EXHIBIT 10.23
PRIDE INTERNATIONAL, INC.
EMPLOYMENT/NON-COMPETITION/
CONFIDENTIALITY AGREEMENT
XXXXXX X. XXXXXXX
EFFECTIVE OCTOBER 1, 1997
INDEX
PAGE NO.
I. PRIOR AGREEMENTS/EMPLOYMENT CONTRACTS . . . . . . . . . . . . . . . . . . . 2
1.01 Effect of Prior Agreements . . . . . . . . . . . . . . . . . . . . ..... . . 2
II. DEFINITION OF TERMS . . . . . . . . . . . . . . . . . . . . . . . . . .... . 3
2.01 Company . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . ... 3
2.02 Executive/Officer/Employee. . . . . . . . . . . . . . . . . . . . . . ...... 3
2.03 Office/Position/Title. . . . . . . . . . . . . . . . . . . . . . . . . .. 3
2.04 Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.05 Change in Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 3
2.06 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........ 4
2.07 Customer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...... 6
III. EMPLOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . ........ . 6
3.01 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 6
3.02 Best Efforts and other Employment of Executive. . . .. . . . . .............. 7
3.03 Term of Employment. . . . . . . . . . . . . . . . . . . . . . . . . . . ... 7
3.04 Compensation and Benefits. . . . . . . . . . . . . . . . . . . . . . . . .... 7
3.05 Termination Without Change in Control. . . . . . . . . . . . . .............. 8
IV. CHANGE IN CONTROL. . . . . . . . . . .. . . . . . . ................... . . . 11
4.01 Extension of Employment Period. . . . . . .. . . . . . . . . . . ............ 11
4.02 Change in Control Termination Payments & Benefits. . . . . . . . . . . .. . . 11
4.03 Voluntary Resignation Upon Change in Control. . . . . . . . . . . ..... . . . 12
V. NON-COMPETITION AND CONFIDENTIALITY. . . . . . . . . .................... . . 12
5.01 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... . 12
5.02 Non-Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 12
5.03 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 13
5.04 Geographical Area . . . . . . . . . . . . . . . . . . . . . . . . . . .... . 14
5.05 Company Remedies For Violation of Non-Competition or
Confidentiality Agreement . . . . . . . . . . . . . . . . . . ....... 14
5.06 Termination of Benefits For Violation of Non-Competition and
Confidentiality Agreement. . . . . . . . . . . . . . . ....... . . . . 15
VI. GENERAL . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . ...... . . 15
6.01 Enforcement Costs . . . . . . . . . . . . . . . . . . . . . . . . ....... . . 15
6.02 Income, Excise and Other Tax Liability. . . . . . . . . . . . . . ...... 16
6.03 Payment of Benefits Upon Termination for Cause. . . . .......... . . . . . . . 16
6.04 Non-Exclusive Agreement. . . . . .. . . . ... . . . . . . . . ..... . . . . . 17
6.05 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... . . 17
6.06 Non-Alienation . . . . . . . . . . . . . . .. . . . . . . . ........... . . . 17
6.07 Entire Agreement: Amendment. . . . . . . . . . . . . . . . .......... . . . . 17
6.08 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.09 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . 18
6.10 Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... . . . 18
6.11 Headings. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . ...... . 18
6.12 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... . 18
6.13 Partial Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . ...... 18
6.14 Counterparts . . . . . . . . . . . . . . . . . . . . ........... . . . . . . 18
EMPLOYMENT/NON-COMPETITION/CONFIDENTIALITY
AGREEMENT
DATE: October 1, 1997
COMPANY/EMPLOYER: Pride International, Inc.,
A Louisiana corporation
San Xxxxxx Plaza, Suite 3300
0000 Xxx Xxxxxx
Xxxxxxx, Xxxxx 00000
EXECUTIVE/EMPLOYEE Xxxxxx X. Xxxxxxx
00000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
This Agreement is made as of the date first above written and to become
effective as herein provided.
