PRIDE INTERNATIONAL,
INC.
CHANGE IN
CONTROL/NON-COMPETITION/
CONFIDENTIALITY AGREEMENT
CHANGE IN
CONTROL/NON-COMPETITION/CONFIDENTIALITY AGREEMENT
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The date of
execution set forth below.
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Pride
International, Inc.,
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a Delaware
corporation
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5847 San
Felipe, Suite 3300
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Houston, Texas
77057
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Leonard E.
Travis
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3388 Sage
Road
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Unit 2301
West
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Houston, Texas
77056
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This
Change in Control/Non-Competition/Confidentiality Agreement by and
between Pride International, Inc . (the
“Company” and as further defined below) and Leonard E.
Travis (“Employee”), effective as of December 18,
2006 (the “Agreement”), is made on the terms as herein
provided.
WHEREAS,
the Company wishes to attract and retain well-qualified employees
and key personnel and to assure itself of the continuity of its
management;
WHEREAS,
the Company recognizes that Employee will serve as a valuable
resource of the Company, however, this Agreement is no assurance of
continued employment;
WHEREAS,
the Company desires to obtain assurances that Employee will devote
his best efforts to his employment with the Company and will not
enter into competition with the Company in its business as now
conducted and to be conducted, or solicit customers or other
employees of the Company to terminate their relationships with the
Company;
WHEREAS,
Employee will serve as a key employee of the Company, and he
acknowledges that his talents and services to the Company are of a
special, unique, unusual and extraordinary character and are of
particular and peculiar benefit and importance to the
Company;
WHEREAS,
the Company is concerned that in the event of a possible or
threatened Change in Control (as defined below) of the Company,
Employee may feel insecure, and therefore the Company desires to
provide security to Employee in the event of a Change in
Control;
WHEREAS,
the Company further desires to assure Employee that if a possible
or threatened Change in Control should arise and Employee should be
involved in deliberations or negotiations in connection therewith,
Employee would be in a secure position to consider and participate
in such transaction as objectively as possible in the best
interests of the Company and
to this end
desires to protect Employee from any direct or implied threat to
his financial well-being by a Change in Control;
WHEREAS,
Employee is willing to continue to serve the Company but desires
assurances that in the event of such a Change in Control he will
have fair and reasonable severance protection;
WHEREAS,
different factors impact the Company and Employee under
circumstances of regular employment between the Company and
Employee when there is no threat of Change in Control and/or none
has occurred, as opposed to circumstances under which a Change in
Control is rumored, threatened, occurring or has occurred. For this
reason, the Agreement deals with circumstances whereby a Change in
Control is threatened, occurring or has occurred; and
WHEREAS,
Employee is willing to enter into and carry out the non-competition
and confidentiality obligations and covenants set forth herein in
consideration of the Agreement.
NOW,
THEREFORE, Employee and the Company (together the
“Parties”) agree as follows:
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I.
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PRIOR
AGREEMENTS/CONTRACTS
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1.01
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PRIOR AGREEMENTS. Employee
represents and warrants to the Company that (i) he has no
continuing non-competition agreements with any prior employers that
have not been disclosed in writing to the Company and
(ii) neither the execution of the Agreement by Employee or the
performance by Employee of his obligations under the Agreement will
result in a violation or breach of, or constitute a default under
the provisions of any contract, agreement or other instrument to
which Employee is or was a party.
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II.
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DEFINITION OF TERMS
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Words used in the Agreement in the
singular shall include the plural and in the plural the singular,
and the gender of words used shall be construed to include
whichever may be appropriate under any particular circumstances of
the masculine, feminine or neuter genders.
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2.01
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BASE SALARY. The term “Base
Salary” shall mean, on the date of determination, twelve
(12) times the then current monthly salary in effect for
Employee (but not less than the highest annual base salary paid to
Employee during any of the three (3) years immediately
preceding the date of his termination from employment with the
Company).
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2.02
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CAUSE. The term “Cause”
shall mean (i) Employee’s failure to perform his duties
and responsibilities with the Company (other than any failure due
to physical or mental incapacity) after a demand for performance is
delivered to him
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by
the Company which specifically identifies the manner in which the
Company believes he has not performed his duties,
(ii) misconduct which causes material injury, monetary or
otherwise, to the Company or its affiliates, (iii) violation
of any Company policy applicable at the time of the events, acts or
omissions at issue, or (iv) intentional action which Employee
knows would not comply with the laws of the United States or any
other jurisdiction applicable to Employee’s actions on behalf
of the Company, and/or any of its subsidiaries or affiliates,
including specifically, without limitation, the United States
Foreign Corrupt Practices Act, generally codified in 15 USC 78 (the
“FCPA”), as the FCPA may hereafter be amended, and/or
its successor statutes.
