EXHIBIT 10.4
PRIDE INTERNATIONAL, INC.
EMPLOYMENT/NON-COMPETITION/
CONFIDENTIALITY AGREEMENT
XXXXX XXXXXXXXX
EMPLOYMENT/NON-COMPETITION/CONFIDENTIALITY AGREEMENT
DATE: The date of execution set forth below.
COMPANY: Pride International, Inc.,
a Delaware corporation
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
EMPLOYEE: Xxxxx Xxxxxxxxx
Xxxxxxxxxx 000
0000 - Xxxxxxxx
Xxxxxx Xxxxx
Xxxxxxxxx
This Employment/Non-Competition/Confidentiality Agreement by and
between Pride International, Inc. (the "Company" and as further defined below)
and Xxxxx Xxxxxxxxx ("Employee") dated as of the date set forth on the signature
page below (the "Agreement"), but effective as of the date set forth in Section
2.05 below, is made on the terms as herein provided.
PREAMBLE
WHEREAS, the Company wishes to attract and retain well-qualified
employees and key personnel and to assure itself of the continuity of its
management;
WHEREAS, Employee is an officer of the Company, serving as Vice
President of Latin American Operations since April 8, 2004, with significant
management responsibilities in the conduct of its business;
WHEREAS, the Company recognizes that Employee is a valuable resource
of the Company, and the Company desires to be assured of the continued services
of Employee;
WHEREAS, the Company desires to obtain assurances that Employee will
devote his best efforts to his employment with the Company and will not enter
into competition with the Company in its business as now conducted and to be
conducted, or solicit customers or other employees of the Company to terminate
their relationships with the Company;
WHEREAS, Employee acknowledges that his talents and services to the
Company are of a special, unique, unusual and extraordinary character and are of
particular and peculiar benefit and importance to the Company;
WHEREAS, the Company is concerned that in the event of a possible or
threatened Change in Control (as defined below) of the Company, Employee may
feel insecure,
and therefore the Company desires to provide security to Employee in the event
of a Change in Control;
WHEREAS, the Company further desires to assure Employee that if a
possible or threatened Change in Control should arise and Employee should be
involved in deliberations or negotiations in connection therewith, Employee
would be in a secure position to consider and participate in such transaction as
objectively as possible in the best interests of the Company and to this end
desires to protect Employee from any direct or implied threat to his financial
well-being by a Change in Control;
WHEREAS, Employee is willing to continue to serve 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 impact the Company and Employee under
circumstances of regular employment between the Company and Employee when there
is no threat of Change in Control and/or none has occurred, as opposed to
circumstances under which a Change in Control is rumored, threatened, occurring
or has occurred. For this reason, the Agreement deals with the regular
employment of Employee under circumstances whereby no Change in Control is
threatened, occurring or has occurred ("Regular Employment") and it deals with
circumstances whereby a Change in Control is threatened, occurring or has
occurred. The Agreement deals with matters impacting both Regular Employment and
employment following a Change in Control, including non-competition and
confidentiality; and
WHEREAS, Employee is willing to enter into and carry out the
non-competition and confidentiality obligations and covenants set forth herein
in consideration of the Agreement.
AGREEMENT
NOW, THEREFORE, Employee and the Company (together the "Parties")
agree as follows:
I. PRIOR AGREEMENTS/CONTRACTS
1.01 PRIOR AGREEMENTS. On and as of 12:00 o'clock noon of the Effective
Date all prior employment and non-competition contracts between
Company and Employee are hereby amended, modified and superseded by
this Agreement insofar as future employment, compensation,
non-competition, confidentiality, accrual of payments or any form of
compensation or benefits from the Company are concerned. This
Agreement does not release or relieve the Company from its liability
or obligation with respect to any compensation, payments or benefits
already accrued to Employee, nor to any vesting of benefits or other
rights which are attributable to length of employment, seniority or
other such matters. This agreement does not relieve Employee of any
prior non-competition or confidentiality obligations and agreements
and the same are hereby modified and
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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 Delaware
corporation, as the same presently exists, as well as any and all
successors, regardless of the nature of the entity or the state or
nation of organization, whether by reorganization, merger,
consolidation, absorption or dissolution. For the purpose of the
Agreement, Company includes all subsidiaries and affiliates of the
Company to the extent such subsidiary and/or affiliate is carrying
on any portion of the business of the Company or a business similar
to that being conducted by the Company.
2.02 LOCAL EMPLOYER. Local Employer means Pride International, S.R.L. 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.
2.03 EXECUTIVE/OFFICER/EMPLOYEE. Executive/Officer/Employee means Xxxxx
Xxxxxxxxx.
2.04 OFFICE/POSITION/TITLE. The Office, Position and Title for which the
Employee is employed is that of Vice President of Latin American
Operations of the Company and carries with it such duties,
responsibilities, rights, benefits and privileges as may reasonably
be assigned to the Employee as are customary and usual for such
position. In addition, the Employee's Office, Position and Title may
include that of an executive or officer of an affiliate or
subsidiary of the Company at the Company's discretion, with such
duties, responsibilities, rights, benefits and privileges as may be
reasonably assigned to the Employee as are customary and usual for
such position. The Employee was appointed to the position of Vice
President of Latin American Operations of the Company as of April 8,
2004 (the "Appointment Date").
