Exhibit 10.4
Form Stock Option Award (with additional provisions)
PRIDE INTERNATIONAL, INC.
2007 LONG-TERM INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
          This option agreement (“Option Agreement” or “Agreement”) executed
between PRIDE INTERNATIONAL, INC. (the “Company”), and                      (the
“Optionee”), an employee of the Company or one of its Subsidiaries, regarding a
right (the “Option”) awarded to the Optionee on                      (the “Grant
Date”) to purchase from the Company up to but not exceeding in the aggregate
______ shares of Common Stock (as defined in the Pride International, Inc. 2007
Long-Term Incentive Plan (the “Plan”)) at $___.___ per share (the “Grant
Price”), such number of shares and such price per share being subject to
adjustment as provided in the Plan, and further subject to the following terms
and conditions:
          1. Relationship to Plan and Employment Agreement.
          This Option is subject to all of the terms, conditions and provisions
of the Plan and administrative interpretations thereunder, if any, which have
been adopted by the Committee and are in effect on the date hereof. Except as
defined herein, capitalized terms shall have the same meanings ascribed to them
under the Plan. In addition, the parties agree that notwithstanding any
provision herein to the contrary, this Agreement shall be deemed modified by the
provisions of any employment agreement between the Optionee and the Company, and
vesting of this Award shall occur in the event stock options and other awards
specifically vest under such employment agreement. For purposes of this Option
Agreement:
          (a) “Disability” has the meaning set forth in
Section 1.409A-3(i)(4)(A) of the Treasury Regulations and shall be determined by
the Committee in its sole discretion.
          (b) “Early Retirement” means the Optionee’s termination of Employment
on or after the date the Optionee has (i) attained age 55 and (ii) completed
15 years of continuous Employment (measured from the Optionee’s last date of
hire by the Company or any of its Subsidiaries).
          (c) “Employment” means employment with the Company or any of its
Subsidiaries.
          (d) “Exchange Act” means the Securities Exchange Act of 1934, as
amended.
          (e) “Option Shares” means the shares of Common Stock covered by this
Option Agreement.
          (f) “Retirement” means the Optionee’s termination of Employment on or
after attainment of age 65, or, if applicable to the Optionee, any earlier age
specified as the Optionee’s Normal Retirement Age under the Pride International,
Inc. Supplemental Executive Retirement Plan.

 

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          2. Exercise Schedule.
          (a) This Option may be exercised in installments in accordance with
the following schedule:

              Additional Percentage of Option
Date Vested
  Shares Available for Purchase
First anniversary of the Grant Date
    33 1/3 %
Second anniversary of the Grant Date
    33 1/3 %
Third anniversary of the Grant Date
    33 1/3 %
 
    100 %

          Except as provided in subparagraph (c) below, the Optionee must be in
continuous Employment from the Grant Date through the date of exercisability in
order for the Option to become exercisable with respect to additional shares of
Common Stock on such date.
          (b) This Option shall become fully exercisable, irrespective of the
limitations set forth in subparagraph (a) above, provided that the Optionee has
been in continuous Employment since the Grant Date, upon the occurrence of:
     (i) a Change in Control;
     (ii) the Optionee’s Disability;
     (iii) the Optionee’s termination of Employment by reason of death; or
                (iv) upon the Optionee’s Termination (as defined in the
Optionee’s employment agreement with the Company and as in effect as of
      the Grant Date).
          (c) If Optionee’s termination of Employment is due to Retirement, this
Option shall continue to become exercisable in accordance with the schedule
identified in subparagraph (a) above as if the Optionee had remained in
Employment until expiration of the Option.
          (d) To the extent the Option becomes exercisable, such Option may be
exercised in whole or in part (at any time or from time to time, except as
otherwise provided herein) until expiration of the Option pursuant to the terms
of this Agreement or the Plan.
          3. Termination of Option
          The Option hereby granted shall terminate and be of no force and
effect with respect to any shares of Common Stock not previously purchased by
the Optionee at the earliest time specified below:
          (a) the tenth anniversary of the Grant Date;
          (b) if Optionee’s Employment is terminated by the Company or a
Subsidiary for serious misconduct (as determined by the Committee) at any time
after the Grant Date, then the Option shall terminate immediately upon such
termination of Optionee’s Employment;

