exv10w5






Exhibit 10.5




PRIDE INTERNATIONAL, INC.




AMENDED AND RESTATED EMPLOYMENT/

NON-COMPETITION/CONFIDENTIALITY AGREEMENT




RANDALL D. STILLEY




 









 





AMENDED AND RESTATED EMPLOYMENT/

NON-COMPETITION/CONFIDENTIALITY AGREEMENT




	 	 	 
	DATE:
	 	The date of execution set forth below.
	 
	 	 
	COMPANY/EMPLOYER:
	 	Pride International, Inc.,
	 
	 	a Delaware corporation
	 
	 	5847 San Felipe, Suite 3300 
	 
	 	Houston, Texas  77057
	 
	 	 
	EMPLOYEE:
	 	Randall D. Stilley
	 
	 	2232 Stanmore Drive
	 
	 	Houston, Texas 77019






          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.




PREAMBLE




          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:




AGREEMENT





	I.	 	PRIOR AGREEMENTS/CONTRACTS
	 
	 	 	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	 	 	As of October 29, 2008, the Prior Agreement is hereby amended, modified and superseded by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.
	 
	II.	 	DEFINITION OF TERMS
	 
	 	 	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.






	 	2.01	 	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.
	 
	 	2.02	 	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:






	 	a.	 	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;
	 
	 	b.	 	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;
	 
	 	c.	 	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
	 
	 	d.	 	the Company shall have sold, transferred or exchanged all, or
substantially all, of its assets to another corporation or other entity or
person.






	 	 	 	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.”
	 
	 	2.03	 	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.
	 
	 	2.04	 	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:






	 	a.	 	Employee’s resignation or retirement is requested by the
Company other than for Cause;
	 
	 	b.	 	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;
	 
	 	c.	 	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;
	 
	 	d.	 	The material breach by the Company of any provision of the
Agreement;
	 
	 	e.	 	Any requirement of the Company that Employee relocate more than
50 miles from downtown Houston, Texas, unless Employee recommended the
relocation; or
	 
	 	f.	 	Failure of the Company to assign and novate the Agreement to a
Purchaser as provided in Section 6.09b.






	 	 	 	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.
	 
	 	2.05	 	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.
	 
	 	2.06	 	EMPLOYMENT DATE. Employee’s initial date of active employment, which was
September 22, 2008.
	 
	 	2.07	 	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).
	 
	 	2.08	 	NEWCO. The term “Newco” means the entity formed to hold, directly or
indirectly, all or substantially all of the Mat Jackup Rig Assets.
	 
	 	2.09	 	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.
	 
	 	2.10	 	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.
	 
	 	2.11	 	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.
	 
	 	2.12	 	PUBLIC COMMON STOCK. The term “Public Common Stock” means the class of equity
securities of Newco acquired by the public in a Newco Transaction.
	 
	 	2.13	 	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.
	 
	 	2.14	 	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.
	 
	 	2.15	 	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.
	 
	 	2.16	 	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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	III.	 	EMPLOYMENT






	 	3.01	 	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.
	 
	 	3.02	 	BEST EFFORTS AND OTHER EMPLOYMENT OBLIGATIONS OF EMPLOYEE; BUSINESS EXPENSES;
AND OFFICE AND OTHER SERVICES.






	 	a.	 	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.
	 
	 	b.	 	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.
	 
	 	c.	 	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.
	 
	 	d.	 	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.
	 
	 	e.	 	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.
	 
	 	f.	 	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.
	 
	 	g.	 	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.






	 	3.03	 	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.
	 
	 	3.04	 	COMPENSATION AND BENEFITS. During the Employment Period Employee shall receive
the following compensation and benefits:






	 	a.	 	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.
	 
	 	b.	 	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.
	 
	 	c.	 	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.	 	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.
	 
	 	e.	 	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).






	 	3.05	 	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):






	 	a.	 	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.	 	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.
	 
	 	c.	 	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.
	 
	 	d.	 	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.
	 
	 	e.	 	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.
	 
	 	f.	 	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.






	 	 	 	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.
	 
	 	 	 	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.
	 
	 	 	 	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.
	 
	 	3.06	 	TERMINATION FOLLOWING A SALE OF ASSETS. If a Sale of Assets occurs, Employee
shall have the rights set forth below.






	 	a.	 	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”).
	 
	 	b.	 	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).






	 	3.07	 	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 the benefits specified in Section 3.05. Notwithstanding
any provision herein to the contrary, if Employee exercises the Walk Right after an
Asset Sale and assignment and novation of the Agreement to a Purchaser, Employee shall
be entitled to the Asset Sale Benefits, if greater. The cash compensation payable
pursuant to this Section 3.07 shall be paid on the date that is sixty (60) days after
Employee’s termination, subject to Section 6.02; provided, however, that if Employee
has not delivered to the Company an executed Release




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	 	 	 	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 3.07.
	 
	 	3.08	 	PAYMENT OF BENEFITS UPON TERMINATION FOR CAUSE. If the termination of Employee
is for Cause, the Company will have the right to withhold all payments other than what
is accrued and owing with respect to base salary, unreimbursed reasonable business
expenses and under the terms of any employee benefit plan maintained by the Company.






