentive to
the Optionee to remain a director of the Company and contribute
to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises,
it is hereby agreed as follows:
1. The Option is issued in accordance with and subject to
all of the terms, conditions and provisions of the Plan
and administrative interpretations thereunder, if any,
which have been adopted by the Committee and are in
effect on the date hereof. Capitalized terms used (but
not otherwise defined herein) shall have the meanings
assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained
herein, the Committee hereby grants to the Optionee an
option ("Option") for a term of ten years ending on
April 7, 2009 ("Option Period") to purchase from the
Company 43,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $7.031 per
share.
3. This Option shall not be exercisable until after 6
months immediately following the Effective Date, and
thereafter shall be exercisable for Common Stock as
follows:
(a) On October 7, 1999, this Option shall be
exercisable for any number of shares up to and
including, but not in excess of, 33-1/3% of the
aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable
for any number of shares up to and including, but
not in excess of, 66-2/3% of the aggregate number
of shares subject to this Option; and
(c) On April 7, 2001, this Option shall be exercisable
for any number of shares of Common Stock up to and
including, but not in excess of, 100% of the
aggregate number of shares subject to this Option;
provided the number of shares as to which this
Option becomes exercisable shall, in each case, be
reduced by the number of shares theretofore
purchased pursuant to the terms hereof.
4. The Option herein granted may be exercised by the
Optionee by giving written notice to the Secretary of
the Company setting forth the number of Option Shares
with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased
and any appropriate withholding taxes, and specifying
the address to which the certificate for such shares is
to be mailed. Payment shall be by means of cash,
certified check, bank draft or postal money order
payable to the order of the Company. As promptly as
practicable after receipt of such written notification
and payment, the Company shall deliver to the Optionee
certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to
which the Option herein granted is exercised by
tendering to the Company other shares of Common Stock
at the time of the exercise or partial exercise hereof.
The certificates representing such other shares of
Common Stock must be accompanied by a stock power duly
executed with signature guaranteed. The value of the
Common Stock so tendered shall be its Fair Market
Value.
6. The Option herein granted shall not be transferable by
the Optionee otherwise than as permitted by Section 13
of the Plan. During the lifetime of the Optionee, such
Option shall be exercisable only by him. No transfer of
the Option herein granted shall be effective to bind
the Company unless the Company shall have been
furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to
establish the validity of the transfer and the
acceptance by the transferee or transferees of the
terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with
respect to any Option Shares until the date of issuance
of a certificate for Option Shares purchased pursuant
to this Agreement. Until such time, the Optionee shall
not be entitled to dividends or to vote at meetings of
the stockholders of the Company.
8. The Company may make such provisions as it may deem
appropriate for the withholding of any taxes which it
determines is required in connection with the option
herein granted. The Optionee may pay all or any
portion of the taxes required to be withheld by the
Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein
granted by electing to have the Company withhold shares
of Common Stock, or by delivering previously owned
shares of Common Stock, having a Fair Market Value
equal to the amount required to be withheld or paid.
The Optionee must make the foregoing election on or
before the date that the amount of tax to be withheld
is determined ("Tax Date"). Any such election is
irrevocable and subject to disapproval by the
Committee. If the Optionee is subject to the short-
swing profits recapture provisions of Section 16(b) of
the Exchange Act, any such election shall be subject to
the following additional restrictions:
(a) Such election may not be made within six months of
the grant of this option, provided that this
limitation shall not apply in the event of death
or disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other
time as may be consistent with Section 16(b)(3) of
the Exchange Act. Where the Tax Date in respect
of the exercise of all or any portion of this
Option is deferred until after such exercise and
the Optionee elects stock withholding, the full
amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this
Option, but the Optionee shall be unconditionally
obligated to tender back to the Company on the Tax
Date the number of shares necessary to discharge
with respect to such Option exercise the greater
of (i) the Company's withholding obligation and
(ii) all or any portion of the holder's federal
and state tax obligation attributable to the
Option exercise. An Election Window is any period
commencing on the third business day following the
Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the
twelfth business day following such release.
9. Upon the acquisition of any shares pursuant to the
exercise of the Option herein granted, the Optionee
will enter into such written representations,
warranties and agreements as the Company may reasonably
request in order to comply with applicable securities
laws or with this Agreement.
10. The certificates representing the Option Shares
purchased by exercise of an option will be stamped or
otherwise imprinted with a legend in such form as the
Company or its counsel may require with respect to any
applicable restrictions on sale or transfer, and the
stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to
such shares.
11. Unless otherwise provided herein, every notice
hereunder shall be in writing and shall be given by
registered or certified mail. All notices of the
exercise by the Optionee of any option hereunder shall
be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its
principal office. Any notice given by the Company to
the Optionee directed to him at his address on file
with the Company shall be effective to bind any other
person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of
any of the Optionee's rights hereunder and the Optionee
shall be deemed to have familiarized himself with all
matters contained herein and in the Plan which may
affect any of the Optionee's rights or privileges
hereunder.
12. Whenever the term "Optionee" is used herein under
circumstances applicable to any other person or persons
to whom this Award, in accordance with the provisions
of Paragraph 6, may be transferred, the word "Optionee"
shall be deemed to include such person or persons.
References to the masculine gender herein also include
the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the
Optionee agrees that he will not exercise the option
herein granted, and that the Company will not be
obligated to issue any shares pursuant to this
Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would
constitute a violation by the Optionee or by the
Company of any provision of any law or regulation of
any governmental authority or any national securities
exchange.
IN WITNESS WHEREOF, this Agreement is executed this 7th day
of April, 1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_______________________
Charles A. Donabedian
EXHIBIT 10.294
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and Douglas A.P.
Hamilton ("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member
of the Board of Directors of the Company, is entitled to receive
a non-qualified stock option award under the Company's 1998
Director Long-Term Incentive Plan ("Plan"), as an incentive to
the Optionee to remain a director of the Company and contribute
to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises,
it is hereby agreed as follows:
1. The Option is issued in accordance with and subject to
all of the terms, conditions and provisions of the Plan
and administrative interpretations thereunder, if any,
which have been adopted by the Committee and are in
effect on the date hereof. Capitalized terms used (but
not otherwise defined herein) shall have the meanings
assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained
herein, the Committee hereby grants to the Optionee an
option ("Option") for a term of ten years ending on
April 7, 2009 ("Option Period") to purchase from the
Company 43,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $7.031 per
share.
3. This Option shall not be exercisable until after 6
months immediately following the Effective Date, and
thereafter shall be exercisable for Common Stock as
follows:
(a) On October 7, 1999, this Option shall be
exercisable for any number of shares up to and
including, but not in excess of, 33-1/3% of the
aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable
for any number of shares up to and including, but
not in excess of, 66-2/3% of the aggregate number
of shares subject to this Option; and
(c) On April 7, 2001, this Option shall be exercisable
for any number of shares of Common Stock up to and
including, but not in excess of, 100% of the
aggregate number of shares subject to this Option;
provided the number of shares as to which this
Option becomes exercisable shall, in each case, be
reduced by the number of shares theretofore
purchased pursuant to the terms hereof.
4. The Option herein granted may be exercised by the
Optionee by giving written notice to the Secretary of
the Company setting forth the number of Option Shares
with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased
and any appropriate withholding taxes, and specifying
the address to which the certificate for such shares is
to be mailed. Payment shall be by means of cash,
certified check, bank draft or postal money order
payable to the order of the Company. As promptly as
practicable after receipt of such written notification
and payment, the Company shall deliver to the Optionee
certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to
which the Option herein granted is exercised by
tendering to the Company other shares of Common Stock
at the time of the exercise or partial exercise hereof.
The certificates representing such other shares of
Common Stock must be accompanied by a stock power duly
executed with signature guaranteed. The value of the
Common Stock so tendered shall be its Fair Market
Value.
6. The Option herein granted shall not be transferable by
the Optionee otherwise than as permitted by Section 13
of the Plan. During the lifetime of the Optionee, such
Option shall be exercisable only by him. No transfer of
the Option herein granted shall be effective to bind
the Company unless the Company shall have been
furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to
establish the validity of the transfer and the
acceptance by the transferee or transferees of the
terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with
respect to any Option Shares until the date of issuance
of a certificate for Option Shares purchased pursuant
to this Agreement. Until such time, the Optionee shall
not be entitled to dividends or to vote at meetings of
the stockholders of the Company.
8. The Company may make such provisions as it may deem
appropriate for the withholding of any taxes which it
determines is required in connection with the option
herein granted. The Optionee may pay all or any
portion of the taxes required to be withheld by the
Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein
granted by electing to have the Company withhold shares
of Common Stock, or by delivering previously owned
shares of Common Stock, having a Fair Market Value
equal to the amount required to be withheld or paid.
The Optionee must make the foregoing election on or
before the date that the amount of tax to be withheld
is determined ("Tax Date"). Any such election is
irrevocable and subject to disapproval by the
Committee. If the Optionee is subject to the short-
swing profits recapture provisions of Section 16(b) of
the Exchange Act, any such election shall be subject to
the following additional restrictions:
(a) Such election may not be made within six months of
the grant of this option, provided that this
limitation shall not apply in the event of death
or disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other
time as may be consistent with Section 16(b)(3) of
the Exchange Act. Where the Tax Date in respect
of the exercise of all or any portion of this
Option is deferred until after such exercise and
the Optionee elects stock withholding, the full
amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this
Option, but the Optionee shall be unconditionally
obligated to tender back to the Company on the Tax
Date the number of shares necessary to discharge
with respect to such Option exercise the greater
of (i) the Company's withholding obligation and
(ii) all or any portion of the holder's federal
and state tax obligation attributable to the
Option exercise. An Election Window is any period
commencing on the third business day following the
Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the
twelfth business day following such release.
9. Upon the acquisition of any shares pursuant to the
exercise of the Option herein granted, the Optionee
will enter into such written representations,
warranties and agreements as the Company may reasonably
request in order to comply with applicable securities
laws or with this Agreement.
10. The certificates representing the Option Shares
purchased by exercise of an option will be stamped or
otherwise imprinted with a legend in such form as the
Company or its counsel may require with respect to any
applicable restrictions on sale or transfer, and the
stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to
such shares.
11. Unless otherwise provided herein, every notice
hereunder shall be in writing and shall be given by
registered or certified mail. All notices of the
exercise by the Optionee of any option hereunder shall
be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its
principal office. Any notice given by the Company to
the Optionee directed to him at his address on file
with the Company shall be effective to bind any other
person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of
any of the Optionee's rights hereunder and the Optionee
shall be deemed to have familiarized himself with all
matters contained herein and in the Plan which may
affect any of the Optionee's rights or privileges
hereunder.
12. Whenever the term "Optionee" is used herein under
circumstances applicable to any other person or persons
to whom this Award, in accordance with the provisions
of Paragraph 6, may be transferred, the word "Optionee"
shall be deemed to include such person or persons.
References to the masculine gender herein also include
the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the
Optionee agrees that he will not exercise the option
herein granted, and that the Company will not be
obligated to issue any shares pursuant to this
Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would
constitute a violation by the Optionee or by the
Company of any provision of any law or regulation of
any governmental authority or any national securities
exchange.
IN WITNESS WHEREOF, this Agreement is executed this 7th day
of April, 1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
__________________________
Douglas A.P. Hamilton
EXHIBIT 10.295
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and Dr. Macko
A.E. Laqueur ("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member
of the Board of Directors of the Company, is entitled to receive
a non-qualified stock option award under the Company's 1995
Director Long-Term Incentive Plan ("Plan"), as an incentive to
the Optionee to remain a director of the Company and contribute
to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises,
it is hereby agreed as follows:
1. The Option is issued in accordance with and subject to
all of the terms, conditions and provisions of the Plan
and administrative interpretations thereunder, if any,
which have been adopted by the Committee and are in
effect on the date hereof. Capitalized terms used (but
not otherwise defined herein) shall have the meanings
assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained
herein, the Committee hereby grants to the Optionee an
option ("Option") for a term of ten years ending on
April 7, 2009 ("Option Period") to purchase from the
Company 43,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $7.031 per
share.
3. This Option shall not be exercisable until after 6
months immediately following the Effective Date, and
thereafter shall be exercisable for Common Stock as
follows:
(a) On October 7, 1999, this Option shall be
exercisable for any number of shares up to and
including, but not in excess of, 33-1/3% of the
aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable
for any number of shares up to and including, but
not in excess of, 66-2/3% of the aggregate number
of shares subject to this Option; and
(c) On April 7, 2001, this Option shall be exercisable
for any number of shares of Common Stock up to and
including, but not in excess of, 100% of the
aggregate number of shares subject to this Option;
provided the number of shares as to which this
Option becomes exercisable shall, in each case, be
reduced by the number of shares theretofore
purchased pursuant to the terms hereof.
4. The Option herein granted may be exercised by the
Optionee by giving written notice to the Secretary of
the Company setting forth the number of Option Shares
with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased
and any appropriate withholding taxes, and specifying
the address to which the certificate for such shares is
to be mailed. Payment shall be by means of cash,
certified check, bank draft or postal money order
payable to the order of the Company. As promptly as
practicable after receipt of such written notification
and payment, the Company shall deliver to the Optionee
certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to
which the Option herein granted is exercised by
tendering to the Company other shares of Common Stock
at the time of the exercise or partial exercise hereof.
The certificates representing such other shares of
Common Stock must be accompanied by a stock power duly
executed with signature guaranteed. The value of the
Common Stock so tendered shall be its Fair Market
Value.
6. The Option herein granted shall not be transferable by
the Optionee otherwise than as permitted by Section 13
of the Plan. During the lifetime of the Optionee, such
Option shall be exercisable only by him. No transfer of
the Option herein granted shall be effective to bind
the Company unless the Company shall have been
furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to
establish the validity of the transfer and the
acceptance by the transferee or transferees of the
terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with
respect to any Option Shares until the date of issuance
of a certificate for Option Shares purchased pursuant
to this Agreement. Until such time, the Optionee shall
not be entitled to dividends or to vote at meetings of
the stockholders of the Company.
8. The Company may make such provisions as it may deem
appropriate for the withholding of any taxes which it
determines is required in connection with the option
herein granted. The Optionee may pay all or any
portion of the taxes required to be withheld by the
Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein
granted by electing to have the Company withhold shares
of Common Stock, or by delivering previously owned
shares of Common Stock, having a Fair Market Value
equal to the amount required to be withheld or paid.
The Optionee must make the foregoing election on or
before the date that the amount of tax to be withheld
is determined ("Tax Date"). Any such election is
irrevocable and subject to disapproval by the
Committee. If the Optionee is subject to the short-
swing profits recapture provisions of Section 16(b) of
the Exchange Act, any such election shall be subject to
the following additional restrictions:
(a) Such election may not be made within six months of
the grant of this option, provided that this
limitation shall not apply in the event of death
or disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other
time as may be consistent with Section 16(b)(3) of
the Exchange Act. Where the Tax Date in respect
of the exercise of all or any portion of this
Option is deferred until after such exercise and
the Optionee elects stock withholding, the full
amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this
Option, but the Optionee shall be unconditionally
obligated to tender back to the Company on the Tax
Date the number of shares necessary to discharge
with respect to such Option exercise the greater
of (i) the Company's withholding obligation and
(ii) all or any portion of the holder's federal
and state tax obligation attributable to the
Option exercise. An Election Window is any period
commencing on the third business day following the
Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the
twelfth business day following such release.
9. Upon the acquisition of any shares pursuant to the
exercise of the Option herein granted, the Optionee
will enter into such written representations,
warranties and agreements as the Company may reasonably
request in order to comply with applicable securities
laws or with this Agreement.
10. The certificates representing the Option Shares
purchased by exercise of an option will be stamped or
otherwise imprinted with a legend in such form as the
Company or its counsel may require with respect to any
applicable restrictions on sale or transfer, and the
stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to
such shares.
11. Unless otherwise provided herein, every notice
hereunder shall be in writing and shall be given by
registered or certified mail. All notices of the
exercise by the Optionee of any option hereunder shall
be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its
principal office. Any notice given by the Company to
the Optionee directed to him at his address on file
with the Company shall be effective to bind any other
person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of
any of the Optionee's rights hereunder and the Optionee
shall be deemed to have familiarized himself with all
matters contained herein and in the Plan which may
affect any of the Optionee's rights or privileges
hereunder.
12. Whenever the term "Optionee" is used herein under
circumstances applicable to any other person or persons
to whom this Award, in accordance with the provisions
of Paragraph 6, may be transferred, the word "Optionee"
shall be deemed to include such person or persons.
References to the masculine gender herein also include
the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the
Optionee agrees that he will not exercise the option
herein granted, and that the Company will not be
obligated to issue any shares pursuant to this
Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would
constitute a violation by the Optionee or by the
Company of any provision of any law or regulation of
any governmental authority or any national securities
exchange.
IN WITNESS WHEREOF, this Agreement is executed this 7th day
of April, 1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Dr. Macko A.E. Laqueur
EXHIBIT 10.296
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and Professor
Michael Porter ("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member
of the Board of Directors of the Company, is entitled to receive
a non-qualified stock option award under the Company's 1998
Director Long-Term Incentive Plan ("Plan"), as an incentive to
the Optionee to remain a director of the Company and contribute
to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises,
it is hereby agreed as follows:
1. The Option is issued in accordance with and subject to
all of the terms, conditions and provisions of the Plan
and administrative interpretations thereunder, if any,
which have been adopted by the Committee and are in
effect on the date hereof. Capitalized terms used (but
not otherwise defined herein) shall have the meanings
assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained
herein, the Committee hereby grants to the Optionee an
option ("Option") for a term of ten years ending on
April 7, 2009 ("Option Period") to purchase from the
Company 43,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $7.031 per
share.
3. This Option shall not be exercisable until after 6
months immediately following the Effective Date, and
thereafter shall be exercisable for Common Stock as
follows:
(a) On October 7, 1999, this Option shall be
exercisable for any number of shares up to and
including, but not in excess of, 33-1/3% of the
aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable
for any number of shares up to and including, but
not in excess of, 66-2/3% of the aggregate number
of shares subject to this Option; and
(c) On April 7, 2001, this Option shall be exercisable
for any number of shares of Common Stock up to and
including, but not in excess of, 100% of the
aggregate number of shares subject to this Option;
provided the number of shares as to which this
Option becomes exercisable shall, in each case, be
reduced by the number of shares theretofore
purchased pursuant to the terms hereof.
4. The Option herein granted may be exercised by the
Optionee by giving written notice to the Secretary of
the Company setting forth the number of Option Shares
with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased
and any appropriate withholding taxes, and specifying
the address to which the certificate for such shares is
to be mailed. Payment shall be by means of cash,
certified check, bank draft or postal money order
payable to the order of the Company. As promptly as
practicable after receipt of such written notification
and payment, the Company shall deliver to the Optionee
certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to
which the Option herein granted is exercised by
tendering to the Company other shares of Common Stock
at the time of the exercise or partial exercise hereof.
The certificates representing such other shares of
Common Stock must be accompanied by a stock power duly
executed with signature guaranteed. The value of the
Common Stock so tendered shall be its Fair Market
Value.
6. The Option herein granted shall not be transferable by
the Optionee otherwise than as permitted by Section 13
of the Plan. During the lifetime of the Optionee, such
Option shall be exercisable only by him. No transfer of
the Option herein granted shall be effective to bind
the Company unless the Company shall have been
furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to
establish the validity of the transfer and the
acceptance by the transferee or transferees of the
terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with
respect to any Option Shares until the date of issuance
of a certificate for Option Shares purchased pursuant
to this Agreement. Until such time, the Optionee shall
not be entitled to dividends or to vote at meetings of
the stockholders of the Company.
8. The Company may make such provisions as it may deem
appropriate for the withholding of any taxes which it
determines is required in connection with the option
herein granted. The Optionee may pay all or any
portion of the taxes required to be withheld by the
Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein
granted by electing to have the Company withhold shares
of Common Stock, or by delivering previously owned
shares of Common Stock, having a Fair Market Value
equal to the amount required to be withheld or paid.
The Optionee must make the foregoing election on or
before the date that the amount of tax to be withheld
is determined ("Tax Date"). Any such election is
irrevocable and subject to disapproval by the
Committee. If the Optionee is subject to the short-
swing profits recapture provisions of Section 16(b) of
the Exchange Act, any such election shall be subject to
the following additional restrictions:
(a) Such election may not be made within six months of
the grant of this option, provided that this
limitation shall not apply in the event of death
or disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other
time as may be consistent with Section 16(b)(3) of
the Exchange Act. Where the Tax Date in respect
of the exercise of all or any portion of this
Option is deferred until after such exercise and
the Optionee elects stock withholding, the full
amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this
Option, but the Optionee shall be unconditionally
obligated to tender back to the Company on the Tax
Date the number of shares necessary to discharge
with respect to such Option exercise the greater
of (i) the Company's withholding obligation and
(ii) all or any portion of the holder's federal
and state tax obligation attributable to the
Option exercise. An Election Window is any period
commencing on the third business day following the
Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the
twelfth business day following such release.
9. Upon the acquisition of any shares pursuant to the
exercise of the Option herein granted, the Optionee
will enter into such written representations,
warranties and agreements as the Company may reasonably
request in order to comply with applicable securities
laws or with this Agreement.
10. The certificates representing the Option Shares
purchased by exercise of an option will be stamped or
otherwise imprinted with a legend in such form as the
Company or its counsel may require with respect to any
applicable restrictions on sale or transfer, and the
stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to
such shares.
11. Unless otherwise provided herein, every notice
hereunder shall be in writing and shall be given by
registered or certified mail. All notices of the
exercise by the Optionee of any option hereunder shall
be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its
principal office. Any notice given by the Company to
the Optionee directed to him at his address on file
with the Company shall be effective to bind any other
person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of
any of the Optionee's rights hereunder and the Optionee
shall be deemed to have familiarized himself with all
matters contained herein and in the Plan which may
affect any of the Optionee's rights or privileges
hereunder.
12. Whenever the term "Optionee" is used herein under
circumstances applicable to any other person or persons
to whom this Award, in accordance with the provisions
of Paragraph 6, may be transferred, the word "Optionee"
shall be deemed to include such person or persons.
References to the masculine gender herein also include
the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the
Optionee agrees that he will not exercise the option
herein granted, and that the Company will not be
obligated to issue any shares pursuant to this
Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would
constitute a violation by the Optionee or by the
Company of any provision of any law or regulation of
any governmental authority or any national securities
exchange.
IN WITNESS WHEREOF, this Agreement is executed this 7th day
of April, 1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
________________________
Professor Michael Porter
EXHIBIT 10.297
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and Dr. Robert L.
Sandmeyer ("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member
of the Board of Directors of the Company, is entitled to receive
a non-qualified stock option award under the Company's 1998
Director Long-Term Incentive Plan ("Plan"), as an incentive to
the Optionee to remain a director of the Company and contribute
to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises,
it is hereby agreed as follows:
1. The Option is issued in accordance with and subject to
all of the terms, conditions and provisions of the Plan
and administrative interpretations thereunder, if any,
which have been adopted by the Committee and are in
effect on the date hereof. Capitalized terms used (but
not otherwise defined herein) shall have the meanings
assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained
herein, the Committee hereby grants to the Optionee an
option ("Option") for a term of ten years ending on
April 7, 2009 ("Option Period") to purchase from the
Company 34,600 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $7.031 per
share.
3. This Option shall not be exercisable until after 6
months immediately following the Effective Date, and
thereafter shall be exercisable for Common Stock as
follows:
(a) On October 7, 1999, this Option shall be
exercisable for any number of shares up to and
including, but not in excess of, 33-1/3% of the
aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable
for any number of shares up to and including, but
not in excess of, 66-2/3% of the aggregate number
of shares subject to this Option; and
(c) On April 7, 2001, this Option shall be exercisable
for any number of shares of Common Stock up to and
including, but not in excess of, 100% of the
aggregate number of shares subject to this Option;
provided the number of shares as to which this
Option becomes exercisable shall, in each case, be
reduced by the number of shares theretofore
purchased pursuant to the terms hereof.
4. The Option herein granted may be exercised by the
Optionee by giving written notice to the Secretary of
the Company setting forth the number of Option Shares
with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased
and any appropriate withholding taxes, and specifying
the address to which the certificate for such shares is
to be mailed. Payment shall be by means of cash,
certified check, bank draft or postal money order
payable to the order of the Company. As promptly as
practicable after receipt of such written notification
and payment, the Company shall deliver to the Optionee
certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to
which the Option herein granted is exercised by
tendering to the Company other shares of Common Stock
at the time of the exercise or partial exercise hereof.
The certificates representing such other shares of
Common Stock must be accompanied by a stock power duly
executed with signature guaranteed. The value of the
Common Stock so tendered shall be its Fair Market
Value.
6. The Option herein granted shall not be transferable by
the Optionee otherwise than as permitted by Section 13
of the Plan. During the lifetime of the Optionee, such
Option shall be exercisable only by him. No transfer of
the Option herein granted shall be effective to bind
the Company unless the Company shall have been
furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to
establish the validity of the transfer and the
acceptance by the transferee or transferees of the
terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with
respect to any Option Shares until the date of issuance
of a certificate for Option Shares purchased pursuant
to this Agreement. Until such time, the Optionee shall
not be entitled to dividends or to vote at meetings of
the stockholders of the Company.
8. The Company may make such provisions as it may deem
appropriate for the withholding of any taxes which it
determines is required in connection with the option
herein granted. The Optionee may pay all or any
portion of the taxes required to be withheld by the
Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein
granted by electing to have the Company withhold shares
of Common Stock, or by delivering previously owned
shares of Common Stock, having a Fair Market Value
equal to the amount required to be withheld or paid.
The Optionee must make the foregoing election on or
before the date that the amount of tax to be withheld
is determined ("Tax Date"). Any such election is
irrevocable and subject to disapproval by the
Committee. If the Optionee is subject to the short-
swing profits recapture provisions of Section 16(b) of
the Exchange Act, any such election shall be subject to
the following additional restrictions:
(a) Such election may not be made within six months of
the grant of this option, provided that this
limitation shall not apply in the event of death
or disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other
time as may be consistent with Section 16(b)(3) of
the Exchange Act. Where the Tax Date in respect
of the exercise of all or any portion of this
Option is deferred until after such exercise and
the Optionee elects stock withholding, the full
amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this
Option, but the Optionee shall be unconditionally
obligated to tender back to the Company on the Tax
Date the number of shares necessary to discharge
with respect to such Option exercise the greater
of (i) the Company's withholding obligation and
(ii) all or any portion of the holder's federal
and state tax obligation attributable to the
Option exercise. An Election Window is any period
commencing on the third business day following the
Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the
twelfth business day following such release.
9. Upon the acquisition of any shares pursuant to the
exercise of the Option herein granted, the Optionee
will enter into such written representations,
warranties and agreements as the Company may reasonably
request in order to comply with applicable securities
laws or with this Agreement.
10. The certificates representing the Option Shares
purchased by exercise of an option will be stamped or
otherwise imprinted with a legend in such form as the
Company or its counsel may require with respect to any
applicable restrictions on sale or transfer, and the
stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to
such shares.
11. Unless otherwise provided herein, every notice
hereunder shall be in writing and shall be given by
registered or certified mail. All notices of the
exercise by the Optionee of any option hereunder shall
be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its
principal office. Any notice given by the Company to
the Optionee directed to him at his address on file
with the Company shall be effective to bind any other
person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of
any of the Optionee's rights hereunder and the Optionee
shall be deemed to have familiarized himself with all
matters contained herein and in the Plan which may
affect any of the Optionee's rights or privileges
hereunder.
12. Whenever the term "Optionee" is used herein under
circumstances applicable to any other person or persons
to whom this Award, in accordance with the provisions
of Paragraph 6, may be transferred, the word "Optionee"
shall be deemed to include such person or persons.
References to the masculine gender herein also include
the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the
Optionee agrees that he will not exercise the option
herein granted, and that the Company will not be
obligated to issue any shares pursuant to this
Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would
constitute a violation by the Optionee or by the
Company of any provision of any law or regulation of
any governmental authority or any national securities
exchange.
IN WITNESS WHEREOF, this Agreement is executed this 7th day
of April, 1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
________________________
Dr. Robert L. Sandmeyer
EXHIBIT 10.298
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and Dr. Robert L.
Sandmeyer ("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member
of the Board of Directors of the Company, is entitled to receive
a non-qualified stock option award under the Company's 1995
Director Long-Term Incentive Plan ("Plan"), as an incentive to
the Optionee to remain a director of the Company and contribute
to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises,
it is hereby agreed as follows:
1. The Option is issued in accordance with and subject to
all of the terms, conditions and provisions of the Plan
and administrative interpretations thereunder, if any,
which have been adopted by the Committee and are in
effect on the date hereof. Capitalized terms used (but
not otherwise defined herein) shall have the meanings
assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained
herein, the Committee hereby grants to the Optionee an
option ("Option") for a term of ten years ending on
April 7, 2009 ("Option Period") to purchase from the
Company 8,400 shares ("Option Shares") of the Company's
Common Stock, at a price equal to $7.031 per share.
3. This Option shall not be exercisable until after 6
months immediately following the Effective Date, and
thereafter shall be exercisable for Common Stock as
follows:
(a) On October 7, 1999, this Option shall be
exercisable for any number of shares up to and
including, but not in excess of, 33-1/3% of the
aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable
for any number of shares up to and including, but
not in excess of, 66-2/3% of the aggregate number
of shares subject to this Option; and
(c) On April 7, 2001, this Option shall be exercisable
for any number of shares of Common Stock up to and
including, but not in excess of, 100% of the
aggregate number of shares subject to this Option;
provided the number of shares as to which this
Option becomes exercisable shall, in each case, be
reduced by the number of shares theretofore
purchased pursuant to the terms hereof.
4. The Option herein granted may be exercised by the
Optionee by giving written notice to the Secretary of
the Company setting forth the number of Option Shares
with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased
and any appropriate withholding taxes, and specifying
the address to which the certificate for such shares is
to be mailed. Payment shall be by means of cash,
certified check, bank draft or postal money order
payable to the order of the Company. As promptly as
practicable after receipt of such written notification
and payment, the Company shall deliver to the Optionee
certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to
which the Option herein granted is exercised by
tendering to the Company other shares of Common Stock
at the time of the exercise or partial exercise hereof.
The certificates representing such other shares of
Common Stock must be accompanied by a stock power duly
executed with signature guaranteed. The value of the
Common Stock so tendered shall be its Fair Market
Value.
6. The Option herein granted shall not be transferable by
the Optionee otherwise than as permitted by Section 13
of the Plan. During the lifetime of the Optionee, such
Option shall be exercisable only by him. No transfer of
the Option herein granted shall be effective to bind
the Company unless the Company shall have been
furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to
establish the validity of the transfer and the
acceptance by the transferee or transferees of the
terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with
respect to any Option Shares until the date of issuance
of a certificate for Option Shares purchased pursuant
to this Agreement. Until such time, the Optionee shall
not be entitled to dividends or to vote at meetings of
the stockholders of the Company.
8. The Company may make such provisions as it may deem
appropriate for the withholding of any taxes which it
determines is required in connection with the option
herein granted. The Optionee may pay all or any
portion of the taxes required to be withheld by the
Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein
granted by electing to have the Company withhold shares
of Common Stock, or by delivering previously owned
shares of Common Stock, having a Fair Market Value
equal to the amount required to be withheld or paid.
The Optionee must make the foregoing election on or
before the date that the amount of tax to be withheld
is determined ("Tax Date"). Any such election is
irrevocable and subject to disapproval by the
Committee. If the Optionee is subject to the short-
swing profits recapture provisions of Section 16(b) of
the Exchange Act, any such election shall be subject to
the following additional restrictions:
(a) Such election may not be made within six months of
the grant of this option, provided that this
limitation shall not apply in the event of death
or disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other
time as may be consistent with Section 16(b)(3) of
the Exchange Act. Where the Tax Date in respect
of the exercise of all or any portion of this
Option is deferred until after such exercise and
the Optionee elects stock withholding, the full
amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this
Option, but the Optionee shall be unconditionally
obligated to tender back to the Company on the Tax
Date the number of shares necessary to discharge
with respect to such Option exercise the greater
of (i) the Company's withholding obligation and
(ii) all or any portion of the holder's federal
and state tax obligation attributable to the
Option exercise. An Election Window is any period
commencing on the third business day following the
Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the
twelfth business day following such release.
9. Upon the acquisition of any shares pursuant to the
exercise of the Option herein granted, the Optionee
will enter into such written representations,
warranties and agreements as the Company may reasonably
request in order to comply with applicable securities
laws or with this Agreement.
10. The certificates representing the Option Shares
purchased by exercise of an option will be stamped or
otherwise imprinted with a legend in such form as the
Company or its counsel may require with respect to any
applicable restrictions on sale or transfer, and the
stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to
such shares.
11. Unless otherwise provided herein, every notice
hereunder shall be in writing and shall be given by
registered or certified mail. All notices of the
exercise by the Optionee of any option hereunder shall
be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its
principal office. Any notice given by the Company to
the Optionee directed to him at his address on file
with the Company shall be effective to bind any other
person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of
any of the Optionee's rights hereunder and the Optionee
shall be deemed to have familiarized himself with all
matters contained herein and in the Plan which may
affect any of the Optionee's rights or privileges
hereunder.
12. Whenever the term "Optionee" is used herein under
circumstances applicable to any other person or persons
to whom this Award, in accordance with the provisions
of Paragraph 6, may be transferred, the word "Optionee"
shall be deemed to include such person or persons.
References to the masculine gender herein also include
the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the
Optionee agrees that he will not exercise the option
herein granted, and that the Company will not be
obligated to issue any shares pursuant to this
Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would
constitute a violation by the Optionee or by the
Company of any provision of any law or regulation of
any governmental authority or any national securities
exchange.
IN WITNESS WHEREOF, this Agreement is executed this 7th day
of April, 1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Dr. Robert L. Sandmeyer
EXHIBIT 10.299
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and William R.
Ziegler ("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member
of the Board of Directors of the Company, is entitled to receive
a non-qualified stock option award under the Company's 1998
Director Long-Term Incentive Plan ("Plan"), as an incentive to
the Optionee to remain a director of the Company and contribute
to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises,
it is hereby agreed as follows:
1. The Option is issued in accordance with and subject to
all of the terms, conditions and provisions of the Plan
and administrative interpretations thereunder, if any,
which have been adopted by the Committee and are in
effect on the date hereof. Capitalized terms used (but
not otherwise defined herein) shall have the meanings
assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained
herein, the Committee hereby grants to the Optionee an
option ("Option") for a term of ten years ending on
April 7, 2009 ("Option Period") to purchase from the
Company 43,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $7.031 per
share.
3. This Option shall not be exercisable until after 6
months immediately following the Effective Date, and
thereafter shall be exercisable for Common Stock as
follows:
(a) On October 7, 1999, this Option shall be
exercisable for any number of shares up to and
including, but not in excess of, 33-1/3% of the
aggregate number of shares subject to this Option;
(b) On April 7, 2000, this Option shall be exercisable
for any number of shares up to and including, but
not in excess of, 66-2/3% of the aggregate number
of shares subject to this Option; and
(c) On April 7, 2001, this Option shall be exercisable
for any number of shares of Common Stock up to and
including, but not in excess of, 100% of the
aggregate number of shares subject to this Option;
provided the number of shares as to which this
Option becomes exercisable shall, in each case, be
reduced by the number of shares theretofore
purchased pursuant to the terms hereof.
4. The Option herein granted may be exercised by the
Optionee by giving written notice to the Secretary of
the Company setting forth the number of Option Shares
with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased
and any appropriate withholding taxes, and specifying
the address to which the certificate for such shares is
to be mailed. Payment shall be by means of cash,
certified check, bank draft or postal money order
payable to the order of the Company. As promptly as
practicable after receipt of such written notification
and payment, the Company shall deliver to the Optionee
certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to
which the Option herein granted is exercised by
tendering to the Company other shares of Common Stock
at the time of the exercise or partial exercise hereof.
The certificates representing such other shares of
Common Stock must be accompanied by a stock power duly
executed with signature guaranteed. The value of the
Common Stock so tendered shall be its Fair Market
Value.
6. The Option herein granted shall not be transferable by
the Optionee otherwise than as permitted by Section 13
of the Plan. During the lifetime of the Optionee, such
Option shall be exercisable only by him. No transfer of
the Option herein granted shall be effective to bind
the Company unless the Company shall have been
furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to
establish the validity of the transfer and the
acceptance by the transferee or transferees of the
terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with
respect to any Option Shares until the date of issuance
of a certificate for Option Shares purchased pursuant
to this Agreement. Until such time, the Optionee shall
not be entitled to dividends or to vote at meetings of
the stockholders of the Company.
8. The Company may make such provisions as it may deem
appropriate for the withholding of any taxes which it
determines is required in connection with the option
herein granted. The Optionee may pay all or any
portion of the taxes required to be withheld by the
Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein
granted by electing to have the Company withhold shares
of Common Stock, or by delivering previously owned
shares of Common Stock, having a Fair Market Value
equal to the amount required to be withheld or paid.
The Optionee must make the foregoing election on or
before the date that the amount of tax to be withheld
is determined ("Tax Date"). Any such election is
irrevocable and subject to disapproval by the
Committee. If the Optionee is subject to the short-
swing profits recapture provisions of Section 16(b) of
the Exchange Act, any such election shall be subject to
the following additional restrictions:
(a) Such election may not be made within six months of
the grant of this option, provided that this
limitation shall not apply in the event of death
or disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other
time as may be consistent with Section 16(b)(3) of
the Exchange Act. Where the Tax Date in respect
of the exercise of all or any portion of this
Option is deferred until after such exercise and
the Optionee elects stock withholding, the full
amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this
Option, but the Optionee shall be unconditionally
obligated to tender back to the Company on the Tax
Date the number of shares necessary to discharge
with respect to such Option exercise the greater
of (i) the Company's withholding obligation and
(ii) all or any portion of the holder's federal
and state tax obligation attributable to the
Option exercise. An Election Window is any period
commencing on the third business day following the
Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the
twelfth business day following such release.
9. Upon the acquisition of any shares pursuant to the
exercise of the Option herein granted, the Optionee
will enter into such written representations,
warranties and agreements as the Company may reasonably
request in order to comply with applicable securities
laws or with this Agreement.
10. The certificates representing the Option Shares
purchased by exercise of an option will be stamped or
otherwise imprinted with a legend in such form as the
Company or its counsel may require with respect to any
applicable restrictions on sale or transfer, and the
stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to
such shares.
11. Unless otherwise provided herein, every notice
hereunder shall be in writing and shall be given by
registered or certified mail. All notices of the
exercise by the Optionee of any option hereunder shall
be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its
principal office. Any notice given by the Company to
the Optionee directed to him at his address on file
with the Company shall be effective to bind any other
person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of
any of the Optionee's rights hereunder and the Optionee
shall be deemed to have familiarized himself with all
matters contained herein and in the Plan which may
affect any of the Optionee's rights or privileges
hereunder.
12. Whenever the term "Optionee" is used herein under
circumstances applicable to any other person or persons
to whom this Award, in accordance with the provisions
of Paragraph 6, may be transferred, the word "Optionee"
shall be deemed to include such person or persons.
References to the masculine gender herein also include
the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the
Optionee agrees that he will not exercise the option
herein granted, and that the Company will not be
obligated to issue any shares pursuant to this
Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would
constitute a violation by the Optionee or by the
Company of any provision of any law or regulation of
any governmental authority or any national securities
exchange.
IN WITNESS WHEREOF, this Agreement is executed this 7th day
of April, 1999, effective as of the 7th day of April, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
______________________
William R. Ziegler
EXHIBIT 10.300
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Paul B. Loyd, Jr.
("Optionee") as of May 19, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1999 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on May 19, 2009 ("Option Period")
to purchase from the Company 80,000 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $10.062 per
share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
33-1/3% of the aggregate number of shares subject to this Option;
(b) On May 19, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before June 19, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By:
Tim W. Nagle - Executive Vice President
OPTIONEE
________________________
Paul B. Loyd, Jr.
EXHIBIT 10.301
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Steven A. Webster
("Optionee") as of May 19, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1999 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on May 19, 2009 ("Option Period")
to purchase from the Company 86,400 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $10.062 per
share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
33-1/3% of the aggregate number of shares subject to this Option;
(b) On May 19, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before June 19, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Steven A. Webster
EXHIBIT 10.302
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Andrew Bakonyi
("Optionee") as of May 19, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1999 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on May 19, 2009 ("Option Period")
to purchase from the Company 24,000 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $10.062 per
share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
33-1/3% of the aggregate number of shares subject to this Option;
(b) On May 19, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before June 19, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Andrew Bakonyi
EXHIBIT 10.303
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Tim W. Nagle
("Optionee") as of May 19, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1999 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on May 19, 2009 ("Option Period")
to purchase from the Company 18,000 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $10.062 per
share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
33-1/3% of the aggregate number of shares subject to this Option;
(b) On May 19, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before June 19, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Tim W. Nagle
EXHIBIT 10.304
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Robert F. Fulton
("Optionee") as of May 19, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1999 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on May 19, 2009 ("Option Period")
to purchase from the Company 18,000 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $10.062 per
share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
33-1/3% of the aggregate number of shares subject to this Option;
(b) On May 19, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before June 19, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Robert F. Fulton
EXHIBIT 10.305
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Bernie Stewart
("Optionee") as of May 19, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1999 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on May 19, 2009 ("Option Period")
to purchase from the Company 21,000 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $10.062 per
share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
33-1/3% of the aggregate number of shares subject to this Option;
(b) On May 19, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before June 19, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Bernie Stewart
EXHIBIT 10.306
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Charles R. Ofner
("Optionee") as of May 19, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1999 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on May 19, 2009 ("Option Period")
to purchase from the Company 12,960 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $10.062 per
share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
33-1/3% of the aggregate number of shares subject to this Option;
(b) On May 19, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or terminationof any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before June 19, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Charles R. Ofner
EXHIBIT 10.307
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Leighton E. Moss
("Optionee") as of May 19, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1999 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on May 19, 2009 ("Option Period")
to purchase from the Company 16,560 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $10.062 per
share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
33-1/3% of the aggregate number of shares subject to this Option;
(b) On May 19, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before June 19, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Leighton E. Moss
EXHIBIT 10.308
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B Falcon
Corporation, a Delaware corporation ("Company"), and Wayne K. Hillin
("Optionee") as of May 19, 1999 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon Corporation
1999 Employee Long-Term Incentive Plan ("Plan") has selected the Optionee
to receive a nonqualified stock option under the terms of the Plan as an
incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have the
following respective meanings:
(a) "Disability" means Disability as defined in the Employment
Agreement; and
(b) "Employment Agreement" means that certain Employment Agreement
dated March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this Agreement.
2. The option awarded hereunder is issued in accordance with and
subject to all of the terms, conditions and provisions of the
Plan and administrative interpretations thereunder, if any, which
have been adopted by the Committee and are in effect on the date
hereof. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Plan.
3. On the terms and subject to the conditions contained herein, the
Company hereby grants to the Optionee an option (the "Option")
for a term of ten years ending on May 19, 2009 ("Option Period")
to purchase from the Company 16,560 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $10.062 per
share.
4. This Option shall not be exercisable, except upon the death or
Disability of the Optionee, until after 6 months immediately
following the Effective Date, and thereafter shall be exercisable
for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
33-1/3% of the aggregate number of shares subject to this Option;
(b) On May 19, 2000, this Option shall be exercisable for
any number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this Option;
and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but not in
excess of, 100% of the aggregate number of shares subject to this
Option;
provided the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole or in part,
by giving written notice to the Compensation and Benefits
Department of the Company setting forth the number of Option
Shares with respect to which the option is to be exercised,
accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to
which the certificate for such shares is to be mailed (or to the
extent permitted by the Company, the written instructions
referred to in the last sentence of this section). Payment shall
be by means of cash, certified check, bank draft or postal money
order payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be delivered, to
the Optionee certificates for the number of Option Shares with
respect to which the Option has been so exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares
with respect to which the Option is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise
or partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed in accordance with market
practice. The value of the Common Stock so tendered shall be its
Fair Market Value.
7. A. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (a) the options herein granted
to him that are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any options herein
granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during
a three-month period beginning on such date, unless the Option
Period shall expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is terminated
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, then (a) the Options
granted to him that are not exercisable on the date of such
termination of employment shall be thereupon be fully
exercisable, and (b) all Options then held by the Optionee,
whether theretofore exercisable or exercisable by reason of the
termination of employment may be exercised by the Optionee during
the full remaining term of this Option; provided, however, that
all Options granted hereunder shall expire and not be exercisable
on the first anniversary of the Optionee's death.
