FORM OF EMPLOYEE MATTERS AGREEMENT BETWEEN PRIDE INTERNATIONAL, INC. and SEAHAWK DRILLING, INC. Dated ____________, 2009
Exhibit 10.3
FORM OF
BETWEEN
PRIDE INTERNATIONAL, INC.
and
SEAHAWK DRILLING, INC.
Dated ____________, 2009
TABLE OF CONTENTS
ARTICLE I DEFINITIONS |
3 | |||
ARTICLE II GENERAL PRINCIPLES |
6 | |||
Section 2.1 Seahawk Plans |
6 | |||
Section 2.2 Pride Plans |
7 | |||
ARTICLE III DEFINED CONTRIBUTION PLANS |
9 | |||
Section 3.1 Seahawk Qualified Plan |
9 | |||
Section 3.2 Spin-Off of Pride Qualified Plan Assets |
9 | |||
ARTICLE IV HEALTH AND WELFARE PLANS AND BENEFITS |
10 | |||
Section 4.1 Establishment of Seahawk Health and Welfare Plans |
10 | |||
Section 4.2 Seahawk Employee Participation in Pride Health and Welfare Plans |
10 | |||
Section 4.3 Pride Obligations with Respect to Seahawk Employee Participation in Pride Health and Welfare Plans |
10 | |||
Section 4.4 Paid Time Off |
10 | |||
Section 4.5 Employees on Leave |
11 | |||
Section 4.6 Retiree Medical |
11 | |||
Section 4.7 Medical Reimbursement Account Plan |
11 | |||
Section 4.8 Health Insurance Portability and Accountability Act of 1996 |
11 | |||
Section 4.9 Workers’ Compensation |
11 | |||
Section 4.10 COBRA |
12 | |||
Section 4.11 Claims Experience |
12 | |||
ARTICLE V EQUITY AND OTHER COMPENSATION |
12 | |||
Section 5.1 Executive and Non-Qualified Plans |
12 | |||
Section 5.2 Pride International, Inc. Long-Term Incentive Plans |
12 | |||
Section 5.3 Employee Stock Purchase Plan |
14 | |||
Section 5.4 Annual Bonus Plan |
15 | |||
Section 5.5 Deduction under Section 83(h) of the Code |
15 | |||
Section 5.6 SEC Registration |
15 | |||
Section 5.7 Section 409A |
15 | |||
ARTICLE VI CERTAIN TRANSITION MATTERS |
15 | |||
Section 6.1 Transition Services Agreement |
15 | |||
Section 6.2 Requests for IRS and DOL Opinions |
16 | |||
Section 6.3 Consent of Third Parties |
16 | |||
Section 6.4 Tax Cooperation |
16 | |||
Section 6.5 Plan Returns |
16 | |||
ARTICLE VII EMPLOYMENT-RELATED MATTERS |
16 | |||
Section 7.1 Terms of Seahawk Employment |
16 | |||
Section 7.2 Non-Termination of Employment; No Third-Party Beneficiaries |
17 | |||
ARTICLE VIII GENERAL PROVISIONS |
17 | |||
Section 8.1 Approval by Pride As Sole Stockholder |
17 |
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Section 8.2 Amendments |
17 | |||
Section 8.3 Fiduciary Matters |
17 | |||
Section 8.4 No Amendment of Plans |
18 | |||
Section 8.5 Effect if Separation does not Occur |
18 | |||
Section 8.6 Limitation of Liability |
18 | |||
Section 8.7 Relationship of Parties |
18 | |||
Section 8.8 Incorporation of Master Separation Agreement Provisions |
19 | |||
Section 8.9 Governing Law |
19 | |||
Section 8.10 Severability |
19 | |||
Section 8.11 Amendment |
19 | |||
Section 8.12 Assignment |
20 | |||
Section 8.13 No Strict Construction; Cooperation of the Parties |
20 | |||
Section 8.14 Termination |
20 | |||
Section 8.15 Conflict |
20 | |||
Section 8.16 Counterparts |
20 |
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This EMPLOYEE MATTERS AGREEMENT (this “Agreement”) is entered into as of ___, 2009 by
and between Pride International, Inc., a Delaware corporation (“Pride”), and Seahawk Drilling,
Inc., a Delaware corporation (“Seahawk”). Capitalized terms used herein and not otherwise defined
shall have the respective meanings assigned to them in Article I hereof or in the Master Separation
Agreement.
WHEREAS, the Board of Directors of Pride has determined that it is in the best interests of
Pride and its shareholders to spin off the Seahawk Business by distributing the capital stock of
Seahawk to Pride’s shareholders;
WHEREAS, in order to effectuate the foregoing, Pride and Seahawk have entered into a Master
Separation Agreement which provides, among other things, subject to the terms and conditions
thereof, for the Distribution and the execution and delivery of certain other agreements, including
this Agreement, in order to facilitate and provide for the foregoing; and
WHEREAS, in order to ensure an orderly transition under the Master Separation Agreement it
will be necessary for Pride and Seahawk to allocate between them assets, liabilities and
responsibilities with respect to certain employee compensation, benefit plans and programs, and
certain employment matters.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
herein contained, the parties, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
Wherever used in this Agreement, the following terms shall have the meanings indicated below,
unless a different meaning is plainly required by the context. The singular shall include the
plural, unless the context indicates otherwise. Headings of sections are used for convenience of
reference only, and in case of conflict, the text of this Agreement, rather than such headings,
shall control:
“Affiliate” shall have the meaning set forth in the Master Separation Agreement.
“Agreement” means this Employee Matters Agreement and all amendments made hereto from
time to time.
“Benefits Maintenance Period” means the period beginning on the Distribution Date and
ending on December 31, 2009 or such other date as the parties mutually agree in writing during
which Pride agrees to provide certain benefits and administrative services to Seahawk including
(without limitation): (i) participation by Seahawk Employees in certain Pride Plans as described in
Article IV and (ii) the provision of “Services” as defined in the Transition Services Agreement.
“Board(s)” means the Board of Directors of Pride and/or the Board of Directors of
Seahawk, as the context indicates.
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“COBRA” means the continuation coverage requirements for “group health plans” under
Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended from time to
time, and as codified in Section 4980B of the Code and Sections 601 through 608 of ERISA, together
with all regulations and proposed regulations promulgated thereunder.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Continuing Seahawk Participant” means a Seahawk Employee who participated in a Pride
Health and Welfare Plan immediately preceding the Distribution Date and is eligible to continue to
participate in such Plan as of the Distribution Date through the Benefits Maintenance Period.
“Distribution” shall have the meaning set forth in the Master Separation Agreement.
“Distribution Date” shall have the meaning set forth in the Master Separation
Agreement.