	IV.	 	CHANGE IN CONTROL






	 	4.01	 	TERMINATION AFTER CHANGE IN CONTROL OF PRIDE INTERNATIONAL, INC. If, prior to
a Newco Transaction or a Sale of Assets, Employee has a Termination within one (1) year
after the date of a Change in Control of Pride International, Inc., Employee will
receive all payments and benefits specified in Section 3.05 hereof 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 as amended and modified below:






	 	a.	 	The salary specified in Section 3.05a will be paid based upon a
multiple of three (3) years (instead of two (2) years).
	 
	 	b.	 	Health insurance specified in Section 3.05b will be provided
until (i) Employee becomes reemployed and receives similar benefits from a new
employer or (ii) three (3) years after the date of the Termination, whichever
is earlier.
	 
	 	c.	 	An amount equal to three (3) times the target bonus award
specified in Section 3.05c hereof.
	 
	 	d.	 	A cash amount equal to 50% of the Equity Value as of the Change
in Control in lieu of the Equity Award specified in Section 3.04e and in lieu
of the benefit specified in Section 3.05d.
	 
	 	e.	 	All other rights and benefits specified in Section 3.05.






	 	4.02	 	TERMINATION AFTER CHANGE IN CONTROL OF NEWCO. If, after a Newco Transaction,
Employee has a Termination within two (2) years after the date of a Change in Control
of Newco, Employee will receive all payments and benefits specified in Section 4.01
hereof 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, in
lieu of the cash payment specified in Section 4.01d, the Equity Award shall be fully
vested.






	V.	 	NON COMPETITION AND PROTECTION OF CONFIDENTIAL INFORMATION






	 	5.01	 	CONSIDERATION. The Company promises to provide Employee with the Company’s
trade secrets and other confidential information, along with personal




12









 






	 	 	 	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.






	 	a.	 	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 V 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.
	 
	 	b.	 	In addition to the consideration described in Section 5.01a,
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 3.05 and Section 3.07, as applicable, shall constitute
additional consideration for the non-competition and confidentiality agreements
set forth herein.






	 	5.02	 	NON-COMPETITION. In exchange for the consideration described above in Section
5.01, Employee agrees that during his employment with the Company and for a period of
two (2) years after he is no longer employed by the Company (unless (i) Employee is
terminated after a Change in Control with the right to payments and benefits under
Article IV or (ii) Employee is terminated pursuant to Section 3.06, in which events
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:






	 	a.	 	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 in Section 5.02(e) and (ii) actually competes with the Company; or
	 
	 	b.	 	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
three (3) 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 three (3) years preceding such 




13









 






	 	 	 	termination from whom the
Company had solicited business during such three (3) years; or
	 
	 	c.	 	actively 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
	 
	 	d.	 	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 services of any officer, director,
employee or any other individual holding a position with the Company within two
(2) years after the date of termination of employment of Employee with the
Company or within two (2) years after such officer, director, employee or
individual terminated employment with the Company, whichever period expires
earlier.
	 
	 	e.	 	The geographical area within which the non-competition
obligations and covenants of the Agreement shall apply is that territory within
two hundred (200) miles of (i) any of the Company’s present offices, (ii) any
of the Company’s present rig yards or rig operations and (iii) any additional location where the Company, as of the date of any action taken in
violation of the non-competition obligations and covenants of the Agreement,
has an office, a rig yard, a rig operation or definitive plans to locate an
office, a rig operation or a rig yard or has recently conducted rig
operations. Notwithstanding the foregoing, if the two hundred (200) mile
radius extends into another country or its territorial waters and the
Company is not then doing business in that other country, there will be no
territorial limitations extending into such other country.






	 	5.03	 	CONFIDENTIALITY/PROTECTION OF INFORMATION. Employee acknowledges that his
employment with the Company has in the past and will, of necessity, continue to provide
him with special knowledge which, if used in competition with the Company, or divulged
to others, could cause serious harm to the Company. Accordingly, Employee will not at
any time during or after his employment by the Company, directly or indirectly,
divulge, disclose, use or communicate to any person, firm or corporation in any manner
whatsoever any information concerning any matter specifically affecting or relating to
the Company or the business of the Company. While engaged as an employee of the
Company, Employee may only use information concerning any matters affecting or relating
to the Company or the business of the Company for a purpose which is necessary to the
carrying out of Employee’s duties as an employee of the Company, and Employee may not
make any use of any information of the Company after he is no longer an employee of the
Company. Employee agrees to the foregoing without regard to whether all of the
foregoing matters will be deemed confidential, material or important, it being
stipulated by the Parties that




14









 






	 	 	 	all information, whether written or otherwise, regarding
the Company’s business, including, but not limited to, information regarding Customers,
Customer lists, costs, prices, earnings, products, services, formulae, compositions,
machines, equipment, apparatus, systems, manufacturing procedures, operations,
potential acquisitions, new location plans, prospective and executed contracts and
other business plans and arrangements, and sources of supply, is prima facie presumed
to be important, material and confidential information of the Company for the purposes
of the Agreement, except to the extent that such information may be otherwise lawfully
and readily available to the general public. Employee further agrees that he will,
upon termination of his employment with the Company, return to the Company all books,
records, lists and other written, electronic, typed or printed materials, whether
furnished by the Company or prepared by Employee, which contain any information
relating to the Company’s business, and Employee agrees that he will neither make nor
retain any copies of such materials after termination of employment. Notwithstanding
any of the foregoing, nothing in the Agreement shall prevent Employee from complying
with applicable federal and/or state laws.
	 
