Exhibit 10.4

PACIFIC DRILLING S.A.

NOTICE OF LONG TERM INCENTIVE CASH AWARD

(Executive Award)

Pacific Drilling S.A. (the “Company”) hereby grants you (the “Participant”) the
following Long Term Incentive Cash Award (the “Cash Award”).  The terms and
conditions of this Cash Award are set forth in this notice below.

Participant Name:

Employee Number:

Grant Name:

Issue Date:

Total Cash Award:

 

 

Vesting and Payment Schedule:

The Cash Award will vest as follows: (i) 33⅓% of the grant on the first
anniversary of the Issue Date (the “Initial Vesting Date”); (ii) 33⅓% of the
grant on the first anniversary of the Initial Vesting Date; and (iii) 33⅓% of
the grant on the second anniversary of the Initial Vesting Date. Except as
provided below, any termination of employment or separation of service prior to
vesting will result in forfeiture of any unvested portion of the Cash Award. In
the event of a Change of Control (as defined in the Company’s 2011 Omnibus Stock
Incentive Plan) the unvested Cash Awards will vest as follows: 50% of the
unvested Cash Award will become fully vested on the effective date of the Change
of Control with the remaining 50% of the unvested Cash Award continuing to vest
on the original vesting schedule, provided that, if you are terminated by your
employer without Cause (as defined below) or you terminate your employment for
Good Reason (as defined below) prior to the sixth month anniversary of such
Change of Control, any outstanding portion of the Cash Award shall vest and be
paid on the date your employment terminates. Notwithstanding the foregoing, no
payments will be triggered as a result of a Change of Control alone unless such
event also constitutes a “change in the ownership,” “change in effective
control,” and/or a “change in the ownership of a substantial portion of assets”
of the Company as those terms are defined under Treasury Regulation
§1.409A-3(i)(5), but only to the extent necessary to establish a time or form of
payment that complies with Section 409A, without altering the definition of
Change of Control for purposes of determining whether your rights to such Award
become vested or otherwise unconditional upon the Change of Control.

 

“Cause” shall mean: (i) your failure to substantially perform your material
duties owed to the Company or your employer, under any employment agreement
between you and the Company or your employer or otherwise (other than as a
result of incapacity due to physical or mental illness); (ii) your gross
negligence, fraud or willful misconduct in the course of your employment with
your employer that has a detrimental effect on the Company, your employer or any
of their Affiliates; (iii) your commission of any act or your failure to take
any act that the Company or your employer reasonably determines was intended by
you to injure the reputation, business, or business relationships of the
Company, your employer or any of their affiliates; (iv) your indictment of,
conviction of, or plea of guilty or nolo contendere to (A) any misdemeanor
involving moral turpitude, theft, unethical business conduct or

 

 

other conduct which could reflect in some material fashion unfavorably upon the
Company, your employer or any of their affiliates or (B) any felony (or the
equivalent of such misdemeanor or felony in a jurisdiction other than the United
States); (v) your material breach of any employment agreement between yourself
and your employer, including without limitation, any of the restrictive
covenants contained therein; or (vi) your intentional, material
misappropriation, embezzlement or misuse of funds or property belonging to the
Company, your employer or any of their Affiliates.

 

“Good Reason” shall mean: (i) A material diminution in your title, duties or
responsibilities, or the assignment to you of duties or responsibilities
inconsistent in any material respect with your title, duties and
responsibilities as set forth in any employment agreement between you and your
employer; (ii) A material reduction in your base salary, other than as part of
an across-the-board reduction in the salaries of other similarly situated
employees of the Company or your employer; (iii) Any reduction in the aggregate
compensation and benefits provided to you under any employment agreement between
you and your employer, other than any such reduction that is part of an
across-the-board reduction in aggregate compensation and benefits provided to
other similarly situated employees of the Company or your employer; or (iv) Any
material breach by your employer of any employment agreement between yourself
and your employer. Notwithstanding the foregoing, you shall not have the right
to terminate your employment hereunder for Good Reason unless (1) within 30 days
of the initial existence of the condition or conditions giving rise to such
right you provide written notice to the Company of the existence of such
condition or conditions, and (2) the Company fails to remedy such condition or
conditions within 30 days following the receipt of such written notice (the
“Cure Period”). If any such condition is not remedied within the Cure Period,
you must terminate your employment with the Company within a reasonable period
of time, not to exceed 30 days, following the end of the Cure Period.

