PRIDE INTERNATIONAL,
INC.
AMENDED AND RESTATED
EMPLOYMENT/
NON-COMPETITION/CONFIDENTIALITY AGREEMENT
AMENDED AND RESTATED EMPLOYMENT/
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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Randall D.
Stilley
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2232 Stanmore
Drive
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Houston, Texas
77019
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This
Amended and Restated Employment/Non-Competition/Confidentiality
Agreement by and between Pride International, Inc. (the
“Company” and as further defined herein) and Randall D.
Stilley (“Employee”), effective as of October 29,
2008 (the “Agreement”), is made on the terms as herein
provided.
WHEREAS,
the Company and Employee have entered into an employment agreement
effective as of September 22, 2008 (the “Prior
Agreement”) and wish to hereby supersede the Prior Agreement
and amend and restate the rights and obligations of the Company and
Employee with regard to Employee’s employment with the
Company in this Agreement; and
WHEREAS,
Employee is willing to enter into the Agreement upon the terms and
conditions and for the consideration set forth herein.
NOW,
THEREFORE, for and in consideration of the mutual promises,
covenants, and obligations contained herein, the Company and
Employee (together the “Parties”) agree as
follows:
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I.
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PRIOR
AGREEMENTS/CONTRACTS
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Employee represents and warrants to
the Company that (i) he has no continuing non-competition,
non-solicitation or other similar 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
nor 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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As
of October 29, 2008, the Prior Agreement is 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 the Company from its liability or obligation with respect
to any compensation, payments or benefits already accrued to
Employee for service prior to October 29, 2008, 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 Employee 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 October 29,
2008.
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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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CAUSE. The term “Cause”
means: (i) the willful and continued failure of Employee
diligently to perform his duties with the Company (other than any
failure due to physical or mental incapacity), (ii) gross
negligence or willful misconduct which causes material injury,
monetary or otherwise, to the Company or its affiliates, (iii)
failure to comply with the Agreement, including violation of one or
more of the covenants in Article V, (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; or
(v) material violation of any policy of the Company applicable
at the time of the events, acts or omissions at issue.
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2.02
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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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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 thirty percent (30%) or more of the total
voting power of the Company’s then outstanding
securities;
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b.
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during any period of twelve
consecutive months, individuals who, as of the date hereof,
constitute the members of the Board (the “Incumbent
Directors”) cease for any reason other than due to death or
disability to constitute at least a majority of the members of the
Board, provided that
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any
director who was nominated for election or was elected with the
approval of at least a majority of the members of the Board who are
at the time Incumbent Directors shall be considered an Incumbent
Director;
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c.
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the
consummation of any transaction (including any merger,
amalgamation, consolidation or scheme of arrangement), the result
of which is that 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 transaction;
or
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d.
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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.
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Notwithstanding any provision hereof
to the contrary, neither a Newco Transaction nor any subsequent
public offering or public distribution by Newco, Pride
International, Inc. or any of their respective affiliates of equity
securities of Newco or its successors shall be considered a
“Change in Control.”
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2.03
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COMPANY. The term
“Company” means Pride International, Inc., a Delaware
corporation, as the same presently exists, or any and all
successors, regardless of the nature of the entity or the state or
nation of organization, whether by assignment, reorganization,
merger, consolidation, absorption or dissolution; provided,
however , that, from and after an assignment and novation
pursuant to Section 6.09, except as provided in
Section 5.09 all references to the Company in the Agreement
shall no longer refer to Pride International, Inc. or any such
successor and shall instead refer to (i) except as set forth in
clause (ii), the entity to whom such assignment and novation is
made and (ii) with respect to the definition of “Change
in Control”, if such entity does not have a class of equity
securities registered under Section 12 of the Securities
Exchange Act of 1934, the direct or indirect parent of such entity,
if any, that has a class of equity securities registered under
Section 12 of the Securities Exchange Act of 1934, other than
Pride International, Inc. and its successors. As used herein,
“Board” shall mean the Board of Directors of the
Company except as otherwise indicated.
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2.04
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CONSTRUCTIVE TERMINATION. The term
“Constructive Termination” means termination of
employment by reason of Employee’s resignation for any 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
material reduction in Employee’s total compensation or
benefits from that provided in the Compensation and Benefits
Section as then in effect immediately prior to such reduction
unless such reduction is generally applicable to all similarly
situated executives of the Company;
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c.
