Document:

exv10w2

 

EXHIBIT 10.2

PRIDE INTERNATIONAL, INC.

CHANGE IN CONTROL/NON-COMPETITION/

CONFIDENTIALITY AGREEMENT

LEONARD E. TRAVIS

 

 

CHANGE IN CONTROL/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:

	 	Leonard E. Travis
	 

	 	3388 Sage Road
	 

	 	Unit 2301 West
	 

	 	Houston, Texas 77056

          This Change in Control/Non-Competition/Confidentiality Agreement by and between Pride
International, Inc. (the “Company” and as further defined below) and Leonard E. Travis
(“Employee”), effective as of December 18, 2006 (the “Agreement”), is made on the terms as herein
provided.

PREAMBLE

          WHEREAS, the Company wishes to attract and retain well-qualified employees and key personnel
and to assure itself of the continuity of its management;

          WHEREAS, the Company recognizes that Employee will serve as a valuable resource of the
Company, however, this Agreement is no assurance of continued employment;

          WHEREAS, the Company desires to obtain assurances that Employee will devote his best efforts
to his employment with the Company and will not enter into competition with the Company in its
business as now conducted and to be conducted, or solicit customers or other employees of the
Company to terminate their relationships with the Company;

          WHEREAS, Employee will serve as a key employee of the Company, and he acknowledges that his
talents and services to the Company are of a special, unique, unusual and extraordinary character
and are of particular and peculiar benefit and importance to the Company;

          WHEREAS, the Company is concerned that in the event of a possible or threatened Change in
Control (as defined below) of the Company, Employee may feel insecure, and therefore the Company
desires to provide security to Employee in the event of a Change in Control;

          WHEREAS, the Company further desires to assure Employee that if a possible or threatened
Change in Control should arise and Employee should be involved in deliberations or negotiations in
connection therewith, Employee would be in a secure position to consider and participate in such
transaction as objectively as possible in the best interests of the Company and

 

 

to this end desires to protect Employee from any direct or implied threat to his financial
well-being by a Change in Control;

          WHEREAS, Employee is willing to continue to serve the Company but desires assurances that in
the event of such a Change in Control he will have fair and reasonable severance protection;

          WHEREAS, different factors impact the Company and Employee under circumstances of regular
employment between the Company and Employee when there is no threat of Change in Control and/or
none has occurred, as opposed to circumstances under which a Change in Control is rumored,
threatened, occurring or has occurred. For this reason, the Agreement deals with circumstances
whereby a Change in Control is threatened, occurring or has occurred; and

          WHEREAS, Employee is willing to enter into and carry out the non-competition and
confidentiality obligations and covenants set forth herein in consideration of the Agreement.

AGREEMENT

          NOW, THEREFORE, Employee and the Company (together the “Parties”) agree as follows:

	I.	 	PRIOR AGREEMENTS/CONTRACTS

	 	1.01	 	PRIOR AGREEMENTS. Employee represents and warrants to the Company that (i) he
has no continuing non-competition 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 or 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.

	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	 	BASE SALARY. The term “Base Salary” shall mean, on the date of determination,
twelve (12) times the then current monthly salary in effect for Employee (but not less
than the highest annual base salary paid to Employee during any of the three (3) years
immediately preceding the date of his termination from employment with the Company).
	 
	 	2.02	 	CAUSE. The term “Cause” shall mean (i) Employee’s failure to perform his
duties and responsibilities with the Company (other than any failure due to physical or
mental incapacity) after a demand for performance is delivered to him

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	 	 	 	by the Company which specifically identifies the manner in which the Company
believes he has not performed his duties, (ii) misconduct which causes material
injury, monetary or otherwise, to the Company or its affiliates, (iii) violation of
any Company policy applicable at the time of the events, acts or omissions at issue,
or (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.
	 
	 	2.03	 	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.	 	there occurs a change in control of the Company of the nature
that would be required to be reported in response to item 6(e) of Schedule 14A
of Regulation 14A or Item 1 of Form 8(k) promulgated under the Securities
Exchange Act of 1934 as in effect on the date of the Agreement, or if neither
item remains in effect, any regulations issued by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934 which serve similar
purposes;
	 
	 	b.	 	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 twenty
percent (20%) or more of the total voting power of the Company’s then
outstanding securities;
	 
	 	c.	 	the individuals who were members of the Board of Directors of
the Company (the “Board”) immediately prior to a meeting of the shareholders of
the Company involving a contest for the election of directors shall not
constitute a majority of the Board following such election;
	 
	 	d.	 	the Company shall have merged into or consolidated with another
corporation, or merged another corporation into the Company, on a basis whereby
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 merger or consolidation;
	 
	 	e.	 	the Company shall have sold, transferred or exchanged all, or
substantially all, of its assets to another corporation or other entity or
person; or
	 
	 	f.	 	a Limited Change in Control (as hereinafter defined) shall have
occurred.