PREAMBLE
WHEREAS, the Company wishes to attract and retain well-qualified
Executive and key personnel and to assure itself of the continuity of its
management;
WHEREAS, Executive is an officer of the Company with significant
management responsibilities in the conduct of its business;
WHEREAS, the Company recognizes that Executive is a valuable resource of
the Company and the Company desires to be assured of the continued services of
Executive;
WHEREAS, the Company desires to obtain assurances that Executive 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, Executive 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 of the Company, uncertainties necessarily arise;
Executive may have concerns about the continuation of his employment status and
responsibilities and may be approached by others offering competing employment
opportunities; the Company, therefore, desires to provide Executive assurances
as to the continuation of his employment status and responsibilities in such
event;
WHEREAS, the Company further desires to assure Executive that, if a
possible or threatened change in control should arise and Executive should be
involved in deliberations or negotiations in
connection therewith, Executive 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 Executive from any direct or
implied threat to his financial well-being;
WHEREAS, Executive is willing to continue to serve as such 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 affect the Company and Executive under
circumstances of regular employment between the Company and the Executive 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 this Employment Agreement is primarily in two
parts. One part deals with the regular employment of Executive under
circumstances whereby no change in control is threatened, occurring or occurred;
herein called "Regular Employment". The second part deals with circumstances
whereby a change in control is threatened, occurring or has occurred. Other
parts of the Agreement deal with matters affecting both Regular Employment and
employment following change in control, including non-competition and
confidentiality; and
WHEREAS, Executive is willing to enter into and carry out the
Non-Competition and Confidentiality Agreement set forth herein in consideration
of the Employment Agreement set forth herein.
AGREEMENT
NOW, THEREFORE, the parties agree as follows:
I. PRIOR AGREEMENTS/EMPLOYMENT CONTRACTS.
1.01 EFFECT OF 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 any of its subsidiaries and Executive are hereby
amended, modified and superseded by this Agreement insofar as future
employment, compensation, non-competition, confidentiality, accrual or
payments of 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 Executive, 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 Executive 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.
II. DEFINITION OF TERMS.
2.01 COMPANY. Company means Pride International, Inc., a Louisiana
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
Non-Competition and Confidentiality Agreement, Company includes any
subsidiary or affiliate of the Company to the extent it 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 Xxxxxx X.
Xxxxxxx.
2.03 OFFICE/POSITION/TITLE. The Office, Position and Title for which the
Executive is employed is that of Vice President, General Counsel and
Secretary of the Company and carries with it the duties,
responsibilities, rights, benefits and privileges presently held by the
Executive, or as may reasonably be assigned to the Executive as are
customary and usual for such position.
2.04 EFFECTIVE DATE. This Agreement becomes effective and binding as of
October 1, 1997.
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 this 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 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;
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;
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, prior to
the expiration of the Employment Period, of the employment of the
Executive 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 non-renewal or failure to extend this Agreement at the end
of any employment term, except for cause.
a. The term "disability" means physical or mental incapacity
qualifying the Executive for a long-term disability under the
Company's long-term disability plan. If no such plan exists
on the Effective Date of this Agreement, the term
"disability" means physical or mental incapacity as
determined by a doctor jointly selected by the Executive and
the Board of Directors of the Company qualifying the
Executive for long-term disability under reasonable
employment standards.
b. The term "cause" means: (i) the willful and continued failure
of the Executive 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 under the Change in Control
provisions and confidentiality provisions hereof). No act or
failure to act by the Executive 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 the
Executive 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
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 the Executive. Notwithstanding the
foregoing, the Executive shall not be deemed
to have been terminated for cause for purposes of this
Agreement unless and until there shall have been delivered to
him a copy of a resolution, duly adopted by a vote of
three-fourths (3/4ths) of the entire Board of Directors of the
Company at a meeting of the Board of Directors called and held
(after reasonable notice to the Executive and an opportunity
for the Executive and his counsel to be heard before the
Board) for the purpose of considering whether the Executive
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 the Executive 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
Executive's title, position, duties, responsibilities or
authority to such an extent or in such a manner as to relegate
Executive to a position not substantially similar to that which
he presently holds; would degrade, embarrass or otherwise make
it unreasonable for Executive to remain in the employment of the
Company; and includes violation of the employment provisions and
conditions of this Agreement.
