EXHIBIT 10.29
PRIDE INTERNATIONAL, INC.
EMPLOYMENT/NON-COMPETITION/
CONFIDENTIALITY AGREEMENT
XXXXX X. XXXXXXX
EMPLOYMENT/NON-COMPETITION/CONFIDENTIALITY AGREEMENT
DATE: The date of execution set forth below.
COMPANY/EMPLOYER: Pride International, Inc.,
a Delaware corporation
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
EMPLOYEE: Xxxxx X. Xxxxxxx
00 Xxxxx Xxx
Xxxxxxx, Xxxxx 00000
This Employment/Non-Competition/Confidentiality Agreement by
and between Pride International, Inc. (the "Company" and as further defined
below) and Xxxxx X. Xxxxxxx ("Employee") dated effective as of December 3, 2003
(the "Agreement") 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, the Company recognizes that Employee will serve as 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 will serve as a key employee of the Company,
and he acknowledges that his talents and services to the Company are of a
special, unique, unusual and extraordinary character and are of particular and
peculiar benefit and importance to the Company;
WHEREAS, the Company is concerned that in the event of a
possible or threatened Change in Control (as defined below) of the Company,
Employee may feel insecure, and therefore the Company desires to provide
security to Employee in the event of a Change in Control;
WHEREAS, the Company further desires to assure Employee that
if a possible or threatened Change in Control should arise and Employee should
be involved in deliberations or negotiations in connection therewith, Employee
would be in a secure position to consider and
participate in such transaction as objectively as possible in the best interests
of the Company and to this end desires to protect Employee from any direct or
implied threat to his financial well-being by a Change in Control;
WHEREAS, Employee is willing to continue to serve 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. Employee represents and warrants to the
Company that (i) he has no continuing non-competition
agreements with any prior employers that have not been
disclosed in writing to the Company and (ii) neither the
execution of the Agreement by Employee or the performance by
Employee of his obligations under the Agreement will result in
a violation or breach of, or constitute a default under the
provisions of any contract, agreement or other instrument to
which Employee is or was a party.
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.
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2.02 EMPLOYMENT DATE. The Employee's initial date of active
employment, which shall be December 3, 2003 (the "Employment
Date").
2.03 CHANGE IN CONTROL. The term "Change in Control" of the Company
shall mean, and shall be deemed to have occurred on the date
of the first to occur of any of the following:
a. there occurs a change in control of the Company of
the nature that would be required to be reported in
response to item 6(e) of Schedule 14A of Regulation
14A or Item 1 of Form 8(k) promulgated under the
Securities Exchange Act of 1934 as in effect on the
date of the Agreement, or if neither item remains in
effect, any regulations issued by the Securities and
Exchange Commission pursuant to the Securities
Exchange Act of 1934 which serve similar purposes;
b. any "person" (as such term is used in Sections 12(d)
and 14(d)(2) of the Securities Exchange Act of 1934)
is or becomes a beneficial owner, directly or
indirectly, of securities of the Company representing
twenty percent (20%) or more of the combined voting
power of the Company's then outstanding securities;
c. the individuals who were members of the Board of
Directors of the Company (the "Board") immediately
prior to a meeting of the shareholders of the Company
involving a contest for the election of directors
shall not constitute a majority of the Board of
Directors following such election;
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.
2.04 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 Employment 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
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qualifying Employee for long-term disability under
reasonable employment standards.
