EXHIBIT 10.3
PRIDE INTERNATIONAL, INC.
EMPLOYMENT/NON-COMPETITION/
CONFIDENTIALITY AGREEMENT
XXXXXXX X. XXXXX
EXHIBIT A
EMPLOYMENT/NON-COMPETITION/CONFIDENTIALITY AGREEMENT
DATE: The date of execution set forth below.
COMPANY/EMPLOYER: Pride International, Inc.,
a Delaware corporation
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
EMPLOYEE: Xxxxxxx X. Xxxxx
0000 Xxxxxxxxxx
Xxxxxxx, XX 00000
This Employment/Non-Competition/Confidentiality Agreement by and
between Pride International, Inc. (the "Company" and as further defined below)
and Xxxxxxx X. Xxxxx ("Employee") dated as of the date set forth on the
signature page below (the "Agreement"), but effective as of the date set forth
in Section 2.04 below, is made on the terms as herein provided.
PREAMBLE
WHEREAS, the Company wishes to attract and retain well-qualified
employees and key personnel and to assure itself of the continuity of its
management;
WHEREAS, Employee is an employee of the Company with significant
management responsibilities in the conduct of its business;
WHEREAS, the Company recognizes that Employee is a valuable resource
of the Company, and the Company desires to be assured of the continued services
of Employee;
WHEREAS, the Company desires to obtain assurances that Employee will
devote his best efforts to his employment with the Company and will not enter
into competition with the Company in its business as now conducted and to be
conducted, or solicit customers or other employees of the Company to terminate
their relationships with the Company;
WHEREAS, Employee is a key employee of the Company, and he
acknowledges that his talents and services to the Company are of a special,
unique, unusual and extraordinary character and are of particular and peculiar
benefit and importance to the Company;
WHEREAS, the Company is concerned that in the event of a possible or
threatened Change in Control (as defined below) of the Company, Employee may
feel insecure, and therefore the Company desires to provide security to Employee
in the event of a Change in Control;
WHEREAS, the Company further desires to assure Employee that if a
possible or threatened Change in Control should arise and Employee should be
involved in deliberations or negotiations in connection therewith, Employee
would be in a secure position to consider and participate in such transaction as
objectively as possible in the best interests of the Company and to this end
desires to protect Employee from any direct or implied threat to his financial
well-being by a Change in Control;
WHEREAS, Employee is willing to continue to serve the Company but
desires assurances that in the event of such a Change in Control he will
continue to have the employment status and responsibilities he could reasonably
expect absent such event and, that in the event this turns out not to be the
case, he will have fair and reasonable severance protection on the basis of his
service to the Company to that time;
WHEREAS, different factors impact the Company and Employee under
circumstances of regular employment between the Company and Employee when there
is no threat of Change in Control and/or none has occurred, as opposed to
circumstances under which a Change in Control is rumored, threatened, occurring
or has occurred. For this reason, the Agreement deals with the regular
employment of Employee under circumstances whereby no Change in Control is
threatened, occurring or has occurred ("Regular Employment") and it deals with
circumstances whereby a Change in Control is threatened, occurring or has
occurred. The Agreement deals with matters impacting both Regular Employment and
employment following a Change in Control, including non-competition and
confidentiality; and
WHEREAS, Employee is willing to enter into and carry out the
non-competition and confidentiality obligations and covenants set forth herein
in consideration of the Agreement.
AGREEMENT
NOW, THEREFORE, Employee and the Company (together the "Parties")
agree as follows:
I. PRIOR AGREEMENTS/CONTRACTS
1.01 PRIOR AGREEMENTS. On and as of 12:00 o'clock noon of the Effective
Date all prior employment and non-competition contracts between
Company and Employee are hereby amended, modified and superseded by
this Agreement insofar as future employment, compensation,
non-competition, confidentiality, accrual of payments or any form of
compensation or benefits from the Company are concerned. This
Agreement does not release or relieve Company from its liability or
obligation with respect to any compensation, payments or benefits
already accrued to Employee, nor to any vesting of benefits or other
rights which are attributable to length of employment, seniority or
other such matters. This agreement does not relieve Employee of any
prior non-competition or confidentiality obligations and agreements
and the same are hereby modified and amended as to future matters
and future confidentiality even as to matters accruing prior to the
Effective Date hereof.
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II. DEFINITION OF TERMS
2.01 COMPANY. Company means Pride International, Inc., a Delaware
corporation, as the same presently exists, as well as any and all
successors, regardless of the nature of the entity or the state or
nation of organization, whether by reorganization, merger,
consolidation, absorption or dissolution. For the purpose of the
Agreement, Company includes all subsidiaries and affiliates of the
Company to the extent such subsidiary and/or affiliate is carrying
on any portion of the business of the Company or a business similar
to that being conducted by the Company.
2.02 EXECUTIVE/OFFICER/EMPLOYEE. Executive/Officer/Employee means Xxxxxxx
X. Xxxxx.
2.03 OFFICE/POSITION/TITLE. The Office, Position and Title for which the
Employee is employed is that of Vice President and Chief Accounting
Officer of the Company and carries with it such duties,
responsibilities, rights, benefits and privileges as may reasonably
be assigned to the Employee as are customary and usual for such
position.
2.04 EFFECTIVE DATE. The Agreement becomes effective and binding as of
May 18, 2004.
2.05 CHANGE IN CONTROL. The term "Change in Control" of the Company shall
mean, and shall be deemed to have occurred on the date of the first
to occur of any of the following:
a. there occurs a change in control of the Company of the nature
that would be required to be reported in response to item 6(e)
of Schedule 14A of Regulation 14A or Item 1 of Form 8(k)
promulgated under the Securities Exchange Act of 1934 as in
effect on the date of the Agreement, or if neither item
remains in effect, any regulations issued by the Securities
and Exchange Commission pursuant to the Securities Exchange
Act of 1934 which serve similar purposes;
b. any "person" (as such term is used in Sections 12(d) and
14(d)(2) of the Securities Exchange Act of 1934) is or becomes
a beneficial owner, directly or indirectly, of securities of
the Company representing twenty percent (20%) or more of the
combined voting power of the Company's then outstanding
securities;
c. the individuals who were members of the Board of Directors of
the Company (the "Board") immediately prior to a meeting of
the shareholders of the Company involving a contest for the
election of directors shall not constitute a majority of the
Board of Directors following such election;
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d. the Company shall have merged into or consolidated with
another corporation, or merged another corporation into the
Company, on a basis whereby less than fifty percent (50%) of
the total voting power of the surviving corporation is
represented by shares held by former shareholders of the
Company prior to such merger or consolidation; or
e. the Company shall have sold, transferred or exchanged all, or
substantially all, of its assets to another corporation or
other entity or person.