8. The Option shall not be transferable by the Optionee otherwise
than as expressly permitted by the Plan. During the lifetime of
the Optionee, the Option shall be exercisable only by her or him.
No transfer of the Option shall be effective to bind the Company
unless the Company shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem
necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and
conditions hereof.
9. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not
apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may be
consistent with Section 16(b) of the Exchange Act and the rules
promulgated thereunder. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until
after such exercise and the Optionee elects stock withholding,
the full amount of shares of Common Stock will be issued or
transferred to the Optionee upon exercise of this Option, but the
Optionee shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater of (i)
the Company's withholding obligation and (ii) all or any portion
of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing
on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such release.
11. Upon the acquisition of any shares pursuant to the exercise of
the Option, the Optionee will enter into such written
representations, warranties and agreements as the Company may
reasonably request in order to comply with applicable securities
laws or with this Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
13. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be delivered by hand or by registered or
certified mail. All notices of the exercise by the Optionee of
any option hereunder shall be directed to R&B Falcon Corporation,
Attention: Benefits and Compensation Department, at the Company's
principal office address from time to time. Any notice given by
the Company to the Optionee directed to him or her at his or her
address on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of
the existence, maturity or termination of any of the Optionee's
rights hereunder and the Optionee shall be deemed to have
familiarized himself with all matters contained herein and in the
Plan which may affect any of the Optionee's rights or privileges
hereunder.
14. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this award, in
accordance with the provisions of Paragraph 8, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
15. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he or she will not exercise the Option, and that the
Company will not be obligated to issue any shares pursuant to
this Agreement, if the exercise of the Option or the issuance of
such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
16. This Agreement is subject to the Plan, a copy of which will be
provided the to Optionee upon written request. The terms and
provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a
conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions
of words and terms contained in the Plan shall be applicable to
this Agreement.
17. In the event of a corporate merger or other business combination
in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or
participating interests in, the surviving entity, based on the
terms of such merger or other business combination, shall be
substituted for the number of Option Shares held by the Optionee
hereunder, and the exercise price per share set out in Paragraph
3 above shall be likewise adjusted, to reflect substantially the
same economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business combination.
In the event of a split-off, spin-off or creating of a different
class of common stock of the Company (including, without
limitation, a tracking stock), the Optionee shall receive an
option to purchase an equivalent number of the shares of common
stock or voting interests of such separate entity being split-off
or spun-off or of the shares of the new class of common stock of
the Company, as if Optionee had owned the shares underlying the
Option Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company, and
the exercise price set out in Paragraph 3 hereof and applicable
to the options to purchase shares or the voting interests of the
new entity being split-off or spun-off shall be adjusted to
reflect substantially the same economic equivalent value of the
Option Shares to the Optionee prior to any such split-off, spin-
off or creation of a new class of common stock of the Company.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before June 19, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By:
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
Wayne K. Hillin
EXHIBIT 10.309
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and Dr. P.C. Chatterjee
("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member of the
Board of Directors of the Company, is entitled to receive a non-qualified
stock option award under the Company's 1999 Director Long-Term Incentive
Plan ("Plan"), as an incentive to the Optionee to remain a director of the
Company and contribute to the performance of the Company, on the terms and
subject to the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. The Option is issued in accordance with and subject to all of the
terms, conditions and provisions of the Plan and administrative
interpretations thereunder, if any, which have been adopted by
the Committee and are in effect on the date hereof. Capitalized
terms used (but not otherwise defined herein) shall have the
meanings assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained herein, the
Committee hereby grants to the Optionee an option ("Option") for
a term of ten years ending on May 19, 2009 ("Option Period") to
purchase from the Company 17,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $10.0625 per share.
3. This Option shall not be exercisable until after 6 months
immediately following the Effective Date, and thereafter shall be
exercisable for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess
of, 33-1/3% of the aggregate number of shares subject to
this Option;
(b) On May 19, 2000, this Option shall be exercisable for any
number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this
Option; and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but
not in excess of, 100% of the aggregate number of shares
subject to this Option;
provided the number of shares as to which this Option
becomes exercisable shall, in each case, be reduced by the
number of shares theretofore purchased pursuant to the terms
hereof.
4. The Option herein granted may be exercised by the Optionee by
giving written notice to the Secretary of the Company setting
forth the number of Option Shares with respect to which the
option is to be exercised, accompanied by payment for the shares
to be purchased and any appropriate withholding taxes, and
specifying the address to which the certificate for such shares
is to be mailed. Payment shall be by means of cash, certified
check, bank draft or postal money order payable to the order of
the Company. As promptly as practicable after receipt of such
written notification and payment, the Company shall deliver to
the Optionee certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to which the
Option herein granted is exercised by tendering to the Company
other shares of Common Stock at the time of the exercise or
partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed. The value of the Common
Stock so tendered shall be its Fair Market Value.
6. The Option herein granted shall not be transferable by the
Optionee otherwise than as permitted by Section 13 of the Plan.
During the lifetime of the Optionee, such Option shall be
exercisable only by him. No transfer of the Option herein granted
shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to establish
the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
8. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the grant
of this option, provided that this limitation shall not
apply in the event of death or disability.
(b) Such election must be made either in an Election Window (as
hereinafter defined) or at such other time as may be
consistent with Section 16(b)(3) of the Exchange Act. Where
the Tax Date in respect of the exercise of all or any
portion of this Option is deferred until after such exercise
and the Optionee elects stock withholding, the full amount
of shares of Common Stock will be issued or transferred to
the Optionee upon exercise of this Option, but the Optionee
shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater
of (i) the Company's withholding obligation and (ii) all or
any portion of the holder's federal and state tax obligation
attributable to the Option exercise. An Election Window is
any period commencing on the third business day following
the Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the twelfth
business day following such release.
9. Upon the acquisition of any shares pursuant to the exercise of
the Option herein granted, the Optionee will enter into such
written representations, warranties and agreements as the Company
may reasonably request in order to comply with applicable
securities laws or with this Agreement.
10. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
11. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be given by registered or certified mail.
All notices of the exercise by the Optionee of any option
hereunder shall be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its principal
office. Any notice given by the Company to the Optionee directed
to him at his address on file with the Company shall be effective
to bind any other person who shall acquire rights hereunder. The
Company shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of any of the
Optionee's rights hereunder and the Optionee shall be deemed to
have familiarized himself with all matters contained herein and
in the Plan which may affect any of the Optionee's rights or
privileges hereunder.
12. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this Award, in
accordance with the provisions of Paragraph 6, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he will not exercise the option herein granted, and
that the Company will not be obligated to issue any shares
pursuant to this Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would constitute a
violation by the Optionee or by the Company of any provision of
any law or regulation of any governmental authority or any
national securities exchange.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_______________________
Dr. P.C. Chatterjee
EXHIBIT 10.310
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and A.L. Chavkin
("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member of the
Board of Directors of the Company, is entitled to receive a non-qualified
stock option award under the Company's 1999 Director Long-Term Incentive
Plan ("Plan"), as an incentive to the Optionee to remain a director of the
Company and contribute to the performance of the Company, on the terms and
subject to the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. The Option is issued in accordance with and subject to all of the
terms, conditions and provisions of the Plan and administrative
interpretations thereunder, if any, which have been adopted by
the Committee and are in effect on the date hereof. Capitalized
terms used (but not otherwise defined herein) shall have the
meanings assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained herein, the
Committee hereby grants to the Optionee an option ("Option") for
a term of ten years ending on May 19, 2009 ("Option Period") to
purchase from the Company 17,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $10.0625 per share.
3. This Option shall not be exercisable until after 6 months
immediately following the Effective Date, and thereafter shall be
exercisable for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess
of, 33-1/3% of the aggregate number of shares subject to
this Option;
(b) On May 19, 2000, this Option shall be exercisable for any
number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this
Option; and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but
not in excess of, 100% of the aggregate number of shares
subject to this Option;
provided the number of shares as to which this Option
becomes exercisable shall, in each case, be reduced by the
number of shares theretofore purchased pursuant to the terms
hereof.
4. The Option herein granted may be exercised by the Optionee by
giving written notice to the Secretary of the Company setting
forth the number of Option Shares with respect to which the
option is to be exercised, accompanied by payment for the shares
to be purchased and any appropriate withholding taxes, and
specifying the address to which the certificate for such shares
is to be mailed. Payment shall be by means of cash, certified
check, bank draft or postal money order payable to the order of
the Company. As promptly as practicable after receipt of such
written notification and payment, the Company shall deliver to
the Optionee certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to which the
Option herein granted is exercised by tendering to the Company
other shares of Common Stock at the time of the exercise or
partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed. The value of the Common
Stock so tendered shall be its Fair Market Value.
6. The Option herein granted shall not be transferable by the
Optionee otherwise than as permitted by Section 13 of the Plan.
During the lifetime of the Optionee, such Option shall be
exercisable only by him. No transfer of the Option herein granted
shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to establish
the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
8. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the grant
of this option, provided that this limitation shall not
apply in the event of death or disability.
(b) Such election must be made either in an Election Window (as
hereinafter defined) or at such other time as may be
consistent with Section 16(b)(3) of the Exchange Act. Where
the Tax Date in respect of the exercise of all or any
portion of this Option is deferred until after such exercise
and the Optionee elects stock withholding, the full amount
of shares of Common Stock will be issued or transferred to
the Optionee upon exercise of this Option, but the Optionee
shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater
of (i) the Company's withholding obligation and (ii) all or
any portion of the holder's federal and state tax obligation
attributable to the Option exercise. An Election Window is
any period commencing on the third business day following
the Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the twelfth
business day following such release.
9. Upon the acquisition of any shares pursuant to the exercise of
the Option herein granted, the Optionee will enter into such
written representations, warranties and agreements as the Company
may reasonably request in order to comply with applicable
securities laws or with this Agreement.
10. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
11. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be given by registered or certified mail.
All notices of the exercise by the Optionee of any option
hereunder shall be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its principal
office. Any notice given by the Company to the Optionee directed
to him at his address on file with the Company shall be effective
to bind any other person who shall acquire rights hereunder. The
Company shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of any of the
Optionee's rights hereunder and the Optionee shall be deemed to
have familiarized himself with all matters contained herein and
in the Plan which may affect any of the Optionee's rights or
privileges hereunder.
12. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this Award, in
accordance with the provisions of Paragraph 6, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he will not exercise the option herein granted, and
that the Company will not be obligated to issue any shares
pursuant to this Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would constitute a
violation by the Optionee or by the Company of any provision of
any law or regulation of any governmental authority or any
national securities exchange.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
___________________________
A.L. Chavkin
EXHIBIT 10.311
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and Charles A. Donabedian
("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member of the
Board of Directors of the Company, is entitled to receive a non-qualified
stock option award under the Company's 1999 Director Long-Term Incentive
Plan ("Plan"), as an incentive to the Optionee to remain a director of the
Company and contribute to the performance of the Company, on the terms and
subject to the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. The Option is issued in accordance with and subject to all of the
terms, conditions and provisions of the Plan and administrative
interpretations thereunder, if any, which have been adopted by
the Committee and are in effect on the date hereof. Capitalized
terms used (but not otherwise defined herein) shall have the
meanings assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained herein, the
Committee hereby grants to the Optionee an option ("Option") for
a term of ten years ending on May 19, 2009 ("Option Period") to
purchase from the Company 17,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $10.0625 per share.
3. This Option shall not be exercisable until after 6 months
immediately following the Effective Date, and thereafter shall be
exercisable for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess
of, 33-1/3% of the aggregate number of shares subject to
this Option;
(b) On May 19, 2000, this Option shall be exercisable for any
number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this
Option; and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but
not in excess of, 100% of the aggregate number of shares
subject to this Option;
provided the number of shares as to which this Option
becomes exercisable shall, in each case, be reduced by the
number of shares theretofore purchased pursuant to the terms
hereof.
4. The Option herein granted may be exercised by the Optionee by
giving written notice to the Secretary of the Company setting
forth the number of Option Shares with respect to which the
option is to be exercised, accompanied by payment for the shares
to be purchased and any appropriate withholding taxes, and
specifying the address to which the certificate for such shares
is to be mailed. Payment shall be by means of cash, certified
check, bank draft or postal money order payable to the order of
the Company. As promptly as practicable after receipt of such
written notification and payment, the Company shall deliver to
the Optionee certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to which the
Option herein granted is exercised by tendering to the Company
other shares of Common Stock at the time of the exercise or
partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed. The value of the Common
Stock so tendered shall be its Fair Market Value.
6. The Option herein granted shall not be transferable by the
Optionee otherwise than as permitted by Section 13 of the Plan.
During the lifetime of the Optionee, such Option shall be
exercisable only by him. No transfer of the Option herein granted
shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to establish
the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
8. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the grant
of this option, provided that this limitation shall not
apply in the event of death or disability.
(b) Such election must be made either in an Election Window (as
hereinafter defined) or at such other time as may be
consistent with Section 16(b)(3) of the Exchange Act. Where
the Tax Date in respect of the exercise of all or any
portion of this Option is deferred until after such exercise
and the Optionee elects stock withholding, the full amount
of shares of Common Stock will be issued or transferred to
the Optionee upon exercise of this Option, but the Optionee
shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater
of (i) the Company's withholding obligation and (ii) all or
any portion of the holder's federal and state tax obligation
attributable to the Option exercise. An Election Window is
any period commencing on the third business day following
the Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the twelfth
business day following such release.
9. Upon the acquisition of any shares pursuant to the exercise of
the Option herein granted, the Optionee will enter into such
written representations, warranties and agreements as the Company
may reasonably request in order to comply with applicable
securities laws or with this Agreement.
10. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
11. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be given by registered or certified mail.
All notices of the exercise by the Optionee of any option
hereunder shall be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its principal
office. Any notice given by the Company to the Optionee directed
to him at his address on file with the Company shall be effective
to bind any other person who shall acquire rights hereunder. The
Company shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of any of the
Optionee's rights hereunder and the Optionee shall be deemed to
have familiarized himself with all matters contained herein and
in the Plan which may affect any of the Optionee's rights or
privileges hereunder.
12. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this Award, in
accordance with the provisions of Paragraph 6, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he will not exercise the option herein granted, and
that the Company will not be obligated to issue any shares
pursuant to this Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would constitute a
violation by the Optionee or by the Company of any provision of
any law or regulation of any governmental authority or any
national securities exchange.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
________________________
Charles A. Donabedian
EXHIBIT 10.312
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and Douglas A.P. Hamilton
("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member of the
Board of Directors of the Company, is entitled to receive a non-qualified
stock option award under the Company's 1999 Director Long-Term Incentive
Plan ("Plan"), as an incentive to the Optionee to remain a director of the
Company and contribute to the performance of the Company, on the terms and
subject to the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. The Option is issued in accordance with and subject to all of the
terms, conditions and provisions of the Plan and administrative
interpretations thereunder, if any, which have been adopted by
the Committee and are in effect on the date hereof. Capitalized
terms used (but not otherwise defined herein) shall have the
meanings assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained herein, the
Committee hereby grants to the Optionee an option ("Option") for
a term of ten years ending on May 19, 2009 ("Option Period") to
purchase from the Company 17,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $10.0625 per share.
3. This Option shall not be exercisable until after 6 months
immediately following the Effective Date, and thereafter shall be
exercisable for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess
of, 33-1/3% of the aggregate number of shares subject to
this Option;
(b) On May 19, 2000, this Option shall be exercisable for any
number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this
Option; and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but
not in excess of, 100% of the aggregate number of shares
subject to this Option;
provided the number of shares as to which this Option
becomes exercisable shall, in each case, be reduced by the
number of shares theretofore purchased pursuant to the terms
hereof.
4. The Option herein granted may be exercised by the Optionee by
giving written notice to the Secretary of the Company setting
forth the number of Option Shares with respect to which the
option is to be exercised, accompanied by payment for the shares
to be purchased and any appropriate withholding taxes, and
specifying the address to which the certificate for such shares
is to be mailed. Payment shall be by means of cash, certified
check, bank draft or postal money order payable to the order of
the Company. As promptly as practicable after receipt of such
written notification and payment, the Company shall deliver to
the Optionee certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to which the
Option herein granted is exercised by tendering to the Company
other shares of Common Stock at the time of the exercise or
partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed. The value of the Common
Stock so tendered shall be its Fair Market Value.
6. The Option herein granted shall not be transferable by the
Optionee otherwise than as permitted by Section 13 of the Plan.
During the lifetime of the Optionee, such Option shall be
exercisable only by him. No transfer of the Option herein granted
shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to establish
the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
8. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the grant
of this option, provided that this limitation shall not
apply in the event of death or disability.
(b) Such election must be made either in an Election Window (as
hereinafter defined) or at such other time as may be
consistent with Section 16(b)(3) of the Exchange Act. Where
the Tax Date in respect of the exercise of all or any
portion of this Option is deferred until after such exercise
and the Optionee elects stock withholding, the full amount
of shares of Common Stock will be issued or transferred to
the Optionee upon exercise of this Option, but the Optionee
shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater
of (i) the Company's withholding obligation and (ii) all or
any portion of the holder's federal and state tax obligation
attributable to the Option exercise. An Election Window is
any period commencing on the third business day following
the Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the twelfth
business day following such release.
9. Upon the acquisition of any shares pursuant to the exercise of
the Option herein granted, the Optionee will enter into such
written representations, warranties and agreements as the Company
may reasonably request in order to comply with applicable
securities laws or with this Agreement.
10. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
11. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be given by registered or certified mail.
All notices of the exercise by the Optionee of any option
hereunder shall be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its principal
office. Any notice given by the Company to the Optionee directed
to him at his address on file with the Company shall be effective
to bind any other person who shall acquire rights hereunder. The
Company shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of any of the
Optionee's rights hereunder and the Optionee shall be deemed to
have familiarized himself with all matters contained herein and
in the Plan which may affect any of the Optionee's rights or
privileges hereunder.
12. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this Award, in
accordance with the provisions of Paragraph 6, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he will not exercise the option herein granted, and
that the Company will not be obligated to issue any shares
pursuant to this Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would constitute a
violation by the Optionee or by the Company of any provision of
any law or regulation of any governmental authority or any
national securities exchange.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
___________________________
Douglas A.P. Hamilton
EXHIBIT 10.313
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and Dr. Macko A.E. Laqueur
("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member of the
Board of Directors of the Company, is entitled to receive a non-qualified
stock option award under the Company's 1999 Director Long-Term Incentive
Plan ("Plan"), as an incentive to the Optionee to remain a director of the
Company and contribute to the performance of the Company, on the terms and
subject to the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. The Option is issued in accordance with and subject to all of the
terms, conditions and provisions of the Plan and administrative
interpretations thereunder, if any, which have been adopted by
the Committee and are in effect on the date hereof. Capitalized
terms used (but not otherwise defined herein) shall have the
meanings assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained herein, the
Committee hereby grants to the Optionee an option ("Option") for
a term of ten years ending on May 19, 2009 ("Option Period") to
purchase from the Company 17,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $10.0625 per share.
3. This Option shall not be exercisable until after 6 months
immediately following the Effective Date, and thereafter shall be
exercisable for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess
of, 33-1/3% of the aggregate number of shares subject to
this Option;
(b) On May 19, 2000, this Option shall be exercisable for any
number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this
Option; and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but
not in excess of, 100% of the aggregate number of shares
subject to this Option;
provided the number of shares as to which this Option
becomes exercisable shall, in each case, be reduced by the
number of shares theretofore purchased pursuant to the terms
hereof.
4. The Option herein granted may be exercised by the Optionee by
giving written notice to the Secretary of the Company setting
forth the number of Option Shares with respect to which the
option is to be exercised, accompanied by payment for the shares
to be purchased and any appropriate withholding taxes, and
specifying the address to which the certificate for such shares
is to be mailed. Payment shall be by means of cash, certified
check, bank draft or postal money order payable to the order of
the Company. As promptly as practicable after receipt of such
written notification and payment, the Company shall deliver to
the Optionee certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to which the
Option herein granted is exercised by tendering to the Company
other shares of Common Stock at the time of the exercise or
partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed. The value of the Common
Stock so tendered shall be its Fair Market Value.
6. The Option herein granted shall not be transferable by the
Optionee otherwise than as permitted by Section 13 of the Plan.
During the lifetime of the Optionee, such Option shall be
exercisable only by him. No transfer of the Option herein granted
shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to establish
the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
8. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the grant
of this option, provided that this limitation shall not
apply in the event of death or disability.
(b) Such election must be made either in an Election Window (as
hereinafter defined) or at such other time as may be
consistent with Section 16(b)(3) of the Exchange Act. Where
the Tax Date in respect of the exercise of all or any
portion of this Option is deferred until after such exercise
and the Optionee elects stock withholding, the full amount
of shares of Common Stock will be issued or transferred to
the Optionee upon exercise of this Option, but the Optionee
shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater
of (i) the Company's withholding obligation and (ii) all or
any portion of the holder's federal and state tax obligation
attributable to the Option exercise. An Election Window is
any period commencing on the third business day following
the Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the twelfth
business day following such release.
9. Upon the acquisition of any shares pursuant to the exercise of
the Option herein granted, the Optionee will enter into such
written representations, warranties and agreements as the Company
may reasonably request in order to comply with applicable
securities laws or with this Agreement.
10. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
11. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be given by registered or certified mail.
All notices of the exercise by the Optionee of any option
hereunder shall be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its principal
office. Any notice given by the Company to the Optionee directed
to him at his address on file with the Company shall be effective
to bind any other person who shall acquire rights hereunder. The
Company shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of any of the
Optionee's rights hereunder and the Optionee shall be deemed to
have familiarized himself with all matters contained herein and
in the Plan which may affect any of the Optionee's rights or
privileges hereunder.
12. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this Award, in
accordance with the provisions of Paragraph 6, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he will not exercise the option herein granted, and
that the Company will not be obligated to issue any shares
pursuant to this Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would constitute a
violation by the Optionee or by the Company of any provision of
any law or regulation of any governmental authority or any
national securities exchange.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
___________________________
Dr. Macko A.E. Laqueur
EXHIBIT 10.314
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and Professor Michael
Porter ("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member of the
Board of Directors of the Company, is entitled to receive a non-qualified
stock option award under the Company's 1999 Director Long-Term Incentive
Plan ("Plan"), as an incentive to the Optionee to remain a director of the
Company and contribute to the performance of the Company, on the terms and
subject to the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. The Option is issued in accordance with and subject to all of the
terms, conditions and provisions of the Plan and administrative
interpretations thereunder, if any, which have been adopted by
the Committee and are in effect on the date hereof. Capitalized
terms used (but not otherwise defined herein) shall have the
meanings assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained herein, the
Committee hereby grants to the Optionee an option ("Option") for
a term of ten years ending on May 19, 2009 ("Option Period") to
purchase from the Company 17,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $10.0625 per share.
3. This Option shall not be exercisable until after 6 months
immediately following the Effective Date, and thereafter shall be
exercisable for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess
of, 33-1/3% of the aggregate number of shares subject to
this Option;
(b) On May 19, 2000, this Option shall be exercisable for any
number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this
Option; and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but
not in excess of, 100% of the aggregate number of shares
subject to this Option;
provided the number of shares as to which this Option
becomes exercisable shall, in each case, be reduced by the
number of shares theretofore purchased pursuant to the terms
hereof.
4. The Option herein granted may be exercised by the Optionee by
giving written notice to the Secretary of the Company setting
forth the number of Option Shares with respect to which the
option is to be exercised, accompanied by payment for the shares
to be purchased and any appropriate withholding taxes, and
specifying the address to which the certificate for such shares
is to be mailed. Payment shall be by means of cash, certified
check, bank draft or postal money order payable to the order of
the Company. As promptly as practicable after receipt of such
written notification and payment, the Company shall deliver to
the Optionee certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to which the
Option herein granted is exercised by tendering to the Company
other shares of Common Stock at the time of the exercise or
partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed. The value of the Common
Stock so tendered shall be its Fair Market Value.
6. The Option herein granted shall not be transferable by the
Optionee otherwise than as permitted by Section 13 of the Plan.
During the lifetime of the Optionee, such Option shall be
exercisable only by him. No transfer of the Option herein granted
shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to establish
the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
8. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the grant
of this option, provided that this limitation shall not
apply in the event of death or disability.
(b) Such election must be made either in an Election Window (as
hereinafter defined) or at such other time as may be
consistent with Section 16(b)(3) of the Exchange Act. Where
the Tax Date in respect of the exercise of all or any
portion of this Option is deferred until after such exercise
and the Optionee elects stock withholding, the full amount
of shares of Common Stock will be issued or transferred to
the Optionee upon exercise of this Option, but the Optionee
shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater
of (i) the Company's withholding obligation and (ii) all or
any portion of the holder's federal and state tax obligation
attributable to the Option exercise. An Election Window is
any period commencing on the third business day following
the Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the twelfth
business day following such release.
9. Upon the acquisition of any shares pursuant to the exercise of
the Option herein granted, the Optionee will enter into such
written representations, warranties and agreements as the Company
may reasonably request in order to comply with applicable
securities laws or with this Agreement.
10. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
11. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be given by registered or certified mail.
All notices of the exercise by the Optionee of any option
hereunder shall be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its principal
office. Any notice given by the Company to the Optionee directed
to him at his address on file with the Company shall be effective
to bind any other person who shall acquire rights hereunder. The
Company shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of any of the
Optionee's rights hereunder and the Optionee shall be deemed to
have familiarized himself with all matters contained herein and
in the Plan which may affect any of the Optionee's rights or
privileges hereunder.
12. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this Award, in
accordance with the provisions of Paragraph 6, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he will not exercise the option herein granted, and
that the Company will not be obligated to issue any shares
pursuant to this Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would constitute a
violation by the Optionee or by the Company of any provision of
any law or regulation of any governmental authority or any
national securities exchange.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
__________________________
Professor Michael Porter
EXHIBIT 10.315
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and Dr. Robert L. Sandmeyer
("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member of the
Board of Directors of the Company, is entitled to receive a non-qualified
stock option award under the Company's 1999 Director Long-Term Incentive
Plan ("Plan"), as an incentive to the Optionee to remain a director of the
Company and contribute to the performance of the Company, on the terms and
subject to the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. The Option is issued in accordance with and subject to all of the
terms, conditions and provisions of the Plan and administrative
interpretations thereunder, if any, which have been adopted by
the Committee and are in effect on the date hereof. Capitalized
terms used (but not otherwise defined herein) shall have the
meanings assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained herein, the
Committee hereby grants to the Optionee an option ("Option") for
a term of ten years ending on May 19, 2009 ("Option Period") to
purchase from the Company 17,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $10.0625 per share.
3. This Option shall not be exercisable until after 6 months
immediately following the Effective Date, and thereafter shall be
exercisable for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess
of, 33-1/3% of the aggregate number of shares subject to
this Option;
(b) On May 19, 2000, this Option shall be exercisable for any
number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this
Option; and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but
not in excess of, 100% of the aggregate number of shares
subject to this Option;
provided the number of shares as to which this Option
becomes exercisable shall, in each case, be reduced by the
number of shares theretofore purchased pursuant to the terms
hereof.
4. The Option herein granted may be exercised by the Optionee by
giving written notice to the Secretary of the Company setting
forth the number of Option Shares with respect to which the
option is to be exercised, accompanied by payment for the shares
to be purchased and any appropriate withholding taxes, and
specifying the address to which the certificate for such shares
is to be mailed. Payment shall be by means of cash, certified
check, bank draft or postal money order payable to the order of
the Company. As promptly as practicable after receipt of such
written notification and payment, the Company shall deliver to
the Optionee certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to which the
Option herein granted is exercised by tendering to the Company
other shares of Common Stock at the time of the exercise or
partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed. The value of the Common
Stock so tendered shall be its Fair Market Value.
6. The Option herein granted shall not be transferable by the
Optionee otherwise than as permitted by Section 13 of the Plan.
During the lifetime of the Optionee, such Option shall be
exercisable only by him. No transfer of the Option herein granted
shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to establish
the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
8. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the grant
of this option, provided that this limitation shall not
apply in the event of death or disability.
(b) Such election must be made either in an Election Window (as
hereinafter defined) or at such other time as may be
consistent with Section 16(b)(3) of the Exchange Act. Where
the Tax Date in respect of the exercise of all or any
portion of this Option is deferred until after such exercise
and the Optionee elects stock withholding, the full amount
of shares of Common Stock will be issued or transferred to
the Optionee upon exercise of this Option, but the Optionee
shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater
of (i) the Company's withholding obligation and (ii) all or
any portion of the holder's federal and state tax obligation
attributable to the Option exercise. An Election Window is
any period commencing on the third business day following
the Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the twelfth
business day following such release.
9. Upon the acquisition of any shares pursuant to the exercise of
the Option herein granted, the Optionee will enter into such
written representations, warranties and agreements as the Company
may reasonably request in order to comply with applicable
securities laws or with this Agreement.
10. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
11. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be given by registered or certified mail.
All notices of the exercise by the Optionee of any option
hereunder shall be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its principal
office. Any notice given by the Company to the Optionee directed
to him at his address on file with the Company shall be effective
to bind any other person who shall acquire rights hereunder. The
Company shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of any of the
Optionee's rights hereunder and the Optionee shall be deemed to
have familiarized himself with all matters contained herein and
in the Plan which may affect any of the Optionee's rights or
privileges hereunder.
12. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this Award, in
accordance with the provisions of Paragraph 6, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he will not exercise the option herein granted, and
that the Company will not be obligated to issue any shares
pursuant to this Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would constitute a
violation by the Optionee or by the Company of any provision of
any law or regulation of any governmental authority or any
national securities exchange.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
________________________
Dr. Robert L. Sandmeyer
EXHIBIT 10.316
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and William R. Ziegler
("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member of the
Board of Directors of the Company, is entitled to receive a non-qualified
stock option award under the Company's 1999 Director Long-Term Incentive
Plan ("Plan"), as an incentive to the Optionee to remain a director of the
Company and contribute to the performance of the Company, on the terms and
subject to the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. The Option is issued in accordance with and subject to all of the
terms, conditions and provisions of the Plan and administrative
interpretations thereunder, if any, which have been adopted by
the Committee and are in effect on the date hereof. Capitalized
terms used (but not otherwise defined herein) shall have the
meanings assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained herein, the
Committee hereby grants to the Optionee an option ("Option") for
a term of ten years ending on May 19, 2009 ("Option Period") to
purchase from the Company 17,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $10.0625 per share.
3. This Option shall not be exercisable until after 6 months
immediately following the Effective Date, and thereafter shall be
exercisable for Common Stock as follows:
(a) On November 19, 1999, this Option shall be exercisable for
any number of shares up to and including, but not in excess
of, 33-1/3% of the aggregate number of shares subject to
this Option;
(b) On May 19, 2000, this Option shall be exercisable for any
number of shares up to and including, but not in excess of,
66-2/3% of the aggregate number of shares subject to this
Option; and
(c) On May 19, 2001, this Option shall be exercisable for any
number of shares of Common Stock up to and including, but
not in excess of, 100% of the aggregate number of shares
subject to this Option;
provided the number of shares as to which this Option
becomes exercisable shall, in each case, be reduced by the
number of shares theretofore purchased pursuant to the terms
hereof.
4. The Option herein granted may be exercised by the Optionee by
giving written notice to the Secretary of the Company setting
forth the number of Option Shares with respect to which the
option is to be exercised, accompanied by payment for the shares
to be purchased and any appropriate withholding taxes, and
specifying the address to which the certificate for such shares
is to be mailed. Payment shall be by means of cash, certified
check, bank draft or postal money order payable to the order of
the Company. As promptly as practicable after receipt of such
written notification and payment, the Company shall deliver to
the Optionee certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to which the
Option herein granted is exercised by tendering to the Company
other shares of Common Stock at the time of the exercise or
partial exercise hereof. The certificates representing such
other shares of Common Stock must be accompanied by a stock power
duly executed with signature guaranteed. The value of the Common
Stock so tendered shall be its Fair Market Value.
6. The Option herein granted shall not be transferable by the
Optionee otherwise than as permitted by Section 13 of the Plan.
During the lifetime of the Optionee, such Option shall be
exercisable only by him. No transfer of the Option herein granted
shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and a copy of
such evidence as the Committee may deem necessary to establish
the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions hereof.
7. The Optionee shall have no rights as a stockholder with respect
to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
8. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required
in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by
the Company or paid by the Optionee in connection with the
exercise of all or any portion of the option herein granted by
electing to have the Company withhold shares of Common Stock, or
by delivering previously owned shares of Common Stock, having a
Fair Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). Any such election is irrevocable and subject to
disapproval by the Committee. If the Optionee is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act, any such election shall be subject to the following
additional restrictions:
(a) Such election may not be made within six months of the grant
of this option, provided that this limitation shall not
apply in the event of death or disability.
(b) Such election must be made either in an Election Window (as
hereinafter defined) or at such other time as may be
consistent with Section 16(b)(3) of the Exchange Act. Where
the Tax Date in respect of the exercise of all or any
portion of this Option is deferred until after such exercise
and the Optionee elects stock withholding, the full amount
of shares of Common Stock will be issued or transferred to
the Optionee upon exercise of this Option, but the Optionee
shall be unconditionally obligated to tender back to the
Company on the Tax Date the number of shares necessary to
discharge with respect to such Option exercise the greater
of (i) the Company's withholding obligation and (ii) all or
any portion of the holder's federal and state tax obligation
attributable to the Option exercise. An Election Window is
any period commencing on the third business day following
the Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the twelfth
business day following such release.
9. Upon the acquisition of any shares pursuant to the exercise of
the Option herein granted, the Optionee will enter into such
written representations, warranties and agreements as the Company
may reasonably request in order to comply with applicable
securities laws or with this Agreement.
10. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with
a legend in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer,
and the stock transfer records of the Company will reflect stop-
transfer instructions, as appropriate, with respect to such
shares.
11. Unless otherwise provided herein, every notice hereunder shall be
in writing and shall be given by registered or certified mail.
All notices of the exercise by the Optionee of any option
hereunder shall be directed to R&B Falcon Corporation, Attention:
Secretary, at the Company's then current address of its principal
office. Any notice given by the Company to the Optionee directed
to him at his address on file with the Company shall be effective
to bind any other person who shall acquire rights hereunder. The
Company shall be under no obligation whatsoever to advise the
Optionee of the existence, maturity or termination of any of the
Optionee's rights hereunder and the Optionee shall be deemed to
have familiarized himself with all matters contained herein and
in the Plan which may affect any of the Optionee's rights or
privileges hereunder.
12. Whenever the term "Optionee" is used herein under circumstances
applicable to any other person or persons to whom this Award, in
accordance with the provisions of Paragraph 6, may be
transferred, the word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein
also include the feminine gender for all purposes.
13. Notwithstanding any of the other provisions hereof, the Optionee
agrees that he will not exercise the option herein granted, and
that the Company will not be obligated to issue any shares
pursuant to this Agreement, if the exercise of the option or the
issuance of such shares of Common Stock would constitute a
violation by the Optionee or by the Company of any provision of
any law or regulation of any governmental authority or any
national securities exchange.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman
OPTIONEE
_________________________
William R. Ziegler
EXHIBIT 10.317
PERFORMANCE BOND
Travelers Casualty and Surety
Company of America BOND NO. 61 SB 103206545 BCM
American Home Assurance Company BOND NO. 21-45-09
Know all Men by these presents that we, RBF EXPLORATION II INC., as
principal (the "Principal"), TRAVELERS CASUALTY AND SURETY COMPANY OF
AMERICA, a Connecticut corporation whose main office is located at One
Tower Square, Hartford, Connecticut 06183 USA, and AMERICAN HOME ASSURANCE
COMPANY, a New York corporation whose main office is located at 70 Pine
Street, New York, New York 10270, as sureties (the "Sureties"), are firmly
and irrevocably bound unto BTM CAPITAL CORPORATION (the "Owner") and CHASE
BANK OF TEXAS, NATIONAL ASSOCIATION (together with such successor trustees
permitted pursuant to the terms hereof and the Indenture (defined below),
the "Indenture Trustee") as Indenture Trustee under a Trust Indenture and
Security Agreement dated as of August 12, 1999, entered into with RBF
Exploration Co. ("RBFE"), as supplemented and amended by the Supplemental
Indenture and Amendment dated as of February 1, 2000, between RBFE, the
Indenture Trustee and the Owner (as so supplemented and amended, the
"Indenture") (the Owner and Indenture Trustee hereinafter called
"Obligees"), in the maximum penal sum of $265,000,000 (including any and
all interest, attorney's fees, expenses, costs and liquidated damages); for
which payment the Principal and Sureties bind themselves, their respective
successors and assigns firmly by these presents.
WHEREAS, by Novation Agreement dated as of February 1, 2000, the Owner has
entered into a written agreement dated November 14, 1997, known as the
Contract for Construction and Sale of Vessel (Hull No. HRBS6) (as amended
to date and as further amended from to time to time as permitted by the
Indenture and otherwise with the consent of the Indenture Trustee and the
Sureties, the "Construction Contract"), with Hyundai Heavy Industries Co.,
Ltd. and Hyundai Corporation (the "Builders") with respect to construction
of a semi-submersible vessel (the "Rig") and the performance of certain
obligations of the Builders under the Construction Contract is guaranteed
by Korea Exchange Bank pursuant to a Letter of Guarantee No. 0696GBD711111
(as may be amended from time to time with the consent of the Indenture
Trustee and the Sureties, the "Bank Performance Guarantee").
WHEREAS, RBFE has entered into a written agreement dated August 12, 1998,
known as the Offshore Daywork Drilling Contract (as amended to date and as
further amended from time to time as permitted by the Indenture and
otherwise with the consent of the Indenture Trustee and the Sureties, the
"SDDI Contract"), with Shell Deepwater Development, Inc. ("SDDI").
WHEREAS, the Principal has entered into a written agreement dated as of
February 1, 2000, known as the Construction Supervisory Agreement (as
amended from time to time with the consent of the Indenture Trustee and the
Sureties, the "CSA"), with the Owner and RBFE to supervise the design,
construction, and delivery of the Rig in accordance with both the
Construction Contract, the CSA and the SDDI Contract.
WHEREAS, in connection with certain monetary advances made or agreed to be
made by RBFE and the Owner in connection with the construction and delivery
of the Rig under the foregoing contracts, the Principal has agreed to
furnish this Performance Bond, guaranteeing either (a) the design,
construction and delivery of the Rig on or before the Outside Date (as
defined in the CSA) or (b) payment of certain damages, in the manner
contemplated by the CSA, in each case based on an Event of Default under
the CSA.
NOW, THEREFORE, the condition of this obligation is such that:
(1) If the Principal has caused the Rig to be delivered to and accepted by
SDDI and Completion (as defined in the CSA) has occurred on or before the
Outside Date (as defined in the CSA), then this obligation shall be null
and void, otherwise to remain in full force and effect.
(2) If, based on an Event of Default (as defined in the CSA), (i) the
Indenture Trustee makes written demand on the Principal for payment of the
amounts contemplated by Section 6.1 of the CSA and (ii) the Principal makes
payment in full on such demand of all amounts due (including Liquidated
Damages (as defined in the CSA)) under said Section 6.1, then this
obligation shall be null and void, otherwise to remain in full force and
effect.
(3) If, based on an Event of Default (as defined in the CSA), (i) the
Indenture Trustee makes written demand on the Principal for payment of the
amounts due pursuant to Section 6.1 of the CSA and the Principal fails to
make payment in full on such demand of all amounts due (including
Liquidated Damages) pursuant to Section 6.1 of the CSA, or (ii) the
Indenture Trustee notifies the Sureties that it has determined (which
determination shall be reasonable and in good faith) that the making of
such demand on the Principal would be stayed pursuant to the operation of
Section 362 of Title 11 of the U.S. Code or otherwise prohibited as a
matter of law because of the existence of a petition for liquidation or
reorganization of the Principal under applicable bankruptcy or similar
laws, then in either case the Sureties shall take the actions set forth in
either the following paragraph (a) or paragraph (b), the choice of one of
such paragraphs to be in the sole discretion of the Sureties:
(a) cause Completion to occur on or before the Outside Date in
accordance with the provisions of the CSA (other than Section
2.5(r), Section 2.5(v), Section 2.5(x), Section 2.5(y), Section
3.2(b), Section 3.2(c) or Article VII (including Appendix A to
the CSA) (it being understood and agreed that, subject to the
provisions of Section 3.2(a) of the CSA and notwithstanding the
existence of a Default or an Event of Default (as defined in the
CSA), the Sureties shall be entitled to requisition funds from
RBFE on behalf of the Owner and from the funds held by the
Indenture Trustee (by Sureties' completion and delivery to the
Indenture Trustee of the Form of Requisition attached to the CSA
as Exhibit B) and credited to the account styled "RBF Exploration
Construction Account" (the "Construction Account") for the
purpose of causing Completion); or
(b) pay in full to the Obligees jointly, by wire transfer of
immediately available funds, within 10 days after the
effectiveness of a claim made by either of the Obligees pursuant
to the terms hereof, all amounts (including Liquidated Damages)
due pursuant to Section 6.1 of the CSA, to the account identified
to the Sureties in a writing executed by both Obligees (the
"Collection Account").
(4) If, following an Event of Default (as defined in the CSA), the
Sureties exercise the choice set forth in clause (3)(a) immediately above,
and Completion does not occur on or before the Outside Date for any reason
(including, without limitation, by reason of insufficiency of funds in the
Construction Account to cause Completion) other than because of a failure
by RBFE on behalf of the Owner or the Indenture Trustee to make payment
under Section 3.2 of the CSA in respect of a properly submitted and
supported requisition (notwithstanding the existence of a Default or Event
of Default (as defined in the CSA)), then the Sureties shall pay in full to
the Obligees jointly, to the Collection Account, the amounts (including
Liquidated Damages) due pursuant to, and within the time provided in,
Section 6.1 of the CSA, which payment shall not be reduced or diminished by
the amount expended by the Sureties in attempting to cause Completion to
occur and which payment shall not exceed the penal sum of this Bond.
