PRIDE INTERNATIONAL, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN PARTICIPATION AGREEMENT
Exhibit 10.2
PRIDE INTERNATIONAL, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
THIS PARTICIPATION AGREEMENT (this “Participation Agreement”), entered into effective as of
March 15, 2007 (the “Effective Date”), by and between Pride International, Inc. (the “Company”), and
Xxxxx X. Xxxxxxx (the “Executive”);
WITNESSETH:
WHEREAS, the Company has established the Pride International, Inc. Supplemental Executive
Retirement Plan, as amended and restated effective February 17, 2005, and as thereafter amended
(the “Plan”), to generally assist the Company and its Affiliates in retaining, attracting and
providing a retirement benefit to certain selected salaried officers and other key management
employees; and
WHEREAS, the Company and the Executive have entered into an employment agreement, effective as
of November 21, 2005 (the “Employment Agreement”); and
WHEREAS, the Committee has selected the Executive for participation in the Plan as more fully
described herein.
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the Company and the Executive agree to the form of this Participation Agreement as follows:
1. Reference to Plan. This Participation Agreement is being entered into 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
still in effect on the date hereof; provided, however, that to the extent the explicit terms of
this Participation Agreement vary from the terms, conditions and provisions of the Plan, this
Participation Agreement shall control. The Executive acknowledges he has received a copy of, and
is familiar with the terms of, the Plan which are hereby incorporated herein by reference.
2. Definitions. Terms not otherwise defined herein shall have the same meaning as
ascribed thereto in the Plan.
(a) “Average Monthly Salary” means the Executive’s average monthly base salary over
the 60 full calendar months immediately preceding the Determination Date or, if
less, the number of full calendar months in the Executive’s period of Service.
(b) “Determination Date” means the Executive’s last day of active employment;
provided, however, that in the event of a Change in Control Termination, the
Determination Date shall be the date immediately preceding the date of the Change in
Control if the Final Average Salary would be greater as of that date.
(c) “Final Average Salary” means, as of a Determination Date, the sum of (1) the
Executive’s Average Monthly Salary times 12 and (2) the Executive’s Target Bonus
Percentage for the year in which the Determination Date occurs multiplied by the
amount in (1) above.
(d) “Target Bonus Percentage” means the percentage of the Executive’s base annual
salary that would be payable as the Executive’s target award under the Company’s
annual bonus plan in effect on the Executive’s Determination Date (if the Company
has not specified a target award for such year, the most recent target award will be
considered continued in effect).
3. Benefit Percentage. As of the Effective Date and subject to the forfeiture and
vesting requirements of the Plan as supplemented by this Participation Agreement, the Executive is
a Participant in the Plan and is entitled to a SERP Benefit, as described in Section 4 of the Plan,
equal to 50% of Final Annual Salary, subject to the terms of this Participation Agreement and the
applicable reduction factor as set forth in Section 4.8 of the Plan for payments provided before
Executive’s Normal Retirement Date.
4. Vesting. Except as otherwise provided in this Participation Agreement, any SERP
Benefit shall be payable on all of the same terms and conditions, including timing, set forth in
the Plan.
(a) Normal or Early Retirement Date. The Executive’s contingent right to receive
the SERP Benefit shall fully vest upon the Executive’s Normal Retirement Date or, if
earlier, upon the Executive’s attainment of his Early Retirement Date.
(b) Termination Under the Employment Agreement. In the event of the Executive’s
“Termination” (as defined in the Employment Agreement) for any reason other than
death or Disability prior to the Executive’s Early or Normal Retirement Date, the
benefits payable under the Plan shall be vested in a percentage of the SERP Benefit
equal to the fraction, not to exceed 1.0, obtained by dividing (a) by (b), where (a)
equals the full calendar months of the Executive’s Service from and after January 1,
2007 and where (b) equals the full calendar months from and after January 1, 2007
until the first that would have occurred of the Executive’s Early Retirement Date
(determined as if the Executive had remained in Service until attainment of his
Early Retirement Date) or Normal Retirement Date.
(c) Death or Disability. The Executive’s SERP Benefit shall immediately vest in
full in the event of the Executive’s termination by reason of death or Disability.
