Document:

exv10w6

 

Exhibit 10.6

ENERGY MANAGEMENT AGREEMENT

(Site Development and Operations)

The purpose of this Agreement is to set forth the understanding and agreement between U.S. Energy
Services, Inc. (“U.S. Energy”) and Ozark Ethanol, LLC(“Client”) related to the provision of energy
management services.

PROJECT DESCRIPTION: Client is developing a 50 million gallon per year ethanol
plant (“Plant”) to be located near Eve, Missouri. The Plant will have peak electric usage of
approximately 5 MW and will consume approximately 4,500 MMBtu of natural gas per
day.

U.S. ENERGY RESPONSIBILITIES: U.S. Energy will provide consulting and energy management
services for supplies of natural gas and electricity for the Plant. These services will be
provided during the construction of the Plant (“Construction Period”), and after the Construction
Period when the Plant has been placed in service (“Completion Date”). The Completion Date shall be
determined when the Plant begins producing ethanol. These services will be provided to Client upon
request:

A. Energy Infrastructure Advisory Services During the Construction Period

	1.	 	Provide an economic comparison of natural gas transmission and distribution service options.
Such options will include service from area distribution utilities, interstate pipelines and
third party contractors.
	 
	 	 	In the event that a direct connect pipeline option is selected, U.S. Energy will submit a
tap request to the pipeline. In addition, U.S. Energy will also attempt to negotiate an
option for Client to minimize interconnect costs through the purchase of firm transportation
to the Plant.
	 
	 	 	If Client wishes to have U.S. Energy conduct a request for proposal for the design and
construction of a gas distribution system on the plant site, a separate fee will be arranged
for this work.
	 
	2.	 	Determine whether firm, interruptible, or a blend of transportation natural gas entitlement
will provide the lowest burnertip cost. Factors that will be considered include pipeline
credits for the new interconnect, cost of an alternate fuel system, and availability of
specific receipt point capacity.
	 
	3.	 	Provide advisory services to Client regarding electric pricing and service agreements.

	 	 a.	 	Analyze the electric service proposals along with primary, secondary and
generation options and recommend an electric sourcing strategy and plan. The plan may
include a combination of electric supplier agreement and/or installation of on-site
generation.

 

 

	 	b.	 	Negotiate final electric service agreements that meet the pricing and
reliability requirements of Client, including options for third party access to
electric metering.
	 
	 	c.	 	Prepare and implement a regulatory strategy, if required and if an alternative
power supplier is selected. Any attorney fees required for the specific purpose of
obtaining regulatory approval for an alternative power supplier, if any, will be over
and above U.S. Energy’s monthly fee herein, and must be pre-approved by Client.

	4.	 	Evaluate the proposed electric distribution infrastructure (substation) for reliability,
future growth potential and determination of the division of ownership of facilities between
the utility and the Plant.

	5.	 	Investigate economic development rates, utility grants, equipment rebates and other utility
programs that may be available.

B. On-Going Energy Management Services Following the Completion Date

U.S. Energy will provide the following services at Client’s request:

	1.	 	Provide natural gas supply information to minimize the cost of natural gas purchased. This
will include acquiring multiple supply quotes and reporting to Client the various supply index
and fixed prices. U.S. Energy will not take title to Client gas supplies, but will
communicate supply prices and potential buying strategies.

	2.	 	Negotiate with pipelines, utilities, other shippers, and suppliers to provide transportation,
balancing, and supply agreements that meet Client’s performance criteria at the lowest
possible cost.

	3.	 	Develop and implement a price risk management plan that is consistent with Client’s pricing
objectives and risk profile. An analysis will be developed to help determine the
amount of fuel usage that should be considered for this price management service. U.S. Energy
will also provide price risk management information through the following communications:

Weekly Update: E-mailed each week

Monthly Pricing Letter: Mailed out monthly

Monthly Conference Call: Occurs the first Tuesday of each month

Hedge Recommendations: Updated regularly and published on U.S. Energy’s web site

Annual Energy Conference: Occurs in May of each year.