“DOL” means the United States Department of Labor.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time.
“FBP” means the Pride International, Inc. Flexible Benefits Plan.
“Group” shall have the meaning set forth in the Master Separation Agreement.
“Health and Welfare Plans,” when immediately preceded by “Pride,” means the health and
welfare plans listed on Schedule 1 established and maintained by Pride for the benefit of employees
of any member of the Pride Group. When immediately preceded by “Seahawk,” “Health and Welfare
Plans” means the health and welfare plans to be established by Seahawk pursuant to Article IV
that correspond to the respective Pride Health and Welfare Plans.
“HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as it
may be amended from time to time.
“IRS” means the United States Internal Revenue Service.
“Master Separation Agreement” means the Master Separation Agreement between Pride and
Seahawk entered into as of ___, 2009.
“Participating Company” means: (a) Pride; (b) any Person (other than an individual)
that Pride has approved for participation in, has accepted participation in, or which is
participating in, a Plan sponsored by Pride; or (c) any Person (other than an individual) that, by
the terms of such a Plan, participates in such a Plan sponsored by Pride or any employees of which,
by the terms of such a Plan, participate in a Plan.
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“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political subdivision thereof.
“Plan,” depending on the context, may mean any plan, policy, program, payroll
practice, arrangement, contract, annuity contract, trust, insurance policy, or any agreement or
funding vehicle providing compensation or benefits to employees, dependents of employees or former
employees or non-employee and employee directors of Pride, Seahawk or any member of the Pride Group
or the Seahawk Group. “Plan,” when immediately preceded by “Pride,” means a Plan sponsored by
Pride or a member of the Pride Group. When immediately preceded by “Seahawk,” “Plan” means
a Plan sponsored by Seahawk or a member of the Seahawk Group.
“Pride” means Pride International, Inc., a Delaware corporation.
“Pride Business” shall have the meaning set forth in the Master Separation Agreement.
“Pride Common Stock” shall have the meaning set forth in the Master Separation
Agreement.
“Pride Distribution Date Value” means the closing price of Pride Common Stock on the
Distribution Date.
“Pride Employee” means any individual who is employed in the Pride Business during the
relevant time period.
“Pride Group” shall have the meaning set forth in the Master Separation Agreement.
“Pride Non-Qualified Plans” means the Pride International, Inc. 2007 Long-Term
Incentive Plan, the Pride International, Inc. 1998 Long-Term Incentive Plan, the Pride
International, Inc. 2004 Directors’ Stock Incentive Plan, the Pride International, Inc. 1993
Director’s Stock Option Plan, the Marine Drilling 2001 Stock Incentive Plan, the Marine Drilling
1992 Long-Term Incentive Plan, the Marine Drilling 1995 Non-Employee Directors’ Plan, the Pride
International, Inc. Supplemental Executive Retirement Plan, the Pride International, Inc. 401(k)
Restoration Plan, each as amended from time to time, and any other plan, other than the Pride
Qualified Plan, maintained by Pride or any of its Subsidiaries for the purpose of providing
incentive or retirement benefits to any Pride Employee and in which any Seahawk Employee
participates as of the date immediately prior to the Distribution Date.
“Pride Qualified Plan” means the Pride International, Inc. 401(k) Retirement and
Savings Plan.
“Pride Plan” means an employee benefit or welfare plan, program, arrangement or
agreement (whether formal or informal, written or unwritten, qualified or unqualified or subject to
ERISA or not) that is maintained or sponsored by a member of the Pride Group for the benefit of
eligible Pride Employees and Seahawk Employees.
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“Seahawk” means Seahawk Drilling, Inc., a Delaware corporation. In all such instances
in which Seahawk is referred to in this Agreement, it shall also be deemed to include a reference
to each member of the Seahawk Group, unless it specifically provides otherwise. Seahawk shall be
solely responsible to Pride for ensuring that each member of the Seahawk Group complies with the
applicable terms of this Agreement.
“Seahawk Business” shall have the meaning set forth in the Master Separation
Agreement.
“Seahawk Common Stock” shall have the meaning set forth in the Master Separation
Agreement.
“Seahawk Distribution Date Value” means the closing price of Seahawk Common Stock on
the Distribution Date.
“Seahawk Employee” means any individual who is employed in the Seahawk Business during
the relevant time period; provided, that no Person on long-term disability as of the Distribution
Date shall be considered a Seahawk Employee.
“Seahawk Group” shall have the meaning set forth in the Master Separation Agreement.
“Seahawk Qualified Plan” means a defined contribution qualified plan and trust
established by Seahawk pursuant to Section 3.1 of this Agreement.
“Seahawk Plan” means an employee benefit or welfare plan, program, arrangement or
agreement (whether formal or informal, written or unwritten, qualified or unqualified or subject to
ERISA or not) that is maintained or sponsored by a member of the Seahawk Group for the benefit of
eligible Seahawk Employees.
“SEC” means the United States Securities and Exchange Commission.
“Subsidiary” shall have the meaning set forth in the Master Separation Agreement.
“Tax Sharing Agreement” shall have the meaning set forth in the Master Separation
Agreement.
“Transition Services Agreement” means the Transition Services Agreement (Pride as
service provider), as set forth and attached as an exhibit to the Master Separation Agreement.
ARTICLE II
GENERAL PRINCIPLES
GENERAL PRINCIPLES
SECTION 2.1 Seahawk Plans
(a) Non-Duplication of Benefits. No employee of the Seahawk Group shall
receive duplicate benefits under Pride Plans and Seahawk Plans. Pride and Seahawk
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shall mutually agree on methods and procedures, if necessary, including amending the
respective Plan documents, to prevent employees of the Seahawk Group from receiving
duplicate benefits from the Pride Plans and the Seahawk Plans.
(b) Service Credit. Except as specified otherwise in this Agreement or as
required by applicable law, each Seahawk Plan in existence on the Distribution Date or the
end of the Benefits Maintenance Period shall provide each Seahawk Employee full credit for
all service with the Pride Group as of the Distribution Date and/or the end of the Benefits
Maintenance Period, as applicable, to the same extent such service was recognized and
credited under the applicable Pride Plan immediately prior to the Distribution Date or the
end of the Benefits Maintenance Period, as applicable, except to the extent that duplication
of benefits would result. These service crediting provisions shall be subject to any
respectively applicable “service bridging,” “break in service,” “employment date” or
“eligibility date” rules under the Seahawk Plans. Nothing herein shall limit Seahawk or its
Affiliates from recognizing service in addition to the recognition of service required
herein.