b. The term "cause" means: (i) the willful and continued
failure of Employee substantially to perform his
duties with the Company (other than any failure due
to physical or mental incapacity) after a demand for
substantial performance is delivered to him by the
Board of Directors which specifically identifies the
manner in which the Board believes he has not
substantially performed his duties, (ii) willful
misconduct materially and demonstrably injurious to
the Company, or (iii) material violation of the
covenant not to compete (except after termination
after Change in Control as discussed herein). No act
or failure to act by Employee shall be considered
"willful" unless done or omitted to be done by him
not in good faith and without reasonable belief that
his action or omission was in the best interest of
the Company. The unwillingness of Employee to accept
any or all of a change in the nature or scope of his
position, authorities or duties, a reduction in his
total compensation or benefits, or other action by or
at request of the Company in respect of his position,
authority, or responsibility that is contrary to this
Agreement, may not be considered by the Board of
Directors to be a failure to perform or misconduct by
Employee. Notwithstanding the foregoing, Employee
shall not be deemed to have been terminated for cause
for purposes of the Agreement unless and until there
shall have been delivered to him a copy of a
resolution, duly adopted by a vote of three-fourths
of the entire Board of Directors of the Company at a
meeting of the Board of Directors called 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;
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(ii) Any significant adverse change in the nature
or scope of Employee's position, authorities
or duties from those described in this
Agreement;
(iii) Any reduction in Employee's total
compensation or benefits from that provided
in the Compensation and Benefits Section
hereof;
(iv) The material breach by the Company of any
other provision of this Agreement;
(v) Any requirement of the Company that Employee
relocate more than 50 miles from downtown
Houston, Texas;
(vi) Any action by the Company which would
constitute Constructive Termination; or
(vii) Non-renewal or failure to extend any
employment term, contrary to the wishes of
Employee.
Termination that entitles Employee to the payments and benefits
provided in Section 3.05 or 4.02 hereof shall not be deemed or treated
by the Company as the termination of Employee's employment or the
forfeiture of his participation, award, or eligibility, for the purpose
of any plan, practice or agreement of the Company referred to in the
Compensation and Benefits Section hereof, if, and to the extent that,
such benefits are provided under Section 3.05 or 4.02 hereof.
2.05 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. As of the Employment Date, Employee shall become
an employee of the Company in an advisory capacity, but shall
not serve as an officer or perform similar policy-making
functions for the Company until December 16, 2003. Effective
as of December 16, 2003, Employee will assume the position of
Executive Vice President and Chief Financial Officer of the
Company. Employee will report to the Company's Chief Executive
Officer. Except as otherwise provided in the Agreement, the
Company hereby agrees to continue Employee in its employ, and
Employee hereby agrees to remain in the employ of the Company,
for the Employment Period (as defined below). From December
16, 2003 through the remaining Employment Period, Employee
shall exercise such position and authority and perform such
responsibilities as are commensurate with the position and
authority of Executive Vice President and Chief Financial
Officer of the Company.
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3.02 BEST EFFORTS AND OTHER EMPLOYMENT OBLIGATIONS OF EMPLOYEE;
BUSINESS EXPENSES AND OFFICE AND OTHER SERVICES.
a. Employee agrees that he will at all times faithfully,
industriously and to the best of his ability,
experience and talents, perform all of the duties
that may be required of and from him pursuant to the
express and implicit terms hereof, to the reasonable
satisfaction of the Company. Said duties shall be
rendered at Houston, Texas, and such other place or
places within or without the State of Texas as the
Company and Employee shall agree.
b. The parties acknowledge that prior to December 16,
2003, Employee will be winding down his duties at his
previous employer. From and after December 16, 2003,
Employee shall devote his normal and regular business
time, attention and skill to the business and
interests of the Company, and the Company shall be
entitled to all of the benefits, profits or other
issue arising from or incident to all work, services
and advice of Employee performed for the Company.
Such employment shall be considered "full time"
employment. Employee shall also have the right to
devote such incidental and immaterial amounts of his
time which are not required for the full and faithful
performance of his duties hereunder to any outside
activities and businesses which are not being engaged
in by the Company and which shall not otherwise
interfere with the performance of his duties
hereunder. Notwithstanding the foregoing, it shall
not be a violation of the Agreement for Employee to
(i) serve on corporate, civic or charitable boards or
committees, (ii) deliver lectures, fulfill speaking
engagements or teach at educational institutions and
(iii) manage personal investments, so long as such
activities do not significantly interfere with the
performance of Employee's responsibilities hereunder.
