Document:

exv10w3

Exhibit 10.3

FORM OF

EMPLOYEE MATTERS AGREEMENT

BETWEEN

PRIDE INTERNATIONAL, INC.

and

SEAHAWK DRILLING, INC.

Dated ____________, 2009

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 
	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	3	 
	 
	 	 	 	 
	ARTICLE II GENERAL PRINCIPLES
	 	 	6	 
	Section 2.1 Seahawk Plans
	 	 	6	 
	Section 2.2 Pride Plans
	 	 	7	 
	 
	 	 	 	 
	ARTICLE III DEFINED CONTRIBUTION PLANS
	 	 	9	 
	Section 3.1 Seahawk Qualified Plan
	 	 	9	 
	Section 3.2 Spin-Off of Pride Qualified Plan Assets
	 	 	9	 
	 
	 	 	 	 
	ARTICLE IV HEALTH AND WELFARE PLANS AND BENEFITS
	 	 	10	 
	Section 4.1 Establishment of Seahawk Health and Welfare Plans
	 	 	10	 
	Section 4.2 Seahawk Employee Participation in Pride Health and Welfare Plans
	 	 	10	 
	Section 4.3 Pride Obligations with Respect to Seahawk Employee Participation in Pride Health and Welfare Plans
	 	 	10	 
	Section 4.4 Paid Time Off
	 	 	10	 
	Section 4.5 Employees on Leave
	 	 	11	 
	Section 4.6 Retiree Medical
	 	 	11	 
	Section 4.7 Medical Reimbursement Account Plan
	 	 	11	 
	Section 4.8 Health Insurance Portability and Accountability Act of 1996
	 	 	11	 
	Section 4.9 Workers’ Compensation
	 	 	11	 
	Section 4.10 COBRA
	 	 	12	 
	Section 4.11 Claims Experience
	 	 	12	 
	 
	 	 	 	 
	ARTICLE V EQUITY AND OTHER COMPENSATION
	 	 	12	 
	Section 5.1 Executive and Non-Qualified Plans
	 	 	12	 
	Section 5.2 Pride International, Inc. Long-Term Incentive Plans
	 	 	12	 
	Section 5.3 Employee Stock Purchase Plan
	 	 	14	 
	Section 5.4 Annual Bonus Plan
	 	 	15	 
	Section 5.5 Deduction under Section 83(h) of the Code
	 	 	15	 
	Section 5.6 SEC Registration
	 	 	15	 
	Section 5.7 Section 409A
	 	 	15	 
	 
	 	 	 	 
	ARTICLE VI CERTAIN TRANSITION MATTERS
	 	 	15	 
	Section 6.1 Transition Services Agreement
	 	 	15	 
	Section 6.2 Requests for IRS and DOL Opinions
	 	 	16	 
	Section 6.3 Consent of Third Parties
	 	 	16	 
	Section 6.4 Tax Cooperation
	 	 	16	 
	Section 6.5 Plan Returns
	 	 	16	 
	 
	 	 	 	 
	ARTICLE VII EMPLOYMENT-RELATED MATTERS
	 	 	16	 
	Section 7.1 Terms of Seahawk Employment
	 	 	16	 
	Section 7.2 Non-Termination of Employment; No Third-Party Beneficiaries
	 	 	17	 
	 
	 	 	 	 
	ARTICLE VIII GENERAL PROVISIONS
	 	 	17	 
	Section 8.1 Approval by Pride As Sole Stockholder
	 	 	17	 

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	Section 8.2 Amendments
	 	 	17	 
	Section 8.3 Fiduciary Matters
	 	 	17	 
	Section 8.4 No Amendment of Plans
	 	 	18	 
	Section 8.5 Effect if Separation does not Occur
	 	 	18	 
	Section 8.6 Limitation of Liability
	 	 	18	 
	Section 8.7 Relationship of Parties
	 	 	18	 
	Section 8.8 Incorporation of Master Separation Agreement Provisions
	 	 	19	 
	Section 8.9 Governing Law
	 	 	19	 
	Section 8.10 Severability
	 	 	19	 
	Section 8.11 Amendment
	 	 	19	 
	Section 8.12 Assignment
	 	 	20	 
	Section 8.13 No Strict Construction; Cooperation of the Parties
	 	 	20	 
	Section 8.14 Termination
	 	 	20	 
	Section 8.15 Conflict
	 	 	20	 
	Section 8.16 Counterparts
	 	 	20	 

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EMPLOYEE MATTERS AGREEMENT

          This EMPLOYEE MATTERS AGREEMENT (this “Agreement”) is entered into as of ___, 2009 by
and between Pride International, Inc., a Delaware corporation (“Pride”), and Seahawk Drilling,
Inc., a Delaware corporation (“Seahawk”). Capitalized terms used herein and not otherwise defined
shall have the respective meanings assigned to them in Article I hereof or in the Master Separation
Agreement.