Gold+ Web Site Access: Gold+ is U.S. Energy’s password-protected web site that

allows clients access to their information. Gold+ access also makes available

industry news, hedging strategies and NYMEX pricing.

- 2 -

 

	4.	 	Provide daily nominations to the suppliers, pipeline, and other applicable shippers for
natural gas deliveries to the Plant. U.S. Energy will utilize customer or utility supplied
telemetering to obtain actual usage data.

	5.	 	Provide a consolidated monthly invoice to Client that reflects all applicable natural gas and
electric energy costs. U.S. Energy will be responsible for reviewing, reconciling and paying
all shipper, supplier and utility invoices.

	6.	 	Provide a monthly usage report of electric energy consumption and costs. Also, where
applicable and available from the utility, obtain monthly interval electric load data and
provide monthly load profile graphs.

	7.	 	On-going review and renegotiation of electric service costs, as required. This may include:

	 	a.	 	Completing and evaluating annual proposals to identify the most reliable and
economic third party electric energy supply.
	 
	 	b.	 	Identifying new service tariffs or opportunities to renegotiate the service
agreement to provide lower costs.
	 
	 	c.	 	Identifying on-site generation opportunities as market conditions change.
	 
	 	d.	 	Provide a monthly projection of energy (natural gas and electricity) and annual
summaries.

	8.	 	Provide natural gas and electric energy operating budgets for the Plant.

AGENCY: U.S. Energy will act as Client’s agent while managing Client’s energy matters.
The scope of this agency is set forth in the Agency Authorization between U.S. Energy and Client
attached as Exhibit A (the terms of which are made a part of this Agreement).

TERM: The initial term of this Agreement shall commence on January 1, 2007 and
continue until twelve (12) months after the Plant’s Completion Date. It will then renew for a
one-year term, year to year thereafter, unless Client or U.S. Energy terminates the contract upon
sixty (60) days prior written notice before the annual renewal date. Client shall remain
responsible for payment and performance associated with any and all transportation, supply, and
storage transactions entered into by U.S. Energy and authorized by Client, prior to termination, as
well as fees and charges for U.S. Energy’s services occurring up until the termination date.

FEES: U.S. Energy’s fee for services during the term of this Agreement shall be a monthly
retainer fee of 2,900 per month plus pre-approved travel expenses. The monthly retainer fee
will increase 4% per year on the annual anniversary date of the effective date of this Agreement.

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In the event that plant financing is not secured, this Agreement shall become null and void and
both parties will be relieved of professional and/or financial obligations due the other party.
However, Client shall remain responsible for payment and performance associated with any and all
transportation, supply, and storage transactions entered into by U.S. Energy and authorized by
Client, prior to termination, as well as fees, charges and pre-approved travel expenses for U.S.
Energy’s services occurring up until the termination date.

If Client elects to utilize U.S Energy to provide physical or financial natural gas hedging
services, a $.01/MMBTu administrative fee will be assessed on volumes hedged to cover the costs
associated with compliance to Federal and State commodities rules and regulations and
administrative costs of facilitating this natural gas hedging service.

BILLING AND PAYMENT: On the first of the month, U.S. Energy shall invoice Client for
appropriate energy costs from the previous month and for the U.S. Energy retainer for the current
month. Client shall pay U.S. Energy within ten (10) days of receipt of invoice.

TAXES: Client will be responsible for payment of all taxes including, but not limited to,
all sales, use, excise, BTU, heating value and other taxes associated with the purchase and/or
transport of natural gas, electricity or other fuels and the provision of services hereunder.

CONFIDENTIALITY: U.S. Energy shall not divulge to any other person or party any
information developed by U.S. Energy hereunder or revealed to U.S. Energy pursuant to this
Agreement, unless such information is (a) already in U.S. Energy’s possession and such information
is not known by U.S. Energy to be subject to another Confidentiality Agreement, or (b) is or
becomes generally available to the public other than as a result of an unauthorized disclosure by
U.S. Energy, its officers, employees, directors, agents or its advisors, or (c) becomes available
to U.S. Energy on a non-confidential basis from a source which is not known to be prohibited from
disclosing such information to U.S. Energy by legal, contractual or fiduciary obligation to Client,
or (d) is required by U.S. Energy to be disclosed by court order, or (e) is permitted by Client.
All such information shall be and remain the property of Client unless such information is subject
to another Confidentiality Agreement, and upon the termination of this Agreement, U.S. Energy shall
return all such information upon Client’s request. Notwithstanding anything to the contrary
herein, U.S. Energy shall not disclose any information which is in any way related to this
Agreement or U.S. Energy’s services hereunder without first discussing such proposed disclosure
with Client.