Employee shall have the right to make investments in
any business provided such investment does not result
in a violation of the Non-Competition Section of this
Agreement.
c. Employee acknowledges and agrees that Employee owes a
fiduciary duty to the Company. In keeping with these
duties, Employee shall make full disclosure to the
Company of all business opportunities pertaining to
the Company's business and shall not appropriate for
Employee's own benefit business opportunities
concerning the subject matter of the fiduciary
relationship.
d. Employee shall not intentionally take any action
which he knows would not comply with United States
laws applicable to Employee's actions on behalf of
the Company, and/or any of its subsidiaries or
affiliates, including specifically, without
limitation, the United States Foreign Corrupt
Practices Act, generally codified in 15 USC 78 (the
"FCPA"), as the FCPA may hereafter be amended, and/or
its successor statutes.
e. During the employment relationship and after the
employment relationship terminates, Employee agrees
to refrain from any disparaging comments
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about the Company, any affiliates, or any current or
former officer, director or employee of the Company
or any affiliate, and Employee agrees not to take any
action, or assist any person in taking any other
action, that is materially adverse to the interests
of the Company or any affiliate or inconsistent with
fostering the goodwill of the Company and its
affiliates; provided, however, that nothing in this
Agreement shall apply to or restrict in any way the
communication of information by Employee to any state
or federal law enforcement agency or require notice
to the Company thereof, and Employee will not be in
breach of the covenant contained above solely by
reason of his testimony which is compelled by process
of law. The Company and its affiliates, officers and
directors agree to refrain from any disparaging
comments about Employee; provided, however, that
nothing in this Agreement shall apply to or restrict
in any way the communication of information by the
Company and its affiliates, officers and directors to
any state or federal law enforcement agency or
require notice to Employee thereof, and the Company
and its affiliates, officers and directors will not
be in breach of the covenant contained above solely
by reason of testimony which is compelled by process
of law.
f. During the Employment Period, Employee shall be
entitled to receive prompt reimbursement for all
reasonable expenses incurred by Employee in
accordance with the most favorable policies,
practices and procedures of the Company as in effect
from time to time.
g. During the Employment Period, the Company shall
furnish Employee with office space, secretarial
assistance and such other facilities and services as
shall be suitable to Employee's position and adequate
for the performance of Employee's duties hereunder.
3.03 TERM OF EMPLOYMENT. Employee's Regular Employment will
commence on the Employment Date and will be a for a term of
two (2) years ending at 12:00 o'clock midnight on the second
anniversary of the Employment Date (the "Employment Period");
thereafter, the Employment Period will be automatically
extended for successive terms of one (1) year commencing on
each anniversary of the Employment 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 $390,000.00, 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.
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b. Employee will be eligible to participate on a
reasonable basis in annual bonus (as more fully
described below), 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. Employee will be eligible to
participate in the Company's annual incentive plan at
a maximum bonus award level of no less than 100% of
Annual Base Salary; provided however, that for the
2004 fiscal year the actual bonus payable to Employee
shall be no less than 75% of Annual Base Salary.
c. Employee will be entitled to receive and participate
in employee benefits (including, but not limited to,
medical, life, health, accident and disability
insurance and disability benefits) and perquisites
which are at least equal to those provided by the
Company to executives with comparable duties
d. Employee will receive paid vacation days each year to
the same extent as provided to executives with
comparable duties; provided, however, Employee will
have no fewer than twenty (20) paid vacation days
each year.
e. Employee shall receive a lump-sum cash sign-on bonus
in the amount of $200,000, payable within the first
fifteen (15) days of January, 2004. In the event
Employee shall cease employment due to voluntary
resignation (other than Constructive Termination) or
for cause during the initial two-year Employment
Period, Employee agrees to repay to the Company
$100,000 immediately upon such cessation of
employment. The Company shall have the right to apply
any compensation payable to Employee on or following
the date of cessation of employment toward the
satisfaction of this obligation, and Employee
consents to such right of set-off.
f. Employee shall receive a monthly automobile allowance
in an amount not less than $750.
g. Effective as of the Employment Date, Employee shall
receive an award of a non-qualified option to acquire
up to 300,000 shares of common stock of Pride
International, Inc. ("Common Stock"), pursuant to the
terms of the 1998 Long Term Incentive Plan (the
"LTIP"). The option award shall become exercisable in
accordance with the following schedule:
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Date of Initial Exercisability
Following Employment Date Number of Shares
------------------------- ----------------
6 Months 60,000
12 Months 60,000
18 Months 60,000
24 Months 60,000
30 Months 60,000
TOTAL 300,000
The exercise price will be the closing share price on
the Employment Date. The option will have a 10-year
term, subject to earlier expiration in the event of
termination of employment in accordance with the
Company's customary option award terms (attached as
Exhibit A hereto). The Company hereby acknowledges
(i) that the stock options granted and to be granted
pursuant to this Section 3.04g and Section 3.04h are
intended to induce Employee to enter into employment
with the Company and to replace stock options granted
by his prior employer which he will forfeit, and (ii)
that the stock options granted and to be granted
pursuant to this Section 3.04g and Section 3.04h are
not intended to reduce the stock options, if any,
which may otherwise be granted by the Company to
Employee by reason of Employee's employment
hereunder.