(c) Beneficiary Designations. Subject to Section 6.3 of this Agreement, all
beneficiary designations made by the Seahawk Employees under or for the Pride Plans shall be
transferred to and be in full force and effect under the corresponding Seahawk Plans until
such time, if ever, that any such beneficiary designation is replaced or revoked by the
Seahawk Employee who made the beneficiary designation. If no such beneficiary designations
are on file, the terms of the applicable Seahawk Plan shall control.
(d) Seahawk Under No Obligation to Maintain Plans. Except as specified
otherwise in this Agreement, nothing in this Agreement shall preclude Seahawk, at any time,
from amending, merging, modifying, terminating, eliminating, reducing, or otherwise altering
in any respect any Seahawk Plan, any benefit under any Seahawk Plan or any trust, insurance
policy or funding vehicle related to any Seahawk Plan (to the extent permitted by law) in
accordance with the applicable governing plan documents.
(e) Pride’s General Obligations. Pride shall provide, or cause to be provided,
to Seahawk all participant information, forms or documents reasonably requested by Seahawk
to fulfill its obligations under this Section 2.1.
(f) Pride Participation in Seahawk Plans. Unless the prior written consent of
Seahawk is obtained, Pride Employees shall not participate in any Seahawk Plans.
SECTION 2.2 Pride Plans
(a) Seahawk’s Participation in Pride Plans. Except as otherwise provided in
this Agreement or unless the prior written consent of Pride is obtained, on and after the
Distribution Date, employees of the Seahawk Group shall not participate in any Pride Plans.
(b) Pride’s General Obligations During the Benefits Maintenance Period. With
respect to any Pride Plan or program that provided benefits to a Seahawk Employee prior to
the Distribution Date, Pride shall provide certain services with respect to the
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Pride Plans in accordance with the terms of the Transition Services Agreement and this
Agreement.
(c) Seahawk’s General Obligations During the Benefits Maintenance Period. With
respect to any Pride Plan or program that provided benefits to a Seahawk Employee prior to
the Distribution Date or to a Continuing Seahawk Participant during the Benefits Maintenance
Period, Seahawk will cooperate with Pride and take any actions reasonably requested by Pride
on a timely basis with respect to such Pride Plans or programs, and Seahawk shall comply
with the terms as set forth in such Plans or any procedures adopted pursuant thereto,
including (without limitation): (i) assisting in the administration of claims under the
Pride Health and Welfare Plans, to the extent requested by the claims administrator of the
applicable plan; (ii) cooperating fully with Pride Plan auditors; (iii) the provision of
payroll processing support; (iv) preserving the confidentiality of all financial
arrangements Pride has or may have with any entity or individual with whom Pride has entered
into an agreement relating to said Pride Plan; and (v) preserving the confidentiality of
participant information to the extent not specified otherwise in this Agreement. In
addition, Seahawk shall provide, or cause to be provided, all participant information that
is necessary or appropriate or as reasonably requested by Pride for the efficient and
accurate administration of each Pride Plan or program that provides benefits to a Continuing
Seahawk Participant during the Benefits Maintenance Period. Pride and its respective
authorized agents shall, subject to all applicable laws, including laws of confidentiality
and data protection, be given reasonable and timely access to, and may make copies of, all
information relating to the subjects of this Agreement in the custody of the other party or
its agents, to the extent necessary or appropriate for the administration of said Plans or
programs.
(d) Reporting and Disclosing Communications to Participants. Subject to the
provisions of the Transition Services Agreement, during the Benefits Maintenance Period: (a)
Pride, solely at its own expense, shall take, or cause to be taken, all actions necessary or
appropriate to accomplish the distribution of all Pride Plan-related communications and
materials to Pride Employees and their beneficiaries participating in Pride Plans and (b)
Seahawk, solely at its own expense, shall take, or cause to be taken, all actions necessary
or appropriate to accomplish the distribution of (i) all Pride Plan-related communications
and materials to Continuing Seahawk Participants and their spouses, dependents or
beneficiaries participating in Pride Plans and (ii) all Seahawk Plan-related communications
and materials to Seahawk Employees and their spouses, dependents or beneficiaries
participating in Seahawk Plans.
(e) Pride Under No Obligation to Maintain Plans. Except as specified otherwise
in this Agreement, nothing in this Agreement shall preclude Pride, at any time, from
amending, merging, modifying, terminating, eliminating, reducing, or otherwise altering in
any respect any Pride Plan, any benefit under any Pride Plan or any trust, insurance policy
or funding vehicle related to any Pride Plan (to the extent permitted by law) in accordance
with the applicable governing plan documents.
(f) Seahawk Obligation to Pay Own Expenses. Except to the extent otherwise
specified herein or in the Transition Services Agreement, Seahawk shall be responsible
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for, and Pride shall have no liability for, any costs associated with any actions
Seahawk is obligated to take to comply with the terms and provisions of this Agreement,
including, without limitation, this Article II.
ARTICLE III
DEFINED CONTRIBUTION PLANS
DEFINED CONTRIBUTION PLANS
SECTION 3.1 Seahawk Qualified Plan
(a) Establishment of Plan. Prior to the Distribution Date, Seahawk shall
establish the Seahawk Qualified Plan with terms and provisions that are substantially
comparable to those of the Pride Qualified Plan. Seahawk shall timely take all necessary,
reasonable or appropriate actions to ensure the Seahawk Qualified Plan’s qualification under
the Section 401(a) of the Code and compliance with ERISA and any other applicable laws.
(b) Continuation of Elections. As of the Distribution Date, Seahawk (acting
directly or through its Affiliates) shall cause the Seahawk Qualified Plan to recognize and
maintain all Pride Qualified Plan elections and designations including, but not limited to,
deferral, investment, and payment form elections, beneficiary designations, and the rights
of alternate payees under qualified domestic relations orders with respect to Seahawk
Employees, to the extent such election or designation is available under the Seahawk
Qualified Plan.
SECTION 3.2 Spin-Off of Pride Qualified Plan Assets
(a) Spin-Off of Assets. No later than sixty (60) days following the
Distribution Date (or such time as mutually agreed by the parties), Pride shall cause the
accounts (including any outstanding loan balances) in the Pride Qualified Plan attributable
to Seahawk Employees and all of the assets in the Pride Qualified Plan related thereto to be
spun-off and transferred in-kind to the Seahawk Qualified Plan, and Seahawk shall cause the
Seahawk Qualified Plan to accept such transfer of accounts and underlying assets and,
effective as of the date of such spin-off and transfer, to assume and to fully perform, pay
and discharge, all obligations of the Pride Qualified Plan relating to the accounts of
Seahawk Employees (to the extent the assets related to those accounts are actually
transferred from the Pride Qualified Plan to the Seahawk Qualified Plan) as of the date of
such spinoff. The transfer of assets shall be conducted in accordance with Section 414(l)
of the Code, Treasury Regulation § 1.414(l)-1, and Section 208 of ERISA.