NOTICES: Any formal notice, request or demand which a party hereto may desire to give to
the other respecting this Agreement shall be in writing and shall be considered as duly delivered
as of the postmark date when mailed by ordinary, registered or certified mail by said party to the
addresses listed below. Either party may, from time-to-time, identify alternate addresses at which
they may receive notice during the term of

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this Agreement by providing written notice to the other
party of such alternate addresses.

	 	 	 	 	 	 	 
	Client:	 	Ozark Ethanol, LLC	 	 
	 

	 	 	 	P.O. Box 43	 	 
	 

	 	 	 	Liberal, MO 64762	 	 
	 

	 	 	 	Attn: Mr. Jim McClendon	 	 
	 
	 	 	 	 	 	 
	U.S. Energy:	 	Bank: US Bank	 	 
	 

	 	(Payment by wire)
	 	Account Name: U.S. Energy Services, Inc.	 	 
	 

	 	 	 	Account #: 173100561153	 	 
	 

	 	 	 	ABA: 091 0000 22	 	 
	 
	 	 	 	 	 	 
	 

	 	(Notices):
	 	U.S. Energy Services, Inc.	 	 
	 

	 	 	 	1000 Superior Blvd, Suite 201	 	 
	 

	 	 	 	Wayzata, MN 55391	 	 
	 

	 	 	 	Attn: Contract Administration	 	 

ASSIGNMENT OR AMENDMENT: The Agreement may not be assigned or amended without the written
consent of U.S. Energy and Client.

APPLICABLE LAW: The Agreement shall be construed in accordance with the laws of the State
of Minnesota.

ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement among the parties
pertaining to the subject matter hereof and supersedes all prior Agreements and understanding
pertaining hereto.

Agreed to and Accepted by:

Ozark Ethanol. LLC

	 	 	 	 	 
	By:

	 	      /s/ Jim McClendon
 

	 	 
	 
	 	 	 	 
	Name: (Print)

	 	      Jim McClendon	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:

	 	     Chairman	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Date:

	 	     11-28-06	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	U.S. Energy Services, Inc.
	 
	 	 	 	 
	By:

	 	      /s/ Gail McMinn	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Name: (PRINT)

	 	      Gail McMinn	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:

	 	     Vice President	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Date:

	 	      12-12-06	 	 
	 

	 	 	 	 

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EXHIBIT A

AGENCY AUTHORIZATION

The purpose of this Agency Authorization (this “Authorization”) is to set forth the authorization
and agreement between U.S. Energy Services, Inc. (“U.S. Energy”) and Ozark Ethanol, LLC (“Client”)
related to the provision of energy supply management services.

Client and U.S. Energy agree on the following terms and conditions:

	1.	 	APPOINTMENT AND SCOPE — Client hereby appoints U.S. Energy as its agent for managing Client’s
energy supplies and to deal with third parties on behalf of Client, in connection with
energy-related matters, in U.S. Energy’s capacity as Client’s agent, including, without
limitation, the purchase of energy resources in such quantity and at such times as Client may
authorize in writing, by electronic communications (e.g., by email), verbally or otherwise
(“Energy Procurements”). U.S. Energy is authorized to contract on behalf of Client for the
acquisition of energy supply, transportation and distribution. U.S. Energy hereby accepts
such appointment and agrees to use commercially reasonable efforts to perform the services
required by this Authorization.

	2.	 	AUTHORITY OF U.S. ENERGY TO ALIGN CREDIT — Client authorizes U.S. Energy, in making Energy
Procurements, to align credit from energy suppliers or third parties on behalf and as an agent
of Client, as needed.