	 	2.04	 	COMPANY. The term “Company” means Pride International, Inc., a Delaware
corporation, as the same presently exists, as well as any and all successors,

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	 	 	 	regardless of the nature of the entity or the state or nation of organization,
whether by reorganization, merger, consolidation, absorption or dissolution. For
the purpose of the Agreement, Company includes all subsidiaries and affiliates of
the Company to the extent such subsidiary and/or affiliate is carrying on any
portion of the business of the Company or a business similar to that being conducted
by the Company.
	 
	 	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. The Employee’s initial date of active employment, which shall
be December 18, 2006.
	 
	 	2.07	 	LIMITED CHANGE IN CONTROL. The term “Limited Change in Control” of the Company
shall mean, and shall be deemed to have occurred on, the date the Company shall have
merged into or consolidated with another corporation, or merged another corporation
into the Company, on a basis whereby at least fifty percent (50%) but not more than
eighty percent (80%) of the total voting power of the surviving corporation is
represented by shares held by former shareholders of the Company immediately prior to
such merger or consolidation.
	 
	 	2.08	 	TARGET BONUS. The term “Target Bonus” shall mean Employee’s target bonus under
the Company’s annual bonus plan for the fiscal year in which Termination occurs or, if
the Company has not specified a target bonus for such year, fifty percent (50%) of the
maximum percentage of Employee’s Base Salary Employee may be entitled to under the
Company’s annual bonus plan in such year.
	 
	 	2.09	 	TERMINATION. The term “Termination” shall mean a termination of Employee’s
employment with the Company for any reason other than Cause or Voluntary Resignation
which takes place (i) within two (2) years following the date of a Change in Control
which occurs for any reason other than a Limited Change in Control or (ii) within one
(1) year following the date of a Limited Change in Control.
	 
	 	2.10	 	VOLUNTARY RESIGNATION. The term “Voluntary Resignation” means termination of
employment with the Company by Employee for any reason other than one or more of the
following events:

	 	a.	 	Employee’s resignation or retirement is requested by the
Company other than for Cause;
	 
	 	b.	 	Any reduction in Employee’s Base Salary from that in effect
immediately prior to the Change in Control;

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	 	c.	 	A significant and material diminution in Employee’s duties and
responsibilities occurring after a Change in Control which would degrade,
embarrass or otherwise make it unreasonable for Employee to remain in the
employment of the Company; or
	 
	 	d.	 	Any requirement following the Change in Control that Employee
relocate more than 50 miles from downtown Houston, Texas.

	III.	 	CHANGE IN CONTROL

	 	3.01	 	CHANGE IN CONTROL TERMINATION PAYMENTS AND BENEFITS. In the event of
Employee’s Termination, the Company shall, in exchange for a full and complete release
of claims against the Company, its affiliates, officers and directors (“Release”), pay
or provide to Employee the payments and benefits specified in this Section 3.01 within
thirty (30) days following the Effective Waiver Date (as defined below), subject to the
provisions of Section 5.04 and provided that the payments will be made as soon as
reasonably practical to his Executor, Administrator or Estate in the event of
Employee’s death. The date that is seven days after Employee’s execution of the Waiver
and Release shall be the “Effective Waiver Date.”

	 	a.	 	An amount equal to two (2) times the sum of (i) his Base Salary
and (ii) his Target Bonus.
	 
	 	b.	 	An amount equal to a prorated portion of the Target Bonus based
on the number of full months of employment completed within the year of
Termination.
	 
	 	c.	 	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, life, health, accident and disability insurance
coverages which are not less than the highest benefits furnished during the
term of the Agreement at a cost to the 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.
	 
	 	d.	 	The Company’s obligation under this Section to continue to pay
or provide health care, life, accident and disability insurance 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;
provided, however, that Employee shall have all rights, if any, afforded to
retirees to convert group life insurance coverage to the individual life
insurance coverage as to the extent of, and whenever his group life insurance
coverage under this Section is reduced or expires.

