EXHIBIT 10.1
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (the "Agreement") made and entered into
effective as of March 10, 1999 (the "Effective Date"), by and between Pride
International, Inc. (the "Company") and Xxx X. Xxxxxx (the "Executive");
W I T N E S S E T H:
WHEREAS, the Executive and the Company are parties to that certain
Employment/Non-Competition/Confidentiality Agreement dated as of August 1, 1994
(the "Employment Agreement"); and
WHEREAS, the parties mutually desire to terminate the Employment
Agreement effective March 10, 1999, and accordingly, the Executive has resigned
from his positions as Chairman of the Board, Chief Executive Officer and
director of the Company as of that date; and
WHEREAS, in consideration of the mutual promises contained herein,
the parties hereto are willing to enter into this Agreement upon the terms and
conditions herein set forth.
NOW, THEREFORE, in consideration of the premises, the terms and
provisions set forth herein, the mutual benefits to be gained by the performance
thereof and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. RESIGNATION OF EMPLOYMENT: Effective as of March 10, 1999, the
Executive resigns his positions as Chairman of the Board, Chief Executive
Officer and director of the Company; and from any other position or office
relating to the affairs of the Company and its subsidiaries.
2. CANCELLATION OF CONTRACTS: The Company and the Executive agree
that the rights and obligations of both parties under (i) the Employment
Agreement and (ii) the stock option agreements issued to the Executive to
purchase the Company's common stock, including the stock option rights assigned
by the Executive to Xxxxxx Interests, Ltd., are hereby cancelled, and that
neither party shall have any further rights or claims under such agreements. The
Company shall pay or cause to be paid to the Executive, as consideration for the
cancellation of the Employment Agreement, a payment of $3,000,000, such amount
to be paid to the Executive, or in the event of his death, to his estate, in ten
substantially equal annual installments, pursuant to the terms of the Company's
401(k) Restoration Plan. The parties hereby agree that, in accordance with
Revenue Ruling 58-301, 1958-1 C.B. 23, the payment made to the Executive
pursuant to this Paragraph 2 of this Agreement as consideration for the
cancellation of his Employment Agreement is not subject to the federal
employment and income tax withholding provisions of Section 3121 of the Federal
Insurance Contributions Act or Section 3402 of the Internal Revenue Code of
1986, as amended.
3. FURTHER CONSIDERATION FOR EXECUTION OF AGREEMENT AND WAIVER AND
RELEASE: In consideration for the Executive's execution of and compliance with
the Agreement and the Waiver and Release attached hereto as ATTACHMENT A, and
the execution by the Executive's family limited partnership, Xxxxxx Interests,
Ltd., of the Waiver and Release attached hereto as ATTACHMENT B, the Company
shall provide the consideration set forth below in this Section 3. This
consideration is provided subject to the binding execution by both the Executive
and Xxxxxx Interests, Ltd. of the attached Waiver and Release agreements, which
must be executed on or before April 15, 1999. The Company's obligation to make
any further payments otherwise due under Section 3A shall cease in the event the
Executive fails to comply with the terms of this Agreement or his Waiver and
Release, and the Company's obligation to make the payment set forth in Section
3B shall cease in the event Xxxxxx Interests, Ltd. fails to comply with the
terms of its Waiver and Release.
A. PAYMENT TO THE EXECUTIVE: The Company shall pay the Executive a
cash payment of $3,080,000, of which $2,080,000 will be paid to the
Executive not later than ten (10) business days after his execution of the
Waiver and Release attached as ATTACHMENT A, without revocation, and the
remaining $1,000,000 shall be paid to the Executive, or in the event of
his death to his estate, in ten (10) substantially equal annual
installments, pursuant to the terms of the Company's 401(k) Restoration
Plan.
B. PAYMENT TO XXXXXX INTERESTS, LTD.: The Company agrees to pay
Xxxxxx Interests, Ltd. a lump sum cash payment of $1,920,000, payable not
later than ten (10) business days after the execution by Xxxxxx Interests,
Ltd. of the Waiver and Release attached hereto as ATTACHMENT B.