2.05 EFFECTIVE DATE. The Agreement becomes effective and binding as of
April 8, 2004.
2.06 CHANGE IN CONTROL. The term "Change in Control" of the Company shall
mean, and shall be deemed to have occurred on the date of the first
to occur of any of the following:
a. there occurs a change in control of the Company of the nature
that would be required to be reported in response to item 6(e)
of Schedule 14A of Regulation 14A or Item 1 of Form 8(k)
promulgated under the Securities Exchange Act of 1934 as in
effect on the date of the Agreement, or if neither item
remains in effect, any regulations issued by the Securities
and Exchange Commission pursuant to the Securities Exchange
Act of 1934 which serve similar purposes;
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b. any "person" (as such term is used in Sections 12(d) and
14(d)(2) of the Securities Exchange Act of 1934) is or becomes
a beneficial owner, directly or indirectly, of securities of
the Company representing twenty percent (20%) or more of the
combined voting power of the Company's then outstanding
securities;
c. the individuals who were members of the Board of Directors of
the Company (the "Board") immediately prior to a meeting of
the shareholders of the Company involving a contest for the
election of directors shall not constitute a majority of the
Board of Directors following such election;
d. the Company shall have merged into or consolidated with
another corporation, or merged another corporation into the
Company, on a basis whereby less than fifty percent (50%) of
the total voting power of the surviving corporation is
represented by shares held by former shareholders of the
Company prior to such merger or consolidation; or
e. the Company shall have sold, transferred or exchanged all, or
substantially all, of its assets to another corporation or
other entity or person.
2.07 TERMINATION. The term "Termination" shall mean termination of the
employment of Employee with the Company (including death and
disability (as described below)) for any reason other than cause (as
described below) or voluntary resignation (as described below).
Termination includes "Constructive Termination" as described below.
Termination includes termination at the end of any "Employment
Period" (as hereinafter defined) due to non-renewal or failure to
extend this Agreement for any reason except for cause.
a. The term "disability" means physical or mental incapacity
qualifying Employee for a long-term disability under the
Company's long-term disability plan. If no such plan exists on
the Effective Date, the term "disability" means physical or
mental incapacity as determined by a doctor jointly selected
by Employee and the Board of Directors of the Company
qualifying Employee for long-term disability under reasonable
employment standards.
b. The term "cause" means: (i) the willful and continued failure
of Employee substantially to perform his duties with the
Company (other than any failure due to physical or mental
incapacity) after a demand for substantial performance is
delivered to him by the Board of Directors which specifically
identifies the manner in which the Board believes he has not
substantially performed his duties, (ii) willful misconduct
materially and demonstrably injurious to the Company, or (iii)
material violation of the covenant not to compete (except
after termination after Change in Control as discussed
herein). No act or failure to act by Employee shall be
considered "willful" unless done or omitted to be done
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by him not in good faith and without reasonable belief that
his action or omission was in the best interest of the
Company. The unwillingness of Employee to accept any or all of
a change in the nature or scope of his position, authorities
or duties, a reduction in his total compensation or benefits,
or other action by or at request of the Company in respect of
his position, authority, or responsibility that is contrary to
this Agreement, may not be considered by the Board of
Directors to be a failure to perform or misconduct by
Employee. Notwithstanding the foregoing, Employee shall not be
deemed to have been terminated for cause for purposes of the
Agreement unless and until there shall have been delivered to
him a copy of a resolution, duly adopted by a vote of
three-fourths of the entire Board of Directors of the Company
at a meeting of the Board of Directors called and held (after
reasonable notice to Employee and an opportunity for Employee
and his counsel to be heard before the Board) for the purpose
of considering whether Employee has been guilty of such a
willful failure to perform or such willful misconduct as
justifies termination for cause hereunder, finding that in the
good faith opinion of the Board of Directors Employee has been
guilty thereof and specifying the particulars thereof.
c. The term "Constructive Termination" means any circumstance by
which the actions of the Company either reduce or change
Employee's title, position, duties, responsibilities or
authority to such an extent or in such a manner as to relegate
Employee to a position not substantially similar to that which
he held prior to such reduction or change and which would
degrade, embarrass or otherwise make it unreasonable for
Employee to remain in the employment of the Company; and
includes a violation by the Company of the employment
provisions and conditions of this Agreement.
d. The resignation of Employee shall be deemed "voluntary" if it
is for any reason other than one or more of the following:
(i) Employee's resignation or retirement is requested by the
Company other than for cause;
(ii) Any significant adverse change in the nature or scope of
Employee's position, authorities or duties from those
described in this Agreement;
(iii) Any reduction in Employee's total compensation or
benefits from that provided in the Compensation and
Benefits Section hereof;
(iv) The material breach by the Company of any other
provision of this Agreement;
(v) Any action by the Company which would constitute
Constructive Termination; or
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(vi) Non-renewal or failure to extend any employment term,
contrary to the wishes of Employee.
Termination that entitles Employee to the payments and benefits provided
in Section 3.05 or 4.02 hereof shall not be deemed or treated by the
Company as the termination of Employee's employment or the forfeiture of
his participation, award, or eligibility, for the purpose of any plan,
practice or agreement of the Company referred to in the Compensation and
Benefits Section hereof, if, and to the extent that, such benefits are
provided under Section 3.05 or 4.02 hereof.
