CHANGE OF CONTROL AGREEMENT

 

MEMORANDUM OF AGREEMENT made as of the 5th day of January, 2007.

BETWEEN:

TESCO CORPORATION

,

a corporation incorporated under the laws of the Province of Alberta, Canada

(hereinafter referred to as the "Corporation")

OF THE FIRST PART

- and -

Anthony Tripodo

an individual residing

in the City of Houston, State of Texas

(hereinafter referred to as the "Executive")

OF THE SECOND PART

WHEREAS the Corporation anticipates the valuable service that the Executive will
provide to the Corporation and believes that it is reasonable and fair that the
Executive receive appropriate treatment in the event of a Change of Control (as
hereinafter defined);

WHEREAS the Corporation further recognizes that the Executive will acquire
special skills relating to his extensive familiarity with the business of the
Corporation;

WHEREAS in the event of a Change of Control, there is a possibility that the
employment of the Executive would be terminated without cause or adversely
modified and the Executive has expressed concern in that regard to the
Corporation;

WHEREAS the Corporation has determined that it would be in the best interests of
the Corporation to induce the Executive to enter into an employment relationship
with the Corporation by providing that in the event of a Change of Control, the
Executive would have certain automatic and guaranteed rights; and

WHEREAS the Corporation and the Executive wish formally to agree to the terms
and conditions which will govern the termination or modification of the
employment of the Executive in the event of a Change of Control;

NOW THEREFORE in consideration for the premises hereof and of the mutual
covenants and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties, the parties hereby agree as follows:

 

    

    RECITALS

    The parties agree, and represent and warrant to each other, that the above
    recitals are true and accurate.

    

    INTERPRETATION

 1. The headings of the Articles and Sections herein are inserted for
    convenience of reference only and shall not affect the meaning or
    construction hereof.
    
 2. This Agreement shall be construed and interpreted in accordance with the
    laws of the State of Texas. Each of the parties hereby irrevocably attorns
    to the jurisdiction of the State and Federal courts located in Harris
    County, Texas with respect to any matters arising out of this Agreement.
    
 3. If any provision contained herein is determined to be void or unenforceable
    in whole or in part, it shall not be deemed to affect or impair the validity
    of any other provision herein and it shall be deemed to be severed from this
    Agreement without affecting the enforceability or validity of the remaining
    provisions of this Agreement. Each provision is deemed to be separate and
    distinct and all provisions, Articles, Sections and paragraphs of this
    Agreement are intended to be so severable.
    
 4. For the purposes of this Agreement, the following terms shall have the
    following meanings, respectively:
    
        "Annual Salary"
        means the base annual salary received by the Executive during the year
        in which the Change of Control occurs, plus any bonus that would be
        earned for such year based upon such annual salary, provided that the
        bonus for such year shall be calculated assuming that one hundred
        percent (100%) of any target for earning maximum bonus is achieved for
        the relevant year;
     a. "Change of Control" means:
        
         i.   the acceptance by the holders of shares of the Corporation,
              representing in the aggregate more than thirty-five percent (35%)
              of all issued and outstanding common shares of the Corporation, of
              any offer, whether by way of a take-over bid or otherwise, for all
              or any of the shares of the Corporation;
              
         ii.  the acquisition hereafter, by whatever means, of ownership or
              control of more than thirty-five percent (35%) in the aggregate of
              all issued and outstanding common shares of the Corporation by any
              companies and/or individuals acting in concert (any or all of the
              aforesaid hereinafter referred to as the control group);
              
         iii. the acquisition of ownership or control of less than thirty-five
              percent (35%) in the aggregate of all issued and outstanding
              common shares of the Corporation by any companies and/or
              individuals acting in concert whereby the voting of such shares
              allows and does result in the election by such companies and/or
              individuals of a majority of the directors of the Corporation or
              the assumption by such companies and/or individuals of the
              effective management of the Corporation;
              
         iv.  the making of any agreement by the Corporation to merge,
              consolidate or amalgamate, which causes the Corporation to be
              absorbed into another company; or
              
         v.   the sale by the Corporation of all or substantially all of the
              assets of the Corporation (other than to a wholly-owned subsidiary
              of the Corporation);
              