	 	5.04	 	COMPANY REMEDIES FOR VIOLATION OF NON-COMPETITION OR CONFIDENTIALITY/PROTECTION
OF INFORMATION PROVISIONS. Without limiting the right of the Company to pursue all
other legal and equitable rights available to it for violation of any of the
obligations and covenants made by Employee herein, it is expressly agreed that:






	 	a.	 	the terms and provisions of the Agreement are reasonable and
constitute an otherwise enforceable agreement to which the provisions of this
Article V are ancillary or a part of as contemplated by TEX. BUS. & COM. CODE
ANN. Sections 15.50-15.52;
	 
	 	b.	 	the consideration provided by the Company under the Agreement
is not illusory;
	 
	 	c.	 	the consideration given by the Company under the Agreement,
including, without limitation, the provision and continued provision by the
Company of trade secrets and other confidential information to Employee, gives
rise to the Company’s interest in restraining and prohibiting Employee from
engaging in the unfair competition prohibited by Section 5.02 and Employee’s
promise not to engage in the unfair competition prohibited by Section 5.02 is
designed to enforce Employee’s consideration (or return promises), including,
without limitation, Employee’s promise to not use or disclose confidential
information or trade secrets; and
	 
	 	d.	 	the injury suffered by the Company by a violation of any
obligation or covenant in this Article V of the Agreement will be difficult to
calculate in damages in an action at law and cannot fully compensate the
Company for any violation of any obligation or covenant in this Article V of
the Agreement, accordingly:




15









 












	 	(i)	 	the Company shall be entitled to injunctive
relief without the posting of a bond or other security to prevent
violations thereof and to prevent Employee from rendering any services
to any person, firm or entity in breach of such obligation or covenant
and to prevent Employee from divulging any confidential information;
and
	 
	 	(ii)	 	compliance with this Article V of the Agreement
is a condition precedent to the Company’s obligation to make payments
of any nature to Employee, subject to the other provisions hereof.






	 	5.05	 	TERMINATION OF BENEFITS FOR VIOLATION OF NON-COMPETITION AND
CONFIDENTIALITY/PROTECTION OF INFORMATION PROVISIONS. If Employee violates the
confidentiality/protection of information and/or non-competition obligations and
covenants herein or any other related agreement he may have signed as an employee of
the Company, Employee agrees there shall be no obligation on the part of the Company to
provide any payments or benefits (other than payments or benefits already earned or
accrued) described in Sections 3.05 or 3.07 of the Agreement. If Employee is
terminated pursuant to Section 3.06 or is terminated after a Change in Control with the
right to payments and benefits under Article IV, there will be no withholding of
benefits or payments due to a violation of the non-competition obligations hereof and
Employee will not be bound by the non-competition provisions hereof.
	 
	 	5.06	 	REFORMATION OF SCOPE. If the provisions of the confidentiality and/or
non-competition obligations and covenants should ever be deemed to exceed the time,
geographic or occupational limitations permitted by the applicable law, Employee and
the Company agree that such provisions shall be and are hereby reformed to the maximum
time, geographic or occupational limitations permitted by the applicable law, and the
determination of whether Employee violated such obligation and covenant will be based
solely on the limitation as reformed.
	 
	 	5.07	 	RETURN OF CONSIDERATION. Employee specifically recognizes and affirms that the
non-competition obligations set out in Section 5.02 are material and important terms of
the Agreement, and Employee further agrees that should all or any part of the
non-competition obligations described in Section 5.02 be held or found invalid or
unenforceable for any reason whatsoever by a court of competent jurisdiction in a legal
proceeding between Employee and the Company, the Company shall be entitled to the
immediate return and receipt from Employee of all consideration described in Section
5.01b, including interest on all amounts paid to Employee under Section 5.01b at the
maximum lawful rate.
	 
	 	5.08	 	ASSISTANCE WITH LEGAL PROCEEDINGS. Employee agrees that during the Employment
Period and for two (2) years after the Employment Period, Employee will furnish such
information and proper assistance as may be reasonably necessary in connection with any
litigation or other legal proceedings in which Pride International, Inc., Newco or any
of their affiliates or subsidiaries




16









 






	 	 	 	is then or may become involved, and shall cooperate
in a timely manner, including but not limited to cooperation with the Board of
Directors of Pride International, Inc. or Newco, officers, counsel, regulators and
auditors, with respect to all internal investigations with respect to which Employee
may have relevant information; provided, however, that no additional compensation shall
be paid or payable to Employee for these services.
	 
	 	5.09	 	DEFINITION OF COMPANY. For purposes of Sections 5.01, 5.02, 5.04 and 5.07,
during the Employment Period and for two (2) years after a Newco Transaction or an
assignment and novation of the Agreement, the term “Company” shall include Pride
International, Inc. and its affiliates, in addition to any other entity that meets the
definition of “Company” under Section 2.03. In addition, for the purpose of Article V,
the term “Company” includes all subsidiaries of the Company to the extent such
subsidiary is carrying on any portion of the business of the Company or a business
similar to that being conducted by the Company.






