EXHIBIT 10.31
PRIDE INTERNATIONAL, INC.
EMPLOYMENT/NON-COMPETITION/
CONFIDENTIALITY AGREEMENT
XXXX X.X. X'XXXXX
EFFECTIVE FEBRUARY 5, 1999
INDEX
I. PRIOR AGREEMENTS/EMPLOYMENT CONTRACTS ...................................... 4
1.01 Effect of Prior Agreements ................................................. 4
II. DEFINITION OF TERMS ........................................................ 4
2.01 Company .................................................................... 4
2.02 Executive/Officer/Employee ................................................. 4
2.03 Office/Position/Title ...................................................... 4
2.04 Effective Date ............................................................. 4
2.05 Change in Control .......................................................... 5
2.06 Termination ................................................................ 5
2.07 Customer ................................................................... 7
III. EMPLOYMENT ................................................................. 7
3.01 Employment ................................................................. 7
3.02 Best Efforts And Other Employment Of Executive ............................. 8
3.03 Term Of Employment ......................................................... 8
3.04 Compensation And Benefits .................................................. 9
3.05 Termination Without Change In Control ...................................... 10
IV. CHANGE IN CONTROL .......................................................... 12
4.01 Extension Of Employment Period ............................................. 12
4.02 Change In Control Termination Payments & Benefits .......................... 13
4.03 Voluntary Resignation Upon Change In Control ............................... 13
V. NON-COMPETITION AND CONFIDENTIALITY ........................................ 13
5.01 Consideration .............................................................. 13
5.02 Non-Competition ............................................................ 14
5.03 Confidentiality ............................................................ 15
5.04 Geographical Area .......................................................... 16
5.05 Company Remedies For Violation Of Non-Competition Or
Confidentiality Agreement .............................................. 16
5.06 Termination Of Benefits For Violation Of Non-Competition And
Confidentiality ........................................................ 17
VI. GENERAL .................................................................... 17
6.01 Enforcement Costs .......................................................... 17
6.02 Income, Excise Or Other Tax Liability ...................................... 18
6.03 Payment Of Benefits Upon Termination For Cause ............................. 19
6.04 Non-Exclusive Agreement .................................................... 19
6.05 Notices .................................................................... 19
6.06 Non-Alienation ............................................................. 19
6.07 Entire Agreement: Amendment ................................................ 20
6.08 Successors And Assigns ..................................................... 20
6.09 Governing Law .............................................................. 20
6.10 Venue ...................................................................... 20
6.11 Headings ................................................................... 20
6.12 Severability ............................................................... 20
6.13 Partial Invalidity ......................................................... 20
6.14 Counterparts ............................................................... 21
EMPLOYMENT/NON-COMPETITION/CONFIDENTIALITY
AGREEMENT
DATE: February 5, 1999
COMPANY/EMPLOYER: Pride International, Inc., A Louisiana corporation
0000 Xxx Xxxxxx, Xxxxx 0000 Xxxxxxx, Xxxxx 00000
EXECUTIVE/EMPLOYEE: Xxxx X.X. X'Xxxxx
000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
This Agreement is made as of the date first above written and to become
effective as herein provided.
PREAMBLE
WHEREAS, the Company wishes to attract and retain well-qualified
Executive and key personnel and to assure itself of the continuity of its
management;
WHEREAS, Executive is an officer of the Company with significant
management responsibilities in the conduct of its business;
WHEREAS, the Company recognizes that Executive is a valuable resource
of the Company and the Company desires to be assured of the continued services
of Executive;
WHEREAS, the Company desires to obtain assurances that Executive will
devote his best efforts to his employment with the Company and will not enter
into competition with the Company in its business as now conducted and to be
conducted, or solicit customers or other employees of the Company to terminate
their relationships with the Company;
WHEREAS, Executive is a key employee of the Company and he acknowledges
that his talents and services to the Company are of a special, unique, unusual
and extraordinary character and are of particular and peculiar benefit and
importance to the Company;
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WHEREAS, the Company is concerned that in the event of a possible or
threatened change in control of the Company, uncertainties necessarily arise;
Executive may have concerns about the continuation of his employment status and
responsibilities and may be approached by others offering competing employment
opportunities; the Company, therefore, desires to provide Executive assurances
as to the continuation of his employment status and responsibilities in such
event;
WHEREAS, the Company further desires to assure Executive that, if a
possible or threatened change in control should arise and Executive should be
involved in deliberations or negotiations in connection therewith, Executive
would be in a secure position to consider and participate in such transaction as
objectively as possible in the best interests of the Company and to this end
desires to protect Executive from any direct or implied threat to his financial
well-being;
WHEREAS, Executive is willing to continue to serve as such but desires
assurances that in the event of such a change in control he will continue to
have the employment status and responsibilities he could reasonably expect
absent such event and, that in the event this turns out not to be the case, he
will have fair and reasonable severance protection on the basis of his service
to the Company to that time;
WHEREAS, different factors affect the Company and Executive under
circumstances of regular employment between the Company and the Executive when
there is no threat of change in control and/or none has occurred, as opposed to
circumstances under which a change in control is rumored, threatened, occurring
or has occurred. For this reason this Employment Agreement is primarily in two
parts. One part deals with the regular employment of Executive under
circumstances whereby no change in control is threatened, occurring or occurred;
herein called "Regular Employment". The second part deals with circumstances
whereby a change in control is threatened, occurring or has occurred. Other
parts of the Agreement deal with matters affecting both Regular Employment and
employment following change in control, including non-competition and
confidentiality;
WHEREAS, the Company has previously entered into a Severance Agreement
with Executive dated March 11, 1997 ("Severance Agreement");
WHEREAS, the Company and Executive desire to terminate the Severance
Agreement and replace it with this Agreement; and
WHEREAS, Executive is willing to enter into and carry out the
Non-Competition and Confidentiality Agreement set forth herein in consideration
of the Employment Agreement set forth herein.
