EXHIBIT 10.24
PRIDE INTERNATIONAL, INC.
EMPLOYMENT/NON-COMPETITION/
CONFIDENTIALITY AGREEMENT
XXXX X. XXXXXX
EFFECTIVE FEBRUARY 5, 1999
INDEX
I. PRIOR AGREEMENTS/EMPLOYMENT CONTRACTS..................................6
1.01 Effect of Prior Agreements......................................6
II. DEFINITION OF TERMS...................................................6
2.01 Company.........................................................6
2.02 Executive/Officer/Employee......................................6
2.03 Office/Position/Title...........................................6
2.04 Effective Date..................................................6
2.05 Change in Control...............................................7
2.06 Termination.....................................................7
2.07 Customer........................................................9
III. EMPLOYMENT...........................................................9
3.01 Employment......................................................9
3.02 Best Efforts And Other Employment Of Executive.................10
3.03 Term Of Employment.............................................10
3.04 Compensation And Benefits......................................11
3.05 Termination Without Change In Control..........................12
IV. CHANGE IN CONTROL....................................................14
4.01 Extension Of Employment Period.................................14
4.02 Change In Control Termination Payments & Benefits..............15
4.03 Voluntary Resignation Upon Change In Control...................15
V. NON-COMPETITION AND CONFIDENTIALITY...................................15
5.01 Consideration..................................................15
5.02 Non-Competition................................................16
5.03 Confidentiality................................................17
5.04 Geographical Area..............................................18
5.05 Company Remedies For Violation Of Non-Competition
Or Confidentiality Agreement................................18
5.06 Termination Of Benefits For Violation Of Non-
Competition And Confidentiality.............................19
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VI. GENERAL.............................................................19
6.01 Enforcement Costs...............................................19
6.02 Income, Excise or Other Tax Liability...........................20
6.03 Payment Of Benefits Upon Termination For Cause..................21
6.04 Non-Exclusive Agreement.........................................21
6.05 Notices.........................................................21
6.06 Non-Alienation..................................................21
6.07 Entire Agreement: Amendment.....................................21
6.08 Successors And Assigns..........................................22
6.09 Governing Law...................................................22
6.10 Venue...........................................................22
6.11 Headings........................................................22
6.12 Severability....................................................22
6.13 Partial Invalidity..............................................22
6.14 Counterparts....................................................23
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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. XxXxxx
1423 Stependale
Xxxx, 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 with
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; 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.
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. XxXxxx.
2.03. OFFICE/POSITION/TITLE. The Office, Position and Title for which
the Executive is employed is that of Vice President and Chief
Financial Officer 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
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February 5, 1999.
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
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an extent or in such a manner as to relegate Executive to
a 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.
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3.0.1. 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 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 and Executive may agree.
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 without
the State of Texas as the Company and Executive 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
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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 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 $170,000.00, 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 and (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 shall 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
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Date of this Agreement with 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 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 a Company car or a car
allowance 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 one (1) full year 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 one
(1) 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 the target award for the Executive
under the
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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.
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 with 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
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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 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 one (1) year {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,
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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
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
one (1) year}.
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.
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I. 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 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 one (1) year 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 the 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 one (1) year
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 one
(1) year 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 one
(1) year preceding Executive's termination of
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employment, to or from any person, firm or entity which
was a customer for such products or services of the
Company during the one (1) year preceding such termination
from whom the Company had solicited business during such
one (1) year; or
c. solicit, aid, counsel or encourage any officer, director,
employee or other individual to: (i) leave his or her
employment or position with the Company, (ii) compete with
the business of the Company, or (iii) violate the terms of
any employment, non-competition or similar agreement with
the Company; or
d. employ, directly or indirectly; permit the employment of;
contract for services or work to be performed by; or
otherwise, use, utilize or benefit from the services of
any officer, director, employee or any other individual
holding a position with the Company within two (2) years
after the Date of Termination of employment of 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, the
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 the
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
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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 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 the 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 nature 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 make it difficult to
calculate in damages in an action at law and
Page 18 of 23
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
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 the 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 the 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 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
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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 the
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 designed to
deny, diminish or to recover from Executive the benefits provided
or intended to be provided to him hereunder, and the 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 attorney's 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 the
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.
6.03. PAYMENT OF BENEFITS UPON TERMINATION FOR CAUSE. If the termination
of the Executive is for cause and not after a Change in Control,
Page 20 of 23
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 the 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 the 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 the 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; (iii) by Federal Express or other expedited
delivery service provided that acknowledgement of receipt is
received and retained by the deliverer and furnished to the
sender, if to the 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. The 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 the 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 the Executive,
his Executors, Administrators, devisees and heirs, in that order,
shall have the right to enforce the provisions hereof.
6.07. ENTIRE AGREEMENT: AMENDMENT. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter
hereof. No
Page 21 of 23
provision of this Agreement may be amended, waived, or discharged
except by the mutual written agreement of the parties. The consent
of any other persons 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 or 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 the 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 the Executive and his legal
representatives, heirs, and assigns, provided however, that in the
event of the 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 parts.
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 the State of Louisiana, 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 Agreement is found to be invalid or unenforceable for any
reason, the remaining provisions of this Agreement shall be
binding upon the parties
Page 22 of 23
hereto and the Agreement will be construed to give meaning to the
remaining provisions of this Agreement in according 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, the 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. XXXXXX
XXXX X. XXXXXX
PRIDE INTERNATIONAL, INC.
CORPORATE SEAL
By: XXX X. XXXXXX
XXX X. XXXXXX
CEO and Chairman of the Board
ATTEST:
By: XXXXX X. XXXXXXXX
Xxxxx X. Xxxxxxxx
Assistant Secretary
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