	VI.	 	GENERAL






	 	6.01	 	INCOME, EXCISE OR OTHER TAX LIABILITY. Employee will be liable for and will
pay all income tax liability by virtue of any payments made to Employee under the
Agreement, as if the same were earned and paid in the normal course of business and not
the result of a Change in Control and not otherwise triggered by the “golden parachute”
or excess payment provisions of the Internal Revenue Code of 1986, as amended (the “Code”) as described below, which would cause
additional tax liability to be imposed.






	 	a.	 	The Company may withhold from any benefits and payments made
pursuant to the Agreement all federal, state, city and other taxes as may be
required pursuant to any law or governmental regulation or ruling.
	 
	 	b.	 	Except as provided in Section 6.01c, in the event it shall be
determined that any amount or payment in the nature of compensation (within the
meaning of Section 280G(b)(2) of the Code) paid or provided to or on behalf of
Employee would be subject to the excise tax imposed by Section 4999 of the Code
(“Excise Tax”), then the amount of “parachute payments” (as defined in Section
280G of the Code) payable or required to be provided to Employee shall be
automatically reduced (a “Reduction”) to the minimum extent necessary to avoid
imposition of such Excise Tax. The parachute payments reduced shall be those
that provide Employee the best economic benefit and to the extent any parachute
payments are economically equivalent with each other, each shall be reduced pro
rata.
	 
	 	c.	 	Notwithstanding any provision herein to the contrary, if a
Reduction under Section 6.01b would result in the amount of parachute payments
being reduced by ten percent (10%) or more of the aggregate parachute payments,
then no Reduction shall apply and Employee shall be entitled to




17









 






	 	 	 	receive an
additional payment (a “Gross-Up Payment”) in an amount such that, after payment
(whether through withholding at the source or otherwise) by Employee of all
taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto), employment taxes and Excise Tax imposed upon the
Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the parachute payment. In the event that the
Excise Tax is subsequently determined to be less than the amount taken into
account hereunder in calculating the Gross-Up Payment, Employee shall repay to
the Company, within five (5) business days following the time that the amount
of such reduction in the Excise Tax is finally determined, the portion of the
Gross-Up Payment attributable to such reduction. In the event that the Excise
Tax is determined to exceed the amount taken into account hereunder in
calculating the Gross-Up Payment (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-Up
Payment), the Company shall make an additional Gross-Up Payment in respect of
such excess within five (5) business days following the time that the amount of
such excess is finally determined. Employee and the Company shall each
reasonably cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of liability for Excise
Tax with respect to the parachute payments.
	 
	 	d.	 	All determinations required to be made under Sections 6.01b and
6.01c shall be made by the Company’s accounting firm (the “Accounting Firm”).
The Accounting Firm shall provide detailed supporting calculations both to the
Company and Employee. All fees and expenses of the Accounting Firm shall be
borne solely by the Company. Absent manifest error, any determination by the
Accounting Firm shall be binding upon the Company and Employee. The Gross-Up
Payment to Employee, if any, shall be made no earlier than the date of the
“parachute payment” to which such Gross-Up Payment relates and no later than
December 31st of the year following the year during which Employee remits the
related Excise Tax.
	 
	 	e.	 	Employee will cooperate with the Company to minimize the tax
consequences to Employee and to the Company so long as the actions proposed to
be taken by the Company do not cause any additional tax consequences to
Employee and do not prolong or delay the time that payments are to be made, or
reduce the amount of payments to be made, unless Employee consents in writing
to any delay or deferment of payment.






	 	6.02	 	SECTION 409A. The Agreement is intended to comply with the provisions of
Section 409A of the Code and applicable Treasury authorities (“Section 409A”) and,
wherever possible, shall be interpreted as being so compliant therewith.




18









 






	 	 	 	Notwithstanding any provision of the Agreement to the contrary, the following
provisions shall apply for purposes of complying with Section 409A:






	 	a.	 	If Employee is a “specified employee,” as such term is defined
in Section 409A, any payments or benefits payable as a result of Employee’s
Termination shall not be payable before the earlier of (i) the date that is six
months after Employee’s Termination, (ii) the date of Employee’s death, or
(iii) the date that otherwise complies with the requirements of Section 409A.
This Section 6.02a shall be applied by accumulating all payments and benefits
that otherwise would have been paid or provided within six months of Employee’s
Termination and (x) paying such accumulated amounts; or, if applicable, (y)
reimbursing to Employee the employer-portion of any insurance premiums paid by
Employee during such period; at the earliest date which complies with the
requirements of Section 409A.
	 
	 	b.	 	Employee and the Company agree that no revision of the
Agreement intended to comply with the terms of Section 409A and to avoid
imposition of the applicable tax thereunder shall be deemed to adversely affect
Employee’s rights or benefits in the Agreement.






	 	6.03	 	NO DUPLICATION OF BENEFITS. Employee shall be entitled to one, and only one,
of the termination payments and benefits described in Section 3.05, Section 3.06a,
Section 3.06b, Section 3.07, Section 4.01 or Section 4.02, as applicable to the
circumstances of Employee’s termination of employment.
	 