PROVIDED, HOWEVER, that (1) subject to the provisions of the following
clause (2), the total liability of the Sureties to make payment of amounts
pursuant to Section 6.1 of the CSA as contemplated by the immediately
foregoing clause (3)(b) and clause (4) of this Performance Bond shall (a)
in no event exceed the total of (x) the actual amount of the payments made
to, at the direction of or for the benefit of RBFE, the Owner or the
Principal, from the funds held by the Indenture Trustee and credited to the
Construction Account and to the account styled "RBF Exploration Payment
Reserve Account" (collectively, the "Disbursement Accounts") under the
Indenture, and (y) the amount of Liquidated Damages (as defined in the
CSA), but in no event in excess of the penal sum of this Performance Bond;
and (b) be reduced by all monies theretofore actually and finally received
by the Obligees prior to payment by the Sureties hereunder on account of
(i) insurance policies or from the Bank Performance Guarantee and/or (ii)
demand made on the Principal or R&B Falcon Corporation by either of the
Obligees, in respect of amounts that would otherwise be due from the
Sureties under this Performance Bond; and (2) nothing in this paragraph
shall be construed to require that the Indenture Trustee take any action
whatsoever with respect to the exercise of any remedy against RBFE. the
Owner, the Principal or any other person or against the Disbursement
Accounts, the Bank Performance Guarantee or any collateral as a
prerequisite to making a claim under this Performance Bond or as a
prerequisite to the performance of Sureties' obligations under this
Performance Bond, and further,
PROVIDED, HOWEVER, that, subject to the provisions of clause (4) above, the
Sureties shall not be liable in the aggregate to both Obligees for more
than the penal sum of this Bond, and, in the event of conflicting or
competing demands by the Obligees, shall be responsible only once in
respect of any underlying claim, and further,
PROVIDED, HOWEVER, that (1) the Sureties' liability hereunder shall
automatically terminate if neither Obligee has provided notice of a claim
on this Performance Bond in accordance with the provisions hereof within 60
days after the Outside Date (as defined in the CSA) and (2) the expiration
of this Bond may be extended, from time to time, with the Sureties' written
consent, and further,
PROVIDED, HOWEVER, the Sureties shall be severally, and not jointly, liable
under this Bond, and, with respect to each payment as well as the penal sum
of this Performance Bond, the maximum liability of Travelers Casualty and
Surety Company of America shall be limited to sixty percent (60%) and of
American Home Assurance Company shall be limited to forty percent (40%),
and further,
PROVIDED, HOWEVER, it is expressly understood and agreed that (x) a claim
under this Performance Bond must be made by either of the Obligees by
filing written notice of such claim with the Sureties at the following
address: Travelers Casualty and Surety Company of America, Attention: Bond
Claim, One Tower Square, 3PB, Hartford, Connecticut 06183-9062 with a copy
to American Home Assurance Company, 175 Water Street, 6th Floor, New York,
New York 10038 Attention: Bond Claims, delivered by overnight courier of
national reputation, (y) notice given in accordance with the foregoing
shall be sufficient to both of the Sureties, and (z) such claim shall be
effective at such time as is provided in the following paragraphs, and
further,
PROVIDED, HOWEVER, any claim filed by either of the Obligees shall be
accompanied by:
(1) if such claim is based on an Event of Default arising from Completion
not occurring by the Outside Date, (a) a copy of the conditional
demand, if any, made by either of the Obligees pursuant to Section
4.3(b) of the CSA, (b) such Obligee's written certification to the
Sureties that Completion did not occur on or prior to the Outside
Date, (c) a copy of the written notice to the Principal (i) stating
that an Event of Default under the CSA has occurred by reason of
Completion not occurring on or prior to the Outside Date, (ii)
terminating the rights of the Principal under the CSA and (iii) if the
conditional demand contemplated by Section 4.3(b) of the CSA was not
made, demanding payment by the Principal of the amounts described in
Section 6.1 of the CSA and (d) such Obligee's written certification to
the Sureties that such payment was not made by the applicable date
(which shall be the later of the Outside Date and fifty (50) days
after the notice described in clause (a), if such notice was given, or
which shall be thirty (30) days after the date of the notice described
in clause (c), if the notice in clause (a) was not given); or
(2) if such claim is based on an Event of Default arising from Initial
Acceptance not occurring on or before June 28, 2000, (a) a copy of the
conditional demand, if any, made by either of the Obligees pursuant to
Section 4.3(a) of the CSA, (b) such Obligee's written certification to
the Sureties that Initial Acceptance did not occur on or prior to June
28, 2000, (c) a copy of (1) the written notice to the Principal
delivered pursuant to Section 6.1 of the CSA (x) stating that an Event
of Default under the CSA has occurred by reason of Initial Acceptance
not occurring on or prior to June 28, 2000, (y) terminating the rights
of the Principal under the CSA, and (z) if the conditional demand
contemplated by Section 4.3(a) of the CSA was not made, demanding
payment by the Principal of the amounts described in Section 6.1 of
the CSA, and (2) the written demand made on R&B Falcon Corporation
under the performance guarantee provided by R&B Falcon Corporation in
favor of the Principal and certain other persons (the "Falcon
Performance Guarantee") in respect of such Event of Default (to the
extent such Event of Default is covered by the Falcon Performance
Guarantee), and (d) such Obligee's written certification to the
Sureties that such payment was not made by the applicable date (which
shall be the later of June 28, 2000 and fifty (50) days after the
notice described in clause (a), if such notice was given, or which
shall be thirty (30) days after the date of the notice described in
clause (c), if the notice in clause (a) was not given); or
(3) If such claim is based on any Event of Default other than those
described in clauses (1) and (2) above, (a) a copy of (1) the written
notice to the Principal stating that an Event of Default has occurred,
terminating the rights of the Principal under the CSA and demanding
payment by the Principal of the amounts described in Section 6.1
within thirty (30) days of such notice, and (2) the written demand
made on R&B Falcon Corporation under the Falcon Performance Guarantee
in respect of such Event of Default (to the extent such Event of
Default is covered by the Falcon Performance Guarantee), and (b) a
copy of a second written notice to the Principal stating that (i) the
Principal has failed to make the payments described in Section 6.1 of
the CSA as demanded in the first written notice, and (ii) as a result
of such failure such Obligee intends to make a demand against the
Sureties under the Performance Bond, and (c) such Obligee's written
certification to the Sureties that the Principal has failed to comply
with its obligations under the CSA within twenty (20) days after
receipt of such second notice.
Notwithstanding anything to the contrary contained herein, a claim
described in clause (1), clause (2) or clause (3) above shall be effective
on the date that is fifty (50) days after the date on which the first
notice with respect to such claim is received by the Sureties (whether in
the form of a copy of a demand or otherwise). The failure of an Obligee to
contemporaneously deliver a copy of any notice to the Sureties as required
under clause (1), clause (2) or clause (3) above, shall not invalidate an
otherwise valid claim made on this Bond but shall have the effect of
delaying the effectiveness of such claim to a date that is 50 days after
the date on which the first such copy of a notice is delivered to the
Sureties.
If either Obligee notifies the Sureties that it has determined (which
determination shall be reasonable and in good faith) that the making of any
demand on the Principal or R&B Falcon Corporation described in clause (1),
clause (2) or clause (3) above would be stayed pursuant to the operation of
Section 362 of Title 11 of the U.S. Code or otherwise prohibited as a
matter of law because of the existence of a petition for liquidation or
reorganization of the Principal or R&B Falcon Corporation under applicable
bankruptcy or similar laws, the failure of either Obligee to make such a
demand on the Principal or R&B Falcon Corporation shall not invalidate an
otherwise valid claim made on this Bond but shall have the effect of
delaying the effectiveness of such claim to a date that is 50 days after
the earlier of (a) the date on which such Obligee so notifies the Sureties
of such determination and (b) the date on which the first notice of such
claim pursuant to clause (1), clause (2) or clause (3) above was delivered
to the Sureties.
Subject to the provisions of this Performance Bond with respect to the
maximum liability of the Sureties, making a claim under the foregoing
clause (2) does not preclude making a subsequent claim under the foregoing
clause (1). The Sureties agree that the Obligees' rights and the Sureties'
obligations under this Performance Bond shall remain in full force and
effect notwithstanding any insolvency or bankruptcy proceeding by or
against the Principal, R&B Falcon Corporation or any of its subsidiaries or
affiliates under Title 11 of the United States Code or any other federal or
state bankruptcy or insolvency laws.
PROVIDED, HOWEVER, that (1) the Indenture Trustee shall be deemed to have
automatically consented to the amendment of the date within the definition
of "Outside Date" under the CSA if (a) such amendment is agreed to by the
Owner and the Principal, and a copy thereof, signed by the Owner, the
Principal and the Sureties has been delivered to the Indenture Trustee, (b)
such amendment is consented to by the Sureties and SDDI and the rights of
the Owner under the SDDI Contract are not impaired, (c) the extension of
time represented by such amendment does not exceed 60 days, (d) the
payments required by Section 4.1 of the CSA are being made as required
thereby and (e) the Sureties certify (upon request of either Obligee) that
they believe in good faith that Completion can be made to occur before the
Outside Date (as such definition is amended), and (2) if either of the
Obligees shall have actual knowledge of an Event of Default, such Obligee
shall use good faith best efforts to so notify the Sureties, but the
failure of an Obligee to so notify the Sureties shall not invalidate an
otherwise valid claim made on this Bond, and further,
PROVIDED, HOWEVER, that if the Sureties elect or are obligated to pay under
clause 3(b) or clause 4 above, rather than cause Completion to occur, the
Sureties shall not be obligated to make payment of any claim on this
Performance Bond, unless and until they shall have received a written
assignment, to become effective upon payment of such claim, of all of the
rights of the Indenture Trustee under each of the Construction Contract,
the Bank Performance Guarantee, the SDDI Contract, the CSA, the Falcon
Performance Guarantee and in all other collateral included within the Trust
Estate (other than the Construction Account) (provided that, to the extent
that the Principal, RBFE or the Owner is obligated to the Indenture Trustee
under the Indenture for amounts in excess of the penal sum of this
Performance Bond, the Indenture Trustee may retain a subordinated second
priority security interest in such collateral to secure such obligation to
the Indenture Trustee so long as the Indenture Trustee agrees not to take
any action with respect to such interest (other than any action necessary
to preserve such interest under applicable law) until such time as all
security interests in such collateral in favor of the Sureties shall have
been released by them); such assignment shall be substantially in the form
to be attached as Exhibit A hereto and shall be accompanied by a legal
opinion substantially in the form to be attached as Exhibit B hereto.
No right of action shall accrue on this Performance Bond to or for the use
of any person or corporation other than the Obligees named herein and any
assignees permitted by the following sentence. Neither Obligee may assign
any one or more of its rights hereunder without the prior written consent
of the Sureties, provided, however, that either Obligee may assign any or
all of its rights hereunder to the other Obligee (subject to the terms of
the Indenture), and otherwise the Sureties will not unreasonably withhold
their consent to the assignment by the Indenture Trustee of any or all of
its rights hereunder to a successor trustee permitted under the Indenture.
This Performance Bond shall be interpreted according to the Laws and
Statutes of the State of Connecticut, U.S.A. The United States District
Court, located in Hartford, Connecticut, shall have exclusive jurisdiction
and venue with respect to any litigation arising under or connected with
this Performance Bond.
The parties hereto voluntarily and intentionally waive any right any of
them may have to a trial by jury in respect of any litigation arising out
of, under or in connection with this Performance Bond or any of the
documents, agreements or transactions contemplated hereby. This Bond may
be executed in one or more counterparts, each of which shall be an original
but all of which together shall constitute one instrument.
This Performance Bond is a complete statement of all of the obligations of
the Sureties in favor of the Obligees in respect of the transactions
contemplated hereby and by the CSA.
[Remainder of page intentionally blank]
IN WITNESS WHEREOF, said the Principal and Sureties have hereunder set
their hands and seals by their duly authorized representatives this ____
day of January, 2000.
Witness: RBF EXPLORATION II INC.
By___________________________(Seal)
Name:
Title:
TRAVELERS CASUALTY AND
SURETY COMPANY OF AMERICA
By____________________________(Seal)
Name:
Title:
AMERICAN HOME ASSURANCE
COMPANY
By____________________________(Seal)
Name:
Title:
- ------------------------------------------------------------------------
EXHIBIT A
to Performance Bond
ASSIGNMENT
THIS ASSIGNMENT dated as of ____________ (as may hereafter be amended,
extended, renewed or otherwise modified from time to time, this
"Assignment"), by ______ [TRUSTEE] ("Assignor"), in favor of TRAVELERS
CASUALTY AND SURETY COMPANY OF AMERICA and AMERICAN HOME ASSURANCE COMPANY,
herein collectively referred to as ("Assignee").
PRELIMINARY STATEMENT
Reference is made to a Performance Bond dated February 1, 2000, issued
on or prior to such date by the Assignee in favor of BTM Capital
Corporation and the Assignor (the "Performance Bond"). All terms as used
herein and not otherwise defined herein shall have the respective meanings
ascribed to them in the Indenture (as such term is defined in the
Performance Bond).
As a condition of the obligation of the Assignee to make payments
pursuant to clause 3(b) or clause 4 of the Performance Bond, Assignor must
execute and deliver this Assignment.
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Assignor hereby absolutely assigns, transfers,
conveys and sets over to Assignee, its successors and assigns all right,
title and interest and all powers, privileges and benefits of Assignor (the
following herein referred to as the "Assigned Rights") (a) in, to and under
any and all of the Project Documents identified on Annex 1 hereto and (b)
against, and with respect to, the Issuer under the Granting Clauses and
Sections 7.1, 7.5 (other than clause (c) and clause (b)), 7.6, 7.7, 7.8,
7.9, 7.12, 8 and 9 of the Indenture; provided, however (i) the Assignee
shall have no obligations to or rights against any of Note Holders under
the Indenture or otherwise and (ii) the Assigned Rights shall not include
any rights of the Assignor in the Construction Account.
TO HAVE AND TO HOLD the Assigned Rights unto Assignee, its successors
and assigns, to its and their own proper use and behoof, upon and subject
to the terms and conditions set forth in this Assignment.
Assignor represents, warrants, covenants and agrees with Assignee and
the Noteholders as follows:
(1) Representations and Warranties. Assignor hereby represents and
warrants to Assignee that:
(a) Assignor has delivered to the Assignee an accurate and
complete copy of each of the Project Documents, each of which is in
full force and effect and none of which has been amended or
supplemented except as permitted by the Performance Bond (photocopies
or originals of which are attached hereto as Annex I to this
Assignment);
(b) Assignor has full corporate power and authority,
without the joinder or consent of any person (except for such consents
as have been obtained and except for any consents of the Sureties that
may be required), to assign the Assigned Rights pursuant to and as
provided in this Assignment;
(c) Assignor has taken no action to create or permit, and
has no actual knowledge of the creation or existence of, any liens,
security interests, charges or encumbrances against the Assigned
Interests since the effective dates of the Project Documents other
than liens, security interests, charges and encumbrances permitted by
or consented to by the Sureties under the Performance Bond; and
(d) no consents, approvals, filings or authorizations are
required to effect the assignment of the Assigned Rights and to grant
to the Assignee all rights and privileges of Assignor in the Assigned
Rights.
(2) Absolute Assignment.
(a) The assignment of the Assigned Rights pursuant to this
Assignment is intended to be, and shall be deemed and construed to be,
an absolute and unconditional present assignment to Assignee of the
Assigned Rights, and not merely the grant or other creation of a lien
or security interest in or on the Assigned Rights.
(b) The assignment of the Assigned Rights pursuant to this
Assignment is and shall be irrevocable. All powers, authorizations
and appointments granted to Assignee pursuant to this Assignment and
all authorizations and directions and notices to parties to the
Project Documents in respect of this Assignment also are and shall be
irrevocable. Assignor shall not take any action that is inconsistent
with this Assignment, and Assignor shall not make any assignment,
designation or direction inconsistent with this Assignment. Any
purported assignment, designation or direction inconsistent with this
Assignment shall be null and void.
(c) Assignor makes no representation or warranty regarding
title to the Assigned Interests other than as set forth in Section 1
above.
(3) Power of Attorney; Further Assurances.
(a) Assignor hereby authorizes Assignee, and appoints
Assignee as Assignor's attorney-in-fact, at Assignee's option, to:
(1) appear, on Assignor's behalf and in its name
(provided that reasonable notice of such use shall be provided to
Assignor), for the purpose of prosecuting any claim for awards,
damages or other amounts which may be or become payable to or for the
benefit of Assignor in any case or proceeds in respect of the Assigned
Rights;
(2) execute and deliver, on Assignor's behalf and in
its name, such further assignments, deeds and other instruments
effectuating any conveyance or assignment reasonably contemplated
hereby; and
(3) take all other actions from time to time
reasonably deemed by Assignee to be necessary or appropriate to enable
Assignee to enjoy and exercise the Assigned Rights.
(b) The authorization and appointment of Assignee pursuant
to the immediately preceding paragraph (a) is irrevocable, is coupled
with an interest and includes full power of substitution.
(c) Assignor will take such acts, and will execute and
deliver such further documents and instruments, as may be reasonably
requested by Assignee to further effect the transfer and assignment of
the Assigned Rights as contemplated hereby (including, without
limitation, the execution and filing of necessary transfer documents
with respect to the First Preferred Ship Mortgage and any Uniform
Commercial Code financing statements).
(4) Notices. All notices, demands, requests and other
communications to be given to the Assignor or the Assignee under
this Assignment shall be given in accordance with the Trust
Indenture and shall become effective as provided in the Trust
Indenture and the Performance Bond.
(5) Indemnification. Assignee agrees to indemnify and hold
harmless Assignor from and against any and all claims, expenses
and liabilities (including attorneys fees and other costs of
defense) arising out of or in connection with Assignee's exercise
of any rights and remedies under the Assigned Rights, any use of
Assignor's name granted pursuant hereto and the power-of-attorney
grant to Assignee hereunder, other than any claims caused solely
by Assignor's own gross negligence or willful misconduct.
(6) Miscellaneous.
(a) The captions and Section headings in this Assignment
are for convenience of reference only and are not intended to define,
alter, limit or enlarge in any way the scope or meaning of this
Assignment or any provision set forth in this Assignment.
(b) The Preliminary Statement set forth at the beginning of
this Assignment is incorporated in and made a part of this Assignment
by this reference.
(c) Each reference in this Assignment to any gender shall
be deemed also to include any other gender, and the use in this
Assignment of the singular shall be deemed also to include the plural
and vice versa, unless the context clearly requires otherwise. As
used in this Assignment, the term "person" means any and all natural
persons (whether acting for themselves or in a representative
capacity), sole proprietorships, partnerships, joint ventures,
associations, trusts, estates, limited liability companies,
corporations (non-profit or otherwise), financial institutions,
governments (and agencies, instrumentalities and political
subdivisions thereof), and other entities, authorities and
organizations of every type. As used in this Assignment, unless the
context clearly requires otherwise, the words "herein," "hereunder,"
hereinafter" and "hereto" and words of similar import shall be deemed
to refer to this Assignment as a whole and not to any particular
Section, paragraph or other subdivision, and the words "include" and
"including" shall be deemed to be followed by the words "without
limitation." Each reference in this Assignment to the provisions of
this Assignment or the provisions of any of the Project Documents
shall be deemed to refer to any and all covenants, agreements, terms,
conditions and other provisions hereof or thereof.
(d) This Assignment shall be governed by the internal laws
of the State of Texas, without regard to principles of conflicts of
law. If any provision of this Assignment shall be invalid, illegal or
unenforceable in any respect, or if any provision of any of the other
Project Documents shall or would invalidate this Assignment, then such
provision alone shall be deemed to be null and void, and the validity,
legality and enforceability of the remaining provisions of this
Assignment and the remaining provisions of the other Project Documents
shall remain in full force and effect and shall not in any way be
affected or impaired thereby.
[Remainder of page intentionally blank; next page is signature page.]
IN WITNESS WHEREOF, Assignor has caused this Assignment to be executed
as of the date first above written.
[TRUSTEE]
By:______________________________________
[Name]
[Title]
STATE OF )
) ss: [Date]
COUNTY OF )
Personally appeared [OFFICER] of [TRUSTEE], who executed the foregoing
instrument and acknowledged the same before me, to be his/her free act and
deed as such [OFFICER] on behalf of said [corporation] [association].
_________________________________
Print Name:
{AFFIX NOTARIAL SEAL} Notary Public
My commission expires:
Annex I
Copies of Project Documents
Including the following (all terms as defined in the Indenture):
Construction Supervisory Agreement
Performance Bond
Performance Guarantee
Refundment Guarantee
Assignment of Drilling Contract
Operation and Maintenance Agreement
First Preferred Ship Mortgage
SDDI Acknowledgment and Consent
[Other agreements and instruments executed by Issuer, RBF II or the Parent]
- ---------------------------------------------------------------------------
EXHIBIT B
to Performance Bond
[Date]
To the Sureties (defined below)
Re: RBF Exploration Co.
$200,000,000 Senior Secured Class A1 Notes
$50,000,000 Senior Secured Class A2 Notes (collectively, the
"Notes")
Ladies and Gentlemen:
We have acted as special outside counsel to Chase Bank of Texas,
National Association (in its individual capacity herein referred to as the
"Bank", and in its capacity as indenture trustee herein referred to as the
"Trustee"), a national banking association with its principal banking
office located in Houston, Texas, in connection with the issuance by RBF
Exploration Co. (the "Company") of the referenced Notes, pursuant to a
Trust Indenture and Security Agreement, dated as of August 12, 1999, as
supplemented and amended by the Supplemental Indenture and Amendment dated
as of February 1, 2000 (the "Indenture"), by and between the Company, BTM
Capital Corporation and the Trustee. All defined terms used throughout
this opinion and not otherwise defined herein shall have the same meanings
as given to such defined terms in the Indenture. In connection with the
foregoing, we have reviewed the assignment (the "Assignment") of even date
herewith executed by the Trustee and delivered to the Sureties and each of
the documents and instruments identified on Annex I hereto (herein referred
to as the "Assigned Agreements").
We have also examined certificates of officers of the Trustee, the
Comptroller of the Currency of the United States, and such other documents
and instruments as we have deemed necessary or appropriate in rendering the
opinions set forth below. In rendering the opinions set forth below, we
have assumed the following:
(A) The genuineness of all signatures (other than signatures of
persons acting on behalf of the Bank and the Trustee), the
authenticity of all documents submitted to us as originals and the
conformity to authentic original documents of all documents submitted
to us as certified, conformed, photostatic or telephonic facsimile
copies.
(B) That each of the other parties to the Assigned Agreements had
full power and authority to execute, deliver and perform its
respective obligations thereunder, the Assigned Agreements have been
duly authorized, executed and delivered by each of the other parties
thereto, and the Assigned Agreements constitute valid and legally
binding obligations of each of the other parties thereto, enforceable
against each in accordance with their respective terms.
Based upon the foregoing and subject to the qualifications hereinafter
stated, we are of the opinion that:
1. The Bank is duly chartered, validly existing and in good standing
as a national banking association with trust powers under the banking laws
of the United States of America.
2. The Trustee has all necessary corporate and trust powers and
authority to execute and deliver the Assignment and its rights under the
Assigned Agreements, to perform its obligations under the Assignment and to
consummate all of the transactions contemplated thereby.
3. The Trustee has duly authorized, executed and delivered the
Assignment.
4. The Assignment constitutes legal, valid and binding obligation of
the Trustee, enforceable against the Trustee in accordance with their
respective terms.
5. The execution and delivery of the Assignment and compliance by
the Trustee with the provisions of the Assignment do not and will not
contravene any law or any order known to us of any court or governmental
authority or agency applicable to or binding on the Trustee or its articles
of association or its bylaws.
6. To our knowledge there are no proceedings pending or threatened
and there is no existing basis for any such proceedings against or
affecting the Trustee in or before any governmental authority or
arbitration board or tribunal which, if adversely determined, might impair
the ability of the Trustee to perform its obligations under the Assignment.
7. No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required
for the due execution, delivery and performance by the Trustee of the
Assignment.
8. The Assignment grants the Sureties all rights of the Trustee in
the Assigned Agreements and will not affect the rights of the Trustee
against third parties thereunder or impair the validity or priority of any
Liens created thereby.
The opinions expressed above are subject to the following qualifications
and limitations:
(a) Enforceability and performance of the Assignment is subject to
and may be limited by (1) principles of equity and (2) applicable
receivership, insolvency, fraudulent conveyance, moratorium and other
similar laws and regulations from time-to-time in effect generally
applicable to and affecting the enforceability of creditors' rights
generally.
(b) We express no opinion as to whether a court would grant specific
performance or any other equitable remedy with respect to the
enforceability of the Assignment.
(c) We express no opinion regarding the validity or enforceability of
the choice-of-law provisions contained in the Assignment.
(d) We express no opinion regarding the validity, enforceability or
priority of any lien, security interest or mortgage on any rights or
collateral assigned to the Sureties by the Trustee pursuant to the
Assignment.
(e) We express no opinion with respect to any of the provisions of
the Assignment and the Assigned Agreements that purport to confer
jurisdiction or venue on any court, to waive service of process, to
waive rights to jury trial, to provide for indemnification of parties
for acts of negligence, to establish evidentiary standards, to
establish standards of care, to exculpate parties from liability for
future actions or any provisions that may otherwise be limited by
public policy considerations, requirements of good faith and fair
dealing, reasonableness and similar standards.
This opinion is limited exclusively to the laws of the State of Texas
and the federal laws of the United States of America in effect on the date
hereof, and we express no opinion with regard to any matter which may be
governed by the laws of any other jurisdiction.
The opinions expressed herein are limited solely to the matters
expressly set forth in this opinion, and no opinion is to be implied or
should be inferred beyond the matters expressly so stated.
Very truly yours,
Annex I
Documents and Instruments
(All terms as defined in the Indenture)
Indenture
Construction Supervisory Agreement
Performance Bond
Performance Guarantee
Refundment Guarantee
Assignment of Drilling Contract
Operation and Maintenance Agreement
First Preferred Ship Mortgage
SDDI Acknowledgment and Consent
[Other agreements and instruments executed by Issuer, RBF II or the Parent]
EXHIBIT 10.318
INDEMNITY AGREEMENT
Pursuant to this Indemnity Agreement (this "Agreement"), each of R&B FALCON
CORPORATION, a Delaware corporation ("Falcon") and RBF EXPLORATION II INC.,
a Nevada corporation all of the capital stock of which is owned by Falcon
("RBF II" and, collectively with Falcon, the "Indemnitors"), hereby
requests TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, One Tower
Square, Hartford, Connecticut 06183, and AMERICAN HOME ASSURANCE COMPANY,
175 Water Street, 6th Floor, New York, New York 10038, each for itself and
its affiliates, parent, and subsidiaries, (individually, a "Company" and
collectively, the "Companies") to severally and not jointly furnish a
performance bond, in the maximum penal sum of $265,000,000 (including any
and all interest, attorney's fees, expenses, costs and liquidated damages),
as evidenced by and as described by the Performance Bond, dated on or
around February 1, 2000, given by the Companies and RBF II in favor of BTM
Capital Corporation (the "Owner") and the Indenture Trustee (as defined in
the Bond, the "Indenture Trustee") (such performance bond, as amended,
modified or supplemented from time to time with the consent of the
Companies, hereinafter referred to as the "Bond"), and as an inducement
therefore each of the Indemnitors makes the following representations of
fact, promises and agreements:
REPRESENTATIONS OF FACT:
1. RBF II is required to deliver the Bond in connection with a
Construction Supervisory Agreement, dated as of February 1, 2000, among RBF
II, RBF Exploration Co. ("RBFE") and the Owner (as amended from time to
time (as permitted by the indenture governing the Indenture Trustee or
otherwise) with the consent of the Companies, the "CSA"), whereby RBF II is
to supervise the design, construction, and delivery of a semi-submersible
vessel in accordance with a written agreement, dated November 14, 1997,
known as the Contract for Construction and Sale of Vessel (Hull No. HRBS6),
between RBFE and Hyundai Heavy Industries Co., Ltd. and Hyundai
Corporation, and in accordance with a written agreement, dated August 12,
1998, known as the Offshore Daywork Drilling Contract, between RBFE and
Shell Deepwater Development, Inc.
2. Each of the Indemnitors has a substantial, material and
beneficial interest in the obtaining of the Bond and it is understood that
the purpose of this Agreement is to induce the Companies to furnish the
Bond. It is understood and agreed, however, that the Companies are under no
obligation to furnish the Bond and, once furnished, the obligations of the
Companies in respect thereof shall be subject to limitation as provided
therein.
PROMISES AND AGREEMENTS: In consideration of the furnishing of the Bond by
the Companies and for other valuable consideration, each of the Indemnitors
hereby jointly and severally promises and agrees as follows:
1. To pay all premiums for the Bond (including for any amendments,
modifications, supplements and replacements), as they fall due, and until
each of the Companies has been provided with competent legal evidence that
the Bond has been duly discharged.
2. To indemnify and exonerate each of the Companies from and against
any and all loss and expense of whatever kind, including, without
limitation, interest, court costs and counsel fees (hereinafter referred to
as "Loss"), which they or either of them may incur or sustain as a result
of or in connection with (x) the furnishing of this Bond and (y) the
enforcement of this Agreement. To this end, each Indemnitor jointly and
severally promises:
(a) To promptly reimburse the Companies or either of them for
all sums paid on account of such Loss and it is agreed that (1)
originals or photocopies of claim drafts, or of payment records kept
in the ordinary course of business, including computer printouts,
verified by affidavit, shall be (in the absence of manifest error)
prima facie evidence of the fact and amount of such Loss, (2) either
or both the Companies shall be entitled to reimbursement for any and
all disbursements made by either or both of them in good faith, under
the belief that either or both of them were liable, or that such
disbursement was necessary or expedient.
(b) To deposit with the Companies or either of them on demand
the amount of any reserve against such Loss which either of the
Companies is required, or deems it prudent to establish, whether on
account of an actual liability or one which is, or may be, asserted
against either or both of them, and whether or not any payment for
such Loss has been made.
3. Each Indemnitor acknowledges and agrees that the obligations
contained in this Agreement were substantial consideration for the issuance
of the Bond, and that the Bond would not have been given without the
execution and delivery of this Agreement by the Indemnitors.
4. The validity and effect of this Agreement shall not be impaired
by, neither Company shall incur any liability on account of, and the
Indemnitors need not be notified of:
(a) Either or both Companies' failure or refusal to furnish the
Bond.
(b) Either or both Companies' consent or failure to consent to
changes in the terms and provisions of the Bond, or the obligation or
performance secured by the Bond.
(c) The taking, failing to take, or release of security,
collateral, assignment, indemnity agreements and the like, as to the
Bond.
(d) The release by either Company, on terms satisfactory to it,
of either or both Indemnitors.
(e) Information which may come to the attention of either
Company which affects or might affect its rights and liabilities or
those of either of the Indemnitors.
5. Neither Indemnitor shall have rights of indemnity, contribution
or right to seek collection of any other outstanding obligation against the
other Indemnitor or any other indemnitors or its property until the
Indemnitors' obligations to the Companies under this Agreement shall have
been satisfied in full.
6. Each Indemnitor also understands and agrees that its obligations
remain in full force and effect for the Bond, notwithstanding that the
entity on whose behalf the Bond was issued has been sold, dissolved, placed
in an insolvency proceeding or whose ownership has been otherwise altered
or affected in any way.
7. This Agreement is in addition to and not in lieu of any other
agreements and obligations undertaken in favor of either or both of the
Companies.
8. (a) Without limiting the rights of the Companies under paragraph
2 hereof, from time to time, the obligees under the Bond may make a
demand for payment or for performance (a "Demand") against the Bond.
Subject to the terms and conditions of the Bond, when such Demand is
made, the Companies must pay the amount of the Demand or cause
completion to occur under the Bond within the time period required by
the Demand. The Companies, with the knowledge and consent of the
Indemnitors, have expressly waived any defenses to making such payment
or to causing completion to occur pursuant to the terms of the Bond.
If either or both of the Indemnitors receive notice from either or
both of the Companies that a Demand has been made against the Bond by
the obligees, the Indemnitors will, within 10 days from receipt of
such notice, pay the Companies the full amount of the Demand, as well
as all necessary fees. Such payment will be made by wire transfer or
otherwise in immediately available funds to the bank account specified
in the notice provided to such Indemnitor by the Companies.
(b) Each Indemnitor waives, to the fullest extent permitted by
applicable law, each and every right which it may have to contest such
payment or performance by either or both of the Companies. Failure to
make payment to the Companies as herein provided shall cause the
Indemnitors to be additionally and jointly and severally liable for
any and all reasonable costs and expenses, including attorney's fees,
incurred by either or both of the Companies in enforcing this
Agreement, together with interest on unpaid amounts due the Companies.
Interest shall accrue, commencing the date either Company pays the
amount of the Demand, at the prime rate of interest in effect on
December 31 of the previous calendar year as published in the Wall
Street Journal plus two percentage points (but such interest rate
shall be limited to the greatest amount permitted pursuant to
applicable law).
9. Each Indemnitor will ensure that at all times the claims of the
Companies against it hereunder rank at least pari passu with claims of all
other unsecured creditors of such Indemnitor, other than creditors
preferred by operation of law.
10. Either Indemnitor shall be considered to be in default of this
paragraph if (a) it fails to pay any principal or premium or interest on
any Debt which is outstanding in the principal amount of at least
$12,500,000 in the aggregate, when the same becomes due and payable and
such failure results in acceleration of the maturity of the principal of
such Debt; or (b) any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Debt and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition results
in acceleration of the maturity of the principal of such Debt; or (c) any
such Debt shall otherwise be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment or as a
result of the giving of notice of a voluntary prepayment), prior to the
stated maturity therefore. "Debt", for the purposes of this paragraph,
shall be defined with respect to either Indemnitor as any indebtedness
incurred in respect of (i) money borrowed, (ii) the issue of any bond,
note, debenture or similar instrument, (iii) acceptance of documentary
credit facilities, (iv) deferred payments for assets or services acquired,
(v) any transaction having, and intended by such Indemnitor to have the
commercial effect of borrowing money, (vi) guarantees, bonds, letters of
credit or similar instruments issued in connection with the performance of
contracts, (vii) interest rate hedging arrangements, including without
limitation, swaps, cap and collar arrangements and any foreign currency or
other hedging arrangements, (viii) rental payments with regard to land,
machinery, equipment or otherwise entered into primarily as a method of
raising finances or of financing the acquisition of the asset leased, and
(ix) guarantees or other assurances against financial loss in respect of
Debt of a person other than such Indemnitor. In the event of a default
under this paragraph, the Indemnitors shall promptly upon written demand by
the Companies deposit with an escrow agent (which shall be a reputable
banking institution offering escrow services) an amount which shall
represent the Companies' pro rata share (based on the full amount of the
Bond), on a pari passu basis, of any and all amounts paid to or otherwise
given as security for the benefit of the other unsecured lenders by either
of the Indemnitors in connection with or related to such failure, event,
condition, declaration or requirement. The escrow account shall be
available to the Companies to satisfy any liability or expense incurred by
either of them under the Bond.
11. This Agreement shall apply to the Bond and to any other bond
furnished by either of the Companies in respect of the Indemnitors'
obligations under the CSA, or where procured by either of the Companies,
any other bond furnished by any other entity in respect of the Indemnitors'
obligations under the CSA, and each other insurer or re-insurer with
respect to the obligations of the Companies hereunder, and if such entity
is another surety, co-surety, insurer or co-insurer, such entity shall also
have the benefit of this Agreement and the right to proceed thereon,
provided that nothing contained in this paragraph shall require that either
Company furnish or procure any other bond other than the Bond.
12. The Indemnitors shall promptly furnish to the Companies (a) a
copy of each requisition form delivered to the Owner pursuant to Section
3.2(a) of the CSA, (b) a copy of each notice (including, without
limitation, a notice of the occurrence of an Event of Default) received in
connection with the CSA and (c) a certificate of the Indemnitors, on or
within 5 days of the Anticipated Delivery Date (as defined in the CSA),
certifying the status of the Project (as defined in the CSA), whether
Completion (as defined in the CSA) has occurred or when it is reasonably
likely to occur, and providing salient facts related to such status and
Completion. The Indemnitors shall promptly furnish to the Companies such
other information as the Companies may reasonably request relating to or
arising out of the Bond, the CSA or this Agreement.
13. Without limitation of the other provisions hereof, each
Indemnitor agrees to cooperate with and assist the Companies and their
agents in performing their respective obligations under the Bond (including
their obligation of performance and completion) and the Indemnitors shall
take no action the effect of which would be to materially impair the
ability of the Companies to perform their obligations under the Bond.
14. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by
law) not invalidate or render unenforceable such provision in any other
jurisdiction.
15. Each agreement or covenant of either Indemnitor contained herein
shall be construed (absent express provision to the contrary) as being
independent of each other covenant contained herein, so that compliance
with any one covenant shall not (absent such an express contrary provision)
be deemed to excuse compliance with any other covenant. Where any
provision herein refers to action to be taken by any party, or which any
party is prohibited from taking, such provision shall be applicable whether
such action is taken directly or indirectly by such party.
16. This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of
the parties hereto.
17. This Agreement may be amended, and the observance of any term
hereof may be waived, with (and only with) the written consent of the
Companies and the Indemnitors.
18. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE
STATE OF CONNECTICUT EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH
STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION
OTHER THAN SUCH STATE.
19. EACH INDEMNITOR HAS READ THIS AGREEMENT CAREFULLY. THERE ARE NO
SEPARATE AGREEMENTS OR UNDERTAKINGS WHICH IN ANY WAY LESSEN THE OBLIGATIONS
OF THE INDEMNITORS AS ABOVE SET FORTH.
[Remainder of page intentionally blank]
WITNESS: The following signatures as of this _____ day of January, 2000.
Indemnitors:
Falcon Federal Tax ID: 76-0544217
R&B FALCON CORPORATION
By____________________________________________(Seal)
Name:
Title:
Attest_______________________________________________
Name:
Title:
RBF II Federal Tax ID:
RBF EXPLORATION II INC.
By____________________________________________(Seal)
Name:
Title:
Attest_______________________________________________
Name:
Title:
EXHIBIT 10.319
=========================================================================
FIRST NAVAL MORTGAGE
Made by
BTM Capital Corporation
In Favor of
Chase Bank of Texas, National Association, as Indenture Trustee
on
DEEPWATER NAUTILUS
Dated February __, 2000
=========================================================================
First Naval Mortgage
Mortgagor: BTM Capital Corporation
125 Summer Street
Boston, MA 02110
Mortgagor's Interest in the Vessel: 100%
Mortgagee: Chase Bank of Texas, National Association
1150 Chase Tower
600 Travis Street
Houston, TX 77002
Amount of Mortgage: $250,000,000.00
Maturity Date: May 1, 2005
THIS FIRST NAVAL MORTGAGE dated the __ day of February, 2000 (as
amended, supplemented or otherwise modified from time to time, the
"Mortgage") is made and given by BTM Capital Corporation, a Delaware
corporation (the "Mortgagor"), whose domicile is set forth above, to Chase
Bank of Texas, National Association, as Indenture Trustee (as such term is
hereinafter defined), whose domicile is set forth above (hereinafter
referred to, together with its successors and assigns, as the "Mortgagee").
RECITALS
A. Mortgagor is the sole owner of the whole of the vessel DEEPWATER
NAUTILUS, duly documented in the name of the Mortgagor under the laws and
flag of the Republic of Panama with Provisional Patente No. 28687-PEXT,
Radio Call Letters HP9953, of 29,051 gross tonnage, 8,715 net tonnage, and
120.7 meters in length, 78.0 meters in width and 41.5 meters in depth (the
"Rig").
B. RBF Exploration Co, a Nevada corporation ("RBF") and Mortgagee
have entered into that certain Trust Indenture and Security Agreement dated
as of August 12, 1999 (as the same may be amended, supplemented, restated
or otherwise modified from time to time including, without limitation, the
Supplemental Indenture (as hereinafter defined), the "Trust Indenture").
RBF, Mortgagor and Mortgagee have entered into that certain Supplemental
Indenture and Amendment of even date herewith (the "Supplemental
Indenture"). Pursuant to the terms and conditions contained in the Trust
Indenture, RBF entered into those certain Note Purchase Agreements dated as
of August 12, 1999, as amended by those certain First Amendments to Note
Purchase Agreements of even date herewith (as heretofore or hereafter
amended, supplemented, restated or otherwise modified from time to time,
the "Note Purchase Agreements"), wherein certain Note Holders (as such term
is defined in the Trust Indenture) have agreed to make a term loan to RBF
in the aggregate principal amount of $250,000,000.00, as evidenced by those
certain Senior Secured Class A1 Notes in the original principal amount of
$200,000,000 and those certain Senior Secured Class A2 Notes in the
original principal amount of $50,000,000 (the promissory notes referred to
above, as the same may be amended, supplemented, restated or otherwise
modified from time to time, being herein collectively referred to as the
"Notes" which are set forth as an Exhibit to this Mortgage as explained
below). The Senior Secured Class A1 Notes are payable in installments of
interest at a rate per annum (based on a 360 day year of twelve thirty-day
months) of 7.31% on the unpaid principal balance thereof, and payments of
principal in accordance with the provisions of an amortization schedule
attached to each of such Notes. The Senior Secured Class A2 Notes are
payable in installments of interest at a rate per annum (based on a 360 day
year of twelve thirty-day months) of 9.41% on the unpaid principal balance
thereof, and payments of principal at maturity. The Trust Indenture, the
Supplemental Indenture, the Note Purchase Agreements, the Notes and certain
of the Project Documents, being the Construction Supervisory Agreement, the
Performance Bond, the Performance Guarantee, the Parent Indemnity, the
Operations and Maintenance Agreement, are attached hereto as Exhibits A, B,
C, D, E, F, G, H, and I respectively, and made a part of this Mortgage as
express mortgage provisions.
C. Mortgagor, pursuant to the terms of the Supplemental Indenture,
assumed certain obligations of RBF (including, without limitation, payment
of the Notes) and now owns the Vessel (as hereinafter defined). Mortgagee
has requested pursuant to the terms of the Trust Indenture that Mortgagor
execute and deliver this Mortgage, and Mortgagor has agreed to (i) enter
into this Mortgage on the Vessel and (ii) preliminarily record such
Mortgage at the Public Registry Office of the Republic of Panama, and
(iii), within six months from the date of such preliminary registration,
permanently register the title to the Vessel in the name of the Mortgagor
in the Public Registry Office of the Republic of Panama.
D. Now, therefore, in consideration of the premises and of other
valuable consideration, receipt of which is hereby acknowledged, Mortgagor
hereby agrees as follows:
ARTICLE I
GRANTING CLAUSE AND DEFINITIONS
Section 1.1 Granting Clause. To secure the full and timely payment
of and the full and timely performance and discharge of the Obligations (as
hereinafter defined), Mortgagor hereby mortgages and executes and
constitutes a First Naval Mortgage in accordance with the provisions of
Chapter V Title IV of Book Second of the Code of Commerce and other
pertinent legislation of the Republic of Panama in favor of Mortgagee, its
successors and assigns, upon the whole of the Rig, together with its
boilers, engines, machinery, masts, spars, sails, riggings, boats, anchors,
cables, chains, tackle, tools, pumps and pumping equipment, apparel,
furniture, fittings and equipment, spare parts, capstans, outfit, tanks and
tank batteries, fixtures, valves, fittings, draw works, machinery and
parts, meters, apparatus, equipment, appliances, tools, implements, cables,
wires, derricks, towers, casing, tubing and rods, and all other
appurtenances thereunto appertaining or belonging, whether now owned or
hereafter acquired, whether or not on board the Rig, and all additions,
improvements, renewals and replacements hereafter made in or to the Rig or
any part thereof, or in or to any said appurtenances, to the extent
Mortgagor has an ownership interest therein (collectively, the "Vessel").
TO HAVE AND TO HOLD all and singular the above mortgaged and described
property unto Mortgagee, its successors and assigns, forever upon the terms
herein set forth;
PROVIDED, HOWEVER, and these presents are on the condition that if the
Obligations are paid and performed in accordance with the terms thereof and
this Mortgage, then these presents and the estates and rights hereunder
shall cease, terminate and be void, otherwise to be and remain in full
force and effect.
Section 1.2 Definitions. As used in this Mortgage, the terms "Note
Holder", "Mortgage", "Mortgagor", "Mortgagee", "Note Purchase Agreements",
"Notes", "Rig", "Trust Indenture", "Supplemental Indenture" and "Vessel"
shall have the meanings assigned to them in the preamble and recitals
hereto. Any capitalized term used in this Mortgage and not defined herein
shall have the meaning assigned to such term in the Trust Indenture. As
used herein, the following terms shall have the following meanings:
"Dollars" or "$" means the lawful currency of the United States of
America.
"Event of Loss" shall mean any one of the following events: (i) actual
total loss or destruction of the Vessel or any accident, occurrence or
event resulting in a constructive total loss or an agreed or compromised
total loss of the Vessel; or (ii) substantial damage to the Vessel, the
repair of which is uneconomical as determined in good faith by the
Mortgagor, including, but not limited to, any event pursuant to which
insurance proceeds are available which are not applied to repair the Vessel
or any other event resulting for any reason whatsoever in the Vessel being
permanently rendered unfit for normal use; or (iii) the condemnation,
confiscation, requisition, seizure, detention, forfeiture, purchase or
other taking of title to or use of the Vessel.
"Event of Default" shall have the meaning set forth in Section 3.1
hereof.
"Master's Wages" shall have the meaning set forth in Section 2.6
hereof.
"Obligations" shall mean (i) the payment when due of all indebtedness
evidenced by the Notes in the aggregate principal sum of $250,000,000.00,
interest (including post-petition interest) as set forth in the Notes and
the Trust Indenture, and premiums (including, without limitation, Make-
Whole Amounts), penalties and late charges thereon, (ii) all other
indebtedness and other sums (including, without limitation, Yield
Protection Amount, Special Yield Protection Amount, Breakage, all expenses,
attorneys' fees, other fees, indemnifications, reimbursements, damages,
other monetary liabilities, and other charges) that may and shall become
due hereunder or under the Notes, the Trust Indenture or the other Project
Documents, (iii) the performance of the covenants contained herein or in
any other Project Document and (iv) any and all renewals, modifications,
amendments, extensions for any period, supplements or restatements of any
of the foregoing.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
In order to induce Mortgagee to accept this Mortgage as collateral
security for the Obligations, Mortgagor represents and warrants to
Mortgagee and, subject to the terms and provisions of Article 6 of the
Supplemental Indenture, covenants and agrees with Mortgagee that:
Section 2.1 Legal Existence; Citizenship and Authorization.
Mortgagor is a corporation duly organized and validly existing under the
laws of the state of Delaware. Mortgagor is duly authorized to mortgage
the Vessel, and all action necessary and required by law for the execution
and delivery of this Mortgage by Mortgagor has been duly and effectively
taken by it, and this Mortgage has been duly authorized, executed and
delivered by Mortgagor. All necessary consents and approvals of any
Governmental Authority or any other entity to the entering into and
performance of this Mortgage by Mortgagor have been duly obtained or given
and the entering into and performance of this Mortgage does not and will
not contravene the terms of or constitute a default under (with or without
giving of notice or lapse of time or both) any material agreement,
instrument or document to which Mortgagor is a party or by which it or its
properties are bound or affected after giving effect to the use of the
proceeds of the Notes.
Section 2.2 Ownership of Vessel; Warranty and Defense of Title.