d. The resignation of the Executive shall be deemed "voluntary" if
it is for any reason other than one or more of the following:
(i) the Executive's resignation or retirement is requested
by the Company other than for cause;
(ii) any significant adverse change in the nature or scope of
the Executive's position, authorities or duties from
those described in this Agreement;
(iii) any reduction in the Executive'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 action by the Company which would constitute
Constructive Termination; and
(vi) non-renewal or failure to extend any employment term,
contrary to the wishes of the Executive.
Termination that entitles the Executive to the payments and benefits
provided in the "Termination Payments and Benefits" Section hereof shall not be
deemed or treated by the Company
as the termination of the Executive'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.
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 this Agreement, the
Company hereby agrees to continue the Executive in its employ, and
the Executive hereby agrees to remain in the employ of the Company,
for the Term of Employment ("Employment Period") herein specified.
During the Employment Period, Executive shall exercise such position
and authority and perform such responsibilities as are commensurate
with the position and authority being exercised and duties being
performed by the Executive immediately prior to the Effective Date of
this Agreement, which services shall be performed at the location
where the Executive was employed immediately prior to the Effective
Date of this Agreement or at such other location as the Company may
reasonably require.
3.02 BEST EFFORTS AND OTHER EMPLOYMENT OF EXECUTIVE.
a. Executive 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. Such
duties shall be rendered at Houston, Texas, and such other
place or places within or outside the State of Texas as the
Company shall in good faith require or as the interest,
needs, business, or opportunities of the Company shall
require.
b. Executive 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 Executive performed for the
Company. Such employment shall be considered "full time"
employment. Executive shall have the right to make
investments in businesses which engage in activities other
than those engaged by the Company. Executive 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. Executive shall have the right to
make investments in the manner and to the extent authorized
and set forth in the Non-Competition Section of this
Agreement.
3.03 TERM OF EMPLOYMENT. ("Employment Period"). Executive's regular
employment (no Change in Control being presently contemplated) will
commence on the Effective Date of this Agreement and will be for a
term of two (2) years ending at 12:00 o'clock midnight September 30,
1999; thereafter, the Term of Employment of Executive will be
automatically extended for successive terms of one (1) year each
commencing October 1, 1999, and on October 1st of each year
thereafter, unless Company or Executive 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. All extended
employment terms will be considered to be within the Employment
Period while Executive is employed with the Company.
3.04 COMPENSATION AND BENEFITS. During the Employment Period the Executive
shall receive the following compensation and benefits:
a. He shall receive an annual base salary which is not less than
his annual base salary with the opportunity for increases,
from time to time thereafter, which are in accordance with
the Company's regular executive compensation practices.
Executive's salary will be reviewed at least annually by the
Compensation Committee of the Board of Directors. Executive's
annual base salary as of the date hereof is $145,000.00.
b. To the extent that such plans exist immediately prior to the
Effective Date of this Agreement, he shall 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 the greater of: (i) the
opportunities provided by the Company for Executives with
comparable duties, or (ii) the opportunities under any such
plans in which he was participating immediately prior to the
Effective Date of this Agreement.
c. To the extent such plans exist immediately prior to the
Effective Date of this Agreement, he will be entitled to
receive and participate in exempt employee benefits
(including, but not limited to, medical, life, health,
accident and disability insurance and disability benefits)
and prerequisites which are the greater of: (i) the employee
benefits and prerequisites provided by the Company to
Executives with comparable duties, or (ii) the employee
benefits and prerequisites to which he was entitled or in
which he participated immediately prior to the Effective Date
of this Agreement.