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Any
circumstance by which the actions of the Company either reduce or
change Employee’s title, position, duties, responsibilities
or authority to
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such an extent or in such a manner
as to relegate Employee to a position not substantially similar to
that which he held prior to such reduction or change and which
would degrade, embarrass or otherwise make it unreasonable for
Employee to remain in the employment of the Company;
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d.
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The
material breach by the Company of any provision of the
Agreement;
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e.
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Any
requirement of the Company that Employee relocate more than 50
miles from downtown Houston, Texas, unless Employee recommended the
relocation; or
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f.
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Failure of the Company to assign and
novate the Agreement to a Purchaser as provided in
Section 6.09b.
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Notwithstanding any provision to the
contrary, in order for Employee’s resignation to be deemed a
Constructive Termination, (A) Employee must provide, within
60 days following the occurrence of the event that Employee
claims constitutes a Constructive Termination, a written notice to
the Company that Employee intends to terminate his employment with
the Company; (B) the written notice must describe the event
constituting the Constructive Termination in reasonable detail; and
(C) within 30 days after receiving such notice from
Employee, the Company must fail to reinstate Employee to the
position he was in, or otherwise cure the circumstances giving rise
to the Constructive Termination.
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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. Employee’s
initial date of active employment, which was September 22,
2008.
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2.07
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MAT
JACKUP RIG ASSETS. The term “Mat Jackup Rig Assets”
means the 21 mat-supported jackup rigs owned directly or indirectly
by Pride International, Inc. on the date of the Agreement (which
includes the Pride Wyoming, which the parties recognize may be a
total loss as a result of Hurricane Ike).
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2.08
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NEWCO. The term “Newco”
means the entity formed to hold, directly or indirectly, all or
substantially all of the Mat Jackup Rig Assets.
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2.09
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NEWCO TRANSACTION. The term
“Newco Transaction” means the first issuance, sale,
distribution or exchange, completed after the Employment Date, of
equity securities of Newco or of any direct or indirect parent of
Newco, other than Pride International, Inc. and its successors, in
each case which issuance, sale, distribution or exchange results in
such equity securities being traded on any United States national
securities exchange or over-the-counter market or on any recognized
foreign securities market, including without limitation (i) a
registered
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underwritten public offering of such
equity securities, (ii) a public offering of such equity
securities on any recognized foreign securities market,
(iii) a distribution of such equity securities to the
stockholders of Pride International, Inc. or its successors or (iv)
an exchange of such equity securities for equity securities of
Pride International, Inc. or its successors.
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2.10
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NEWCO TRANSACTION DATE. The term
“Newco Transaction Date” means the closing date of a
Newco Transaction, which, in the case of a public offering
contemplated by clause (i) or (ii) of the definition of
“Newco Transaction”, means the closing date for the
offering of equity securities, except for purposes of determining
the VWAP under Section 3.04e, for which purpose it means the
first day of regular-way trading of the equity securities and, in
the case of a distribution or exchange contemplated by clause
(iii) or (iv) of the definition of “Newco
Transaction”, means the first day of regular-way trading of
the equity securities being distributed.
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2.11
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PEER GROUP. The term “Peer
Group” means Hercules Offshore, Inc., Rowan Companies Inc.,
Nabors Industries Ltd., Patterson-UTI Energy Inc., Helmerich &
Payne Inc., and Superior Energy Services, Inc., or any successor to
the foregoing primarily engaged in the same trade or business as
such entity was engaged in as of the date of the
Agreement.
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2.12
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PUBLIC COMMON STOCK. The term
“Public Common Stock” means the class of equity
securities of Newco acquired by the public in a Newco
Transaction.
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2.13
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PURCHASER. The term
“Purchaser” means one or more third-parties
unaffiliated with the Company which acquire the Mat Jackup Rig
Assets in a Sale of Assets.
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2.14
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SALE OF ASSETS. The term “Sale
of Assets” shall refer to a transaction or series of
transactions consummated prior to the Newco Transaction Date in
which the Company sells or otherwise transfers to one or more
third-parties unaffiliated with the Company all or substantially
all of the Mat Jackup Rig Assets.
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2.15
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TERMINATION. The term
“Termination” shall mean termination of the employment
of Employee with the Company (including by reason of Constructive
Termination) for any reason other than (i) Cause,
(ii) Voluntary Resignation, or (iii) death.