Mortgagor is the sole owner of the whole of the Vessel and is lawfully
possessed of the whole of the Vessel, free from any Lien whatsoever other
than the Lien of this Mortgage, and the Liens permitted by Section 2.6
hereof, and Mortgagor will warrant and defend the title to and possession
of the Vessel and every part thereof for the benefit of Mortgagee against
the claims and demands of all other Persons whomsoever, subject to the
Liens and other matters permitted by the Trust Indenture or this Mortgage.
Section 2.3 Compliance with Laws.
(a) Documentation. The Vessel is, and during the term of this
Mortgage shall continue to be, duly and lawfully registered under the laws
and flag of the Republic of Panama, and Mortgagor will comply with and
satisfy all of the provisions of the laws of the Republic of Panama in
order that the Vessel shall continue to be documented pursuant to the laws
of the Republic of Panama as a vessel of the Republic of Panama under the
Republic of Panama Flag.
(b) Laws, Treaties and Conventions. The Vessel shall, and
Mortgagor covenants that it will in the operation of the Vessel, at all
times comply in all material respects with all applicable laws, treaties
and conventions and rules and regulations issued thereunder, and shall have
on board as and when required thereby valid certificates showing compliance
therewith, except when (i) the use or title of the Vessel has been taken,
requisitioned or chartered by any Governmental Authority, (ii) there has
been an Event of Loss, or (iii) there has been any other partial loss or
damage with respect to the Vessel and Mortgagor shall be in compliance with
its obligations under Sections 5.2(b) and 8.3(e) of the Trust Indenture.
Section 2.4 Operation of Vessel. Mortgagor will not (except during
any period when the use or title to the Vessel has been taken,
requisitioned or chartered by any Governmental Authority) cause or permit
the Vessel to be operated in any manner contrary to applicable law or
regulation of the Republic of Panama or the United States of America, will
not abandon the Vessel in any non-United States port (unless an Event of
Loss has occurred as to the Vessel or the safety or welfare of the
Mortgagor's employees on the Vessel is endangered), will not engage in any
unlawful trade, violate any law or carry any cargo that will expose the
Vessel to penalty, forfeiture or capture and will not do, or suffer or
permit to be done, anything which can or may injuriously affect the
documentation of the Vessel under the existing laws and regulations of the
Republic of Panama. Without limiting the generality of the foregoing, the
Mortgagor shall not, except as permitted by applicable laws or regulations,
charter the Vessel to, or permit the Vessel to serve under any contract
with, a person included within the definition of (i) "national" of a
"designated foreign country," or "specially designated national" of a
"designated foreign county," in the Foreign Assets Control Regulations or
the Cuban Assets Control Regulations of the United States Treasury
Department, 31 C.F.R. Parts 500 and 515, in each case as amended,
(ii) "Government of Libya," "entity of the Government of Libya" or "Libyan
entity" in the Libyan Sanctions Regulations of the United States Treasury
Department, 31 C.F.R. Part 550, as amended, or (iii) "Government of Iraq,"
"entity of the Government of Iraq" or "Iraqi Government entity" in the
Iraqi Sanctions Regulations, 31 C.F.R. Part 575, as amended, all within
the meaning of said Regulations or of any regulations, interpretations or
rulings issued thereunder, or engage in any transaction that violates any
provision of said Regulations or that violates any provision of the Iranian
Transactions Regulations, 31 C.F.R. Part 560, as amended, the Transaction
Control Regulations, 31 C.F.R. Part 505, as amended, the Foreign Assets
Control Regulations, 31 C.F.R. Part 500, as amended, or Executive Orders
12810 and 12831, or call at a Cuban port to load or discharge cargo or to
effect repairs on the Vessel. Furthermore, the Mortgagor shall keep the
Vessel at all times in United States territorial waters in the Gulf of
Mexico or in the Gulf of Mexico on or above the outer Continental Shelf of
the United States; provided, however, if SDDI requires the Drilling Rig to
change location pursuant to the SDDI Contract, the Drilling Rig may be
moved to such location as SDDI so requires subject to compliance with
Section 8.11 of the Trust Indenture.
Section 2.5 Claims, Taxes, Fees. etc. Mortgagor will pay and
discharge or cause to be paid and discharged prior to delinquency, all
claims against, and fees, taxes, assessments, governmental charges, fines
and penalties imposed on, the Vessel, its cargoes or any income therefrom;
provided, that nothing in this Section 2.5 shall require Mortgagor to pay
any such claim, fee, tax, assessment, governmental charge, fine or penalty
so long as the validity thereof shall be contested by it in good faith and
by appropriate proceedings, and, provided, further, that such contest shall
not subject the Vessel, or any part thereof, to arrest, attachment,
forfeiture or loss or subject the Mortgagee or any Note Holder to the risk
of any civil or criminal liability.
Section 2.6 Liens. Neither Mortgagor, any charterer or subcharterer,
the master of the Vessel nor any other Person has or shall have any right,
power or authority to create, incur or permit to be placed or imposed or
continued upon the Vessel, and Mortgagor shall not permit to exist on the
Vessel any Lien whatsoever other than the Lien of this Mortgage and the
following:
(i) Liens for wages of the crew (including wages of a master to
the extent provided by law, "Master's Wages"), general average and salvage
(including contract salvage) for the previous voyage which shall not have
been due and payable for sixty (60) days after termination of employment or
which shall then be contested by Mortgagor in good faith and by appropriate
proceedings; provided that such contest shall not subject the Vessel to
arrest, attachment, forfeiture or loss or subject the Mortgagee or any Note
Holder to the risk of any civil or criminal liability;
(ii) Liens for wages of the crew (including Master's Wages) and
salvage (including contract salvage) which are either unclaimed or covered
by insurance;
(iii) Liens incident to current operations of Mortgagor in
the ordinary course of business (except for wages of the crew including
Master's Wages and salvage) or liens covered by insurance and any
deductible applicable thereto;
(iv) Liens for repairs the payment for which is either not
overdue or is being contested by Mortgagor in good faith and by appropriate
proceedings; provided that such contest shall not subject the Vessel to
arrest, attachment, forfeiture or loss or subject the Mortgagee or any Note
Holder to risk of any civil or criminal liability;
(v) Liens arising by reason of an actual or constructive total
loss or an agreed or compromised total loss of the Vessel; and
(vi) other Liens expressly permitted by the Trust Indenture;
provided that the Liens stated to be permitted by the foregoing
subparagraphs (i) through (iv) shall, unless they constitute a Lien for
damage arising out of maritime tort, for wages of a stevedore when employed
directly by Mortgagor, charterer, master, ship's husband, or agent, for
wages of the crew (including Master's Wages), for general average, or for
salvage (including contract salvage), be permitted only to the extent such
Liens are either accrued but not yet due or are subordinate to the Lien of
this Mortgage. Nothing contained in this Section 2.6 constitutes a waiver
by Mortgagee of Mortgagee's preferred status. If any such Lien is placed
on the Vessel which is not subordinate to the Lien of this Mortgage,
Mortgagor will promptly after becoming aware of such Lien notify Mortgagee.
Section 2.7 Notice of Mortgage. Mortgagor will at all times carry on
board the Vessel (with the ship's papers) a certified copy of this Mortgage
and any amendments and supplements hereto and any assignments hereof, and
will exhibit or cause to be exhibited the same to any Person having
business with the Vessel which might give rise to a Lien upon the Vessel or
to the sale, conveyance, mortgage or lease thereof and, on demand, to any
representative of Mortgagee. Mortgagor will also place and keep
prominently displayed on the Vessel a framed printed notice in plain type
of such size that the paragraph of reading matter shall cover a space of
not less than six inches wide by nine inches high (or such other dimensions
as may be required by law) reading as follows:
"NOTICE OF MORTGAGE
This Vessel is owned by BTM Capital Corporation and is subject to
a First Naval Mortgage in favor of Chase Bank of Texas, National
Association, as Indenture Trustee, as Mortgagee, a certified copy
of which Mortgage is kept with this Vessel's papers. Under the
terms of said Mortgage, neither the owner, any charterer or
subcharterer, the master of this Vessel nor any other person has
any right, power or authority to create, incur or permit to be
placed or imposed upon this Vessel any lien whatsoever other than
the lien of said Mortgage, liens for wages, general average or
salvage, and certain other liens permitted by the provisions of
said Mortgage."
Section 2.8 Libel or Attachment. If any legal action is filed
against the Vessel or if the Vessel shall be attached, arrested, levied
upon or taken into custody by virtue of any proceeding in any court or
tribunal, Mortgagor will promptly notify Mortgagee thereof by telegram,
cable or facsimile, confirmed by letter addressed to Mortgagee, and within
thirty (30) days after any such action (other than (i) an action involving
claims less than $1,000,000 or (ii) an action involving claims equal to or
in excess of $1,000,000 and where the Mortgagee has not received a
reservation of rights notice, or similar communication from its insurer
contesting or denying coverage), levy, attachment, arrest, or taking into
custody, Mortgagor will cause the Vessel to be released and will promptly
notify Mortgagee of such release in the manner aforesaid. In the event
that the Vessel shall not be released within thirty (30) days after such
action, levy, attachment, arrest or action to take the Vessel into custody,
Mortgagor does hereby authorize and empower Mortgagee, in the name of
Mortgagor, or its successor or assigns, to apply for and receive possession
of and to take possession of the Vessel with all the rights and powers that
Mortgagor, or its successors or assigns, might have, possess or exercise in
any such event; and this power of attorney shall be irrevocable and may be
exercised not only by Mortgagee hereinabove named but also by any one such
appointee or the appointees of Mortgagee, with full power of substitution,
to the same extent as if the said appointee or appointees had been named as
one of the attorneys above named by express designation.
Section 2.9 Maintenance of Vessel. Except as to such period as (i)
the use or title of the Vessel has been taken, requisitioned or chartered
by a Governmental Authority, (ii) there has been actual or constructive
total loss or an agreed or compromised total loss of the Vessel, or (iii)
there has been any other partial loss or damage with respect to the Vessel
and Mortgagor shall be in compliance with its obligations under Sections
5.2(b) and 8.3(e) of the Trust Indenture, Mortgagor will, at all times and
without cost or expense to Mortgagee, maintain and preserve, or cause to be
maintained and preserved, the Vessel in good running order and repair, so
that the Vessel shall be tight, staunch, strong and well and sufficiently
tackled, appareled, furnished, seaworthy, equipped and in every respect in
first class order and operating condition and in full compliance with and
able to perform all operations under the SDDI Contract; and otherwise in
compliance with the provisions of the Trust Indenture.
Section 2.10 Inspection. Weather permitting, and subject to approval
(if any) by applicable Governmental Authority and SDDI pursuant to any
rights of SDDI under the SDDI Contract, Mortgagor will permit Mortgagee,
any Note Holder or its representative to visit and inspect the Vessel,
under the Mortgagor's guidance, to examine all of its books of account,
records, reports and other papers, to make copies and extracts therefrom
and to discuss its affairs, finances and accounts with its officers,
employees, and independent public accountants (and by this provision the
Mortgagor authorizes said accountants to discuss with Mortgagee or any Note
Holder the finances and affairs of the Mortgagor) all at such reasonable
time, upon reasonable notice and as often as may be reasonably requested;
provided that the Mortgagor shall not be required to pay or reimburse any
Note Holder for expenses which such Note Holder may incur in connection
with any such visitation or inspection, except that if such visitation or
inspection is made during any period when an Indenture Default or an
Indenture Event of Default shall have occurred and be continuing, the
Mortgagor agrees to reimburse such Note Holder for all such reasonable
expenses promptly upon demand.
Section 2.11 Sale or Other Disposition of Vessel. Except as
expressly allowed in the Trust Indenture, Mortgagor will not sell,
mortgage, lease, charter, transfer or in any other way dispose of all or
any part of the Vessel without the prior written consent of Mortgagee.
Section 2.12 Notice. Mortgagor shall promptly notify the Mortgagee
forthwith by facsimile thereafter confirmed by letter of:
(a) any casualty event in excess of $1,000,000 with respect to
the Vessel; and
(b) any occurrence in respect of the Vessel that is or is likely, by
the passing of time or otherwise, to become an Event of Loss; and
(c) any material requirement or recommendation made by any insurer or
classification society or by any competent authority which is not complied
with within a reasonable time; and
(d) any arrest, governmental detention, or attachment of the Vessel
or the assertion or purported assertion of any lien against the Vessel; and
(e) any intended dry docking of the Vessel, as to which the Mortgagor
shall give the Mortgagee 30 days' prior notice, provided, that in the event
of any emergency dry docking of the Vessel, the Mortgagor shall promptly
notify the Mortgagee; and
(f) any intended deactivation or lay-up of the Vessel.
Section 2.13 Insurance.
(a) All Risk Property Insurance. Mortgagor shall, at its own
expense, keep the Vessel insured, in lawful money of the United States,
against all such risks (including without limitation, hull and
machinery/increased value, protection and indemnity risk, pollution
liability, war risks (when available) and, when laid up, port risk
insurance, as well as such excess policies over and above protection and
indemnity and general liability coverage which shall represent collective
limits of not less than $400,000,000), in such form and with such insurance
companies or underwriters as required under Section 2.13(f) as shall be at
least as protective as insurance maintained by prudent owners of vessels
and equipment similar to the Vessel, engaged in international contract
offshore oil and gas operations, and in any event all as reasonably
acceptable to Mortgagee and, so long as the Performance Bond is outstanding
or amounts are due to the Surety as a result of payments made by it
thereunder, the Surety and in compliance with the SDDI Contract. Without
limiting the generality of the foregoing, with respect to hull and
machinery/increased value insurance, including war risk (when available),
the Mortgagor shall insure the Vessel for an amount which is at least equal
to the actual value of the Vessel, but in no event less than $275,000,000.
Such insurance shall cover marine and war risk perils, on hull and
machinery, with per occurrence deductibles not in excess of $1,000,000 and
shall be maintained in the broadest forms reasonably available in the
American and British insurance markets. The Mortgagor shall maintain
protection and indemnity (or its equivalent) insurance, including war risk
protection and indemnity (or its equivalent) coverage and coverage against
pollution liability in an amount not less than $400,000,000 (or such
greater amount as may be required from time to time under Oil Pollution Act
of 1990 or other environmental laws). All of the foregoing insurance shall
have a per occurrence deductible not to exceed $1,000,000 and be placed
through such underwriters or associations reasonably acceptable to the
Mortgagee. The Vessel shall not operate in or proceed into any area then
excluded by trading warranties under its marine or war risk policies
(including protection indemnity or its equivalent) without satisfying the
conditions of the relevant policies, evidence of which shall be furnished
to the Mortgagee and, so long as the Performance Bond is outstanding or
amounts are due to the Surety as a result of payments made by it
thereunder, the Surety.
(b) Liability; Workers' Compensation. Mortgagor shall maintain
at all times such worker's compensation, employer's liability, and
longshoreman and harbor worker's insurance as shall be required by
applicable law. Such policies shall provide that any loss under such
insurance may be paid directly to the entity to whom any liability covered
by such policies has been incurred.
(c) Payment Provisions. All payments made under policies of
insurance maintained under this Section shall be applied as set forth in
Section 5.2 of the Trust Indenture.
(d) Constructive Total Loss. In the case of an Event of Loss
that is a constructive total loss of the Vessel, Mortgagee shall have the
right (but only with prior written consent of Mortgagor unless an Indenture
Event of Default has occurred and is continuing) to join in Mortgagor's
claim for a constructive total loss of the Vessel, and if both (i) such
claims are accepted by all underwriters under all policies then in force as
to the Vessel and (ii) payment in full is made in cash under such policies
to Mortgagee in an amount at least equal to the then outstanding amount of
the Obligations, then Mortgagee shall have the right to abandon the Vessel
to the underwriters under such policies, free from the Lien of this
Mortgage.
(e) Agreed Total Loss. Mortgagee shall not have the right to
enter into an agreement or compromise providing for an agreed or
compromised total loss of the Vessel without the prior written consent of
Mortgagor unless an Indenture Event of Default has occurred and is
continuing. If Mortgagor shall have given its prior consent thereto, or an
Indenture Event of Default has occurred and is continuing, Mortgagee shall
have the right in its discretion to enter into an agreement or compromise
providing for an agreed or compromised total loss of the Vessel, provided
the same is agreed to by underwriters under all applicable policies.
(f) Insurers. All insurance required under this Section 2.13
shall be placed and kept with such insurance companies, Lloyd's Syndicates,
underwriters' associations, protection and indemnity clubs or underwriting
funds as are reputable, generally recognized within the industry, and (i)
in the case of hull and machinery insurance, rated by either Standard &
Poors Rating Services, a division of the McGraw Hill Companies, Inc.
("S&P"), Moody's Investors Services, Inc. ("Moody's) or Duff & Phelps
Credit Rating Co. ("Duff") with at least the equivalent to an S&P rating of
BBB (and with at least 75% of the companies, determined by dollar amount of
policy coverage, rated by S&P, Duff or Moody's with at least the equivalent
to an S&P rating of A) or, if not rated by S&P, Duff or Moody's then rated
"excellent" or better by A.M. Best, and (ii) in the case of protection and
indemnity risk insurance, rated by either S&P, Duff or Moody's with at
least the equivalent to an S&P rating of BBB.
(g) Taking by Governmental Authority. During the continuance of
a taking, requisition or charter of the use of the Vessel by any
Governmental Authority, the provisions of this Section 2.13 shall be deemed
to have been complied with in all respects as to the Vessel if (A) in the
case of a taking, requisition or charter of the use of the Vessel by any
Governmental Authority (other than as set forth in (B) below) an indemnity
is provided that is acceptable to the Required Holders in their sole
discretion from a Person that is acceptable to the Required Holders in
their sole discretion, or (B) in the case of a taking, requisition or
charter of the use of the Vessel by any United States Governmental
Authority, such Governmental Authority shall have agreed (i) to reimburse
Mortgagee and Mortgagor for loss or damage resulting from the risks
indicated in paragraphs (a) and (b) of this Section 2.13, or (ii) that
Mortgagee and Mortgagor shall be entitled to just compensation therefor.
In the event of any taking, requisition, charter or loss of the Vessel
contemplated by this paragraph (g), Mortgagor shall promptly furnish to
Mortgagee a sworn certificate of an officer of Mortgagor stating that such
taking, requisition, charter or loss has occurred and, if there shall have
been a taking, requisition or charter of the Vessel, that the Governmental
Authority has agreed (i) to reimburse Mortgagor for loss or damage
resulting from the risks indicated in the above-mentioned paragraphs (a)
and (b) or provided an indemnity acceptable to the Required Holders in
their sole discretion, or (ii) that Mortgagor or Mortgagee, as the case may
be, is entitled to just compensation therefor.
(h) Mortgage Provisions. All insurance required under this Section
2.13 shall be taken out in the name of Mortgagor or on its behalf by an
Affiliate of Mortgagor. Mortgagee and each Note Holder and the Sureties
shall be named as an additional insureds under all liability policies
(other than workers' compensation and similar insurance), and the Mortgagee
and, so long as the Performance Bond is outstanding or amounts are due to
the Surety as a result of payments made by it thereunder, the Surety, shall
be named as the loss payees, as their interests may appear, under all
physical damage policies with respect to the Vessel for any loss in excess
of $5,000,000 or, after the occurrence and during the continuation of any
Event of Default, any loss. All policies for such insurance shall also
provide that (i) there shall be no recourse against Mortgagee (or its
assignee) or any Note Holder or any loss payee or additional insured for
the payment of premiums or commissions, (ii) if such policies provide for
the payment of club calls, assessments or advances, there shall be no
recourse against Mortgagee (or its assignee) or any Note Holder or any loss
payee or additional insured for the payment thereof. All policies shall
provide that the insurers shall provide to Mortgagee (or its assignee) and
each Note Holder and any loss payee and additional insured, as the case may
be, 30 days prior notice of any material change in the coverage of such
insurance as well as ten (10) days prior written notice of any cancellation
of such insurance in the event of non-payment of premiums and seven (7)
days prior written notice of any cancellation of such insurance for war
risk.
(i) Compliance. Mortgagor shall not do any act, nor permit any
act to be done, whereby any insurance required by this Section 2.13 shall
or may be suspended, impaired or defeated, or permit the Vessel to engage
in any voyage, to engage in any activity or to carry any cargo not
permitted under the policies of insurance then in effect without first
procuring comparable insurance for such voyage, activity or the carriage of
such cargo.
(j) Policies. Mortgagor, upon execution of this Mortgage, shall
deliver to Mortgagee certificates of insurance, evidencing the insurance
maintained under this Section 2.13. Mortgagor, upon the request of
Mortgagee, will promptly deliver to Mortgagee true copies of such policies.
(k) Opinion and Certificates. On the date hereof, and on each
anniversary and each material change in coverage, Mortgagor shall promptly
furnish or cause to be furnished to Mortgagee and, so long as the
Performance Bond is outstanding or amounts are due to the Surety as a
result of payments made by it thereunder, the Surety, a detailed
certificate or opinion (signed by a reputable insurance broker) as to the
insurance maintained by Mortgagor pursuant to this Section 2.13, specifying
the respective policies of insurance covering the same and attaching
certificates of confirmation evidencing the same and stating with regard to
the insurance maintained by Mortgagor pursuant to this Section 2.13 the
amounts, deductibles, and the risks against which such insurance is issued.
(l) Obligation to Collect. Mortgagor shall, at no cost or
expense to Mortgagee, have the duty and responsibility to make all proofs
of loss and take any and all other steps necessary as a prudent owner or
as reasonably directed by Mortgagee to effect collections from underwriters
for any loss under any insurance on or in respect of the Vessel or the
operation thereof.
Section 2.14 Change of Flag, Location or Name. Mortgagor will not
change or transfer the flag, location or the name of the Vessel except in
strict compliance with Sections 8.11, 9.19 and 9.20 of the Trust Indenture.
Section 2.15 Mortgage Covenant Regarding Payment and Performance of
Obligations. Mortgagor hereby expressly agrees as an express mortgage
covenant to pay and perform when due and performable all of the Obligations
in accordance with their terms.
ARTICLE III
REMEDIES; APPLICATION OF PROCEEDS
Section 3.1 Sale, Etc. If an Event of Default shall have occurred
and be continuing, Mortgagee may, to the fullest extent permitted by and in
accordance with applicable law:
(a) exercise all the rights and remedies in foreclosure and otherwise
given to mortgagees by the laws of the Republic of Panama, and by the
applicable laws of any other applicable jurisdiction;
(b) bring suit at law, in equity or in admiralty or initiate and
prosecute such other judicial, extrajudicial, or administrative proceedings
as it may consider appropriate to recover any and all sums due, or declared
due, in respect of the Obligations, with the right to enforce payment of
said sums against any assets of Mortgagor, whether they are covered by this
Mortgage or otherwise;
(c) to the extent permitted by and in accordance with any applicable
law, take possession of the Vessel, with or without legal proceedings, at
any place where it may be found, and Mortgagor or any Person in possession
of the Vessel, forthwith upon request by Mortgagee, as mortgage creditor,
shall deliver possession to Mortgagee on demand of Mortgagee, and Mortgagee
shall have the right, subject to applicable law, without being responsible
for loss or damage to lay up, hold, charter, lease, operate or otherwise
use the Vessel for such period and under such conditions as it may deem
most expedient for its interest, accounting only for net profits, if any,
arising from such use and charging against all receipts from such use or
from the sale of the Vessel by court proceedings or pursuant to subsection
(d) below, all costs, expenses, charges, damages or losses by reason of
such use; and if at any time Mortgagee shall avail itself of the right
herein given to it to take the Vessel and shall take it, Mortgagee shall
have the right to dock the Vessel at any dock, pier or other premises owned
or leased by Mortgagor without charge, or at any other place at the cost
and expense of Mortgagor;
(d) to the extent permitted by and in accordance with any applicable
law, sell the Vessel at public or private sale, by sealed bids or
otherwise, on such terms and conditions as Mortgagee deems best, free of
any claim, lien, commitment or encumbrance, regardless of the nature
thereof, in favor of Mortgagor and, except as provided by law, any other
Person, upon advance notice of ten (10) consecutive days published in any
newspaper authorized to publish legal notices of that kind in the port of
registry and the place of sale of the Vessel and by sending notice of such
sale at least twenty (20) days prior to the date fixed for such sale, by
telegraph, cable, telefax or telex, confirmed by mail, to Mortgagor and any
other mortgagees of record. In the event that the Vessel shall be offered
for sale by private sale, no newspaper publication of notice shall be
required, nor notice of adjournment of sale. Sale may be held at such
place and at such time as Mortgagee by notice may have specified, or may be
adjourned by Mortgagee from time to time by announcement at the time and
place appointed for such sale or for such adjourned sale, and without
further notice or publication Mortgagee may make any such sale at the time
and place to which the same shall be so adjourned; and any sale may be
conducted without bringing the Vessel to the place designated for such sale
and in such manner as Mortgagee may deem to be for its best advantage, and
Mortgagee may become the purchaser at any public sale, and shall have the
right to credit on the purchase price any and all sums of money due
hereunder or under any other Project Document. Without limiting the
generality of the foregoing, Mortgagee shall be entitled to exercise all
the rights and remedies available to it under Articles 1527 and 1527-A of
the Code of Commerce of the Republic of Panama;
(e) manage, insure, maintain and repair the Vessel and charter,
employ, sail or lay up the Vessel in such manner, upon such terms and for
such period as the Mortgagee deems reasonably expedient (and in such case
Mortgagor and Mortgagee agree that an annual accounting will be sufficient
to discharge any reporting requirements relating to such management); and
for the purposes aforesaid the Mortgagee shall be entitled to do all acts
and things reasonably incidental or conducive thereto and in particular to
enter into such arrangements respecting such Vessel, and the insurance,
management, maintenance, repair, classification, chartering and employment
of such Vessel, in all respects as if the Mortgagee were the owner of such
Vessel and, to the extent permitted by and in accordance with any
applicable law, without being responsible for any loss thereby incurred;
(f) recover from the Mortgagor on demand any liabilities, losses and
reasonable expenses as may be incurred by the Mortgagee in or about the
exercise of the power vested in the Mortgagee hereunder;
(g) generally, recover from the Mortgagor on demand any liabilities,
losses and reasonable expenses incurred by the Mortgagee in or about or
incidental to the exercise by it of any of the powers aforesaid;
(h) not be required to have the Vessel marshaled (upon any sale of
the Vessel) or be required to realize on any other collateral prior to its
realization on the Vessel; and
(i) exercise any other rights it may have under applicable law or any
other Project Document.
As used in this Mortgage, "Event of Default" shall mean the occurrence
of an Indenture Event of Default under the Trust Indenture.
Section 3.2 Finality of Sale. A sale of the Vessel made in pursuance
of this Mortgage, whether under the power of sale hereby granted or any
judicial proceedings, shall operate to divest all right, title and interest
of any nature whatsoever of Mortgagor therein and thereto, and shall bar
Mortgagor, its successors and assigns, and all Persons claiming by, through
or under them. No purchaser shall be bound to inquire whether notice has
been given or whether any default has occurred, or as to the propriety of
the sale, or as to application of the proceeds thereof.
Section 3.3 Powers and Rights of Mortgagee Upon Notice of Default.
During the occurrence and continuance of an Event of Default, Mortgagee
shall have the following powers and rights:
(a) Sale. Mortgagor does hereby irrevocably appoint Mortgagee
and its successors and assigns the true and lawful attorney of Mortgagor,
in its name and stead, for the purpose of Sections 3.1 and 3.2, to make all
necessary transfers of the Vessel, and for that purpose Mortgagee shall
execute all necessary instruments of assignment and transfer (including
bills of sale), Mortgagor hereby ratifying and confirming all that its said
attorney shall lawfully do by virtue hereof. Nevertheless, Mortgagor
shall, if so requested by Mortgagee, ratify and confirm any sale of the
Vessel by executing and delivering to the purchaser thereof such proper
bills of sale, conveyances, instruments of transfer and releases as may be
designated in such request.
(b) Revenues and proceeds of Vessel; Prior Liens.
(i) Mortgagee is hereby irrevocably appointed
attorney-in-fact of Mortgagor, with the power, among other things, so
long as an Event of Default has occurred and is continuing, in the
name of Mortgagor to demand, collect, receive, compromise and sue for,
so far as may be permitted by law, all freights, hire, earnings,
issues, revenues, income and profits of the Vessel, and all amounts
due from underwriters under any insurance thereon as payment of losses
or as return premiums or otherwise, salvage awards and recoveries,
recoveries in general average or otherwise, and all other sums due or
to become due in respect of the Vessel or in respect of any insurance
thereon from any Person whomsoever, and to make, give and execute in
the name of Mortgagor acquittances, receipts, releases or other
discharges for the same, whether under seal or otherwise, and to
endorse and accept in the name of Mortgagor all checks, notes, drafts,
warrants, agreements and all other instruments in writing with respect
to the foregoing, Mortgagor hereby confirming and ratifying the same.
(ii) So long as an Event of Default has occurred and is
continuing, Mortgagee is hereby irrevocably authorized to pay or
furnish indemnity in the proper amounts against any Liens which have
or may (in the reasonable opinion of Mortgagee) have priority over the
Lien of this Mortgage and which are not permitted under this Mortgage
or the Trust Indenture.
(c) Additional Rights. Mortgagor covenants and agrees that in
addition to any and all other rights, powers and remedies elsewhere in this
Mortgage granted to and conferred upon Mortgagee, Mortgagee in any suit to
enforce any of its rights, powers or remedies shall be entitled as a matter
of right and not as a matter of discretion (i) to seek the appointment of a
receiver or receivers of the Vessel and any receiver or receivers so
appointed shall have full right and power to use and operate the Vessel as
shall be ordered by any court having jurisdiction, (ii) to a decree
ordering and directing the sale and disposal of the Vessel, and Mortgagee
may become the purchaser at such sale and shall have the right to credit
against the purchase price any and all sums of money due hereunder, and
(iii) to have full rights and remedies at law and in equity including,
without limitation, specific performance of the covenants hereof including,
without limitation, the following paragraph of this Section 3.3(c).
Mortgagor further covenants and agrees that if (i) an Indenture Event
of Default under Section 7.1(a), (d), (e), (f), (h), (j), (m), (n) or (q)
of the Trust Indenture has occurred and is continuing or (ii) any other
Indenture Event of Default has occurred and is continuing which has
resulted in acceleration of the maturity of the Notes, then Mortgagor
shall, upon the request of Mortgagee and at the direction of the Required
Holders, immediately move the Vessel to such United States port or other
location within the territorial waters of the United States subject to the
in rem admiralty jurisdiction of the United States federal courts as
Mortgagee may designate in its sole and absolute discretion.
(d) Notice to Mortgagor. Mortgagee shall notify Mortgagor
promptly after taking any action permitted by this Section 3.3.
Section 3.4 Restoration of Position. In case Mortgagee shall have
proceeded to enforce any right, power or remedy under this Mortgage by
foreclosure, entry or otherwise, and such proceeding shall have been
discontinued or abandoned by Mortgagee for any reason or shall have been
determined adversely to Mortgagee, then and in every such case Mortgagor
and Mortgagee shall, subject to any determination in such proceeding (and
subject to the application of applicable laws), be restored to their former
positions and rights hereunder with respect to the property subject or
intended to be subject to this Mortgage, and all rights, remedies and
powers of Mortgagee shall, subject to any determination in such proceeding,
continue as if no such proceedings had been taken.
Section 3.5 Application of Proceeds. The proceeds of any sale and
net earnings derived from the operation, use, charter, or any other
employment of the Vessel by Mortgagee, as mortgage creditor, and within any
of the powers and authority above given, as well as the proceeds of any
judgment which Mortgagee may obtain by reason of the breach or failure to
perform any of the terms of this Mortgage, as well as the proceeds of any
claim for damage received by Mortgagee while exercising the powers and the
authorities above given shall be applied as follows:
(i) to the payment of all charges and expenses, including the
costs of any public or private sale or sales, the cost of replevying
or taking possession of the Vessel which may be incurred or paid out
by Mortgagee, as mortgage creditor, and the expenses and reasonable
administration and external attorneys' fees incurred by Mortgagee on
foreclosure or in the protection of the rights and interests of
Mortgagee founded upon this Mortgage;
(ii) to pay or to furnish indemnity in the proper amounts against
any Liens which have or may (in the reasonable opinion of Mortgagee)
have priority over the Lien of this Mortgage and which are not Liens
permitted under this Mortgage; and
(iii) to deliver to the Mortgagee for application as provided
in the Trust Indenture.
Section 3.6 Waiver. (a) To the extent now or at any time hereafter
enforceable under applicable law, the Mortgagor covenants that it will not
at any time insist upon or plead, or in any manner whatsoever claim or take
any benefit or advantage of, any stay or extension law now or at any time
hereafter in force, nor claim, take nor insist upon any benefit or
advantage of or from any law now or hereafter in force providing for the
valuation or appraisement of the Vessel or any part thereof, prior to any
sale or sales thereof to be made pursuant to any provision herein
contained, or to the decree, judgment or order of any court of competent
jurisdiction, nor, after such sale or sales, claim or exercise any right
under any statute now or hereafter made or enacted by any state or
otherwise to redeem the property so sold or any part thereof, and hereby
expressly waives for itself and on behalf of each and every Person, all
benefit and advantage of any such law or laws, and covenants that it will
not invoke or utilize any such law or laws or otherwise hinder, delay or
impede the execution of any power herein granted and delegated to the
Mortgagee, but will suffer and permit the execution of every such power as
though no such law or laws had been made or enacted.
(b) The Mortgagor waives any right to require the Mortgagee, the
Sureties or the Note Holders to proceed against any other Person, or to
exhaust any other Collateral or other security for the obligations secured
hereby, or to have any other Person joined with the Mortgagor in any suit
arising out of the Obligations or the other Project Documents, or to pursue
any other remedy in the Mortgagee's, the Sureties' or the Note Holders'
power. The Mortgagor further waives any and all notice of acceptance of
this Mortgage by any other Person directly or indirectly liable for such
obligations from time to time. The Mortgagor further waives any defense
arising by reason of any disability or other defense of any other Person or
by reason of the cessation from any cause whatsoever of the liability of
any other Person liable for the Obligations secured hereby. Until all of
such Obligations shall have been paid in full, the Mortgagor shall have no
right to subrogation and the Mortgagor waives the right to enforce any
remedy which the Mortgagee, the Sureties or the Note Holders have or may
hereafter have against any other Person liable for such obligations, and
the Mortgagor waives any benefit of any right to participate in any
security whatsoever now or hereafter held by the Mortgagee, the Sureties or
the Note Holders. The Mortgagor authorizes the Mortgagee, the Sureties
(when and if they are an assignee of this Mortgage as provided in the
Performance Bond) and the Note Holders, without notice or demand and
without any reservation of rights against the Mortgagor and without
affecting the Mortgagor's liability hereunder or on the obligations secured
hereby, from time to time to (a) take or hold any Property other than the
Collateral from any other Person as security for such obligations, and
exchange, enforce, waive and release any or all of such Property, (b) apply
such Property and direct the order or manner of sale thereof as the
Mortgagee, the Sureties (when and if they are an assignee of this Mortgage
as provided in the Performance Bond) and the Note Holders may in their
discretion determine, and (c) renew, extend for any period, accelerate,
modify, compromise, settle or release any of the obligations of any other
Person in respect of the Obligations secured hereby or other security for
such Obligations.
ARTICLE IV
GENERAL POWERS OF MORTGAGEE
Section 4.1 General Powers of Mortgagee.
(a) Arrest or Detention of Vessel. In the event that the Vessel
shall be arrested or detained by a marshal or other officer of any court of
law, equity or admiralty jurisdiction in any country or nation of the world
or by any government or other entity and shall not be released from arrest
or detention within thirty (30) days from the date of arrest or detention,
Mortgagor does hereby authorize and empower Mortgagee, in the name of
Mortgagor, or its successors or assigns, to apply for and receive
possession of and to take possession of the Vessel with all the rights and
powers that Mortgagor, or its successors or assigns, might have, possess or
exercise in any such event; and this power of attorney shall be irrevocable
and may be exercised not only by Mortgagee but also by its appointee or
appointees, with full power of substitution, to the same extent as if the
said appointee or appointees had been named as the attorney above named by
express designation.
(b) Suits. Mortgagor also authorizes and empowers Mortgagee or
its appointees or any of them to appear in the name of Mortgagor, its
successors or assigns, in any court of any country or nation of the world
where a suit is pending against the Vessel because of or on account of any
alleged Lien against the Vessel from which the Vessel has not been released
in accordance with the terms of this Mortgage and to take such proceedings
as to it may seem proper towards the defense of such suit and the discharge
of such Lien.
(c) Reimbursement of Expenses. If Mortgagor fails to perform
any obligation or covenant under this Mortgage, Mortgagee shall have the
right, but not the obligation, to perform or take such actions to comply
with the terms of this Mortgage, and all amounts reasonably expended in
connection with such conduct shall be a demand obligation of Mortgagor
owing to Mortgagee at the Default Rate specified in the Trust Indenture and
shall be secured by the Lien of this Mortgage.
ARTICLE V
SUNDRY PROVISIONS
Section 5.1 Release. If the Obligations shall have been fully and
finally satisfied and discharged to the satisfaction of the Trustee then
this Mortgage and the estate and rights hereunder shall cease, determine,
and become null and void; and Mortgagee, on the request of Mortgagor and at
Mortgagor's cost and expense, shall forthwith cause satisfaction and
discharge of this Mortgage to be entered upon its and other appropriate
records and shall execute and deliver to Mortgagor such instruments as may
be necessary in Mortgagor's reasonable opinion to duly acknowledge the
satisfaction and discharge of this Mortgage. Upon any termination of this
Mortgage or release of the Vessel as permitted by the Trust Indenture,
Mortgagee will, at the expense of Mortgagor, execute and deliver to
Mortgagor such documents and take such other actions as Mortgagor shall
reasonably request to evidence the termination of this Mortgage or the
release of the Vessel, as the case may be.
Section 5.2 Right of Peaceful Enjoyment. During the term of this
Mortgage and so long as no Event of Default shall have occurred and be
continuing, Mortgagor shall have full and peaceful enjoyment, use, right to
possession and control of the Vessel subject to the terms of the Project
Documents.
Section 5.3 Cumulative Remedies; No Waiver. Each and every power and
remedy herein given to Mortgagee shall be cumulative and shall be in
addition to every other power and remedy herein or in any other Project
Document or now or hereafter existing at law, in equity, in admiralty, or
by statute, and each and every power and remedy whether herein given or
given in any other Project Document or otherwise existing may be exercised
from time to time and as often and in such order, or in the alternative as
may be deemed expedient by Mortgagee, and the exercise or the beginning of
the exercise of any power or remedy shall not be construed to be a waiver
of the right to exercise at the same time or thereafter any other power or
remedy. No course of dealing on the part of Mortgagee, its officers,
employees, consultants or agents, nor any delay or omission by Mortgagee in
the exercise of any right or power or in the pursuance of any remedy shall
operate as a waiver of any such right, power or remedy.
Section 5.4 Further Assurances. In the event that this Mortgage, or
any provisions hereof, shall be deemed invalid in whole or in part by
reason of any present or future law or any decision of any court having
jurisdiction, or if the documents at any time held by Mortgagee shall be
deemed by Mortgagee for any reason insufficient to carry out the rights and
powers granted to Mortgagee herein, then, from time to time, Mortgagor will
do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, such other and further assurances and documents
(including favorable opinions of counsel, including Panamanian counsel) as
in the opinion of Mortgagee may reasonably be required in order to more
effectively subject the Vessel to the Lien of this Mortgage or more
effectively subject the Vessel to the performance of the terms and
provisions of this Mortgage, or to enable this Mortgage to continuously
enjoy the status of a first naval mortgage. Without limiting the
foregoing, Mortgagor specifically agrees to obtain the definitive
registration of this Mortgage at the Office of the Public Registry of
Panama, and to deliver the original evidence of such registration to
Mortgagee, within six months of the date first written above.
Section 5.5 Survival of Agreements. All representations, warranties,
covenants and agreements herein contained or made in writing in connection
with this Mortgage shall survive the execution of this Mortgage and shall
continue in full force and effect until all sums secured hereby shall have
been paid in full, and the same shall bind and inure to the benefit of the
respective successors and assigns of Mortgagor and Mortgagee.
Section 5.6 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing
(including by facsimile transmission), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when
actually delivered or in the case of facsimile transmission, when received
and telephonically confirmed, addressed as follows or to such other address
as may be hereafter notified by the respective parties hereto or any
assignee thereof or successor thereto:
Mortgagor: BTM Capital Corporation
125 Summer Street
Boston, MA 02110
Facsimile No. (617) 345-5687
Attention: Senior Vice President - Administration
Mortgagee: Chase Bank of Texas, National Association
1150 Chase Tower
600 Travis Street
Houston, TX 77002
Attention: Mauri J. Cowen, V.P.
Section 5.7 Counterparts. This instrument may be executed in any
number of counterparts, and each of such counterparts shall for all
purposes be deemed to be an original.
Section 5.8 Section Headings. The section headings used in this
Mortgage are for convenience of reference only and are not to affect the
construction of or be taken into consideration in interpreting this
Mortgage.
Section 5.9 GOVERNING LAW. EXCEPT AS PROVIDED TO THE CONTRARY BELOW,
THIS MORTGAGE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK AND THE GENERAL MARITIME LAW OF THE
UNITED STATES OF AMERICA; PROVIDED, HOWEVER, THAT WITH RESPECT TO THE
CREATION AND PERFECTION OF LIENS ON THE VESSEL OR AS OTHERWISE REQUIRED BY
THE LAWS OF THE REPUBLIC OF PANAMA, BEING THE PLACE WHERE THE VESSEL IS
FLAGGED, THIS MORTGAGE SHALL BE GOVERNED BY THE LAWS OF THE REPUBLIC OF
PANAMA.
Section 5.10 Jurisdiction.
(a) Any legal action or proceeding with respect to this Mortgage may
be brought in the courts of the United States for the Southern District of
New York and the Mortgagor hereby accepts for itself and its property,
generally and unconditionally, the non-exclusive jurisdiction of such
court. The Mortgagor further irrevocably consents to the service of
process out of such court in any such action or proceeding in the manner
provided for in the Trust Indenture. Nothing herein shall affect the right
of the Mortgagee to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against the Mortgagor in
any other jurisdiction.
(b) Without prejudice to the generality of Clause 5.10(a), the
Mortgagee shall have the right to arrest and take action against the Vessel
at whatever place such Vessel shall be found lying and for the purpose of
any action which the Mortgagee may bring before the courts of such
jurisdiction or other judicial authority and for the purpose of any action
which the Mortgagee may bring against such Vessel, any writ, notice,
judgment or other legal process or documents may (without prejudice to any
other method of service under applicable law) be served upon the master of
such Vessel (or upon anyone acting as the master) and such service shall be
deemed good service on the Mortgagor for all purposes.
(c) Each of the parties hereto stipulates that, when the Vessel is
located on the Outer Continental Shelf within the jurisdiction of the
United States Federal District Courts under 43 U.S.C. 1331(1) and
1349(b)(1), (i) that the United States Federal District Courts shall have
"in rem" admiralty jurisdiction over the Vessel and (ii) that the Vessel is
present within the territorial jurisdiction of said courts for all
purposes, including the enforcement of any maritime liens or other remedies
hereunder.
Section 5.11 Amendments and Waivers. None of the terms or provisions
of this Mortgage may be waived, amended, supplemented or otherwise modified
except if made in compliance with the terms and provisions of the Trust
Indenture.
Section 5.12 Termination. The grant of the Liens hereunder and all
of Mortgagee's rights, powers and remedies in connection therewith, shall
unless otherwise provided in the Trust Indenture or this Mortgage, remain
in full force and effect until final payment in full of (A) the Notes under
the terms thereof or of the Trust Indenture, and (B) all other Obligations
then due and owing under the Trust Indenture, the Notes and the other
Project Documents. Upon the payment in full of (A) the Notes under the
terms thereof or of the Trust Indenture, and (B) all Obligations then due
and owing under the Trust Indenture, the Notes and the other Project
Documents, Mortgagor shall be entitled to the return, upon its request and
at its expense, of the Vessel free and clear of all liens created by this
Mortgage.
Section 5.13 Trust Indenture. This Mortgage is issued pursuant to
the terms, conditions and provisions of the Trust Indenture.
Section 5.14 Severability. In the event that any provision of this
Mortgage or the Trust Indenture or the Notes shall be deemed invalid or
unenforceable by reason of any present or future law or any decision of any
authoritative court, the validity and enforceability of the other
provisions hereof or thereof shall not be affected thereby.