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2.03
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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:
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a.
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there occurs a change in control of
the Company of the nature that would be required to be reported in
response to item 6(e) of Schedule 14A of Regulation 14A
or Item 1 of Form 8(k) promulgated under the Securities
Exchange Act of 1934 as in effect on the date of the Agreement, or
if neither item remains in effect, any regulations issued by the
Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934 which serve similar purposes;
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b.
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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 total
voting power of the Company’s then outstanding
securities;
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c.
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the
individuals who were members of the Board of Directors of the
Company (the “Board”) immediately prior to a meeting of
the shareholders of the Company involving a contest for the
election of directors shall not constitute a majority of the Board
following such election;
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d.
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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;
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e.
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the
Company shall have sold, transferred or exchanged all, or
substantially all, of its assets to another corporation or other
entity or person; or
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f.
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a
Limited Change in Control (as hereinafter defined) shall have
occurred.
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2.04
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COMPANY. The term
“Company” means Pride International, Inc., a Delaware
corporation, as the same presently exists, as well as any and all
successors,
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regardless of the nature of the
entity or the state or nation of organization, whether by
reorganization, merger, consolidation, absorption or dissolution.
For the purpose of the Agreement, Company includes all subsidiaries
and affiliates of the Company to the extent such subsidiary and/or
affiliate is carrying on any portion of the business of the Company
or a business similar to that being conducted by the
Company.
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2.05
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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.
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2.06
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EMPLOYMENT DATE. The
Employee’s initial date of active employment, which shall be
December 18, 2006.
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2.07
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LIMITED CHANGE IN CONTROL. The term
“Limited Change in Control” of the Company shall mean,
and shall be deemed to have occurred on, the date the Company shall
have merged into or consolidated with another corporation, or
merged another corporation into the Company, on a basis whereby at
least fifty percent (50%) but not more than eighty percent (80%) of
the total voting power of the surviving corporation is represented
by shares held by former shareholders of the Company immediately
prior to such merger or consolidation.
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2.08
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TARGET BONUS. The term “Target
Bonus” shall mean Employee’s target bonus under the
Company’s annual bonus plan for the fiscal year in which
Termination occurs or, if the Company has not specified a target
bonus for such year, fifty percent (50%) of the maximum percentage
of Employee’s Base Salary Employee may be entitled to under
the Company’s annual bonus plan in such year.
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2.09
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TERMINATION. The term
“Termination” shall mean a termination of
Employee’s employment with the Company for any reason other
than Cause or Voluntary Resignation which takes place
(i) within two (2) years following the date of a Change
in Control which occurs for any reason other than a Limited Change
in Control or (ii) within one (1) year following the date
of a Limited Change in Control.
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2.10
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VOLUNTARY RESIGNATION. The term
“Voluntary Resignation” means termination of employment
with the Company by Employee for any reason other than one or more
of the following events:
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a.
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Employee’s resignation or
retirement is requested by the Company other than for
Cause;
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b.
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Any
reduction in Employee’s Base Salary from that in effect
immediately prior to the Change in Control;
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c.
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A
significant and material diminution in Employee’s duties and
responsibilities occurring after a Change in Control which would
degrade, embarrass or otherwise make it unreasonable for Employee
to remain in the employment of the Company; or
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d.
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Any
requirement following the Change in Control that Employee relocate
more than 50 miles from downtown Houston, Texas.
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3.01
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CHANGE IN CONTROL TERMINATION
PAYMENTS AND BENEFITS. In the event of Employee’s
Termination, the Company shall, in exchange for a full and complete
release of claims against the Company, its affiliates, officers and
directors (“Release”), pay or provide to Employee the
payments and benefits specified in this Section 3.01 within
thirty (30) days following the Effective Waiver Date (as
defined below), subject to the provisions of Section 5.04 and
provided that the payments will be made as soon as reasonably
practical to his Executor, Administrator or Estate in the event of
Employee’s death. The date that is seven days after
Employee’s execution of the Waiver and Release shall be the
“Effective Waiver Date.”
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a.
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An
amount equal to two (2) times the sum of (i) his Base
Salary and (ii) his Target Bonus.
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b.
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An
amount equal to a prorated portion of the Target Bonus based on the
number of full months of employment completed within the year of
Termination.