d. To the extent such plans exist immediately prior to the
Effective Date of this Agreement, he will be entitled to
continue to accrue credited service for retirement benefits
and to be entitled to receive retirement benefits under and
pursuant to the terms of the Company's qualified retirement
plan for exempt employees, the Company's supplemental
executive retirement plan, and any successor or other
retirement plan or agreement in effect on the Effective Date
of this Agreement in respect of his retirement, whether or
not a qualified
plan or agreement, so that his aggregate monthly retirement
benefit from all such plans and agreements (regardless when
he begins to receive such benefit) will be not less than it
would be had all such plans and agreements in effect
immediately prior to the Effective Date of this Agreement
continued to be in effect without change until and after he
begins to receive such benefits.
e. Paid vacations each year to the same extent as he is
presently receiving or the benefits provided to Executives
with comparable duties whichever is greater.
f. Participation in all other executive incentive stock and
benefit plans approved by the Committee.
3.05 TERMINATION WITHOUT CHANGE IN CONTROL. The Company shall have the
right to terminate Executive at any time during the Employment Period
(including any extended term). Should the Company choose not to renew
or extend the Employment Period of this Employment Agreement or
choose to terminate the Executive, during or at the end of, the
Employment Period, or in the event of death or disability of the
Executive, 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 and provide to the Executive (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
(including the amount allocated to the covenant not to
compete), which base salary is here defined as twelve (12)
times the then current monthly salary in effect for the
Executive 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 the Executive
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 Executive and his immediate
family (at no cost to the Executive) for a period of one (1)
full year following the Date of Termination, life, health,
accident and disability insurance which are not less than the
highest benefits furnished to the Executive and his immediate
family during the term of this Agreement.
c. An amount equal to the target award for the Executive under
the Company's annual bonus plan for the fiscal year in which
termination occurs, provided that if the Executive has
deferred his award for such year under a Company plan, the
payment due the Executive under this subparagraph shall be
paid in accordance with the terms of the deferral or as
specified by the Executive.
d. The Company shall pay, distribute and otherwise provide to
the Executive the amount and value of his entire plan account
and interest under any retirement plan, employee benefit
plan, investment plan or stock ownership plan, if any
exists on the Date of Termination, and all employer
contributions made or payable to any such plan for his
account prior to the end of the month in which Termination
occurs shall be deemed vested and payable to him. Such
payment or distribution shall be in accordance with the
elections made by the Executive in respect of distributions
in accordance with the plan as if the Executive's employment
in the Company terminated at the end of the month in which
Termination occurs.
e. All stock options and awards to which the Executive is
entitled will immediately vest and the time for exercising
any option will be as specified in the plan as if the
Executive were still employed by the Company; provided
however if the immediate vesting of all benefits under the
plan is not permitted by the plan, then the benefits will be
vested only to the extent authorized or permitted by the
plan.
f. If Executive elects to treat the termination as retirement,
on the Date of Termination the Executive shall be deemed to
have retired from the Company and he shall be entitled at
that time, or at such later time as he may elect consistent
with the terms of any applicable plan or benefit. Executive
may treat the termination as termination other than
"retirement" if Executive so elects and may defer
"retirement" to a later date if permitted by any applicable
plan.
g. The "Compensation and Benefits" Section hereof shall be
applicable in determining the payments and benefits due the
Executive under this Section and if Termination occurs after
a reduction in all or part of the Executive'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 the Executive has ceased to be an
actual employee of the Company, because he has insufficient
or reduced credited service based upon his actual employment
by the Company, because the plan or arrangement has been
terminated or amended after the Effective Date of this
Agreement, or for any other reason, the Company itself shall
pay or otherwise provide the equivalent of such rights,
benefits and credits for such benefits to the Executive, his
dependents, beneficiaries and estate as if Executive's
employment had not been terminated.
i. All life, health, hospitalization, medical and accident
benefits available to Executive's spouse and dependents shall
continue for the same term as the Executive's benefits. If
the Executive dies, all benefits will be provided for a term
of one (1) year (or two (2) years after a Change in Control)
after the date of death of the Executive.