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AGREEMENT
NOW, THEREFORE, the parties agree as follows:
I. PRIOR AGREEMENTS/EMPLOYMENT CONTRACTS.
1.01 EFFECT OF PRIOR AGREEMENTS. On and as of 12:00 o'clock noon of the
Effective Date all prior employment and non-competition contracts
between Company and Executive are hereby amended, modified and
superseded by this Agreement insofar as future employment,
compensation, non-competition, confidentiality, accrual of payments or
any form of compensation or benefits from the Company are concerned.
This Agreement does not release or relieve Company from its liability
or obligation with respect to any compensation, payments, or benefits
already accrued to Executive, nor to any vesting of benefits or other
rights which are attributable to length of employment, seniority or
other such matters. This Agreement does not relieve Executive of any
prior non-competition or confidentiality obligations and agreements and
the same are hereby modified and amended as to future matters and
future confidentiality even as to matters accruing prior to the
Effective Date hereof. The Severance Agreement is hereby terminated
with no liability to the Company.
II. DEFINITION OF TERMS.
2.01 COMPANY. Company means Pride International, Inc., a Louisiana
corporation, as the same presently exists, as well as any and all
successors, regardless of the nature of the entity or the State or
Nation of organization, whether by reorganization, merger,
consolidation, absorption or dissolution. For the purpose of the
Non-Competition and Confidentiality Agreement, Company includes any
subsidiary or affiliate of the Company to the extent it is carrying on
any portion of the business of the Company or a business similar to
that being conducted by the Company.
2.02 EXECUTIVE/OFFICER/EMPLOYEE. Executive/Officer/Employee means Xxxx X.X.
X'Xxxxx.
2.03 OFFICE/POSITION/TITLE. The Office, Position and Title for which the
Executive is employed is that of Vice President - Worldwide Marketing
of the Company and carries with it the duties, responsibilities,
rights, benefits and privileges presently held by the Executive, or as
may reasonably be assigned to the Executive as are customary and usual
for such position.
2.04 EFFECTIVE DATE. This Agreement becomes effective and binding as of
February 5, 1999.
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2.05 CHANGE IN CONTROL. The term "Change in Control" of the Company shall
mean, and shall be deemed to have occurred on the date of the first to
occur of any of the following:
a. there occurs a Change in Control of the Company of the nature that
would be required to be reported in response to item 6(e) of
Schedule 14A of Regulation 14A or Item 1 of Form 8(k) promulgated
under the Securities Exchange Act of 1934 as in effect on the date
of this Agreement, or if neither item remains in effect, any
regulations issued by the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934 which serve
similar purposes;
b. any "person" {as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934} is or becomes a beneficial
owner, directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined voting
power of the Company's then outstanding securities;
c. the individuals who were members of the Board of Directors of the
Company immediately prior to a meeting of the shareholders of the
Company involving a contest for the election of Directors shall
not constitute a majority of the Board of Directors following such
election;
d. the Company shall have merged into or consolidated with another
corporation, or merged another corporation into the Company, on a
basis whereby less than fifty percent (50%) of the total voting
power of the surviving corporation is represented by shares held
by former shareholders of the Company prior to such merger or
consolidation; or
e. the Company shall have sold, transferred or exchanged all, or
substantially all, of its assets to another corporation or other
entity or person.
2.06 TERMINATION. The term "termination" shall mean termination, prior to
the expiration of the Employment Period, of the employment of the
Executive with the Company {including death and disability (as
described below)} for any reason other than cause (as described below)
or voluntary resignation (as described below). Termination includes
"Constructive Termination" as described below. Termination includes
non-renewal or failure to extend this Agreement at the end of any
employment term, except for cause.