2.08 CUSTOMER. The term "Customer" includes all persons, firms or
entities that are purchasers or end-users of services or products
offered, provided, developed, designed, sold or leased by the
Company during the relevant time periods, and all persons, firms or
entities which control, or which are controlled by, the same person,
firm or entity which controls such purchase.
III. EMPLOYMENT
3.01 EMPLOYMENT. Except as otherwise provided in the Agreement, the
Company hereby agrees to continue the Employee in its employ, and
the Employee hereby agrees to remain in the employ of the Company
for the Employment Period (as defined below). During the Employment
Period (as defined below), Employee shall exercise such position and
authority and perform such responsibilities as are commensurate with
such.
3.02 BEST EFFORTS AND OTHER EMPLOYMENT OBLIGATIONS OF EMPLOYEE; BUSINESS
EXPENSES AND OFFICE AND OTHER SERVICES.
a. Employee agrees that he will at all times faithfully,
industriously and to the best of his ability, experience and
talents, perform all of the duties that may be required of and
from him pursuant to the express and implicit terms hereof, to
the reasonable satisfaction of the Company. Said duties shall
be rendered at Buenos Aires, Argentina, and such other place
or places within or without Argentina as the Company and
Employee shall agree.
b. Employee shall devote his normal and regular business time,
attention and skill to the business and interests of the
Company, and the Company shall be entitled to all of the
benefits, profits or other issue arising from or incident to
all work, services and advice of Employee performed for the
Company. Such employment shall be considered "full time"
employment. Employee shall also have the right to devote such
incidental and immaterial amounts of his time which are not
required for the full and faithful performance of his duties
hereunder to any outside activities and businesses which are
not being engaged in by the Company and which shall not
otherwise interfere with the performance of his duties
hereunder.
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Notwithstanding the foregoing, it shall not be a violation of
the Agreement for Employee to (i) serve on corporate, civic or
charitable boards or committees, (ii) deliver lectures,
fulfill speaking engagements or teach at educational
institutions and (iii) manage personal investments, so long as
such activities do not significantly interfere with the
performance of Employee's responsibilities hereunder. Employee
shall have the right to make investments in any business
provided such investment does not result in a violation of the
Non-Competition Section of this Agreement.
c. Employee acknowledges and agrees that Employee owes a
fiduciary duty to the Company. In keeping with these duties,
Employee shall make full disclosure to the Company of all
business opportunities pertaining to the Company's business
and shall not appropriate for Employee's own benefit business
opportunities concerning the subject matter of the fiduciary
relationship.
d. Employee shall not intentionally take any action which he
knows would not comply with the laws of the United States,
Argentina or any other jurisdiction applicable to Employee's
actions on behalf of the Company, and/or any of its
subsidiaries or affiliates, including specifically, without
limitation, the United States Foreign Corrupt Practices Act,
generally codified in 15 USC 78 (the "FCPA"), as the FCPA may
hereafter be amended, and/or its successor statutes.
e. During the employment relationship and after the employment
relationship terminates, Employee agrees to refrain from any
disparaging comments about the Company, any affiliates, or any
current or former officer, director or employee of the Company
or any affiliate, and Employee agrees not to take any action,
or assist any person in taking any other action, that is
materially adverse to the interests of the Company or any
affiliate or inconsistent with fostering the goodwill of the
Company and its affiliates; provided, however, that nothing in
this Agreement shall apply to or restrict in any way the
communication of information by Employee to any state or
federal law enforcement agency or require notice to the
Company thereof, and Employee will not be in breach of the
covenant contained above solely by reason of his testimony
which is compelled by process of law. The Company and its
affiliates, officers and directors agree to refrain from any
disparaging comments about Employee; provided, however, that
nothing in this Agreement shall apply to or restrict in any
way the communication of information by the Company and its
affiliates, officers and directors to any state or federal law
enforcement agency or require notice to Employee thereof, and
the Company and its affiliates, officers and directors will
not be in breach of the covenant contained above solely by
reason of testimony which is compelled by process of law.
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f. During the Employment Period, Employee shall be entitled to
receive prompt reimbursement for all reasonable expenses
incurred by Employee in accordance with the most favorable
policies, practices and procedures of the Company as in effect
from time to time.
g. During the Employment Period, the Company shall furnish
Employee with office space, secretarial assistance and such
other facilities and services as shall be suitable to
Employee's position and adequate for the performance of
Employee's duties hereunder.
3.03 TERM OF EMPLOYMENT. Employee's Regular Employment will commence on
the Effective Date and will be a for a term ending at 12:00 o'clock
midnight on April 8, 2006 (the "Employment Period"); thereafter, the
Employment Period will be automatically extended for successive
terms of one (1) year commencing on each anniversary of the
Appointment Date, unless the Company or Employee gives written
notice to the other that employment will not be renewed or continued
after the next scheduled expiration date which is not less than one
(1) year after the date that the notice of non-renewal was given.