(d) Change in Control. If the Executive has a Change in Control Termination, the
Executive’s SERP Benefit shall immediately vest in full.
(e) Cause. The Executive shall forfeit all rights to any benefits under the Plan,
whether or not vested, upon a termination of employment for Cause.
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5. Effect of Termination on SERP Benefit. Except as otherwise provided in this
Participation Agreement, any SERP Benefit shall be payable on all of the same terms and conditions,
including timing, set forth in the Plan. If the Executive is terminated without a vested interest
in his or her SERP Benefit as determined pursuant to paragraph 4 of this Participation Agreement,
the SERP Benefit shall be forfeited and the Executive shall have no rights to any payments
hereunder. Notwithstanding any provisions herein to the contrary, in no event shall the SERP
Benefit be paid sooner than the date permitted under Section 409A of the Code or Section 8.11 of
the Plan related to compliance with Section 409A of the Code.
(a) Normal Retirement Date. If the Executive terminates employment on or after his
Normal Retirement Date with a vested SERP Benefit, the SERP Benefit will be paid as
provided in Section 4.1 of the Plan.
(b) Early Retirement Date. If the Executive terminates employment on or after his
Early Retirement Date but before his Normal Retirement Date with a vested SERP
Benefit, the SERP Benefit will be paid as provided in Section 4.2 of the Plan.
(c) Termination Under the Employment Agreement. Section 4.9(c) of the Plan is
superseded in its entirety by the provisions of this paragraph 5(c). In the event
of the Executive’s “Termination” (as defined in the Employment Agreement) for any
reason other than death or Disability prior to his Normal Retirement Date, the
vested portion of the Executive’s SERP Benefit shall be payable in the applicable
form specified in Section 4.9(a) or Section 4.9(b) of the Plan, and shall be paid as
soon as practicable after the Executive’s Normal Retirement Date; provided, however,
that if the Executive’s termination is on or after his Early Retirement Date, the
SERP Benefit shall be paid as soon as practicable after the Executive’s termination.
(d) Death. If the Executive terminates employment by reason of death, the SERP
Benefit shall be paid as provided in Section 4.5 of the Plan.
(e) Disability. If the Executive terminates employment by reason of Disability, the
SERP Benefit shall be paid as provided in Section 4.6 of the Plan.
(f) Change in Control. Section 4.4 of the Plan is superseded in its entirety by the
provisions of this paragraph 5(f). The Executive’s SERP Benefit shall be equal to
the Actuarial Equivalent of the benefit that would have been payable on the first to
occur of the Executive’s Normal or Early Retirement Date (with Early Retirement Date
determined as if the Executive had remained in Service until attainment of his Early
Retirement Date). The Executive’s SERP Benefit shall be paid as soon as practicable
after his separation from employment, but no sooner than the date permitted under
Section 409A of the Code or Section 8.11 of the Plan related to compliance with
Section 409A of the Code. To the extent the Executive is entitled to a supplemental
payment (a “gross up payment”) to be made pursuant to the Employment Agreement to
the Executive as necessary to offset or mitigate the impact of the golden parachute
excise tax on the Executive,
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such provision shall control with respect to any benefit paid to the Executive
pursuant to this paragraph 5(f).
(g) Cause. The Executive shall forfeit all rights to any benefits under the Plan,
whether or not vested, upon a termination of employment for Cause.
6. Retiree Medical Benefits. If the Executive terminates employment with any vested
right to a SERP Benefit pursuant to the terms of the Plan and this Participation Agreement, whether
or not the SERP Benefit commences on termination, the Executive shall be deemed to have satisfied
the eligibility requirements to be a qualifying retiree for retiree medical and dental benefits.