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a. The term "disability" means physical or mental incapacity
qualifying the Executive for a long-term disability under the
Company's long-term disability plan. If no such plan exists on the
Effective Date of this Agreement, the term "disability" means
physical or mental incapacity as determined by a doctor jointly
selected by the Executive and the Board of Directors of the
Company qualifying the Executive for long-term disability under
reasonable employment standards.
b. The term "cause" means: (i) the willful and continued failure of
the Executive substantially to perform his duties with the Company
(other than any failure due to physical or mental incapacity)
after a demand for substantial performance is delivered to him by
the Board of Directors which specifically identifies the manner in
which the Board believes he has not substantially performed his
duties, (ii) willful misconduct materially and demonstrably
injurious to the Company or (iii) material violation of the
covenant not to compete (except after termination under the Change
in Control provisions hereof and confidentiality provisions
hereof.) No act or failure to act by the Executive shall be
considered "willful" unless done or omitted to be done by him not
in good faith and without reasonable belief that his action or
omission was in the best interest of the Company. The
unwillingness of the Executive to accept any or all of a change in
the nature or scope of his position, authorities or duties, a
reduction in his total compensation or benefits, or other action
by or 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 the Executive. Notwithstanding the
foregoing, the Executive shall not be deemed to have been
terminated for cause for purposes of this Agreement unless and
until there shall have been delivered to him a copy of a
resolution, duly adopted by a vote of three-fourths of the entire
Board of Directors of the Company at a meeting of the Board of
Directors called and held (after reasonable notice to the
Executive and an opportunity for the Executive and his counsel to
be heard before the Board) for the purpose of considering whether
the Executive has been guilty of such a willful failure to perform
or such willful misconduct as justifies termination for cause
hereunder, finding that in the good faith opinion of the Board of
Directors the Executive has been guilty thereof and specifying the
particulars thereof.
c. The term "Constructive Termination" means any circumstance by
which the actions of the Company either reduce or change
Executive's title, position, duties, responsibilities or authority
to such an extent or in such a manner as to relegate Executive
to a
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position not substantially similar to that which he presently
holds; would degrade, embarrass or otherwise make it unreasonable
for Executive to remain in the employment of the Company; and
includes violation of the employment provisions and conditions of
this Agreement.
d. The resignation of the Executive shall be deemed "voluntary" if it
is for any reason other than one or more of the following:
(i) The Executive's resignation or retirement is requested by
the Company other than for cause;
(ii) Any significant adverse change in the nature or scope of the
Executive's position, authorities or duties from those
described in this Agreement;
(iii) Any reduction in the Executive's total compensation or
benefits from that provided in the Compensation and Benefits
Section hereof;
(iv) The material breach by the Company of any other provision of
this Agreement;
(v) Any action by the Company which would constitute
Constructive Termination; or
(vi) Non-renewal or failure to extend any employment term,
contrary to the wishes of the Executive.
Termination that entitles the Executive to the payments and benefits
provided in the "Termination Payments and Benefits" Section hereof shall not be
deemed or treated by the Company as the termination of the Executive's
employment or the forfeiture of his participation, award, or eligibility, for
the purpose of any plan, practice or agreement of the Company referred to in the
Compensation and Benefits Section hereof.
2.07 CUSTOMER. The term "Customer" includes all persons, firms or entities
that are purchasers or end-users of services or products offered,
provided, developed, designed, sold or leased by the Company during the
relevant time periods, and all persons, firms or entities which
control, or which are controlled by, the same person, firm or entity
which controls such purchase.
III. EMPLOYMENT.
3.01 EMPLOYMENT. Except as otherwise provided in this Agreement, the Company
hereby agrees to continue the Executive in its employ, and the
Executive hereby agrees to
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remain in the employ of the Company, for the Term of Employment
("Employment Period") herein specified. During the Employment Period,
Executive shall exercise such position and authority and perform such
responsibilities as are commensurate with the position and authority
being exercised and duties being performed by the Executive immediately
prior to the Effective Date of this Agreement, which services shall be
performed at the location where the Executive was employed immediately
prior to the Effective Date of this Agreement or at such other location
as the Company may reasonably require.
3.02 BEST EFFORTS AND OTHER EMPLOYMENT OF EXECUTIVE.
a. Executive agrees that he will at all times faithfully,
industriously and to the best of his ability, experience and
talents, perform all of the duties that may be required of and
from him pursuant to the express and implicit terms hereof, to the
reasonable satisfaction of the Company. Such duties shall be
rendered at Houston,
Texas, and such other place or places within
or outside the State of
Texas as the Company shall agree.
b. Executive shall devote his normal and regular business time,
attention and skill to the business and interests of the Company,
and the Company shall be entitled to all of the benefits, profits
or other issue arising from or incident to all work, services and
advice of Executive performed for the Company. Such employment
shall be considered "full time" employment. Executive shall have
the right to make investments in businesses which engage in
activities other than those engaged by the Company. Executive
shall also have the right to devote such incidental and immaterial
amount of his time which are not required for the full and
faithful performance of his duties hereunder to any outside
activities and businesses which are not being engaged in by the
Company and which shall not otherwise interfere with the
performance of his duties hereunder. Executive shall have the
right to make investments in the manner and to the extent
authorized and set forth in the Non-Competition Section of this
Agreement.