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	 	 	 	Apart from this subparagraph, Employee shall have and be subject to no
obligation to mitigate.
	 
	 	e.	 	The Company shall deduct applicable withholding taxes in
performing its obligations under this Section.

	 	 	A sample form of Release is attached as Exhibit A. Employee acknowledges that the Company
retains the right to modify the required form of the Release as the Company deems necessary
in order to effectuate a full and complete release of claims against the Company, its
affiliates, officers and directors and to delay payment until timely execution of the
Release without revocation.
	 
	 	 	Nothing in this Section is intended, nor shall be deemed or interpreted, to be an amendment
to any compensation, benefit or other plan of the Company. 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.

	 	3.02	 	This Agreement is no guarantee of continued employment and Employee remains an
“at will” employee hereunder.

	IV.	 	NON COMPETITION AND PROTECTION OF CONFIDENTIAL INFORMATION

	 	4.01	 	CONSIDERATION. Company promises to provide Employee with the Company’s trade
secrets and other confidential information, along with personal 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 IV 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 4.01(a),
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 3.01 shall constitute additional consideration for the
non-competition and confidentiality agreements set forth herein.

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	 	4.02	 	NON-COMPETITION. In exchange for the consideration described above in Section
4.01, Employee agrees that during his employment with the Company and for a period of
one (1) year after he is no longer employed by the Company (unless he has a right to
payments and benefits under Article III as a result of a Termination, in which event
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 below 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
two (2) 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 two (2) year preceding such termination from whom the
Company had solicited business during such two (2) years; or
	 
	 	c.	 	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 one
(1) year after the date of termination of employment of Employee with the
Company or within one (1) year after such officer, director, employee or
individual terminated employment with the Company, whichever period expires
earlier.

	 	 	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

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	 	 	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.

	 	4.03	 	CONFIDENTIALITY/PROTECTION OF INFORMATION. Employee acknowledges that his
employment with the Company will, of necessity, provide him with specialized 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 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.
	 
	 	4.04	 	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 this Agreement are reasonable and
constitute an otherwise enforceable agreement to which the provisions of this
Article

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	 	 	 	IV 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 this Agreement
is not illusory;
	 
	 	c.	 	the consideration given by the Company under this 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 4.02 and Employee’s
promise not to engage in the unfair competition prohibited by Section 4.02 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 IV 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 IV of
the Agreement, accordingly:

	 	(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 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.

	 	4.05	 	TERMINATION OF BENEFITS FOR VIOLATION OF NON-COMPETITION AND
CONFIDENTIALITY/PROTECTION OF INFORMATION PROVISIONS. If Employee is terminated after
a Change in Control with the right to payments and benefits under Article III, 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.
	 
	 	4.06	 	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.

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	 	4.07	 	RETURN OF CONSIDERATION. Employee specifically recognizes and affirms that the
non-competition obligations set out in Section 4.02 are material and important terms of
this Agreement, and Employee further agrees that should all or any part of the
non-competition obligations described in Section 4.02 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
4.01(b), including interest on all amounts paid to Employee under Section 4.01(b) at
the maximum lawful rate.

	V.	 	GENERAL

	 	5.01	 	INDEMNIFICATION. If Employee shall obtain a final judgment in Employee’s favor
with respect to any litigation brought by Employee or the Company to enforce or
interpret any provision of the Agreement, the Company, to the fullest extent permitted
by applicable law, hereby indemnifies Employee for his reasonable attorney’s fees and
disbursements incurred in such litigation and hereby agrees to pay in full all such
fees and disbursements up to a maximum of one hundred fifty thousand dollars ($150,000)
in connection with such litigation.
	 
	 	5.02	 	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 the United States, which
would cause additional tax liability to be imposed. Notwithstanding any contrary
provisions in any plan, program or policy of the Company, if all or any portion of the
benefits payable under the Agreement, either alone or together with other payments and
benefits which Employee receives or is entitled to receive from the Company, would
constitute a “parachute payment” within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”), the Company shall reduce Employee’s
payments and benefits payable under the Agreement to the extent necessary so that no
portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code,
but only if, by reason of such reduction, the net after-tax benefit shall exceed the
net after-tax benefit if such reduction were not made. “Net after-tax benefit” for
these purposes shall mean the sum of (i) the total amount payable to Employee under the
Agreement, plus (ii) all other payments and benefits which Employee receives or is then
entitled to receive from the Company that, alone or in combination with the payments
and benefits payable under the Agreement, would constitute a “parachute payment” within
the meaning of Section 280G of the Code (each such benefit hereinafter referred to as
an “Additional Parachute Payment”), less (iii) the amount of federal income taxes
payable with respect to the foregoing calculated at the maximum marginal income tax
rate for each year in which the foregoing shall be paid to Employee (based upon the
rate in effect for such year as set forth in the Code at the time of the payment under
the