3.04 COMPENSATION AND BENEFITS. During the Employment Period Employee
shall receive the following compensation and benefits:
a. Employee will receive an annual base salary of not less than
$240,000.00, with the opportunity for increases, from time to
time thereafter, which are in accordance with the Company's
regular executive compensation practices (the "Annual Base
Salary"). The Annual Base Salary will be reviewed at least
annually, but in no event earlier than December 2004.
b. Employee will be eligible to participate on a reasonable
basis, and to continue his existing participation, in annual
bonus, stock option and other incentive compensation plans
which provide opportunities to receive compensation in
addition to his Annual Base Salary which are at least equal to
the opportunities provided by the Company for executives with
comparable duties.
c. Employee will be entitled to receive and participate in
employee benefits (including, but not limited to, medical,
life, health, accident and disability insurance and disability
benefits) and perquisites which are at least equal to those
provided to executives with comparable duties who are employed
by the Local Employer.
d. Employee will receive paid vacation days each year to the same
extent as provided to executives with comparable duties who
are employed by the Local Employer.
e. Employee shall receive a monthly automobile allowance in an
amount not less than $750.00.
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f. Employee will participate, or if dependent on Employee's
election, will be eligible to participate in all other
executive incentive stock and benefit plans approved by the
Local Employer.
3.05 TERMINATION WITHOUT CHANGE IN CONTROL. Notwithstanding anything
herein to the contrary, the Company shall have the right to
terminate Employee's employment at any time during the Employment
Period (including any extended term). Should the Company choose not
to renew or extend the Employment Period of the Agreement or choose
to terminate Employee during, or at the end of, the Employment
Period, or in the event of death or disability of Employee, if the
termination is not after a Change in Control and is not for cause,
the Company shall, within thirty (30) days following such
termination, pay or provide to Employee (or his Executor,
Administrator or Estate in the event of death, as soon as reasonably
practical):
a. An amount equal to one (1) full year of his base salary, which
base salary is here defined as twelve (12) times the then
current monthly salary in effect for Employee and all other
benefits due him based upon the salary in effect on the date
of Termination (but not less than the highest annual base
salary paid to Employee during any of the three (3) years
immediately preceding his date of Termination). There shall be
deducted only such amounts as may be required by law to be
withheld for taxes and other applicable deductions.
b. The Company shall provide to Employee for a period of one (1)
full year following the date of his Termination, life, health,
accident and disability insurance coverages which are not less
than the highest benefits furnished to Employee during the
term of this Agreement.
c. An amount equal to the target award for Employee under the
Company's annual bonus plan for the fiscal year in which
Termination occurs; provided, however, that (i) if Employee
has deferred his award for such year under a Company plan, the
payment due Employee under this subparagraph shall be paid in
accordance with the terms of the deferral or as specified by
Employee and (ii) if the Company has not specified a target
award for such year, the amount will be equal to fifty percent
(50%) of the maximum percentage of Employee's Annual Base
Salary Employee may be entitled to under the Company's annual
bonus plan in such year.
d. The Company will pay, distribute and otherwise provide to
Employee the amount and value of his entire plan account and
interest under any retirement plan, employee benefit plan,
investment plan or stock ownership plan, if any exists on the
date of his Termination, and all employer contributions made
or payable to any such plan for his account prior to the end
of the month in which his termination occurs shall be deemed
vested and payable to him; provided, however, that in the
event any such employer contributions are prohibited from
being deemed vested
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and payable for any reason (other than due to a lack of
Employee's consent), the total amount of such employer
contributions shall be paid to Employee in a lump sum outside
of any such plan. Such payment or distribution shall be made
in accordance with the elections made by Employee with respect
to distributions in accordance with the plan as if Employee's
employment with the Company terminated at the end of the month
in which Termination occurs.
e. All stock options and awards to which Employee is entitled
will immediately vest and the time for exercising any option
will extend for 120 days following such termination of
employment, or such later date as shall be specified in the
applicable plan and award agreement; provided, however, that
in no event shall the time for exercising an option extend
beyond the original term of the option.
f. With respect to any qualified or non-qualified retirement
pension plan that may be adopted by the Company after the
Effective Date, if Employee elects to treat Termination as
retirement then on the date of Termination, Employee shall be
deemed to have retired from the Company. At that time, or at
such later time as he may elect consistent with the terms of
any such applicable plan or benefit, in order to receive
benefits or avoid or minimize any applicable early pension
reduction provisions, he shall be entitled to commence to
receive the retirement benefits to which he is entitled under
such plan(s). Employee may treat the termination as
termination other than "retirement" if Employee so elects and
may defer "retirement" to a later date if permitted by any
applicable plan(s).
g. The "Compensation and Benefits" section hereof shall be
applicable in determining the payments and benefits due
Employee under this section and if Termination occurs after a
reduction in all or part of Employee's total compensation or
benefits, the lump sum severance allowance and other
compensation and benefits payable to him pursuant to this
section shall be based upon his compensation and benefits
before the reduction.
h. If any provision of this Section cannot, in whole or in part,
be implemented and carried out under the terms of the
applicable compensation, benefit or other plan or arrangement
of the Company because Employee has ceased to be an actual
employee of the Company, due to insufficient or reduced
credited service based upon his actual employment by the
Company or because the plan or arrangement has been terminated
or amended after the Effective Date, or for any other reason,
the Company itself shall pay or otherwise provide the
equivalent of such rights, benefits and credits for such
benefits to the Employee, his dependents, beneficiaries and
estate as if Employee's employment had not been terminated.