3.03 TERM OF EMPLOYMENT. ("EMPLOYMENT PERIOD"). Executive's regular
employment (no Change in Control being presently contemplated) will
commence on the Effective Date of this Agreement and will be for a term
of two (2) years ending at 12:00 o'clock midnight February 4, 2001;
thereafter, the Term of Employment of Executive will be automatically
extended for successive terms of one (1) year each commencing February
5, 2001, and on February 5 of each year thereafter, unless Company or
Executive gives
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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 year after the date that the notice of non-renewal was
given. All extended employment terms will be considered to be within
the Employment Period while Executive is employed with the Company.
3.04 COMPENSATION AND BENEFITS. During the Employment Period the Executive
shall receive the following compensation and benefits:
a. He shall receive an annual base salary of not less than his
annual base salary which is $217,000.00, with the opportunity for
increases, from time to time thereafter, which are in accordance
with the Company's regular executive compensation practices.
Executive's salary will be reviewed at least annually by the
Compensation Committee of the Board of Directors.
b. To the extent that such plans exist immediately prior to the
Effective Date of this Agreement, he shall be eligible to
participate on a reasonable basis, and to continue his existing
participation, in annual bonus, stock option and other incentive
compensation plans which provide opportunities to receive
compensation in addition to his annual base salary which are the
greater of: (i) the opportunities provided by the Company for
Executives with comparable duties, or (ii) the opportunities under
any such plans in which he was participating immediately prior to
the Effective Date of this Agreement.
c. To the extent such plans exist immediately prior to the Effective
Date of this Agreement, he shall be entitled to receive and
participate in salaried employee benefits including, but not
limited to: medical, life, health, accident and disability
insurance and disability benefits and prerequisites which are the
greater of: (i) the employee benefits and prerequisites provided
by the Company to Executives with comparable duties, or (ii) the
employee benefits and prerequisites to which he was entitled or in
which he participated immediately prior to the Effective Date of
this Agreement.
d. To the extent such plans exist immediately prior to the Effective
Date of this Agreement, he will be entitled to continue to accrue
credited service for retirement benefits and to be entitled to
receive retirement benefits under and pursuant to the terms of the
Company's qualified retirement plan for salaried employees, the
Company's supplemental executive retirement plan, and any
successor or other retirement plan or agreement in effect on the
Effective Date of this Agreement in respect to his retirement,
whether or not a qualified plan or agreement, so that his
aggregate monthly retirement benefit from all such plans and
agreements (regardless when he begins to receive such benefit)
will be not less
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than it would be had all such plans and agreements were in effect
immediately prior to the Effective Date of this Agreement and
continued to be in effect without change until and after he begins
to receive such benefits.
e. Paid vacations each year and use of Company cars
to the same extent as he is presently receiving or the benefits
provided to Executives with comparable duties whichever
is greater.
f. Participation in all other executive incentive stock and benefit
plans approved by the Compensation Committee.
3.05. TERMINATION WITHOUT CHANGE IN CONTROL. The Company shall have the right
to terminate Executive at any time during the Employment Period
(including any extended term). Should the Company choose not to renew
or extend the Employment Period of this Employment Agreement or choose
to terminate the Executive during, or at the end of, the Employment
Period, or in the event of death or disability of the Executive, if the
termination is not after a Change in Control and is not for cause, the
Company shall, within thirty (30) days following such termination, pay
and provide to the Executive (or his Executor, Administrator or Estate
in the event of death, as soon as reasonably practical):
a. An amount equal to two full years of his base salary (including
the amount allocated to the covenant not to compete), which base
salary is here defined as twelve (12) times the then current
monthly salary in effect for the Executive and all other benefits
due him based upon the salary in effect on the Date of Termination
(but not less than the highest annual base salary paid to the
Executive during any of the three (3) years immediately preceding
his Date of Termination). There shall be deducted only such
amounts as may be required by law to be withheld for taxes and
other applicable deductions.
b. The Company shall provide to Executive for a period of two (2)
full years following the Date of Termination, life, health,
accident and disability insurance. These benefits are not to be
less than the highest benefits furnished to the Executive during
the term of this Agreement.
c. An amount equal to two (2) times the target award for the
Executive under the Company's annual bonus plan for the fiscal
year in which termination occurs, provided that if the Executive
has deferred his award for such year under a Company plan, the
payment due the Executive under this subparagraph shall be paid in
accordance with the terms of the deferral or as specified by the
Executive.