2.06 TERMINATION. The term "Termination" shall mean termination of the
employment of Employee with the Company (including death and
disability (as described below)) for any reason other than cause (as
described below) or voluntary resignation (as described below).
Termination includes "Constructive Termination" as described below.
Termination includes termination at the end of any "Employment
Period" (as hereinafter defined) due to non-renewal or failure to
extend this Agreement for any reason except for cause.
a. The term "disability" means physical or mental incapacity
qualifying Employee for a long-term disability under the
Company's long-term disability plan. If no such plan exists on
the Effective Date, the term "disability" means physical or
mental incapacity as determined by a doctor jointly selected
by Employee and the Board of Directors of the Company
qualifying Employee for long-term disability under reasonable
employment standards.
b. The term "cause" means: (i) the willful and continued failure
of Employee substantially to perform his duties with the
Company (other than any failure due to physical or mental
incapacity) after a demand for substantial performance is
delivered to him by the Board of Directors which specifically
identifies the manner in which the Board believes he has not
substantially performed his duties, (ii) willful misconduct
materially and demonstrably injurious to the Company, or (iii)
material violation of the covenant not to compete (except
after termination after Change in Control as discussed
herein). No act or failure to act by Employee shall be
considered "willful" unless done or omitted to be done by him
not in good faith and without reasonable belief that his
action or omission was in the best interest of the Company.
The unwillingness of Employee to accept any or all of a change
in the nature or scope of his position, authorities or duties,
a reduction in his total compensation or benefits, or other
action by or at request of the Company in respect of his
position, authority, or responsibility that is contrary to
this Agreement, may not be considered by the Board of
Directors to be a failure to perform or misconduct by
Employee. Notwithstanding the foregoing, Employee shall not be
deemed to have been terminated for cause for purposes of the
Agreement unless and until there shall have been delivered to
him a copy of a resolution, duly adopted by a vote of
three-fourths of the entire Board of Directors of the Company
at a meeting of the Board of Directors called
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and held (after reasonable notice to Employee and an
opportunity for Employee and his counsel to be heard before
the Board) for the purpose of considering whether Employee has
been guilty of such a willful failure to perform or such
willful misconduct as justifies termination for cause
hereunder, finding that in the good faith opinion of the Board
of Directors Employee has been guilty thereof and specifying
the particulars thereof.
c. The term "Constructive Termination" means any circumstance by
which the actions of the Company either reduce or change
Employee's title, position, duties, responsibilities or
authority to such an extent or in such a manner as to relegate
Employee to a position not substantially similar to that which
he held prior to such reduction or change and which would
degrade, embarrass or otherwise make it unreasonable for
Employee to remain in the employment of the Company; and
includes a violation by the Company of the employment
provisions and conditions of this Agreement.
d. The resignation of Employee shall be deemed "voluntary" if it
is for any reason other than one or more of the following:
(i) Employee's resignation or retirement is requested by the
Company other than for cause;
(ii) Any significant adverse change in the nature or scope of
Employee's position, authorities or duties from those
described in this Agreement;
(iii) Any reduction in Employee's total compensation or
benefits from that provided in the Compensation and
Benefits Section hereof;
(iv) The material breach by the Company of any other
provision of this Agreement;
(v) Any requirement of the Company that Employee relocate
more than 50 miles from downtown Houston, Texas;
(vi) Any action by the Company which would constitute
Constructive Termination; or
(vii) Non-renewal or failure to extend any employment term,
contrary to the wishes of Employee.
Termination that entitles Employee to the payments and benefits provided
in Section 3.05 or 4.02 hereof shall not be deemed or treated by the
Company as the termination of Employee's employment or the forfeiture of
his participation, award, or eligibility, for the purpose of any plan,
practice or agreement of the Company referred to in the Compensation and
Benefits Section hereof, if, and to the extent that, such benefits are
provided under Section 3.05 or 4.02 hereof.
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2.07 CUSTOMER. The term "Customer" includes all persons, firms or
entities that are purchasers or end-users of services or products
offered, provided, developed, designed, sold or leased by the
Company during the relevant time periods, and all persons, firms or
entities which control, or which are controlled by, the same person,
firm or entity which controls such purchase.
III. EMPLOYMENT
3.01 EMPLOYMENT. Except as otherwise provided in the Agreement, the
Company hereby agrees to continue the Employee in its employ, and
the Employee hereby agrees to remain in the employ of the Company
for the Employment Period (as defined below). During the Employment
Period (as defined below), Employee shall exercise such position and
authority and perform such responsibilities as are commensurate with
such.
3.02 BEST EFFORTS AND OTHER EMPLOYMENT OBLIGATIONS OF EMPLOYEE; BUSINESS
EXPENSES AND OFFICE AND OTHER SERVICES.
a. Employee agrees that he will at all times faithfully,
industriously and to the best of his ability, experience and
talents, perform all of the duties that may be required of and
from him pursuant to the express and implicit terms hereof, to
the reasonable satisfaction of the Company. Said duties shall
be rendered at Houston, Texas, and such other place or places
within or without the State of Texas as the Company and
Employee shall agree.
b. Employee shall devote his normal and regular business time,
attention and skill to the business and interests of the
Company, and the Company shall be entitled to all of the
benefits, profits or other issue arising from or incident to
all work, services and advice of Employee performed for the
Company. Such employment shall be considered "full time"
employment. Employee shall also have the right to devote such
incidental and immaterial amounts of his time which are not
required for the full and faithful performance of his duties
hereunder to any outside activities and businesses which are
not being engaged in by the Company and which shall not
otherwise interfere with the performance of his duties
hereunder. Notwithstanding the foregoing, it shall not be a
violation of the Agreement for Employee to (i) serve on
corporate, civic or charitable boards or committees, (ii)
deliver lectures, fulfill speaking engagements or teach at
educational institutions and (iii) manage personal
investments, so long as such activities do not significantly
interfere with the performance of Employee's responsibilities
hereunder. Employee shall have the right to make investments
in any business provided such investment does not result in a
violation of the Non-Competition Section of this Agreement.
c. Employee acknowledges and agrees that Employee owes a
fiduciary duty to the Company. In keeping with these duties,
Employee shall make full
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disclosure to the Company of all business opportunities
pertaining to the Company's business and shall not appropriate
for Employee's own benefit business opportunities concerning
the subject matter of the fiduciary relationship.
d. Employee shall not intentionally take any action which he
knows would not comply with United States laws applicable to
Employee's actions on behalf of the Company, and/or any of its
subsidiaries or affiliates, including specifically, without
limitation, the United States Foreign Corrupt Practices Act,
generally codified in 15 USC 78 (the "FCPA"), as the FCPA may
hereafter be amended, and/or its successor statutes.