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i. All life, health, hospitalization, medical and accident
benefits available to Employee's spouse and dependents shall
continue for the same term as Employee's benefits. If Employee
dies, all benefits will be provided for a term of one (1) year
(or two (2) years if after a Change in Control) after the date
of death of Employee.
j. The Company's obligation under this Section to continue to pay
or provide health care, life, accident and disability
insurance to Employee, Employee's spouse and Employee's
dependents shall be reduced when and to the extent any such
benefits are paid or provided to Employee by another employer;
provided, however, that Employee shall have all rights, if
any, that would be afforded to Employee as a retiree to
convert group life insurance coverage to the individual life
insurance coverage as, to the extent of, and whenever his
group life insurance coverage under this Section is reduced or
expires. Apart from this subparagraph, Employee shall have and
be subject to no obligation to mitigate.
k. The Company shall deduct applicable withholding taxes in
performing its obligations under this Section.
Nothing in this Section is intended, nor shall be deemed or interpreted,
to be an amendment to any compensation, benefit or other plan of the
Company. To the extent the Company's performance under this Section
includes the performance of the Company's obligations to Employee under
any other plan or under another agreement between the Company and
Employee, the rights of Employee under such other plan or other agreement,
which are discharged under the Agreement, are discharged, surrendered, or
released pro tanto.
IV. CHANGE IN CONTROL
4.01 EXTENSION OF EMPLOYMENT PERIOD. Upon any Change in Control, the
Employment Period shall be immediately and without further action
extended for a term of two (2) years following the effective date of
the Change in Control and will expire at 12:00 o'clock midnight on
the last day of the month following two (2) years after the Change
in Control. Thereafter, the Employment Period will be extended for
successive terms of one (1) year each, unless terminated, all in the
manner specified in Section 3.03.
4.02 CHANGE IN CONTROL TERMINATION PAYMENTS AND BENEFITS. In the event
Employee is terminated within two (2) years following a Change in
Control, Employee will receive the payments and benefits specified
in the "Termination Without Change in Control" Section at the same
time and in the same manner therein specified except as amended and
modified below:
a. The salary and benefits specified in Section 3.05a. will be
paid based upon a multiple of two (2) years (instead of one
(1) year).
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b. Life, health, accident and disability insurance specified in
Section 3.05b. will be provided until (i) Employee becomes
reemployed and receives similar benefits from a new employer
or (ii) two (2) years after the date of Termination, whichever
is earlier.
c. An amount equal to two (2) times the maximum award that
Employee could receive under the Company's annual bonus plan
for the fiscal year in which the Termination occurs, instead
of the benefits provided in Section 3.05c hereof.
d. Section 3.05e is modified such that the time for exercising
any option will extend to the later of (i) the date that is
two (2) years after the date of the Change in Control or (ii)
the date that is 120 days after the date of Employee's
Termination; provided, however, that in no event shall the
time for exercising an option extend beyond the original term
of the option.
e. All other rights and benefits specified in Section 3.05.
4.03 VOLUNTARY RESIGNATION UPON CHANGE IN CONTROL. If Employee
voluntarily resigns his employment within six (6) months after a
Change in Control (whether or not the Company may be alleging the
right to terminate employment for cause), he will receive the same
payments, compensation and benefits as if he had had a Termination
on the date of resignation after Change in Control.
V. NON COMPETITION AND CONFIDENTIALITY/PROTECTION OF INFORMATION
5.01 CONSIDERATION. Employee recognizes that in each of the highly
competitive businesses in which the Company is engaged, the
Company's trade secrets and other confidential information, along
with personal contacts, are of primary importance in securing and
maintaining business prospects, in retaining the accounts and
goodwill of present Customers and protecting the business of the
Company. Employee, therefore, agrees that in exchange for the
provision of trade secrets and other confidential information, he
will agree to the non-competition and confidentiality obligations
and covenants outlined in this Section V.
5.02 NON-COMPETITION. In exchange for the consideration described above
in Section 5.01, Employee agrees that during his employment with the
Company and for a period of six (6) months after he is no longer
employed by the Company (unless his employment is terminated after a
Change in Control, in which event there will be no covenant not to
compete and the noncompete covenants and obligations herein will
terminate on the date of termination of Employee), Employee will
not, directly or indirectly, either as an individual, proprietor,
stockholder (other than as a holder of up to one percent (1%) of the
outstanding shares of a corporation whose shares are listed on a
stock exchange or traded in
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accordance with the automated quotation system of the National
Association of Securities Dealers), partner, officer, employee or
otherwise:
a. work for, become an employee of, invest in, provide consulting
services to or in any way engage in any business which (i) is
primarily engaged in the drilling and workover of oil and gas
xxxxx within the geographical area described in Section
5.02(e) and (ii) actually competes to a substantial extent
with the Company; or
b. provide, sell, offer to sell, lease, offer to lease, or
solicit any orders for any products or services which the
Company provided and with regard to which Employee had direct
or indirect supervision or control, within one (1) year
preceding Employee's termination of employment, to or from any
person, firm or entity which was a Customer for such products
or services of the Company during the one (1) year preceding
such termination from whom the Company had solicited business
during such one (1) year; or
c. solicit, aid, counsel or encourage any officer, director,
employee or other individual to (i) leave his or her
employment or position with the Company, (ii) compete with the
business of the Company, or (iii) violate the terms of any
employment, non-competition or similar agreement with the
Company; or
d. employ, directly or indirectly, permit the employment of,
contract for services or work to be performed by, or otherwise
use, utilize or benefit from the services of any officer,
director, employee or any other individual holding a position
with the Company within two (2) years after the date of
termination of employment of Employee with the Company or
within two (2) years after such officer, director, employee or
individual terminated employment with the Company, whichever
period expires earlier; provided however, Employee can seek
written consent from the Company to hire an officer, director,
employee or individual who has terminated employment with the
Company, and Company consent will not be unreasonably
withheld.