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          (c) if Optionee’s Employment is terminated for any reason other than
death, Early Retirement, Retirement, Disability or serious misconduct, then the
Option shall terminate on the first business day following the expiration of the
120-day period which began on the date of termination of Optionee’s Employment;
          (d) if Optionee’s Employment is terminated due to (i) death at any
time after the Grant Date and while in the employ of the Company or its
Subsidiaries or within 60 days after termination of such Employment or
(ii) Disability at any time after the Grant Date, then the Option shall
terminate on the first business day following the expiration of the one-year
period which began on the date of Optionee’s death, Retirement or Disability, as
applicable;
          (e) if Optionee’s Employment is terminated due to Early Retirement or
Retirement, then the Option shall terminate on the first business day following
the expiration of the three-year period which began on the date of Optionee’s
Early Retirement or Retirement, as applicable; or
          (f) in the event Optionee has a Change in Control Termination (as
defined in Optionee’s employment agreement with the Company and as in effect as
of the Grant Date) then the Option shall terminate on the later of (i) the date
that is two years after the date of the Change in Control or (ii) the date that
is 120 days after the date of Optionee’s Change in Control Termination.
          Except as provided in Section 2(c) hereof, in any event in which the
Option remains exercisable for a period of time following the date of
termination of Optionee’s Employment, the Option may be exercised during such
period of time only to the extent it was exercisable as provided in Section 2 on
such date of termination of Optionee’s Employment. Except as provided in Section
2(c) hereof, the portion of the Option not exercisable upon termination shall
terminate and be of no force and effect upon the date of the Optionee’s
termination of Employment.
          4. Exercise of Option
          Subject to the limitations set forth herein and in the Plan, this
Option may be exercised by written notice provided to the Company as set forth
in Section 5. Such written notice shall (a) state the number of shares of Common
Stock with respect to which the Option is being exercised, (b) be accompanied by
cash or shares of Common Stock (not subject to limitations on transfer) or a
combination of cash and Common Stock payable to Pride International, Inc. in the
full amount of the purchase price for any shares of Common Stock being acquired
and (c) be accompanied by cash or Common Stock in the full amount of all federal
and state withholding or other employment taxes applicable to the taxable income
of such Optionee resulting from such exercise (or instructions to satisfy such
withholding obligation by withholding Option Shares in accordance with
Section 8); provided, however, that any shares of Common Stock delivered in
payment of the option price that are or were the subject of an award under the
Plan must be shares that the Optionee has owned for a period of at least six
months prior to the date of exercise. For the purpose of determining the amount,
if any, of the purchase price satisfied by payment in Common Stock, such Common
Stock shall be valued at its Fair Market Value on the date of exercise.

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          Notwithstanding anything to the contrary contained herein, the
Optionee agrees that he will not exercise the option granted pursuant hereto,
and the Company will not be obligated to issue any option shares pursuant to
this Option Agreement, if the exercise of the Option or the issuance of such
shares would constitute a violation by the Optionee or by the Company of any
provision of any law or regulation of any governmental authority or any stock
exchange or transaction quotation system. The Optionee agrees that, unless the
options and shares covered by the Plan have been registered pursuant to the
Securities Act of 1933, as amended (the “Act”), the Company may, at its
election, require the Optionee to give a representation in writing in form and
substance satisfactory to the Company to the effect that he is acquiring such
shares for his own account for investment and not with a view to, or for sale in
connection with, the distribution of such shares or any part thereof.
          If any law or regulation requires the Company to take any action with
respect to the shares specified in such notice, the time for delivery thereof,
which would otherwise be as promptly as possible, shall be postponed for the
period of time necessary to take such action.
          5. Notices
          Notice of exercise of the Option must be made in the following manner,
using such forms as the Company may from time to time provide:
          (a) by registered or certified United States mail, postage prepaid, to
Pride International, Inc., Attn: Corporate Secretary, 5847 San Felipe,
Suite 3300, Houston, Texas 77057, in which case the date of exercise shall be
the date of mailing; or
          (b) by hand delivery or otherwise to Pride International, Inc., Attn:
Corporate Secretary, 5847 San Felipe, Suite 3300, Houston, Texas 77057, in which
case the date of exercise shall be the date when receipt is acknowledged by the
Company.
          Notwithstanding the foregoing, in the event that the address of the
Company is changed prior to the date of any exercise of this Option, notice of
exercise shall instead be made pursuant to the foregoing provisions at the
Company’s current address.
          Any other notices provided for in this Agreement or in the Plan shall
be given in writing and shall be deemed effectively delivered or given upon
receipt or, in the case of notices delivered by the Company to the Optionee,
five days after deposit in the United States mail, postage prepaid, addressed to
the Optionee at the address specified at the end of this Agreement or at such
other address as the Optionee hereafter designates by written notice to the
Company.
          6. Assignment of Option
          Subject to the approval of the Committee, in its sole discretion, the
Option may be transferred by the Optionee to (i) the children or grandchildren
of the Optionee (“Immediate Family Members”), (ii) a trust or trusts for the
exclusive benefit of such Immediate Family Members (“Immediate Family Member
Trusts”) or (iii) a partnership or partnerships in which such Immediate Family
Members have at least 99% of the equity, profit and loss interests (“Immediate
Family Member Partnerships”). Subsequent transfers of transferred Options shall
be prohibited except by will or the laws of descent and distribution, unless
such transfers are made to the original Optionee or a person to whom the
original Optionee could have made a