Notwithstanding any provision hereof to the contrary, the Company
shall have the right to terminate Employee’s employment at
any time during the Employment Period, as defined below (including
any extended term), and the Company has no obligation to deliver
advance notice of termination. No Termination shall be deemed to
occur solely due to an assignment and novation of the Agreement
pursuant to Section 6.09.
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2.16
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VOLUNTARY RESIGNATION. The term
“Voluntary Resignation” means any termination of
employment by Employee for any reason other than a Constructive
Termination.
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3.01
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EMPLOYMENT. Except as otherwise
provided in the Agreement, the Company hereby agrees to continue
Employee in its employ, and Employee hereby agrees to remain in the
employ of the Company, for the Employment Period. During the
Employment Period, Employee shall exercise such position and
authority and perform such responsibilities as are commensurate
with the position to which he is assigned and as directed by
(i) the Chief Executive Officer of Pride International, Inc.
prior to a Newco Transaction, (ii) the Board of Directors of
Newco after a Newco Transaction, or (iii) the Chief Executive
Officer or Board of Directors of the Purchaser as designated by the
Purchaser after a Sale of Assets. The office, position and title
for which Employee is initially employed is that of Chief Executive
Officer — Mat Jackup Division of the Company (and simply the
Chief Executive Officer after a Newco Transaction). Employee and
the Company agree that the Company may re-assign Employee to
another office, position and/or title, subject to Employee’s
rights under Section 2.04.
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3.02
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BEST EFFORTS AND OTHER EMPLOYMENT
OBLIGATIONS OF EMPLOYEE; BUSINESS EXPENSES; AND OFFICE AND OTHER
SERVICES.
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a.
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Employee 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 terms hereof.
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b.
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Employee 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 Employee performed for the
Company. Such employment shall be considered “full
time” employment. Employee shall also have the right to
devote such incidental and immaterial amounts 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.
Notwithstanding the foregoing, it shall not be a violation of the
Agreement for Employee to (i) serve on corporate, civic or
charitable boards or committees, (ii) deliver lectures,
fulfill speaking engagements or teach at educational institutions
and (iii) manage personal investments, so long as such
activities do not significantly interfere with the performance of
Employee’s responsibilities hereunder. Employee shall have
the right to make investments in any business provided such
investment does not result in a violation of Article V of the
Agreement.
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c.
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Employee acknowledges and agrees
that Employee owes a fiduciary duty to the Company. In keeping with
these duties, Employee shall make full disclosure to the Company of
all business opportunities pertaining to the
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Company’s business and shall
not appropriate for Employee’s own benefit business
opportunities concerning the subject matter of the fiduciary
relationship.
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d.
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Employee shall not intentionally
take any action which he 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 FCPA, as the FCPA may hereafter be amended, and/or
its successor statutes.
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e.
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During the employment relationship
and after the employment relationship terminates, Employee agrees
to refrain from any disparaging comments about the Company, any
affiliates, or any current or former officer, director or employee
of the Company or any affiliate, and Employee agrees not to take
any action, or assist any person in taking any other action, that
is materially adverse to the interests of the Company or any
affiliate or inconsistent with fostering the goodwill of the
Company and its affiliates; provided, however , that nothing
in the Agreement shall apply to or restrict in any way the
communication of information by Employee to any state or federal
law enforcement agency or require notice to the Company thereof,
and Employee will not be in breach of the covenant contained above
solely by reason of his testimony which is compelled by process of
law. The Company and its affiliates, officers, directors, and
authorized representatives and agents agree to refrain from any
disparaging comments about Employee; provided, however ,
that nothing in the Agreement shall apply to or restrict in any way
the communication of information by the Company and its affiliates,
officers, directors, and authorized representatives and agents to
any state or federal law enforcement agency or require notice to
Employee thereof, and the Company and its affiliates, officers,
directors, and authorized representatives and agents will not be in
breach of the covenant contained above solely by reason of
testimony which is compelled by process of law.
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f.
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During the Employment Period,
Employee shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by Employee in accordance with the
most favorable policies, practices and procedures of the Company as
in effect from time to time. Such reimbursement shall be made
subject to the terms and conditions of the Company’s policy
on the earlier of (i) the date specified in the
Company’s policy or (ii) to the extent the reimbursement
is taxable and subject to Section 409A (as defined in Section
6.02), no later than December 31 of the calendar year next
following the calendar year in which the expense was
incurred.
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g.