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	 	 	 	Agreement), less (iv) the amount of excise taxes imposed with respect to the
payments and benefits described in (i) and (ii) above by Section 4999 of the Code.
	 
	 	5.03	 	PAYMENT OF BENEFITS UPON TERMINATION FOR CAUSE. If the termination of Employee
occurs within two (2) years after a Change in Control (other than a Limited Change in
Control) or within one (1) year after a Limited Change in Control, the Company shall
not have the right to suspend or withhold payments to Employee due to an assertion that
the termination was for Cause until or unless a final judgment is entered upholding the
Company’s determination that the termination was for Cause, in which event Employee
will be liable to the Company for all amounts paid, plus interest at the rate allowed
for judgments under Article 5069-1.05 V.A.T.S.
	 
	 	5.04	 	SECTION 409A. Notwithstanding any provision of the Agreement to the contrary,
the following provisions shall apply for purposes of complying with Section 409A of the
Code and applicable Treasury authorities (“Section 409A”):

	 	a.	 	If Employee is a “specified employee,” as such term is defined
in Section 409A and determined as described below in this Section 5.04, any
payments payable as a result of Employee’s Termination (other than death or
Disability) 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 5.04(a) shall be applied by accumulating all payments that
otherwise would have been paid within six months of Employee’s Termination and
paying such accumulated amounts at the earliest date which complies with the
requirements of Section 409A. Employee shall be a “specified employee” for the
twelve-month period beginning on April 1 of a year if Employee is a “key
employee” as defined in Section 416(i) of the Code (without regard to Section
416(i)(5)) as of December 31 of the preceding year.
	 
	 	b.	 	If any provision of the Agreement would result in the
imposition of an applicable tax under Section 409A, Employee and the Company
agree that such provision will be reformed to avoid imposition of the
applicable tax and no action taken to comply with Section 409A shall be deemed
to adversely affect Employee’s rights or benefits hereunder.

	 	5.05	 	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.
	 
	 	5.06	 	NOTICES. Notices, requests, demands and other communications provided for by
the Agreement shall be in writing and shall either be personally delivered by

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	 	 	 	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 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.
	 
	 	5.07	 	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 5.09 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.
	 
	 	5.08	 	ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire agreement
of the Parties with respect of the subject matter hereof. 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.
	 
	 	5.09	 	SUCCESSORS AND ASSIGNS. 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. 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. If the Company
should split, divide or otherwise become more than one entity, all liability and
obligations of the Company shall be the joint and several liability and obligation of
all of the parts, unless the Agreement is assigned in accordance with this Section.
	 
	 	5.10	 	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

-12-

 

	 	 	 	State, the validity, interpretation and enforcement of the Agreement shall be
governed by the laws of the State of Texas.
	 
	 	5.11	 	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.
	 
	 	5.12	 	HEADINGS. The headings in the Agreement are inserted for convenience of
reference only and shall not affect the meaning or interpretation of the Agreement.
	 
	 	5.13	 	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 hereto, and the Agreement will
be construed to give meaning to the remaining provisions of the Agreement in accordance
with the intent of the Agreement.
	 
	 	5.14	 	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.
	 
	 	5.15	 	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.

-13-

 

          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/ Leonard E. Travis
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Leonard E. Travis
	 
	 

	 	 	 	 
	 	Date: December 18, 2006
	 
	 	 	 	 	 	 
	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:
	 	December 18, 2006

-14-

 

EXHIBIT A

Waiver And Release

          Pursuant to the terms of my Agreement with Pride International, Inc. effective
___, and in exchange for the payments and benefits as provided in Section 3.01 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. (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 [21/45] 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 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
expressly represent

A-1

 

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.