e. During the employment relationship and after the employment
relationship terminates, Employee agrees to refrain from any
disparaging comments about the Company, any affiliates, or any
current or former officer, director or employee of the Company
or any affiliate, and Employee agrees not to take any action,
or assist any person in taking any other action, that is
materially adverse to the interests of the Company or any
affiliate or inconsistent with fostering the goodwill of the
Company and its affiliates; provided, however, that nothing in
this Agreement shall apply to or restrict in any way the
communication of information by Employee to any state or
federal law enforcement agency or require notice to the
Company thereof, and Employee will not be in breach of the
covenant contained above solely by reason of his testimony
which is compelled by process of law. The Company and its
affiliates, officers and directors agree to refrain from any
disparaging comments about Employee; provided, however, that
nothing in this Agreement shall apply to or restrict in any
way the communication of information by the Company and its
affiliates, officers and directors to any state or federal law
enforcement agency or require notice to Employee thereof, and
the Company and its affiliates, officers and directors will
not be in breach of the covenant contained above solely by
reason of testimony which is compelled by process of law.
f. During the Employment Period, Employee shall be entitled to
receive prompt reimbursement for all reasonable expenses
incurred by Employee in accordance with the most favorable
policies, practices and procedures of the Company as in effect
from time to time.
g. During the Employment Period, the Company shall furnish
Employee with office space, secretarial assistance and such
other facilities and services as shall be suitable to
Employee's position and adequate for the performance of
Employee's duties hereunder.
3.03 TERM OF EMPLOYMENT. Employee's Regular Employment will commence on
the Effective Date and will be a for a term ending at 12:00 o'clock
midnight on May 18, 2006 (the "Employment Period"); thereafter, the
Employment Period
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will be automatically extended for successive terms of one (1) year
commencing on each anniversary of the Effective Date, unless the
Company or Employee gives written notice to the other that
employment will not be renewed or continued after the next scheduled
expiration date which is not less than one (1) year after the date
that the notice of non-renewal was given.
3.04 COMPENSATION AND BENEFITS. During the Employment Period Employee
shall receive the following compensation and benefits:
a. Employee will receive an annual base salary of not less than
$190,000.00, with the opportunity for increases, from time to
time thereafter, which are in accordance with the Company's
regular executive compensation practices (the "Annual Base
Salary"). The Annual Base Salary will be reviewed at least
annually, but in no event earlier than December 2004.
b. Employee will be eligible to participate on a reasonable
basis, and to continue his existing participation, in annual
bonus, stock option and other incentive compensation plans
which provide opportunities to receive compensation in
addition to his Annual Base Salary which are at least equal to
the opportunities provided by the Company for executives with
comparable duties.
c. Employee will be entitled to receive and participate in
employee benefits (including, but not limited to, medical,
life, health, accident and disability insurance and disability
benefits) and perquisites which are at least equal to those
provided by the Company to executives with comparable duties.
d. Employee will receive paid vacation days each year to the same
extent as provided to executives with comparable duties.
e. Employee shall receive a monthly automobile allowance in an
amount not less than $750.00.
f. As of the Effective Date, Employee shall receive an award of a
non-qualified option to acquire up to 30,000 shares of common
stock of Pride International, Inc., pursuant to the terms of
the 1998 Long Term Incentive Plan. The option award shall
become exercisable in accordance with the following schedule:
Date of Initial Exercisability
Following Effective Date Number of Shares
------------------------ ----------------
6 Months 6,000
12 Months 6,000
18 Months 6,000
24 Months 6,000
30 Months 6,000
TOTAL 30,000
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The exercise price will be the closing share price on the
Effective Date. The option will have a 10-year term, subject
to earlier expiration in the event of termination of
employment in accordance with the Company's customary option
award terms (attached as Exhibit A hereto).
g. Employee will participate, or if dependent on Employee's
election, will be eligible to participate in all other
executive incentive stock and benefit plans approved by the
Company.
3.05 TERMINATION WITHOUT CHANGE IN CONTROL. Notwithstanding anything
herein to the contrary, the Company shall have the right to
terminate Employee's employment at any time during the Employment
Period (including any extended term). Should the Company choose not
to renew or extend the Employment Period of the Agreement or choose
to terminate Employee during, or at the end of, the Employment
Period, or in the event of death or disability of Employee, if the
termination is not after a Change in Control and is not for cause,
the Company shall, within thirty (30) days following such
termination, pay or provide to Employee (or his Executor,
Administrator or Estate in the event of death, as soon as reasonably
practical):
a. An amount equal to one (1) full year of his base salary, which
base salary is here defined as twelve (12) times the then
current monthly salary in effect for Employee and all other
benefits due him based upon the salary in effect on the date
of Termination (but not less than the highest annual base
salary paid to Employee during any of the three (3) years
immediately preceding his date of Termination). There shall be
deducted only such amounts as may be required by law to be
withheld for taxes and other applicable deductions.
b. The Company shall provide to Employee for a period of one (1)
full year following the date of his Termination, life, health,
accident and disability insurance coverages which are not less
than the highest benefits furnished to Employee during the
term of this Agreement.
c. An amount equal to the target award for Employee under the
Company's annual bonus plan for the fiscal year in which
Termination occurs; provided, however, that (i) if Employee
has deferred his award for such year under a Company plan, the
payment due Employee under this subparagraph shall be paid in
accordance with the terms of the deferral or as specified by
Employee and (ii) if the Company has not specified a target
award for such year, the amount will be equal to fifty percent
(50%) of the maximum percentage of Employee's Annual Base
Salary Employee may be entitled to under the Company's annual
bonus plan in such year.
d. The Company will pay, distribute and otherwise provide to
Employee the amount and value of his entire plan account and
interest under any
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retirement plan, employee benefit plan, investment plan or
stock ownership plan, if any exists on the date of his
Termination, and all employer contributions made or payable to
any such plan for his account prior to the end of the month in
which his termination occurs shall be deemed vested and
payable to him; provided, however, that in the event any such
employer contributions are prohibited from being deemed vested
and payable for any reason (other than due to a lack of
Employee's consent), the total amount of such employer
contributions shall be paid to Employee in a lump sum outside
of any such plan. Such payment or distribution shall be made
in accordance with the elections made by Employee with respect
to distributions in accordance with the plan as if Employee's
employment with the Company terminated at the end of the month
in which Termination occurs.
e. All stock options and awards to which Employee is entitled
will immediately vest and the time for exercising any option
will extend for 120 days following such termination of
employment, or such later date as shall be specified in the
applicable plan and award agreement; provided, however, that
in no event shall the time for exercising an option extend
beyond the original term of the option.