    
        "Date of Termination"
        shall mean the date of termination of the Executive's employment;
        "Disability"
        means any physical or mental incapacity, disease or affliction, as
        determined by a legally qualified medical practitioner selected by the
        Corporation which prevents the Executive to a substantial degree from
        performing his obligations.
        "Good Reason"
        shall include, without limitation, the occurrence within one year after
        the occurrence of a Change of Control of any of the following without
        the Executive's written consent (except in connection with the
        termination of the employment of the Executive for Just Cause or
        Disability):
        
        
         i.   a change which reduces the Executive's responsibilities in effect
              immediately prior to the Change of Control; or
              
         ii.  a reduction by the Corporation of the Executive's base annual
              salary, benefits or any other form of remuneration or any change
              in the basis upon which the Executive's salary, benefits or any
              other form of remuneration payable by the Corporation is
              determined and calculated; provided that base annual salary,
              benefits or such other remuneration may be reduced or the basis
              upon which they are calculated changed if the aggregate
              compensation to be received by the Executive provides the same
              overall economic benefit to the Executive;
              
         iii. the Corporation relocating the Executive to any place other than
              the location at which he performed his duties for the Corporation
              immediately prior to the Change of Control, except for required
              travel on the Corporation's business to an extent substantially
              consistent with the Executive's obligations immediately prior to
              the Change of Control;
              
         iv.  any failure by the Corporation to provide the Executive with the
              number of paid vacation days to which he was entitled immediately
              prior to the Change of Control or the Corporation failing to
              increase such paid vacation on a basis consistent with practices
              in effect immediately prior to the Change of Control or with
              practices implemented subsequent to the Change of Control with
              respect to the Senior executives of the Corporation, whichever is
              more favorable to the Executive; or
              
         v.   the failure by the Corporation to obtain, in a form satisfactory
              to the Executive, an effective assumption of its obligations under
              this Change of Control Agreement;
    
        "Just Cause"
        in connection with a termination by the Corporation, shall mean: (1)
        embezzlement or theft by the Executive of any property of the
        Corporation; (2) any breach by the Executive of any material provision
        of this Agreement; (3) any act by the Executive constituting a felony or
        otherwise involving theft, fraud, gross dishonesty or moral turpitude;
        (4) negligence or willful misconduct on the part of the Executive in the
        performance of his duties as an employee, officer or director of the
        Corporation; (5) The Executive's breach of his fiduciary obligations to
        the Corporation; or (6) any chemical dependence of the Executive which
        adversely affects the performance of his duties and responsibilities to
        the Corporation.

TERMINATION ON CHANGE OF CONTROL

If (1) the Executive's employment is terminated by the Corporation, other than
for Just Cause in the manner provided for in Section 6(b) of Executive's
employment agreement, Disability or death; (2) the Executive's employment is
terminated by the Executive for Good Reason, in either case within one year
prior to or after the occurrence of one of the events set forth in Section
2.04(b) of this Agreement; or (3) if the Executive's employment is terminated by
the Executive for any reason at his sole discretion within sixty (60) days after
the occurrence of any of the events set forth in Section 2.04(b) of this
Agreement, then:
 a. the Corporation shall pay the Executive within ten (10) days after the Date
    of Termination (or within such other reasonable period to effect tax
    planning at the request of the Executive) and to the extent permitted by
    law, a sum equal to two (2) times the Annual Salary;
    
 b. the Executive shall be reimbursed all expenses incurred by him prior to the
    Date of Termination;
    
 c. the Corporation shall pay for the return of the Executive to his ordinary
    place of residence in the event that the Executive is residing elsewhere for
    the purpose of carrying out his employment duties and provided that the
    Executive so returns within ninety (90) days of the Date of Termination;
    
