Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT (the “Agreement”) is entered into by and among Transocean Ltd., a
Swiss corporation (“Transocean”), Transocean Offshore Deepwater Drilling Inc.
(“TODDI”), and Transocean Management Ltd. (“Transocean Management”)
(collectively, the “Company”), and Gregory L. Cauthen (the “Executive”),
effective as of January 9, 2012.

 

WHEREAS, TODDI wishes to employ the Executive to provide services to the
Company, and Transocean desires to appoint the Executive to serve as its
Executive Vice President and Chief Financial Officer, and the Executive wishes
to accept such employment; and

 

WHEREAS, it is in the best interests of the Company to provide the Executive
with the compensation and benefits as provided herein in order to retain the
services of the Executive and to permit the Executive to focus on the interests
of the Company.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound, the
Executive and the Company agree as follows:

 

1.                                       Term.

 

(a)                                  Employment Term.  TODDI agrees to employ
the Executive and the Executive agrees to be employed by TODDI for the period
commencing on January 9, 2012 (the “Effective Date”) and ending on the date six
months after Effective Date (the “Employment Term”).

 

(b)                                 Termination.  Any party to this Agreement
may terminate this Agreement prior to the close of the Employment Term by
providing sixty days advance written notice to the other parties. 
Notwithstanding the foregoing, in the event that the Agreement is terminated by
the Company or by mutual agreement prior to the six-month anniversary of the
Effective Date, the Company shall pay to the Executive, within thirty days
following the termination of his employment, a lump-sum payment in an amount
equal to the difference between the total Base Salary (as defined in
Section 3(a)) which he would have received if he had remained in the Company’s
employ through the six-month anniversary of the Effective Date and the amount of
Base Salary actually paid to him.

 

(c)                                  Extension of Term.  From time to time the
parties may mutually agree in writing to extend the Employment Term beyond the
period described in 1(a) above (not to exceed twelve months from the Effective
Date) and such extended period will be considered the Employment Term.

 

2.                                       Position and Duties.

 

(a)                                  Position.  The Executive shall serve as the
Company’s Executive Vice President and Chief Financial Officer and shall
exercise and perform all duties, powers and responsibilities commensurate with
such title and office.  The Executive shall report

 

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to the President and Chief Executive Officer of Transocean.  The Executive
agrees to relinquish the title of Executive Vice President and Chief Financial
Officer upon the appointment of a successor Chief Financial Officer of
Transocean, and during the remainder of the Employment Term shall perform such
duties as shall be assigned to the Executive by the President and Chief
Executive Officer (“CEO”) of Transocean including, without limitation,
facilitation of the transition to the successor Chief Financial Officer.  The
Executive agrees to enter into a Secondment Agreement with TODDI and Transocean
Management.

 

(b)                                 Exclusivity.  During the Employment Term the
Executive shall devote substantially all of his attention and time during normal
business hours to the business and affairs of the Company and shall use his
reasonable best efforts to perform and discharge faithfully and efficiently the
duties and responsibilities assigned to him.  It shall not be a violation of
this Agreement for the Executive to (i) serve on civic or charitable boards or
committees, (ii) with the prior approval of the CEO, serve on one board of a
public or private company as long as such public or private company is not a
competitor or customer of Transocean, or (iii) manage the Executive’s personal
investments, provided that such activities do not interfere or conflict with the
performance and fulfillment of the Executive’s duties and responsibilities under
this Agreement.

 

3.                                       Compensation and Related Matters.  The
following terms and conditions shall apply to the Executive’s compensation and
benefits during the Employment Term:

 

(a)                                  Base Salary.  TODDI shall pay the Executive
a base salary (“Base Salary”) of $ 53,333.33 per month in accordance with
TODDI’s normal payroll practices as in effect from time to time, less
withholding for taxes and deductions for other appropriate items.