(b) Contributions as of the Distribution Date. All contributions payable to the
Pride Qualified Plan with respect to employee deferrals and contributions, matching
contributions and other contributions for participants who are Seahawk Employees through the
Distribution Date, determined in accordance with the terms and provisions of the Pride
Qualified Plan, ERISA and the Code, shall be paid by Pride to the Pride Qualified Plan, as
applicable, prior to the date of the asset transfer described in this Section 3.2.
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(c) Form 5310-A. No later than thirty (30) days prior to the Distribution Date,
Pride and Seahawk (each acting directly or through their respective Affiliates) shall, to
the extent necessary, file IRS Forms 5310-A regarding the spinoff and transfer of assets and
liabilities from the Pride Qualified Plan to the Seahawk Qualified Plan as contemplated
under this Section 3.2.
ARTICLE IV
HEALTH AND WELFARE PLANS AND BENEFITS
HEALTH AND WELFARE PLANS AND BENEFITS
SECTION 4.1 Establishment of Seahawk Health and Welfare Plans
Except as specified otherwise in this Agreement, effective on or before the Distribution Date,
Seahawk shall establish the Seahawk Health and Welfare Plans. The Seahawk Health and Welfare Plans
in effect as of the Distribution Date shall be substantially comparable to the Pride Plans in
effect on the Distribution Date. Seahawk may modify, with prior written notice to Pride, the
seniority benefit allowance made available to Seahawk Employees for purposes of offsetting the cost
of welfare benefits.
SECTION 4.2 Seahawk Employee Participation in Pride Health and Welfare Plans
As of the Distribution Date, Continuing Seahawk Participants shall be eligible to continue to
participate in the Pride Health and Welfare Plans in which such Continuing Seahawk Participants
participated immediately prior to the Distribution Date. Any Seahawk Employee hired or re-hired by
Seahawk on or after the Distribution Date shall be eligible to participate in the Seahawk Health
and Welfare Plans and shall not be eligible to participate in the Pride Health and Welfare Plans.
Continuing Seahawk Participants shall cease to be eligible to participate in Pride Health and
Welfare Plans upon the expiration of the Benefits Maintenance Period, and, except with respect to
claims incurred at or prior to the end of the Benefits Maintenance Period, Pride shall have no
further obligations with respect to the health and welfare benefits of Seahawk Employees after the
end of the Benefits Maintenance Period.
SECTION 4.3 Pride Obligations with Respect to Seahawk Employee Participation in Pride
Health and Welfare Plans
Pride shall continue to administer, or cause to be administered, the Pride Health and Welfare Plans
in accordance with their terms as of the Distribution Date and applicable law. During the Benefits
Maintenance Period, Pride shall provide written notice to Seahawk of any amendment or termination
of any Pride Health and Welfare Plan, or any material feature thereof, including, but not limited
to, any stop-loss insurance, in which Seahawk Employees participate on or after the Distribution
Date, except to the extent such amendment or termination would not affect any benefits of Seahawk
Employees under such Plans.
SECTION 4.4 Paid Time Off
As a result of the Distribution and from and after the Distribution Date, Pride has no obligation
to pay or provide any benefits in connection with any accrued paid time off with respect to any
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Xxxxxxx Xxxxxxxx. With respect to Pride Employees who become Seahawk Employees due to the
Distribution, during the 2009 calendar year Seahawk shall administer the Seahawk paid time off
policies in a manner such that such employee’s service with Pride is deemed to be service with
Seahawk. Seahawk shall credit each Seahawk Employee with the amount of accrued but unused vacation
time, sick time and other time-off benefits as such Seahawk Employee had with the Pride Group as of
the Distribution Date. Notwithstanding the above, Seahawk shall not be required to credit any
Seahawk Employee with any accrual to the extent that a benefit attributable to such accrual is
provided by the Pride Group (it being understood that the Pride Group shall be under no obligation
to provide any such benefit). Nothing in this Agreement shall obligate Seahawk to continue, or
prevent Seahawk from modifying the terms of, the Seahawk paid time off policies after 2009.
SECTION 4.5 Employees on Leave
Subject to Pride’s agreement to provide certain administrative services as specified in the
Transition Services Agreement, notwithstanding any other provision of this Agreement to the
contrary, effective as of the Distribution Date, Seahawk (acting directly or through its
Affiliates) shall assume, or shall have caused the Seahawk Health and Welfare plans to assume,
liability for payment of any salary continuation or short-term disability coverage or leave under
the Family & Medical Leave Act of 1993, as amended, or other leave of absence with respect to
Seahawk Employees, and Pride shall have no further responsibility for such disabled employees or
employees on such leave after the Distribution Date.
SECTION 4.6 Retiree Medical
Pride and Seahawk acknowledge and agree that no Seahawk Employee is eligible for retiree medical
benefits from Pride. Nothing in this Agreement shall obligate Seahawk to establish, maintain or
continue to sponsor a retiree medical benefits plan for any Seahawk Employee.
SECTION 4.7 Medical Reimbursement Account Plan
As of the Distribution Date, Seahawk Employees shall cease to participate in the FBP. Effective
prior to or as of the Distribution, Seahawk shall establish, and Seahawk Employees shall be
eligible to participate in, a Seahawk Plan with terms and provisions that are substantially
comparable to those of the FBP. Pride and Seahawk agree to reconcile claims and contributions
under the FBP as specified in the Transition Services Agreement.
SECTION 4.8 Health Insurance Portability and Accountability Act of 1996
On or before the Distribution Date, Pride and Seahawk shall enter into reciprocal business
associate agreements providing for the confidentiality of protected health information in
compliance with the requirements of HIPAA.
SECTION 4.9 Workers’ Compensation
Effective on and after the Distribution Date, Seahawk shall be responsible for the administration,
costs and funding of workers’ compensation claims with respect to Seahawk Employees.
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SECTION 4.10 COBRA
Subject to Pride’s agreement to provide certain administrative services as specified in the
Transition Services Agreement, effective as of the Distribution Date, Seahawk (acting directly or
through its Affiliates) shall assume, or shall cause the Seahawk Health and Welfare Plans to
assume, responsibility for compliance with the health care continuation coverage requirements of
COBRA with respect to eligible Seahawk Employees who were Seahawk Employees at or after the
Distribution Date. Neither the Distribution nor any transfers of employment that occur as of the
Distribution Date shall constitute a COBRA qualifying event for purposes of COBRA.