	3.	 	AUTHORITY OF U.S. ENERGY TO EXTEND CREDIT — Client hereby agrees that when making Energy
Procurements on behalf of a Client, U.S. Energy may use U.S. Energy funds to pay suppliers,
thereby extending credit directly to Client (and acting as a “Creditor,” as that term is used
in this Authorization).

	4.	 	TERM — The term of this Authorization shall commence as of the date hereof and shall continue
indefinitely until such time as the parties hereto shall agree in writing to terminate the
Authorization.

	5.	 	INDEPENDENT CONTRACTOR — It is not the intent of the parties hereto to form any partnership
or joint venture relationship. Each party shall, in relation to its obligations hereunder,
act as an independent contractor.

	6.	 	RELEASE OF ENERGY CONSUMPTION RECORDS AND BILLS — This Agreement serves as authorization for
the release of Client’s energy consumption records and bills from pipelines and suppliers to
U.S. Energy.

	7.	 	AUTHORITY — Each party represents and warrants to the other that it is fully empowered and
authorized to execute and deliver this Authorization, and the individuals signing this
Authorization each represent and warrant that he or she is fully authorized to do so.

Agreed to and Accepted by:

	 	 	 	 	 	 	 	 	 	 	 
	Ozark Ethanol,
LLC	 	 	 	U.S. Energy
Services, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	     /s/ Jim McClendon
 

	 	 	 	By:
	 	     /s/ Gail McMinn
 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Print Name:

	 	     Jim McClendon
	 	 	 	Print Name:
	 	      Gail McMinn	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	      Chairman
	 	 	 	Title:
	 	      Vice President	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	      11-28-06
	 	 	 	Date:
	 	      12-12-06	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

- 6 -exv10w1

 

EXHIBIT 10.1

PRIDE INTERNATIONAL, INC.

1998 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 December 18, 2006
(the “Award 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. 1998 Long-Term Incentive Plan
(the “Plan”)) at $___.___ per share (the “Exercise 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 Company’s
Compensation Committee (“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” means illness or other incapacity which prevents the Optionee from continuing
to perform the duties of his job for a period of more than three months.

          (b) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (c) “Option Shares” means the shares of Common Stock covered by this Option Agreement.

          (d) “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.

 

 

          2. Exercise Schedule.

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

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage of Option Shares
	 	 	Date Vested	 	Available for Purchase
	 
	 	 	 	 	25	%
	 
	 	 	 	 	25	%
	 
	 	 	 	 	25	%
	 
	 	 	 	 	25	%
	 
	 	 	 	 	 	 	100	%

          The Optionee must be in continuous employment with the Company or any of its Subsidiaries from
the Award 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 with the
Company or any of its Subsidiaries since the Award Date, upon the occurrence of

     (i) a Change in Control or

     (ii) the Optionee’s termination of employment by reason of death,
Disability or Retirement.

          (c) 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 Award Date;

          (b) if Optionee’s employment with the Company and its Subsidiaries is terminated by the
Company or a Subsidiary for serious misconduct (as determined by the Committee) at any time after
the Award Date, then the Option shall terminate immediately upon such termination of Optionee’s
employment; or

          (c) if Optionee’s employment with the Company and its Subsidiaries is terminated for any
reason other than death, Retirement, Disability or serious misconduct, then the Option shall
terminate on the first business day following the expiration of the 60-day period which began on
the date of termination of Optionee’s employment; or

 

 

          (d) if Optionee’s employment with the Company and its Subsidiaries is terminated due to (i)
death at any time after the Award Date and while in the employ of the Company or its Subsidiaries
or within 60 days after termination of such employment, (ii) Retirement, or (iii) Disability at any
time after the Award 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.

          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. 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 Participant 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.

          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 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.

          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 with the Company or any Subsidiary.

 

 

          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.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	PRIDE INTERNATIONAL, INC.
	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:
	 	 	 	 	Title:

          The Optionee hereby accepts the foregoing Option Agreement, subject to the terms and
provisions of the Plan and administrative interpretations thereof referred to above.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	OPTIONEE:
	 
	 	 	 	 	 	 	 	 
	Date:

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