 

(b)                                 Bonus.  The Executive shall become entitled
to a bonus payment (the “Bonus”) in the amount of $ 256,000.00 (equivalent to a
target bonus opportunity of 80 percent of Base Salary for the Employment Term)
contingent upon Executive’s full cooperation and assistance during the
Employment Term with the active search for a successor to the Executive as Chief
Financial Officer and the orderly transition of responsibilities to such
successor, as determined by the Compensation Committee of the Board of Directors
of Transocean (the “Committee”) in its discretion.  The determination of the
Committee shall be made in good faith, taking into account a recommendation by
the CEO with respect to the Executive’s satisfaction of the criteria for the
bonus payment.  Any such Bonus shall be paid in a single lump-sum cash payment
thirty days after the first meeting of the Committee subsequent to the
Executive’s termination of employment or, if earlier, on March 15, 2013.  The
Executive shall not be eligible to participate in the Performance Award and Cash
Bonus Plan or any other bonus plan maintained by the Company or an affiliate.

 

(c)                                  Long-Term Incentive Plan.  Within 30 days
after the Effective Date, the Executive shall receive a grant of 22,610 deferred
units (the “Deferred Unit Award”) under the Long-Term Incentive Plan of
Transocean Ltd. (the “LTIP”), which shall be subject to no further service
conditions following the date six months after the Effective

 

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Date, subject to the Executive’s continued service through that date (his
“deemed retirement date”) or, if earlier, upon the Executive’s earlier
termination of employment with the consent of Transocean and, to the extent not
forfeited, shall be vested and payable in three equal installments on the three
anniversaries following the date of grant.  If the Executive terminates
employment without satisfaction of the service conditions, the Deferred Unit
Award shall be forfeited.  The Executive shall have no other entitlement to
awards under the LTIP.

 

(d)                                 Benefit Plans.  The Executive shall be
eligible to participate in TODDI’s savings and retirement plans and welfare
benefit plans, including, but not limited to, medical, dental, short-term and
long-term disability and Executive life insurance on terms and conditions set
forth in such plans as generally applicable to TODDI’s senior executive
employees.  Notwithstanding the foregoing, the Executive shall not participate
in the Company’s Executive Severance Policy.

 

(e)                                  Expenses.  The Executive shall be entitled
to receive prompt reimbursement in accordance with the policies, practices and
procedures of the Company. for all reasonable expenses incurred by the Executive
in the performance of his duties and responsibilities hereunder, including but
not limited to, such reasonable living and transportation expenses as may be
necessary to enable the Executive to perform his duties and responsibilities at
Transocean’s Swiss headquarters.  The Executive shall receive perquisites
consistent with those afforded other executive officers of Transocean, as
applicable, including tax preparation and tax equalization benefits.

 

(f)                                    Vacation.  During the Employment Term,
the Executive shall be entitled to paid vacation in accordance with the
policies, practices and procedures of TODDI as in effect from time to time in an
amount equal to six weeks multiplied by the number of days in the Employment
Term divided by 365.

 

4.                                       Representations and Warranties.  The
Executive represents and warrants to the Company that the execution, delivery
and performance by the Executive of this Agreement do not and will not conflict
with or result in a violation of any provision of, or constitute a default
under, any contract, agreement, instrument or obligation to which the Executive
is a party or by which the Executive is bound.

 

5.                                       Confidentiality.  The Executive
acknowledges that, in the course of his employment with the Company, he will
acquire Confidential Information which is and remains the exclusive property of
the Company and/or its affiliates.  The Executive agrees, during the Employment
Term and following the termination of his employment with the Company, not to
divulge to any other person, firm, corporation or legal entity, any Confidential
Information or trade secret of the Company or its affiliates, except as required
by law.  “Confidential Information” shall mean information:  (A) disclosed to or
known by the Executive as a consequence of or through the Executive’s employment
with the Company and/or its affiliates; (B) not generally known outside the
Company and its affiliates; and (C) which relates to any aspect of the Company
and its affiliates, or their business, finances, operation plans, budgets,
research, or strategic development.  “Confidential Information” includes, but is
not limited to, trade secrets, proprietary information,

 

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financial documents, long range plans, customer information, employee
compensation, marketing strategy, data bases, pricing and costing data, patent
information, computer software developed by the Company or its affiliates,
investments made by the Company or its affiliates, and any information provided
to the Company or its affiliates by a third party under restrictions against
disclosure or use by the Company, its affiliates or others.

 

6.                                       Non-Solicitation of Customers.  The
Executive agrees that, during the one year period following the termination of
his employment with the Company, he will not directly or indirectly, on his own
behalf or on behalf of others, solicit or accept any business producing or
providing products or services which the Company or any of its affiliates
produces or provides from any person that was a customer or client or
prospective customer or client of the Company or its affiliates during the
period during which the Executive was employed with the Company or its
affiliates.