4. AMENDMENT TO 401(K) RESTORATION PLAN AND SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN: The Company shall amend the Company's 401(k) Restoration Plan
to permit payments to be made thereunder in the form negotiated pursuant to this
Agreement, and the Company and the Executive agree that all amounts payable to
the Executive under the Company's 401(k) Restoration Plan shall be paid to the
Executive, or in the event of his death to his estate, in ten (10) substantially
equal annual installments beginning in January, 2000. In addition, the Company
agrees to amend the Company's 401(k) Restoration Plan and the Supplemental
Executive Retirement Plan to permit the Executive to have the right to elect, at
any time beginning four and one-half years after the Effective Date, to obtain
the aggregate unpaid amounts due under those plans in an immediate lump sum
payment, subject to a 5% reduction of the balance payable as a penalty for
acceleration of payment.
5. CONFIDENTIALITY; NON-COMPETITION:
A. CONFIDENTIALITY: The Executive recognizes and acknowledges that
in the course of his employment with the Company and as a result of the
position of trust he has held with the Company he has obtained private or
confidential information and proprietary data relating to the Company and
its affiliates including, without limitation, financial information,
customer lists, patent information and other data which are valuable
assets and property rights of the Company and its affiliates. All of such
private or confidential information and proprietary data is referred to
herein as "Confidential Information";
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provided, however, that Confidential Information will not include any
information known generally to the public (other than as a result of
unauthorized disclosure by the Executive). The Executive agrees that he
will not at any time, directly or indirectly, disclose or use Confidential
Information acquired during his employment with the Company and its
affiliates except with the prior written consent of the Chief Executive
Officer of the Company.
B. NON-SOLICITATION: The Executive agrees that he will not, for five
years after the Effective Date, in the Executive's individual capacity or
on behalf of another (i) hire or offer to hire any of the officers,
employees, directors or agents of the Company or its affiliates, (ii)
persuade or attempt to persuade in any manner any officer, employees,
directors or agent of the Company to discontinue any relationship with the
Company or its affiliates or (iii) solicit or divert or attempt to divert
any customer or supplier of the Company or its affiliates.
C. NON-COMPETITION: The Executive acknowledges that his employment
with the Company has provided him with specialized knowledge concerning
the business of the Company ("Company Business") which, if used in
competition with the Company could cause serious harm to the Company, and
the covenants contained in this Agreement are essential to protect the
business and goodwill of the Company. Accordingly, the Executive agrees
that for a period of five (5) years after the Effective Date, the
Executive will not in the United States or any other country where the
Company conducts operations related to the Company Business, directly or
indirectly, either as an individual, proprietor, stockholder (other than
as a holder of up to one (1%) percent 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, director 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 the Executive was engaged, or over which
the Executive had direct or indirect supervision or control, within
three 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 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 years preceding the
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 years preceding such termination from whom
the Company had solicited business during such three years.
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D. ENFORCEMENT: The Executive hereby agrees that a violation of the
provisions of Section 5 or 6 would cause irreparable injury to the Company
and its affiliates, for which they would have no adequate remedy at law.
Any controversy or claim arising out of or relating to the provisions of
this Section 5 or 6, or any alleged breach of Section 5 or 6, shall be
settled by binding arbitration in accordance with Section 12.
Notwithstanding the foregoing, however, the Company specifically retains
the right before, during or after the pendency of any arbitration to seek
injunctive relief from a court having jurisdiction for any actual or
threatened breach of Section 5 or 6 without necessity of complying with
any requirement as to the posting of a bond or other security (it being
understood that the Executive hereby waives any such requirement). Any
such injunctive relief shall be in addition to any other remedies to which
the Company may be entitled at law or in equity or otherwise, and the
institution and maintenance of an action or judicial proceeding for, or
pursuit of, such injunctive relief shall not constitute a waiver of the
right of the Company to submit the dispute to arbitration.
If any provision of Section 5 or 6 is found by either a court
of competent jurisdiction or the arbitrators to be unreasonably broad,
oppressive or unenforceable, such court or arbitrators (i) shall narrow
the scope of the Agreement in order to ensure that the application thereof
is not unreasonably broad, oppressive or unenforceable and (ii) to the
fullest extent permitted by law, shall enforce such Agreement as though
reformed.