f. With respect to any qualified or non-qualified retirement
pension plan that may be adopted by the Company after the
Effective Date, if Employee elects to treat Termination as
retirement then on the date of Termination, Employee shall be
deemed to have retired from the Company. At that time, or at
such later time as he may elect consistent with the terms of
any such applicable plan or benefit, in order to receive
benefits or avoid or minimize any applicable early pension
reduction provisions, he shall be entitled to commence to
receive the retirement benefits to which he is entitled under
such plan(s). Employee may treat the termination as
termination other than "retirement" if Employee so elects and
may defer "retirement" to a later date if permitted by any
applicable plan(s).
g. The "Compensation and Benefits" section hereof shall be
applicable in determining the payments and benefits due
Employee under this section and if Termination occurs after a
reduction in all or part of Employee's total compensation or
benefits, the lump sum severance allowance and other
compensation and benefits payable to him pursuant to this
section shall be based upon his compensation and benefits
before the reduction.
h. If any provision of this Section cannot, in whole or in part,
be implemented and carried out under the terms of the
applicable compensation, benefit or other plan or arrangement
of the Company because Employee has ceased to be an actual
employee of the Company, due to insufficient or reduced
credited service based upon his actual employment by the
Company or because the plan or arrangement has been terminated
or amended after the Effective Date, or for any other reason,
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the Company itself shall pay or otherwise provide the
equivalent of such rights, benefits and credits for such
benefits to the Employee, his dependents, beneficiaries and
estate as if Employee's employment had not been terminated.
i. All life, health, hospitalization, medical and accident
benefits available to Employee's spouse and dependents shall
continue for the same term as Employee's benefits. If Employee
dies, all benefits will be provided for a term of one (1) year
(or two (2) years if after a Change in Control) after the date
of death of Employee.
j. The Company's obligation under this Section to continue to pay
or provide health care, life, accident and disability
insurance to Employee, Employee's spouse and Employee's
dependents shall be reduced when and to the extent any such
benefits are paid or provided to Employee by another employer;
provided, however, that Employee shall have all rights, if
any, afforded to retirees to convert group life insurance
coverage to the individual life insurance coverage as, to the
extent of, and whenever his group life insurance coverage
under this Section is reduced or expires. Apart from this
subparagraph, Employee shall have and be subject to no
obligation to mitigate.
k. The Company shall deduct applicable withholding taxes in
performing its obligations under this Section.
Nothing in this Section is intended, nor shall be deemed or interpreted,
to be an amendment to any compensation, benefit or other plan of the
Company. To the extent the Company's performance under this Section
includes the performance of the Company's obligations to Employee under
any other plan or under another agreement between the Company and
Employee, the rights of Employee under such other plan or other agreement,
which are discharged under the Agreement, are discharged, surrendered, or
released pro tanto.
IV. CHANGE IN CONTROL
4.01 EXTENSION OF EMPLOYMENT PERIOD. Upon any Change in Control, the
Employment Period shall be immediately and without further action
extended for a term of two (2) years following the effective date of
the Change in Control and will expire at 12:00 o'clock midnight on
the last day of the month following two (2) years after the Change
in Control. Thereafter, the Employment Period will be extended for
successive terms of one (1) year each, unless terminated, all in the
manner specified in Section 3.03.
4.02 CHANGE IN CONTROL TERMINATION PAYMENTS AND BENEFITS. In the event
Employee is terminated within two (2) years following a Change in
Control, Employee will receive the payments and benefits specified
in the
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"Termination Without Change in Control" Section at the same time and
in the same manner therein specified except as amended and modified
below:
a. The salary and benefits specified in Section 3.05a. will be
paid based upon a multiple of two (2) years (instead of one
(1) year).
b. Life, health, accident and disability insurance specified in
Section 3.05b. will be provided until (i) Employee becomes
reemployed and receives similar benefits from a new employer
or (ii) two (2) years after the date of Termination, whichever
is earlier.
c. An amount equal to two (2) times the maximum award that
Employee could receive under the Company's annual bonus plan
for the fiscal year in which the Termination occurs, instead
of the benefits provided in Section 3.05c hereof.
d. Section 3.05e is modified such that the time for exercising
any option will extend to the later of (i) the date that is
two (2) years after the date of the Change in Control or (ii)
the date that is 120 days after the date of Employee's
Termination; provided, however, that in no event shall the
time for exercising an option extend beyond the original term
of the option.
e. All other rights and benefits specified in Section 3.05.
4.03 VOLUNTARY RESIGNATION UPON CHANGE IN CONTROL. If Employee
voluntarily resigns his employment within six (6) months after a
Change in Control (whether or not the Company may be alleging the
right to terminate employment for cause), he will receive the same
payments, compensation and benefits as if he had had a Termination
on the date of resignation after Change in Control.
V. NON COMPETITION AND CONFIDENTIALITY/PROTECTION OF INFORMATION
5.01 CONSIDERATION. Employee recognizes that in each of the highly
competitive businesses in which the Company is engaged, the
Company's trade secrets and other confidential information, along
with personal contacts, are of primary importance in securing and
maintaining business prospects, in retaining the accounts and
goodwill of present Customers and protecting the business of the
Company. Employee, therefore, agrees that in exchange for the
provision of trade secrets and other confidential information, he
will agree to the non-competition and confidentiality obligations
and covenants outlined in this Section V.
5.02 NON-COMPETITION. In exchange for the consideration described above
in Section 5.01, Employee agrees that during his employment with the
Company and for a period of six (6) months after he is no longer
employed by the Company (unless his employment is terminated after a
Change in Control, in which event there will be no covenant not to
compete and the noncompete covenants and
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obligations herein will terminate on the date of termination of
Employee), Employee will not, directly or indirectly, either as an
individual, proprietor, stockholder (other than as a holder of up to
one percent (1%) of the outstanding shares of a corporation whose
shares are listed on a stock exchange or traded in accordance with
the automated quotation system of the National Association of
Securities Dealers), partner, officer, employee or otherwise:
a. work for, become an employee of, invest in, provide consulting
services to or in any way engage in any business which (i) is
primarily engaged in the drilling and workover of oil and gas
xxxxx within the geographical area described in Section
5.02(e) and (ii) actually competes to a substantial extent
with the Company; or
b. provide, sell, offer to sell, lease, offer to lease, or
solicit any orders for any products or services which the
Company provided and with regard to which Employee had direct
or indirect supervision or control, within one (1) year
preceding Employee's termination of employment, to or from any
person, firm or entity which was a Customer for such products
or services of the Company during the one (1) year preceding
such termination from whom the Company had solicited business
during such one (1) year; or
c. solicit, aid, counsel or encourage any officer, director,
employee or other individual to (i) leave his or her
employment or position with the Company, (ii) compete with the
business of the Company, or (iii) violate the terms of any
employment, non-competition or similar agreement with the
Company; or
d. employ, directly or indirectly, permit the employment of,
contract for services or work to be performed by, or otherwise
use, utilize or benefit from the services of any officer,
director, employee or any other individual holding a position
with the Company within two (2) years after the date of
termination of employment of Employee with the Company or
within two (2) years after such officer, director, employee or
individual terminated employment with the Company, whichever
period expires earlier; provided however, Employee can seek
written consent from the Company to hire an officer, director,
employee or individual who has terminated employment with the
Company, and Company consent will not be unreasonably
withheld.