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c.
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The
Company shall provide to Employee, Employee’s spouse and
Employee’s eligible dependents for a period of two
(2) full years following the date of Employee’s
Termination, life, health, accident and disability insurance
coverages which are not less than the highest benefits furnished
during the term of the Agreement at a cost to the Employee as if he
had remained a full time employee. If Employee dies during such
term, health insurance coverage will be provided to
Employee’s spouse and eligible dependents until the date that
is two (2) years after the date of Employee’s
Termination.
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d.
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The
Company’s obligation under this Section to continue to pay or
provide health care, life, accident and disability insurance to
Employee, Employee’s spouse and Employee’s dependents
shall be reduced when and to the extent any such benefits are paid
or provided to Employee by another employer; provided, however,
that Employee shall have all rights, if any, afforded to retirees
to convert group life insurance coverage to the individual life
insurance coverage as to the extent of, and whenever his group life
insurance coverage under this Section is reduced or
expires.
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Apart from this subparagraph,
Employee shall have and be subject to no obligation to
mitigate.
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e.
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The
Company shall deduct applicable withholding taxes in performing its
obligations under this Section.
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A
sample form of Release is attached as Exhibit A. Employee
acknowledges that the Company retains the right to modify the
required form of the Release as the Company deems necessary in
order to effectuate a full and complete release of claims against
the Company, its affiliates, officers and directors and to delay
payment until timely execution of the Release without
revocation.
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Nothing in this Section is intended,
nor shall be deemed or interpreted, to be an amendment to any
compensation, benefit or other plan of the Company. To the extent
the Company’s performance under this Section includes the
performance of the Company’s obligations to Employee under
any other plan or under another agreement between the Company and
Employee, the rights of Employee under such other plan or other
agreement, which are discharged under the Agreement, are
discharged, surrendered, or released pro tanto.
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3.02
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This Agreement is no guarantee of
continued employment and Employee remains an “at will”
employee hereunder.
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IV.
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NON
COMPETITION AND PROTECTION OF CONFIDENTIAL INFORMATION
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4.01
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CONSIDERATION. Company promises to
provide Employee with the Company’s trade secrets and other
confidential information, along with personal contacts, that are of
critical importance in securing and maintaining business prospects,
in retaining the accounts and goodwill of present Customers and
protecting the business of the Company.
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a.
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Employee, therefore, agrees that in
exchange for the Company’s promise to provide trade secrets
and other confidential information, Employee agrees to the
non-competition and confidentiality obligations and covenants
outlined in this Article IV and that absent his agreement to
these obligations and covenants, the Company will not now provide
and will not continue to provide him with trade secrets and other
confidential information.
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b.
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In
addition to the consideration described in Section 4.01(a),
the parties agree that (i) fifteen percent (15%) of
Employee’s base salary and bonus, if any, paid and to be paid
to Employee and (ii) one hundred percent (100%) of the
payments and benefits, including Employee’s right to receive
the same, under Section 3.01 shall constitute additional
consideration for the non-competition and confidentiality
agreements set forth herein.
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4.02
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NON-COMPETITION. In exchange for the
consideration described above in Section 4.01, Employee 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
he has a right to payments and benefits under Article III as a
result of a Termination, in which event there will be no covenant
not to compete and the noncompete covenants and obligations herein
will terminate on the date of termination of Employee), Employee
will not, directly or indirectly, either as an individual,
proprietor, stockholder (other than as a holder of up to one
percent (1%) of the outstanding shares of a corporation whose
shares are listed on a stock exchange or traded in accordance with
the automated quotation system of the National Association of
Securities Dealers), partner, officer, employee or
otherwise:
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a.
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work for, become an employee of,
invest in, provide consulting services to or in any way engage in
any business which (i) is primarily engaged in the drilling
and workover of oil and gas wells within the geographical area
described below and (ii) actually competes with the Company;
or
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b.
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provide, sell, offer to sell, lease,
offer to lease, or solicit any orders for any products or services
which the Company provided and with regard to which Employee had
direct or indirect supervision or control, within two
(2) years preceding Employee’s termination of
employment, to or from any person, firm or entity which was a
Customer for such products or services of the Company during the
two (2) year preceding such termination from whom the Company
had solicited business during such two (2) years;
or
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c.
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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
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d.
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directly or indirectly
(i) influence the employment of, or engagement in any contract
for services or work to be performed by, or (ii) otherwise use,
utilize or benefit from the servic
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