Section 5.15 No Waiver of Preferred Status. No provision of this
Mortgage, the Trust Indenture or the Notes shall be deemed to constitute a
waiver by the Mortgagee of the preferred status of this Mortgage given to
foreign flag Vessel by 46 U.S.C. 31325 and 31326, of the United States of
America or comparable legislation of any other jurisdiction where this
Mortgage may be enforced, and any provision of or incorporated in this
Mortgage which would otherwise constitute such a waiver shall to such
extent be of no force or effect.
Section 5.16 Acceptance of Terms and Conditions. The Mortgagee
hereby accepts all the terms and conditions set forth in this Mortgage.
Section 5.17 Power to Record. The Mortgagee and the Mortgagor
declare that they hereby confer a special Power of Attorney on Mssrs.
Benedetti & Benedetti, lawyers of Panama, Republic of Panama, empowering
each of them to take all necessary steps to file and register this Mortgage
in the appropriate registries of the Republic of Panama.
Section 5.18 Limitation on Liability. The liability of BTM Capital
Corporation under the obligations and covenants expressed herein is limited
as set forth in Article 6 of the Supplemental Indenture, the terms of which
are set forth as Exhibit B and incorporated by reference herein.
IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly
executed as of the day and year first above written.
MORTGAGOR: BTM CAPITAL CORPORATION
By:___________________________
Name:
Title:
MORTGAGEE: CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION
By:__________________________
Name:
Title:
THE STATE OF TEXAS
COUNTY OF HARRIS
THIS INSTRUMENT was acknowledged before me on February __, 2000, by
_____________________________, ___________________________________ of BTM
Capital Corporation, a Delaware corporation on behalf of such corporation,
and after having first been duly authorized by said corporation to do so.
AND THE said ___________ did further produce to me sufficient proof
that he is the duly elected ___________ of said corporation and that he was
duly authorized by said corporation to execute the foregoing Mortgage, and
I the notary hereby certify that the signature of the said ______________
on the foregoing Mortgage was placed thereon in my presence and is
therefore authentic.
Notary Public in and for
the State of Texas
Printed Name of Notary:
______________________________
My Commission Expires:
______________________________
THE STATE OF TEXAS
COUNTY OF HARRIS
THIS INSTRUMENT was acknowledged before me on February __, 2000, by
_____________________________, ___________________________________ of Chase
Bank of Texas, National Association, on behalf of such association, and
after having first been duly authorized by said corporation to do so.
AND THE said ___________ did further produce to me sufficient proof
that he is the duly elected ___________ of said corporation and that he was
duly authorized by said corporation to execute the foregoing Mortgage, and
I the notary hereby certify that the signature of the said ______________
on the foregoing Mortgage was placed thereon in my presence and is
therefore authentic.
Notary Public in and for
the State of Texas
Printed Name of Notary:
______________________________
My Commission Expires:
______________________________
EXHIBIT 10.320
=========================================================================
CONSTRUCTION SUPERVISORY AGREEMENT
dated as of February 1, 2000
among
BTM Capital Corporation
as Owner
RBF Exploration Co.,
and
RBF Exploration II, Inc.,
as Construction Supervisor
=========================================================================
CONSTRUCTION SUPERVISORY AGREEMENT
This CONSTRUCTION SUPERVISORY AGREEMENT, dated as of February 1,
2000 (as amended, supplemented or otherwise modified from time to
time, this "Agreement") among BTM Capital Corporation, a Delaware
corporation, as owner ("Owner"), RBF Exploration Co., a Nevada
corporation ("RBFE") and RBF EXPLORATION II INC., a Nevada
corporation, as construction supervisor ("Construction Supervisor").
PRELIMINARY STATEMENT
A. RBFE contemporaneously with the execution hereof entered
into that certain Equipment Sale and Funding Agreement of even date
herewith (the "Sale and Funding Agreement") pursuant to which RBFE
conveyed certain property and equipment to the Owner and entered into
the Novation Agreement of even date herewith, by and between RBFE,
Hyundai Heavy Industries Co., Ltd. and Hyundai Corporation (each, a
"Builder"), and the Owner (as amended, supplemented or otherwise
modified from time to time with the consent of the Owner, Construction
Supervisor, Indenture Trustee and the Surety, the "Construction
Contract") with respect to the construction of a semi-submersible
drilling vessel as described in the specifications to the Construction
Contract (the "Drilling Rig").
B. RBFE and Shell Deepwater Development, Inc. ("SDDI"), have
entered into that certain Offshore Daywork Drilling Contract, with an
effective date of August 12, 1998 (as amended, supplemented or
otherwise modified from time to time with the consent of Construction
Supervisor, Indenture Trustee and the Surety, the "SDDI Contract").
C. Pursuant to the Sale and Funding Agreement, RBFE has agreed,
among other things, to make loans to the Owner to fund various funding
obligations under this Agreement and in relation thereto to the supply
of certain equipment specified in the Sale and Funding Agreement.
D. As RBFE or one of its affiliates is and will be a party to
the SDDI Contract, performance of which will require the use of the
Drilling Rig, RBFE and the Owner contemplate that on or before the
Commencement Date they will enter into arrangements with respect to
the Drilling Rig to ensure that RBFE or one of its affiliates can
perform the SDDI Contract in its existing, amended or novated form in
accordance with its terms.
E. RBFE and the Construction Supervisor are parties to a
certain Construction Supervisory Agreement, with effective date of
August 12, 1999 (the "Original CSA") which is to be replaced by this
Agreement;
F. Subject to the terms and conditions hereof, as required by
the Sale and Funding Agreement, Owner desires to appoint Construction
Supervisor as Owner's sole and exclusive agent to supervise the design
and construction of the Drilling Rig in accordance with the
Construction Contract, the acquisition and assembly of the equipment
to be used thereon, and the delivery of the Drilling Rig to SDDI in
accordance with the SDDI Contract, and Construction Supervisor desires
to accept such appointment.
NOW, THEREFORE, in consideration of the foregoing, and for other
good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto covenant and agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms. Capitalized terms used but not
otherwise defined in this Agreement have the meanings set forth below:
"Advance Payment Refund Amount" - at any time, the aggregate of
all payments, advances or reimbursements theretofore made by or on
behalf of the Owner or Indenture Trustee on account of the Cost of the
Project to the Builders, any vendor of Owner's Supplies or any other
equipment, Construction Supervisor or any other person, under the
Construction Contract or any other contract or agreement with respect
to the provision of any goods or services or for other purposes
relating to the Project, including, without limitation, amounts
advanced or incurred pursuant to Section 6.3 hereof, as set forth in a
certificate of RBFE on behalf of the Owner (or the Indenture Trustee
as Owner's assignee), which certificate shall be conclusive and
binding upon Construction Supervisor.
"Affiliate" - has the meaning set forth in the Trust Indenture.
"Anticipated Delivery Date" - May 1, 2000.
"Business Day" - has the meaning set forth in the Trust
Indenture.
"Certificate of Requisition" - as defined in Section 3.2.
"Collection Account" - as defined in Section 4.1.
"Commencement Date" - the date and hour that the last of the
following conditions has been satisfied: (i) the full crew is aboard,
(ii) the Drilling Rig has cleared customs and other formalities as
contemplated by the SDDI Contract, (iii) SDDI has inspected and
accepted the Drilling Rig and the personnel to perform the Work, (iv)
the Drilling Rig and the full crew are in all respects ready to
commence and sustain continued drilling operations at the rated
specifications of Appendix A to the SDDI Contract during the term of
the SDDI Contract, and (v) the Drilling Rig has departed a mutually
agreed (by RBFE on behalf of the Owner and SDDI) U.S. Gulf of Mexico
port or location after loading SDDI's drilling equipment and materials
and is en route to SDDI's first drilling or well location under the
SDDI Contract (or would have departed in the event of SDDI's failure
to designate such location in a timely manner). Notwithstanding the
foregoing, however, SDDI may require or allow the Drilling Rig to
commence work at an earlier date in which case such earlier date shall
be the Commencement Date and any of the above requirements for the
Commencement Date which have not been met shall be deemed waived.
"Complete" or "Completion" - with respect to the Project, means
that (i) the Drilling Rig (a) has been completed and delivered to
Owner under the Construction Contract substantially in accordance with
the Specifications, (b) has been completed and equipped in all
material respects in accordance with the requirements of SDDI Contract
and the specifications set forth therein and is fully capable of
performing the Work in accordance with the requirements and
specifications of the SDDI Contract, (c) has been delivered to and
unconditionally accepted by SDDI under the SDDI Contract without
waiver of any material requirement of the SDDI Contract without the
consent of Indenture Trustee, and (d) is free and clear of liens
except as permitted by the Project Documents, and (ii) the
Commencement Date has occurred.
"Cost of the Project" - the total cost of design, construction,
equipping, testing and delivering the Drilling Rig including all costs
of any nature whatsoever relating thereto and causing acceptance of
the Drilling Rig by SDDI under and in accordance with the SDDI
Contract.
"Default" - any event or circumstance which with the giving of
notice, passage of time or both would constitute an Event of Default.
"Environmental Laws" - any and all Governmental Requirements
pertaining to health, safety or the environment or the regulation of
hazardous substances or pollutants in effect in any and all
jurisdictions in which RBFE or the Owner is conducting or at any time
has conducted business, or where any Property of Owner is located,
including without limitation, the Oil Pollution Act of 1990 ("OPA"),
the Clean Air Act, as amended, the Comprehensive Environmental,
Response, Compensation, and Liability Act of 1980 ("CERCLA"), as
amended, the Federal Water Pollution Control Act, as amended, the
Occupational Safety and Health Act of 1970, as amended, the Resource
Conservation and Recovery Act of 1976 ("RCRA"), as amended, the Safe
Drinking Water Act, as amended, the Toxic Substances Control Act, as
amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, and
any other international, federal, local or state environmental
conservation or protection laws. The terms "oil" and "discharge"
shall have the meanings specified in OPA, the terms "hazardous
substance" and "release" (or "threatened release") have the meanings
specified in CERCLA, except that "hazardous substance" shall also
include petroleum and any fraction thereof, and the terms "solid
waste" and "disposal" (or "disposed") have the meanings specified in
RCRA; provided, however, that (i) in the event either OPA, CERCLA or
RCRA is amended so as to broaden the meaning of any term defined
thereby, such broader meaning shall apply subsequent to the effective
date of such amendment and (ii) to the extent the laws of the state in
which any Property of the Owner is located establish a meaning for
"oil," "discharge," "hazardous substance," "release," "solid waste" or
disposal" which is broader than that specified in either OPA, CERCLA
or RCRA, such broader meaning shall apply.
"Event of Default" - as defined in Section 6.1.
"Excess Costs" - the full amount of the Cost of the Project in
excess of $315,000,000.
"Governmental Authority" - the country, the state, county, city
and political subdivisions in which any Person or such Person's
Property is located or which exercises jurisdiction over any such
Person or such Person's Property, and any court, agency department,
commission, board, body, bureau of instrumentality of any of them
including monetary authorities which exercises jurisdiction over any
such Person or such Person's Property. Unless otherwise specified,
all references to Governmental Authority herein shall mean a
Governmental Authority having jurisdiction over RBFE or any of its
Property or the Drilling Rig.
"Governmental Requirements" - any law, statute, code, ordinance,
order, determination, rule, regulation, publication, judgment, decree,
injunction, franchise, permit, registration, consent, approval,
certificate, license, authorization or other directive or requirement
(whether or not having the force of law), including, without
limitation, Environmental Laws, energy regulations and occupational,
safety and health standards or controls, of any Governmental
Authority.
"Indemnified Parties" - Owner, RBFE, Indenture Trustee and any
other holder of any mortgage or security interest in the Drilling Rig,
any party providing financing to RBFE or Owner in connection with the
Project (including, without limitation, each Note Holder and all
Credit Support Parties, as defined in the Trust Indenture), the
Surety, any Affiliate of any of the foregoing and their respective
directors, officers, shareholders, partners, employees, attorneys,
agents and licensees and the successors and assigns of any of the
foregoing (individually an "Indemnified Party").
"Indenture Trustee" - the trustee under the Trust Indenture.
"Initial Acceptance" - with respect to the Drilling Rig, means
that (i) the Drilling Rig has been completed in accordance with the
Specifications and tendered to Owner under the Construction Contract,
(ii) all trials contemplated by the Construction Contract have been
completed, and (iii) RBFE has accepted the Drilling Rig on behalf of
the Owner under the Construction Contract.
"Initial Acceptance Date" - June 28, 2000.
"Liquidated Damages" - liquidated damages in the amount of
$65,767,852, which amount shall be payable in addition to, and not to
the exclusion of, the Advance Payment Refund Amount as set forth in
this Agreement.
"Note Holder" - has the meaning set forth in the Trust Indenture.
"Outside Date" - September 30, 2000 (unless the Indenture Trustee
is deemed to have consented to an extension of the Outside Date as
provided in the penultimate "Provided, However" paragraph of the
Performance Bond in which event the Outside Date shall be extended
accordingly).
"Owner Lien" - has the meaning set forth in the Trust Indenture.
"Owner's Supplies" - all of the items to be furnished by Owner
for the Drilling Rig as specified in the Specifications.
"Performance Bond" - as defined in Section 2.6.
"Person" - an individual, partnership, corporation, limited
liability company, trust, unincorporated association or organization,
government, governmental agency or governmental subdivision.
"Project" - the design, construction, equipping and testing of
the Drilling Rig and causing its delivery to and acceptance by SDDI,
all as contemplated by and in accordance with this Agreement, the
Construction Contract and the SDDI Contract.
"Property" - any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
"Project Documents" - has the meaning set forth in the Trust
Indenture.
"Specifications" - the specifications and other information set
forth in Exhibits 1 through 4, inclusive, of the Construction
Contract, as the same may be modified from time to time in accordance
with the terms of the Construction Contract and with the consent of
Construction Supervisor, Indenture Trustee and the Surety.
"Supplemental Indenture" - has the meaning set out in the
definition of Trust Indenture below.
"Surety" - collectively, the providers of the Performance Bond.
"Termination Date" - as defined in Section 4.2.
"Trust Indenture" - the Trust Indenture and Security Agreement
dated as of August 12, 1999, between RBF Exploration Co. and Chase
Bank of Texas, National Association, as amended by the Supplemental
Indenture and Amendment dated February 1, 2000 (the "Supplemental
Indenture") and as from time to time further amended, supplemented or
modified.
"Work" - the drilling, deepening, sidetracking, workover,
testing, completing and/or plugging and abandonment operations
required by SDDI on SDDI's well(s) or wells for others as designated
by SDDI, together with ancillary services such as soil survey boring,
environmental data collection, fishing and retrieval (both down-hole
and on the sea floor), other services and subsea activities required
by SDDI for which the Drilling Rig is fit, and the moving of the
Drilling Rig between locations.
ARTICLE II
AGENCY
SECTION 2.1. Appointment of Construction Supervisor. (a)
Pursuant to and subject to the terms and conditions set forth herein,
Owner hereby irrevocably designates and appoints Construction
Supervisor as its exclusive agent to design, construct, acquire, equip
and test the Drilling Rig in accordance with the terms, conditions and
requirements of the Construction Contract and the SDDI Contract and to
deliver the Drilling Rig to, and cause acceptance of the Drilling Rig
by, SDDI in accordance with the requirements of the SDDI Contract. In
connection with the foregoing, Owner expressly authorizes Construction
Supervisor, or any agent or contractor of Construction Supervisor, and
the Construction Supervisor agrees, to take all action necessary or
desirable for the performance and satisfaction of all of Construction
Supervisor's obligations hereunder.
(b) Subject to the terms and conditions of this Agreement,
Construction Supervisor shall have sole management and control over
the construction means, methods, sequences and procedures with respect
to the construction, maintenance and equipping of the Drilling Rig.
Upon delivery of the Drilling Rig pursuant to the Construction
Contract, the Construction Supervisor shall have full and exclusive
custody, possession, control and command of the Drilling Rig for
performance of this Agreement.
(c) Construction Supervisor shall undertake to the Owner and to
RBFE to perform the Project in accordance with the provisions of this
Agreement including, without limitation, the provisions of Section
2.5, and, subject to the provisions hereof, shall pay for the Cost of
the Project. Construction Supervisor shall make all commercially
reasonable efforts to cause the Project to be Complete on or before
the Anticipated Delivery Date and shall, in any event, cause the
Project to be Complete on or before the Outside Date. Construction
Supervisor shall pay for the Cost of the Project using (i) the
proceeds of advances under Article III hereof and (ii) its own funds
to the extent of all Excess Costs. Construction Supervisor shall be
solely responsible for payment of all Excess Costs. If, for any
reason, the proceeds of advances under Article III hereof are
insufficient to pay the entire Cost of the Project, Construction
Supervisor shall, nonetheless, be bound and required to fulfill its
obligations hereunder and pay the entire Cost of the Project, and,
under no circumstances, shall the insufficiency of the funds available
to Construction Supervisor reduce or release Construction Supervisor
from any of its obligations hereunder.
SECTION 2.2. Acceptance. Construction Supervisor hereby
unconditionally and irrevocably accepts the designation and
appointment as Owner's agent in accordance with the terms hereof. In
connection herewith, the Owner will only act as directed by RBFE and
any and all direction to the Construction Supervisor by the Owner
hereunder shall be through RBFE.
SECTION 2.3. Termination of Authority. Construction
Supervisor's authority under this Agreement shall terminate on the
earlier to occur of (i) Completion of the Project in accordance with
the terms and conditions of this Agreement and satisfaction of the
other terms and provisions hereof, or (ii) termination by Owner (with
the consent of RBFE) pursuant to Article VI hereof.
SECTION 2.4. Sub-Contracts and Delegation. Construction
Supervisor may execute any of its duties under this Agreement by or
through agents, contractors, employees or attorneys-in-fact, and
Construction Supervisor shall enter into such agreements in addition
to the Construction Contract that Construction Supervisor deems
necessary or desirable in connection with the Project and performance
of all of its other duties hereunder. No such delegation shall limit
or reduce in any way Construction Supervisor's duties and obligations
under this Agreement, and Construction Supervisor shall be and remain
fully liable and responsible therefor.
SECTION 2.5 Covenants of the Construction Supervisor. In
addition to, and without limitation of, the Construction Supervisor's
covenants elsewhere herein, the Construction Supervisor hereby
covenants and agrees that it will, at its own expense with no claim
for reimbursement thereof against Owner:
(a) monitor, supervise and approve in all respects the design,
construction, equipping and testing of the Drilling Rig and the
procurement, delivery and installation of all parts, materials,
equipment and supplies to be installed and/or otherwise used thereon,
including, without limitation, all Owner's Supplies (as defined in the
Construction Contract), all in accordance with the provisions of the
Construction Contract and the SDDI Contract and in connection
therewith to exercise all rights and perform all obligations of Owner
under the Construction Contract and the contractor under the SDDI
Contract in such manner to ensure that the Drilling Rig will be so
constructed, completed, delivered and accepted;
(b) approve or disapprove in a timely manner all plans and
drawings as Construction Supervisor shall deem to be in the best
interests of RBFE and the Owner and to comply with the SDDI Contract;
(c) attend tests and trials of the Drilling Rig and all major
items of Owner's Supplies;
(d) comply with all obligations of the "Owner" (as defined in
the Construction Contract) under the Construction Contract
in order to maintain the Construction Contract in full
force and effect so as to preserve fully the rights of the
"Owner" thereunder;
(e) agree to any amendment, modification or change in the
Construction Contract, the Specifications, Owner's Supplies and the
plans and specifications, as Construction Supervisor deems in its sole
discretion to be necessary for the completion of the Drilling Rig as
necessary for complete performance of the Project; provided, that (i)
no such amendment or modification shall result in a delay of
Completion beyond the Outside Date, (ii) the aggregate effect of any
amendment or modification, when taken together with any previous or
contemporaneous amendments or modifications, will not have a material
adverse effect on the soundness, structural integrity, classification,
value, utility, operation or useful life of the Drilling Rig and (iii)
no such amendment or modification shall increase Owner's liability
thereunder;
(f) appoint in the name of Owner any and all arbitrators
required or permitted to be appointed by Owner under the Construction
Contract and conduct any and all arbitrations required or permitted to
be conducted under or pursuant to the Construction Contract in
connection with any disputes arising thereunder;
(g) take all such other actions with respect to the Drilling
Rig or Construction Contract as Construction Supervisor shall deem to
be in the best interests of RBFE and the Owner;
(h) identify and assist with the acquisition of Owner's
Supplies in accordance with the terms and conditions of the
Construction Contract and the SDDI Contract;
(i) perform all engineering work and all design and supervisory
functions relating to the Project;
(j) negotiate and enter into all contracts or arrangements to
procure Owner's Supplies and services necessary to construct the
Drilling Rig on such terms and conditions as are customary and
reasonable in light of local standards and practices and prudent
industry practices;
(k) comply with and obtain all necessary licenses, permits,
authorizations and other rights (including, without limitation, the
issuance of a certificate of classification of the Drilling Rig by the
American Bureau of Shipping as a A1 M, "Column Stabilized Drilling
Unit", a CDS, P, a PAS, and accompanied by a statement of fact from
ABS for UK/Den/HSE compliance and Drilling System Compliance) required
under all applicable laws, rules and regulations from all governmental
authorities in connection with the development and construction of the
Drilling Rig in accordance with the Construction Contract and the
transportation thereof to the appropriate port in the U.S. Gulf of
Mexico and to otherwise comply with such laws, rules and regulations;
(l) maintain all books and records with respect to the
construction, transportation and delivery of the Drilling Rig;
(m) maintain the Drilling Rig in good first class condition and
working order and move the Drilling Rig to the appropriate port or
other location in the U.S. Gulf of Mexico and to cause the Drilling
Rig to be delivered to and accepted by SDDI and the Commencement Date
to occur under the SDDI Contract;
(n) cause construction of the Drilling Rig to be pursued
diligently and without undue interruption in accordance with the
Construction Contract and in compliance with all Governmental
Requirements;
(o) make all commercially reasonable efforts to cause the
Project to be Complete on or before the Anticipated Delivery Date and
shall, in any event, cause the Project to be Complete no later than
the Outside Date;
(p) enforce all of the obligations of the Builders under the
Construction Contract;
(q) (i) until delivery of the Drilling Rig to Owner under the
Construction Contract, maintain insurance on Owner's Supplies in
accordance with the requirements of the Construction Contract and the
Trust Indenture, and (ii) from and after delivery of the Drilling Rig
to Owner under the Construction Contract and through the date of
Completion, maintain or cause to be maintained insurance on the
Drilling Rig at all times in accordance with the requirements set
forth on Schedule A hereto;
(r) immediately upon acceptance of the Drilling Rig by Owner
under the Construction Contract, cause the Drilling Rig to be (i)
documented and registered in the name of Owner under the laws of the
Republic of Panama with no other filing, recordation or registration
of any other document or instrument necessary in order to establish
Owner's good and valid title thereto and (ii) covered by a mortgage in
favor of the Indenture Trustee which shall have been duly filed with
the Public Registry Office of the Republic of Panama and be a first
preferred ship mortgage under the laws of the Republic of Panama
effective as against creditors of and purchasers from Owner;
(s) provide all personnel required in order to perform
Construction Supervisor's obligations hereunder, including, without
limitation, those personnel necessary to move the Drilling Rig to a
port in the U.S. Gulf of Mexico, deliver the Drilling Rig to SDDI and
cause acceptance of the Drilling Rig by SDDI in accordance with the
SDDI Contract, such personnel to have the qualifications necessary to
comply with Construction Supervisor's obligations hereunder and any
qualifications imposed by applicable law, rules and regulations, and
such personnel to be made available at such locations and in such
numbers as may be required in order to comply with the foregoing;
(t) provide such administrative, engineering and other
technical support services as may be needed by the personnel provided
pursuant to the foregoing item (s) in order for Construction
Supervisor to perform its obligations hereunder, including, without
limitation, accounting, data processing, legal, tax, project
management, contract administration, transportation, communications,
payroll, purchasing, shipping and personnel administration services;
(u) provide such equipment, materials, spare parts, supplies
and related property as the personnel provided pursuant to the
foregoing item (s) and the personnel providing the services described
in the foregoing item (t) may require in order for Construction
Supervisor to perform its obligations hereunder, such equipment,
materials, spare parts, supplies and related property to be provided
as such locations and in such quantities as may be required to such
performance;
(v) perform all covenants and obligations of the Mortgagor
under the First Naval Mortgage delivered pursuant to
clause (r) above; and
(w) to the extent any of the foregoing requires the execution
of any documents by the Owner or that the Owner take any
action, the Construction Supervisor will timely so advise
the Owner and prepare any such documents for the Owner's
signature.
(x) perform or cause to be performed, at its sole cost and
expense, all obligations of the Issuer pursuant to Section
7.01 of the Supplemental Indenture.
(y) perform or cause to be performed, at its sole cost and
expense, all actions necessary to effect a sale of the
Drilling Rig pursuant to the provisions of clause 9 of the
Sale and Funding Agreement.
SECTION 2.6. Performance Bond. Construction Supervisor shall
obtain and maintain at its sole cost and expense in full force and
effect at all times a performance bond in the form attached hereto as
Exhibit A, naming Owner, and Indenture Trustee and their respective
successors and assigns as dual obligees (such bond, the "Performance
Bond").
SECTION 2.7. Casualty and Construction Period Event of Loss.
If at any time before Completion of the Project there occurs any loss
or damage to the Drilling Rig from fire or other casualty,
Construction Supervisor shall promptly cause such loss or damage to be
repaired and the Project to be completed in accordance with the terms
hereof and all appropriate insurance claims to be made in respect
thereof, so as to cause the Commencement Date to occur on or before
the Outside Date. Construction Supervisor shall notify Owner and RBFE
on behalf of the Owner of any such loss or damage that Construction
Supervisor reasonably believes will cost more than $1,000,000 to
repair or which gives rise to a claim of more than $1,000,000 under
the insurance policies then in effect with respect to the Drilling
Rig. The Construction Supervisor will take actions and directions
with respect to any such loss or damage and/or insurance coverage as
directed by RBFE and give prompt notice thereof to the Owner.
ARTICLE III
FUNDING OF CONSTRUCTION COSTS
SECTION 3.1. Funding of Construction Costs. Subject to the
terms and conditions of this Agreement, RBFE agrees to make loans to
the Owner pursuant to the Sale and Funding Agreement sufficient to pay
or reimburse or cause to be paid and reimbursed Construction
Supervisor for the Cost of the Project up to a maximum of
$315,000,000.
SECTION 3.2. Requisitions and Payments. (a) Subject to the
terms and conditions hereof and so long as there is no Default or
Event of Default continuing hereunder, RBFE on behalf of the Owner
pursuant to the Sale and Funding Agreement shall make or cause to be
made payments to Construction Supervisor or its order upon
Construction Supervisor's written request from time to time no more
frequently than monthly on account of the Cost of the Project. Each
such payment shall be made upon Construction Supervisor's delivery of
a requisition in the form attached to the Trust Indenture as Annex H
("Certificate of Requisition"), copies of which shall be provided to
Indenture Trustee and the Surety upon submission to RBFE on behalf of
the Owner. All payments will be made directly to the Builders, other
vendors of Owner's Supplies or other equipment or to any other party
on account of the Cost of the Project or as reimbursement to
Construction Supervisor only upon receipt of proper evidence that
Construction Supervisor has paid any such amount to Builders, such
other vendor or such other party.
(b) The aggregate of all payments by or on behalf of the Owner
made under this Agreement on account of the Cost of the Project shall
not exceed $315,000,000, and Construction Supervisor shall be solely
responsible for all Excess Costs.
(c) Nothing in this Article III or elsewhere in this Agreement
shall have the effect of limiting Construction Supervisor's
obligations hereunder or making such obligations conditional on the
availability of funds from Owner or RBFE. Construction Supervisor's
obligations hereunder with respect to the performance of the Project
and the payment therefor are absolute and unconditional, and
Construction Supervisor shall pay and perform its obligations
hereunder notwithstanding any breach or default by RBFE or the Owner
hereunder or any other circumstance whatsoever.
(d) Notwithstanding anything herein to the contrary, it is
understood and agreed that the Owner does not and shall not have any
funding or other obligations under this Agreement and no recourse
shall be had against the Owner or its assets for performance hereof
except as provided in Article 6 of the Supplemental Indenture. This
clause, however, shall not limit the obligation of the Owner set forth
in Section 8.8 of this Agreement.
ARTICLE IV
EXTRAORDINARY PAYMENTS; CONDITIONAL DEMAND
SECTION 4.1. Certain Periodic Payments. In the event that
Completion of the Project does not occur on or before the Anticipated
Delivery Date, then Construction Supervisor shall thereafter make
periodic payments to the Collection Account established pursuant to
the Trust Indenture which currently is account #55-03-001-2074900 at
Chase Bank of Texas, N.A. (the "Collection Account") in the amount of
$150,000 for each day from and after the Anticipated Delivery Date
through the date specified in the following sentence to compensate the
parties for losses incurred in connection with such late delivery.
Construction Supervisor shall make such payments through the earliest
to occur of (i) the date of Completion, (ii) the Termination Date (as
defined in Section 4.2 if the rescission or termination contemplated
by Section 4.2 has occurred), and (iii) the date of payment in full of
the amounts required by Section 6.1 following a demand therefor by
reason of an Event of Default. Such payments shall be made from time
to time on demand by the Indenture Trustee, RBFE or the Owner and in
any event all such accrued and unpaid payments shall be made not less
than monthly on the last day of each month (or the next succeeding
Business Day, if such day is not a Business Day).
SECTION 4.2. Lump Sum Payment. In the event that (i) Owner
(or Construction Supervisor on behalf of Owner) rescinds the
Construction Contract pursuant to Article X thereof, or (ii) SDDI
terminates the SDDI Contract pursuant to section 2.2.1.2 thereof, then
in either case Construction Supervisor shall on the earliest to occur
of (a) the Outside Date, (b) within six months following the effective
date of the earlier to occur of such rescission or termination (the
earlier to occur of the date of such rescission or termination, the
"Termination Date"), or (c) if the conditional demand contemplated by
Section 4.3(a) has been made, the date on which payment would be due
pursuant to such demand, pay to the Collection Account the Advance
Payment Refund Amount together with the Liquidated Damages, for losses
incurred as a result of such rescission or termination. Construction
Supervisor shall also make periodic payments to the Collection Account
on demand in the amount of $150,000 for each day from and after the
Termination Date through the date of payment by Construction
Supervisor of the Advance Payment Refund Amount plus Liquidated
Damages, to compensate the parties for losses incurred in connection
with delay in such payment. Such payments shall be made from time to
time on demand by the Indenture Trustee, RBFE or the Owner and in any
event all such accrued and unpaid payments shall be made not less than
monthly on the last Business Day of each month.
SECTION 4.3. Conditional Demands. (a) In the event that
Initial Acceptance of the Drilling Rig does not occur on or before the
Anticipated Delivery Date and the rescission or termination
contemplated by Section 4.2 has not occurred, then the Indenture
Trustee, RBFE or RBFE on behalf of the Owner may make demand on
Construction Supervisor for payment of the amount required by Section
6.1. Such demand shall be upon the condition that if Initial
Acceptance of the Drilling Rig does occur on or before the Initial
Acceptance Date, then such demand is void. If Initial Acceptance of
the Drilling Rig does not occur on or before the Initial Acceptance
Date, then Construction Supervisor shall pay in full the amounts
required by Section 6.1 on or before the date specified in such demand
which date shall be no earlier than the later to occur of (i) Initial
Acceptance Date, or (ii) 50 days after the making of the demand
contemplated by this Section 4.3(a). The Indenture Trustee or RBFE
may provide a copy of the notice of such demand to the Surety.
(b) In the event that Completion of the Project does not occur
on or before July 31, 2000 and the rescission or termination
contemplated by Section 4.2 has not occurred, then the Indenture
Trustee, RBFE, or the Owner may make demand on Construction Supervisor
for payment of the amount required by Section 6.1. Such demand shall
be upon the condition that if Completion of the Project does occur on
or before the Outside Date, then such demand is void. If the
Completion of the Project does not occur on or before the Outside
Date, then Construction Supervisor shall pay in full the amounts
required by Section 6.1 on or before the date specified in such demand
which date shall be no earlier than the later to occur of (i) the
Outside Date, or (ii) 50 days after the making of the demand
contemplated by this Section 4.3(b). The Indenture Trustee or RBFE
may provide a copy of the notice of such demand to the Surety.
ARTICLE V
REPRESENTATION AND WARRANTIES
Construction Supervisor represents and warrants to Owner and RBFE
as follows:
SECTION 5.1 Organization and Power. Construction Supervisor (i)
is a corporation duly formed, validly existing and in good standing
under the laws of the State of Nevada and is duly qualified as a
foreign corporation and in good standing in all jurisdictions in which
such qualification is required in order for Construction Supervisor to
carry on its business as now conducted; and (ii) has the full
corporate power, authority and legal right to carry on its business as
now conducted and to execute, deliver and perform this Agreement.
SECTION 5.2 No Violation. Neither the execution, delivery or
performance by Construction Supervisor of this Agreement nor
compliance herewith (i) conflicts or will conflict with or results or
will result in a breach of or constitutes or will constitute a default
under (A) any law in effect as of the date hereof binding upon
Construction Supervisor or the Drilling Rig or (B) any order, writ,
injunction or decree of any court or other governmental authority
binding upon Construction Supervisor or the Drilling Rig, or (ii)
results or will result in the creation or imposition of any lien,
charge or encumbrance upon its property pursuant to such agreement or
instrument. Neither the execution, delivery or performance by the
Construction Supervisor of this Agreement nor compliance by
Construction Supervisor herewith conflicts or will conflict with or
results or will result in a breach of or constitutes or will
constitute a default under (i) the certificate of incorporation or by-
laws of Construction Supervisor or (ii) any agreement or instrument to
which Construction Supervisor is a party or by which it is bound.
SECTION 5.3 Agreement is Legal and Authorized. This Agreement
has been duly authorized by Construction Supervisor by all necessary
corporate action (including any necessary action by its shareholders)
and duly executed and delivered by it, and, assuming the due
authorization, execution and delivery thereof by Owner, is a legal,
valid and binding obligation of Construction Supervisor enforceable
against it in accordance with its terms, except as certain rights and
remedies as set forth herein may be limited by (a) bankruptcy,
reorganization and similar laws of general application relating to or
affecting the enforcement of creditors' rights and (b) general
principles of equity.
SECTION 5.4 Consents. No consent, license, approval or
authorization of, or filing, registration or declaration with, or
exemption or other action by, any governmental or public body,
authority, bureau or agency (including courts) under the laws of the
United States of America, the State of Delaware or of any other state
is required in connection with the execution and delivery or
performance by Construction Supervisor of this Agreement.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.1. Events of Default. If any one or more of the
following events (each an "Event of Default") shall occur:
(a) Construction Supervisor shall fail to make any payment
required by the terms of this Agreement, including, without
limitation, any payment required on account of Excess Costs or any
payment required pursuant to Article IV hereof and such failure shall
continue for two (2) Business Days;
(b) the Performance Bond shall be rescinded, terminated or
cease to be in full force and effect or either Surety shall assert,
claim or take the position that the Performance Bond is rescinded,
terminated or not in full force and effect or otherwise take any steps
to rescind or terminate the Performance Bond or cause it not to be in
full force and effect;
(c) Construction Supervisor shall fail to observe or perform
any term, covenant or condition (other than any covenant or condition
as to which provision is otherwise made in this Section 6.1) of this
Agreement and such failure shall remain uncured for a period of 30
days after the earlier of actual knowledge thereof by Construction
Supervisor or the giving of written notice thereof by Owner; provided,
however, no Event of Default shall be deemed to occur if such failure
or breach remains capable of cure and Construction Supervisor shall
have promptly commenced the cure of such failure or breach and
continues to act with diligence to cure such failure or breach and
such failure or breach is in fact cured no later than Completion of
the Project;
(d) any representation or warranty made by Construction
Supervisor in this Agreement (or in any certificate or instrument
executed in connection therewith) shall be untrue, inaccurate or
misleading in any material respect;
(e) Construction Supervisor shall generally fail to pay, or
admit in writing its inability to pay, its debts as they become due,
or shall voluntarily commence any case or proceeding or file any
petition under any bankruptcy, insolvency or similar law or seeking
dissolution, liquidation or reorganization or the appointment of a
receiver, agent, custodian, liquidator or similar person for itself or
a substantial portion of its property, assets or business or to effect
a plan or other arrangement with its creditors, or shall file any
answer admitting the jurisdiction of the court and the material
allegations of any involuntary petition filed against it in any
bankruptcy, insolvency or similar case or proceeding, or shall be
adjudicated bankrupt, or shall make a general assignment for the
benefit of creditors, or shall consent to, or acquiesce in the
appointment of, a receiver, agent, custodian, liquidator or similar
person for itself or a substantial portion of its property, assets or
business, or action shall be taken by Construction Supervisor for the
purpose of effectuating, authorizing or furthering any of the
foregoing;
(f) involuntary proceedings or an involuntary petition shall be
commenced or filed against Construction Supervisor under any
bankruptcy, insolvency or similar law or seeking the dissolution,
liquidation or reorganization of such person or the appointment of a
receiver, agent, custodian, liquidator or similar person for
Construction Supervisor or of a substantial part of its property,
assets or business, or any writ, judgment, warrant of attachment,
execution or similar process shall be issued or levied against a
substantial part of its property, assets or business, and such
proceedings or petition shall not be dismissed or stayed, or such
writ, judgment, warrant of attachment, execution or similar process
shall not be released, vacated or fully bonded, within 60 days after
commencement, filing or levy, as the case may be;
(g) any of the events set forth in the foregoing clauses (e)
and (f) shall occur with respect to either of Builders and such event
shall, in the reasonable judgement of RBFE or the Owner, materially
and adversely affect the ability of either Builder to perform its
obligations under the Construction Contract;
(h) a material default by Builder occurs and is continuing
under the Construction Contract and Construction Supervisor is not
diligently pursuing the cure thereof or RBFE or the Owner determines
in its reasonable discretion that such default is of a nature that it
cannot be cured for Completion on or before the Outside Date;
(i) Initial Acceptance of the Drilling Rig has not occurred on
or before June 28, 2000; or
(j) Completion of the Project has not occurred on or before the
Outside Date;
then in any such event, Owner may, in addition to the other rights and
remedies provided for in this Article immediately terminate the rights
of the Construction Supervisor under this Agreement by giving
Construction Supervisor written notice of such termination, and upon
the giving of such notice, this Agreement shall terminate as to the
rights of Construction Supervisor. The Owner may provide a copy of
such notice to the Surety. If the Indenture Trustee, RBFE or the
Owner has not made either of the conditional demands contemplated by
Section 4.3, the Indenture Trustee, RBFE or the Owner may demand in
such notice that Construction Supervisor pay to the Collection
Account, within thirty (30) days after the date of receipt of such
notice, all accrued and unpaid amounts due pursuant to Section 4.1 and
the second sentence of Section 4.2 and, to the extent not paid
pursuant to Section 4.2, and pay to the Collection Account an amount
equal to the Advance Payment Refund Amount together with the
Liquidated Damages. In the event that the Indenture Trustee, RBFE or
the Owner has made either of the conditional demands contemplated by
Section 4.3, Construction Supervisor shall pay the amounts described
in the preceding sentence on the date specified in such demand
consistent with Section 4.3.
SECTION 6.2. Additional Remedies. (a) If an Event of Default
shall have occurred and be continuing, Owner, RBFE and the Indenture
Trustee shall have all rights and remedies available at law, equity or
otherwise.
(b) No failure to exercise and no delay in exercising any
right, remedy, power or privilege under this Agreement shall operate
as a waiver thereof; nor shall any single or partial exercise of any
right, remedy or power or privilege under this Agreement preclude any
other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and
privileges provided in this Agreement are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
SECTION 6.3. Owner's Right to Cure Event of Default. Owner or
RBFE, without waiving or releasing any obligation owed to it or any
Event of Default may (but shall be under no obligation to) remedy any
Event of Default for the account of and at the sole cost and expense
of Construction Supervisor. All funds advanced or out-of-pocket costs
and expenses incurred in connection with such remedy, together with
interest thereon at an annual rate of 12% from the date on which such
sums or expenses are paid by Owner or RBFE, shall be paid by
Construction Supervisor to the Owner or RBFE, as appropriate, on
demand.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1. Construction Supervisor hereby assumes all
liability for its services to be performed hereunder and under the
Project Documents including payment of all fees for permits, studies
and variances, whether performed by Construction Supervisor, by any
contractor or subcontractor or any other entity performing the Project
directly or indirectly for or under Construction Supervisor or any
contractor or subcontractor.
SECTION 7.2. Construction Supervisor acknowledges that it is a
fundamental assumption of the Construction Supervisor and the
Indemnified Parties that the Indemnified Parties and all persons and
entities associated with the Indemnified Parties should not incur any
Claims or Losses (other than Claims and/or Losses to the extent caused
by the Fault of such Indemnified Party or, with respect to a BTM
Indemnitee (as defined below), other than with respect to Taxes, to
the extent consisting of the Owner's obligations under Section 4.05 of
the Supplemental Indenture), by reason of the execution and delivery
of the Transaction Documents (as defined in the Supplemental
Indenture) and its or their participation in the transactions
contemplated thereby (the Transaction Documents, the Project and the
transactions contemplated thereby, herein collectively referred to as
the "Transaction").
SECTION 7.3. Therefore, in order to assure the continuing
efficacy of the statements and fundamental assumptions described in
Section 7.1 and 7.2 above, in the face of the possibility of Claims or
Losses being imposed on, asserted against, or incurred by the
Indemnified Parties, the Construction Supervisor covenants that the
Construction Supervisor shall, on a Current Basis and an After-Tax
Basis, indemnify, protect, defend and hold harmless the Indemnified
Parties from, against and in respect of, any and all Claims and/or
Losses imposed on, incurred by or asserted against any Indemnified
Party in any way relating to, resulting from or arising out of or in
connection with, directly or indirectly, the Transaction (other than,
with respect to any particular Indemnified Party, Claims and/or Losses
to the extent caused by the Fault of such Indemnified Party and with
respect to the Owner and its successors and assigns under the
Supplemental Indenture (each a "BTM Indemnitee"), other than with
respect to Taxes, to the extent consisting of the Owner's obligations
under Section 4.05 of the Supplemental Indenture), whether caused by
or arising in connection with the failure of the Construction
Supervisor to fully perform its obligations under this Construction
Supervisory Agreement or caused by or arising in connection with any
other act, any failure to act, breach of any representations or
warranty, any event or any other circumstance whatsoever pertaining to
any person or entity, including, without limitation of the generality
of the foregoing, any of the following:
(a) any of the Transaction Documents (as defined in the
Supplemental Indenture) and any other instruments or
agreements entered into by any of the parties hereto in
connection with the Transaction, and any amendment,
supplement or modification of or to such Transaction
Documents, instruments or agreements, the enforcement by
any Indemnified Party of any of its rights under this
Construction Supervisory Agreement, such Transaction
Documents, instruments or agreements or any breach or
failure to perform or observe, or other noncompliance
with, any covenant or agreement or other obligation to be
performed by any party to such Transaction Documents,
instruments or agreements, or the incorrectness of any
representation or warranty of any such party;
(b) the Drilling Rig or any part or component thereof,
including without limitation, (a) the manufacture,
design, purchase, acceptance, nonacceptance or rejection,
ownership, idling, laying up, documentation,
redocumentation, registration, reregistration,
deregistration, financing, refinancing, delivery,
nondelivery, charter, subcharter, assignment, possession,
use or non-use, operation, loading or unloading,
maintenance, testing, repair, overhaul, condition,
alteration, modification, addition, improvement, storage,
seaworthiness, replacement, repair, sale, substitution,
return, abandonment, redelivery or other disposition of
the Drilling Rig or any part or any component thereof
(including, in each case, latent or other defects,
whether or not discoverable) and any claim for patent,
trademark, or copyright infringement and all liabilities,
obligations, losses, damages and claims in any way
relating to or arising out of injury to persons,
properties or the environment (including, without
limitation, all Claims and Losses associated with
remediation, response, removal, corrective action, clean-
up, remedial action, treatment, compliance, restoration,
abatement, containment, monitoring, sampling,
investigation, the protection of wildlife and aquatic
life and vegetation, the interference with or
contamination of any wetland or body of water or aquifer,
an any relevant mitigative action under any Environmental
Law relating to the Drilling Rig and any Claims or Losses
associated with the existence or presence of any
Hazardous Substance at, in or under the Drilling Rig, or
any part thereof, or the release, emission or discharge
of any Hazardous Substance into the environment), or
damages to or destruction of any natural resources, and
strict liability in tort, (b) any claim or penalty
arising out of violations of Applicable Law, (c) death or
property damage of any person, and (d) any Liens in
respect of the Drilling Rig or any part or any component
thereof; and
(c) Taxes other than Excluded Taxes.
