SCHEDULE 14A
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant toss. 240.14a-12
R&B FALCON CORPORATION
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies: (2)
Aggregate number of securities to which transaction applies: (3) Per unit
price or other underlying value of transaction computed pursuant to
Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transactions:
(5) Total fee paid.
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
2
R&B Falcon Corporation (the "Company") and certain other persons
named below may be deemed to be participants in the solicitation of proxies in
respect of the proposed merger (the "Merger") of TSF Delaware Inc. ("Merger
Sub"), a Delaware corporation and an indirect wholly owned subsidiary of
Transocean Sedco Forex Inc. ("TSF"), with and into the Company, and the
issuance of ordinary shares, par value $0.01 per share, of TSF, in connection
therewith, pursuant to the Agreement and Plan of Merger, dated as of August
19, 2000, by and among TSF, Transocean Holdings Inc., a Delaware corporation
and a direct wholly owned subsidiary of TSF, Merger Sub and the Company. The
participants in the solicitation may include (i) the directors of the Company
and (ii) the following executive officers of the Company: Andrew Bakonyi
(President and Chief Operating Officer), Tim W. Nagle (Executive Vice
President and Chief Financial Officer), Bernie W. Stewart (President--R&B
Falcon Holdings, Inc.), Ron Toufeeq (Senior Vice President, Operations),
Charles R. Ofner (Senior Vice President) and Wayne K. Hillin (Senior Vice
President).
The interests of the foregoing individuals in the Merger consists of
(i) their beneficial ownership of shares of the Company's common stock, par
value $0.01 per share (the "Common Stock"), and options ("Options") to
purchase Common Stock; (ii) in the case of the executive officers, certain
change-of-control provisions in their employment contracts with the Company;
and (iii), in the case of Mr. Loyd, a consulting agreement proposed to be
entered into in connection with the Merger. All Options will vest and become
immediately exercisable at the time of consummation of the Merger. Additional
information with respect to these items is set forth below.
<TABLE>
Securities Ownership
<CAPTION>
Name and Title Shares of Options
Common Stock Vested Unvested
<S> <C> <C> <C>
Purnendu Chatterjee (Director) 14,740,941 (1) 40,000 25,501
Arnold L. Chavkin (Director) 656,444 (2) 57,700 25,501
Charles A. Donabedian (Director) 9,386 45,900 25,501
Douglas A. P. Hamilton (Director) 515,740 40,000 25,501
Macko A. E. Laqueur (Director) 310,158 (3) 57,700 25,501
Paul B. Loyd, Jr. (Chairman of the Board 182,700 2,047,040 758,334
of Directors and Chief Executive Officer)
Richard A. Pattarozzi (Director) -- -- 60,000
Michael E. Porter (Director) 29,750 (4) 40,000 25,501
Robert L. Sandmeyer (Director) 9,579 25,700 25,501
Douglas E. Swanson (Director) 36,179 (5) 466,600 5,500
Steven A. Webster (Director) 5,242,473 (6) 1,510,147 5,500
William R. Ziegler (Director) 3,305,365 (7) 103,000 25,501
Andrew Bakonyi (President and Chief 20,811 423,363 313,334
Operating Officer)
<PAGE>
3
Tim W. Nagle (Executive Vice President 53,992 520,742 338,334
and Chief Financial Officer)
Bernie W. Stewart (President--R&B 22,500 361,750 197,500
Falcon Holdings, Inc.)
Ron Toufeeq (Senior Vice President, 14,566 224,816 180,000
Operations)
Charles R. Ofner (Senior Vice President) 28,345 248,342 129,000
Wayne K. Hillin (Senior Vice President) 38,386 219,909 144,000
</TABLE>
(1) Includes (i) 745,484 shares held for his account, (ii) 12,749,176 shares
held by S-C Rig Investments, L.P., the sole general partner of which is
S-C Rig Co., a company owned and controlled by Dr. Chatterjee, (iii)
250,000 shares held by the Chatterjee Charitable Foundation, of which Dr.
Chatterjee is a trustee, (iv) 76,698 shares held by S-C Rig Co., (v)
742,783 shares held by Chatterjee Fund Management, L.P., a limited
partnership of which Dr. Chatterjee is the sole general partner and (vi)
176,800 shares owned by Furzedown Trading Limited.