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d. The Company shall pay, distribute and otherwise provide to the
Executive the amount and value of his entire plan account and
interest under any retirement plan, employee benefit plan,
investment plan or stock ownership plan, if any exists on the Date
of Termination, and all employer contributions made or payable to
any such plan for his account prior to the end of the month in
which Termination occurs shall be deemed vested and payable to
him. Such payment or distribution shall be in accordance with the
elections made by the Executive with respect to distributions in
accordance with the plan as if the Executive's employment in the
Company terminated at the end of the month in which Termination
occurs.
e. All stock options and awards to which the Executive is entitled
will immediately vest and the time for exercising any option will
be as specified in the plan as if the Executive were still
employed by the Company; provided however if the immediate vesting
of all benefits under the plan is not permitted by the plan, then
the benefits will be vested only to the extent authorized or
permitted by the plan.
f. If Executive elects to treat the termination as retirement then on
the Date of Termination, the Executive 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 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 total combined qualified and
non-qualified retirement benefits to which he is entitled
hereunder; or, his total non-qualified retirement benefit
hereunder if under the terms of the Company's qualified retirement
plan for salaried employees he is not entitled to a qualified
benefit. Executive may treat the termination as termination other
than "retirement" if Executive so elects and may defer
"retirement" to a later date if permitted by any applicable plan.
g. The "Compensation and Benefits" Section hereof shall be applicable
in determining the payments and benefits due the Executive under
this Section and if Termination occurs after a reduction in all or
part of the Executive's total compensation or benefits, the lump
sum severance allowance and other compensation and benefits
payable to him pursuant to this section shall be based upon his
compensation and benefits before the reduction.
h. If any provision of this Section cannot, in whole or in part, be
implemented and carried out under the terms of the applicable
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compensation, benefit or other plan or arrangement of the Company
because the Executive 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 of this Agreement, or for any other reason, the Company
itself shall pay or otherwise provide the equivalent of such
rights, benefits and credits for such benefits to the Executive,
his dependents, beneficiaries and estate as if Executive's
employment had not been terminated.
i. All life, health, hospitalization, medical and accident benefits
available to Executive's spouse and dependents shall continue for
the same term as the Executive's benefits. If the Executive dies,
all benefits will be provided for a term of two (2) years (or
three (3) years if after a change in control) after the date of
death of the Executive.
j. The Company's obligation under this Section to continue to pay or
provide health care, life, accident and disability insurance to
the Executive, the Executive's spouse and Executive's dependents,
during the remainder of the Employment Period shall be reduced
when and to the extent any of such benefits are paid or provided
to the Executive by another employer, provided that the Executive
shall have all rights afforded to retirees to convert group
insurance coverage to the individual insurance coverage as, to the
extent of, and whenever his group insurance coverage under this
Section is reduced or expires. Apart from this subparagraph, the
Executive shall have and be subject to no obligation to mitigate.
k. The Company shall deduct applicable withholding taxes in
performing its obligations under this Section.
Nothing in this Section is intended, nor shall be deemed or
interpreted, to be an amendment to any compensation, benefit or other plan to
the Company. To the extent the Company's performance under this Section includes
the performance of the Company's obligations to the Executive under any other
plan or under another agreement between the Company and the Executive, the
rights of the Executive under such other plan or other agreements, which are
discharged under this Agreement, are discharged, surrendered, or released pro
tanto.
IV. CHANGE IN CONTROL.
4.01 EXTENSION OF EMPLOYMENT PERIOD. Upon any Change in Control the
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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 12:00 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 the Term of Employment Section pertaining to
regular employment.
4.02 CHANGE IN CONTROL, TERMINATION PAYMENTS AND BENEFITS. In the event the
Executive is terminated within three (3) years following a Change in
Control, the Executive will receive the payments and benefits specified
in the "Termination without Change in Control" Section in the same time
and manner therein specified except as amended and modified hereby:
a. The salary and benefits specified in Section 3.05a will be paid
based upon a multiple of 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) Executive 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 the
Executive could receive under the Company's Annual Bonus Plan for
the fiscal year in which the termination occurs, instead of the
benefits provided in Section 3.05(c) hereof.
d. All other rights and benefits specified in Section 3.05.
4.03 VOLUNTARY RESIGNATION UPON CHANGE IN CONTROL. If the Executive
voluntarily resigns his employment within twelve (12) months after a
Change in Control (whether or not Company may be alleging the right to
terminate employment for cause), he will receive the same payments,
compensation and benefits as if he had been terminated on the date of
resignation after Change in Control.
V. NON-COMPETITION AND CONFIDENTIALITY.
5.01 CONSIDERATION. The base salary awarded to the Executive and to be paid
to the Executive in the future includes consideration for the
Non-Competition and Confidentiality Agreement set forth herein and the
amount to be paid to Executive in the event of the termination of
employment of Executive, voluntarily, involuntarily, or under a Change
in Control, under Sections 3.05a and 4.02a hereof constitute payment,
in part, for the Non-Competition and Confidentiality of the Executive.
It is contracted, stipulated
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and agreed that fifteen percent (15%) of such amount paid and to be
paid to the Executive shall constitute the consideration for the
Non-Competition and Confidentiality Agreement set forth herein.