Appendix A to this Construction Supervisory Agreement sets forth
certain relevant definitions and procedures relating to this
indemnity.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Notices. All notices, consents, directions,
approvals, instructions, requests, demands and other communications
required or permitted by the terms hereof to be given to any person
(collectively "Notices") shall be given in writing in and any such
Notice shall be deemed given (i) when personally delivered, or (ii)
three days after the date deposited in the United States mails, with
proper postage prepaid, for first class certified mail, return receipt
requested, or (iii) when signed for by the recipient, if delivered by
overnight courier or express mail service, addressed as follows:
if to Owner: BTM Capital Corporation
125 Summer Street
Boston, MA 02110
Attention: Senior Vice President - Administration
if to RBFE: RBF Exploration Co.
901 Threadneedle, Suite 200
Houston, Texas 77079
Attn: President
if to Construction Supervisor
RBF Exploration II Inc.
901 Threadneedle, Suite 200
Houston, TX 77079
Attn: President
and in any case with a copy to the Surety at its address specified in
the Performance Bond, or at such other address as either party hereto
may from time to time designate by Notice duly given in accordance
with the provisions of this Section 8.1 to the other party. No Notice
shall be deemed effective until given to the Surety.
SECTION 8.2 Successors and Assign; Third Party Beneficiaries.
(a) This Agreement shall be binding upon and inure to the benefit of
Owner, RBFE, Construction Supervisor, the Indemnified Parties and
their respective legal representatives, successors and permitted
assigns. Each of the Owner and/or RBFE may assign its rights
hereunder to the Indenture Trustee pursuant to the Trust Indenture,
and the Indenture Trustee may assign such rights to the Surety in the
circumstances contemplated by the Performance Bond. Except in
connection with the exercise by the Surety of its rights to perform on
behalf of Construction Supervisor pursuant to the Performance Bond,
Construction Supervisor shall not assign its rights or obligations
hereunder without the prior written consent of Owner, RBFE, Indenture
Trustee and the Surety. In no event, however, may the Construction
Supervisor assign its obligations under the indemnity provided in
Article VII hereof without the consent of the Indenture Trustee, the
Surety and the Owner, which may be withheld in its sole discretion.
(b) The Owner shall have the right to assign its rights
hereunder to an Affiliate of the Owner (and such Affiliate shall be
bound by all of the terms and provisions of this Agreement as if it
were the Owner hereto) and, in the event of the Owner exercises its
Put Option under and as defined in the Sale and Funding Agreement, it
shall assign its rights hereunder to RBFE or an Affiliate of RBFE (as
directed by RBFE).
(c) Indenture Trustee, RBFE and each party providing financing
to RBFE and/or the Owner in connection with the Project (including,
without limitation, each Note Holder and Credit Support Party, as such
terms are defined in the Trust Indenture) and Surety is an intended
third party beneficiary of this Agreement. Indenture Trustee and/or
RBFE shall each have the right, but not the obligation, in its sole
judgment and discretion, from time to time, but subject to the terms
of this Agreement, to make demand for performance and to proceed
against Construction Supervisor for the performance of any of its
obligations hereunder, and/or, subject to Section 3.2(d) above, to
proceed from time to time against Owner for the performance of any
such obligations, as Indenture Trustee, in its sole discretion, may
determine. In addition, each Indemnified Party is an intended third
party beneficiary of the indemnity provided in Article VII hereof and
may enforce the same directly.
(d) Monetary damage recoveries for claims made hereunder by the
Owner, RBFE and/or the Indenture Trustee shall be without duplication.
SECTION 8.3 GOVERNING LAW. (a) THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT (INCLUDING ALL MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE) SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, BUT EXCLUDING (TO THE MAXIMUM EXTENT PERMITTED BY
LAW) ALL OTHER RULES RELATING TO CHOICE OF LAW, CHOICE OF FORUM OR
CONFLICT OF LAWS).
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN NEW
YORK COUNTY, OR THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
OWNER, RBFE AND CONSTRUCTION SUPERVISOR HEREBY ACCEPTS FOR ITSELF AND
(TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH
OF OWNER, RBFE AND CONSTRUCTION SUPERVISOR HEREBY IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING, WITHOUT LIMITATION ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR
PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THE SUBMISSION TO
JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE ANY PERSON FROM
OBTAINING JURISDICTION OVER OTHER PARTIES IN ANY COURT OTHERWISE
HAVING JURISDICTION.
(c) EACH OF OWNER, RBFE AND CONSTRUCTION SUPERVISOR HEREBY
IRREVOCABLY DESIGNATES CAPITOL SERVICES, INC. LOCATED AT 40 COLVIN
STREET, SUITE 200, ALBANY, NEW YORK 12206, AS ITS DESIGNEE, APPOINTEE
AND AGENT TO RECEIVE, FOR AND ON ITS BEHALF, SERVICE OF PROCESS IN
SUCH JURISDICTION IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED
ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY OVERNIGHT COURIER TO
OWNER, RBFE AND CONSTRUCTION SUPERVISOR AT ITS ADDRESS SET FORTH
HEREIN, BUT THE FAILURE OF TO RECEIVE SUCH COPY SHALL NOT AFFECT IN
ANY WAY THE SERVICE OF SUCH PROCESS. EACH OF OWNER, RBFE AND
CONSTRUCTION SUPERVISOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO CONSTRUCTION SUPERVISOR AT ITS SAID ADDRESS,
SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF OWNER, RBFE OR
INDENTURE TRUSTEE OR ANY OTHER PERSON TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST CONSTRUCTION SUPERVISOR IN ANY OTHER JURISDICTION.
(e) OWNER, RBFE AND CONSTRUCTION SUPERVISOR EACH HEREBY (I)
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN; (II)
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFIES THAT NO
PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF COUNSEL FOR ANY PARTY
HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVERS, AND (IV) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT, AND THE TRANSACTIONS CONTEMPLATED HEREBY
AND THEREBY BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION.
SECTION 8.4 No Waiver; Amendments. No failure on the part of
Owner, RBFE or Indenture Trustee or any of their respective agents to
exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by Owner,
RBFE or Indenture Trustee or any of their respective agents of any
right, power, or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power, or remedy.
This Agreement may not be amended, modified or any material terms
hereof waived without the express written consent of the Indenture
Trustee and the Surety.
SECTION 8.5 Counterparts. This Agreement may be executed in any
number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same agreement.
SECTION 8.6 Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 8.7 Headings and Table of Contents. The headings and
table of contents contained in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
SECTION 8.8 Non-Petition Covenant. Each of the Owner and the
Construction Supervisor hereby agrees that until the 368th day
following payment in full of any and all Notes (as defined in the
Trust Indenture), neither the Owner nor the Construction Supervisor
will institute, and neither the Owner nor the Construction Supervisor
will join with others in instituting, any involuntary bankruptcy or
analogous proceeding against RBFE under any bankruptcy,
reorganization, receivership or similar law, domestic or foreign, as
now or hereafter in effect.
SECTION 8.9 August 12, 1999 Construction Supervisory Agreement
Superseded. This Agreement supercedes and replaces in its entirety
that certain Construction Supervisory Agreement dated August 12, 1999,
by and between RBFE as "Owner" and RBF Exploration II Inc., as
"Construction Supervisor" which prior agreement is terminated and of
no further force or effect as of the date hereof. In this connection
the Construction Supervisor and RBFE each represent to the other and
to the Owner that no amounts under the Original CSA are owed by either
the Construction Supervisor or RBFE to the other, no default has
occurred under the Original CSA, no requisitions for advance have been
submitted to the Indenture Trustee which are unfunded and outstanding
at this time, no other claim exists between the Construction
Supervisor and RBFE and there have been no amendments or modifications
to the Original CSA prior to the date of its replacement by this
Agreement.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
BTM CAPITAL CORPORATION
By:_________________________
Name:
Title:
RBF EXPLORATION CO.
By:_________________________
Name:
Title:
RBF EXPLORATION II INC.
By:_________________________
Name:
Title:
SCHEDULE A
Insurance Requirements
(a) All Risk Property Insurance. Upon delivery to Owner of
the Drilling Rig under the Construction Contract, Construction
Supervisor shall, on behalf of Owner, keep the Drilling Rig insured,
in lawful money of the United States, against all such risks
(including without limitation, hull and machinery/increased value,
protection and indemnity risk, pollution liability, war risks (when
available) and, when laid up, port risk insurance, as well as such
excess policies over and above protection and indemnity and general
liability coverage which shall represent collective limits of not less
than $400,000,000), in such form and with such insurance companies or
underwriters as required under paragraph (c) as shall be at least as
protective as insurance maintained by prudent owners of vessels and
equipment similar to the Drilling Rig, engaged in international
contract offshore oil and gas operations, and in any event all as
reasonably acceptable to Indenture Trustee and the Owner and RBFE and,
so long as the Performance Bond is outstanding or amounts are due to
the Surety as a result of payments made by it thereunder, the Surety
and in compliance with the SDDI Contract. Without limiting the
generality of the foregoing, with respect to hull and
machinery/increased value insurance, including war risk (when
available), the Construction Supervisor shall insure the Drilling Rig
for an amount which is at least equal to the actual value of the
Drilling Rig, but in no event less than $275,000,000. Such insurance
shall cover marine and war risk perils, on hull and machinery, with
per occurrence deductibles not in excess of $1,000,000 and shall be
maintained in the broadest forms reasonably available in the American
and British insurance markets. The Construction Supervisor shall on
behalf of Owner and RBFE maintain protection and indemnity (or its
equivalent) insurance, including war risk protection and indemnity (or
its equivalent) coverage and coverage against pollution liability in
an amount not less than $400,000,000 (or such greater amount as may be
required from time to time under Oil Pollution Act of 1990 or other
environmental laws). All of the foregoing insurance shall have a per
occurrence deductible not to exceed $1,000,000 and be placed through
such underwriters or associations as specified in clause (d) below.
The Drilling Rig shall not operate in or proceed into any area then
excluded by trading warranties under its marine or war risk policies
(including protection indemnity or its equivalent) without satisfying
the conditions of the relevant policies, evidence of which shall be
furnished to Indenture Trustee and, so long as the Performance Bond is
outstanding or amounts are due to the Surety as a result of payments
made by it thereunder, the Surety.
(b) Liability; Workers' Compensation. Construction
Supervisor on behalf of Owner and RBFE shall maintain at all times
such worker's compensation, employer's liability, and longshoreman and
harbor worker's insurance as shall be required by applicable law.
Such policies shall provide that any loss under such insurance may be
paid directly to the entity to whom any liability covered by such
policies has been incurred.
(c) Payment Provisions. All payments made under policies
of insurance maintained under this Section shall be applied as set
forth in Section 5.2 of the Trust Indenture.
(d) Insurers. All insurance required under this Schedule A
shall be placed and kept with such insurance companies, Lloyd's
Syndicates, underwriters' associations, protection and indemnity clubs
or underwriting funds as are reputable, generally recognized within
the industry, and (i) in the case of hull and machinery insurance,
rated by either Standard & Poors Rating Services, a division of the
McGraw Hill Companies, Inc. ("S&P"), Moody's Investors Services, Inc.
("Moody's) or Duff & Phelps Credit Rating Co. ("Duff") with at least
the equivalent to an S&P rating of BBB (and with at least 75% of the
companies, determined by dollar amount of policy coverage, rated by
S&P, Duff or Moody's with at least the equivalent to an S&P rating of
A) or, if not rated by S&P, Duff or Moody's then rated "excellent" or
better by A.M. Best, and (ii) in the case of protection and indemnity
risk insurance, rated by either S&P, Duff or Moody's with at least the
equivalent to an S&P rating of BBB.
(e) Taking by United States. During the continuance of a
taking, requisition or charter of the use of the Drilling Rig by any
governmental body of the United States of America, the provisions of
this Schedule A shall be deemed to have been complied with in all
respects as to the Drilling Rig if the United States Government or any
such governmental body shall have agreed (i) to reimburse Owner, RBFE
and Indenture Trustee for loss or damage resulting from the risks
indicated in paragraphs (a) and (b) of this Schedule A, or (ii) that
Owner, RBFE and Indenture Trustee shall be entitled to just
compensation therefor. In the event of any taking, requisition,
charter or loss of the Drilling Rig contemplated by this paragraph
(e), Construction Supervisor shall promptly furnish to Indenture
Trustee a sworn certificate of an officer of Construction Supervisor
stating that such taking, requisition, charter or loss has occurred
and, if there shall have been a taking, requisition or charter of the
Drilling Rig, that the United States Government or governmental body
has agreed (i) to reimburse Owner, RBFE and the Indenture Trustee for
loss or damage resulting from the risks indicated in the
above-mentioned paragraphs (a) and (b) or (ii) that Indenture Trustee,
Owner or RBFE, as the case may be, is entitled to just compensation
therefor.
(f) Mortgage Provisions. All insurance required under this
Schedule A shall be taken out in the name of Owner or on its behalf by
an Affiliate of Construction Supervisor and RBFE, the Indenture
Trustee and each Note Holder and the Sureties shall be named as an
additional insured under all liability policies (other than workers'
compensation and similar insurance), and RBFE, the Indenture Trustee
and, so long as the Performance Bond is outstanding or amounts are due
to the Surety as a result of payments made by it thereunder, the
Surety, shall be named as the loss payees, as their interests may
appear, under all physical damage policies with respect to the
Drilling Rig for any loss in excess of $5,000,000 or, after the
occurrence and during the continuation of any Event of Default, any
loss. All policies for such insurance shall also provide that (i)
there shall be no recourse against Owner (or its assignee), RBFE, the
Indenture Trustee or any Note Holder or any loss payee or additional
insured for the payment of premiums or commissions, (ii) if such
policies provide for the payment of club calls, assessments or
advances, there shall be no recourse against Owner (or its assignee),
RBFE, the Indenture Trustee or any Note Holder or any loss payee or
additional insured for the payment thereof. All policies shall
provide that the insurers shall provide to Owner (or its assignee),
RBFE, the Indenture Trustee and each Note Holder and any loss payee
and additional insured, as the case may be, 30 days prior notice of
any material change in the coverage of such insurance as well as ten
(10) days prior written notice of any cancellation of such insurance
in the event of non-payment of premiums and seven (7) days prior
written notice of any cancellation of such insurance for war risk.
(g) Compliance. Construction Supervisor shall not do any
act, nor permit any act to be done, whereby any insurance required by
this Schedule A shall or may be suspended, impaired or defeated, or
permit the Drilling Rig to engage in any voyage, to engage in any
activity or to carry any cargo not permitted under the policies of
insurance then in effect without first procuring comparable insurance
for such voyage, activity or the carriage of such cargo.
(h) Policies. Construction Supervisor, upon execution of
this Agreement, shall deliver to Owner, Indenture Trustee and Surety
certificates of insurance, evidencing the insurance maintained under
this Schedule A. Construction Supervisor, upon the request of Owner
or the Indenture Trustee, will promptly deliver to Owner or the
Indenture Trustee true copies of such policies.
(i) Opinion and Certificates. On the date hereof, and on
each anniversary and each material change in coverage, Construction
Supervisor shall promptly furnish or cause to be furnished to
Indenture Trustee and, at all time on and after the date hereof when
the Performance Bond is outstanding or amounts are due to the Surety
as a result of payments made by it thereunder, the Surety, a detailed
certificate or opinion (signed by a reputable insurance broker) as to
the insurance maintained by Construction Supervisor pursuant to this
Schedule A, specifying the respective policies of insurance covering
the same and attaching certificates of confirmation evidencing the
same and stating with regard to the insurance maintained by
Construction Supervisor pursuant to this Schedule A the amounts,
deductibles, and the risks against which such insurance is issued.
(j) Obligation to Collect. Construction Supervisor shall,
at no cost or expense to Owner, have the duty and responsibility to
make all proofs of loss and take any and all other steps necessary as
a prudent owner or as reasonably directed by Owner to effect
collections from underwriters for any loss under any insurance on or
in respect of the Drilling Rig or the operation thereof.
(k) Mortgage. The rights and obligations of Construction
Supervisor and Owner with respect to insurance shall be subject to
such other terms and conditions as shall be contained in the mortgage
described in Section 2.5(r)(ii) hereof, and in the event of any
inconsistency between the terms of this Exhibit A and the terms of
such mortgage, the terms of such mortgage shall take precedence.
EXHIBIT A
Form of Performance Bond
APPENDIX A
CERTAIN INDEMNITY DEFINITIONS AND PROCEDURES
"Applicable Law" shall mean, without limitation, all applicable
laws and treaties, and judgments, decrees, injunctions, within any
court, arbitration board, governmental entity and rules, regulations,
consents, licenses and permits of any governmental entity.
"After-Tax Basis" shall mean, with respect to any payment to
be received by an Indemnified Party, the amount of such payment (the
base payment) supplemented by a further payment (the additional
payment) to such Indemnified Party so that the sum of the base payment
plus the additional payment shall after deduction of the amount of all
federal, state, local and foreign income Taxes required to be paid by
such Indemnified Party in respect of the receipt or accrual of the
base payment and the additional payment (taking into account any
reduction in such income Taxes resulting from Tax benefits realized or
to be realized by the recipient in the taxable year of the payment as
a result of the payment or the event giving rise to the payment) be
equal to the amount required to be received. Such calculations shall
be made on the basis of the highest applicable Federal income tax
statutory rate applicable to corporations for all relevant periods and
at the highest applicable statutory income tax rates applicable to
corporations in the state, local and foreign taxing jurisdiction
applicable to the Transactions for all relevant periods and shall take
into account the deductibility of state, local and foreign income
taxes, or crediting of foreign income taxes, for Federal income tax
purposes. A certificate as to additional amounts payable to an
Indemnified Party submitted by such Indemnified Party to the
Construction Supervisor shall show in reasonable detail the additional
amount payable and the calculations used to determine in good faith
such amount and shall be deemed prima facie correct.
"Claim" shall mean any liability (including in respect of
negligence (whether passive or active or other torts), strict or
absolute liability in tort or otherwise, warranty, latent or other
defects (regardless of whether or not discoverable), statutory
liability, property damage, bodily injury or death), obligation, loss,
settlement, damage, penalty, claim, action, suit, proceeding (whether
civil or criminal), judgment, penalty, fine and other legal or
administrative sanction, judicial or administrative p roceeding, cost,
expense or disbursement, including reasonable legal, investigation and
expert fees, expenses and reasonable related charges, of whatsoever
kind and nature.
"Current Basis", when used herein with respect to an
indemnity obligation of the Construction Supervisor, shall mean the
payment, fulfillment or discharge of such obligation promptly upon the
Construction Supervisor's having been notified by an Indemnified Party
of an actual or potential Loss or Claim with respect to such
Indemnified Party and the Transaction, without regard to the issue of
the possible Fault of such Indemnified Party.
"Excluded Taxes" shall mean, with respect to any particular
Indemnified Party, any Taxes imposed by any United States federal,
state or local government based on or measured by the amount of
capital, net worth and net or gross income or receipts attributable to
fees or other compensation that such Indemnified Party receives from
the Construction Supervisor or any Affiliate of the Construction
Supervisor in connection with the Transaction, except (i) any state or
local income Taxes (other than those imposed by the jurisdiction of
the place of business of the Indemnified Party) of the foregoing
nature to the extent imposed as a result of the such Indemnified
Party's participation in the Transaction or (ii) any withholding Taxes
(in both cases, including any penalties, interest additions to tax or
other costs or expenses applicable in connection therewith).
"Fault", when used with respect to an Indemnified Party and a
Loss or Claim to which an Indemnified Party would, but for the
occurrence of Fault, be entitled to be indemnified hereunder, shall
mean the gross negligence or wilful misconduct of such Indemnified
Party in the performance of such Indemnified Party's obligations under
the Transaction Documents to which such Indemnified Party is a party
as expressly judicially determined in the final judgment of a court
having jurisdiction over such Indemnified Party and the relevant
subject matter as to which gross negligence or wilful misconduct has
been alleged, such judgment being final and being or having become
subject to no further appeals therefrom (provided that if such court
is the U.S. District Court for the Southern District of New York, a
final judgment of such court even though such judgment is subject to
appeal, it being understood that if such judgment is reversed or
vacated on such appeal, "Fault" shall be deemed not to have been
adjudged by such District Court), but only to the extent that such
adjudged gross negligence or wilful misconduct was the cause of such
Loss and Claim.
"Hazardous Substances" means (a) any substance (i) defined
as a "hazardous substance under the federal Comprehensive
Environmental Response, Compensation and Liability Act, or (ii)
regulated as a "hazardous waste" under the federal Resource
Conversation and Recovery Act, (b) any petroleum product, (c) any
asbestos-containing material, (d) polycholorinated biphenyls, (e)
"source material", "byproduct material" and "special nuclear
material", regulated under the Atomic Energy Act, and (f) any
substance regulated as a hazardous air pollutant, and, to the extent
not included in any of the foregoing, any substance in any form
whatsoever (including products) regulated, restricted or controlled by
or under any Environmental Law.
"Loss" shall mean any and all liabilities, obligations, losses,
damages, penalties, claims, actions, suits, costs, expenses and
disbursements, including legal fees and expenses of whatever kind and
nature.
"Taxes" shall mean all fees, taxes (including without
limitation sales taxes, use taxes, stamp taxes, value-added taxes, ad
valorem taxes and property taxes (personal and real, tangible and
intangible) and taxes imposed on, based on or measured by capital, net
worth, and net or gross income or receipts), levies, assessments,
withholdings and other charges and impositions of any nature, plus all
related interest, penalties, fines and additions to tax, now or
hereafter imposed by any federal, state, local or foreign government
or other taxing authority.
ARTICLE 2.
Certain Indemnification Procedures
Section 2.1. Full Payment. All indemnity amounts payable to
any Indemnified Party by the Construction Supervisor under the
Indemnity (as hereinafter defined) shall be paid in full without set-
off or counterclaim.
Section 2.2. Notices. If any Indemnified Party hereunder has
actual knowledge of any Losses hereby indemnified against, it shall
give prompt written notice thereof to the Construction Supervisor
(including, without limitation, copies of any notices received from
any taxing authority with respect to any Tax that is subject to
indemnification hereunder) and if the Construction Supervisor has
knowledge of any Losses or the assertion of any Claims hereby
indemnified against, it shall give prompt written notice thereof to
the relevant Indemnified Party. Notwithstanding the foregoing, the
failure of any Indemnified Party to promptly notify the Construction
Supervisor as provided in this Section 2.2, shall not release the
Construction Supervisor from any of its obligations to indemnify such
Indemnified Party hereunder.
Section 2.3. Losses or Claims Other Than Taxes. In the case of
the indemnification provided under Article VII of the Construction
Supervisory Agreement (the "Indemnity") for Losses or Claims other
than with respect to indemnification for Taxes, the following shall
apply.
(a) Notice of Proceedings; Defense of Claims; Limitations.
(i) In case any action, suit or proceeding shall be
brought against any Indemnified Party for which the Construction
Supervisor is responsible under the Indemnity, such Indemnified
Party shall promptly notify the Construction Supervisor of the
commencement thereof (provided that the failure to so provide
such notice shall not relieve the Construction Supervisor from
any liability which it may have to an Indemnified Party pursuant
to the Indemnity) and the Construction Supervisor may, at its
cost and expense, participate in and to the extent that it shall
wish (subject to the provisions of the following paragraph),
assume and control the defense thereof, with counsel reasonably
satisfactory to such Indemnified Party and, subject to Clause
(iii), settle or compromise the same.
(ii) the Construction Supervisor or its insurer(s)
shall have the right, at its or their cost and expense, to
investigate or, if the Construction Supervisor and its
insurer(s) shall agree not to dispute liability hereunder or
under any insurance policies pursuant to which coverage is
sought, defend, or participate in the defense of, any action,
suit or proceeding, with counsel reasonably satisfactory to the
relevant Indemnified Party, relating to any Losses for which
indemnification is sought pursuant to the Indemnity, and each
Indemnified Party shall cooperate, at the cost and expense of
the Construction Supervisor, with the Construction Supervisor or
its insurer(s) with respect thereto; provided, that the
Construction Supervisor shall not be entitled to control the
defense of any such action, suit or proceeding (a) unless the
Construction Supervisor shall have acknowledged in writing its
obligation to indemnify such Indemnified Party in respect
thereof (without prejudice to the Construction Supervisor's
right to assert the Fault of the Indemnified Party), or (b) if
in the reasonable judgment of any Indemnified Party, any such
action, suit or proceeding with respect to such Losses could
have a material adverse impact on the business of such
Indemnified Party or involve the potential imposition of
criminal liability on such Indemnified Party or involve a
conflict of interest between such Indemnified Party and the
Construction Supervisor. In connection with any such action,
suit or proceeding being controlled by the Construction
Supervisor, such Indemnified Party shall have the right to
participate therein, at its sole cost and expense, with counsel
of its choice. The Construction Supervisor shall supply the
Indemnified Party with such information reasonably requested by
each Indemnified Party as is necessary or advisable for such
Indemnified Party to control or participate in any proceeding to
the extent permitted by this Section 2.3. Nothing contained in
this Section 2.3 shall be deemed to require an Indemnified Party
to contest any Loss or to control any action, suit or proceeding
with respect thereto.
(iii) Provided that the Construction Supervisor is
not in default of its obligations under the Indemnity, an
Indemnified Party shall not enter into a settlement or other
compromise with respect to any Losses for which indemnification
is sought hereunder without the prior written consent of the
Construction Supervisor, which consent shall not be unreasonably
withheld or delayed, unless such Indemnified Party waives its
right to be indemnified with respect to such Losses under this
Section 2.3. The Construction Supervisor shall not enter into a
settlement or other compromise with respect to any Losses absent
the giving to such Indemnified Party of prior written notice of
such settlement or compromise, and the Construction Supervisor
will not enter into such a settlement or other compromise absent
such Indemnified Party prior written consent, which consent
shall not be unreasonably withheld or delayed unless if in the
reasonable judgment of such Indemnified Party, such settlement
or compromise could have a material adverse impact on the
business of such Indemnified Party or involve the potential
imposition of criminal liability on such Indemnified Party;
provided that such consent shall not be required if such
settlement or compromise provides for the total and irrevocable
release of such Indemnified Party with respect to all claims
relating to such Losses without admission of any liability of
such Indemnified Party with respect to such Losses and imposes
no conditions or restrictions upon such Indemnified Party.
(iv) In any circumstance in which the Construction
Supervisor shall not be entitled to control the defense of any
action, suit or proceeding described above, or compromise or
settle any Losses, the Construction Supervisor shall have the
right to participate therein, at its sole cost and expense, with
counsel reasonably acceptable to the involved Indemnified Party;
provided, that the Construction Supervisor's participation shall
not interfere in any way with the defense of such case or the
overall strategy for the contesting thereof; provided, further,
that nothing in this subparagraph (iv) shall prevent the
Construction Supervisor from bringing its own separate cause of
action to the extent permitted by Applicable Law.
(b) Information. The Construction Supervisor will provide
the relevant Indemnified Party with such information not within the
control of such Indemnified Party, as is in the Construction
Supervisor's or any of its Affiliates' control or is reasonably
available to the Construction Supervisor or such Affiliate, which such
Indemnified Party may reasonably request and will otherwise cooperate
with such Indemnified Party so as to enable such Indemnified Party to
fulfill its obligations under this Section 2.3. The Indemnified Party
shall, at the Construction Supervisor's cost and expense, supply the
Construction Supervisor with such information not within the control
of the Construction Supervisor, as is in such the Construction
Supervisor's control or is reasonably available to such Indemnified
Party, which the Construction Supervisor may reasonably request to
control or participate in any proceeding to the extent permitted by
Section 2.3.
Section 2.4. Losses or Claims With Respect to Taxes. In
the case of the indemnification provided under the Indemnity for
Losses or Claims with respect to indemnification for Taxes, the
following shall apply.
(a) Payment. Each payment shall be paid either (i) when
due directly to the applicable taxing authority by the Construction
Supervisor if it is permitted to do so, or (ii) where direct payment
is not permitted, and with respect to gross up amounts, in immediately
available funds to the Indemnified Party by the later of (A) 5 days
following the Construction Supervisor's receipt of the Indemnified
Party's written demand for the payment or (B) in the case of any
Indemnified Party demand for which the Construction Supervisor has
requested review and determination pursuant to paragraph (b) below,
the completion of such review and determination; provided, however, in
no event later than the date which is five Business Days prior to the
date on which such Taxes are required to be paid to the applicable
taxing authority.
(b) Independent Examination. Within 5 days after the
Construction Supervisor receives any request for any Indemnified Party
payment with respect to Taxes (other than in the case of payments to
be made on an After-Tax Basis) from the Indemnified Party, the
Construction Supervisor may request in writing that an independent
public accounting firm selected by the Indemnified Party and
reasonably acceptable to the Construction Supervisor review and
determine on a confidential basis the amount of any Indemnified Party
payment by the Construction Supervisor to the Indemnified Party
pursuant to this Section 2.4. The Indemnified Party shall cooperate
with such accounting firm and supply it with all information
reasonably necessary for the accounting firm to conduct such review
and determination (but not tax returns and books); provided that such
accounting firm shall agree in writing in a manner satisfactory to the
Indemnified Party to maintain the confidentiality of such information.
The fees and disbursements of such accounting firm will be paid by the
Construction Supervisor.
(c) Tax Benefit. If, as the result of any Taxes paid or
indemnified against by the Construction Supervisor under the
Indemnity, the aggregate Taxes actually paid by the Indemnified Party
for any taxable year and not subject to indemnification pursuant to
the Indemnity are less (whether by reason of a deduction, credit,
allocation or apportionment of income or otherwise) than the amount of
such Taxes that otherwise would have been payable by such Indemnified
Party (a "Tax Benefit"), then to the extent such Tax Benefit was not
taken into account in determining the amount of indemnification
payable by the Construction Supervisor, such Indemnified Party shall
pay to the Construction Supervisor the lesser of (A) (y) the amount of
such Tax Benefit, plus (z) an amount equal to any United States
federal, state or local income tax benefit resulting to the
Indemnified Party from the payment under clause (y) above and this
clause (z) (determined using the same assumptions as set forth in the
second sentence under the definition of After-Tax Basis) and (B) the
amount of the Indemnified Party payment giving rise to such Tax
Benefit. If it is subsequently determined that the Indemnified Party
was not entitled to such Tax Benefit, the portion of such Tax Benefit
that is required to be repaid or recaptured will be treated as Taxes
for which the Construction Supervisor must indemnify the Indemnified
Party pursuant to the Indemnity. Notwithstanding anything to the
contrary herein, the Indemnified Party shall determine the allocation
of any tax benefits, savings, credit, deduction or allocation in its
sole discretion to be exercised in good faith and each position to be
taken on its tax return shall be in its sole control and it shall not
be required to disclose any tax return or related documentation to any
Person.
(d) Refund. If the Indemnified Party obtains a refund or
credit of all or part of any Taxes paid, reimbursed or advanced by the
Construction Supervisor pursuant to the Indemnity, the Indemnified
Party promptly shall pay to the Construction Supervisor (x) the amount
of such refund or credit (net of any Tax payable by the Indemnified
Party as a result of the receipt or accrual of such refund or credit)
plus (y) an amount equal to any United States federal, state or local
income tax benefit realized by such Indemnified Party by reason of
such payment to the Construction Supervisor (determined using the same
assumptions as set forth in the second sentence under the definition
of After-Tax Basis); provided that the amount payable to the
Construction Supervisor pursuant to this sentence shall not exceed the
amount of the Indemnified Party payment in respect of such refunded or
credited Taxes that was made by the Construction Supervisor. If it is
subsequently determined that the Indemnified Party was not entitled to
such refund or credit, the portion of such refund or credit that is
required to be repaid or recaptured will be treated as Taxes for which
the Construction Supervisor must indemnify the Indemnified Party
pursuant to Indemnity.
(e) Reports. If any report, statement or return is
required to be filed by the Indemnified Party with respect to any Tax
that is subject to indemnification under the Indemnity, the
Construction Supervisor will (1) notify the Indemnified Party in
writing of such requirement not later than 30 days prior to the date
such report, statement or return is required to be filed (determined
without regard to extensions) and (2) either (y) unless directed by
the Indemnified Party otherwise, if permitted by applicable law,
prepare such report, statement or return for filing by the
Construction Supervisor, send a copy of such report, statement or
return to the Indemnified Party and timely file such report, statement
or return with the appropriate taxing authority, or (z) in all other
cases, prepare and furnish to such the Indemnified Party not later
than 30 days prior to the date such report, statement or return is
required to be filed (determined without regard to extensions) a
proposed form of such report, statement or return for filing by the
Indemnified Party.
Each of the Indemnified Party and the Construction
Supervisor, as the case may be, will timely provide the other, at the
Construction Supervisor's expense, with all information in its
possession that the other party may reasonably require and request to
satisfy its tax filing obligations. the Construction Supervisor
(A) shall hold each Indemnified Party harmless on an After-Tax Basis
from and against all liabilities arising out of any insufficiency or
inaccuracy of any report, statement or return and (B) shall indemnify
each Indemnified Party for all liabilities, costs and expenses
(including reasonable attorneys', accountants' and other professional
fees for tax related filings or reviews) of such Indemnified Party
with respect to all returns, reports or statements to which this
Section 2.4 applies.
EXHIBIT 10.321
=========================================================================
Date 1 February 2000
RBF EXPLORATION CO.
as Seller
- and -
BTM CAPITAL CORPORATION
as Purchaser
EQUIPMENT SALE AND FUNDING AGREEMENT
in respect of
Hyundai Hull No. HRBS6 (also described as RBS8M and tbn "Deepwater Nautilus")
and certain equipment to be purchased
and supplied for its construction
and use as a drilling rig
WATSON, FARLEY & WILLIAMS
London
==========================================================================
INDEX
Clause Page
1 DEFINITIONS AND INTERPRETATION 1
2 REPRESENTATIONS AND WARRANTIES 5
3 SALE OF THE EQUIPMENT 6
4 EQUIPMENT PURCHASE PRICE 7
5 HULL LOAN 8
6 COMMON PROVISIONS 10
7 INTEREST 10
8 COMPENSATION AND WARRANTY RIGHTS 11
9 SALES AGENCY 11
10 PUT OPTION 12
11 PAYMENTS 13
12 MISCELLANEOUS 13
13 NOTICES 14
14 GOVERNING LAW AND JURISDICTION 14
THIS AGREEMENT is made on 1 February 2000
BETWEEN:
(1) RBF EXPLORATION CO. of 901 Threadneedle, Suite 200, Houston, Texas
770079, USA (the "Seller") and
(2) BTM CAPITAL CORPORATION of 125 Summer Street, Boston, Massachusetts
02110, USA (the "Purchaser")
BACKGROUND:
(A) By the Construction Contract the Builders agreed to design, build,
launch, complete and deliver to the Seller, and the Seller agreed to
purchase from the Builders, take delivery of and pay for, the Vessel.
(B) By the Construction Novation Agreement the Purchaser has agreed to
assume and discharge with effect from the Effective Time all the
rights, obligations and liabilities of the Seller under the
Construction Contract and be substituted as "OWNER" under the
Construction Contract.
(C) Pursuant to Article XVI (OWNER'S Supplies) of the Construction
Contract the Seller has supplied and delivered to the Builders the
Equipment (being the "OWNER'S Supplies" referred to in the
Construction Contract), title to which remains at all times with the
"OWNER" as prescribed by the Construction Contract.
(D) This Agreement sets out the terms upon which the Seller agrees:
(i) to transfer title and risk to and in the Equipment to the
Purchaser;
(ii) to lend money to finance the Purchaser's acquisition of the
Vessel under the Construction Contract; and
(iii) to provide credit to the Purchaser to assist it in its
purchase of the Equipment.
IT IS AGREED as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 Definitions. In this Agreement unless the context otherwise requires
the following words and expressions shall have the following meanings:
"Amendment to Note Purchase Agreement" has the meaning given in the
Supplemental Indenture;
"Builders Refund Date" means, following the rescission or deemed
rescission of the Construction Contract pursuant to Article X
(Rescission by Owner), Article XI (Owner's Default) or paragraph 2(b)
of Article XVII (Insurance) of the Construction Contract, the date
upon which the Purchaser (or the Indenture Trustee) first receives any
amount payable by the Builders or the Refund Guarantor in accordance
with those provisions (or, as the case may be, after an arbitral
award);
"Construction Contract" means the construction and sale contract dated
14 November 1997 and made between (i) the Seller (in its former name
RB Exploration Co.) and (ii) the Builders in respect of the Vessel, as
amended, supplemented or modified to date and, from the Effective Time
(or as the context may require), as novated, transferred and assumed
and amended by the Construction Novation Agreement and as from time to
time further amended, supplemented or modified;
"Construction Novation Agreement" means an agreement dated the same
date as this Agreement and made between the Builders, the Seller and
the Purchaser for the transfer to the Purchaser of all the Seller's
rights, obligations and liabilities under the Construction Contract;
"Construction Supervisor" means RBF Exploration II Inc., a Nevada
corporation;
"Construction Supervisory Agreement" means an agreement dated the
same date as this Agreement and made or to be made between (1) the
Purchaser, as owner, (2) the Seller and (3) the Construction
Supervisor, whereby the Construction Supervisor is appointed as agent
to supervise the design and construction of the Vessel in accordance
with the Construction Contract, the acquisition and assembly of the
Equipment to be used thereon, and the delivery of the Vessel to SDDI
in accordance with the SDDI Contract;
"Contract Price" has the meaning given in the Construction Contract;
"Default Interest" means default interest as referred to in Clause
7.3;
"Delay Compensation Rights" means all rights in relation to those
certain periodic payments in the amount of $150,000 per day which may
become payable to the Purchaser by the Construction Supervisor in
accordance with Section 4.1, 4.2 and/or 6.1 of the Construction
Supervisory Agreement;
"Delivery" means the delivery of the Vessel by the Builders under the
Construction Contract;
"Effective Time" means the date and time specified as such in the
Effective Time Notice;
"Effective Time Notice" means the notice to be signed and exchanged
between the Seller, the Purchaser and the Builders in accordance with
clause 3.4 of the Construction Novation Agreement in the form set out
in schedule A to that agreement;
"Encumbrance" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment, trust arrangement or security
interest or other encumbrance of any kind securing any obligation of
any person or any type of preferential arrangement (including without
limitation title transfer and/or retention arrangements having a
similar effect);
"Equipment" means all Owner's Supplies, supplied or to be supplied
and delivered to the Builders pursuant to Article XVI of the
Construction Contract;
"Equipment Purchase Price" has the meaning given in Clause 3.1;
"Excepted Liens" has the meaning given in the Trust Indenture;
"Financiers" means the Indenture Trustee and any other approved
person providing finance or credit support for the Seller in
connection with the construction and acquisition of the Vessel;
"Financiers' and Surety Consent" means all consents to this Agreement
required to be obtained by the Seller under or in connection with the
Trust Indenture (and related security arrangements) including, without
limitation, the consent of the Surety and the consent given under
Article 2 of the Supplemental Indenture;
"Further Novation Date" means, if applicable, the date of further
novation of the Construction Contract and transfer of the Equipment to
the Replacement Purchaser in accordance with clause 8 of the
Construction Novation Agreement;
"Hull Loan" has the meaning given in Clause 5.1;
"Insurances" means the insurances effected or to be effected by the
Builders in accordance with Article XVII of the Construction Contract;
"Mortgagee Sale Date" means, if applicable, the date of completion of
any foreclosure sale of the Vessel by the Indenture Trustee as
mortgagee of the Vessel;
"Note Purchase Agreements" and "Notes" have the meanings given in the
Trust Indenture;
"On-Sale Date" means, if applicable, in relation to a sale of the
Vessel contemplated by Clause 9, the date upon which the proceeds of
sale (or, in the case of a sale on hire purchase terms, the proceeds
of the first instalment of hire) are paid by the new purchaser of the
Vessel;
"OWNER" has the meaning given in the Construction Contract;
"Payment Date" has the meaning given in Clause 4.2;
"Put Date" means, if applicable, the date specified in the Put Option
Notice for transfer of title to the Vessel pursuant to Clause 10.4;
"Put Option Notice" means a notice in the form of the Schedule;
"Refund Guarantor" has the meaning given in the Construction Novation
Agreement;
"Replacement Purchaser" has the meaning given in the Construction
Novation Agreement;
"SDDI" means Shell Deepwater Development Inc., a Delaware corporation;
"SDDI Contract" means the offshore daywork drilling contract dated 12
August 1998 and made between the Seller and SDDI, as amended,
supplemented or otherwise modified from time to time with the consent
of the Construction Supervisor, the Indenture Trustee and the Surety;
"Supervisor" means such person as the "OWNER" has appointed or may
from time to time appoint as Supervisor for the purposes of the
Construction Contract;
"Total Loss Proceeds Date" means, if applicable, following the total
loss or compulsory acquisition of the Vessel, the date upon which the
Indenture Trustee (or the Purchaser) receives all or part of the
insurance proceeds or requisition compensation relating to such loss
or acquisition;
"Transaction Documents" means the Construction Novation Agreement,
the Construction Supervisory Agreement, this Agreement, the Note
Purchase Agreements, the Amendment to Note Purchase Agreement, the
Trust Indenture, the Supplemental Indenture and all documents executed
or to be executed pursuant to or in connection with those agreements;
"Vessel" means the semi submersible drilling unit more particularly
described in the Construction Contract and identified as Hyundai Hull
No. HRBS6 (and also described by the Seller as RBS8M and tbn
"Deepwater Nautilus"); and
"Warranty Rights" means:
(a) all rights, including (without limitation) the benefit of article
IX (Warranty of Quality) of the Construction Contract, which may
from time to time exist against the Builders in respect of the
condition, design or construction of any part of the Vessel; and
(b) the benefit of all vendor or supplier warranties relating to the
Equipment.
1.2 CSA definitions. In addition to the definitions set out in Clause
1.1, in this Agreement unless the context otherwise requires the
following words and expressions shall have the meanings given in the
Construction Supervisory Agreement:
"Builders"
"Indenture Trustee"
"Note Holder(s)"
"Owner Lien(s)"
"Owner's Supplies"
"SDDI"
"SDDI Contract"
"Supplemental Indenture"
"Surety"
"Termination Date"
"Trust Indenture".
1.3 Clause references. References in this Agreement to Clauses and the
Schedule are, unless otherwise specified, references to clauses of and
the schedule to this Agreement.
1.4 References to "persons" and "successors".
(a) References to "person" or "persons" or to words importing persons
include, without limitation, individuals, firms, corporations,
government agencies, committees, departments, authorities and other
bodies, incorporated or unincorporated, whether having distinct legal
personality or not; and, unless otherwise specified, their respective
successors.
(b) References to a "successor" include any person who is entitled (by
assignment, novation, merger or otherwise) to any other person's
rights under this Agreement (or any interest in those rights) or who,
as administrator, liquidator or otherwise, is entitled to exercise
those rights; and in particular references to a successor include a
person to whom those rights (or any interest in those rights) are
transferred or pass as a result of a merger, division, reconstruction
or other reorganisation of it or any other person.
1.5 Clause headings. Clause and sub-clause headings are for ease of
reference only and shall not affect the interpretation of this
Agreement.
2 REPRESENTATIONS AND WARRANTIES
2.1 Seller's representations and warranties. The Seller represents and
warrants to the Purchaser that the following statements are, at the
date of this Agreement, true and accurate:
(a) the Seller is duly incorporated under the laws of Nevada and has full
power and authority to enter into and perform its obligations under
this Agreement and to consummate the transactions contemplated by this
Agreement;
(b) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement have
been duly authorised by all necessary corporate action on the part of
the Seller and do not contravene any law, regulation or order binding
on the Seller or any of its assets or its constitutional documents;
(c) subject to the Financiers' and Surety Consent, neither the execution,
delivery and performance by the Seller of this Agreement, nor the
consummation of any of the transactions by the Seller contemplated by
this Agreement, require the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action in
respect of, any governmental authority or agency or any other person,
except such as have been obtained and are in full force and effect (or
which are only required to be obtained after the date of this
Agreement in the ordinary course of the operation or employment of the
Vessel);
(d) this Agreement constitutes legal, valid and binding obligations and
liabilities of the Seller, except as enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganisation, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or law);
(e) the Seller is the legal and beneficial owner of the Equipment;
(f) (subject to the Financiers' and Surety Consent) at the Effective Time
the Equipment will be free from any Encumbrances whatsoever (save for
Excepted Liens); and
(g) the Seller has supplied and delivered to the Builders, and the
Builders have accepted, all of the Equipment in accordance with the
provision of Article XVI (OWNER'S Supplies) of the Construction
Contract and the Equipment satisfies the requirements of such
provisions.