          WHEREAS, the Board of Directors of Pride has determined that it is in the best interests of
Pride and its shareholders to spin off the Seahawk Business by distributing the capital stock of
Seahawk to Pride’s shareholders;

          WHEREAS, in order to effectuate the foregoing, Pride and Seahawk have entered into a Master
Separation Agreement which provides, among other things, subject to the terms and conditions
thereof, for the Distribution and the execution and delivery of certain other agreements, including
this Agreement, in order to facilitate and provide for the foregoing; and

          WHEREAS, in order to ensure an orderly transition under the Master Separation Agreement it
will be necessary for Pride and Seahawk to allocate between them assets, liabilities and
responsibilities with respect to certain employee compensation, benefit plans and programs, and
certain employment matters.

          NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
herein contained, the parties, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS

          Wherever used in this Agreement, the following terms shall have the meanings indicated below,
unless a different meaning is plainly required by the context. The singular shall include the
plural, unless the context indicates otherwise. Headings of sections are used for convenience of
reference only, and in case of conflict, the text of this Agreement, rather than such headings,
shall control:

          “Affiliate” shall have the meaning set forth in the Master Separation Agreement.

          “Agreement” means this Employee Matters Agreement and all amendments made hereto from
time to time.

          “Benefits Maintenance Period” means the period beginning on the Distribution Date and
ending on December 31, 2009 or such other date as the parties mutually agree in writing during
which Pride agrees to provide certain benefits and administrative services to Seahawk including
(without limitation): (i) participation by Seahawk Employees in certain Pride Plans as described in
Article IV and (ii) the provision of “Services” as defined in the Transition Services Agreement.

          “Board(s)” means the Board of Directors of Pride and/or the Board of Directors of
Seahawk, as the context indicates.

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          “COBRA” means the continuation coverage requirements for “group health plans” under
Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended from time to
time, and as codified in Section 4980B of the Code and Sections 601 through 608 of ERISA, together
with all regulations and proposed regulations promulgated thereunder.

          “Code” means the Internal Revenue Code of 1986, as amended from time to time.

          “Continuing Seahawk Participant” means a Seahawk Employee who participated in a Pride
Health and Welfare Plan immediately preceding the Distribution Date and is eligible to continue to
participate in such Plan as of the Distribution Date through the Benefits Maintenance Period.

          “Distribution” shall have the meaning set forth in the Master Separation Agreement.

          “Distribution Date” shall have the meaning set forth in the Master Separation
Agreement.

          “DOL” means the United States Department of Labor.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time.

          “FBP” means the Pride International, Inc. Flexible Benefits Plan.

          “Group” shall have the meaning set forth in the Master Separation Agreement.

          “Health and Welfare Plans,” when immediately preceded by “Pride,” means the health and
welfare plans listed on Schedule 1 established and maintained by Pride for the benefit of employees
of any member of the Pride Group. When immediately preceded by “Seahawk,” “Health and Welfare
Plans” means the health and welfare plans to be established by Seahawk pursuant to Article IV
that correspond to the respective Pride Health and Welfare Plans.

          “HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as it
may be amended from time to time.

          “IRS” means the United States Internal Revenue Service.

          “Master Separation Agreement” means the Master Separation Agreement between Pride and
Seahawk entered into as of ___, 2009.

          “Participating Company” means: (a) Pride; (b) any Person (other than an individual)
that Pride has approved for participation in, has accepted participation in, or which is
participating in, a Plan sponsored by Pride; or (c) any Person (other than an individual) that, by
the terms of such a Plan, participates in such a Plan sponsored by Pride or any employees of which,
by the terms of such a Plan, participate in a Plan.

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          “Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political subdivision thereof.

          “Plan,” depending on the context, may mean any plan, policy, program, payroll
practice, arrangement, contract, annuity contract, trust, insurance policy, or any agreement or
funding vehicle providing compensation or benefits to employees, dependents of employees or former
employees or non-employee and employee directors of Pride, Seahawk or any member of the Pride Group
or the Seahawk Group. “Plan,” when immediately preceded by “Pride,” means a Plan sponsored by
Pride or a member of the Pride Group. When immediately preceded by “Seahawk,” “Plan” means
a Plan sponsored by Seahawk or a member of the Seahawk Group.

          “Pride” means Pride International, Inc., a Delaware corporation.

          “Pride Business” shall have the meaning set forth in the Master Separation Agreement.

          “Pride Common Stock” shall have the meaning set forth in the Master Separation
Agreement.

          “Pride Distribution Date Value” means the closing price of Pride Common Stock on the
Distribution Date.

          “Pride Employee” means any individual who is employed in the Pride Business during the
relevant time period.

          “Pride Group” shall have the meaning set forth in the Master Separation Agreement.

