[PRIDE INTERNATIONAL LETTERHEAD]
VIA FAX
February 6, 1997
TO: Xxxxx Xxxxxxx Xxxx
FROM: Xxx X. Xxxxxx
SUBJECT: Compensation Agreement
Dear Xxxxx:
This letter shall set forth our agreement to amend in entirety the
compensation arrangements previously made with you as set forth in our letter
agreement dated March 20, 1996. The amended terms to govern future services are
set forth below:
ACQUISITION FINDER AND DEVELOPMENT FEE
For acquisition candidates that you have previously identified or
which you identify after the date hereof, as to which we shall mutually agree in
writing in advance of commencement of negotiations, (and excluding SAIPEM, as
discussed below), we shall pay you upon the successful closing of an acquisition
transaction a fee calculated as follows:
TRANSACTION AMOUNT FEE PERCENTAGE
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Portion of Total From:
$0 - $10 million 2.5%
$10 - $20 million 2.0%
$20 - $50 million 1.0%
$50 - $75 million 0.75%
$75 - $100 million 0.50%
[PRIDE INTERNATIONAL LETTERHEAD]
Xxxxx Xxxxxxx Xxxx
Compensation Agreement
Page 2
Xxxx earned hereunder will be capped at a maximum of $1.0 million per
transaction.
ADVANCES TOWARD FEES
For a period of three years (January 1997 - December 1999), Pride will
advance you the amount of $15,000 per month against fees which may become
payable hereunder. At the time any fees are payable hereunder, the balance of
advances previously paid will be offset against such fees. At any time that fees
earned pursuant to this agreement exceed the aggregate amount of $540,000
($15,000 x 36 months), the excess amount will be paid to you in cash at such
time. Furthermore, Pride will continue to pay the monthly $15,000 amount for
the balance of the term or, at your election, in a lump sum. To the extent that
there is any advance balance remaining upon termination of this agreement, you
will not be required to refund such balance and said balance will be discharged
as if otherwise earned. If the agreement is renewed, the balance will be
carried forward on the same basis for such extension period.
No other cash payments will be due from Pride pursuant to this
agreement other than reasonable direct out-of-pocket expenses attributable to
specific business development projects, which are approved by a Vice President
or higher ranking officer of Pride and which are in accordance with established
corporate policy.
SPECIAL TRANSACTION
It is agreed that you have undertaken preliminary efforts with respect
to a possible business combination with the drilling division of SAIPEM. It is
further agreed that compensation for you in connection with these efforts shall
be treated as outside of the scope of the fee structure set forth above.
Pride anticipates that it will engage Xxxxxxxxx, Xxxxxx & Xxxxxxxx
("DLJ") as its financial adviser for the potential SAIPEM transaction. DLJ has
confirmed to Pride that it will enter into a fee sharing arrangement with you.
Such agreement shall be separate herefrom and shall be contingent upon
successful efforts. It is contemplated that the total DLJ fee will be
approximately 0.8 - 1.0% of the transaction value.
Xxxxx Xxxxxxx Xxxx
Compensation Agreement
Page 3
NEW CUSTOMER BUSINESS DEVELOPMENT
From time to time, you may be able to identify and cultivate new
client relationships on behalf of Pride. Generally, customers in existing
countries of operations will not qualify for such fee; however in certain cases,
particular customers, including certain existing customers, may qualify upon our
mutual agreement. In such cases, Pride will pay you a business development fee
out of revenues generated from new projects developed. In all cases, when you
identify a potential business development opportunity, you will identify such to
Pride and Pride will acknowledge in writing our desire for your pursuit of
business development activities or otherwise advise you of reasons why no such
activities are to be developed subject to this provision. Fees applicable to
business development activities will be agreed on a case-by-case basis in
writing, in advance.
OTHER
So long as this Compensation Agreement is in effect, you will not be
eligible for those remuneration benefits otherwise attributable to outside
directors of the Company.
This agreement shall be cancelled upon 60 days of written notice from
either party to the other.
Please review the terms of this letter and execute the space below to
indicate your agreement to modify the compensation arrangement between you and
the Company.
Very truly yours,
/s/ Xxx X. Xxxxxx
Xxx X. Xxxxxx
President and
Chief Executive Officer
AGREED AND ACCEPTED, effective January 1, 1997.
/s/ Xxxxx X. Xxxxxxx M.
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Xxxxx X. Xxxxxxx X.