SECTION 4.11 Claims Experience
The parties (acting directly or through their Affiliates) shall take any action necessary to ensure
that any claims experience under the Pride Health and Welfare Plans attributable to Continuing
Seahawk Participants shall be allocated to the Seahawk Health and Welfare Plans.
ARTICLE V
EQUITY AND OTHER COMPENSATION
EQUITY AND OTHER COMPENSATION
SECTION 5.1 Executive and Non-Qualified Plans
Except as otherwise provided herein, upon the Distribution Date, Seahawk Employees shall be
considered terminated from employment for purposes of the Pride Non-Qualified Plans and such
Seahawk Employees’ benefits under the Pride Non-Qualified Plans shall be governed by the terms of
said Plans. Pride shall retain all liabilities for any benefits accrued by employees of the Pride
Group and the Seahawk Group under the Pride Non-Qualified Plans.
SECTION 5.2 Pride International, Inc. Long-Term Incentive Plans
(a) No Further Equity Awards to Seahawk Employees. Certain Seahawk Employees
have been granted options, restricted stock and/or restricted stock units under the Pride
International, Inc. 2007 Long-Term Incentive Plan and/or the Pride International, Inc. 1998
Long-Term Incentive Plan. No awards will be made under said Plans to Seahawk Employees
after the Distribution Date.
(b) Distributions on and Replacement of Unvested Pride Restricted Stock Awards.
Seahawk Employees who hold, as of the Distribution Date, unvested Pride restricted stock
awards (the “Pride RSAs”) shall receive the number of shares of Seahawk Common Stock, free
of restrictions, that would have been distributed in the Distribution
on a like number of shares of Pride Common Stock covered by the Pride RSA. As of the Distribution Date but
immediately after any distributions described in this Section 5.2(b), Seahawk Employees
holding Pride RSAs will be considered terminated from employment with Pride pursuant to the
terms of the applicable Pride Plan, and such Pride RSAs shall be forfeited pursuant to the
terms of the applicable award agreement and the applicable Pride Plan. Effective as soon as
practicable on or after the Distribution Date, the Seahawk Board shall replace such
forfeited Pride RSAs with Seahawk restricted stock unit awards (the “Seahawk RSA Replacement
Award”). The Seahawk RSA Replacement
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Award shall take into account vesting service with Pride such that the Seahawk RSA
Replacement Award vests at the same time and subject to the same terms as the forfeited
Pride RSAs. The number of shares of Seahawk Common Stock subject to a Seahawk RSA
Replacement Award with respect to a Pride RSA shall be equal to (x) divided by (y) where (x)
is the Pride Distribution Date Value multiplied by the number of shares of Pride Common
Stock subject to the Pride RSA that are forfeited, and (y) is the Seahawk Distribution Date
Value, with the resulting number of shares subject to the Seahawk RSA Replacement Award
being rounded down to the nearest whole share. Seahawk shall be responsible for the
satisfaction of all tax reporting requirements in respect of the distribution of Seahawk
Common Stock to a Seahawk Employee or the vesting of a Seahawk RSA Replacement Award and
shall be responsible for remitting the appropriate tax or withholding amounts to the
appropriate taxing authorities in respect of the distribution and vesting of all such
restricted shares.
(c) Distributions on and Replacement of Unvested Pride Restricted Stock Units
Granted Prior to 2009. Seahawk Employees who hold, as of the Distribution Date,
unvested Pride restricted stock unit awards granted prior to 2009 (the “Pride RSUs”) shall
receive a cash payment equal to the Seahawk Distribution Date Value of the number of shares
of Seahawk Common Stock that would have been distributed in the Distribution on the number
of shares of Pride Common Stock covered by the Pride RSU. As of the Distribution Date but
immediately after any distributions described in this Section 5.2(c), Seahawk Employees
holding Pride RSUs will be considered terminated from employment with Pride pursuant to the
terms of the applicable Pride Plan, and such Pride RSUs shall be forfeited pursuant to the
terms of the applicable award agreement and the applicable Pride Plan. Effective as soon as
practicable on or after the Distribution Date, the Seahawk Board shall replace such
forfeited Pride RSUs with Seahawk restricted stock unit awards (the “Seahawk RSU Replacement
Award”). The Seahawk RSU Replacement Award shall take into account vesting service with
Pride such that the Seahawk RSU Replacement Award vests at the same time and subject to the
same terms as the forfeited Pride RSUs. The number of shares of Seahawk Common Stock
subject to a Seahawk RSU Replacement Award with respect to a Pride RSU shall be equal to (x)
divided by (y) where (x) is the Pride Distribution Date
Value multiplied by the number of shares of Pride Common Stock subject to the Pride RSU that are forfeited, and (y) is the
Seahawk Distribution Date Value, with the resulting number of shares subject to the Seahawk
RSU Replacement Award being rounded down to the nearest whole share. Seahawk shall be
responsible for the satisfaction of all tax reporting requirements in respect of the
payments to a Seahawk Employee with respect to a Pride RSU or a Seahawk RSU Replacement
Award or the vesting of a Seahawk RSU Replacement Award and shall be responsible for
remitting the appropriate tax or withholding amounts to the appropriate taxing authorities
in respect of the payment and vesting of all such restricted stock units.
(d) Replacement of Unvested Pride Restricted Stock Units Granted in 2009.
Seahawk Employees who hold, as of the Distribution Date, unvested Pride restricted stock
unit awards granted in 2009 (the “Pride 0000 XXXx”) shall not receive cash, shares or other
property with respect to the Pride 0000 XXXx as a result of the Distribution. As of the
Distribution Date, Seahawk Employees holding Pride 0000 XXXx will be considered terminated
from employment pursuant to the terms of the applicable Pride
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Plan, and such Pride 0000 XXXx shall be forfeited pursuant to the terms of the
applicable award agreement and the applicable Pride Plan. Effective as soon as practicable
on or after the Distribution Date, the Seahawk Board shall replace such forfeited Pride 0000
XXXx with Seahawk restricted stock unit awards (the “Seahawk 0000 XXX Replacement Award”).