	 	6.04	 	REFORMATION DUE TO LAW DEVELOPMENTS. Employee acknowledges that the Company’s
tax consequences as a result of Employee’s compensation under the Agreement are of
significant interest to the Company and that developments involving relevant tax laws,
rules and regulations could unfavorably impact the Company’s tax consequences.
Employee agrees that he is obligated to consider in good faith any proposal by the
Company to revise or reform his compensation structure hereunder if the Company advises
Employee that such compensation structure has or will result in unfavorable tax
consequences to the Company.
	 
	 	6.05	 	NON-EXCLUSIVE AGREEMENT. The specific arrangements referred to herein are not
intended to exclude or limit Employee’s participation in other benefits available to
Employee or personnel of the Company generally, or to preclude or limit other
compensation or benefits as may be authorized by the Board at any time, or to limit or
reduce any compensation or benefits to which Employee would be entitled but for the
Agreement.
	 
	 	6.06	 	NOTICES. Notices, requests, demands and other communications provided for by
the Agreement shall be in writing and shall either be personally delivered by hand or
sent by: (i) Registered or Certified Mail, Return Receipt Requested, postage prepaid,
properly packaged, addressed and deposited in the United States Postal System; (ii) via
facsimile transmission if the receiver acknowledges




19









 






	 	 	 	receipt; or (iii) via Federal
Express or other expedited delivery service provided that acknowledgment of receipt is
received and retained by the deliverer and furnished to the sender, if to Employee, at
the last address he has filed, in writing, with the Company, or if to the Company, to
its Corporate Secretary at its principal executive offices.
	 
	 	6.07	 	NON-ALIENATION. Employee shall not have any right to pledge, hypothecate,
anticipate, or in any way create a lien upon any amounts provided under the Agreement,
and no payments or benefits due hereunder shall be assignable in anticipation of
payment either by voluntary or involuntary acts or by operation of law. So long as
Employee lives, no person, other than the Parties hereto, shall have any rights under
or interest in the Agreement or the subject matter hereof. Upon the death of Employee,
his beneficiary designated under Section 6.09 or, if none, his executors,
administrators, devisees and heirs, in that order, shall have the right to enforce the
provisions hereof, to the extent applicable.
	 
	 	6.08	 	ENTIRE AGREEMENT; AMENDMENT. The Agreement constitutes the entire agreement of
the Parties with respect of the subject matter hereof. The Prior Agreement is hereby
superseded and revoked by execution of the Agreement. No provision of the Agreement
may be amended, waived, or discharged except by the mutual written agreement of the
Parties. The consent of any other person(s) to any such amendment, waiver or discharge
shall not be required.
	 
	 	6.09	 	SUCCESSORS AND ASSIGNS.






	 	a.	 	The Agreement shall be binding upon and inure to the benefit of
the Company, its successors and assigns, by operation of law or otherwise,
including, without limitation, any corporation or other entity or persons which
shall succeed (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of the
Company, and the Company will require any successor, by agreement in form and
substance satisfactory to Employee, expressly to assume and agree to perform
the Agreement.
	 
	 	b.	 	Notwithstanding anything herein to the contrary, the Parties
specifically agree, and Employee specifically consents, that the Agreement
shall be assigned and novated to Newco, in advance of or upon consummation of
any Newco Transaction, and may, in the Company’s discretion, be assigned and
novated to the Purchaser or any of its affiliates in any Sale of Assets, and
after such assignment and novation (and, in the case of a Newco Transaction,
upon the consummation of such Newco Transaction), neither Pride International,
Inc. nor any of its successors will have any obligations hereunder.
	 
	 	c.	 	For purposes of clarity, upon the assignment and novation of
the Agreement to a Purchaser, such Purchaser shall assume all of the




20









 






	 	 	 	obligations of the Agreement including, without limitation, the obligations set
forth in Sections 3.06 and 3.07.
	 
	 	d.	 	Except as otherwise provided herein, the Agreement shall be
binding upon and inure to the benefit of Employee and his legal
representatives, heirs and assigns; provided, however, that in the event of
Employee’s death prior to payment or distribution of all amounts, distributions
and benefits due him hereunder, if any, each such unpaid amount and
distribution shall be paid in accordance with the Agreement to the person or
persons designated by Employee to the Company to receive such payment or
distribution and in the event Employee has made no applicable designation, to
his estate.






	 	6.10	 	AUTHORITY OF PRIDE INTERNATIONAL, INC. WITH RESPECT TO NEWCO TRANSACTION.
Without limiting the generality of any other provision hereof, nothing in the Agreement
shall limit or restrict Pride International, Inc. from (i) taking any action in
connection with the separation of its Mat Jackup Rig Assets on the terms determined by
Pride International, Inc. (ii) entering into, amending, modifying, interpreting or
terminating any arrangement (including separation arrangements, corporate governance
arrangements, tax sharing arrangements, registration rights agreements or transition
services agreements, all of which may be on the terms specified by Pride International,
Inc.), (iii) establishing or amending the Charter, By-Laws and other governing
documents of Newco to provide for, among other things, protections for Pride
International, Inc. and granting it consent and other rights not available to other
shareholders, (iv) establishing the Board of Directors of Newco, (v) effecting the
sale of securities of Newco to Pride International, Inc. on terms that Pride
International, Inc. determines, (vi) varying the terms of the Newco Transaction from
those described herein, (vii) restricting the ability of Newco to compete with Pride
International, Inc. or (viii) taking any other action related to the formation,
capitalization, business operations, timing of transactions or otherwise, it being
specifically understood by the Parties that any of such actions or other actions
taken by Pride International, Inc. in connection with the Newco Transaction
(including the decision not to effect a Newco Transaction), restructuring, any
disposition transactions or otherwise shall not constitute a Constructive
Termination or otherwise constitute a breach of the Agreement.
	 