j. The Company's obligation under this Section to continue to
pay or provide health care, life, accident and disability
insurance to the Executive, the Executive's spouse and
Executive's dependents, during the remainder of the
Employment Period shall be reduced when and to the extent any
of such benefits are paid or provided to the Executive by
another employer, provided that the Executive shall have all
rights afforded to retirees to convert group insurance
coverage to the individual insurance coverage as, to the
extent of, and whenever his group insurance coverage under
this Section is reduced or expires. Apart from this
subparagraph, the Executive 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 to the Company. To
the extent the Company's performance under this Section includes the performance
of the Company's obligations to the Executive under any other plan or under
another agreement between the Company and the Executive, the rights of the
Executive under such other plan or other agreements, which are discharged under
this 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 the Term of Employment Section pertaining to
regular employment.
4.02 CHANGE IN CONTROL TERMINATION PAYMENTS AND BENEFITS. In the event the
Executive is terminated within two (2) years following a Change in
Control, the Executive will receive the payments and benefits
specified in the "Termination without Change in Control" Section in
the same time and manner therein specified except as amended and
modified hereby:
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) Executive 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 the
Executive
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.
d. All other rights and benefits specified in Section 3.05.
4.03 VOLUNTARY RESIGNATION UPON CHANGE IN CONTROL. If the Executive
voluntarily resigns his employment within six (6) months after a
Change in Control (whether or not Company may be alleging the right
to terminate employment for cause), he will receive the same
payments, compensation and benefits as if he had been terminated on
the date of resignation after Change in Control.
V. NON-COMPETITION AND CONFIDENTIALITY.
5.01 CONSIDERATION.The base salary awarded to the Executive and to be paid
to the Executive in the future includes consideration for the
Non-Competition and Confidentiality Agreement set forth herein and
the amount to be paid to Executive in the event of the termination of
employment of Executive, voluntarily, involuntarily, or under a
Change of Control, under Section 3.05a and 4.02a hereof constitute
payment, in part, for the Non-Competition and Confidentiality of the
Executive. It is contracted, stipulated and agree that fifteen
percent (15%) of such amount paid and to be paid to the Executive
shall constitute the consideration for the Non-Competition and
Confidentiality Agreement set forth herein.
5.02 NON-COMPETITION. Executive 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
could cause serious harm to the Company. Accordingly, the Executive
agrees that during his employment with the Company and for a period
of one (1) year 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 provisions of
the covenant not to compete herein contained will terminate on the
date of termination of Executive) Executive 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 or in any way engage in any business
which provides, produces, leases or sells products or
services of the same or similar type provided, produced,
leased or sold by the Company and with regard to which
Executive was engaged, or over which Executive had direct or
indirect supervision or control, within one (1) year
preceding the Executive's termination of employment, in any
area where the Company provided, produced, leased or sold
such products or services at any time during the one (1) year
preceding such termination of employment; 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 the Executive had
direct or indirect supervision or control, within one (1)
years preceding Executive'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 three (3)
years 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 or (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 Executive with the Company or
within two (2) years after such officer, director, employee
or individual terminated employment with the Company,
whichever occurs earlier.
5.03 CONFIDENTIALITY. Executive 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, Executive 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, Executive 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 the Executive's duties as an
employee of the Company, and Executive may not make use of any
information of the Company after he is no longer an employee of the
Company. Executive 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 this Agreement, except to the extent that such
information may be otherwise lawfully and readily available to the
general public. Executive further agrees that he will, upon
termination of his employment with the Company, return to the Company
all books, records, lists and other written, typed or printed
materials, whether furnished by the Company or prepared by Executive,
which contain any
information relating to the Company's business, and Executive agrees
that he will neither make nor retain any copies of such materials
after termination of employment. Notwithstanding any of the
foregoing, Executive 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 would likely cause damage to the Company or
constitute a material detriment to the Company.
5.04 GEOGRAPHICAL AREA. The geographical area within which the
non-competition covenants of this 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 covenants of
this 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 extends into another county and the
Company is not then doing business in that other county, there will
be no territorial limitations extending into such other county.