5.02 NON-COMPETITION. Executive acknowledges that his employment with the
Company has in the past and will, of necessity, provide him with
specialized knowledge which, if used in competition with the Company
could cause serious harm to the Company. Accordingly, the Executive
agrees that during his employment with the Company and for a period of
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 provisions of the
covenant not to compete herein contained will terminate on the date of
termination of Executive) the Executive will not, directly or
indirectly, either as an individual, proprietor, stockholder {other
than as a holder of up to one percent (1%) of the outstanding shares of
a corporation whose shares are listed on a stock exchange or traded in
accordance with the automated quotation system of the National
Association of Securities Dealers}, partner, officer, employee or
otherwise:
a. work for, become an employee of, invest in, provide consulting
services or in any way engage in any business which provides,
produces, leases or sells products or services of the same or
similar type provided, produced, leased or sold by the Company and
with regard to which Executive was engaged, or over which
Executive had direct or indirect supervision or control, within
three (3) years preceding the Executive's termination of
employment, in any area where the Company provided, produced,
leased or sold such products or services at any time during the
three (3) years preceding such termination of employment; or
b. provide, sell, offer to sell, lease, offer to lease, or solicit
any orders for any products or services which the Company provided
and with regard to which the Executive had direct or indirect
supervision or control, within three (3) years preceding
Executive's termination of employment, to or from any person, firm
or entity which was a customer for such products or services of
the Company during the three (3) years preceding such termination
from whom the Company had solicited business during such 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
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agreement with the Company; or
d. employ, directly or indirectly; permit the employment of; contract
for services or work to be performed by; or otherwise, use,
utilize or benefit from the services of any officer, director,
employee or any other individual holding a position with the
Company within two (2) years after the Date of Termination of
employment of Executive with the Company or within two (2) years
after such officer, director, employee or individual terminated
employment with the Company, whichever occurs earlier.
5.03 CONFIDENTIALITY. Executive acknowledges that his employment with the
Company has in the past and will, of necessity, provide him with
specialized knowledge which, if used in competition with the Company,
or divulged to others, could cause serious harm to the Company.
Accordingly, Executive will not at any time during or after his
employment by the Company, directly or indirectly, divulge, disclose or
communicate to any person, firm or corporation (in any manner
whatsoever) any information concerning any matter affecting or relating
to the Company or the business of the Company. While engaged as an
employee of the Company, Executive may only use information concerning
any matters affecting or relating to the Company or the business of the
Company for a purpose which is necessary to the carrying out of the
Executive's duties as an employee of the Company, and Executive may not
make use of any information of the Company after he is no longer an
employee of the Company. The Executive agrees to the foregoing without
regard to whether all of the foregoing matters will be deemed
confidential, material or important, it being stipulated by the
parties. 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, machinery, equipment, apparatus,
systems, manufacturing procedures, operations, potential acquisitions,
new location plans, prospective and executed contracts and other
business arrangements, and sources of supply, is prima facie presumed
to be important, material and confidential information of the Company
for the purposes of this Agreement, except to the extent that such
information may be otherwise lawfully and readily available to the
general public. The Executive further agrees that he will, upon
termination of his employment with the Company, return to the Company
all books, records, lists and other written, typed or printed
materials, whether furnished by the Company or prepared by the
Executive, which contain any information relating to the Company's
business, and the Executive agrees that he will neither make nor retain
any copies of such materials after termination of employment.
Notwithstanding any of the foregoing, the Executive will not be liable
for any breach of these confidentiality provisions unless the same
constitutes a material detriment
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to the Company, or due to the nature of the information divulged and
the manner in which it was divulged and the person to whom it was
divulged would likely cause damage to the Company or constitute a
material detriment to the Company.
5.04 GEOGRAPHICAL AREA. The geographical area within which the
non-competition covenants of this Agreement shall apply is that
territory within two hundred (200) miles of: (i) any of the Company's
present offices, (ii) any of the Company's present rig yards, and (iii)
any additional location where the Company, as of the date of any action
taken in violation of the non-competition covenants of this Agreement,
has an office, a rig yard, or definitive plans to locate an office or a
rig yard. Notwithstanding the foregoing, if the two hundred (200) mile
radius extends into another country and the Company is not then doing
business in that other country, there will be no territorial
limitations extending into such other country.
5.05 COMPANY REMEDIES FOR VIOLATION OF NON-COMPETITION OR CONFIDENTIALITY
AGREEMENT. Without limiting the right of the Company to pursue all
other legal and equitable rights available to it for violation of any
of the covenants made by Executive herein, it is agreed that:
a. the skills, experience and contacts of Executive are of a special,
unique, unusual and extraordinary character which give them a
peculiar value;
b. because of the business of the Company, the restrictions agreed to
by Executive as to time and area contained in this Agreement are
reasonable; and
c. the injury suffered by the Company by a violation of any covenant
in this Agreement resulting from loss of profits created by the
competitive use of such skills, experience and contacts that
otherwise will be difficult to calculate in damages in an action
at law and cannot fully compensate the Company for any violation
of any covenant in this Agreement, accordingly:
(i) the Company shall be entitled to injunctive relief to
prevent violations of such covenants or continuing
violations thereof and to prevent Executive from rendering
any services to any person, firm or entity in breach of such
covenant and to prevent Executive from divulging any
confidential information, and
(ii) compliance with this Agreement is a condition
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precedent to the Company's obligation to make payments of
any nature to the Executive.