e. The geographical area within which the non-competition
obligations and covenants of the Agreement shall apply is that
territory within two hundred (200) miles of (i) any of the
Company's present offices, (ii) any of the Company's present
rig yards and (iii) any additional location where the Company,
as of the date of any action taken in violation of the
non-competition obligations and covenants of the Agreement,
has an office, a rig yard, or definitive plans to locate an
office or a rig yard. Notwithstanding the foregoing, if the
two hundred (200) mile radius
-13-
extends into another country or its territorial waters and the
Company is not then doing business in that other country,
there will be no territorial limitations extending into such
other country.
5.03 CONFIDENTIALITY/PROTECTION OF INFORMATION. Employee acknowledges
that his employment with the Company has in the past and will, of
necessity, provide him with specialized knowledge which, if used in
competition with the Company, or divulged to others, could cause
serious harm to the Company. Accordingly, Employee will not at any
time during or after his employment by the Company, directly or
indirectly, divulge, disclose or communicate to any person, firm or
corporation in any manner whatsoever any information concerning any
matter affecting or relating to the Company or the business of the
Company. While engaged as an employee of the Company, Employee may
only use information concerning any matters affecting or relating to
the Company or the business of the Company for a purpose which is
necessary to the carrying out of Employee's duties as an employee of
the Company, and Employee may not make use of any information of the
Company after he is no longer an employee of the Company. Employee
agrees to the foregoing without regard to whether all of the
foregoing matters will be deemed confidential, material or
important, it being stipulated by the parties that all information,
whether written or otherwise, regarding the Company's business,
including, but not limited to, information regarding Customers,
Customer lists, costs, prices, earnings, products, services,
formulae, compositions, machines, equipment, apparatus, systems,
manufacturing procedures, operations, potential acquisitions, new
location plans, prospective and executed contracts and other
business arrangements, and sources of supply, is prima facie
presumed to be important, material and confidential information of
the Company for the purposes of the Agreement, except to the extent
that such information may be otherwise lawfully and readily
available to the general public. Employee further agrees that he
will, upon termination of his employment with the Company, return to
the Company all books, records, lists and other written, electronic,
typed or printed materials, whether furnished by the Company or
prepared by Employee, which contain any information relating to the
Company's business, and Employee agrees that he will neither make
nor retain any copies of such materials after termination of
employment. Notwithstanding any of the foregoing, nothing in this
Agreement shall prevent Employee from complying with applicable
federal and/or state laws. Notwithstanding any of the foregoing,
Employee will not be liable for any breach of these confidentiality
provisions unless the same constitutes a material detriment to the
Company, or due to the nature of the information divulged and the
manner in which it was divulged and the person to whom it was
divulged it would likely cause damage to the Company or constitute a
material detriment to the Company.
5.04 COMPANY REMEDIES FOR VIOLATION OF NON-COMPETITION OR
CONFIDENTIALITY/PROTECTION OF INFORMATION PROVISIONS. Without
limiting the right of the Company to pursue all other legal and
equitable rights available to it for violation of any of the
obligations and covenants made by Employee herein, it is agreed
that:
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a. the skills, experience and contacts of Employee are of a
special, unique, unusual and extraordinary character which
give them a peculiar value;
b. because of the business of the Company, the restrictions
agreed to by Employee as to time and area contained in the
Agreement are reasonable; and
c. the injury suffered by the Company by a violation of any
obligation or covenant in the Agreement resulting from loss of
profits created by (i) the competitive use of such skills,
experience contacts and otherwise and/or (ii) the use or
communication of any information deemed confidential herein
will be difficult to calculate in damages in an action at law
and cannot fully compensate the Company for any violation of
any obligation or covenant in the Agreement, accordingly:
(i) the Company shall be entitled to injunctive relief
to prevent violations thereof and prevent Employee
from rendering any services to any person, firm or
entity in breach of such obligation or covenant
and to prevent Employee from divulging any
confidential information; and
(ii) compliance with the Agreement is a condition
precedent to the Company's obligation to make
payments of any nature to Employee, subject to the
other provisions hereof.
5.05 TERMINATION OF BENEFITS FOR VIOLATION OF NON-COMPETITION AND
CONFIDENTIALITY/PROTECTION OF INFORMATION PROVISIONS. If Employee
materially violates the confidentiality/protection of information
and/or non-competition obligations and covenants herein or any other
related agreement he may have signed as an employee of the Company,
Employee agrees there shall be no obligation on the part of the
Company to provide any payments or benefits (other than payments or
benefits already earned or accrued) described in Section 3.05 of the
Agreement, subject to the provision of Section 6.01 hereof. There
will be no withholding of benefits or payments due to a violation of
the non-competition obligations hereof if the termination occurred
after a Change in Control, and Employee will not be bound by the
non-competition provisions if terminated after a Change in Control.
5.06 REFORMATION OF SCOPE. If the provisions of the confidentiality
and/or non-competition obligations and covenants should ever be
deemed to exceed the time, geographic or occupational limitations
permitted by the applicable law, Employee and the Company agree that
such provisions shall be and are hereby reformed to the maximum
time, geographic or occupational limitations permitted by the
applicable law, and the determination of whether Employee violated
such obligation and covenant will be based solely on the limitation
as reformed.