(2) Mr. Chavkin is President of Chemical Investments, Inc. ("Chemical"), an
affiliate of Chase Capital Partners and Chase Manhattan Corporation.
Chemical held 656,444 shares of Common Stock as of March 9, 2000.
(3) The shares listed for Mr. Laqueur include those beneficially owned by him
through his control of Workships Intermediaries N.B., a stockholder of
the Company.
(4) Includes 1,750 shares held by the Agnes Porter Trust.
(5) Includes 17,099 shares owned by the R&B Falcon U.S. Savings Plan for the
benefit of Mr. Swanson.
(6) Includes (i) 885,000 shares in the name of Mr. Webster as voting trustee
for Linda M. Webster, his spouse, (ii) 1,838,600 shares owned by FDI
Marine, Inc., of which Mr. Webster is an officer and director and of
which Linda Webster is a principal stockholder, (iii) 1,089,600 shares
owned by Falcon Drilling Services, Inc., of which Mr. Webster is an
officer and director and of which Linda Webster is a principal
stockholder, (iv) 559,800 shares owned by NFM Gulf Enterprises, Inc., of
which Mr. Webster is an officer, director and principal stockholder, and
(v) 70,650 shares owned by Cerrito Partners, 23,600 shares owned by
Cerrito Investments Limited Partnership, 57,360 shares owned by Cerrito
Investments I-A, L.P., and 11,880 shares owned by Webster Family
Investors, all of which are investment partnerships of which Mr. Webster
is the general partner or an officer of the general partner.
(7) Includes (i) 1,590,600 shares owned by FDI Marine, Inc., of which Mr.
Ziegler is an officer, director and principal stockholder, (ii) 950,372
shares owned by Falcon Drilling Services, Inc., of which Mr. Ziegler is
an officer, director and principal stockholder and (iii) 559,800 shares
owned by NFM Gulf Enterprises, Inc., of which Mr. Ziegler is an officer,
director and principal stockholder.
<PAGE>
4
Employment Contracts
Each officer of the Company may be removed from office at any time
by the Board of Directors, subject to his rights under any applicable
employment agreement. The Company entered into employment agreements dated
August 25, 1999 with each of its executive officers. The agreements provide
for a three year term of employment, with an automatic one year extension
implemented whenever the remaining term is one year (two years in the case of
Mr. Loyd). Each of such agreements provides that if the officer is terminated
by the Board during the employment term and outside the window period for
reasons other than a suspension for disability or termination for cause, the
Company will pay the officer a lump sum equal to the sum of his base salary
for the balance of the employment term and a bonus equal to the highest annual
bonus paid to the officer since January 1, 1998 (or if higher, his targeted
annual bonus for year in which he is terminated), all long-term incentive
awards shall vest, the Company will continue to provide at its cost all health
and welfare benefits for his spouse and dependents for the remaining
employment term and the Company will pay or reimburse such officer for certain
outplacement services not to exceed 15% of the officer's then current base
salary. For purposes of the employment agreement, "cause" means 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, the 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 conviction of a criminal offense constituting
a felony.
Each of the agreements further provides that each officer has the
right during the employment period to terminate the agreement for good reason
or during a window period. For that purpose "good reason" means the occurrence
of one or more of the following without the officer's written consent
including the assignment of duties materially inconsistent with the
authorities, duties, responsibilities and status as an officer of the Company
or a reduction in same from those in effect the preceding year, the required
relocation of an officer more than 50 miles than the officer's current primary
residence is from the Company's current headquarters, a reduction in the
officer's base salary (except as otherwise permitted by the agreement), a
material reduction in the officer's participation in the Company's long-term
incentive, employee benefit or retirement plans, policies or arrangements
(other than those substantially consistent with the average level of
participation of other executives having position commensurate with the
officer's position) or failure of the Company to obtain a satisfactory
agreement from any successor to the Company to assume and perform this
agreement. A window period for purposes of the agreements means 12 months
prior to the effective date of a change of control that occurs during the
initial three-year term of the employment period (or 6 months with respect to
any effective date of change of control occurring thereafter) and 24 months
following the effective date of a change in control. Upon termination by an
officer for good reason during a window period or by the Company (other than
for cause or suspension for disabilities), the Company will pay three times
the officer's then base salary and highest annual bonus since January 1, 1998
(or the targeted higher bonus, if higher), unpaid salary and accrued vacation
pay through the date of termination, prorated annual bonus (at highest annual
bonus) for the year of termination, continuation of welfare benefits for three
years, lump sum cash payment of the actuarial present value benefit of all
supplemental retirement plans in which the officer participates, reimbursement
of outplacement costs (limited as per above) and vesting of all long-term
incentive awards.