The Seahawk 0000 XXX Replacement Award shall take into account vesting service with Pride
such that the Seahawk 0000 XXX Replacement Award vests at the same time and subject to the
same terms as the forfeited Pride 2009 RSUs. The number of shares of Seahawk Common Stock
subject to a Seahawk 0000 XXX Replacement Award with respect to a Pride 0000 XXX shall be
equal to the sum of (x) divided by (y) plus (z), where (x) is the Pride Distribution Date
Value multiplied by the number of shares of Pride Common Stock subject to the Pride 0000 XXX
that are forfeited, (y) is the Seahawk Distribution Date Value,
and (z) is the number of shares of Seahawk Common Stock that would have been distributed in the Distribution with
respect to the number of shares of Pride Common Stock covered by the Pride 2009 RSU, with
the resulting number of shares subject to the Seahawk 0000 XXX Replacement Award being
rounded down to the nearest whole share. Seahawk shall be responsible for the satisfaction
of all tax reporting requirements in respect of the payments to a Seahawk Employee with
respect to a Seahawk 0000 XXX Replacement Award or the vesting of a Seahawk 0000 XXX
Replacement Award and shall be responsible for remitting the appropriate tax or withholding
amounts to the appropriate taxing authorities in respect of the payment and vesting of all
such restricted stock units.
(e) Pride Stock Options. The exercise price and number of option shares with
respect to any awards of options to purchase Pride Common Stock that are outstanding on the
Distribution Date will be adjusted to reflect the Distribution as determined by the
Compensation Committee of the Pride Board pursuant to the terms of the applicable Pride
Plan. As of the Distribution Date, Seahawk Employees holding options granted under any
Pride Plan will be considered terminated from employment, and unvested options shall be
forfeited pursuant to the terms of the applicable award agreement and the applicable Pride
Plan. Options that were vested as of the Distribution Date shall remain exercisable for the
period specified in the applicable award agreement and applicable Pride Plan. The parties
recognize that Seahawk may, in its discretion, take action to make such equity-based award
or compensation as it deems appropriate with respect to options held by Seahawk Employees
under any Pride Plan which are forfeited, cancelled or expire unexercised as a result of
Seahawk Employees being considered terminated from employment with Pride under the Pride
Plans.
SECTION 5.3 Employee Stock Purchase Plan
Effective as of the Distribution Date, Seahawk Employees shall cease to be eligible to participate
in the Pride International, Inc. Employee Stock Purchase Plan. Seahawk Employee will continue
contribute to the Pride International, Inc. Employee Stock Purchase Plan through the last payroll
date immediately preceding the Distribution Date (or such earlier time as mutually determined by
Pride and Seahawk) and any contributions made with respect to the purchase period in which the
Distribution occurs will be refunded or distributed to the Seahawk Employee in accordance with the
terms of such Plan.
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SECTION 5.4 Annual Bonus Plan
Seahawk Employees shall not be eligible to participate in the Pride Annual Incentive Plan after the
Distribution Date. Seahawk acknowledges that Pride is under no obligation to pay any bonuses to
any Seahawk Employees with respect to the 2009 calendar year, and Seahawk hereby indemnifies Pride
with respect to any claims against Pride made by or on behalf of a Seahawk Employee with respect
bonus compensation payable with respect to the 2009 calendar year.
SECTION 5.5 Deduction under Section 83(h) of the Code
The deduction attributable to equity-based compensation permitted under Section 83(h) of the Code
including, without limitation, the deduction attributable to the grant of stock, the vesting of
restricted stock, and the exercise of stock options shall generally be allocated to the employer as
of the date the amount is includible in the employee’s income, and the taxable income associated
with the compensation shall be reported by such employer. Where the issuer or payor of such
compensation is in the Pride Group or the Seahawk Group and the employer is in the other Group, the
employer will make a payment, or series of payments (including such payments reflected in
intercompany accounts), to the issuer or payor equal to the amount of the corresponding tax
deduction(s).
SECTION 5.6 SEC Registration
The parties mutually agree to use commercially reasonable efforts to maintain effective
registration statements with the SEC with respect to the long-term incentive awards described in
this Article V, to the extent any such registration statement is required by applicable law.
SECTION 5.7 Section 409A
Notwithstanding anything in this Agreement to the contrary (including the treatment of supplemental
and deferred compensation plans, outstanding long-term incentive awards and annual incentive awards
as described herein), upon Seahawk’s written request to Pride, Pride and Seahawk agree to negotiate
in good faith regarding the need for any treatment different from that otherwise provided herein to
comply with, to the extent permissible under applicable Law, Section 409A of the Code such that the
supplemental or deferred compensation or long-term incentive award, annual incentive award or other
compensation does not cause the imposition of a tax under Section 409A of the Code.
ARTICLE VI
CERTAIN TRANSITION MATTERS
CERTAIN TRANSITION MATTERS
SECTION 6.1 Transition Services Agreement
On or about the date hereof, Pride and Seahawk shall enter into the Transition Services Agreement
covering the provisions of various services to be provided by Pride and its Affiliates to Seahawk.
The provisions of this Agreement shall be subject to the provisions of such Transition Services
Agreement and to the extent that any provision in this Agreement is inconsistent with a provision
in the Transition Services Agreement the provision in the Transition Services Agreement shall
control. Nothing in this Agreement is intended to expand
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the scope of the “Services” as defined in the Transition Services Agreement, and each service
contemplated to be provided hereunder shall be subject to charges, reimbursement obligations and
other terms as set forth in the Transition Services Agreement.
SECTION 6.2 Requests for IRS and DOL Opinions
Pride and Seahawk shall make such applications to regulatory agencies, including, without
limitation, the IRS and the DOL, as may be necessary or appropriate. Pride and Seahawk shall
cooperate fully with one another on any issue relating to the transactions contemplated by this
Agreement for which Pride and/or Seahawk elects to seek a determination letter or private letter
ruling from the IRS, an advisory opinion from the DOL or similar opinion or ruling from any other
regulatory agency, domestic or foreign.
SECTION 6.3 Consent of Third Parties
If any provision of this Agreement is dependent on the consent of any third party (such as a
vendor) and such consent is withheld, Pride and Seahawk shall use their commercially reasonable
efforts to implement the applicable provisions of this Agreement to the fullest extent practicable.
If any provision of this Agreement cannot be implemented due to the failure of such third party to
consent, Pride and Seahawk shall negotiate in good faith to implement the provision in a mutually
satisfactory manner.
SECTION 6.4 Tax Cooperation
In connection with the interpretation and administration of this Agreement, Pride and Seahawk shall
take into account the agreements and policies established pursuant to the Master Separation
Agreement and the Tax Sharing Agreement.
SECTION 6.5 Plan Returns
Plan Returns shall be filed or caused to be filed by Pride or Seahawk, as the case may be, in
accordance with the principles established in the Tax Sharing Agreement. For purposes of this
Section 6.5, “Plan Returns” means any return, report, certificate, form or similar statement or
document required to be filed with a government agency with respect to an employee benefit plan or
program, domestic or foreign.