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During the Employment Period, the
Company shall furnish Employee with office space, secretarial
assistance and such other facilities and services as
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shall be suitable to
Employee’s position and adequate for the performance of
Employee’s duties hereunder.
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3.03
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TERM OF EMPLOYMENT. The term of
Employee’s employment for purposes of the Agreement will
commence on the Employment Date and be for a term ending at 12:00
o’clock midnight on the third anniversary of the Employment
Date (the “Employment Period”). On the second
anniversary of the Employment Date, and each anniversary
thereafter, the Employment Period will be automatically extended
for successive terms of one (1) year; provided, however
, that the Company or Employee may give written notice to the other
that the Agreement will not be renewed or continued after the next
scheduled expiration date which is not less than one (1) year
after the date that the notice of non-renewal was given.
Notwithstanding the above, the Employment Period will expire upon
Employee’s termination of employment for any reason including
Termination, death, Cause or Voluntary Resignation. Employee agrees
to provide thirty (30) days written notice of any Voluntary
Resignation. Immediately upon termination of employment with the
Company, Employee agrees to resign from all officer and director
positions held with the Company and its affiliates.
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3.04
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COMPENSATION AND BENEFITS. During
the Employment Period Employee shall receive the following
compensation and benefits:
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a.
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Employee will receive an annual base
salary of not less than $625,000.00, with the opportunity for
increases, from time to time thereafter, which are in accordance
with the Company’s regular executive compensation practices
(such salary, as in effect from time to time, the “Annual
Base Salary”). The Board will review the Annual Base Salary
at least annually.
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b.
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Employee shall be eligible to
participate in an annual bonus plan at a target bonus award level
of no less than 100% of Annual Base Salary and at a maximum bonus
award level of 200% of Annual Base Salary, it being understood that
the performance criteria and actual bonus awards are determined by
the Company in its discretion and bonus amounts are not guaranteed.
Notwithstanding the foregoing, in lieu of a bonus under the annual
bonus plan for 2008, Employee will be entitled to a guaranteed
bonus of 100% of Annual Base Salary pro-rated for the number of
days from the Employment Date through December 31, 2008, which
shall be payable no later than March 15, 2009 subject to
Employee’s continued employment with the Company through
December 31, 2008.
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c.
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Employee will be entitled to
participate in employee welfare and qualified plans (including, but
not limited to, 401(k), life, health, accident and disability
insurance and disability benefits), and to receive perquisites, to
the extent offered by the Company generally to its senior vice
presidents.
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d.
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Employee will receive paid vacation
days each year to the same extent as provided to executives with
comparable duties, in accordance with Company policy and practices,
but not less than five (5) weeks per year.
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e.
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Subject to Sections 3.05d, 3.06
and 3.07, Employee shall be eligible to receive an equity award,
effective as of the Newco Transaction Date (the “Equity
Award”). The value of the Equity Award (the “Equity
Value”) shall be determined in accordance with the provisions
of Exhibit A. The Equity Award shall be comprised of 50%
options to acquire Public Company Stock and 50% restricted stock
units of Public Company Stock. For purposes of apportioning the
Equity Award, the stock options shall be valued by the Board using
a binomial option pricing model based on the volatility of the Peer
Group and an exercise price equal to the volume-weighted average
price of the Public Company Stock on the Newco Transaction Date
(“VWAP”), and the restricted stock units shall be
valued based on VWAP. Awarded restricted stock units shall vest,
and the options shall become exercisable, (a) in three
installments of one-third of the underlying shares on the Newco
Transaction Date and one-third of the underlying shares on each of
the next two anniversaries of the Newco Transaction Date, provided
that Employee continues to be employed by Newco on the vesting
dates, (b) in full on the Change in Control of Newco,
(c) in full upon termination of Employee’s employment
with Newco by reason of death or Disability, and (d) in full on a
Termination of Employee. The option shall be subject to expiration
on the earlier of (i) the tenth anniversary of the date of
grant, (ii) 60 days after Employee’s Termination or
Voluntary Resignation, (iii) one year after Employee’s
termination of employment due to death, or (iv) the date of
termination of employment for Cause. For purposes of this
Section 3.04e, “Disability” shall mean a
disability in accordance with Treasury Regulation §
1.409A-3(i)(4).