	 	6.11	 	GOVERNING LAW. Except to the extent required to be governed by the laws of the
State of Delaware because the Company is incorporated under the laws of said State, the
validity, interpretation and enforcement of the Agreement shall be governed by the laws
of the State of Texas.
	 
	 	6.12	 	VENUE. To the extent permitted by applicable state or federal law, venue for
all proceedings hereunder will be in the U.S. District Court for the Southern District
of Texas, Houston Division.




21









 







	 	6.13	 	HEADINGS. The headings in the Agreement are inserted for convenience of
reference only and shall not affect the meaning or interpretation of the Agreement.
	 
	 	6.14	 	SEVERABILITY; PARTIAL INVALIDITY. In the event that any provision, portion or
section of the Agreement is found to be invalid or unenforceable for any reason, the
remaining provisions of the Agreement shall be unaffected thereby, shall remain in full
force and effect and shall be binding upon the Parties, and the Agreement will be
construed to give meaning to the remaining provisions of the Agreement in accordance
with the intent of the Agreement.
	 
	 	6.15	 	COUNTERPARTS. The Agreement may be executed in one or more counterparts, each
of which shall be deemed to be original, but all of which together constitute one and
the same instrument.
	 
	 	6.16	 	NO WAIVER. Employee’s or the Company’s failure to insist upon strict
compliance with any provision of the Agreement or the failure to assert any right
Employee or the Company may have hereunder, shall not be deemed to be a waiver of such
provision or right or any other provision or right of the Agreement.









	 	 	 	IN WITNESS WHEREOF, Employee has hereunto set his hand and, pursuant to the authorization from
its Board of Directors and





the Compensation Committee of such Board of Directors, the Company has
caused these presents to be executed in its name and on its
behalf.










	 	 	 	EXECUTED in multiple originals and/or counterparts as of the date set forth below.









	 	 	 	 	 	 	 	 	 
	 	 	 	 	/s/ Randall D. Stilley	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Randall D. Stilley	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Date: October 29, 2008	 	 
	 
	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	PRIDE INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ W. Gregory Looser

	 	 	 	By:
	 	/s/ Louis A. Raspino	 	 
	 

	 	 	 	 	 	 	 	 
	W. Gregory Looser

	 	 	 	 	 	Louis A. Raspino	 	 
	Secretary

	 	 	 	 	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Date: October 29, 2008	 	 






22









 






EXHIBIT A




          The following terms shall have the meanings ascribed hereto for purposes of calculating the
Equity Value, if applicable:



“Equity Value” shall mean $4,800,000 multiplied by the Adjustment Ratio.



“Adjustment Ratio” shall mean the quotient (calculated to the nearest five decimal places) obtained
by dividing the Index Value as of the Estimate Date by the Index Value as of October 28, 2008. The
Adjustment Ratio shall be no greater than 1.40 and no less than .75.



“Estimate Date” shall mean (A) with respect to an Equity Award on the Newco Transaction Date, five
Trading Days prior to the Newco Transaction Date, (B) with respect to an Equity Value under Section
3.06a, the closing date of an Asset Sale, or (C) with respect to an Equity Value under Section
4.01d, the date of a Change in Control of Pride International, Inc.



“Applicable Stock” shall mean the common stock (or equivalent in the event of a noncorporate
entity) of each of the members of the Peer Group (each of such companies being referred to as an
“Issuer”).



“Market Capitalization” on any day shall mean, with respect to any Applicable Stock, the product
obtained by multiplying (a) the Market Value of such Applicable Stock on such day by (b) the
number of outstanding shares of all Applicable Stock as last reported in a filing with the
Securities and Exchange Commission.



“Index Value” on any day shall mean the sum of the Market Capitalization of the Applicable Stocks
on such day (i.e., the sum of the Market Capitalization of the common stock of Hercules Offshore,
Inc., plus the Market Capitalization of the common stock of Rowan Companies Inc., plus the Market
Capitalization of the common stock of Nabors Industries Ltd., plus the Market Capitalization of the
common stock of Patterson-UTI Energy, Inc, plus the Market Capitalization of the common stock of
Helmerich & Payne Inc., plus the Market Capitalization of the common stock of Superior Energy
Services, Inc.) divided by the sum of the number of outstanding shares of all Applicable Stock as
last reported in a filing with the Securities and Exchange Commission, appropriately adjusted for a
determination as of the Estimate Date to reflect any stock splits, reverse stock splits or stock
dividends with respect to Applicable Stocks after October 28, 2008.