e. The geographical area within which the non-competition
obligations and covenants of the Agreement shall apply is that
territory within two hundred (200) miles of (i) any of the
Company's present offices, (ii) any of the Company's present
rig yards and (iii) any additional location where the Company,
as of the date of any action taken in violation of the
non-competition obligations and covenants of the Agreement,
has an office, a rig yard, or definitive plans to locate an
office or a rig yard. Notwithstanding the foregoing, if the
two hundred (200) mile radius extends into another country or
its territorial waters and the Company is not then doing
business in that other country, there will be no territorial
limitations extending into such other country.
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5.03 CONFIDENTIALITY/PROTECTION OF INFORMATION. Employee acknowledges
that his employment with the Company has in the past and will, of
necessity, provide him with specialized knowledge which, if used in
competition with the Company, or divulged to others, could cause
serious harm to the Company. Accordingly, Employee will not at any
time during or after his employment by the Company, directly or
indirectly, divulge, disclose or communicate to any person, firm or
corporation in any manner whatsoever any information concerning any
matter affecting or relating to the Company or the business of the
Company. While engaged as an employee of the Company, Employee may
only use information concerning any matters affecting or relating to
the Company or the business of the Company for a purpose which is
necessary to the carrying out of Employee's duties as an employee of
the Company, and Employee may not make use of any information of the
Company after he is no longer an employee of the Company. Employee
agrees to the foregoing without regard to whether all of the
foregoing matters will be deemed confidential, material or
important, it being stipulated by the parties that all information,
whether written or otherwise, regarding the Company's business,
including, but not limited to, information regarding Customers,
Customer lists, costs, prices, earnings, products, services,
formulae, compositions, machines, equipment, apparatus, systems,
manufacturing procedures, operations, potential acquisitions, new
location plans, prospective and executed contracts and other
business arrangements, and sources of supply, is prima facie
presumed to be important, material and confidential information of
the Company for the purposes of the Agreement, except to the extent
that such information may be otherwise lawfully and readily
available to the general public. Employee further agrees that he
will, upon termination of his employment with the Company, return to
the Company all books, records, lists and other written, electronic,
typed or printed materials, whether furnished by the Company or
prepared by Employee, which contain any information relating to the
Company's business, and Employee agrees that he will neither make
nor retain any copies of such materials after termination of
employment. Notwithstanding any of the foregoing, nothing in this
Agreement shall prevent Employee from complying with applicable
federal and/or state laws. Notwithstanding any of the foregoing,
Employee will not be liable for any breach of these confidentiality
provisions unless the same constitutes a material detriment to the
Company, or due to the nature of the information divulged and the
manner in which it was divulged and the person to whom it was
divulged it would likely cause damage to the Company or constitute a
material detriment to the Company.
5.04 COMPANY REMEDIES FOR VIOLATION OF NON-COMPETITION OR
CONFIDENTIALITY/PROTECTION OF INFORMATION PROVISIONS. Without
limiting the right of the Company to pursue all other legal and
equitable rights available to it for violation of any of the
obligations and covenants made by Employee herein, it is agreed
that:
a. the skills, experience and contacts of Employee are of a
special, unique, unusual and extraordinary character which
give them a peculiar value;
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b. because of the business of the Company, the restrictions
agreed to by Employee as to time and area contained in the
Agreement are reasonable; and
c. the injury suffered by the Company by a violation of any
obligation or covenant in the Agreement resulting from loss of
profits created by (i) the competitive use of such skills,
experience contacts and otherwise and/or (ii) the use or
communication of any information deemed confidential herein
will be difficult to calculate in damages in an action at law
and cannot fully compensate the Company for any violation of
any obligation or covenant in the Agreement, accordingly:
(i) the Company shall be entitled to injunctive relief to
prevent violations thereof and prevent Employee from
rendering any services to any person, firm or entity in
breach of such obligation or covenant and to prevent
Employee from divulging any confidential information;
and
(ii) compliance with the Agreement is a condition precedent
to the Company's obligation to make payments of any
nature to Employee, subject to the other provisions
hereof.
5.05 TERMINATION OF BENEFITS FOR VIOLATION OF NON-COMPETITION AND
CONFIDENTIALITY/PROTECTION OF INFORMATION PROVISIONS. If Employee
materially violates the confidentiality/protection of information
and/or non-competition obligations and covenants herein or any other
related agreement he may have signed as an employee of the Company,
Employee agrees there shall be no obligation on the part of the
Company to provide any payments or benefits (other than payments or
benefits already earned or accrued) described in Section 3.05 of the
Agreement, subject to the provision of Section 6.01 hereof. There
will be no withholding of benefits or payments due to a violation of
the non-competition obligations hereof if the termination occurred
after a Change in Control, and Employee will not be bound by the
non-competition provisions if terminated after a Change in Control.