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VI. GENERAL
6.01 ENFORCEMENT COSTS. The Company is aware that upon the occurrence of
a Change in Control, or under other circumstances even when a Change
in Control has not occurred, the Board of Directors or a stockholder
of the Company may then cause or attempt to cause the Company to
refuse to comply with its obligations under the Agreement, or may
cause or attempt to cause the Company to institute, or may
institute, litigation seeking to have the Agreement declared
unenforceable, or may take, or attempt to take other action to deny
Employee the benefits intended under the Agreement; or actions may
be taken to enforce the non-competition or confidentiality
provisions of the Agreement. In these circumstances, the purpose of
the Agreement could be frustrated. It is the intent of the parties
that Employee not be required to incur the legal fees and expenses
associated with the protection or enforcement of his rights under
the Agreement by litigation or other legal action because such costs
would substantially detract from the benefits intended to be
extended to Employee hereunder nor be bound to negotiate any
settlement of his rights hereunder under threat of incurring such
costs. Accordingly, if at any time after the Effective Date, it
should appear to Employee that the Company is or has acted contrary
to or is failing or has failed to comply with any of its obligations
under the Agreement for the reason that it regards the Agreement to
be void or unenforceable, that Employee has violated the terms of
the Agreement, or for any other reason, or that the Company has
purported to terminate his employment for cause or is in the course
of doing so, or is withholding payments or benefits, or is
threatening to withhold payments or benefits, contrary to the
Agreement, or in the event that the Company or any other person
takes any action to declare the Agreement void or unenforceable, or
institutes any litigation or other legal action designed to deny,
diminish or to recover from Employee the benefits provided or
intended to be provided to him hereunder, and Employee has acted in
good faith to perform his obligations under the Agreement, the
Company irrevocably authorizes Employee from time to time to retain
counsel of his choice at the expense of the Company to represent him
in connection with the protection and enforcement of his rights
hereunder including, without limitation, representation in
connection with termination of his employment or withholding of
benefits or payments contrary to the Agreement or with the
initiation or defense of any litigation or any other legal action,
whether by or against Employee or the Company or any director,
officer, stockholder or other person affiliated with the Company, in
any jurisdiction. The Company is not authorized to withhold the
periodic payments of attorney's fees and expenses hereunder based
upon any belief or assertion by the Company that Employee has not
acted in good faith or has violated the Agreement. If the Company
subsequently establishes that Employee was not acting in good faith
and has violated the Agreement, Employee will be liable to the
Company for reimbursement of amounts paid due to Employee's actions
not based on good faith and in violation of the Agreement. The
reasonable fees and expenses of counsel selected from time to time
by Employee hereinabove provided shall be paid or reimbursed to
Employee by the Company, on a regular, periodic basis within thirty
(30) days after presentation by Employee of a statement or
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statements prepared by such counsel in accordance with its customary
practices, up to a maximum aggregate amount of $250,000.00.
6.02 INCOME, EXCISE OR OTHER TAX LIABILITY. Employee will be liable for
and will pay all income tax liability by virtue of any payments made
to Employee under this Agreement, as if the same were earned and
paid in the normal course of business and not the result of a Change
in Control and not otherwise triggered by the "golden parachute" or
excess payment provisions of the Internal Revenue Code of the United
States, which would cause additional tax liability to be imposed. If
any additional income tax, excise or other taxes are imposed on any
amount or payment in the nature of compensation paid or provided to
or on behalf of Employee, the Company shall "gross-up" Employee for
such tax liability by paying to Employee an amount sufficient so
that after payment of all such taxes so imposed, Employee's position
on an after-tax basis is what it would have been had no such
additional taxes been imposed. Employee will cooperate with the
Company to minimize the tax consequences to Employee and to the
Company so long as the actions proposed to be taken by the Company
do not cause any additional tax consequences to Employee and do not
prolong or delay the time that payments are to be made, or reduce
the amount of payments to be made, unless Employee consents in
writing to any delay or deferment of payment.
6.03 PAYMENT OF BENEFITS UPON TERMINATION FOR CAUSE. If the termination
of Employee is not after a Change in Control and is for cause, the
Company will have the right to withhold all payments other than (i)
what is accrued and owing under the terms of any employee benefit
plan maintained by the Company, and (ii) those specified in Section
6.01; provided however, that if a final judgment is entered finding
that cause did not exist for termination, the Company will pay all
benefits to Employee to which he would have been entitled had
Employee's termination not been for cause, plus interest on all
amounts withheld from Employee at the rate specified for judgments
under Article 5069-1.05 V.A.T.S. but not less than ten percent (10%)
per annum. If the termination for cause occurs after a Change in
Control, the Company shall not have the right to suspend or withhold
payments to Employee under any provision of the Agreement until or
unless a final judgment is entered upholding the Company's
determination that the termination was for cause, in which event
Employee will be liable to the Company for all amounts paid, plus
interest at the rate allowed for judgments under Article 5069-1.05
V.A.T.S.
6.04 NON-EXCLUSIVE AGREEMENT. The specific arrangements referred to
herein are not intended to exclude or limit Employee's participation
in other benefits available to Employee or personnel of the Company
generally, or to preclude or limit other compensation or benefits as
may be authorized by the Board of Directors of the Company at any
time, or to limit or reduce any compensation or benefits to which
Employee would be entitled but for the Agreement.
6.05 NOTICES. Notices, requests, demands and other communications
provided for by the Agreement shall be in writing and shall either
be personally delivered by
-17-
hand or sent by: (i) Registered or Certified Mail, Return Receipt
Requested, postage prepaid, properly packaged, addressed and
deposited in the United States Postal System; (ii) via facsimile
transmission 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, if to Employee, at the last address he
has filed, in writing, with the Company, or if to the Company, to
its Corporate Secretary at its principal executive offices.
6.06 NON-ALIENATION. Employee shall not have any right to pledge,
hypothecate, anticipate, or in any way create a lien upon any
amounts provided under the Agreement, and no payments or benefits
due hereunder shall be assignable in anticipation of payment either
by voluntary or involuntary acts or by operation of law. So long as
Employee lives, no person, other than the parties hereto, shall have
any rights under or interest in the Agreement or the subject matter
hereof. Upon the death of Employee, his executors, administrators,
devisees and heirs, in that order, shall have the right to enforce
the provisions hereof, to the extent applicable.
6.07 ENTIRE AGREEMENT; AMENDMENT. The Agreement constitutes the entire
agreement of the Parties with respect of the subject matter hereof.
No provision of the Agreement may be amended, waived, or discharged
except by the mutual written agreement of the Parties. The consent
of any other person(s) to any such amendment, waiver or discharge
shall not be required.
6.08 SUCCESSORS AND ASSIGNS. The Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns, by
operation of law or otherwise, including, without limitation, any
corporation or other entity or persons which shall succeed (whether
direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the
Company, and the Company will require any successor, by agreement in
form and substance satisfactory to Employee, expressly to assume and
agree to perform the Agreement. Except as otherwise provided herein,
the Agreement shall be binding upon and inure to the benefit of
Employee and his legal representatives, heirs and assigns; provided,
however, that in the event of Employee's death prior to payment or
distribution of all amounts, distributions and benefits due him
hereunder, if any, each such unpaid amount and distribution shall be
paid in accordance with the Agreement to the person or persons
designated by Employee to the Company to receive such payment or
distribution and in the event Employee has made no applicable
designation, to his estate. If the Company should split, divide or
otherwise become more than one entity, all liability and obligations
of the Company shall be the joint and several liability and
obligation of all of the parts.