5.05 COMPANY REMEDIES FOR VIOLATION OF NON-COMPETITION OR CONFIDENTIALITY
AGREEMENT.Without limiting the right of the Company to pursue all
other legal and equitable rights available to it for violation of any
of the covenants made by Executive herein, it is agreed that:
a. the skills, experience and contacts of Executive 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 Executive as to time and area contained in this
Agreement are reasonable; and
c. the injury suffered by the Company by a violation of any
covenant in this Agreement resulting from loss of profits
created by the competitive use of such skills, experience and
contacts and otherwise will be difficult to calculate in
damages in an action at law and cannot fully compensate the
Company for any violation of any covenant in this Agreement,
accordingly:
(i) the Company shall be entitled to injunctive relief to
prevent violations of such covenants or continuing
violations thereof and to prevent Executive from
rendering any services to any person, firm or entity in
breach of such covenant and to prevent Executive from
divulging any confidential information; and
(ii) compliance with this Agreement is a condition precedent
to the Company's obligation to make payments of any
nature to Executive.
5.06 TERMINATION OF BENEFITS FOR VIOLATION OF NON-COMPETITION AND
CONFIDENTIALITY. If Executive's termination was not after a Change in
Control and if Executive shall be materially violating the
Confidentiality and/or Non-Competition Agreement or any agreement he
may have signed as an employee of the Company, Executive agrees that
after receipt of written notice he shall continue such action and
that 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 the Termination of Rights and
Benefits Section hereof, subject to the provisions of Section 6.01
hereof. There will be no withholding of benefits or payments if the
termination occurred after a Change in Control and Executive will not
be bound by the non-competition provisions if terminated while the
Change in Control provisions hereof are applicable.
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 an shareholder of
the Company may then cause or attempt to cause the Company to refuse
to comply with its obligations under this Agreement, or may cause or
attempt to cause the Company to institute, or may institute,
litigation seeking to have this Agreement declared unenforceable, or
may take, or attempt to take, other action to deny Executive the
benefits intended under this Agreement; or actions may be taken to
enforce the non-competition or confidentiality provisions of this
Agreement. In these circumstances, the purpose of this Agreement
could be frustrated. It is the intent of the parties that the
Executive not be required to incur the legal fees and expenses
associated with the protection or enforcement of his rights under
this Agreement by litigation or other legal action because such costs
would substantially detract from the benefits intended to be extended
to Executive 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 of this
Agreement, it should appear to Executive that the Company is or has
acted contrary to or is failing or has failed to comply with any of
its obligations under this Agreement for the reason that it regards
this Agreement to be void or unenforceable, that Executive has
violated the terms of this 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 this Agreement, or in the event that the Company or any
other person takes any action to declare this Agreement void or
unenforceable, or institutes any litigation or other legal action
designed to deny, diminish or to recover from Executive the benefits
provided or intended to be provided to him hereunder, and Executive
has acted in good faith to perform his obligations under this
Agreement, the Company irrevocably authorizes Executive 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 this Agreement or with the
initiation or defense of any litigation or any other legal action,
whether by or against Executive or the Company or any Director,
Officer, Shareholder or other person affiliated with the Company, in
any jurisdiction. Company is not authorized to withhold the periodic
payments of attorneys' fees and
expenses hereunder based upon any belief or assertion by the Company
that Executive has not acted in good faith or has violated this
Agreement. If Company subsequently establishes that Executive was not
acting in good faith and has violated this Agreement, Executive will
be liable to the Company for reimbursement of amounts paid due to
Executive's actions not based on good faith and in violation of this
Agreement. The reasonable fees and expenses of counsel selected from
time to time by Executive as hereinabove provided shall be paid or
reimbursed to Executive by the Company, on a regular, periodic basis
within thirty (30) days after presentation by Executive of a
statement or statements prepared by such counsel in accordance with
its customary practices, up to a maximum aggregate amount of One
Hundred Fifty Thousand Dollars ($150,000).