5.06 TERMINATION OF BENEFITS FOR VIOLATION OF NON-COMPETITION AND
CONFIDENTIALITY. If Executive's termination was not after a Change in
Control and if the Executive shall have materially violated the
Confidentiality and/or Non-Competition Agreement or any agreement he
may have signed as an employee of the Company, the Executive agrees
that there shall be no obligation on the part of the Company to provide
any payments or benefits (other than payments or benefits already
earned or accrued) described in the Termination of Rights and Benefits
Section hereof, subject to the provisions of Section 6.01 hereof. There
will be no withholding of benefits or payments if the termination
occurred after a Change in Control and Executive will not be bound by
the non-competition provisions if terminated while the Change in
Control provisions hereof are applicable.
VI. GENERAL.
6.01 ENFORCEMENT COSTS. The Company is aware that upon the occurrence of a
Change in Control, or under other circumstances even when a Change in
Control has not occurred, the Board of Directors or a stockholder of
the Company may then cause or attempt to cause the Company to refuse to
comply with its obligations under this Agreement, or may cause or
attempt to cause the Company to institute, or may institute, litigation
seeking to have this Agreement declared unenforceable, or may take, or
attempt to take other action to deny Executive the benefits intended
under this Agreement; or actions may be taken to enforce the
non-competition or confidentiality provisions of this Agreement. In
these circumstances, the purpose of this Agreement could be frustrated.
It is the intent of the parties that the Executive not be required to
incur the legal fees and expenses associated with the protection or
enforcement of his rights under this Agreement by litigation or other
legal action because such costs would substantially detract from the
benefits intended to be extended to Executive hereunder, nor be bound
to negotiate any settlement of his rights hereunder under threat of
incurring such costs. Accordingly, if at any time after the Effective
Date of this Agreement, it should appear to Executive that the Company
is or has acted contrary to or is failing or has failed to comply with
any of its obligations under this Agreement for the reason that it
regards this Agreement to be void or unenforceable, that Executive has
violated the terms of this Agreement, or for any other reason, or that
the Company has purported to terminate his employment for cause or is
in the course of doing so, or is withholding payments or benefits, or
is threatening to withhold payments or benefits, contrary to this
Agreement, or in the event that the Company or any other person takes
any action to declare this Agreement void or unenforceable, or
institutes any litigation or other legal action
Page 19 of 23
designed to deny, diminish or to recover from Executive the benefits
provided or intended to be provided to him hereunder, and Executive has
acted in good faith to perform his obligations under this Agreement,
the Company irrevocably authorizes Executive from time to time to
retain counsel of his choice at the expense of the Company to represent
him in connection with the protection and enforcement of his rights
hereunder, including, without limitation, representation in connection
with termination of his employment or withholding of benefits or
payments contrary to this Agreement or with the initiation or defense
of any litigation or any other legal action, whether by or against the
Executive 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 attorneys' fees and
expenses hereunder based upon any belief or assertion by the Company
that Executive has not acted in good faith or has violated this
Agreement. If Company subsequently establishes that Executive was not
acting in good faith and has violated this Agreement, Executive will be
liable to the Company for reimbursement of amounts paid due to
Executive's actions not based on good faith and in violation of this
Agreement. The reasonable fees and expenses of counsel selected from
time to time by Executive as hereinabove provided shall be paid or
reimbursed to Executive by the Company, on a regular, periodic basis
within thirty (30) days after presentation by Executive of a statement
or statements prepared by such counsel in accordance with its customary
practices, up to a maximum aggregate amount of $250,000.00.
6.02 INCOME, EXCISE OR OTHER TAX LIABILITY. Executive will be liable for and
will pay all income tax liability by virtue of any payments made to the
Executive under this Agreement, as if the same were earned and paid in
the normal course of business and not the result of a Change in Control
and not otherwise triggered by the "golden parachute" or excess payment
provisions of the Internal Revenue Code of the United States, which
would cause additional tax liability to be imposed. If any additional
income tax, excise or other taxes are imposed on any amount or payment
in the nature of compensation paid or provided to or on behalf of
Executive, the Company shall "gross up" Executive for such tax
liability by paying to Executive an amount sufficient so that after
payment of all such taxes so imposed Executive's position on an
after-tax basis is what it would have been had no such additional taxes
been imposed. Executive will cooperate with the company to minimize the
tax consequences to the Executive and to the Company so long as the
actions proposed to be taken by the Company do not cause any additional
tax consequences to Executive and do not prolong or delay the time that
payments are to be made, or the amount of payments to be made, unless
the Executive consents, in writing, to any delay or deferment of
payment.