For this purpose, and regardless whether at such time the Company makes retiree medical and dental
coverage available to employees generally, retiree medical and dental coverage shall be provided
until the Executive’s death, shall extend to the Executive, his spouse as of the date of
termination of employment (if any), and his eligible dependents who were covered under the
Company’s group health plan as of the date of termination of employment (“Eligible Dependents”),
and shall be at least as favorable as the group medical and dental coverage offered to employees of
the Company who serve in an executive capacity; provided, however, that coverage shall (i) be
suspended during any period the Executive is eligible for and covered by other group medical
coverage provided by another employer, (ii) at such time as the Executive or the Executive’s
spouse, as applicable, becomes eligible for and covered by Medicare, be converted to Medicare
Supplement coverage (providing coverage for deductibles and coinsurance in excess of coverage under
Medicare Part A and B or any successor to such parts), and (iii) terminate with respect to Eligible
Dependents, other than the Executive’s spouse, at such time as the Eligible Dependents are no
longer eligible for coverage under the terms of the group medical plan maintained for active
executives of the Company. The Executive shall be responsible for the payment of the applicable
premiums for the cost of coverage at the same rate paid by active employees of the Company who
serve in an executive capacity. If the Executive is eligible for retiree medical and dental
benefit coverage pursuant to this paragraph 6, such benefit coverage shall commence on the
Executive’s Normal Retirement Date or, if the Executive has terminated after his Early Retirement
Date, the Early Retirement Date; provided, however, if the Executive is receiving health insurance
coverage on such date pursuant to the Employment Agreement, the retiree medical and dental benefit
coverage shall commence upon the expiration of continued health insurance coverage as provided
under the Employment Agreement.
7. Tax Provisions. The Executive agrees that the payor of the Plan benefit may take
whatever steps the payor, in its sole discretion, deems appropriate or necessary to satisfy state
and federal income tax, social security, Medicare, other tax withholding obligations arising out of
the benefits payable under this Participation Agreement. The Executive further agrees that all
payments and benefits hereunder shall be subject to Section 409A of the Code or Section 8.11 of the
Plan related to compliance with Section 409A of the Code.
8. Status of Participation Agreement. The benefits payable under this Participation
Agreement shall be independent of, and in addition to, any other agreement relating to the
Executive’s employment that may exist from time to time between the parties hereto, or any other
compensation payable by the Employer to the Executive, whether salary, bonus or otherwise. This
Participation Agreement shall not be deemed to constitute a contract of
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employment between the parties hereto, nor shall any provision hereof, except as expressly
stated, restrict the right of the Employer to discharge the Executive or restrict the right of the
Executive to terminate the Executive’s employment.
9. Entire Agreement. Except as otherwise provided in this paragraph 9, this
Participation Agreement and the Plan constitute the entire understanding between the parties hereto
with respect to the subject matter hereof, and all promises, representations, understandings,
arrangements and prior agreements are superseded in their entirety by this Participation Agreement
and the Plan. This Participation Agreement may be amended, modified or terminated, in whole or in
part, at any time by a written instrument executed by both parties hereto. Notwithstanding
anything to the contrary in the Plan, this Participation Agreement may set forth specific terms or
provisions modifying the terms of the Plan with respect to the Executive, and the terms of this
Participation Agreement shall be controlling. Except as explicitly provided in this paragraph 9,
this Participation Agreement is not intended to constitute a waiver by the Executive of any rights
or benefits that he may have under the Employment Agreement and if any provision of the Employment
Agreement is more favorable to the Executive than the provisions of the Plan or this Participation
Agreement, such more favorable provision of the Employment Agreement shall control.
10. Severability. If, for any reason, any provision of this Participation Agreement
is held invalid, in whole or in part, such invalidity shall not affect any other provision of this
Agreement not so held invalid, and each such other provision shall to the full extent consistent
with law continue in full force and effect. If this Agreement or any portion thereof conflicts
with any law or regulation governing the activities of the Employer, this Participation Agreement
or appropriate portion thereof shall be deemed invalid and of no force or effect.
11. Governing Law. This Participation Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
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IN WITNESS WHEREOF, the parties have executed this Participation Agreement (in multiple
copies) as of the date set forth below.
| PRIDE INTERNATIONAL, INC. | ||||
ATTEST: |
By | /s/ Xxxxx X. Xxxxxxx President and Chief Executive Officer |
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| /s/ W. Xxxxxxx Xxxxxx | Date: | March 15, 2007 | ||
Secretary |
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| /s/ Xxxxx X. Xxxxxxx |
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| Date: | March 15, 2007 | |||
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