ARTICLE VII
EMPLOYMENT-RELATED MATTERS
EMPLOYMENT-RELATED MATTERS
SECTION 7.1 Terms of Seahawk Employment
Employees of the Seahawk Group may be required to execute a new agreement regarding confidential
information and proprietary developments in a form approved by Seahawk. In addition, nothing in
this Agreement, the Master Separation Agreement, the Transition Services Agreement or the Tax
Sharing Agreement should be construed to change the at-will status of any of the employees of any
member of the Pride Group or the Seahawk Group.
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SECTION 7.2 Non-Termination of Employment; No Third-Party Beneficiaries
No provision of this Agreement shall be construed to create any right, or accelerate entitlement,
to any compensation or benefit whatsoever on the part of any Seahawk Employee or other future,
present or former employee of Pride, Seahawk, the Pride Group or the Seahawk Group under any Pride
Plan or Seahawk Plan or otherwise. Without limiting the generality of the foregoing: (a) except as
otherwise provided in this Agreement or applicable provisions of the Plans, neither the
Distribution nor the termination of the Participating Company status of Seahawk or any member of
the Seahawk Group shall cause any employee to be deemed to have incurred a termination of
employment; and (b) except as otherwise provided in this Agreement, no transfer of employment
between the Pride Group and the Seahawk Group before the Distribution Date shall be deemed a
termination of employment for any purpose hereunder.
ARTICLE VIII
GENERAL PROVISIONS
GENERAL PROVISIONS
SECTION 8.1 Approval by Pride As Sole Stockholder
Effective as of the Distribution Date, Seahawk shall have adopted the Seahawk Plans in order to
provide the benefits contemplated herein, including, without limitation, the Seahawk 2009 Stock
Incentive Plan (the “Seahawk Stock Plan”), which shall permit the issuance of options, restricted
stock, restricted stock units and other long-term incentive awards that have material terms and
conditions substantially similar to those long-term incentive awards issued under the Pride
International, Inc. 2007 Long-Term Incentive Plan in respect of which Seahawk long-term incentive
awards will be issued as required under Article V. The Seahawk Plans, including the Seahawk Stock
Plan, shall be approved prior to the Distribution Date by Pride as the sole stockholder of Seahawk.
SECTION 8.2 Amendments
Prior to the Distribution Date, Pride shall amend the Pride Plans and the applicable Pride Stock
Plans and award agreements as described on Schedule 8.2 hereto.
SECTION 8.3 Fiduciary Matters
The parties acknowledge that actions required to be taken pursuant to the Agreement may be subject
to fiduciary duties or standards of conduct under ERISA or other applicable law. Neither party
shall be deemed to be in violation of the Agreement if it fails to comply with any provision of the
Agreement based upon its good faith determination that to do so would violate such a fiduciary duty
or standard. Each party shall be responsible for taking such actions as are deemed necessary and
appropriate to comply with its own fiduciary responsibilities.
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SECTION 8.4 No Amendment of Plans
Unless explicitly designated otherwise, no provision of this Agreement is intended to be an
amendment of any Pride Plan or Seahawk Plan. If a person not entitled to enforce this Agreement
brings a lawsuit or other action to enforce any provision in this Agreement as an amendment to a
Plan or another agreement, plan, program or document, and that provision is construed to be such an
amendment despite not being explicitly designated as one in this Agreement, that provision shall
lapse retroactively, thereby precluding it from having any amendatory effect.
SECTION 8.5 Effect if Separation does not Occur
Subject to Section 8.10, if the Distribution does not occur, then all actions and events that are,
under this Agreement, to be taken or occur effective prior to, as of or following the Distribution
Date, or otherwise in connection with the Distribution, shall not be taken or occur except to the
extent specifically agreed by the parties and neither party shall have any liability or further
obligation to the other party under this Agreement.
SECTION 8.6 Limitation of Liability
TO THE EXTENT THAT PRIDE OR ANY MEMBER OF THE PRIDE GROUP PROVIDES SERVICES UNDER THIS AGREEMENT TO
SEAHAWK, AND SUCH SERVICES ARE NOT OTHERWISE ADDRESSED IN THE TRANSITION SERVICES AGREEMENT, SUCH
SERVICES SHALL BE PERFORMED WITH THE SAME GENERAL DEGREE OF CARE AS WHEN PERFORMED WITHIN THE PRIDE
ORGANIZATION. SEAHAWK HEREBY EXPRESSLY WAIVES ANY RIGHT SEAHAWK MAY OTHERWISE HAVE FOR ANY LOSSES,
TO ENFORCE SPECIFIC PERFORMANCE OR TO PURSUE ANY OTHER REMEDY AVAILABLE IN CONTRACT, AT LAW, OR IN
EQUITY IN THE EVENT OF ANY NON-PERFORMANCE, INADEQUATE PERFORMANCE, FAULTY PERFORMANCE OR OTHER
FAILURE OR BREACH BY PRIDE OR ANY MEMBER OF THE PRIDE GROUP UNDER OR RELATING TO THIS AGREEMENT,
NOTWITHSTANDING THE NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE) OF PRIDE OR
ANY MEMBER OF THE PRIDE GROUP OR ANY OTHER PERSON OR ENTITY INVOLVED IN THE PROVISION OF SERVICES
AND WHETHER DAMAGES ARE ASSERTED IN CONTRACT OR TORT, UNDER FEDERAL, STATE OR FOREIGN LAWS OR OTHER
STATUTE OR OTHERWISE; PROVIDED, HOWEVER, THAT THE FOREGOING WAIVER SHALL NOT EXTEND TO COVER, AND
PRIDE SHALL BE RESPONSIBLE FOR, SUCH LOSSES CAUSED BY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
PRIDE, ANY MEMBER OF THE PRIDE GROUP OR ANY THIRD PARTY SERVICE PROVIDER HEREUNDER.
SECTION 8.7 Relationship of Parties
Nothing in this Agreement shall be deemed or construed by the parties or any third party as
creating a fiduciary relationship, a relationship of principal and agent, partnership or joint
venture between the parties, the understanding and agreement being that no provision contained
herein, and no act of the parties, shall be deemed to create any relationship between the parties
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other than the relationship set forth herein. This Agreement shall be binding upon and inure
solely to the benefit of and be enforceable by each party and its respective successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended to or shall confer
upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of
this Agreement.
SECTION 8.8 Incorporation of Master Separation Agreement Provisions
If a dispute, claim or controversy results from or arises out of or in connection with this
Agreement, the parties agree to use the procedures set forth in Article V of the Master Separation
Agreement in lieu of other available remedies, to resolve same. The provisions of Sections 7.1
(Limitation of Liability) and Section 7.5 (Notices) of the Master Separation Agreement are hereby
incorporated herein by reference, and unless otherwise expressly specified herein, such provisions
shall apply as if fully set forth herein (references in this Section 8.8 to an “Article” or a
“Section” shall mean Articles or Sections of the Master Separation Agreement, and, except as
expressly set forth herein, references in the material incorporated herein by reference shall be
references to the Master Separation Agreement).