6.09 GOVERNING LAW. Except to the extent required to be governed by the
laws of the State of Delaware because the Company is incorporated
under the laws of said
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State, the validity, interpretation and enforcement of the Agreement
shall be governed by the laws of the State of Texas.
6.10 VENUE. To the extent permitted by applicable state or federal law,
venue for all proceedings hereunder will be in the U.S. District
Court for the Southern District of Texas, Houston Division.
6.11 HEADINGS. The headings in the Agreement are inserted for convenience
of reference only and shall not affect the meaning or interpretation
of the Agreement.
6.12 SEVERABILITY. In the event that any provision or portion of the
Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions of the Agreement shall be
unaffected thereby and shall remain in full force and effect.
6.13 PARTIAL INVALIDITY. In the event that any part, portion or section
of the Agreement is found to be invalid or unenforceable for any
reason, the remaining provisions of the Agreement shall be binding
upon the parties hereto, and the Agreement will be construed to give
meaning to the remaining provisions of the Agreement in accordance
with the intent of the Agreement.
6.14 COUNTERPARTS. The Agreement may be executed in one or more
counterparts, each of which shall be deemed to be original, but all
of which together constitute one and the same instrument.
6.15 NO WAIVER. No failure by either party hereto at any time to give
notice of any breach by the other party of, or to require compliance
with, any condition or provision of the Agreement shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.
-19-
IN WITNESS WHEREOF, Employee has hereunto set his hand and, pursuant
to the authorization from its Board of Directors and the Compensation Committee
of such Board of Directors, the Company has caused these presents to be executed
in its name and on its behalf.
EXECUTED in multiple originals and/or counterparts as of the date
set forth below.
/s/ Xxxxxxx X. Xxxxx
------------------------------------
Xxxxxxx X. Xxxxx
Date: May 18, 2004
-------------------------------
ATTEST: PRIDE INTERNATIONAL, INC.
/s/ W. Xxxxxxx Xxxxxx By: /s/ Xxxx X. Xxxxx
----------------------------- --------------------------------
Assistant Secretary Xxxx X. Xxxxx
Chief Executive Officer
Date: June 2, 2004
--------------------------------
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EXHIBIT A
PRIDE INTERNATIONAL, INC.
1998 LONG-TERM INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
This option agreement ("Option Agreement" or "Agreement") executed
between PRIDE INTERNATIONAL, INC. (the "Company"), and Xxxxxxx X. Xxxxx (the
"Optionee"), an employee of the Company, regarding a right (the "Option")
awarded to the Optionee on ________________ (the "Award Date") to purchase from
the Company up to but not exceeding in the aggregate 30,000 shares of Common
Stock (as defined in the Pride International, Inc. 1998 Long-Term Incentive Plan
(the "Plan")) at $ ________ per share (the "Exercise Price"), such number of
shares and such price per share being subject to adjustment as provided in the
Plan, and further subject to the following terms and conditions:
1. RELATIONSHIP TO PLAN AND EMPLOYMENT AGREEMENT.
This Option is subject to all of the terms, conditions and
provisions of the Plan and administrative interpretations thereunder, if any,
which have been adopted by the Company's Compensation Committee ("Committee")
and are in effect on the date hereof. Except as defined herein, capitalized
terms shall have the same meanings ascribed to them under the Plan. In addition,
the parties agree that notwithstanding any provision herein to the contrary,
this Agreement shall be deemed modified by the provisions of any employment
agreement between the Optionee and the Company, and vesting of this Award shall
occur in the event stock options and other awards specifically vest under such
employment agreement. For purposes of this Option Agreement:
(a) "DISABILITY" means illness or other incapacity which prevents
the Optionee from continuing to perform the duties of his job for a period of
more than three months.
(b) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(c) "OPTION SHARES" means the shares of Common Stock covered by this
Option Agreement.
(d) "RETIREMENT" means the Optionee's termination of employment on
or after attainment of age 65, or, if applicable to the Optionee, any earlier
age specified as the Optionee's Normal Retirement Age under the Pride
International, Inc. Supplemental Executive Retirement Plan.
2. EXERCISE SCHEDULE.
(a) This Option may be exercised in installments in accordance with
the following schedule:
Percentage of Option Shares
Date Vested Available for Purchase
----------- ----------------------
Six months after Award Date 20%
Twelve months after Award Date 20%
Eighteen months after Award Date 20%
Twenty-four months after Award Date 20%
Thirty months after Award Date 20%
---
100%
The Optionee must be in continuous employment with the Company or
any of its Subsidiaries from the Award Date through the date of exercisability
in order for the Option to become exercisable with respect to additional shares
of Common Stock on such date.
(b) This Option shall become fully exercisable, irrespective of the
limitations set forth in subparagraph (a) above, provided that the Optionee has
been in continuous employment with the Company or any of its Subsidiaries since
the Award Date, upon the occurrence of a Change in Control.
(c) To the extent the Option becomes exercisable, such Option may be
exercised in whole or in part (at any time or from time to time, except as
otherwise provided herein) until expiration of the Option pursuant to the terms
of this Agreement or the Plan.
3. TERMINATION OF OPTION
The Option hereby granted shall terminate and be of no force and
effect with respect to any shares of Common Stock not previously purchased by
the Optionee at the earliest time specified below:
(a) the tenth anniversary of the Award Date;
(b) if Optionee's employment with the Company and its Subsidiaries
is terminated by the Company or a Subsidiary for serious misconduct (as
determined by the Committee) at any time after the Award Date, then the Option
shall terminate immediately upon such termination of Optionee's employment; or
(c) if Optionee's employment with the Company and its Subsidiaries
is terminated for any reason other than death, Retirement, Disability or serious
misconduct, then the Option shall terminate on the first business day following
the expiration of the 60-day period which began on the date of termination of
Optionee's employment; or
(d) if Optionee's employment with the Company and its Subsidiaries
is terminated due to (i) death at any time after the Award Date and while in the
employ of the Company or its Subsidiaries or within 60 days after termination of
such employment,
-2-
(ii) Retirement, or (iii) Disability at any time after the Award Date, then the
Option shall terminate on the first business day following the expiration of the
one-year period which began on the date of Optionee's death, Retirement or
Disability, as applicable.
In any event in which the Option remains exercisable for a period of
time following the date of termination of Optionee's employment, the Option may
be exercised during such period of time only to the extent it was exercisable as
provided in Section 2 on such date of termination of Optionee's employment. The
portion of the Option not exercisable upon termination shall terminate and be of
no force and effect upon the date of the Optionee's termination of employment.