“Market Value” of any Applicable Stock on any day shall mean the volume-weighted average price of a
share of such Applicable Stock on such day (if such day is a Trading Day, and if such day is not a
Trading Day, on the Trading Day immediately preceding such day) or, in case no reported sale takes
place on such Trading Day, the average of the reported closing bid and asked prices regular way of
a share of such Applicable Stock on such Trading Day, in either case on the New York Stock Exchange
or, if the shares of such Applicable Stock are not quoted on the New York Stock Exchange on such
Trading Day, on the Nasdaq National Market, or if the shares of such Applicable Stock are not
quoted on the Nasdaq National Market on such Trading




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Day, the average of the closing bid and asked prices of a share of such Applicable Stock in the
over-the-counter market on such Trading Day as furnished by any New York Stock Exchange member firm
selected by the Company, or if such closing bid and asked prices are not made available by any such
New York Stock Exchange member firm on such Trading Day (including without limitation because such
Applicable Stock is not publicly held (whether because an Issuer of such Applicable Stock has been
acquired by a third party in an acquisition (an “Issuer Acquisition”) or otherwise) or because such
Applicable Stock has been reclassified, converted or exchanged into cash, securities or other
property), the market value of a share of such Applicable Stock as determined by the Board;
provided that (a) the “Market Value” of any share of Applicable Stock on any day prior to the “ex”
date or any similar date for any dividend or distribution paid or to be paid with respect to the
Applicable Stock shall be reduced by the fair market value of the per share amount of such dividend
or distribution as determined by the Board and (b) the “Market Value” of any share of Applicable
Stock on any day prior to (i) the effective date of any subdivision (by stock split or otherwise)
or combination (by reverse stock split or otherwise) of outstanding shares of Applicable Stock or
(ii) the “ex” date or any similar date for any dividend or distribution with respect to the
Applicable Stock in shares of the Applicable Stock shall be appropriately adjusted as determined by
the Board to reflect such subdivision, combination, dividend or distribution. In the case of an
Issuer Acquisition such Issuer’s Applicable Stock shall be removed from the determination of Market
Value for both October 28, 2008 and the Estimate Date; provided, however, that if there occurs an
aggregate of two or more of any combination of Issuer Acquisitions (excluding an Issuer Acquisition
in which an Issuer is acquired by another Issuer) or Issuer Bankruptcies (as defined herein), then
the parties shall retain the remaining Applicable Stock in the determination of Market Value for
both October 28, 2008 and the Estimate Date but shall add any additional companies as Issuers as
shall be determined by Simmons & Company International (or if Simmons & Company International does
not accept such assignment, as determined by a mutually agreeable investment banking firm with
experience in the oilfield service industry). In making such determination, Simmons & Company
International shall seek to choose companies to be included as Issuers in order to have the
calculation of Market Value as most appropriately as possible reflect the U.S. Gulf of Mexico
shallow-water and inland barge drilling business. Any number of additional Issuers (including
zero) may be included by Simmons & Company International, but the total number of Issuers,
including Issuers already determined hereunder, may not exceed six. The costs of Simmons & Company
International shall be paid by the Company. An Issuer shall be deleted from the determination of
Market Value for all periods if such Issuer declares bankruptcy under applicable federal bankruptcy
laws (an “Issuer Bankruptcy”). In addition, the Board may make other changes to the determination
of Market Value not inconsistent with the foregoing that it deems fair and equitable under the
circumstances.



“Trading Day” shall mean each weekday other than any day on which securities are not traded on the
New York Stock Exchange or the Nasdaq National Market or in the over-the-counter market.




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EXHIBIT B




Waiver And Release




          Pursuant to the terms of my Employment Agreement with Pride International, Inc. effective
September 22, 2008, as amended and restated effective October 29, 2008, and in exchange for the
payment of $                           which is the cash amount payable pursuant to [Section                     ] of the
Agreement and benefits as provided in [Section                     ] of the Agreement, as applicable (the
“Separation Benefits”), I hereby waive all claims against and release (i) Pride International, Inc.
and its directors, officers, employees, agents, insurers, predecessors, successors and assigns
(collectively referred to as the “Company”), (ii) all of the affiliates (including all parent
companies and all wholly or partially owned subsidiaries) of the Company and their directors,
officers, employees, agents, insurers, predecessors, successors and assigns (collectively referred
to as the “Affiliates”), and (iii) the Company’s and its Affiliates’ employee benefit plans and the
fiduciaries and agents of said plans (collectively referred to as the “Benefit Plans”) from any and
all claims, demands, actions, liabilities and damages arising out of or relating in any way to my
employment with or separation from employment with the Company and its Affiliates other than
amounts due pursuant to [Section                     ] of the Agreement and rights under [Section                     ] of the
Agreement. (The Company, its Affiliates and the Benefit Plans are sometimes hereinafter
collectively referred to as the “Released Parties.”)




          I understand that signing this Waiver and Release is an important legal act. I acknowledge
that I have been advised in writing to consult an attorney before signing this Waiver and Release.
I understand that, in order to be eligible for the Separation Benefits, I must sign (and return to
the Company) this Waiver and Release before I will receive the Separation Benefits. I acknowledge
that I have been given at least [___] days to consider whether to accept the Separation Benefits and
whether to execute this Waiver and Release.