2.2 Purchaser's representations and warranties. The Purchaser represents
and warrants to the Seller that the following statements are, at the
date of this Agreement, true and accurate:
(a) the Purchaser is duly incorporated under the laws of Delaware and has
full power and authority to enter into and perform its obligations
under this Agreement and to consummate the transactions contemplated
by this Agreement;
(b) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement have
been duly authorised by all such corporate action on the part of the
Purchaser as may be necessary under the internal laws of the State of
Delaware and the State of New York and do not contravene any such
applicable internal law, order or regulation binding on the Purchaser
or any of its assets or its constitutional documents; and this
Agreement has been so duly authorised, executed and delivered by the
Purchaser; and
(c) neither the execution, delivery and performance by the Purchaser of
this Agreement, nor the consummation of any of the transactions by the
Purchaser contemplated by this Agreement, require the consent or
approval of, the giving of notice to, the registration with, or the
taking of any other action in respect of, any governmental authority
or agency or any other person, except such as have been obtained and
are in full force and effect (or which are required in connection with
the registered ownership or operation of the Vessel, in respect of
which the Purchaser has duly executed such documents and instruments
as the Seller has provided to it).
2.3 Survival and repetition. The representations and warranties given in
this Clause 2 shall survive the execution of this Agreement and shall
be deemed to be repeated at the Effective Time.
3 SALE OF THE EQUIPMENT
3.1 Sale of Equipment. The Seller and the Purchaser agree that at the
Effective Time the Seller shall sell and the Purchaser shall buy all
the Seller's right, title and interest in and to the Equipment for the
fixed amount of US$147,000,000 (the "Equipment Purchase Price"),
payable by the Purchaser in accordance with Clause 4.
3.2 Title and risk. At the Effective Time the title to the Equipment (and
the benefit of all vendor or supplier warranties relating to the
Equipment, to the extent that they are assignable) shall be
transferred to and vest in the Purchaser, and as between the Seller
and the Purchaser all risk in the Equipment shall pass to the
Purchaser.
3.3 Disclaimer. The Purchaser acknowledges and agrees that:
(a) (save as and to the extent expressly represented and warranted under
Clause 2.1) the Seller has not made or given and shall not be deemed
to have made or given any term, condition, representation, warranty or
covenant, express or implied (whether statutory or otherwise), as to
the suitability, capacity, age, state, value, quality, durability,
condition, appearance, safety, design, construction, operation,
performance, description, merchantability, fitness for use or purpose
or any particular use or purpose or suitability of the Equipment or
any part thereof, as to the absence of latent or other defects,
whether or not discoverable, as to the absence of any infringement of
any patent, trademark or copyright, or as to title to the Equipment or
any part thereof or any other representation or warranty whatsoever,
express or implied, with respect to the Equipment or any part thereof,
all of which are hereby excluded; and
(b) (save as aforesaid) the Purchaser is buying the Equipment on an "as
is, where is, and with all faults" basis and that the signing and
delivery by the Purchaser of the Effective Time Notice in accordance
with clause 3.4 of the Construction Novation Agreement shall be
conclusive evidence as between the Seller and the Purchaser that the
Equipment is complete, in good order and condition, of satisfactory
quality, fit for any purpose for which it may be intended or required,
suitable in all respects and in every way satisfactory.
3.4 Further assurances. The Seller agrees and undertakes to execute all
such documents and do all such actions and things as may be reasonably
required to give effect to the transfer of the Equipment to the
Purchaser, and further (through the Construction Supervisor) to
provide all such assistance as may be reasonably required to enable
the Purchaser, as "OWNER", to perform its obligations under paragraphs
1(b) and 4 of Article XVI (OWNER'S Supplies) of the Construction
Contract, in each case at the expense of the Seller.
4 EQUIPMENT PURCHASE PRICE
4.1 Credit agreement. The Equipment Purchase Price shall remain
outstanding until the Payment Date whereupon (subject to Clause 4.3
and 6) it shall become immediately due and payable.
4.2 Payment Date. The "Payment Date" shall be the earliest of the
following to occur:
(a) the Further Novation Date;
(b) the Builders Refund Date;
(c) the Mortgagee Sale Date;
(d) the Put Date;
(e) the On-Sale Date; and
(f) the Total Loss Proceeds Date.
4.3 Limited recourse to Purchaser. The Seller agrees hereby to limit its
recourse against the Purchaser, in respect of the Purchaser's
obligation and liability to pay the Equipment Purchase Price and
accrued interest in respect thereof (except Default Interest) (for the
purposes of this Clause 4, the "Purchaser's Liability"), in the manner
and subject to the terms and conditions set out in this Clause 4.3 and
Clauses 6 and 7. If the Payment Date is:
(a) the Further Novation Date, the Purchaser's Liability shall be fully
satisfied and discharged by the vesting of title to and transfer of
the Equipment in and to the Replacement Purchaser in accordance with
the provisions of clause 8 of the Construction Novation Agreement;
(b) the Builders Refund Date, the Purchaser's Liability shall be paid out
of, and recoverable by the Seller only from and to the extent of, all
amounts received or recovered (whether before or after arbitral award)
by the Purchaser (or by the Indenture Trustee) from the Builders by
way of refund or application of insurance proceeds under:
(i) paragraph 2 of Article X (Rescission by Owner); or
(ii) paragraph 4 of Article XVI (Owner's Supplies); or
(iii) paragraph 3(b) of Article XI (Owner's Default); or
(iv) paragraph 2(b) of Article XVII (Insurance),
of the Construction Contract;
(c) the Mortgagee Sale Date, the Purchaser's Liability shall be paid out
of, and recoverable by the Seller only from and to the extent of, the
proceeds of sale of the Vessel;
(d) the Put Date, the Purchaser's Liability shall be fully satisfied and
discharged by the vesting of title to and transfer of the Vessel in
and to the Seller in accordance with the provisions of Clause 10;
(e) the On-Sale Date, the Purchaser's Liability shall be paid out of, and
recoverable by the Seller only from and to the extent of, the proceeds
of sale of the Vessel;
(f) the Total Loss Proceeds Date, the Purchaser's Liability shall be paid
out of, and recoverable by the Seller only from and to the extent of,
the proceeds of the Insurances or requisition compensation payable to
the Purchaser (or to the Indenture Trustee) in respect of the total
loss or compulsory acquisition of the Vessel.
5 HULL LOAN
5.1 Credit agreement. The Seller agrees to provide to the Purchaser a
credit facility in several advances ( each an "Advance" and together
the "Hull Loan") to finance:
(a) the amount payable by the Purchaser to the Seller under clause 4.3 of
the Construction Novation Agreement;
(b) the final instalment of the Contract Price (as defined in the
Construction Contract) in the amount of US$198,000,000 (adjusted
upwards or downward in accordance with Article III of the Construction
Contract, if applicable) payable to the Builders on the date of
Delivery of the Vessel pursuant to paragraphs 4(e) and 5(c) of Article
II of the Construction Contract;
(c) all other amounts, if any, payable by the OWNER to the Builders under
or in connection with the Construction Contract;
(d) all amounts payable by the Purchaser from time to time (as directed by
the Construction Supervisor) in respect of the Vessel's insurances;
and
(e) all amounts payable by the Purchaser from time to time to the
Construction Supervisor pursuant to, and in respect of its services
under or arising out of, the Construction Supervisory Agreement.
5.2 Application of Advances. The Advances shall be made as follows:
(a) the Advance in respect of the amount referred to in Clause 5.1(a)
shall be deemed to be borrowed and applied as contemplated by the
Construction Novation Agreement at the Effective Time;
(b) the Advance or Advances in respect of the amounts referred to in
paragraphs (b) and (c) of Clause 5.1 shall be made and applied
(subject always to the relevant provisions of the Trust
Indenture) by direct payment to the Builders as and when such
amounts become due and payable under the Construction Contract;
(c) the Advances in respect of the amounts referred to in paragraphs
(d) and (e) of Clause 5.1 shall be made and applied (subject as
aforesaid) by payment as the Construction Supervisor shall
direct.
5.3 Authorisation of direct payments. The Purchaser hereby authorises the
Seller to effect such direct payment, which payment shall be deemed,
in each case, to constitute the borrowing by the Purchaser of the
relevant Advance.
5.4 Repayment. The Hull Loan shall, to the extent advanced and subject to
Clause 5.5, be repayable on the Payment Date.
5.5 Limited recourse to Purchaser. The Seller agrees hereby to limit its
recourse against the Purchaser, in respect of the Purchaser's
obligation and liability to repay the Hull Loan and accrued interest
in respect thereof (except Default Interest) (for the purposes of this
Clause 5, the "Purchaser's Liability") in the manner and subject to
the terms and conditions set out in this Clause 5.5 and Clauses 6 and
7. If the Payment Date is:
(a) the Further Novation Date, the Purchaser's Liability shall be fully
satisfied and discharged by the completion of the further novation of
the Construction Contract by the Purchaser to the Replacement
Purchaser in accordance with the provisions of Clause 8 of the
Construction Novation Agreement;
(b) the Builders Refund Date, the Purchaser's Liability shall be repaid
out of, and recoverable by the Seller only from and to the extent of,
all amounts received or recovered (whether before or after arbitral
award) by the Purchaser (or by the Indenture Trustee) from the
Builders or the Refund Guarantor by way of refund or application of
insurance proceeds under the provisions of the Construction Contract
referred to in paragraphs (i) to (iv) of Clause 4.3(b);
(c) the Mortgagee Sale Date, the provisions of Clause 4.3(c) shall apply
mutatis mutandis (with Purchaser's Liability construed as defined in
this Clause 5.5);
(d) the Put Date, the provisions of Clause 4.3(d) shall apply mutatis
mutandis (with Purchaser's Liability construed as defined in this
Clause 5.5);
(e) the On-Sale Date, the provisions of Clause 4.3(e) shall apply mutatis
mutandis (with Purchaser's Liability construed as defined in this
Clause 5.5);
(f) the Total Loss Proceeds Date, the provisions of Clause 4.3(f) shall
apply mutatis mutandis (with Purchaser's Liability construed as
defined in this Clause 5.5).
6 COMMON PROVISIONS
6.1 Pro tanto satisfaction. If and to the extent that any amount in
respect of which the Seller is entitled to have recourse against the
Purchaser under the provisions of Clauses 4.3 and 5.5 is received by
the Indenture Trustee and applied in accordance with the provisions of
the Trust Indenture (as amended by the Supplemental Indenture), such
application shall discharge in the same amount the aggregate
Purchaser's Liability under those Clauses 4.3 and 5.5.
6.2 Limited recourse. Notwithstanding the provisions of Clauses 4 and 5,
the Purchaser shall only be responsible to the Seller under this
Agreement to the extent provided for in Article 6 of the Supplemental
Indenture and those provisions are hereby incorporated into this
Agreement to that extent and shall be read and take effect as one with
the Agreement.
6.3 Commission. Any and all amounts received or recovered by or for the
account of the Purchaser in respect of the sale, total loss,
compulsory acquisition, transfer or other disposal of the Vessel shall
if and to the extent that such amounts exceed the aggregate
Purchaser's Liability under Clauses 4 and 5 (and subject to the terms
of the Trust Indenture (as amended by the Supplemental Indenture)) be
paid over to the Seller for its own account as a sales or claims
handling commission.
7 INTEREST
7.1 Interest. Subject to the provisions of this Agreement, interest on
the outstanding balance of the Hull Loan and the Equipment Purchase
Price shall accrue from the date of the Effective Time until the date
upon which the aggregate Purchaser's Liability under Clauses 4 and 5
is fully satisfied and discharged (or deemed to be so) in accordance
with the provisions of those Clauses. Accrued interest shall become
due and payable on the Payment Date and on a daily basis thereafter.
7.2 Normal rate of interest. The rate of interest on the Hull Loan and
the Equipment Purchase Price shall be equal to the rate per annum
applicable under the Notes (irrespective of the Seller's actual source
of funding of the Hull Loan and the Equipment Purchase Price or any
part thereof).
7.3 Default interest. If any amount to which the Seller is entitled to be
paid under Clause 4.3 or 5.5 is actually received by the Purchaser it
shall be paid over promptly to the Indenture Trustee or the Seller (as
applicable) in or towards satisfaction of the Purchaser's obligation
and liability to pay or repay the Equipment Purchase Price and the
Hull Loan. If any such amount is actually received and not paid over
within 2 New York banking days of written request by the Seller (or
Indenture Trustee), interest on such amount shall accrue on a daily
basis (both before and after judgement) from the date of such request
at a rate per annum equal to 2% over the rate applicable under Clause
7.2 and shall be payable by the Purchaser on demand (and such interest
shall be compounded monthly if and to the extent unpaid). For the
avoidance of doubt, Clause 6.2 shall apply to the Purchaser's
liability arising under this Clause 7.3.
8 COMPENSATION AND WARRANTY RIGHTS
8.1 Assignment of Delay Compensation Rights and Warranty Rights. In
acknowledgement of the Seller's commercial risk (as contractor under
the SDDI Contract), including in respect of delay or defective
condition of the Vessel, the Purchaser hereby assigns and agrees to
assign to the Seller, at the cost and expense of the Seller, any Delay
Compensation Rights and Warranty Rights which are vested or will vest
in the Purchaser to the extent that they are assignable.
9 SALES AGENCY
9.1 Sales agency. The Seller is hereby appointed by the Purchaser as its
sole and exclusive sales and marketing agent for the Vessel. Such
agency shall commence at the Effective Time and terminate only upon
the earliest of the following to occur (and shall otherwise be
irrevocable):
(a) delivery of a Put Option Notice pursuant to Clause 10;
(b) upon notice being given by the Purchaser to the Seller that it has
delivered a Further Novation Notice pursuant to Clause 8.2 of the
Construction Novation Agreement;
(c) termination of the sales agency by mutual agreement (with the prior
written consent of the Construction Supervisor, the Financiers and the
Surety);
9.2 Purpose. It is agreed that a purpose of the agency provisions in this
Clause 9 is to secure and protect the rights and interest of the
Seller in ensuring that the obligations and liabilities of the
Purchaser relating to the Vessel (including the Equipment) are
performed and discharged.
9.3 Agency terms. The Seller shall not be authorised to sell the Vessel
or any part of it (to the extent that the Purchaser holds title to the
Vessel or may acquire it pursuant to the Construction Contract and
this Agreement) or to approve or execute on behalf of the Purchaser
any document relating to the sale of the Vessel, but the Purchaser
agrees that it shall, at the Seller's cost and expense and upon
reasonable notice execute such agreement as may be requested by the
Seller or the on-purchaser for the sale of the Vessel, provided that
the same complies with the provisions of Clause 9.4 (and with the
terms of the Trust Indenture).
9.4 Sale terms. Any sale arranged by the Seller pursuant to Clause 9.1
shall comply with the following conditions:
(a) the sale may be absolute or on conditional sale or hire purchase terms
and the proceeds of such sale shall be applied as permitted by the
Trust Indenture;
(b) the sale shall be made upon terms which do not expose the Purchaser to
any liability which it would not have had but for the execution of the
relevant sale documents (save for liability for breach of the warranty
set out in this Clause 9.4(b)) and otherwise without any
representation, recourse or warranty whatsoever to or on the part of
the Purchaser, other than a warranty that the Purchaser shall pass
such title to the Vessel as the Purchaser has acquired, free and clear
of all Owner Liens;
(c) the sale shall be on an "as is, where is and with all faults" basis
and governed by the laws of New York save that the Purchaser hereby
undertakes upon any such sale to deliver and render to the on-
purchaser all such documents required for the re-registration of title
to the Vessel as the Seller shall furnish to the Purchaser for
execution; and
(d) such other terms as the Seller may determine is its sole discretion
not inconsistent with the terms set out in (a) to (c) above.
10 PUT OPTION
10.1 Put Option. The Seller hereby grants to the Purchaser an option (the
"Put Option") to sell all of the Purchaser's interest in the Vessel to
the Seller upon the terms set out in this Clause 10.
10.2 Exercise. The Put Option shall be exercisable at any time after the
occurrence of any of the events specified in Clause 10.3 by the
Purchaser delivering to the Seller a Put Option Notice specifying a
date (the "Put Date") not less than 5 days (unless the Seller consents
to a shorter period) and not more than 30 days after the date of such
notice upon which the transfer of title under Clause 10.4 is to be
effected. Such notice once given shall be irrevocable without the
consent of the Seller. For the avoidance of doubt, the exercise or
non-exercise of the Put Option shall, as between the Purchaser and the
Seller, be entirely at the discretion of the Purchaser.
10.3 Option trigger events. The events referred to in Clause 10.2 are:
(a) the Seller, as sales agent, notifies the Purchaser in writing that it
is unwilling or unable to arrange a sale of the Vessel as contemplated
by Clause 9; or
(b) the occurrence of the Termination Date; or
(c) sale of the Vessel, as contemplated by Clause 9, does not occur by 30
June 2000; or
(d) the Construction Supervisor breaches, or fails to perform or
discharge, in any material respect its indemnity obligations under the
Construction Supervisory Agreement;
(e) the failure of the Noteholders to provide the consent referred to in
Section 4.01 of the Supplemental Indenture; or
(f) an Indenture Event of Default under the Trust Indenture caused by or
attributable to the Seller as the Issuer thereunder shall have been
declared by the Indenture Trustee or the Note Holders and either (i)
the Notes have been accelerated or (ii) the Indenture Event of Default
has continued uncured and unwaived for a period of 60 days.
10.4 Transfer of title. A sale pursuant to the exercise of the Put Option
shall be effected by transfer of title to the Vessel to the Seller on
an "as is, where is and risk all faults" basis and otherwise without
any representation, recourse or warranty whatsoever to or on the part
of the Purchaser, other than a warranty that the Purchaser shall pass
such title to the Vessel as the Purchaser has acquired, free and clear
of all Owner Liens, provided that non-compliance with the requirement
to pass title free of Owner Liens shall not affect the Purchaser's
right to exercise the Put Option, subject only to whatever claims the
Seller may have against the Purchaser by reason of such non-
compliance. The Seller and the Purchaser shall execute all such
documents as may be required to give effect to such sale and transfer,
provided that the Purchaser's obligations in this regard shall be to
execute and deliver only such documents and instruments as the Seller
or the Indenture Trustee shall furnish to the Purchaser for signature
and to do only such other things as the Seller or the Indenture
Trustee shall direct as being necessary to accomplish such sale and
transfer.
10.5 Option consideration. In consideration of the sale and transfer of
the Vessel to the Seller in accordance with this Clause 10, the Seller
shall, and shall be deemed hereby to (with effect from the completion
of the sale and subject to the Purchaser's performance of its
obligations under Clause 10.4), release the Purchaser from all its
liabilities and obligations under this Agreement (including, without
limitation, in respect of the Purchaser's Liability under Clauses 4
and 5), other than its warranty contemplated by Clause 10.4.
11 PAYMENTS
11.1 Payments. All payments to be made by the Purchaser to the Seller
under this Agreement shall be made to the Collection Account (as
defined in the Trust Indenture) in US dollars in immediately available
funds and without set-off, counterclaim or deduction of any kind
whatsoever, save for any withholding or other deduction which the
Seller is required to make by applicable law.
12 MISCELLANEOUS
12.1 Counterparts. This Agreement may be executed in several counterparts
and any single counterpart or set of counterparts signed, in either
case, by all of the parties thereto shall be deemed to be an original,
and all counterparts when taken together shall constitute one and the
same instrument.
12.2 Amendments. This Agreement may be amended only by an instrument in
writing signed by all of the parties to this Agreement.
12.3 Waiver. Any waiver of any right, power or privilege by any party to
this Agreement shall be in writing signed by such party. No failure
or delay by any party hereto to exercise any right, power or privilege
under this Agreement shall operate as a waiver of that right, power or
privilege nor shall any single or partial exercise of that right,
power or privilege preclude any further exercise of that right, power
or privilege or of any other right, power or privilege. The rights
and remedies provided in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
12.4 Assignment. Except as contemplated by Clause 12.5 the Purchaser shall
not be entitled to assign or transfer its obligations under this
Agreement without the prior written consent of the Seller and the
Indenture Trustee.
12.5 Collateral assignment. The Seller hereby consents to the collateral
assignment by the Purchaser (or any assignee of the Purchaser
permitted under Clause 12.4) in favour of the Indenture Trustee of all
or part of the Purchaser's rights under or arising out of this
Agreement.
13 NOTICES
13.1 Notices etc. Every notice, request, demand or other communication
under this Agreement shall:
(a) be in the English language and in writing delivered personally or by
prepaid first class airmail letter or fax (confirmed in the case of a
fax by prepaid first class airmail letter sent within 24 hours of
despatch but so that the non-receipt of such confirmation shall not
affect in any way the validity of the fax in question);
(b) be deemed to have been received, in the case of a fax, when a
confirmation by the recipient of receipt of such fax is despatched
(provided that, in the case of a fax transmission, if the date of
despatch is not a business day in the country of the addressee it
shall be deemed to have been received at the opening of business on
the next such working day in that country), and in the case of a
letter, when delivered personally or if put in the post, when actually
received;
(c) be sent:
(i) to the Seller to:
RBF Exploration Co.
901 Threadneedle
Houston
Texas 77079-2902
USA
Fax: (1) (281) 496 0285
Attention: Project Director
(ii) to the Purchaser to:
BTM Capital Corporation125 Summer Street
Boston, MA 02110
Fax:
Attention: Senior Vice President - Administration
or in each case to such other person or address or fax number as one
party may notify in writing to the other parties hereto.
14 GOVERNING LAW AND JURISDICTION
14.1 Law. This Agreement (including, but not limited to, its validity and
enforceability) shall be governed by, and construed in accordance
with, the laws of the State of New York other than conflict of law
rules thereof that would require the application of the laws of a
jurisdiction other than such State.
14.2 Jurisdiction. Any legal action or proceeding with respect to this
Agreement may be brought in the Courts of the State of New York in New
York County or of the United States of America for the Southern
District of New York, and, by execution and delivery of this
Agreement, each of the parties to this Agreement hereby accepts for
itself and (to the extent permitted by law) in respect of its
property, generally and unconditionally, the jurisdiction of the
aforesaid Courts. Each of the parties to this Agreement hereby
irrevocably waives any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of forum non
conveniens, which it may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions. This
submission to jurisdiction is non-exclusive and does not preclude the
parties from obtaining jurisdiction over the other parties in any
Court otherwise having jurisdiction.
14.3 Non-petition covenant. The Purchaser hereby agrees that until the
368th day following payment in full of any and all Notes, the
Purchaser will not institute, and will not join with others in
instituting, any involuntary bankruptcy or analogous proceeding
against the Seller under any bankruptcy, reorganisation, receivership
or similar law, domestic or foreign, as now or hereafter in effect.
This Agreement has been executed by the parties to this Agreement on the
date specified at the beginning of this Agreement.
Signed by )
)
for and on behalf of )
RBF EXPLORATION CO. )
in the presence of: )
Signed by )
)
for and on behalf of )
BTM CAPITAL CORPORATION )
in the presence of: )
SCHEDULE
FORM OF PUT OPTION NOTICE
To: RBF Exploration Co.
From: BTM Capital Corporation
Date [] 2000
Dear Sirs
re: Equipment Sale and Funding Agreement dated [] January 2000 (the
"Agreement")
1. We refer to the Agreement.
2. This Notice is the Put Option Notice and we hereby exercise our option
contained in clause 10 of the Agreement.
3. The Put Date shall be [] (or such other date within the period from []
to [] as we may mutually agree).
4. This Notice shall be governed by and construed in accordance with New
York law.
Yours faithfully
______________________________
for and on behalf of
BTM CAPITAL CORPORATION
EXHIBIT 10.322
==========================================================================
Dated 1 February 2000
HYUNDAI CORPORATION and HYUNDAI HEAVY INDUSTRIES CO., LTD.
as Builders
- and -
RBF EXPLORATION CO.
as Original Purchaser
- and -
BTM CAPITAL CORPORATION
as New Purchaser
-------------------------
NOVATION AGREEMENT
-------------------------
in respect of the construction and sale contract
for Hyundai Hull No. H RBS6
(also described as RBS8M and tbn "Deepwater
Nautilus")
WATSON, FARLEY & WILLIAMS
London
==========================================================================
INDEX
Clause Page
1 DEFINITIONS AND INTERPRETATION 1
2 REPRESENTATIONS AND WARRANTIES 4
3 NOVATION 6
4 PAYMENTS 7
5 INSURANCES 8
6 REFUND GUARANTEE 8
7 SALE OF OWNER's SUPPLIES 8
8 FURTHER NOVATION 9
9 AMENDMENT TO CONSTRUCTION CONTRACT 10
10 ASSIGNMENT 10
11 MISCELLANEOUS 10
12 NOTICES 11
13 GOVERNING LAW AND JURISDICTION 12
THIS AGREEMENT is made on 1 February 2000
BETWEEN
(1) HYUNDAI CORPORATION of 140-2, Kye-Dong, Chongro-Ku, Seoul, Korea and
HYUNDAI HEAVY INDUSTRIES CO., LTD. of 1 Cheonha-Dong, Dong-Ku, Ulsan,
Korea (jointly and severally, the "Builders");
(2) RBF EXPLORATION CO. of 901 Threadneedle, Suite 200, Houston, Texas
77079, USA (the "Original Purchaser");
(3) BTM CAPITAL CORPORATION of 125 Summer Street, Boston, Massachusetts
02110, USA (the "New Purchaser").
BACKGROUND
(A) By the Construction Contract the Builders agreed to design, build,
launch, complete and deliver to the Original Purchaser, and the
Original Purchaser agreed to purchase from the Builders, take delivery
of and pay for the Vessel.
(B) Subject to and upon the terms and conditions of this Agreement, the
New Purchaser has agreed to assume all the rights and obligations of
the Original Purchaser under the Construction Contract and the
Builders are willing to agree to the substitution of the New Purchaser
in place of the Original Purchaser in relation to such rights and
obligations and to the release of the Original Purchaser in respect of
those rights and obligations.
(C) It is intended that the existing supervision arrangements in relation
to the construction of the Vessel will be maintained both before and
after the Effective Time.
(D) By a construction supervisory agreement dated the same date as this
Agreement the New Purchaser has appointed RBF Exploration II Inc., a
Nevada corporation affiliated to the Original Purchaser, as the New
Purchaser's sole and exclusive agent to continue to supervise the
design and construction of the Vessel in accordance with the
Construction Contract.
IT IS AGREED as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 Definitions. In this Agreement unless the context otherwise requires
the following words and expressions shall have the following meanings:
"Affiliate" has the meaning given in the Construction Contract.
"Construction Contract" means the construction and sale contract dated
14 November 1997 made between (i) the Original Purchaser (in its
former name RB Exploration Co.) and (ii) the Builders in respect of
the Vessel, as amended by letters dated 10 November 1999 and 1
February 2000 addressed by the Original Purchaser to the Builders and
as otherwise amended, supplemented or modified to date and, from the
Effective Time (or as the context may require), means that contract as
novated, transferred and assumed or amended by this Agreement and as
from time to time further amended, supplemented or modified.
"Construction Expenditure Amount" means an amount equal to the
aggregate of all amounts paid prior to the Effective Time by the
Original Purchaser to the Builders pursuant to Article II of the
Construction Contract in or towards payment of the Contract Price (as
defined therein).
"Delivery" means the delivery of the Vessel under the Construction
Contract.
"Effective Time" means the date and time (prior to Delivery) on which
the conditions specified in Clause 3.3 are satisfied as specified in
the Effective Time Notice.
"Effective Time Notice" means the notice to be signed and exchanged in
accordance with Clause 3.4 in the form set out in Schedule A.
"Equipment Sale and Funding Agreement" means an agreement dated the
same date as this Agreement and made between the Original Purchaser,
as seller, and the New Purchaser, as buyer, for the sale of the
topsides of the Vessel and any related equipment specified in that
agreement including all items of "OWNER's Supplies" supplied or to be
supplied to the Builders under the Construction Contract.
"Financiers' Consent" means all consents to this Agreement required to
be obtained by the Original Purchaser under or in connection with the
Trust Indenture (and related security arrangements) including, without
limitation, the consent given under Article 2 of the Supplemental
Indenture.
"Further Novation Notice" means the notice which may be served by the
New Purchaser and the Replacement Purchaser in accordance with Clause
8.2 in the form set out in Schedule B.
"Indenture Trustee" means Chase Bank of Texas, National Association,
acting as trustee for the Note Holders (as defined in the Trust
Indenture).
"Insurances" means the insurances effected or to be effected by the
Builders in accordance with Article XVII of the Construction Contract.
"Nomination Notice" means a notice which may be served by the New
Purchaser in accordance with Clause 8.1 in the form set out in
Schedule C.
"Novated Obligations" means all the obligations and liabilities
expressed to be imposed on the OWNER under the Construction Contract
and which obligations and liabilities shall, for the avoidance of
doubt, include (without limitation) obligations and liabilities
arising under or in respect of the Construction Contract at or before
the Effective Time which have not been performed or satisfied at or
before the Effective Time; and for the purpose of establishing or
determining the obligations or liabilities of the parties under this
Agreement and/or the Construction Contract, the acts or omissions, or
any series of acts or omissions, or course of conduct, of the Builders
or the Original Purchaser (including, without limitation, those acts
or omissions or series of acts or omissions, or course of conduct
creating or giving rise to a right of rescission or restitution,
misrepresentation, negligence or breach of warranty or duty) which
occurred or did not occur at or before the Effective Time whether in
accordance with, or in breach of, the Construction Contract, or
otherwise howsoever, may be relied upon by parties to this Agreement.
"Novated Rights" means all the rights expressed to be granted to the
OWNER under the Construction Contract and the Refund Guarantee and
which rights shall, for the avoidance of doubt, include (without
limitation) all rights, claims, actions and proceedings in respect of
the Construction Contract arising or, as the case may be, accrued or
commenced at or before the Effective Time; and for the purpose of
establishing or determining the rights or claims of the parties under
this Agreement and/or the Construction Contract, the acts or
omissions, or any series of acts or omissions, or course of conduct of
the Builders or the Original Purchaser (including, without limitation,
those acts or omissions, or series of acts or omissions, or course of
conduct creating or giving rise to a right of rescission or
restitution, misrepresentation, negligence or breach of warranty or
duty) which occurred or did not occur at or before the Effective Time
whether in accordance with, or in breach of, the Construction
Contract, or otherwise howsoever, may be relied upon by the parties to
this Agreement.
"OWNER" and "OWNER's Supplies" have the meanings given to those
expressions in the Construction Contract.
"Refund Guarantee" means the refund guarantee issued by the Refund
Guarantor to the Original Purchaser in accordance with Article X of
the Construction Contract, which will be assigned to the New Purchaser
or (following the issue of a Further Novation Notice) the Replacement
Purchaser pursuant to Clauses 3.1 or 8.
"Refund Guarantor" means Korea Exchange Bank.
"Replacement Purchaser" has the meaning given in Clause 8.
"Supervisor" means such person as the "OWNER" has appointed or may
from time to time appoint as Supervisor for the purposes of and as
referred to in the Construction Contract.
"Supplemental Indenture" means the supplemental indenture and
amendment dated the same date as this Agreement and made between (1)
the Original Purchaser, (2) the New Purchaser and (3) the Indenture
Trustee.
"Trust Indenture" means the trust indenture and security agreement
dated 12 August 1999 and made between (1) the Original Purchaser and
(2) the Indenture Trustee, as amended by the Supplemental Indenture
and as from time to time further amended, supplemented or modified.
"Vessel" means the semi submersible drilling unit more particularly
described in the Construction Contract and identified as Hyundai Hull
No. H RBS6 (and also described by the Original Purchaser as RBS8M and
tbn "Deepwater Nautilus").
1.2 Clause references. References in this Agreement to Clauses and
Schedules are, unless otherwise specified, references to clauses of
and schedules to this Agreement.
1.3 References to "persons" and "successors".
(a) References to "person" or "persons" or to words importing persons
include, without limitation, individuals, firms, corporations,
government agencies, committees, departments, authorities and other
bodies, incorporated or unincorporated, whether having distinct legal
personality or not; and, unless otherwise specified, their respective
successors.
(b) References to a "successor" include any person who is entitled (by
assignment, novation, merger or otherwise) to any other person's
rights under this Agreement (or any interest in those rights) or who,
as administrator, liquidator or otherwise, is entitled to exercise
those rights; and in particular references to a successor include a
person to whom those rights (or any interest in those rights) are
transferred or pass as a result of a merger, division, reconstruction
or other reorganisation of it or any other person).
1.4 Clause headings. Clause and sub-clause headings are for ease of
reference only and shall not affect the interpretation of this
Agreement.
2 REPRESENTATIONS AND WARRANTIES
2.1 Builders' representations and warranties. The Builders jointly and
severally represent and warrant to each of the other parties to this
Agreement that the following statements are, at the date of this
Agreement, true and accurate:
(a) each Builder is duly incorporated under the laws of Korea and has full
power and authority to enter into and perform its obligations and
discharge its liabilities under this Agreement and to consummate the
transactions contemplated by the Construction Contract and this
Agreement;
(b) the execution, delivery and performance of the Construction Contract
and this Agreement and the consummation of the transactions
contemplated by the Construction Contract and this Agreement have been
duly authorised by all necessary corporate action on the part of the
Builders and do not contravene any applicable law, regulation or order
binding on the Builders or any of their assets or their constitutional
documents;
(c) neither the execution, delivery and performance by the Builders of the
Construction Contract and this Agreement, nor the consummation of any
of the transactions by the Builders contemplated by the Construction
Contract and this Agreement, require the consent or approval of, the
giving of notice to, the registration with, or the taking of any other
action in respect of, any governmental authority or agency or any
other person, except such as have been obtained and are in full force
and effect;
(d) the Construction Contract and this Agreement constitute legal, valid
and binding obligations and liabilities of the Builders, except as
enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganisation, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(f) there are no disputes outstanding between the Builders and the
Original Purchaser under the Construction Contract, nor are the
Builders aware of any unremedied defaults by the Original Purchaser
under the Construction Contract (and for the purposes of this sub-
clause (e), "disputes" does not refer to outstanding or further change
orders or claims, if any, which have yet to be agreed); and
(g) the Construction Contract has not (other than by this Agreement and by
the letters referred to in the definitions of Construction Contract in
Clause 1.1) been amended, varied, cancelled, novated or terminated.
2.2 New Purchaser's representations and warranties. The New Purchaser
represents and warrants to each of the other parties to this Agreement
that the following statements are, at the date of this Agreement, true
and accurate:
(a) the New Purchaser is duly incorporated under the laws of Delaware and
has full power and authority to enter into and perform its obligations
and discharge its liabilities under this Agreement and to consummate
the transactions contemplated by this Agreement;
(b) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement have
been duly authorised by all such corporate action on the part of the
New Purchaser as may be necessary under the internal laws of the State
of Delaware and the State of New York and do not contravene any such
applicable internal law, order or regulation binding on the New
Purchaser or any of its assets or its constitutional documents;
(c) neither the execution, delivery and performance by the New Purchaser
of this Agreement, nor the consummation of any of the transactions by
the New Purchaser contemplated by this Agreement, require the consent
or approval of, the giving of notice to, the registration with, or the
taking of any other action in respect of, any governmental authority
or agency or any other person, except such as have been obtained and
are in full force and effect (or which are required in connection with
the registered ownership or operation of the Vessel, in respect of
which the New Purchaser has duly executed such documents and
instruments as the Seller has provided to it); and
(d) this Agreement constitutes legal, valid and binding obligations and
liabilities of the New Purchaser, except as enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganisation,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
2.3 Original Purchaser's representations and warranties. The Original
Purchaser represents and warrants to each of the other parties to this
Agreement that the following statements are, at the date of this
Agreement, true and accurate:
(a) the Original Purchaser is duly incorporated under the laws of Nevada
and has full power and authority to enter into and perform its
obligations under this Agreement and to consummate the transactions
contemplated by this Agreement;
(b) the execution, delivery and performance of the Construction Contract
and this Agreement and the consummation of the transactions
contemplated by the Construction Contract and this Agreement have been
duly authorised by all necessary corporate action on the part of the
Original Purchaser and do not contravene any law, regulation or order
binding on the Original Purchaser or any of its assets or its
constitutional documents;
(c) subject to the Financiers' Consent, neither the execution, delivery
and performance by the Original Purchaser of the Construction Contract
or this Agreement, nor the consummation of any of the transactions by
the Original Purchaser contemplated by the Construction Contract and
this Agreement, require the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action in
respect of, any governmental authority or agency or any other person,
except such as have been obtained and are in full force and effect (or
which are only required to be obtained after the date of this
Agreement in the ordinary course of the operation or employment of the
Vessel); and
(d) the Construction Contract and this Agreement constitute legal, valid
and binding obligations and liabilities of the Original Purchaser
except as enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganisation, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
2.4 Original Purchaser's representations and warranties to New Purchaser.
The Original Purchaser represents and warrants to the New Purchaser
that the following statements are, at the date of this Agreement, true
and accurate:
(a) the Original Purchaser has supplied the New Purchaser with true,
complete and up-to-date copies of the Construction Contract;
(b) (save as may have been separately disclosed to the New Purchaser in
writing prior to the execution of this Agreement) there are no
disputes outstanding between the Original Purchaser and the Builders
under the Construction Contract; nor is the Original Purchaser in
default, or aware of any unremedied defaults by the Builders, under
the Construction Contract; and
(c) the Construction Contract has not (other than by this Agreement and by
the letters referred to in the definition of Construction Contract in
Clause 1.1) been amended, varied, cancelled, novated or terminated.
2.3 Survival of representations and warranties. The representations and
warranties given in this Clause 2 shall survive the execution of this
Agreement and shall be deemed to be repeated at the Effective Time.
3 NOVATION
3.1 Novation to New Purchaser. In reliance upon the representations and
warranties given by the parties under Clause 2, the Original Purchaser
agrees to transfer the Construction Contract to the New Purchaser and
the New Purchaser agrees to assume all obligations and liabilities
under the Construction Contract on and with effect from the Effective
Time, upon the following terms and conditions and subject to Clauses
3.2 to 3.4:
(a) the Original Purchaser releases and discharges the Builders from all
their obligations to the Original Purchaser in respect of the Novated
Rights;
(b) the Original Purchaser is released and discharged from the Novated
Obligations;
(c) the New Purchaser shall hereby be vested with and have the benefit of
the Novated Rights (and accordingly the Builders undertake to perform
their obligations and discharge their liabilities in respect of the
Novated Rights under the Construction Contract in favour of the New
Purchaser); and
(d) the New Purchaser shall assume and duly perform the Novated
Obligations, so that, with effect from the Effective Time, the New
Purchaser shall be substituted in place of the Original Purchaser as a
party to the Construction Contract and the Construction Contract
shall on and with effect from the Effective Time be construed and
treated, and the Builders shall be bound by the Construction Contract
in all respects, as if the New Purchaser were named in the
Construction Contract as "OWNER" instead of the Original Purchaser.
3.2 Intended effects of novation. Without prejudice to the generality of
the provisions of Clause 3.1, the following are intended to be
effected by, or are hereby agreed as incidental to, the transfer and
assumption of the Novated Rights and Novated Obligations:
(a) The Builders and the New Purchaser acknowledge and agree that they
shall adopt and be bound by the procedures and understandings
established between the Builders and the Original Purchaser in
relation to the Construction Contract before the Effective Time.
(b) All actions taken by any person (including, but not limited to, any
decision, delegation, revocation, order, request, change, instruction,
confirmation, direction, statement, certificate, appointment payment,
opinion, application, notification, submission, application, approval
or certificate) prior to the Effective Time under, pursuant to, or in
connection with, the Construction Contract shall take effect under
this Agreement and the Construction Contact, as between the Builders
and the New Purchaser, to the extent such actions took effect
originally between the Builders and the Original Purchaser.
(c) The scope, quantum and nature of the Builders' rights, obligations and
liabilities in and arising out of their respective performance of the
Construction Contract (and of those liable through either of them)
shall be the same in all material respects as it has been to date and
shall not be adversely affected by the implementation of this
Agreement.
(d) Notwithstanding that, as between the Original Purchaser and the New
Purchaser, the Original Purchaser may agree to indemnify and/or limit
its recourse to the New Purchaser, as owner of the Vessel, the
Builders undertake not to contend (whether in proceedings or
otherwise) that the New Purchaser has suffered or incurred no damage,
loss or expense, or that their liability to the New Purchaser shall be
reduced or extinguished, by reason of the substitution (or the
consequences of such substitution) of the New Purchaser as "OWNER"
under the Construction Contract.
3.3 Conditions for novation. The transfer and assumption contained in
Clause 3.1 shall be conditional upon:
(a) the receipt by the Original Purchaser of the Financiers' Consent and
the parties' compliance with its terms concerning the implementation of
this Agreement; and
(b) the payment by the New Purchaser to the Original Purchaser of the
Construction Expenditure Amount,
provided however that the Builders shall be entitled (without enquiry)
to rely on the execution and delivery to it by the other parties of
the Effective Time Notice as conclusive evidence that the conditions
set out in this Clause 3.3 have been satisfied or waived.
3.4 Effective Time Notice. Once the conditions set out in Clause 3.3 have
been satisfied the Effective Time Notice shall be completed and
executed by all the parties to this Agreement to fix the day and time
of the Effective Time. If the Effective Time does not occur prior to
Delivery the transfer and assumption of Novated Rights and Novated
Obligations and all other matters or consequences expressed to be
effective as at or from the Effective Time shall not take effect
unless the parties to this Agreement so agree.
3.5 Builders' consent. The Builders consent hereby to the novation,
transfer and assumption of the Construction Contract on the terms of
Clauses 3.1 to 3.4.
3.6 Confirmation of Supervisor's appointment. The New Purchaser hereby
confirms that with effect from the Effective Time the Supervisor is
appointed by the New Purchaser to continue to act as "Supervisor" for
the purposes of the Construction Contract.
3.7 Funding and payment of New Purchaser's payment obligations. The
Original Purchaser hereby confirms to the Builders that pursuant to
the Equipment Sale and Funding Agreement it has agreed, and hereby
guarantees to the Builders, to fund and thereby ensure that the New
Purchaser will discharge all its payment obligations under the
Construction Contract whenever they become due for so long as the New
Purchaser remains a party to the Construction Contract, and
furthermore shall ensure that the proceeds of such funding shall, to
the extent that they are to be applied in or towards payment to the
Builders under the Construction Contract, be paid direct to the
Builders' account.
4 PAYMENTS
4.1 Payments to the Original Purchaser. The Builders shall, subject to
receipt or deemed receipt of the payment to be made to it under Clause
4.2, pay to the Original Purchaser at the Effective Time the
Construction Expenditure Amount in reimbursement of the Original
Purchaser's expenditure under the Construction Contract.
4.2 Payments to the Builders. The New Purchaser shall pay to the Builders
at the Effective Time the Construction Expenditure Amount in full
discharge of such of the payment obligations and liabilities of
"OWNER" as have been already agreed, invoiced and fallen due under the
Construction Contract as at or prior to the Effective Time.
4.3 Direct payment to Original Purchaser. The Builders hereby authorise
and instruct the New Purchaser to pay the amount payable under Clause
4.2 direct to the Original Purchaser, and the parties hereby agree
that such payment shall fully discharge the payment obligations and
liabilities under Clauses 4.1 and 4.2.
4.4 Payments to "OWNER". Following the transfer and assumption contained
in Clause 3.1 and unless a Further Novation Notice is served by the
New Purchaser under Clause 8.1, all payments due to be made to the
OWNER under the Construction Contract shall continue to be made to the
Indenture Trustee for deposit in the account specified by the Original
Purchaser in its notice to the Builders dated 12 August 1999.
5 INSURANCES
5.1 Notification to insurers. The Builders undertake:
(a) promptly to notify the insurers in respect of all Insurances of the
transfer and assumption effected by this Agreement and the sale of
OWNER's Supplies to the New Purchaser referred to in Clause 7; and
(b) to procure that:
(i) all cover notes, policies and other contractual documents
relating to the Insurances shall be endorsed accordingly with the
name of the New Purchaser together with its affiliates, agents,
servants and employees (in each case according to their
respective interests); and
(ii) copies of all such documents, endorsed as provided above,
are provided to the New Purchaser.
6 REFUND GUARANTEE
6.1 Assignment of Refund Guarantee. Promptly after the Effective Time, if
the New Purchaser so requests by delivery to the Builders of a copy of
such notice, the Builders shall procure that the Refund Guarantor
acknowledges a notice of assignment of the Refund Guarantee in favour
of the New Purchaser in the form set out as Schedule C to this
Agreement.
7 SALE OF OWNER'S SUPPLIES
7.1 Owner's Supplies. The Original Purchaser hereby gives notice to the
Builders, and the Builders hereby acknowledge, that with effect at and
from the Effective Time the title to all OWNER's Supplies supplied and
delivered to the Builders pursuant to Article XVI (OWNER's SUPPLIES)
of the Construction Contract shall be transferred to and vest in the
New Purchaser pursuant to the Equipment Sale and Funding Agreement.