 d. the Corporation shall continue to pay the appropriate premiums in respect of
    all rights and benefits under any life insurance, disability, medical and
    dental plans being provided by the Corporation to the Executive at the Date
    of Termination, to the extent permitted by the terms of the applicable
    policy, for a period of twenty-four (24) months from the Date of Termination
    or until the Executive secures alternative employment, whichever is shorter.
    If the Executive's participation in any such benefit plan is not permitted
    by the terms of the applicable policy, the Corporation shall arrange to
    provide the Executive with benefits substantially similar to those which the
    Executive is entitled to receive under such benefit plan or to pay to the
    Executive such amount which, after the deduction of any income tax payable
    by the Executive in respect of such payment, would enable the Executive to
    purchase substantially similar coverage on an individual basis during such
    period; and
    
 e. all club memberships or similar perquisites held in the Corporation's name
    for the Executive's benefit at the Date of Termination shall be transferred
    to the Executive at no cost to the Executive and all related annual and
    other mandatory user fees which have been fully paid or pre-paid by the
    Corporation may be retained without reimbursement by the Executive.
    

Except as otherwise provided in Section 3.01, the benefits payable pursuant to
this Article shall not be reduced in any respect in the event the Executive
shall secure or shall not reasonably pursue alternative employment following the
termination of the Executive's employment.

NO CHANGE TO EXISTING EMPLOYMENT RELATIONSHIP

Nothing in this Agreement shall alter the terms and conditions of the
Executive's employment with the Corporation except in the event of a Change of
Control.

RELEASES AND PRE-PAYMENT OF DEBT

In order to receive any payments pursuant to this Agreement, the Executive shall
first be required to repay any amounts then due and owing by the Executive to
the Corporation, and the Executive shall be required to execute a Release in a
form satisfactory to the Corporation which releases the Corporation of any
claims which the Executive may have as against the Corporation with respect to
the termination of the Executive's employment.

ACCELERATION OF OPTIONS

Notwithstanding the provision of any agreement to the contrary, in the event of
a Change of Control, the Corporation shall, subject to necessary regulatory
approvals (which shall be vigorously pursued by the Corporation) cause all of
the Executive's existing unvested stock options or other Long Term Incentive
Plan awards to be accelerated and vested immediately upon the Change of Control.

STATUTORY DEDUCTIONS

The obligation of the Corporation to make any payment hereunder shall, in each
case, be subject to any and all withholdings and deductions required by law to
be made by the Corporation.

GENERAL

The Executive shall not be prohibited from obtaining re-employment of any type
after his termination.
The Executive agrees that after termination of his employment by him, he will
tender his resignation from any position he may hold as an officer or director
of the Corporation or any of its affiliated or associated companies.
If a Change of Control occurs, the Corporation agrees to pay, to the full extent
permitted by law, all legal fees and expenses to a maximum of fifty thousand
dollars ($50,000.00) which the Executive, the Executive's legal representatives
or the Executive's family may reasonably incur arising out of or in connection
with any litigation concerning the validity or enforceability of any provision
of this Agreement, or any action by the Executive, the Executive's legal
representatives or the Executive's family to enforce his or their rights under
this Agreement regardless of the outcome of such litigation, and the Corporation
agrees to pay interest, compounded quarterly, on the total unpaid amount payable
under this Agreement until such amount is fully paid, such interest to be
calculated at a rate equal to two percent (2%) in excess of the prime commercial
lending rate announced from time to time by J.P. Morgan Chase Bank or its
successor during the period of such nonpayment.
This Agreement shall inure to the benefit of and be binding upon the Executive
and his heirs, executors and administrators and upon the Corporation and its
successors and assigns. In the event of any inconsistency between this Agreement
and the Employment Agreement between the Executive and the Corporation, the
terms of this Agreement shall govern. Neither party can waive or shall be deemed
to have waived any right set out in this Agreement except to the extent that
such waiver is in writing.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.

TESCO CORPORATION

       

Per:

/s/ Julio Quintana

 

Julio Quintana

President and Chief Executive Officer

Per:

/s/ James A. Lank

 

James Lank

General Counsel and Corporate Secretary

         

/s/ Anthony Tripodo

Anthony Tripodo