h. Effective as of January 2, 2004, Employee shall be
awarded a non-qualified option pursuant to the LTIP
to acquire up to 150,000 shares of Common Stock. The
exercise price will be the closing share price on the
date of grant. The option will have a 10-year term,
subject to earlier expiration in the event of
termination of employment in accordance with the
Company's customary option award terms (attached as
Exhibit B hereto). The option will become exercisable
in three installments, with 50,000 shares exercisable
on the date of grant, and 50,000 shares becoming
exercisable on each of the first and second
anniversaries of the date of grant.
i. Employee shall be entitled to participate in the
Company's Supplemental Executive Retirement Plan (the
"SERP") subject to the vesting schedule set forth
below. Employee shall be eligible to accrue an annual
benefit, payable in accordance with the terms of the
SERP, for a period of up to ten (10) years following
his retirement. The benefit shall be equal to 40% of
Annual Base Salary at the time of retirement or such
other benefit under the SERP as shall be provided to
employees of comparable status, subject to any
conditions for payment of benefit under the terms of
the SERP and subject to the vesting schedule set
forth below. Benefits payable under the SERP will
become vested, subject to Employee's continued
employment, in accordance with the schedule set forth
below:
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Cumulative Annual Base Salary
Date Amount Vested Payout Percentage
---- ------------- -----------------
12/31/04 -0- -0-
12/31/05 -0- -0-
12/31/06 -0- -0-
12/31/07 20% 8%
12/31/08 40% 16%
12/31/09 60% 24%
12/31/10 80% 32%
12/31/11 100% 40%
In the event of Employee's Termination at any time
after the Employment Date or in the event of
Employee's termination following a Change in Control
under circumstances entitling him to benefits under
Section 4.02, the benefits payable under the SERP
will be fully vested. In addition, upon a Change in
Control the benefits payable under the SERP will be
fully vested to the extent provided under the terms
of the SERP as in effect from time to time. In the
event of Employee's separation from employment, for
any reason other than Termination, prior to December
31, 2011 (other than a termination resulting in full
vesting pursuant to the preceding two sentences), the
portion of the SERP payout percentage which has not
become vested will be forfeited. Employee shall be
deemed to have attained his "Early Retirement Age"
for purposes of the SERP in the event of his
cessation of employment, for any reason other than
Termination, following attainment of any vested
benefit under the schedule above or in the event of
his cessation of employment which results in
attainment of full vesting under the provisions of
this Section 3.04i. Employee's benefits under the
SERP shall not be reduced by reason of the fact that
his years of service may be fewer than otherwise
required under the terms of the SERP for the full
benefit.
j. Employee will participate, or if dependent on
Employee's election, will be eligible to participate
in all other executive incentive stock and benefit
plans approved by the Company.
3.05 TERMINATION WITHOUT CHANGE IN CONTROL. Notwithstanding
anything herein to the contrary, the Company shall have the
right to terminate Employee's employment at any time during
the Employment Period (including any extended term). Should
the Company choose not to renew or extend the Employment
Period of the Agreement or choose to terminate Employee
during, or at the end of, the Employment Period, or in the
event of death or disability of Employee, if the termination
is not after a Change in Control and is not for cause, the
Company shall, within thirty (30) days following such
termination, pay or provide to Employee (or his Executor,
Administrator or Estate in the event of death, as soon as
reasonably practical):
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a. An amount equal to two (2) full years 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
two (2) full years 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 two times 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 two times 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
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.
This Section 3.05 shall not be deemed to refer to the
SERP, which is otherwise addressed in Section 3.04i.
e. All stock options and awards to which Employee is
entitled will immediately vest and the time for
exercising any option will be as specified in the
applicable plan and award agreement as if Employee
were still employed by the Company.
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f. With respect to any qualified or non-qualified
retirement pension plan that may be adopted by the
Company after the Employment 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 Employment 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.