          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

A-2

 

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

	 	 

A-3exv10w1

 

Exhibit 10.1

AMENDMENT NO. 1 TO

EMPLOYMENT AGREEMENT

THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (“Amendment”) is made this twenty-first day of
December 2006, between NVR, INC., a Virginia corporation (the “Company”) and DWIGHT C. SCHAR, (the
“Executive”). References within this Amendment to the Company refer to NVR and its subsidiaries
and affiliates.

WHEREAS, the parties wish to amend that Employment Agreement entered into between the Company and
the Executive dated July 1, 2005 (“Employment Agreement”); and

WHEREAS, Section 8.3 of the Employment Agreement states that amendments shall only be effectuated
pursuant to a written instrument signed by both parties to the Employment Agreement;

WHEREAS, the Company and the Executive find it desirous to execute an Amendment, whereby the
Executive’s base salary and bonus opportunity for calendar year 2007 is $0.00.

ACCORDINGLY, for and in consideration of the foregoing and of the mutual covenants and agreement
set forth in this Amendment, the parties AGREE as follows:

	1.	 	Paragraph 1.1 of the Employment Agreement is hereby amended and restated in its entirety as
follows:
	 
	 	 	Employment by the Company. The Company hereby employs the Executive, for itself and
its affiliates, to render full-time services to the Company. The Executive will serve in
the capacity of Chairman of the Board. The Executive will perform such duties as are
imposed on the holder of that office by the By-laws of the Company and such other duties as
are customarily performed by one holding such position in the same or similar businesses or
enterprises as those of the Company. The
Executive will perform such other related duties as may be assigned to him from time to time
by the Company’s Board of Directors. The Executive will devote his time and

 

 

	 	 	attention to
the performance of such duties and to the promotion of the business and interests of the
Company. This provision, however, will not prevent the Executive from engaging in other
activities, including investing his funds and assets in any form or manner, so long as such
investments and other activities do not interfere with the performance of his full-time
duties for the Company, and subject to the limitations set forth in Section 7.1 of this
Agreement and the Company’s other policies and procedures.

	2.	 	Paragraph 1.3 is hereby deleted in its entirety.
	 
	3.	 	Paragraph 3.1 of the Employment Agreement is hereby amended and restated in its entirety as
follows:
	 
	 	 	As compensation for all services rendered pursuant to this Agreement, the Company will pay
to the Executive an annual base salary of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS
($1,500,000) payable in equal monthly installments of ONE HUNDRED TWENTY-FIVE THOUSAND
DOLLARS ($125,000). For calendar year 2007 only, (i) the Executive’s annual base salary is
equal to $0.00, and (ii) the Executive’s annual base salary for purposes of calculating any
payments due the Executive pursuant to Section 6 of the Agreement shall be deemed to be
$1,500,000, provided that the Company may make any adjustments to the Executive’s 2007 base
salary up to $1,500,000 to the extent necessary to avoid unintended consequences under the
Employee Retirement Income Security Act, the Internal Revenue Code, the Company’s benefit
plans or other similar laws and arrangements. The Company’s Board of Directors in its sole
discretion may increase, but may not reduce, the Executive’s annual base salary.
	 
	4.	 	The first sentence of Paragraph 3.2 of the Employment Agreement is hereby amended and
restated in its entirety as follows:
	 
	 	 	The Executive shall be eligible to be paid a bonus annually in cash pursuant to the
Company’s annual incentive plan, as determined by the Compensation Committee of the Board of
Directors, in a maximum amount of 100% of the Executive’s annual base salary as then in
effect.
	 
	5.	 	Paragraph 3.5 of the Employment Agreement is hereby amended and restated in it entirety as
follows:

 

 

	 	 	The Executive is required to continuously hold at all times NVR, Inc. common stock with a
value equal to the higher of (i) $12,000,000 and (ii) eight (8) times the Executive’s base
salary as then in effect, subject to adjustment at any time by the Company’s Board of
Directors upon thirty days notice.
	 
	6.	 	Except as expressly provided herein, the terms and conditions of the Employment Agreement
shall remain in full force and effect and shall be binding on the parties hereto.

     IN WITNESS WHEREOF, the parties have duly executed and delivered this Amendment, or have
caused this Amendment to be duly executed and delivered in their name and on their behalf,
intending to be legally bound by its terms, as of the day and year first above written.

NVR, INC.

	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Robert M. Paul
 

	 	 	 	/s/ Dwight C. Schar
 

	 	 
	 

	 	ROBERT M. PAUL
	 	 	 	DWIGHT C. SCHAR

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