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3.05
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TERMINATION WITHOUT CHANGE IN
CONTROL. Notwithstanding anything herein to the contrary, the
Company shall have the right to terminate Employee’s
employment at any time during the Employment Period (including any
extended term). In the event of any Termination that does not
entitle Employee to payments and benefits under Section 3.06,
Section 3.07 or Article IV, the Company shall, sixty
(60) days following such Termination, or at such other time(s)
specified in this Section 3.05 or Section 6.02, and in
exchange for a full and complete release of claims against the
Company, its affiliates, officers and directors
(“Release”), pay or provide to Employee (or his
designee or estate, as determined under Section 6.09, in the
event of death after Termination and prior to satisfaction of the
Company’s obligations in this Section 3.05):
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a.
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An
amount equal to two (2) full years of his Annual Base Salary
in effect on the date of Termination.
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b.
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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, health insurance coverage which is comparable to that
provided to similarly situated active executives at a cost to
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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c.
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An
amount equal to two (2) times the target bonus award for
Employee under the Company’s annual bonus plan for the fiscal
year in which Termination occurs; provided, however , that
if the Company has not specified a target award for such year, the
prior year’s target will be used, and, if none, the amount
will be equal to one hundred percent (100%) of Employee’s
Annual Base Salary.
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d.
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If
the Termination is after the Newco Transaction Date, the Equity
Award shall be fully vested. If the Termination is prior to the
Newco Transaction Date, the Equity Award shall not be granted,
Employee shall have no right to the Equity Award, and the Company
shall have no obligation to grant the Equity Award.
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e.
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The
“Compensation and Benefits” Section hereof shall be
applicable in determining the payments and benefits due Employee
under this Section and if Termination occurs after a reduction in
all or part of Employee’s total compensation or benefits, the
lump sum severance allowance and other compensation and benefits
payable to him pursuant to this Section shall be based upon his
compensation and benefits before the reduction, except for any
reduction permitted under Section 2.04b.
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f.
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The
Company’s obligation under this Section to continue to pay or
provide health insurance coverage 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. Apart from this subparagraph, Employee shall have
and be subject to no obligation to mitigate.
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Notwithstanding any provision herein
to the contrary, if Employee has not delivered to the Company an
executed Release on or before the fiftieth (50th) day after the
date of Termination, Employee shall forfeit all of the payments and
benefits described in this Section 3.05.
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A
sample form of Release is attached as Exhibit B .
Employee acknowledges that the Company retains the right to modify
the required form of the Release as the Company reasonably deems
necessary in order to effectuate a full and complete release of
claims related to Employee’s employment against the Company,
its
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affiliates, officers and directors
and to delay payment until timely execution of the Release without
revocation.
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For
the avoidance of doubt and to avoid duplication of benefits, 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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3.06
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TERMINATION FOLLOWING A SALE OF
ASSETS. If a Sale of Assets occurs, Employee shall have the rights
set forth below.
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a.
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If
a Sale of Assets occurs and (i) the Agreement is assigned and
novated to a Purchaser, and (ii) Employee has a Termination
prior to a Newco Transaction, then the Company shall pay or provide
to Employee all payments and benefits specified in
Section 3.05 at the same time and in the same manner therein
specified (including the condition of timely execution of a Release
and subject to Section 6.02) except that Employee shall
receive a cash amount equal to 50% of the Equity Value as of the
closing date of the Sale of Assets in lieu of the Equity Award
specified in Section 3.04e and in lieu of the benefit
specified in Section 3.05d (collectively, the “Asset
Sale Benefits”).
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b.
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If
a Sale of Assets occurs and (i) the Agreement is not assigned
and novated to a Purchaser, and (ii) Employee has a
Termination before the date that is six (6) months after the
closing date of the Sale of Assets, then the Company shall pay or
provide to Employee the Asset Sale Benefits at the same time and in
the same manner as provided in Section 3.06a (including the
condition of timely execution of a Release and subject to
Section 6.02).
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3.07
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NON-OCCURRENCE OF THE NEWCO
TRANSACTION. If a Newco Transaction does not occur prior to the
second anniversary of the Employment Date, Employee may voluntarily
terminate his employment at any time after the second anniversary
of the Employment Date and prior to a Newco Transaction (the
“Walk Right”), and the Company shall, in exchange for a
Release following such termination, pay or provide to Employee a
cash amount equal to 50% of the Equity Value as of the date of the
voluntary termination in lieu of any other compensation including,
without limitation, the Equity Award specified in
Section 3.04e and
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