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transfer in the manner described herein. No transfer shall be effective unless
and until written notice of such transfer is provided to the Committee, in the
form and manner prescribed by the Committee. Following transfer, any such
Options shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer, and, except as otherwise provided
herein, the term Optionee shall be deemed to refer to the transferee.
          After the death of the Optionee, exercise of the Option shall be
permitted only by the Optionee’s executor or the personal representative of the
Optionee’s estate (or by his assignee, in the event of a permitted assignment)
and only to the extent that the option was exercisable on the date of the
Optionee’s death.
          7. Stock Certificates
          Certificates representing the Common Stock issued pursuant to the
exercise of the Option will bear all legends required by law and necessary or
advisable to effectuate the provisions of the Plan and this Option. The Company
may place a “stop transfer” order against shares of the Common Stock issued
pursuant to the exercise of this Option until all restrictions and conditions
set forth in the Plan or this Agreement and in the legends referred to in this
Section 7 have been complied with.
          8. Withholding
          No certificates representing shares of Common Stock purchased
hereunder shall be delivered to or in respect of an Optionee unless the amount
of all federal, state and other governmental withholding tax requirements
imposed upon the Company with respect to the issuance of such shares of Common
Stock has been remitted to the Company or unless provisions to pay such
withholding requirements have been made to the satisfaction of the Committee.
The Committee may make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in connection with this
Option. The Optionee may pay all or any portion of the taxes required to be
withheld by the Company or paid by the Optionee in connection with the exercise
of all or any portion of this Option by delivering cash, or, with the
Committee’s approval, by electing to have the Company withhold shares of Common
Stock, or by delivering previously owned shares of Common Stock, having a Fair
Market Value equal to the amount required to be withheld or paid. The Optionee
may only request withholding Option Shares having a Fair Market Value equal to
the statutory minimum withholding amount. The Optionee must make the foregoing
election on or before the date that the amount of tax to be withheld is
determined. If the Optionee is subject to the short-swing profits recapture
provisions of Section 16(b) of the Exchange Act, any such election shall be
subject to such other restrictions as may be established by the Committee in
order that satisfaction of withholding tax obligations with shares of Common
Stock might be exempt from the operation of Section 16(b) of the Exchange Act in
whole or in part.
          9. Shareholder Rights
          The Optionee shall have no rights of a shareholder with respect to
shares of Common Stock subject to the Option unless and until such time as the
Option has been exercised and ownership of such shares of Common Stock has been
transferred to the Optionee.

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          10. Successors and Assigns
          This Agreement shall bind and inure to the benefit of and be
enforceable by the Optionee, the Company and their respective permitted
successors and assigns (including personal representatives, heirs and legatees),
except that the Optionee may not assign any rights or obligations under this
Agreement except to the extent and in the manner expressly permitted herein.
          11. No Employment Guaranteed
          No provision of this Option Agreement shall confer any right upon the
Optionee to continued Employment.
          12. Governing Law
          This Option Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of Texas.
          13. Amendment
          This Agreement cannot be modified, altered or amended except by an
agreement, in writing, signed by both the Company and the Optionee.

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