 

7.                                       Non-Solicitation of Employees.  The
Executive agrees that during the one year period following the termination of
his employment with the Company, he will not either directly or indirectly, on
his own behalf or on behalf of others, hire, solicit, induce, recruit or
encourage any of the employees of the Company or its affiliates to leave their
employment, or attempt to solicit, induce, recruit, or hire employees of the
Company or its affiliates.

 

8.                                       Non-Disparagement.  The Executive
agrees that, during the Employment Term and following the termination of his
employment with the Company, in acting alone or in concert with others, he will
not (A) publicly criticize or disparage the Company, its affiliates or any
officers, employees, directors or agents of the Company or its affiliates, or
privately criticize or disparage the Company, its affiliates or any officers,
employees, directors or agents of the Company or its affiliates in a manner
intended or reasonably calculated to result in public embarrassment to, or
injury to the reputation of the Company, its affiliates or any officers,
employees, directors or agents of the Company or its affiliates; (B) directly or
indirectly, acting alone or acting in concert with others, institute or
prosecute, or assist any person in any manner in instituting or prosecuting, any
legal proceedings of any nature against the Company or its affiliates;
(C) commit damage to the property of the Company or its affiliates or otherwise
engage in any misconduct which is injurious to the business or reputation of the
Company or its affiliates; or (D) take any other action, or assist any person in
taking any other action, that is adverse to the interests of the Company or its
affiliates or inconsistent with fostering the goodwill of the Company or its
affiliates; provided, however, that nothing in this Section 8 shall apply to or
restrict in any way the communication of information by the Executive to any
state, federal or governmental law enforcement agency or require notice to the
Company or its affiliates, and the Executive will not be in breach of the
covenant contained in (B) above solely by reason of his testimony which is
compelled by process of law.

 

9.                                       Cooperation.  The Executive agrees,
following his termination of employment, to reasonably cooperate with and make
himself available on a continuing basis to the Company and affiliates,
predecessors and successors (the “Transocean Group”) and their representatives
and legal advisors in connection with any matters in which he was involved
during his employment with the Company or any then existing or future claims,

 

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investigations, administrative proceedings, lawsuits and other legal and
business matters as reasonably requested by the Company.  The Executive also
agrees to promptly send the General Counsel, Transocean Ltd. copies of all
correspondence (for example, but not limited to, subpoenas) received by him in
connection with any such matters involving or relating to the Transocean Group,
unless he is expressly prohibited by law from so doing.  The Executive agrees
not to cooperate voluntarily in any third party claims against the Transocean
Group.  The Executive agrees that nothing in this Agreement restricts his
ability to appropriately respond to a subpoena or other request from the
government or regulators.  The Company agrees to reimburse the Executive for his
reasonable out-of-pocket expenses incurred in connection with the performance of
his obligations under this Section.

 

10.                                 Section 409A.  The Agreement is intended to
comply with the provisions of Section 409A of the Code and applicable Treasury
authorities (“Section 409A”) and, wherever possible, shall be construed and
interpreted to ensure that any payments that may be paid, distributed provided,
reimbursed, deferred or settled under this Agreement will not be subject to any
additional taxation under Section 409A.  This Section 10 does not create an
obligation on the part of Company to modify the Agreement in the future and does
not guarantee that the amounts or benefits owed under the Agreement will not be
subject to interest and penalties under Section 409A.  Notwithstanding any
provision of this Agreement to the contrary, if the Executive is a “specified
employee” within the meaning of that term under Section 409A(a)(2)(B) of the
Code on the Executive’s Termination Date, then any payment or benefit to be
paid, transferred or provided to the Executive pursuant to the provisions of
this Agreement that would be subject to the tax imposed by Section 409A of the
Code if paid, transferred or provided at the time otherwise specified in this
Agreement shall be delayed and thereafter paid, transferred or provided on the
first Business Day that is six months after the Executive’s Termination Date (or
if earlier, within 30 days after the date of the Executive’s death) to the
extent necessary for such payment or benefit to avoid being subject to the tax
imposed by Section 409A of the Code.  Each of the payments due to the Executive
with respect to the Deferred Units under Section 3(c) of this Agreement are
designated as separate payments for purposes of Section 409A and the short-term
deferral rules under Treasury Regulation Section 1.409A-1(b)(4)(i)(F).  As a
result, payments under Section 3(c) that are by their terms scheduled to be made
on or before March 15, 2013 are exempt from the requirements of Code
Section 409A under the separation pay and short-term deferral exemption
provisions.