6. NONDISPARAGEMENT: As a material inducement to the Company to
enter into this Agreement, the Executive agrees that he will not (i) publicly
criticize or disparage the Company or any affiliate, or privately criticize or
disparage the Company or any affiliate in a manner intended or reasonably
calculated to result in public embarrassment to, or injury to the reputation of,
the Company or any affiliate in any community in which the Company or any
affiliate is engaged in business; (ii) directly or indirectly, acting alone or
acting in concert with others, institute or prosecute, or assist any person in
any manner in instituting or prosecuting, any legal proceedings of any nature
against the Company or any affiliate; subject, however, with respect to any
legal action relating to the Executive's employment, to the execution by the
Executive of the attached Waiver and Release; (iii) commit damage to the
property of the Company or any affiliate or otherwise engage in any misconduct
which is injurious to the business or reputation of the Company or any
affiliate; or (iv) take any other action, or assist any person in taking any
other action, that is adverse to the interests of the Company or any affiliate
or inconsistent with fostering the goodwill of the Company or any affiliate;
provided, however, that the Executive will not be in breach of the covenant
contained in (ii) above solely by reason of his testimony which is compelled by
process of law. As used in Sections 5 and 6 of this Agreement, the term
"affiliate" means the Company, any subsidiary, any officer, director or
executive of the Company or any subsidiary, and any former officer, director or
executive of the Company or any subsidiary.
7. ASSISTANCE WITH LITIGATION: The Executive agrees that for a
period of five years after the Effective Date, the Executive will furnish such
information and proper assistance as may be reasonably necessary in connection
with any litigation in which the Company or any subsidiary is then or may become
involved.
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8. INDEMNIFICATION: The Company agrees to indemnify the Executive
for any claims that may be asserted against the Executive by any person acting
in the capacity of a stockholder of the Company relating to the subject matter
of this Agreement, excluding claims by Xxxxxx Interests, Ltd. or any party with
whom the Executive has a contractual relationship.
9. NONASSIGNABILITY: Neither this Agreement nor any right or
interest hereunder shall be subject, in any manner, to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge, whether voluntary or
involuntary, by operation of law or otherwise, any attempt at such shall be
void; and further provided, that any such benefit shall not in any way be
subject to the debts, contract, liabilities, engagements or torts of the
Executive, nor shall it be subject to attachment or legal process for or against
the Executive. Notwithstanding the foregoing, in the event of the Executive's
death prior to the payment in full of the cash payments under Section 2, or the
payment in full of the cash payment under Section 3, if the Executive has become
entitled to the Section 3 benefit by execution of the Waiver and Release, such
cash payments will be paid to the Executive's estate.
10. AMENDMENT OF AGREEMENT: This Agreement may not be modified or
amended except by an instrument in writing signed by the parties hereto.
11. WAIVER: No term or condition of this Agreement shall be deemed
to have been waived, nor shall there be an estoppel against the enforcement of
any provision of this Agreement, except by written instrument of the party
charged with such waiver or estoppel.
12. ARBITRATION: Any dispute, controversy or claim arising out of or
relating to the obligations under this Agreement, shall be settled by final and
binding arbitration in accordance with the American Arbitration Association
Employment Dispute Resolution Rules. The arbitrator shall be selected by mutual
agreement of the parties, if possible. If the parties fail to reach agreement
upon appointment of an arbitrator within 30 days following receipt by one party
of the other party's notice of desire to arbitrate, the arbitrator shall be
selected from a panel or panels submitted by the American Arbitration
Association (the "AAA"). The selection process shall be that which is set forth
in the AAA Employment Dispute Resolution Rules, except that, if the parties fail
to select an arbitrator from one or more panels, AAA shall not have the power to
make an appointment but shall continue to submit additional panels until an
arbitrator has been selected. All fees and expenses of the arbitration,
including a transcript if requested, will be borne by the parties equally.
13. NOTICES: All notices or communications hereunder shall be in
writing, addressed as follows:
To the Company:
Pride International, Inc.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
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To the Executive:
Xxx X. Xxxxxx
HC12 Box 64R
Xxxxxxxxxxxxxx, XX 00000
All such notices shall be conclusively deemed to be received and shall be
effective; (i) if sent by hand delivery, upon receipt, (ii) if sent by telecopy
or facsimile transmission, upon confirmation of receipt by the sender of such
transmission or (iii) if sent by registered or certified mail, on the fifth day
after the day on which such notice is mailed.