6.02 INCOME, EXCISE OR OTHER TAX LIABILITY. Executive will be liable for
and will pay all income tax liability by virtue of any payments made
to Executive 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 executive, the Company shall "gross up" Executive for
such tax liability by paying to Executive an amount sufficient so
that after payment of all such taxes so imposed Executive's position
on an after-tax basis is what it would have been had no such
additional taxes been imposed. Executive will cooperate with the
Company to minimize the tax consequences to the Executive and to the
Company so long as the actions proposed to be taken by the Company do
not cause any additional tax consequences to Executive and do not
prolong or delay the time that payments are to be made, or the amount
of payments to be made, unless the Executive consents, in writing, to
any delay or deferment of payment.
6.03 PAYMENT OF BENEFITS UPON TERMINATION FOR CAUSE. If the termination of
Executive is for cause and not after a Change in Control, the Company
will have the right to withhold all payments (except 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 Executive to which he would have been
entitled had the termination not been for cause, plus interest on all
amounts withheld from Executive 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 have not right to suspend or withhold
payments to Executive under any provision of this Agreement until or
unless a final judgment is entered upholding the Company's
determination that the termination was for cause, in which event
Executive 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 Executive's participation in
other benefits available to executive personnel 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 Executive would be
entitled but for this Agreement.
6.05 NOTICES. Notices, requests, demands and other communications provided
for by this Agreement shall be in writing and shall either be
personally delivered by 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 Executive, 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. Executive shall not have any right to pledge,
hypothecate, anticipate, or in any way create a lien upon any amounts
provided under this 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
Executive lives, no person, other than the parties hereto, shall have
any rights under or interest in this Agreement or the subject matter
hereof. Upon the death of Executive, his Executors, Administrators,
Devisees and Heirs, in that order, shall have the right to enforce
the provisions hereof.
6.07 ENTIRE AGREEMENT: AMENDMENT. This Agreement constitutes the entire
agreement of the parties with respect of the subject matter hereof.
No provision of this 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. This 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 Executive, expressly to assume and
agree to perform this Agreement. Except as otherwise provided herein,
this Agreement shall be binding upon and inure to the benefit of
Executive and his legal representatives, heirs and assigns, provided
however, that in the event of Executive's death prior to payment or
distribution of all amounts, distributions and benefits due him
hereunder, each such unpaid amount and distribution shall be paid in
accordance with this Agreement to the person or persons designated by
Executive to the Company to receive such payment or distribution and
in the event Executive 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 Louisiana because the Company is incorporated
under the laws of said State, the validity, interpretation and
enforcement of this Agreement shall be governed by the laws of the
State of Texas.
6.10 VENUE. To the extent permitted by applicable State and Federal law,
venue for all proceedings hereunder will be in Xxxxxx County, Texas.
6.11 HEADINGS. The headings in this Agreement are inserted for convenience
of reference only and shall not affect the meaning or interpretation
of this Agreement.
6.12 SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions of this 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
this Agreement is found to be invalid or unenforceable for any
reason, the remaining provisions of this Agreement shall be binding
upon the parties hereto and the Agreement will be construed to give
meaning to the remaining provisions of this Agreement in accordance
with the intent of this Agreement.
6.14 COUNTERPARTS. This 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.
IN WITNESS WHEREOF, Executive has hereunto set his hand and, pursuant to
the authorization from its Board of Directors and the Compensation Committee,
the Company has caused these presents to be executed in its name and on its
behalf, and its corporate seal to be hereunto affixed and attested by its
Secretary or Assistant Secretary, all as of the day and year first above
written.
EXECUTED in multiple originals and/or counterparts as of the Effective Date.
/s/ XXXXXX X. XXXXXXX
XXXXXX X. XXXXXXX
PRIDE INTERNATIONAL, INC.
CORPORATE SEAL
BY:/s/ XXX X. XXXXXX
XXX X. XXXXXX
CEO and Chairman of the Board