          In exchange for the payment to me of the Separation Benefits, (1) I agree not to sue in any
local, state and/or federal court regarding or relating in any way to my employment with or
separation from employment with the Company and its Affiliates, and (2) I knowingly and voluntarily
waive all claims and release the Released Parties from any and all claims, demands, actions,
liabilities, and damages, whether known or unknown, arising out of or relating in any way to my
employment with or separation from employment with the Company and its Affiliates, except to the
extent that my rights are vested under the terms of any employee benefit plans sponsored by the
Company and its Affiliates and except with respect to such rights or claims as may arise after the
date this Waiver and Release is executed. This Waiver and Release includes, but is not limited to,
claims and causes of action under: Title VII of the Civil Rights Act of 1964, as amended; the Age
Discrimination in Employment Act of 1967, as amended, including the Older Workers Benefit
Protection Act of 1990; the Civil Rights Act of 1866, as amended; the Civil Rights Act of 1991; the
Americans with Disabilities Act of 1990; the Workers Adjustment and Retraining Notification Act of
1988; the Pregnancy Discrimination Act of 1978; the Employee Retirement Income Security Act of
1974, as amended; the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended; the
Family and Medical Leave Act of 1993; the Fair Labor Standards Act; the Occupational Safety and
Health Act; the Texas Labor Code §21.001 et. seq.; the Texas Labor Code; claims in connection with
workers’ compensation, retaliation or “whistle blower” statutes; and/or contract, tort, defamation,
slander, wrongful termination or any other state or federal regulatory, statutory or common law.
Further, I




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expressly represent that no promise or agreement which is not expressed in this Waiver and
Release has been made to me in executing this Waiver and Release, and that I am relying on my own
judgment in executing this Waiver and Release, and that I am not relying on any statement or
representation of the Company or its Affiliates or any of their agents. I agree that this Waiver
and Release is valid, fair, adequate and reasonable, is with my full knowledge and consent, was not
procured through fraud, duress or mistake and has not had the effect of misleading, misinforming or
failing to inform me. I acknowledge and agree that the Company will withhold any taxes required by
federal or state law from the Separation Benefits otherwise payable to me.




          Notwithstanding the foregoing, I do not release and expressly retain (a) all rights to
indemnity, contribution, and a defense, and directors and officers and other liability coverage
that I may have under any statute, the bylaws of the Company or by other agreement; and (b) the
right to any, unpaid reasonable business expenses and any accrued benefits payable under any
Company welfare plan or tax-qualified plan.




          I acknowledge that payment of the Separation Benefits is not an admission by any one or more
of the Released Parties that they engaged in any wrongful or unlawful act or that they violated any
federal or state law or regulation. I acknowledge that neither the Company nor its Affiliates have
promised me continued employment or represented to me that I will be rehired in the future. I
acknowledge that my employer and I contemplate an unequivocal, complete and final dissolution of my
employment relationship. I acknowledge that this Waiver and Release does not create any right on
my part to be rehired by the Company or its Affiliates, and I hereby waive any right to future
employment by the Company or its Affiliates.




          I understand that for a period of 7 calendar days following the date that I sign this Waiver
and Release, I may revoke my acceptance of this Waiver and Release, provided that my written
statement of revocation is received on or before that seventh day by [Name and/or Title],
[address], facsimile number:                                         , in which case the Waiver and Release will not become
effective. In the event I revoke my acceptance of this Waiver and Release, the Company shall have
no obligation to provide the Separation Benefits to me. I understand that failure to revoke my
acceptance of the offer within 7 calendar days from the date I sign this Waiver and Release will
result in this Waiver and Release being permanent and irrevocable.




          Should any of the provisions set forth in this Waiver and Release be determined to be invalid
by a court, agency or other tribunal of competent jurisdiction, it is agreed that such
determination shall not affect the enforceability of other provisions of this Waiver and Release.
I acknowledge that this Waiver and Release sets forth the entire understanding and agreement
between me and the Company and its Affiliates concerning the subject matter of this Waiver and
Release and supersede any prior or contemporaneous oral and/or written agreements or
representations, if any, between me and the Company or its Affiliates.




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          I acknowledge that I have read this Waiver and Release, have had an opportunity to ask
questions and have it explained to me and that I understand that this Waiver and Release will have
the effect of knowingly and voluntarily waiving any action I might pursue, including breach of
contract, personal injury, retaliation, discrimination on the basis of race, age, sex, national
origin, or disability and any other claims arising prior to the date of this Waiver and Release.
By execution of this document, I do not waive or release or otherwise relinquish any legal rights I
may have which are attributable to or arise out of acts, omissions, or events of the Company or its
Affiliates which occur after the date of the execution of this Waiver and Release.




	 	 	 	 	 	 	 
	 
	 

	 	 	 	 	 	 
	Employee’s Printed Name

	 	 	 	Company’s Representative
	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Employee’s Signature

	 	 	 	Company’s Execution Date
	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 


	 	 	 	 	 	 
	Employee’s Signature Date

	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 

Employee’s Social Security Number

	 	 	 	  	 	 







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