Page 20 of 23
6.03 PAYMENT OF BENEFITS UPON TERMINATION FOR CAUSE. If the termination of
Executive is for cause and not after a Change in Control, the Company
will have the right to withhold all payments (except those specified in
Sections 6.01); provided, however, that if a final judgment is entered
finding that cause did not exist for termination, the Company will pay
all benefits to Executive to which he would have been entitled had the
termination not been for cause, plus interest on all amounts withheld
from the Executive at the rate specified for judgments under Article
5069-1.05 V.A.T.S. but not less than ten percent (10%) per annum. If
the termination for cause occurs after a Change in Control, the Company
shall have no right to suspend or withhold payments to Executive under
any provision of this Agreement until or unless a final judgment is
entered upholding the Company's determination that the termination was
for cause, in which event Executive will be liable to the Company for
all amounts paid, plus interest at the rate allowed for judgments under
Article 5069-1.05 V.A.T.S.
6.04 NON-EXCLUSIVE AGREEMENT. The specific arrangements referred to herein
are not intended to exclude or limit Executive's participation in other
benefits available to executive personnel generally, or to preclude or
limit other compensation or benefits as may be authorized by the Board
of Directors of the Company at any time, or to limit or reduce any
compensation or benefits to which Executive would be entitled but for
this Agreement.
6.05 NOTICES. Notices, requests, demands and other communications provided
for by this Agreement shall be in writing and shall either be
personally delivered by hand or sent by: (i) Registered or Certified
Mail, return receipt requested, postage prepaid, properly packaged,
addressed and deposited in the United States Postal System; (ii) by
facsimile transmission if the receiver acknowledges receipt; or (iii)
by Federal Express or other expedited delivery service provided that
acknowledgment of receipt is received and retained by the deliverer and
furnished to the sender, if to Executive, at the last address he has
filed in writing with the Company, or if to the Company, to its
Corporate Secretary at its principal executive offices.
6.06 NON-ALIENATION. Executive shall not have any right to pledge,
hypothecate, anticipate, or in any way create a lien upon any amounts
provided under this Agreement, and no payments or benefits due
hereunder shall be assignable in anticipation of payment either by
voluntary or involuntary acts or by operation of law. So long as
Executive lives, no person, other than the parties hereto, shall have
any rights under or interest in this Agreement or the subject matter
hereof. Upon the death of Executive, his Executors, Administrators,
devisees and heirs, in that order, shall have the right to enforce the
provisions hereof.
Page 21 of 23
6.07 ENTIRE AGREEMENT: AMENDMENT. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof. No
provision of this Agreement may be amended, waived, or discharged
except by the mutual written agreement of the parties. The consent of
any other person(s) to any such amendment, waiver or discharge shall
not be required.
6.08 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the Company, its successors and assigns, by operation
of law or otherwise, including, without limitation, any corporation or
other entity or persons which shall succeed (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, and the
Company will require any successor, by agreement in form and substance
satisfactory to Executive, expressly to assume and agree to perform
this Agreement. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of Executive and his
legal representatives, heirs and assigns, provided however, that in the
event of Executive's death prior to payment or distribution of all
amounts, distributions and benefits due him hereunder, each such unpaid
amount and distribution shall be paid in accordance with this Agreement
to the person or persons designated by Executive to the Company to
receive such payment or distribution and in the event Executive has
made no applicable designation, to his Estate. If the Company should
split, divide or otherwise become more than one entity, all liability
and obligations of the Company shall be the joint and several liability
and obligation of all of the parties.
6.09 GOVERNING LAW. Except to the extent required to be governed by the laws
of the State of Louisiana because the Company is incorporated under the
laws of said State, the validity, interpretation and enforcement of
this Agreement shall be governed by the laws of the State of
Texas.
6.10 VENUE. To the extent permitted by applicable State and Federal law,
venue for all proceedings hereunder will be in Xxxxxx County,
Texas.
6.11 HEADINGS. The headings in this Agreement are inserted for convenience
of reference only and shall not affect the meaning or interpretation of
this Agreement.
6.12 SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect.
6.13 PARTIAL INVALIDITY. In the event that any part, portion or Section of
this
Page 22 of 23
Agreement is found to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall be binding upon the
parties hereto and the Agreement will be construed to give meaning to
the remaining provisions of this Agreement in accordance with the
intent of this Agreement.
6.14 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be original, but all of
which together constitute one and the same instrument.
IN WITNESS WHEREOF, Executive has hereunto set his hand and, pursuant
to the authorization from its Board of Directors and the Compensation Committee,
the Company has caused these presents to be executed in its name and on its
behalf, and its corporate seal to be hereunto affixed and attested by its
Secretary or Assistant Secretary, all as of the day and year first above
written.
Executed in multiple originals and/or counterparts as of the Effective
Date.
/s/ XXXX X. X. X'XXXXX
-------------------------------------
XXXX X.X. X'XXXXX
PRIDE INTERNATIONAL, INC.
CORPORATE SEAL
BY: /s/ XXX X. XXXXXX
----------------------------------
XXX X. XXXXXX
CEO and Chairman of the Board
ATTEST:
BY: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxx
Assistant Secretary
Page 23 of 23