SECTION 8.9 Governing Law
To the extent not preempted by applicable federal law, this Agreement shall be governed by,
construed and interpreted in accordance with the laws of the State of Texas, irrespective of the
choice of law principles of the State of Texas, as to all matters, including matters of validity,
construction, effect, performance and remedies.
SECTION 8.10 Severability
If any term or other provision of this Agreement or the application thereof to any Person or
circumstances is determined by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable under any rule of law or public policy, all other terms and provisions of this
Agreement, or application of such provision to Persons or circumstances other than those as to
which it has been held invalid, void, illegal or unenforceable, shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to either party. Upon such determination that any
term or other provision is invalid, illegal, void or unenforceable, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original intent of the parties
as closely as possible and in an acceptable manner to the end that transactions contemplated hereby
are fulfilled to the fullest possible extent.
SECTION 8.11 Amendment
Pride and Seahawk may mutually agree to amend, modify or supplement the provisions of this
Agreement at any time or times, either prospectively or retroactively, to such extent and in such
manner as the Boards mutually deem advisable. Each Board may delegate its amendment power, in
whole or in part, to one or more Persons or committees as it deems advisable.
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SECTION 8.12 Assignment
Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned,
in whole or in part, directly or indirectly, by a party without the prior written consent of the
other party, and any attempt to assign any rights or obligations arising under this Agreement
without such consent shall be void, except that a party may at any time assign any or all of its
rights or obligations hereunder to one of its wholly owned subsidiaries (but no such assignment
shall relieve such party of any of its obligations under this Agreement).
SECTION 8.13 No Strict Construction; Cooperation of the Parties
The language this Agreement uses shall be deemed to be the language the parties hereto have chosen
to reflect their mutual intent, and no rule of strict construction or presumption based upon the
party that has drafted this Agreement shall be applied against any party hereto. The parties
acknowledge that the names used for Plans under this Agreement may not be the sole name designated
for such Plans, but the parties acknowledge and agree to recognize the Plans under the names used
herein. To the extent that issues arise related to the subject matter hereof that are not
specifically addressed by this Agreement, the parties will cooperate to address such issues in the
same manner and using the same principles provided in this Agreement.
SECTION 8.14 Termination
This Agreement may be terminated at any time prior to the Distribution Date by Pride in its sole
discretion (without the approval of Seahawk). This Agreement may be terminated at any time after
the Distribution Date by mutual consent of Pride and Seahawk. In the event of termination pursuant
to this Section 8.14, no party shall have any liability of any kind under this Agreement to the
other party.
SECTION 8.15 Conflict
In the event of any conflict between the provisions of this Agreement and the Master Separation
Agreement or any Plan, the provisions of this Agreement shall control. In the event of any
conflict between the provisions of this Agreement and the Transition Services Agreement, the
provisions of this Agreement shall control.
SECTION 8.16 Counterparts
This Agreement may be executed in two or more counterparts each of which shall be deemed to be an
original, but all of which together shall constitute but one and the same Agreement.
SECTION 8.17 Successor Employer
The parties agree that Seahawk shall be treated as a successor employer with respect to each
Seahawk Employee in the calendar year that contains the Distribution Date, and, in connection with
the foregoing, the parties agree to follow the “Alternative Procedures” set forth in Section 5 of
Revenue Procedure 2004-53 with respect to Form W-2 reporting obligations and social security,
unemployment and other U.S. payroll taxes. The parties understand and agree that Seahawk, as the
successor employer, shall assume the entire Form W-2 reporting obligations for
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such Seahawk Employees for the calendar year that contains the Effective Date. Pride shall
provide all information required by Seahawk in order for Seahawk to complete its Form W-2 reporting
obligations. Seahawk agrees to indemnify Pride with respect to any liabilities, costs and expenses
incurred by Pride that are directly related to the treatment of Seahawk as a successor employer for
the Seahawk Employees, including without limitation the Form W-2 reporting obligations.
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IN WITNESS WHEREOF, each of the parties has caused this Employee Matters Agreement to be
executed on its behalf by its officers thereunto duly authorized on the day and year first above
written.
| PRIDE INTERNATIONAL, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| SEAHAWK DRILLING, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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Schedule 1
Pride Health and Welfare Plans
| U.S. Employee Benefit | Plan Name | Provider / Vendor | ||
| Self-funded Medical, Dental | Pride
International, Inc. Group Health & Dental Plan |
UMR | ||
| Stop Loss Coverage (applicable only to medical benefits) | Pride
International, Inc. Group Health & Dental Plan |
Symetra | ||
| Pharmacy Benefit Manager | Pride
International, Inc. Group Health & Dental Plan |
CVS/Caremark | ||
| Long Term Disability | Pride
International, Inc. Long Term Disability Plan |
MetLife | ||
| Short Term Disability | Pride
International, Inc. Short Term Disability Plan |
MetLife | ||
| Life, Accidental Death & Dismemberment (AD&D), and Disability | Pride
International, Inc.
Life and Accidental
Death &
Dismemberment
Insurance Plan
|
MetLife | ||
| Vision Coverage | Pride
International, Inc. Group Health & Dental Plan |
Superior Vision | ||
| Employee Assistance Program | Pride
International, Inc. Group Health & Dental Plan |
United Behavioral Health | ||
| Business Travel Accident | Pride
International, Inc. Business Travel Accident Plan |
CIGNA | ||
| Life, Accidental Death (Personal & Work-Related)1 |
Pride
International, Inc.
Life and Accidental
Death &
Dismemberment
Insurance Plan
|
Mobility Benefits - Previnter |
| 1 | Former International Technical Services LLC (ITS) employees only. |
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| Non-U.S. Employee Benefit | Plan Name | Provider | ||
| Medical, Dental & Vision (including prescription coverage and employee assistance program) (Personal & Work-Related) | Pride
International, Inc. Group Health & Dental Plan |
Mobility Benefits — Previnter | ||
| Life, Accidental Death (Personal & Work-Related) |
Pride
International, Inc.
Life and Accidental
Death &
Dismemberment
Insurance Plan |
|||
| Short-Term Disability (Personal & Work-Related) |
Pride
International, Inc. Short Term Disability Plan |
|||
| Long-Term Disability (Personal & Work-Related) |
Pride
International, Inc. Long Term Disability Plan |
|||
| Business Travel Accident | Pride
International, Inc. Business Travel Accident Plan |
CIGNA | ||
| Savings | Investment Savings
Plan (ISP)
|
Legal & General Bank |
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