 

11.                                 Enforcement of Agreement.  No waiver or
nonaction with respect to any breach by the other party of any provision of this
Agreement, nor the waiver or nonaction with respect to any breach of the
provisions of similar agreements with other employees or consultants shall be
construed to be a waiver of any succeeding breach of such provision, or as a
waiver of the provision itself.  Should any provisions hereof be held to be
invalid or wholly or partially unenforceable, such holdings shall not invalidate
or void the remainder of this Agreement.  Portions held to be invalid or
unenforceable shall be revised and reduced in scope so as to be valid and
enforceable, or, if such is not possible, then such portion shall be deemed to
have been wholly excluded with the same force and effect as if they had never
been included herein.

 

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12.                                 Choice of Law.  This Agreement shall be
interpreted and construed in accordance with and shall be governed by the laws
of the State of Texas, notwithstanding any conflicts of law principles which may
refer to the laws of any other jurisdiction.

 

13.                                 Notices.  Notices provided for in this
Agreement shall be in writing and shall either be personally delivered by hand
or sent by:  (i) mail service, postage prepaid, properly packaged, addressed and
deposited with the mail service system; (ii) via facsimile transmission or
electronic mail if the receiver acknowledges receipt; or (iii) via Federal
Express or other expedited delivery service provided that acknowledgment of
receipt is received and retained by the deliverer and furnished to the sender. 
Notices to the Executive by the Company shall be delivered to the last address
on file in the Executive’s personnel records, and notices by the Executive to
the Company. shall be delivered to Transocean Management Ltd., c/o Mr. Ian
Clark, Vice President, Human Resources, Chemin de Blandonnet 10, CH-1214
Vernier, Switzerland.

 

14.                                 Assignment.  This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
any successors or assigns of the Company.

 

15.                                 Amendment.  This Agreement may not be
modified or amended in any respect except by an instrument in writing signed by
the party against whom such modification or amendment is sought to be enforced. 
No person, other than pursuant to a resolution of the Board or a committee
thereof, shall have authority on behalf of the Company to agree to modify, amend
or waive any provision of this Agreement or anything in reference thereto.

 

16.                                 Withholding Taxes.  The Company may withhold
from any amounts payable under this Agreement such federal, state, local or
foreign taxes as shall be required to be withheld pursuant to any applicable law
or regulation.

 

17.                                 Nonalienation of Benefits.  The Executive
shall not have any right to pledge, hypothecate, anticipate or in any way create
a lien upon any payments or other benefits provided under this Agreement; and no
benefits payable hereunder shall be assignable in anticipation of payment either
by voluntary or involuntary acts, or by operation of law, except by will or
pursuant to the laws of descent and distribution.

 

18.                                 Entire Agreement.  This Agreement
constitutes the entire agreement between the parties hereto concerning the
subject matter hereof, and from and after the date of this Agreement, this
Agreement shall supersede any other prior agreement or understanding, both
written and oral, between the parties with respect to such subject matter.

 

19.                                 Captions.  The captions herein are inserted
for convenience of reference only, do not constitute a part of this Agreement,
and shall not affect in any manner the meaning or interpretation of this
Agreement.

 

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IN WITNESS WHEREOF, each of the Companies have caused this Agreement to be
executed on its behalf by its duly authorized officer, and the Executive has
executed this Agreement, as of the date first above set forth.

 

 

 

TRANSOCEAN LTD.

 

 

 

 

By:

/s/ Ian M. Clark

 

 

Ian M. Clark

 

 

Vice President, Human Resources

 

 

 

 

TRANSOCEAN DEEPWATER DRILLING INC.

 

 

 

 

By:

/s/ John L. Truschinger

 

 

John L. Truschinger

 

 

Senior Vice President, Support Services &

 

 

Chief Information Officer

 

 

 

 

TRANSOCEAN MANAGEMENT LTD.

 

 

 

 

By:

/s/ Nick Deeming

 

 

Nick Deeming

 

 

Senior Vice President & General Counsel

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Gregory L. Cauthen

 

Gregory L. Cauthen

 

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