5.06 REFORMATION OF SCOPE. If the provisions of the confidentiality
and/or non-competition obligations and covenants should ever be
deemed to exceed the time, geographic or occupational limitations
permitted by the applicable law, Employee and the Company agree that
such provisions shall be and are hereby reformed to the maximum
time, geographic or occupational limitations permitted by the
applicable law, and the determination of whether Employee violated
such obligation and covenant will be based solely on the limitation
as reformed.
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
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has not occurred, the Board of Directors or a stockholder of the
Company may then cause or attempt to cause the Company to refuse to
comply with its obligations under the Agreement, or may cause or
attempt to cause the Company to institute, or may institute,
litigation seeking to have the Agreement declared unenforceable, or
may take, or attempt to take other action to deny Employee the
benefits intended under the Agreement; or actions may be taken to
enforce the non-competition or confidentiality provisions of the
Agreement. In these circumstances, the purpose of the Agreement
could be frustrated. It is the intent of the parties that Employee
not be required to incur the legal fees and expenses associated with
the protection or enforcement of his rights under the Agreement by
litigation or other legal action because such costs would
substantially detract from the benefits intended to be extended to
Employee hereunder nor be bound to negotiate any settlement of his
rights hereunder under threat of incurring such costs. Accordingly,
if at any time after the Effective Date, it should appear to
Employee that the Company is or has acted contrary to or is failing
or has failed to comply with any of its obligations under the
Agreement for the reason that it regards the Agreement to be void or
unenforceable, that Employee has violated the terms of the
Agreement, or for any other reason, or that the Company has
purported to terminate his employment for cause or is in the course
of doing so, or is withholding payments or benefits, or is
threatening to withhold payments or benefits, contrary to the
Agreement, or in the event that the Company or any other person
takes any action to declare the Agreement void or unenforceable, or
institutes any litigation or other legal action designed to deny,
diminish or to recover from Employee the benefits provided or
intended to be provided to him hereunder, and Employee has acted in
good faith to perform his obligations under the Agreement, the
Company irrevocably authorizes Employee from time to time to retain
counsel of his choice at the expense of the Company to represent him
in connection with the protection and enforcement of his rights
hereunder including, without limitation, representation in
connection with termination of his employment or withholding of
benefits or payments contrary to the Agreement or with the
initiation or defense of any litigation or any other legal action,
whether by or against Employee or the Company or any director,
officer, stockholder or other person affiliated with the Company, in
any jurisdiction. The Company is not authorized to withhold the
periodic payments of attorney's fees and expenses hereunder based
upon any belief or assertion by the Company that Employee has not
acted in good faith or has violated the Agreement. If the Company
subsequently establishes that Employee was not acting in good faith
and has violated the Agreement, Employee will be liable to the
Company for reimbursement of amounts paid due to Employee's actions
not based on good faith and in violation of the Agreement. The
reasonable fees and expenses of counsel selected from time to time
by Employee hereinabove provided shall be paid or reimbursed to
Employee by the Company, on a regular, periodic basis within thirty
(30) days after presentation by Employee of a statement or
statements prepared by such counsel in accordance with its customary
practices, up to a maximum aggregate amount of $250,000.00.
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6.02 INCOME, EXCISE OR OTHER TAX LIABILITY. Employee will be liable for
and will pay all income tax liability by virtue of any payments made
to Employee under this Agreement, as if the same were earned and
paid in the normal course of business and not the result of a Change
in Control and not otherwise triggered by the "golden parachute" or
excess payment provisions of the Internal Revenue Code of the United
States, which would cause additional tax liability to be imposed. If
any additional income tax, excise or other taxes are imposed on any
amount or payment in the nature of compensation paid or provided to
or on behalf of Employee, the Company shall "gross-up" Employee for
such tax liability by paying to Employee an amount sufficient so
that after payment of all such taxes so imposed, Employee's position
on an after-tax basis is what it would have been had no such
additional taxes been imposed. Employee will cooperate with the
Company to minimize the tax consequences to Employee and to the
Company so long as the actions proposed to be taken by the Company
do not cause any additional tax consequences to Employee and do not
prolong or delay the time that payments are to be made, or reduce
the amount of payments to be made, unless Employee consents in
writing to any delay or deferment of payment.
6.03 PAYMENT OF BENEFITS UPON TERMINATION FOR CAUSE. If the termination
of Employee is not after a Change in Control and is for cause, the
Company will have the right to withhold all payments other than (i)
what is accrued and owing under the terms of any employee benefit
plan maintained by the Company, and (ii) those specified in Section
6.01; provided however, that if a final judgment is entered finding
that cause did not exist for termination, the Company will pay all
benefits to Employee to which he would have been entitled had
Employee's termination not been for cause, plus interest on all
amounts withheld from Employee at the rate specified for judgments
under Article 5069-1.05 V.A.T.S. but not less than ten percent (10%)
per annum. If the termination for cause occurs after a Change in
Control, the Company shall not have the right to suspend or withhold
payments to Employee under any provision of the Agreement until or
unless a final judgment is entered upholding the Company's
determination that the termination was for cause, in which event
Employee will be liable to the Company for all amounts paid, plus
interest at the rate allowed for judgments under Article 5069-1.05
V.A.T.S.