8 FURTHER NOVATION
8.1 Nomination of Replacement Purchaser. The New Purchaser shall (with
the prior consent of the Indenture Trustee) be entitled at any time
prior to Delivery to nominate in a Further Novation Notice an
Affiliated Company (as defined in Article XIII (Successors and
Assigns) of the Construction Contract) of the Original Purchaser (or,
with the prior written consent of the Builders, any other company) as
"Replacement Purchaser" for the purposes of this Clause 8.
8.2 Entitlement to exercise further novation rights. If on or prior to
the Delivery Date (but before Delivery takes place), the New Purchaser
and the Replacement Purchaser serve a Further Novation Notice on the
Builders and the Original Purchaser the following provisions of this
Clause 8 apply.
8.3 Further novation. Upon the service of a notice pursuant to Clause
8.2, the following shall occur:
(a) the New Purchaser shall give notice to the Refund Guarantor of the
further assignment of the Refund Guarantee to the Replacement
Purchaser and the Builders shall procure the acknowledgement of the
Refund Guarantor (substantially in the form of Schedule C
appropriately adapted); and
(b) title to any OWNER's Supplies acquired at such date by the New
Purchaser shall automatically be transferred to the Replacement
Purchaser.
8.4 Assumption by Replacement Purchaser. Immediately upon the
effectiveness of the releases, notifications and transfers contained
in Clause 8.3, the following shall occur:
(a) the New Purchaser shall be automatically released and discharged from
all Novated Obligations and shall no longer be under any obligation or
liability under this Agreement or the Construction Contract or in
respect of the Vessel;
(b) the Builders shall be automatically released and discharged from their
obligations and liabilities to the New Purchaser in respect of the
Novated Rights and shall instead owe those to the Replacement
Purchaser; and
(c) all the Novated Obligations and all the Novated Rights shall be
automatically transferred to and assumed by the Replacement Purchaser.
8.5 Tender for delivery etc. If a Further Novation Notice is served after
the date on which the Vessel has been validly tendered for delivery
pursuant to the Construction Contract, that tender will not be
invalidated by reason of that Further Novation Notice having been
served and in such circumstances:
(a) the Builders and the Replacement Purchaser will co-operate with a view
to facilitating delivery of the Vessel on the date specified for
delivery of the Vessel in that tender;
(b) the Builders will, if they have at that time produced the delivery
documents pursuant to and in accordance with Article VII (Delivery) of
the Construction Contract, have a reasonable time (not exceeding 10
days) to prepare replacement delivery documents showing the
Replacement Purchaser as "OWNER" under the Construction Contract as
further transferred and assumed;
(c) the time for delivery of the Vessel pursuant to the Construction
Contract as further transferred and assumed will be extended by the
period referred to in Clause 8.5(b); and
(d) subject to the compliance by the Builders with their obligations under
Clause 8.5(b) and further subject to Clause 8.5(c), the Builders'
rights and obligations under the Construction Contract as further
transferred and assumed will not be affected as a result of any delay
to the delivery of the Vessel arising directly as a result of that
further transfer and assumption.
9 AMENDMENT TO CONSTRUCTION CONTRACT
9.1 Amendment. With effect from the Effective Time the Construction
Contract shall be further amended as follows:
(a) in paragraph 4 (Registration) of Article I (- DESCRIPTION AND CLASS)
of the Construction Contract, after the words "the United States of
America" shall be inserted the words "or Panama";
(b) references in the Construction Contract to "this Contract" shall be
construed as references to the Construction Contract as transferred
and assumed, amended or otherwise modified by this Agreement; and
(c) by construing all references to Affiliated Company(ies) as references
to Affiliated Company(ies) of the Original Purchaser.
10 ASSIGNMENT
10.1 Assignment of Novated Rights. The Builders hereby consent to the
direct or indirect assignment (or series of assignments) by the New
Purchaser in favour of the Original Purchaser (or any Affiliate of the
Original Purchaser) of the Novated Rights, including in particular,
but without limitation, the rights of the OWNER under:
(a) Article III (ADJUSTMENT OF CONTRACT PRICE);
(b) Article IX (WARRANTY OF QUALITY); and
(c) Article X (RESCISSION BY OWNER),
of the Construction Contract.
10.2 Collateral assignment. The Builders hereby further consent to the
collateral assignment by the New Purchaser (or any assignee of the New
Purchaser permitted under Clause 10.1) in favour of the Indenture
Trustee of the Novated Rights.
10.3 Assignment of Novated Obligations. The New Purchaser shall not be
entitled to assign or transfer its rights and obligations under this
Agreement or the Novated Obligations (except pursuant to Clause 8)
without the prior written consent of the Original Purchaser.
11 MISCELLANEOUS
11.1 Counterparts. This Agreement may be executed in several counterparts
and any single counterpart or set of counterparts signed, in either
case, by all of the parties thereto shall be deemed to be an original,
and all counterparts when taken together shall constitute one and the
same instrument.
11.2 Amendments. This Agreement may be amended only by an instrument in
writing signed by all of the parties to this Agreement.
11.3 Waiver. Any waiver of any right, power or privilege by any party to
this Agreement shall be in writing signed by such party. No failure
or delay by any party hereto to exercise any right, power or privilege
under this Agreement shall operate as a waiver of that right, power or
privilege nor shall any single or partial exercise of that right,
power or privilege preclude any further exercise of that right, power
or privilege or of any other right, power or privilege. The rights
and remedies provided in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
11.4 Costs and expenses. All costs and expenses arising out of the
negotiation, preparation or execution of this Agreement shall be for
the account of the Original Purchaser, and the Original Purchaser
shall reimburse the Builders in respect of all documented out-of-
pocket costs and expenses, reasonably incurred by the Builders under,
or arising out of the implementation of, this Agreement.
12 NOTICES
12.1 Notices etc. Every notice, request, demand or other communication
under this Agreement or the Construction Contract shall:
(a) be in the English language and in writing delivered personally or by
prepaid first class airmail letter or fax (confirmed in the case of a
fax by prepaid first class airmail letter sent within 24 hours of
despatch but so that the non-receipt of such confirmation shall not
affect in any way the validity of the fax in question);
(b) be deemed to have been received, in the case of a fax, when a
confirmation by the recipient of receipt of such fax is despatched
(provided that, in the case of a fax transmission, if the date of
despatch is not a business day in the country of the addressee it
shall be deemed to have been received at the opening of business on
the next such working day in that country), and in the case of a
letter, when delivered personally or if put in the post, when actually
received;
(c) be sent:
(i) to the Builders to:
Hyundai Heavy Industries Co., Ltd.
No. 1, Cheonha-Dong, Dong-Ku
Ulsan
Korea
Fax: (82) 522 230 3448 / 3425
Attention: General Manager
(ii) to the Original Purchaser to:
RBF Exploration Co.
901 Threadneedle
Houston
Texas 77079-2902
USA
Fax: (1) (281) 496 0285
Attention: Project Director
(iii) to the New Purchaser to:
BTM Corporation
125 Summer Street
Boston
Massachusetts 02110
USA
Fax:
Attention: Senior Vice President/Administration
with a copy to:
RBF Exploration II Inc.
c/o The Original Purchaser
or in each case to such other person or address or fax number as one
party may notify in writing to the other parties hereto.
13 GOVERNING LAW AND JURISDICTION
13.1 Law. This Agreement (including, but not limited to, its validity and
enforceability) shall be governed by, and construed in accordance
with, the laws of the State of New York other than conflict of law
rules thereof that would require the application of the laws of a
jurisdiction other than such State.
13.2 Jurisdiction. Any legal action or proceeding with respect to this
Agreement may be brought in the Courts of the State of New York in New
York County or of the United States of America for the Southern
District of New York, and, by execution and delivery of this
Agreement, each of the parties to this Agreement hereby accepts for
itself and (to the extent permitted by law) in respect of its
property, generally and unconditionally, the jurisdiction of the
aforesaid Courts. Each of the parties to this Agreement hereby
irrevocably waives any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of forum non
conveniens, which it may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions. This
submission to jurisdiction is non-exclusive and does not preclude the
parties from obtaining jurisdiction over the other parties in any
Court otherwise having jurisdiction.
13.3 Arbitration. Subject to Clause 13.2, any disputes arising out of or
by virtue of the Construction Contract (as transferred and assumed,
amended or otherwise modified by this Agreement) shall be referred to
arbitration as provided for in Article XII (Arbitration) of the
Construction Contract.
SCHEDULE A
FORM OF EFFECTIVE TIME NOTICE
Novation Agreement
Dated [ ] 2000 (the "Agreement") in relation to
Hyundai Hull No. HRBS6
In accordance with Clause 3.3 of the Agreement, the undersigned hereby
confirm that the conditions set out in Clause 3.3 of the Agreement have
been satisfied at [ ] hours on [ ] 2000.
_________________________________________
For and on behalf of
HYUNDAI CORPORATION
_________________________________________
For and on behalf of
HYUNDAI HEAVY INDUSTRIES CO., LTD.
_________________________________________
For and on behalf of
RBF EXPLORATION CO.
_________________________________________
For and on behalf
BTM CAPITAL CORPORATION
SCHEDULE B
FORM OF FURTHER NOVATION NOTICE
To: Hyundai Corporation
Hyundai Heavy Industries Co., Ltd.
cc: RBF Exploration II Inc.
cc: RBF Exploration Co.
Dear Sirs,
Novation Agreement dated [ ] 2000 (the "Agreement") in relation
to Hull No. HRBS6
In accordance with Clause 8.2 of the Agreement we hereby notify you that
the provisions of Clause 8.3 of the Agreement shall have immediate effect.
BTM Capital Corporation hereby names and assigns to _______________________
as Replacement Purchaser all of its right, title and interest in the
Construction Contract. The Replacement Purchaser hereby agrees to comply
with and be bound by such provisions as if it had been a party to the
Agreement.
____________________________
For and on behalf of
BTM CAPITAL CORPORATION
____________________________
For and on behalf of
[REPLACEMENT PURCHASER]
SCHEDULE C
FORM OF NOTICE OF ASSIGNMENT OF REFUND GUARANTEE
To: Korea Exchange Bank
Kye Dong Branch
140-2 Kye Dong
Chongro-Ku
Seoul
Korea
cc: BTM Capital Corporation
Dated: [ ] 2000
Dear Sirs,
re: Letter of Guarantee No. 0696GBD711111 (the "Guarantee")
1. We hereby give you notice that pursuant to a novation agreement dated
[ ] 2000 and made between (1) Hyundai Corporation and Hyundai
Heavy Industries Co., Ltd., (2) ourselves and (3) BTM Capital Corporation
("BTM") all our rights, obligations and liabilities under the Contract (as
defined in the Guarantee) and the Guarantee have been transferred to BTM.
2. This notice shall be governed by and construed in accordance with the
General Maritime law of the United States of America.
3. Please acknowledge the above by countersigning and returning to us
(with a copy to BTM) a copy of this notice.
Yours faithfully
_____________________
RBF Exploration Co.
By:
Title:
Acknowledged and accepted as of the date of the above notice:
_____________________
Korea Exchange Bank
By:
Title:
This Agreement has been executed by the parties to this Agreement on the
date specified at the beginning of this Agreement.
THE BUILDERS
Signed by )
)
for and on behalf of )
HYUNDAI CORPORATION )
in the presence of: )
Signed by )
)
for and on behalf of )
HYUNDAI HEAVY INDUSTRIES )
CO., LTD. )
in the presence of: )
THE ORIGINAL PURCHASER
Signed by )
)
for and on behalf of )
RBF EXPLORATION CO. )
in the presence of: )
THE NEW PURCHASER
Signed by )
)
for and on behalf of )
BTM CAPITAL CORPORATION )
in the presence of: )
EXHIBIT 10.323
ACKNOWLEDGMENT OF RIG OWNERSHIP AND
RATIFICATION OF OPERATION AND MAINTENANCE AGREEMENT
This Acknowledgment of Rig Ownership and Ratification of Operation and
Maintenance Agreement ("Acknowledgment") dated as of February 1, 2000 is
among R&B Falcon Corporation, a Delaware corporation ("Manager"), RBF
Exploration Co., a Nevada corporation ("RBFE"), and BTM Capital
Corporation, a Delaware corporation ("Independent Owner").
WHEREAS, Manager and RBFE have entered into that certain Operation and
Maintenance Agreement dated as of August 12, 1999 ("O&M Agreement"); and
WHEREAS, RBFE and the Independent Owner contemporaneously with the
execution hereof have entered into that certain Equipment Sale and Funding
Agreement of even date herewith ("Sale and Funding Agreement") pursuant to
which RBFE conveyed certain property and equipment for use in the
construction of the Drilling Rig (as defined in the O&M Agreement) to the
Independent Owner (the "Conveyance of Drilling Rig Equipment"); and
WHEREAS, Hyundai Corporation, Hyundai Heavy Industries Co., Ltd.
(collectively, "Hyundai"), RBFE and the Independent Owner contemporaneously
with the execution hereof have entered into that certain Novation Agreement
of even date herewith ("Novation Agreement") pursuant to which RBFE
transferred all of its rights and obligations under that certain Contract
for Construction and Sale of Vessel (Hull No. HRBS6) dated November 14,
1997 beween RBFE and Hyundai to the Independent Owner (together with the
Conveyance of Drilling Rig Equipment, the "Conveyance of Drilling Rig
Interests");
NOW THEREFORE, in consideration of the premises set forth herein and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Manager understands that RBFE has entered into the Sale and
Funding Agreement and the Novation Agreement and hereby acknowledges and
consents to the Conveyance of Drilling Rig Interests.
2. Manager hereby agrees that the obligations and liabilities of the
Manager under the O&M Agreement are beneficial both to RBFE and the
Independent Owner and that such obligations and liabilities may be enforced
by either RBFE or RBFE on behalf of the Independent Owner.
3. Manager hereby further agrees that the Conveyance of Drilling Rig
Interests in no way affects the underlying terms of the O&M Agreement as
between Manager and RBFE, and Manager hereby ratifies and affirms its
obligations and continued liability under the O&M Agreement.
4. THIS ACKNOWLEDGMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY
AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, OTHER THAN CONFLICT OF
LAWS RULES THEREOF THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A
JURISDICTION OTHER THAN SUCH STATE.
5. The parties may sign any number of copies of this Acknowledgment.
Each signed copy shall be an original, but all of such executed copies
together shall represent the same agreement.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Acknowledgment
to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
R&B FALCON CORPORATION
By:_______________________________________
Name:
Title:
RBF EXPLORATION CO.
By:_______________________________________
Name:
Title:
BTM CAPITAL CORPORATION
By:_______________________________________
Name:
Title:
EXHIBIT 10.324
PERFORMANCE GUARANTEE
THIS PERFORMANCE GUARANTEE (this "Guarantee"), dated as of February 1,
2000 is made by R&B FALCON CORPORATION, a Delaware corporation (the
"Guarantor") in favor of RBF EXPLORATION CO., a Nevada corporation ("RBF"),
BTM CAPITAL CORPORATION, a Delaware corporation (the "Owner"), TRAVELERS
CASUALTY AND SURETY COMPANY OF AMERICA, a Connecticut corporation, and
AMERICAN HOME ASSURANCE COMPANY, a New York corporation (both collectively,
the "Sureties"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Trustee (together with its successors and
assigns, the "Trustee") under that certain Trust Indenture dated as of
August 12, 1999 by and between the Trustee and RBF, as amended and
supplemented by that certain Supplemental Indenture and Amendment of even
date herewith by and among the Trustee, the Owner and RBF (as hereafter
supplemented or amended, the "Indenture").
WHEREAS, RBF issued USD 250,000,000 of Senior Secured Notes (the
"Notes") pursuant to the Indenture to finance the construction, outfitting
and mobilization of the semi-submersible drilling rig to be named DEEPWATER
NAUTILUS (the "Drilling Rig");
WHEREAS, RBF has transferred the Drilling Rig to the Owner;
WHEREAS, pursuant to the Construction Supervisory Agreement dated the
date hereof (the "Construction Supervisory Agreement") the Owner has
engaged RBF Exploration II Inc., a Nevada corporation, (the "Supervisor")
to manage and supervise the design, construction and outfitting of the
Drilling Rig at the yard of the Builders and its mobilization as required
by the SDDI Contract;
WHEREAS, both RBF and the Supervisor are each a wholly-owned indirect
subsidiary of the Guarantor and it is to the corporate benefit of the
Guarantor that the Owner acquires the Drilling Rig and that the Supervisor
manage the design, construction, outfitting and mobilization of the
Drilling Rig; and
WHEREAS, pursuant to the Indenture, both RBF and the Owner have
granted to the Trustee a security interest in, among other things, certain
rights in the Construction Supervisory Agreement.
NOW, THEREFORE, in consideration of the premises, the Guarantor hereby
agrees as follows:
SECTION 1. Guarantee.
The Guarantor hereby unconditionally and irrevocably guarantees the
full performance and observance by the Supervisor of all of the terms of
the Construction Supervisory Agreement (other than the payment obligations
of the Supervisor set out in Article IV of such agreement). All of the
obligations of the Supervisor under the Construction Supervisory Agreement
guaranteed by the Guarantor pursuant to this Guarantee are referred to
herein as the "Obligations." If the Supervisor fails to perform and
observe any term or condition of the Construction Supervisory Agreement,
other than those contained in Article IV, the Guarantor undertakes to
itself perform or cause to be performed, within ten (10) days after receipt
of notice to such effect from RBF, the Owner, the Sureties or the Trustee,
any such term or condition not so performed or observed by the Supervisor,
and to indemnify and hold RBF, the Owner, the Sureties and the Trustee
harmless from and against any loss, costs, damage, claim or expenses, other
than those contained in Article IV, which may be incurred by or asserted
against them in connection with any failure on the part of the Supervisor
to perform or observe any term or condition of the Construction Supervisory
Agreement.
SECTION 2. Guarantee Absolute.
(a) The Guarantor hereby guarantees that the Obligations will be
performed or paid strictly in accordance with the terms of the
Construction Supervisory Agreement, regardless of any law,
regulation or order now or hereafter in effect in any
jurisdiction affecting any such terms or the rights of RBF, the
Owner, the Sureties or the Trustee with respect thereto. The
liability of the Guarantor under this Guarantee shall be absolute
and unconditional irrespective of:
(i) any lack of validity or enforceability of the Construction
Supervisory Agreement, the Construction Contract or any
other agreement or instrument entered into between RBF, the
Owner, the Trustee, the Builders, the Sureties and/or the
Guarantor;
(ii) any change in the time, manner or place of performance or
payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any
consent to departure from the Construction Supervisory
Agreement or the Construction Contract;
(iii) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Supervisor in
respect of the Obligations or the Guarantor in respect of this
Guarantee.
(b) This Guarantee shall continue to be effective or be reinstated,
as the case may be, if at any time any performance or payment of
any of the Obligations is rescinded or must otherwise be returned
by RBF, the Owner, the Sureties or the Trustee upon the
insolvency, bankruptcy or reorganization of RBF or the Owner or
otherwise, all as though such payment had not been made.
SECTION 3. Waiver.
The Guarantor hereby waives (a) notice of acceptance hereof, protest,
demand and dishonor, presentment and demand of any kind now or hereafter,
provided by any statute or rule of law, (b) promptness, diligence, notice
of acceptance and any other notice with respect to any of the Obligations
and this Guarantee and any requirement that RBF, the Owner, the Sureties or
the Trustee or any other person exhaust any right or take any action
against the Supervisor or any other person or entity or any collateral, (c)
all set offs and counterclaims it may have against RBF, the Owner, the
Sureties, the Trustee or any other person and (d) any defense arising by
any insolvency, lack of authority, power, dissolution or any other defense
of the Supervisor or the Guarantor.
SECTION 4. Subrogation.
The Guarantor will not exercise any rights which it may acquire by way
of subrogation under this Guarantee, by any payment made hereunder or
otherwise, until all the Obligations and all other obligations of the
Supervisor under the Construction Supervisory Agreement shall have been
performed or paid in full. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all the Obligations
shall not have been performed or paid in full, such amount shall be
forthwith paid to the Trustee for the account of RBF and the Owner to be
credited and applied against the Obligations.
SECTION 5. Payments Free and Clear of Taxes, Etc.
(a) All sums payable by the Guarantor under this Guarantee, shall be
paid in full without set-off or counterclaim and in such amounts
as may be necessary in order that all such payments (after
deduction or withholding for or on account of any present or
future taxes, levies, imposts, duties or other charges of
whatsoever nature imposed by any Governmental Entity or taxing
authority thereof, other than any income tax or franchise tax or
other tax or fee on or measured by the gross receipts or net
income of RBF, the Owner, the Trustee, the Sureties or the Note
Holders collectively the "Taxes") shall not be less than the
amounts otherwise specified to be paid under this Guarantee.
(b) A certificate as to any additional amounts payable to RBF, the
Owner or the Trustee under this Section 5 submitted to the
Guarantor by the Trustee shall show in reasonable detail the
amount payable and the calculations used to determine in good
faith such amount and shall be deemed prima facie correct.
(c) With respect to each deduction or withholding for or on account
of any Taxes, the Guarantor shall promptly furnish to the Owner
and the Trustee such certificates, receipts and other documents
as may be required (in the reasonable judgment of the Trustee) to
establish any income tax credit to which the Trustee may be
entitled.
SECTION 6. APPLICABLE LAW AND JURISDICTION.
THIS GUARANTEE (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND
ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, OTHER THAN CONFLICT OF LAWS RULES
THEREOF. ANY LEGAL ACTION OR PROCEEDING AGAINST THE GUARANTOR WITH RESPECT
TO THIS GUARANTEE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK,
SITTING IN NEW YORK COUNTY, THE U.S. DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, OR IN THE COURTS OF ANY OTHER JURISDICTION WHERE SUCH
ACTION OR PROCEEDING MAY BE PROPERLY BROUGHT.
SECTION 7. Representations and Warranties.
The Guarantor hereby represents and warrants to RBF, the Owner, the
Sureties and the Trustee as follows:
(a) It is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware
duly qualified as a foreign corporation to do business
wherever its business or ownership of property requires it
to be so qualified and has the corporate power and authority
and the legal right to own and lease its property and to
conduct its business.
(b) The execution, delivery and performance by the Guarantor of
this Guarantee and any other documents contemplated herein
and the completion of all other transactions herein
contemplated are within the Guarantor's authority, are in
furtherance of the Guarantor's purposes, have been duly
authorized by all necessary action and will not contravene
any applicable law or regulation nor violate the Guarantor's
Articles of Incorporation or By-Laws nor any agreement
binding on the Guarantor nor any applicable law or
regulation or order or decree of any governmental authority
or agency.
(c) This Guarantee is supported by adequate and sufficient
consideration, has been validly executed by or on behalf of the
Guarantor and represents the valid and binding obligation of the
Guarantor, enforceable in accordance with its terms and will not
result in the Guarantor's liabilities (including the maximum
amount of liabilities that may be reasonably expected to result
from all contingent liabilities and giving effect to rights of
contribution and subrogation) exceeding the fair market value of
its assets. The enforceability of this Guarantee, however, is
subject to all applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the rights of creditors
generally and to general equity principles.
(d) The legality, validity, enforceability or admissibility of
this Guarantee are not subject to or conditional upon this
Guarantee being filed, recorded or enrolled with any
governmental authority or agency or stamped with any stamp,
duty or similar transaction tax of the State of Texas, the
State of New York or the United States of America.
(e) There are no pending, or to the best of the Guarantor's
knowledge, any threatened actions or proceedings affecting
the Guarantor before any court, governmental agency or
arbitrator in any country, which may materially adversely
affect the financial condition or operations of the
Guarantor.
SECTION 8. The Construction Supervisory Agreement.
The Guarantor hereby acknowledges receipt of the Construction
Supervisory Agreement and hereby consents and agrees to the Construction
Supervisory Agreement and to all the terms and provisions thereof.
SECTION 9. Amendments, Etc.
No amendment or waiver of any provision of this Guarantee nor consent
to any departure by the Guarantor therefrom shall in any event be effective
unless the same shall be in writing and signed by the Trustee and, so long
as the Performance Bond (as defined in the Indenture) is outstanding or
amounts are due to the Sureties as a result of payments made by them
thereunder, the Sureties and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION 10. Notices.
All notices, requests and demands shall be in writing (including
telecopier transmission) given to or made upon the respective parties
hereto as follows:
In the case of the Guarantor at:
R&B Falcon Corporation
901 Threadneedle
Houston, Texas 77079
Attention: Chief Financial Officer
Telecopier: (281) 496-0285
In the case of the Owner at:
BTM Capital Corporation
125 Summer Street
Boston, MA 02110
Attention: Senior Vice President ? Administration
Telecopier: (617) 345-5687
In the case of RBF at:
RBF Exploration Co.
901 Threadneedle
Houston, Texas 77079
Attention: President
Telecopier:(281) 496-0285
In the case of the Trustee, at:
Chase Bank of Texas, National Association
1150 Chase Tower
600 Travis Street
Houston, TX 77002
Attention: Mauri J. Cowen
Telecopier: (713) 216-5476
In the case of the Sureties, at:
Travelers Casualty and Surety Company of America
One Tower Square, 3PB
Hartford, Connecticut 06183
Attention: Bond Claim
Telecopier: 860-277-5722
American Home Assurance Company
175 Water Street, 6th Floor
New York, New York 10038
Attention: Bond Claims
Telecopier: 212-458-1331
or to such other address as any party hereto shall designate by written
notice to the other parties hereto. All notices shall be effective upon
delivery or three (3) days after being deposited in the United States mail
with postage prepaid certified, return receipt requested in a correctly
addressed wrapper, or upon receipt if delivered to Federal Express or
similar courier company or transmitted by telefax during normal business
hours.
SECTION 11. No Waiver; Remedies.
No failure on the part of RBF, the Owner, the Sureties or the Trustee
to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 12. Continuing Guarantee.
This Guarantee is a continuing guarantee and shall (i) remain in full
force and effect until performance or payment in full of the Obligations
and payment in full of all other amounts due under this Guarantee, (ii) be
binding upon the Guarantor, its successors or assigns, as the case may be,
(iii) inure to the benefit of and be enforceable by RBF, the Owner, the
Sureties and the Trustee and their respective successors, transferees and
assigns, provided, however, that the Guarantor may not transfer its
obligations under this Guarantee or any part of it without the prior
written consent of RBF, the Owner, the Sureties and the Trustee; and (iv)
continue to be effective, or be reinstated, as the case may be, if at any
time payment or any part thereof, of any of the Obligations is rescinded or
must be restored or returned by RBF, the Owner, the Sureties or the Trustee
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization
of the Guarantor or upon the appointment of a receiver, trustee or similar
officer for the Guarantor all as though such payment had not been made.
SECTION 13. Non-Petition Covenant.
So long as any indebtedness or other obligations secured by the
Indenture are outstanding, the Guarantor will not institute, and will not
join with others in instituting, any involuntary bankruptcy or analogous
proceeding against RBF or the Owner under any bankruptcy, reorganization,
receivership or similar law, domestic or foreign, as now or hereafter in
efffect.
Section 14. Definitions.
All capitalized terms used in this Guarantee and not defined herein
are used with the meanings given to them in the Construction Supervisory
Agreement.
[signature page follows]
IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this
Guarantee, as of the date first above written.
R&B FALCON CORPORATION
By:_______________________
Name:_____________________
Title:____________________
THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
Before me, the undersigned authority, on this day personally appeared
_______________, the Executive Vice President of R&B FALCON CORPORATION,
known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he executed the same for the
purposes and consideration therein expressed, in the capacity stated, and
as the act and deed of said corporation.
Given under my hand and seal of office this ________ day of February,
2000.
_________________________________
Notary Public, State of T E X A S
EXHIBIT 10.325
BILL OF SALE
RBF Exploration Co., a Nevada corporation ("Seller") hereby sells,
transfers, assigns, conveys and delivers to BTM Capital Corporation, a
Delaware corporation ("Purchaser"), its successors and assigns forever,
free and clear of all claims, liens or encumbrances, all of Seller's right
and title to, and interest in, the equipment and other items of personal
property listed in the "Owner Furnished" column on Schedule 1 hereto (the
"Equipment"), along with any and all applicable vendor warranties;
To have and to Hold the same and each and all thereof unto Purchaser,
its successors and assigns forever, to its and their own use and benefit
forever.
Seller does hereby bind itself, and its successors and assigns, to
warrant and forever defend title to the Equipment, unto Purchaser, and its
successors and assigns, against every person whomsoever lawfully claiming
or to claim the same or any part thereof. SELLER MAKES NO OTHER
WARRANTIES, EXPRESS OR IMPLIED, AND SPECIFICALLY EXCLUDES ANY WARRANTY OF
FITNESS FOR PURCHASER'S PARTICULAR PURPOSE. SELLER DISCLAIMS ALL ORAL
WARRANTIES.
IN WITNESS WHEREOF, Seller has executed this Bill of Sale as of the
____ day of February, 2000.
RBF EXPLORATION CO.
By:_________________________
Name:__________________
Title:_________________
EXHIBIT 10.326
ACKNOWLEDGMENT OF INDEPENDENT TRANSACTION
WHEREAS, Victory Receivables Corporation, Anchor National Life
Insurance Company, First SunAmerica Life Insurance Company and Parthenon
Receivables Funding, LLC ("Purchasers") have each entered into certain Note
Purchase Agreements dated as of August 12, 1999 with RBF Exploration Co., a
Nevada corporation ("Issuer"), as amended by certain First Amendments to
Note Purchase Agreements of even date herewith, and as may be further
amended from time to time; and
WHEREAS, Issuer and Chase Bank of Texas, National Association, as
Trustee ("Trustee"), entered into that certain Trust Indenture and Security
Agreement dated as of August 12, 1999 (the "Indenture"), as supplemented
and amended by that certain Supplemental Indenture and Amendment of even
date herewith (the "Supplemental Indenture") by and among BTM Capital
Corporation, a Delaware corporation ("Independent Owner" and together with
the Purchasers, Issuer, Trustee and any other person or entity, the
"Parties"), Issuer, and Trustee, and as may be further supplemented or
amended from time to time (the "Indenture"); and
WHEREAS, Issuer now desires to amend, or have amended, certain
documents subject or related to the Indenture that are listed on Schedule A
hereto (the "Amended Documents") in connection with the delivery of the
Drilling Rig, and Issuer also desires to enter into, or have entered into
or created, certain documents that are listed on Schedule B hereto (the
"New Documents" and collectively with the Amended Documents, the "Stage One
Documents"); and
WHEREAS, after execution of the New Documents, Issuer may propose to
further change the structure of the transaction ("Stage Two") and further
amend some or all of the Stage One Documents or enter into or create new
documents with respect thereto (the "Stage Two Documents");
NOW, THEREFORE, to clarify the intentions of the Parties with respect
to any further amendment of any of the documents or the completion of Stage
Two, the Parties hereby agree and acknowledge as follows:
1. Unless otherwise defined herein, capitalized terms used herein
shall have the meaning ascribed thereto in the Supplemental Indenture or,
if not therein, in the Indenture.
2. The execution and delivery of the Stage One Documents are not
required pursuant to the terms of the Indenture, but are being executed and
delivered at the request of the Issuer. Such execution and delivery of the
Stage One Documents does not, and shall not be deemed to, (a) evidence any
consent or approval of Stage Two by any of the Parties, (b) require the
Parties to negotiate with respect to Stage Two and (c) require the Parties
to enter into, acknowledge, consent or take any other action or inaction
with respect to Stage Two or any Stage Two Document.
3. THIS ACKNOWLEDGMENT OF INDEPENDENT TRANSACTION (INCLUDING, BUT
NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
OTHER THAN CONFLICT OF LAWS RULES THEREOF THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
4. The Parties may sign any number of copies of this Acknowledgment
of Independent Transaction. Each signed copy shall be an original, but all
of such executed copies together shall represent the same agreement.
IN WITNESS WHEREOF, the undersigned Parties have caused this
Acknowledgment of Independent Transaction to be executed and delivered by
its duly authorized officer as of February 1, 2000.
RBF EXPLORATION CO.
By_________________________
Name:______________________
Title:_____________________
BTM CAPITAL CORPORATION
By_________________________
Name:______________________
Title:_____________________
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By_________________________
Name:______________________
Title:_____________________
VICTORY RECEIVABLES CORPORATION
By_________________________
Name:______________________
Title:_____________________
ANCHOR NATIONAL LIFE INSURANCE COMPANY
By_________________________
Name:______________________
Title:_____________________
FIRST SUNAMERICA LIFE INSURANCE COMPANY
By_________________________
Name:______________________
Title:_____________________
PARTHENON RECEIVABLES FUNDING, LLC
By: Parthenon Receivables Funding Corporation,
its sole member
By_________________________
Name:______________________
Title:_____________________
- -------------------------------------------------------------------------
SCHEDULE A
Amended Documents
1. Indenture
2. Construction Contract
3. Construction Supervisory Agreement
4. Performance Guarantee
5. Performance Bond
6. Note Purchase Agreements
7. UCC-1 Financing Statement file number 99-164271 executed by Issuer in
favor of Trustee filed on August 16, 1999
- -------------------------------------------------------------------------
SCHEDULE B
New Documents
1. Supplemental Indenture
2. Amendment to Note Purchase Agreement
3. New Performance Bond
4. First Preferred Ship Mortgage
5. New Construction Supervisory Agreement
6. Sale and Funding Agreement
7. Novation Agreement
8. Certain UCC-1 Financing Statements executed by Issuer and Independent
Owner in favor of Trustee relating to security interests granted under
the Indenture, Supplemental Indenture and the Assignment of Interests
9. UCC-3 Financing Statement Change executed by Issuer and Trustee
affecting and evidencing the transaction contemplated by the Stage One
Documents
10. Acknowledgment of Rig Ownership and Ratification of Operation and
Maintenance Agreement by and among Parent, Issuer and Independent
Owner
11. New Performance Guarantee
12. Collection Account Notification Letter
13. Acknowledgment of Independent Transaction of even date herewith by and
among each Note Holder signatory to the Note Purchase Agreements,
Issuer, Independent Owner and Trustee
EXHIBIT 21
R&B FALCON CORPORATION
LIST OF SUBSIDIARIES AS OF DECEMBER 31, 1999
(Ownership is 100% Unless Otherwise Indicated)
NAME PLACE OF
- ---- --------
INCORPORATION
-------------
Cliffs Drilling Company Delaware
R&B Falcon Holdings, Inc. [formerly Delaware
R&B Falcon Drilling (U.S.), Inc.]
R&B Falcon Drilling (International & Deepwater) Inc. Delaware
R&B Falcon Deepwater Development Inc. Nevada
R&B Falcon Subsea Development Inc. Nevada
RBF Production Co. Delaware
RBFUS-1, Inc. Delaware
RBFUS-2, Inc. Delaware
- -------------------------------------------------------------------
SUBSIDIARIES OWNED BY CLIFFS DRILLING COMPANY:
Cliffs Oil and Gas Company Delaware
Cliffs Drilling International, Inc. Delaware
Cliffs Drilling Venezuela, Inc. Delaware
Cliffs Drilling de Venezuela, S.A. Venezuela
Cliffs Drilling (Barbados) Holdings SRL - 99.99% Barbados
Cliffs Drilling Trinidad L.L.C. Delaware
Cliffs Drilling do Brasil Servicos
de Petroleo S/C Ltda. Brazil
Servicios Integrados Petroleros C.C.I., S.A. is a
Venezuelan joint venture which is 33-1/3% owned by
Cliffs Drilling Company
SUBSIDIARY OWNED BY CLIFFS DRILLING INTERNATIONAL, INC.
Cliffs Drilling de Mexico, S.A. de C.V. Mexico
Cliffs Central Drilling International is a joint
venture which is 50% owned by Cliffs Drilling
International, Inc.
SUBSIDIARIES OWNED BY CLIFFS DRILLING TRINIDAD L.L.C.
Cliffs Drilling (Barbados) Holdings SRL - 0.01% Barbados
Cliffs Drilling (Barbados) SRL - 0.01% Barbados
SUBSIDIARY OWNED BY CLIFFS DRILLING (BARBADOS) HOLDINGS SRL
Cliffs Drilling (Barbados) SRL - 99.9% Barbados
SUBSIDIARY OWNED BY CLIFFS DRILLING (BARBADOS) SRL
Cliffs Drilling Trinidad Offshore Limited Trinidad
SUBSIDIARIES OWNED BY R&B FALCON HOLDINGS, INC.:
Caribe U.S.A., Inc. Louisiana
Falcon Atlantic Ltd. Cayman Islands
Falcon Drilling Do Brasil, Ltda. Brazil
Perforaciones Falrig De Venezuela C.A. Venezuela
Raptor Exploration Company, Inc. Delaware
R&B Falcon (S.E.A.) Pte. Ltd. Singapore
R&B Falcon Drilling USA, Inc. Delaware
SUBSIDIARIES OWNED BY R&B FALCON DRILLING (INTERNATIONAL
& DEEPWATER) INC.
Arcade Drilling AS - 74.4% Norway
R&B Falcon Drilling Co. Oklahoma
RBF Holding Corporation Delaware
R&B Falcon Management Services, Inc. Delaware
Reading & Bates Coal Co. Nevada
Reading & Bates Development Co. Delaware
Reading & Bates Petroleum Co. Texas
SUBSIDIARIES OWNED BY R&B FALCON DRILLING CO.
Onshore Services, Inc. Texas
R&B Falcon Borneo Drilling Co., Ltd. Oklahoma
R&B Falcon Deepwater (UK) Limited England
R&B Falcon Drilling Limited Oklahoma
R&B Falcon Exploration Co. Oklahoma
R&B Falcon Enterprises Co. Texas
R&B Falcon, Inc. Oklahoma
R&B Falcon International Energy
Services B.V. Netherlands
R&B Falcon (Ireland) Limited Ireland
R&B Falcon Offshore, Limited Oklahoma
R&B Falcon (U.K.) Limited England
RBF Deepwater Exploration Inc. Nevada
RBF Deepwater Exploration II Inc. Nevada
RBF Deepwater Exploration III Inc. Nevada
RBF Drilling Co. Oklahoma
RBF Drilling Services, Inc. Oklahoma
RBF Exploration Co. Nevada
RBF Exploration II Inc. Nevada
RBF Offshore, Inc. Nevada
RBF Rig Corporation Oklahoma
Rig Logistics, Inc. Nevada
R&B Falcon Drilling Co. and RBF Drilling Co.
together own 100% of Reading & Bates-Demaga
Perfuracoes Ltda., a civil society with
shares of limited responsibility organized
under the laws of the Federative Republic
of Brazil
R&B Falcon Drilling Co. and R&B Falcon, Inc.
together own 100% of PT RBF Offshore Drilling,
a limited liability company organized under
the laws of the Republic of Indonesia
SUBSIDIARIES OWNED BY READING & BATES DEVELOPMENT CO.
RB Gabon Inc. Oklahoma
RB International Ltd. Cayman Islands
RB Mediterranean Ltd. Cayman Islands
Total Offshore Production Systems Texas
Reading & Bates Development Co. owns
75% of Total Offshore Production
Systems, a joint venture organized
under the laws of the State of
Texas
TOPS Gyrfalcon L.L.C. Delaware
Reading & Bates Development Co. owns
75% of TOPS Gyrfalcon L.L.C., a
limited liability company organized
under the laws of the State of Delaware
MINDOC, L.L.C. Louisiana
Reading & Bates Development Co. owns
16 2/3% of MINDOC, L.L.C., a limited
liability company organized under the
laws of the State of Louisiana
SUBSIDIARY OWNED BY R&B FALCON SUBSEA DEVELOPMENT INC.
Total Offshore Production Systems Texas
R&B Falcon Subsea Development Inc. owns
25% of Total Offshore Production
Systems, a joint venture organized
under the laws of the State of
Texas
SUBSIDIARIES OWNED BY READING & BATES COAL CO.
Appalachian Permit Co. Kentucky
Bismarck Coal Inc. Kentucky
Caymen Coal Inc. West Virginia
SUBSIDIARY OWNED BY RBF DEEPWATER EXPLORATION INC.
RBF Deepwater Exploration Inc. owns 50%
of Deepwater Drilling L.L.C., a limited
liability company organized under the
laws of the State of Delaware
SUBSIDIARY OWNED BY RBF DEEPWATER EXPLORATION II INC.
RBF Deepwater Exploration II Inc. owns
60% of Deepwater Drilling II L.L.C., a
limited liability company organized
under the laws of the State of Delaware
SUBSIDIARIES OWNED BY RBF DRILLING CO.
R&B Falcon Drilling Co. and RBF Drilling
Co. together own 100% of Reading & Bates-
Demaga Perfuracoes Ltda., a civil society
with shares of limited responsibility
organized under the laws of the Federative
Republic of Brazil
RBF Drilling Co. and RBF Drilling Services,
Inc. together own 100% of RBF Servicos
Angola, Limitada, a limited liability company
organized under the laws of the Republic of Angola
SUBSIDIARIES OWNED BY RBF DRILLING SERVICES, INC.
RBF Drilling Services, Inc. owns 60%
of NRB Drilling Services Limited
incorporated in Nigeria
RBF Drilling Services, Inc. and Onshore
Services, Inc. together own 100% of
RBF (Nigeria) Limited, a company limited
by shares and organized under the laws
of the Federal Republic of Nigeria
RBF Drilling Services, Inc. and RBF Drilling
Co. together own 100% of RBF Servicos Angola,
Limitada, a limited liability company organized
under the laws of the Republic of Angola
SUBSIDIARIES OWNED BY RBF HOLDING CORPORATION
RBF Subsidiary Corporation Delaware
RBF Holding Corporation owns 90% of RBF FPSO
L.P., an exempted limited partnership
organized under the laws of the Cayman
Islands, B.W.I.
SUBSIDIARIES OWNED BY R&B FALCON BORNEO DRILLING CO., LTD.
R&B Falcon Borneo Drilling Co., Ltd.
owns 49.99% of R&B Falcon (M) Sdn.
Berhad, incorporated in Malaysia
SUBSIDIARIES OWNED BY R&B FALCON ENTERPRISES CO.
Shore Services, Inc. Texas
SUBSIDIARIES OWNED BY R&B FALCON EXPLORATION CO.
R&B Falcon (A) Pty Ltd Australia
SUBSIDIARIES OWNED BY R&B FALCON, INC.
R&B Falcon, Inc. and R&B Falcon Drilling Co.
together own 100 % of PT RBF Offshore Drilling,
a limited liability company organized under
the laws of the Republic of Indonesia
SUBSIDIARIES OWNED BY R&B FALCON INTERNATIONAL ENERGY SERVICES B.V.
R&B Falcon B.V. Netherlands
SUBSIDIARIES OWNED BY R&B FALCON (U.K.) LIMITED
R&B Falcon (Caledonia) Limited England
SUBSIDIARIES OWNED BY BISMARCK COAL INC.
Certicoals, Incorporated West Virginia
SUBSIDIARIES OWNED BY RB INTERNATIONAL LTD.
RB Anton Ltd. Cayman Islands
RB Astrid Ltd. Cayman Islands
RB Vietnam Ltd. Cayman Islands
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Form 10-K of our report dated February 22, 2000
included in Registration Statement File Nos. 333-43475, 333-67755,
333-67757, 333-68101, 333-81179, 333-81181, 333-81381, 333-88839,
333-88841 and 333-88843. It should be noted that we have not audited any
financial statements of the Company subsequent to December 31, 1999 or
performed any audit procedures subsequent to the date of our report.
/s/Arthur Andersen LLP
Houston, Texas
March 13, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of R&B Falcon Corporation for the year ended December
31, 1999 and 1998 as restated for comparative purposes and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> DEC-31-1999 DEC-31-1998
<CASH> 255 177
<SECURITIES> 302 0
<RECEIVABLES> 250 282
<ALLOWANCES> 23 12
<INVENTORY> 53 36
<CURRENT-ASSETS> 867 539
<PP&E> 4,297 3,550
<DEPRECIATION> 662 519
<TOTAL-ASSETS> 4,916 3,714
<CURRENT-LIABILITIES> 353 353
<BONDS> 2,933 1,866
276 0
0 0
<COMMON> 2 2
<OTHER-SE> 1,202 1,248
<TOTAL-LIABILITY-AND-EQUITY> 4,916 3,714
<SALES> 0 0
<TOTAL-REVENUES> 919 1,033
<CGS> 0 0
<TOTAL-COSTS> 874 817
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 170 64
<INCOME-PRETAX> (87) 161
<INCOME-TAX> (32) 59
<INCOME-CONTINUING> (68) 91
<DISCONTINUED> 0 36
<EXTRAORDINARY> (2) (24)
<CHANGES> 0 0
<NET-INCOME> 103 (103)
<EPS-BASIC> (.54) .61
<EPS-DILUTED> (.54) .61
</TABLE>