4. EXERCISE OF OPTION
Subject to the limitations set forth herein and in the Plan, this
Option may be exercised by written notice provided to the Company as set forth
in Section 5. Such written notice shall (a) state the number of shares of Common
Stock with respect to which the Option is being exercised, (b) be accompanied by
cash or shares of Common Stock (not subject to limitations on transfer) or a
combination of cash and Common Stock payable to Pride International, Inc. in the
full amount of the purchase price for any shares of Common Stock being acquired
and (c) be accompanied by cash or Common Stock in the full amount of all federal
and state withholding or other employment taxes applicable to the taxable income
of such Participant resulting from such exercise (or instructions to satisfy
such withholding obligation by withholding Option Shares in accordance with
Section 8); provided, however, that any shares of Common Stock delivered in
payment of the option price that are or were the subject of an award under the
Plan must be shares that the Optionee has owned for a period of at least six
months prior to the date of exercise. For the purpose of determining the amount,
if any, of the purchase price satisfied by payment in Common Stock, such Common
Stock shall be valued at its Fair Market Value on the date of exercise.
Notwithstanding anything to the contrary contained herein, the
Optionee agrees that he will not exercise the option granted pursuant hereto,
and the Company will not be obligated to issue any option shares pursuant to
this Option Agreement, if the exercise of the Option or the issuance of such
shares 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 stock
exchange or transaction quotation system. The Optionee agrees that, unless the
options and shares covered by the Plan have been registered pursuant to the
Securities Act of 1933, as amended (the "Act"), the Company may, at its
election, require the Optionee to give a representation in writing in form and
substance satisfactory to the Company to the effect that he is acquiring such
shares for his own account for investment and not with a view to, or for sale in
connection with, the distribution of such shares or any part thereof.
If any law or regulation requires the Company to take any action
with respect to the shares specified in such notice, the time for delivery
thereof, which would otherwise be as promptly as possible, shall be postponed
for the period of time necessary to take such action.
-3-
5. NOTICES
Notice of exercise of the Option must be made in the following
manner, using such forms as the Company may from time to time provide:
(a) by registered or certified United States mail, postage prepaid,
to Pride International, Inc., Attn: Corporate Secretary, 0000 Xxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxx 00000, in which case the date of exercise shall be the date
of mailing; or
(b) by hand delivery or otherwise to Pride International, Inc.,
Attn: Corporate Secretary, 0000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, in
which case the date of exercise shall be the date when receipt is acknowledged
by the Company.
Notwithstanding the foregoing, in the event that the address of the
Company is changed prior to the date of any exercise of this Option, notice of
exercise shall instead be made pursuant to the foregoing provisions at the
Company's current address.
Any other notices provided for in this Agreement or in the Plan
shall be given in writing and shall be deemed effectively delivered or given
upon receipt or, in the case of notices delivered by the Company to the
Optionee, five days after deposit in the United States mail, postage prepaid,
addressed to the Optionee at the address specified at the end of this Agreement
or at such other address as the Optionee hereafter designates by written notice
to the Company.
6. ASSIGNMENT OF OPTION
Subject to the approval of the Committee, in its sole discretion,
the Option may be transferred by the Optionee to (i) the children or
grandchildren of the Optionee ("Immediate Family Members"), (ii) a trust or
trusts for the exclusive benefit of such Immediate Family Members ("Immediate
Family Member Trusts") or (iii) a partnership or partnerships in which such
Immediate Family Members have at least 99% of the equity, profit and loss
interests ("Immediate Family Member Partnerships"). Subsequent transfers of
transferred Options shall be prohibited except by will or the laws of descent
and distribution, unless such transfers are made to the original Optionee or a
person to whom the original Optionee could have made a transfer in the manner
described herein. No transfer shall be effective unless and until written notice
of such transfer is provided to the Committee, in the form and manner prescribed
by the Committee. Following transfer, any such Options shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer, and, except as otherwise provided herein, the term Optionee shall be
deemed to refer to the transferee.
After the death of the Optionee, exercise of the Option shall be
permitted only by the Optionee's executor or the personal representative of the
Optionee's estate (or by his assignee, in the event of a permitted assignment)
and only to the extent that the option was exercisable on the date of the
Optionee's death.
7. STOCK CERTIFICATES
Certificates representing the Common Stock issued pursuant to the
exercise of the Option will bear all legends required by law and necessary or
advisable to effectuate the
-4-
provisions of the Plan and this Option. The Company may place a "stop transfer"
order against shares of the Common Stock issued pursuant to the exercise of this
Option until all restrictions and conditions set forth in the Plan or this
Agreement and in the legends referred to in this Section 7 have been complied
with.
8. WITHHOLDING
No certificates representing shares of Common Stock purchased
hereunder shall be delivered to or in respect of an Optionee unless the amount
of all federal, state and other governmental withholding tax requirements
imposed upon the Company with respect to the issuance of such shares of Common
Stock has been remitted to the Company or unless provisions to pay such
withholding requirements have been made to the satisfaction of the Committee.
The Committee may make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in connection with this
Option. 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 this Option by delivering cash, or, with the
Committee's approval, 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
may only request withholding Option Shares having a Fair Market Value equal to
the statutory minimum withholding amount. The Optionee must make the foregoing
election on or before the date that the amount of tax to be withheld is
determined. 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 such other restrictions as may be established by the Committee in
order that satisfaction of withholding tax obligations with shares of Common
Stock might be exempt from the operation of Section 16(b) of the Exchange Act in
whole or in part.
9. SHAREHOLDER RIGHTS
The Optionee shall have no rights of a shareholder with respect to
shares of Common Stock subject to the Option unless and until such time as the
Option has been exercised and ownership of such shares of Common Stock has been
transferred to the Optionee.
10. SUCCESSORS AND ASSIGNS
This Agreement shall bind and inure to the benefit of and be
enforceable by the Optionee, the Company and their respective permitted
successors and assigns (including personal representatives, heirs and legatees),
except that the Optionee may not assign any rights or obligations under this
Agreement except to the extent and in the manner expressly permitted herein.
11. NO EMPLOYMENT GUARANTEED
No provision of this Option Agreement shall confer any right upon
the Optionee to continued employment with the Company or any Subsidiary.
-5-
12. GOVERNING LAW
This Option Agreement shall be governed by, construed and enforced
in accordance with the laws of the State of Texas.
13. AMENDMENT
This Agreement cannot be modified, altered or amended except by an
agreement, in writing, signed by both the Company and the Optionee.
PRIDE INTERNATIONAL, INC.
Date: May 18, 2004 By: ____________________________________
Name: Xxxx X. Xxxxx
Title: Chief Executive Officer
The Optionee hereby accepts the foregoing Option Agreement, subject
to the terms and provisions of the Plan and administrative interpretations
thereof referred to above.
OPTIONEE:
Date: May 18, 2004 ________________________________________
Xxxxxxx X. Xxxxx
-6-