6.04 NON-EXCLUSIVE AGREEMENT. The specific arrangements referred to
herein are not intended to exclude or limit Employee's participation
in other benefits available to Employee or personnel of the Company
generally, or to preclude or limit other compensation or benefits as
may be authorized by the Board of Directors of the Company at any
time, or to limit or reduce any compensation or benefits to which
Employee would be entitled but for the Agreement.
6.05 NOTICES. Notices, requests, demands and other communications
provided for by the Agreement shall be in writing and shall either
be personally delivered by 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
-17-
receipt; or (iii) via Federal Express or other expedited delivery
service provided that acknowledgment of receipt is received and
retained by the deliverer and furnished to the sender, if to
Employee, at the last address he has filed, in writing, with the
Company, or if to the Company, to its Corporate Secretary at its
principal executive offices.
6.06 NON-ALIENATION. Employee shall not have any right to pledge,
hypothecate, anticipate, or in any way create a lien upon any
amounts provided under the Agreement, and no payments or benefits
due hereunder shall be assignable in anticipation of payment either
by voluntary or involuntary acts or by operation of law. So long as
Employee lives, no person, other than the parties hereto, shall have
any rights under or interest in the Agreement or the subject matter
hereof. Upon the death of Employee, his executors, administrators,
devisees and heirs, in that order, shall have the right to enforce
the provisions hereof, to the extent applicable.
6.07 ENTIRE AGREEMENT; AMENDMENT. The Agreement constitutes the entire
agreement of the Parties with respect of the subject matter hereof.
No provision of the Agreement may be amended, waived, or discharged
except by the mutual written agreement of the Parties. The consent
of any other person(s) to any such amendment, waiver or discharge
shall not be required.
6.08 SUCCESSORS AND ASSIGNS. The Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns, by
operation of law or otherwise, including, without limitation, any
corporation or other entity or persons which shall succeed (whether
directly or indirectly, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets
of the Company, and the Company will require any successor, by
agreement in form and substance satisfactory to Employee, expressly
to assume and agree to perform the Agreement. In addition, the
Company may assign its obligations under this Agreement to any
corporation or other entity or persons which shall succeed (whether
directly or indirectly, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets
of the Local Employer, and the Company will require such assignee to
assume and agree to perform the Agreement, and such assignee shall
be substituted for the "Company" throughout this Agreement. Except
as otherwise provided herein, the Agreement shall be binding upon
and inure to the benefit of Employee and his legal representatives,
heirs and assigns; provided, however, that in the event of
Employee's death prior to payment or distribution of all amounts,
distributions and benefits due him hereunder, if any, each such
unpaid amount and distribution shall be paid in accordance with the
Agreement to the person or persons designated by Employee to the
Company to receive such payment or distribution and in the event
Employee has made no applicable designation, to his estate. If the
Company should split, divide or otherwise become more than one
entity, all liability and obligations of the Company shall be the
joint and several liability and obligation of all of the parts.
-18-
6.09 GOVERNING LAW. Except to the extent required to be governed by the
laws of the State of Delaware because the Company is incorporated
under the laws of said State, the validity, interpretation and
enforcement of the Agreement shall be governed by the laws of the
State of Texas.
6.10 VENUE. To the extent permitted by applicable state or federal law,
venue for all proceedings hereunder will be in the U.S. District
Court for the Southern District of Texas, Houston Division.
6.11 HEADINGS. The headings in the Agreement are inserted for convenience
of reference only and shall not affect the meaning or interpretation
of the Agreement.
6.12 SEVERABILITY. In the event that any provision or portion of the
Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions of the Agreement shall be
unaffected thereby and shall remain in full force and effect.
6.13 PARTIAL INVALIDITY. In the event that any part, portion or section
of the Agreement is found to be invalid or unenforceable for any
reason, the remaining provisions of the Agreement shall be binding
upon the parties hereto, and the Agreement will be construed to give
meaning to the remaining provisions of the Agreement in accordance
with the intent of the Agreement.
6.14 COUNTERPARTS. The Agreement may be executed in one or more
counterparts, each of which shall be deemed to be original, but all
of which together constitute one and the same instrument.
6.15 NO WAIVER. No failure by either party hereto at any time to give
notice of any breach by the other party of, or to require compliance
with, any condition or provision of the Agreement shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.
-19-
IN WITNESS WHEREOF, Employee has hereunto set his hand and, pursuant
to the authorization from its Board of Directors and the Compensation Committee
of such Board of Directors, the Company has caused these presents to be executed
in its name and on its behalf.
EXECUTED in multiple originals and/or counterparts as of the date
set forth below.
/s/ Xxxxx Xxxxxxxxx
----------------------------------------
Xxxxx Xxxxxxxxx
Date: July 1, 2004
-----------------------------------
ATTEST: PRIDE INTERNATIONAL, INC.
/s/ W. Xxxxxxx Xxxxxx By: /s/ Xxxx X. Xxxxx
------------------------------- ------------------------------------
Assistant Secretary Xxxx X. Xxxxx
Chief Executive Office
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