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 two (2) years (or
three (3) years if after a Change in Control) after
the date of death of Employee.
j. The Company's obligation under this Section to
continue to pay or provide health care, life,
accident and disability insurance to Employee,
Employee's spouse and Employee's dependents shall be
reduced when and to the extent any such benefits are
paid or provided to Employee by another employer;
provided, however, that Employee shall have all
rights, if any, afforded to retirees to convert group
life insurance coverage to the individual life
insurance coverage as, to the extent of, and whenever
his group life insurance coverage under this Section
is reduced or expires. Apart from this subparagraph,
Employee shall have and be subject to no obligation
to mitigate.
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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 three (3) years following the
effective date of the Change in Control and will expire at 12
o'clock midnight on the last day of the month following three
(3) 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 three (3) 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 three (3) years
(instead of two (2) years).
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) three (3) years
after the date of Termination, whichever is earlier.
c. An amount equal to three (3) 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. 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 twelve (12) 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.
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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 on and after December 16, 2003 and
for a period of two (2) years 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 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 three (3) years 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 three (3) years
preceding such termination from whom the Company had
solicited business during such three (3) years; 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
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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.
5.03 CONFIDENTIALITY/PROTECTION OF INFORMATION. Employee
acknowledges that his employment with the Company 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
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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;
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
-16-
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 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
Employment 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
-17-
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. 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 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.
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
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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 (including vested rights
to the SERP benefit) 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 receipt; or (iii)
via Federal Express or other expedited delivery service
provided that acknowledgment of receipt is received and
retained by the deliverer and furnished to the sender, if to
Employee, at the last address he has filed, in writing, with
the Company, or if to the Company, to its Corporate Secretary
at its principal executive offices.
6.06 NON-ALIENATION. Employee shall not have any right to pledge,
hypothecate, anticipate, or in any way create a lien upon any
amounts provided under the Agreement, and no payments or
benefits due hereunder shall be assignable in anticipation of
payment either by voluntary or involuntary acts or by
operation of law. So long as Employee lives, no person, other
than the parties hereto, shall have any rights under or
interest in the Agreement or the subject matter hereof. Upon
the death of Employee, his executors, administrators, devisees
and heirs, in that order, shall have the right to enforce the
provisions hereof, to the extent applicable.
6.07 ENTIRE AGREEMENT; AMENDMENT. The Agreement constitutes the
entire agreement of the Parties with respect of the subject
matter hereof. No provision of the Agreement may be amended,
waived, or discharged except by the mutual written agreement
of the Parties. The consent of any other person(s) to any such
amendment, waiver or discharge shall not be required.
6.08 SUCCESSORS AND ASSIGNS. The Agreement shall be binding upon
and inure to the benefit of the Company, its successors and
assigns, by operation of law or otherwise, including, without
limitation, any corporation or other entity or persons which
shall succeed (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company, and the
Company will require any successor, by agreement in form and
substance satisfactory to Employee, expressly to assume and
agree to perform the
-19-
Agreement. Except as otherwise provided herein, the Agreement
shall be binding upon and inure to the benefit of Employee and
his legal representatives, heirs and assigns; provided,
however, that in the event of Employee's death prior to
payment or distribution of all amounts, distributions and
benefits due him hereunder, if any, each such unpaid amount
and distribution shall be paid in accordance with the
Agreement to the person or persons designated by Employee to
the Company to receive such payment or distribution and in the
event Employee has made no applicable designation, to his
estate. If the Company should split, divide or otherwise
become more than one entity, all liability and obligations of
the Company shall be the joint and several liability and
obligation of all of the parts.
6.09 GOVERNING LAW. Except to the extent required to be governed by
the laws of the State of Delaware because the Company is
incorporated under the laws of said 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.
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.
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EXECUTED in multiple originals and/or counterparts, effective
as of December 3, 2003.
/s/ Xxxxx X. Xxxxxxx
------------------------------------
Xxxxx X. Xxxxxxx
ATTEST: PRIDE INTERNATIONAL, INC.
/s/ W. Xxxxxxx Xxxxxx By: /s/ Xxxx X. Xxxxx
--------------------- -------------------------------
W. Xxxxxxx Xxxxxx Xxxx X. Xxxxx
Assistant Secretary President and Chief Executive Officer
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