14. SOURCE OF PAYMENTS: All cash payments provided in this Agreement
will be paid from the general funds of the Company. The Executive's status with
respect to amounts owed under this Agreement will be that of a general unsecured
creditor of the Company, and the Executive will have no right, title or interest
whatsoever in or to any investments which the Company may make to aid the
Company in meeting its obligations hereunder. Nothing contained in this
Agreement, and no action taken pursuant to this provision, will create or be
construed to create a trust of any kind or a fiduciary relationship between the
Company and the Executive or any other person; provided, however, that the
Company may continue to maintain a grantor trust subject to claims of creditors
of the Company, to hold certain assets payable under the Company's 401(k)
Restoration Plan. The Company in its sole discretion may retain as owner and for
its own benefit insurance on the life of the Executive in such amounts and in
such forms consistent with the policies on the life of the Executive held by the
Company as of the Effective Date. Such life insurance policies may be held by
the Company in connection with the liabilities assumed by the Company pursuant
to this Agreement, but shall not be deemed to be held under any trust for the
benefit of the Executive, any beneficiary of the Executive or his estate, or to
be security for the performance of the obligations of the Company but shall be,
and remain, a general, unpledged and unrestricted asset of the Company. Neither
the Executive nor his beneficiaries or estate shall have any right or interest
in or to any proceeds of such policies.
15. FEDERAL INCOME TAX WITHHOLDING: The Company may withhold from
any benefits payable under this Agreement all federal, state, city or other
taxes that will be required pursuant to any law or governmental regulation or
ruling.
16. SEVERABILITY: If any provision of this Agreement is held to be
invalid, illegal or unenforceable, in whole or part, such invalidity will not
affect any otherwise valid provision, and all other valid provisions will remain
in full force and effect.
17. COUNTERPARTS: This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, and all of which
together will constitute one document.
18. TITLES: The titles and headings preceding the text of the
paragraphs and subparagraphs of this Agreement have been inserted solely for
convenience of reference and do not constitute a part of this Agreement or
affect its meaning, interpretation or effect.
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19. GOVERNING LAW: This Agreement will be construed and enforced in
accordance with the laws of the State of Texas.
IN WITNESS WHEREOF, the parties have executed this Agreement on
March 24, 1999, but effective as of the date and year first above written.
PRIDE INTERNATIONAL, INC.
By /s/ XXXX X. XXXXX
Xxxx X. Xxxxx
EXECUTIVE
/s/ XXX X. XXXXXX
Xxx X. Xxxxxx
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ATTACHMENT A
Dated: March 24, 1999
WAIVER AND RELEASE
In exchange for the consideration offered under the Separation
Agreement between me and Pride International, Inc. (the "Company"), dated
effective March 10, 1999 (the "Agreement"), I hereby waive all of my claims and
release the Company, its affiliates, its subsidiaries and each of their
directors and officers, executives and agents, and executive benefit plans and
the fiduciaries and agents of said plans (collectively referred to as the
"Corporate Group") from any and all claims, demands, actions, liabilities and
damages. All payments under Paragraph 3 of the Agreement are voluntary on the
part of the Company and are not required by any legal obligation of the Company
to me other than the Agreement itself. I choose to accept this offer.
I UNDERSTAND THAT SIGNING THIS WAIVER AND RELEASE IS AN IMPORTANT
LEGAL ACT. I ACKNOWLEDGE THAT THE COMPANY HAS ADVISED ME IN WRITING TO CONSULT
AN ATTORNEY BEFORE SIGNING THIS WAIVER AND RELEASE. I UNDERSTAND THAT I HAVE
UNTIL 21 CALENDAR DAYS AFTER THE DATE SHOWN ABOVE TO CONSIDER WHETHER TO SIGN
AND RETURN THIS WAIVER AND RELEASE TO THE COMPANY BY FIRST-CLASS MAIL OR BY HAND
DELIVERY IN ORDER FOR IT TO BE EFFECTIVE.
