PRIDE INTERNATIONAL, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AMENDED PARTICIPATION AGREEMENT
Exhibit 10.8
PRIDE INTERNATIONAL, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AMENDED
PARTICIPATION AGREEMENT
PARTICIPATION AGREEMENT
THIS AMENDED PARTICIPATION AGREEMENT (this “Amended Participation Agreement”), entered into
effective as of December 31, 2008, by and between Pride International, Inc. (the “Company”), and
Xxxxxx X. Xxxx (the “Executive”);
WITNESSETH:
WHEREAS, the Company has established the Pride International, Inc. Supplemental Executive
Retirement Plan, as amended and restated effective January 1, 2009 (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 amended and restated employment
agreement, effective as of December 31, 2008 (the “Employment Agreement”); and
WHEREAS, the Committee has selected the Executive for participation in the Plan effective as
of March 15, 2007 (the “Effective Date”); and
WHEREAS, the Company and the Executive previously entered into a participation agreement under
the Plan and desire to enter into this Amended Participation Agreement and to supersede any prior
agreements or understandings in their entirety; and
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the Company and the Executive agree to the form of this Amended Participation Agreement as follows:
1. Reference to Plan. This Amended 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 Amended Participation Agreement vary from the terms, conditions and provisions of the Plan,
this Amended 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 Annual Salary would be greater as of that date.
(c) “Early Retirement Date” means the Executive’s attainment of age 62.
(d) “Final Annual 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.
(e) “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 Amended Participation Agreement, the
Executive is a Participant in the Plan and is entitled to a SERP Benefit equal to 50% of Final
Annual Salary, as described in Section 4 of the Plan, subject to the terms of this Amended
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 Amended 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
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.
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(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 and Other Terminations. The Executive shall forfeit all rights to any
benefits under the Plan, whether or not vested, upon a termination of employment due
to Cause or due to any reason not described in items (a) through (d) of this
paragraph 4.
5. Effect of Termination on SERP Benefit. Except as otherwise provided in this
Amended 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 Amended
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(a) of the Plan.
(c) Termination Under the Employment Agreement. In the event of the Executive’s
“Termination” (as defined in the Employment Agreement) for any reason other than
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) of the Plan, and shall be paid in accordance with Section 4.9(b) of
the Plan.
(d) Involuntary Termination. Section 4.2(b) of the Plan shall not apply to the
Executive and is hereby superseded in its entirety.
(e) 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.
(f) 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.
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(g) Change in Control. If the Executive has a Change in Control Termination, the
SERP Benefit shall be paid as provided in Section 4.4 of the Plan.
(h) Cause and Other Terminations. The Executive shall forfeit all rights to any
benefits under the Plan, whether or not vested, upon a termination of employment due
to Cause or due to any reason not described in items (a) through (g) of this
paragraph 5.
6. Minimum Normal Retirement Benefit. For purposes of Section 4.9(a) of the Plan, the
Executive’s Minimum Normal Retirement Benefit is $4,880,895.
7. Retiree Medical Benefits. As of the date the Executive terminates employment with
any vested right to a SERP Benefit pursuant to the terms of the Plan and this Amended 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 later of the Executive’s death or the death of Executive’s surviving
spouse (if any), shall extend to the Executive, his spouse (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 by the Company 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, or if applicable, the
Executive’s surviving spouse, shall be responsible for the payment of the applicable premiums for
the cost of all coverage described in this paragraph at a rate not to exceed the cost to active
employees of the Company who serve in an executive capacity of the most comprehensive group medical
and dental coverage offered by the Company. Any benefits to the Executive’s spouse or surviving
spouse pursuant to this paragraph are available solely to the spouse to whom the Executive was
married on the date of termination. If the Executive is eligible for retiree medical and dental
benefit coverage pursuant to this paragraph 7, 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.
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Notwithstanding the foregoing, the Executive shall pay the full cost of the benefits as
determined under the then current practices of the Company on a monthly basis provided that the
Company shall reimburse the Executive the excess of costs, if any, above the then active employee cost for such benefits. Any reimbursements by the Company to the
Executive required under this paragraph shall be made on a regular, periodic basis within thirty
(30) days after such reimbursable amounts are incurred by the Executive. Any reimbursements
provided during one taxable year of the Executive shall not affect the expenses eligible for
reimbursement in any other taxable year of the Executive (with the exception of applicable lifetime
maximums applicable to medical expenses or medical benefits described in Section 105(b) of the
Code) and the right to reimbursement under this paragraph shall not be subject to liquidation or
exchange for another benefit or payment.
8. 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 Amended Participation Agreement. The Executive acknowledges that
all payments and benefits hereunder are subject to delayed payment pursuant to Section 8.11 of the
Plan in compliance with Section 409A of the Code.
9. Status of Amended Participation Agreement. The benefits payable under this Amended
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 Amended Participation Agreement shall not be deemed to constitute a contract of 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.
10. Entire Agreement. Except as otherwise provided in this paragraph 10, this Amended
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 Amended Participation
Agreement and the Plan. This Amended 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 Amended 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 Amended Participation Agreement shall be controlling. Except as
explicitly provided in this paragraph 10, this Amended 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 Amended Participation Agreement, such more
favorable provision of the Employment Agreement shall control.
11. Severability. If, for any reason, any provision of this Amended Participation
Agreement is held invalid, in whole or in part, such invalidity shall not affect any other
provision of this Amended Participation 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
Amended Participation Agreement or any portion thereof conflicts with
any law or regulation governing the activities of the Employer, this Amended Participation Agreement or
appropriate portion thereof shall be deemed invalid and of no force or effect.
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12. Governing Law. This Amended Participation Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
IN WITNESS WHEREOF, the parties have executed this Amended Participation Agreement (in
multiple copies) as of the date set forth below.
| PRIDE INTERNATIONAL, INC. | |||||||
| By | /s/ Xxxxx X. Xxxxxxx | ||||||
| ATTEST: | Xxxxx X. Xxxxxxx | ||||||
| President and Chief Executive Officer | |||||||
/s/ W. Xxxxxxx Xxxxxx
|
Date: | 12/31/08 | |||||
W. Xxxxxxx Xxxxxx |
|||||||
Senior Vice President — Legal, Information |
|||||||
Strategy and General Counsel |
/s/ Xxxxxx X. Xxxx | ||||||
| EXECUTIVE | |||||||
| Date: | 12/31/08 | ||||||
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