<PAGE>
5
Under the employment agreements, a change in control is deemed to
occur as of the date when one or more of the following conditions is
satisfied: (i) an individual or entity or any group of persons acting in
concert becomes the beneficial owner, as defined in Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
of securities of the Company possessing 25% or more of the voting power for
the election of directors of the Company; (ii) any consolidation, merger or
business combination involving the Company or any securities of the Company
occurs in which the holder of voting securities of the Company prior to such
consolidation, merger or business combination do not hold 60% or more of the
total voting power in an election of directors of the Company (or other
surviving corporation) following such consolidation , merger or business
combination; (iii) during any two-year consecutive period, individuals
constituting directors of the Company at the beginning of the period cease to
constitute a majority thereof unless the election or nomination of each new
director was approved by at least two-thirds of the directors still in office
who were directors of the Company at the beginning of such period; or (iv) a
sale, lease, exchange or other transfer of all or substantially all of the
assets of the Company to a party which is not controlled by or under common
control with the Company.
In connection with the Merger, TSF and the Company have agreed to
amend each of the agreements to provide that each officer shall have the
right, for a 30-day period commencing on the first anniversary of the
effective time of the Merger, to voluntarily terminate employment for any
reason and such termination shall be deemed to be a "qualifying termination"
during a window period. TSF also has agreed that "good reason" shall exist
pursuant to the terms of the agreements if an officer experiences a material
diminution in position or duties immediately following the Merger. In
addition, if TSF has not notified an officer prior to the Merger whether or
not such officer's employment is to be continued on terms that would not give
rise to "good reason" under the terms of the applicable agreement, such
officer will be entitled to specified payments under the agreement. TSF also
has agreed that following the Merger none of the executive officers will be
bound by any of the noncompetition provisions of the agreements.
In the event of the death of an officer during the employment term
or window period, the Company will pay to the officer's surviving spouse or
other designated beneficiary the officer's base salary and highest annual
bonus for the remaining employment term, plus a pro-rata portion of the
highest annual bonus for the year in which death occurs, all long-term
incentive awards shall vest, and the Company will provide at the Company's
cost all health and welfare benefits for the officer's spouse and dependents
for the remaining term of the employment agreement. In the event of an
officer's inability to perform his duties for 180 days during the employment
term or window period, the Board may after 30 days written notice suspend
their employment and place them on disability in which then the Company will
provide all health and welfare benefits (including, but not limited to, short
and long-term disability benefits and retirement benefits), plus pay base
salary through the date of suspension, pro-rata portion of the highest annual
bonus for the year in which suspension occurs and all long-term incentive
awards will vest (unless the disability relates to alcohol or drug dependence
in which case any long- term incentive awards will vest ratably).
The agreements provide that if any payment to one of the covered
officers will be subject to any excise tax under Section 4999 of the Internal
Revenue Code (the "Code"), a "gross-up" payment would be made to place the
officer in the same net after-tax position as would have been the case if no
excise tax had been payable.
<PAGE>
6
Consulting Agreement with Mr. Loyd
In connection with the Merger, the Company expects to enter into a
consulting agreement (the "Consulting Agreement") with Paul B. Loyd, Jr., the
Chairman of the Board of Directors and Chief Executive Officer of the Company.
The Consulting Agreement provides for an annual retainer of $300,000, which
will be increased to $360,000 if Mr. Loyd becomes a member of TSF's Board of
Directors, and reimbursement of customary expenses. During the term of the
Consulting Agreement, Mr. Loyd has agreed not to perform similar services for
any other company that provides offshore contract drilling services. The
Consulting Agreement has a term of three years, commencing on the effective
date of the Merger (or two years, if Mr. Loyd becomes a member of TSF's Board
of Directors), subject to Mr. Loyd's ability to terminate the agreement on 30
days' notice to the Company.