Other Terms Applicable to the Cash Award

Administration; Amendment:  The Cash Award will be administered by the
Committee, which has the authority to interpret, administer, reconcile any
inconsistency in, correct any default in and supply any omission in, this notice
and make any other determination and take any other action that the Committee
deems necessary or desirable for the administration of the Cash Award. The
Committee may waive any conditions or rights under, or amend any terms of the
Cash Award, prospectively or retroactively; provided, however, that any such
waiver or amendment that would materially and adversely impair your rights will
not to that extent be effective without your consent. Except as otherwise
provided herein, all determinations, interpretations and other decisions under
or with respect to the Cash Award by the Committee shall be final, conclusive
and binding.

 

Tax Matters:  You will not receive your cash following the vesting of the Cash
Award unless you pay, or make acceptable arrangements to pay, any taxes required
to be withheld as a result of the vesting and payment of the award. You hereby
authorize withholding from payroll or any other payment due to you from the
Company or any Affiliate to satisfy any such withholding tax obligation. The
provisions of this notice are intended to comply with Section 409A of the Code,
and all such provisions shall be construed and interpreted accordingly. For
purposes of Section 409A of the Code, each payment made under this notice will
be treated as a separate payment. Notwithstanding any provision of this notice
to the contrary, if necessary to comply with the restriction in Section
409A(a)(2)(B) of the Code concerning payments to “specified employees” (as
defined in Section 409A of the Code) any payment on account of your separation
from service that would otherwise be due hereunder within six months after such
separation will be delayed until the first business day of the seventh month
following the date of your termination and the first such payment will include
the cumulative amount of any payments that would have been paid prior to such
date if not for such restriction. Notwithstanding anything contained herein to

 

 

 

 

 

the contrary, you will not be considered to have terminated employment with the
Company for purposes of this notice unless you would be considered to have
incurred a “separation from service” from the Company within the meaning of
Section 409A.

 

Miscellaneous:  The Company and its Affiliates reserves the right to terminate
your service at any time and for any reason without thereby incurring any
liability to you. You may not sell, transfer, pledge, exchange, hypothecate or
dispose of the Cash Award.

 

Governing Law:  The validity, construction and effect of this notice shall be
determined in accordance with the laws of the State of New York, without giving
effect to the conflict of laws provisions thereof.

 

By clicking “Agree” below, you acknowledge receipt of this Notice, and agree
that (a) you have carefully read, fully understand and agree to all of the terms
and conditions described in this Notice; (b) you understand and agree that  this
Notice, including any  attachments, constitutes the entire understanding between
you and the Company regarding this Cash Award, and that any prior agreements,
commitments or negotiations concerning this Cash Award are replaced and
superseded; (c) you have been given an opportunity to consult your own legal and
tax counsel with respect to all matters relating to this grant prior to agreeing
and that you have either consulted such counsel or voluntarily declined to
consult such counsel and (d) any tax liability or other adverse tax consequences
to you resulting from the grant or vesting of the Cash Award will be the
responsibility of, and will be borne entirely by, you.

In addition, by clicking “Agree” below you are consenting to receive documents
from the Company and Solium Capital Inc. or any future plan administrator (the
“Administrator”) by means of electronic delivery.  You agree that you have
received notice that delivery of the Notice of Long Term Incentive Cash Award,
and any other documents that the Company is required or desires to deliver to
you will be made electronically through the Administrator’s website or via the
most recent email account that the Company has on file for you at the time of
the document distribution.  If documents are posted to the Administrator’s
website rather than emailed directly to you, then the Company or the
Administrator will send you an email notifying you that a document or documents
have been posted and instruction on how to access those documents. You
understand that in order to view these documents you will need a connection to
the internet, you will need to log into your email and/or the Administrator’s
intranet page, and you will need to have internet web browsing software and
software that can process PDF documents, such as Adobe Reader, installed on the
computer you are using in order to view the documents being delivered to you.
 These programs and an internet connection are available on your workplace
computer.  If you are attempting to access these documents from your home
computer and you do not have access to this software, the Company will provide
you with free software and technical assistance in order to access the
documents.  The only cost to you of viewing the documents electronically should
be any charges you may incur for connection to the internet, to the extent you
do not access the documents from your work computer and you do not have access
to a free internet connection outside of work.

Pacific Drilling S.A.

SOCIÉTÉ ANONYME

8-10 Avenue de la Gare

L-1610 Luxembourg

By:

 

Title:

CEO