In exchange for the consideration offered to me by the Company
pursuant to Paragraph 3 of the Agreement, which is in addition to any
remuneration or benefits to which I am already entitled, I agree not to xxx or
file any charges of discrimination, or any other action or proceeding with any
local, state and/or federal agency or court regarding or relating in any way to
the Company, and I knowingly and voluntarily waive all claims and release the
Corporate Group from any and all claims, demands, actions, liabilities, and
damages, whether known or unknown, arising out of or relating in any way to the
Company, except with respect to rights under the Agreement and such rights or
claims as may arise after the date this Waiver and Release is executed. This
Waiver and Release includes, but is not limited to, claims and causes of action
under: Title VII of the Civil Rights Act of 1964, as amended; the Age
Discrimination in Employment Act of 1967, as amended; the Civil Rights Act of
1866, as amended; the Civil Rights Act of 1991; the Americans with Disabilities
Act of 1990; the Older Workers Benefit Protection Act of 1990; the Executive
Retirement Income Security Act of 1974, as amended; the Family and Medical Leave
Act of 1993; and/or contract, tort, defamation, slander, wrongful termination or
other claims or any other state or federal statutory or common law.
Should any of the provisions set forth in this Waiver and Release be
determined to be invalid by a court, agency or other tribunal of competent
jurisdiction, it is agreed that such determination shall not affect the
enforceability of other provisions of this Waiver and Release.
I acknowledge that this Waiver and Release and the Agreement set
forth the entire understanding and agreement between me and the Company or any
other member of the Corporate Group concerning the subject matter of this Waiver
and Release and supersede any prior or
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contemporaneous oral and/or written agreements or representations, if any,
between me and the Company or any other member of the Corporate Group.
I understand that for a period of 7 calendar days following my
signing this Waiver and Release (the "Waiver Revocation Period"), I may revoke
my acceptance of the offer by delivering a written statement to the Company by
hand or by registered mail, addressed to the address for the Company specified
in the Agreement, in which case the Waiver and Release will not become
effective. In the event I revoke my acceptance of this offer, the Company shall
have no obligation to provide me the consideration offered under Paragraph 3 of
the Agreement. I understand that failure to revoke my acceptance of the offer
within the Waiver Revocation Period will result in this Waiver and Release being
permanent and irrevocable.
I acknowledge that I have read this Waiver and Release, have had an
opportunity to ask questions and have it explained to me and that I understand
that this Waiver and Release will have the effect of knowingly and voluntarily
waiving any action I might pursue, including breach of contract, personal
injury, retaliation, discrimination on the basis of race, age, sex, national
origin or disability and any other claims arising prior to the date of this
Waiver and Release.
By execution of this document, I do not waive or release or
otherwise relinquish any legal rights I may have which are attributable to or
arise out of acts, omissions or events of the Company or any other member of the
Corporate Group which occur after the date of execution of this Waiver and
Release.
AGREED TO AND ACCEPTED this
24th day of March, 1999.
/s/ XXX X. XXXXXX
Xxx X. Xxxxxx
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ATTACHMENT B
WAIVER AND RELEASE
Effective as of March 10, 1999, Xxxxxx Interests, Ltd. ("TIL")
agrees to relinquish, waive and disclaim any and all claims or rights TIL may
have with respect to the stock option rights (the "Options") assigned by Xxx X.
Xxxxxx to TIL to purchase the common stock of Pride International, Inc. (the
"Company"). TIL hereby agrees that the relinquishment of its rights to any
benefits under the Options is given in exchange for good and valuable
consideration given by the Company in the form of an agreement to pay a lump sum
cash payment of $1,920,000 not later than ten business days after the execution
by TIL of this Waiver and Release, pursuant to the terms of the Separation
Agreement between the Company and Xxx X. Xxxxxx dated effective March 10, 1999.
The undersigned hereby fully releases the Company, its directors, officers,
executives, agents and fiduciaries from any and all claims, demands, actions,
liabilities and damages relating in any way to the Options.
The undersigned certifies to the Company that he is a duly
authorized representative of TIL and has the authority to execute this Waiver
and Release on TIL's behalf.
AGREED TO AND ACCEPTED
this 24th day of March, 1999
XXXXXX INTERESTS, LTD.
By: /s/ XXX X. XXXXXX
Title: Managing Partner
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