          “Pride Non-Qualified Plans” means the Pride International, Inc. 2007 Long-Term
Incentive Plan, the Pride International, Inc. 1998 Long-Term Incentive Plan, the Pride
International, Inc. 2004 Directors’ Stock Incentive Plan, the Pride International, Inc. 1993
Director’s Stock Option Plan, the Marine Drilling 2001 Stock Incentive Plan, the Marine Drilling
1992 Long-Term Incentive Plan, the Marine Drilling 1995 Non-Employee Directors’ Plan, the Pride
International, Inc. Supplemental Executive Retirement Plan, the Pride International, Inc. 401(k)
Restoration Plan, each as amended from time to time, and any other plan, other than the Pride
Qualified Plan, maintained by Pride or any of its Subsidiaries for the purpose of providing
incentive or retirement benefits to any Pride Employee and in which any Seahawk Employee
participates as of the date immediately prior to the Distribution Date.

          “Pride Qualified Plan” means the Pride International, Inc. 401(k) Retirement and
Savings Plan.

          “Pride Plan” means an employee benefit or welfare plan, program, arrangement or
agreement (whether formal or informal, written or unwritten, qualified or unqualified or subject to
ERISA or not) that is maintained or sponsored by a member of the Pride Group for the benefit of
eligible Pride Employees and Seahawk Employees.

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          “Seahawk” means Seahawk Drilling, Inc., a Delaware corporation. In all such instances
in which Seahawk is referred to in this Agreement, it shall also be deemed to include a reference
to each member of the Seahawk Group, unless it specifically provides otherwise. Seahawk shall be
solely responsible to Pride for ensuring that each member of the Seahawk Group complies with the
applicable terms of this Agreement.

          “Seahawk Business” shall have the meaning set forth in the Master Separation
Agreement.

          “Seahawk Common Stock” shall have the meaning set forth in the Master Separation
Agreement.

          “Seahawk Distribution Date Value” means the closing price of Seahawk Common Stock on
the Distribution Date.

          “Seahawk Employee” means any individual who is employed in the Seahawk Business during
the relevant time period; provided, that no Person on long-term disability as of the Distribution
Date shall be considered a Seahawk Employee.

          “Seahawk Group” shall have the meaning set forth in the Master Separation Agreement.

          “Seahawk Qualified Plan” means a defined contribution qualified plan and trust
established by Seahawk pursuant to Section 3.1 of this Agreement.

          “Seahawk Plan” means an employee benefit or welfare plan, program, arrangement or
agreement (whether formal or informal, written or unwritten, qualified or unqualified or subject to
ERISA or not) that is maintained or sponsored by a member of the Seahawk Group for the benefit of
eligible Seahawk Employees.

          “SEC” means the United States Securities and Exchange Commission.

          “Subsidiary” shall have the meaning set forth in the Master Separation Agreement.

          “Tax Sharing Agreement” shall have the meaning set forth in the Master Separation
Agreement.

          “Transition Services Agreement” means the Transition Services Agreement (Pride as
service provider), as set forth and attached as an exhibit to the Master Separation Agreement.

ARTICLE II

GENERAL PRINCIPLES

          SECTION 2.1 Seahawk Plans

     (a) Non-Duplication of Benefits. No employee of the Seahawk Group shall
receive duplicate benefits under Pride Plans and Seahawk Plans. Pride and Seahawk

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shall mutually agree on methods and procedures, if necessary, including amending the
respective Plan documents, to prevent employees of the Seahawk Group from receiving
duplicate benefits from the Pride Plans and the Seahawk Plans.

     (b) Service Credit. Except as specified otherwise in this Agreement or as
required by applicable law, each Seahawk Plan in existence on the Distribution Date or the
end of the Benefits Maintenance Period shall provide each Seahawk Employee full credit for
all service with the Pride Group as of the Distribution Date and/or the end of the Benefits
Maintenance Period, as applicable, to the same extent such service was recognized and
credited under the applicable Pride Plan immediately prior to the Distribution Date or the
end of the Benefits Maintenance Period, as applicable, except to the extent that duplication
of benefits would result. These service crediting provisions shall be subject to any
respectively applicable “service bridging,” “break in service,” “employment date” or
“eligibility date” rules under the Seahawk Plans. Nothing herein shall limit Seahawk or its
Affiliates from recognizing service in addition to the recognition of service required
herein.

     (c) Beneficiary Designations. Subject to Section 6.3 of this Agreement, all
beneficiary designations made by the Seahawk Employees under or for the Pride Plans shall be
transferred to and be in full force and effect under the corresponding Seahawk Plans until
such time, if ever, that any such beneficiary designation is replaced or revoked by the
Seahawk Employee who made the beneficiary designation. If no such beneficiary designations
are on file, the terms of the applicable Seahawk Plan shall control.

     (d) Seahawk Under No Obligation to Maintain Plans. Except as specified
otherwise in this Agreement, nothing in this Agreement shall preclude Seahawk, at any time,
from amending, merging, modifying, terminating, eliminating, reducing, or otherwise altering
in any respect any Seahawk Plan, any benefit under any Seahawk Plan or any trust, insurance
policy or funding vehicle related to any Seahawk Plan (to the extent permitted by law) in
accordance with the applicable governing plan documents.

     (e) Pride’s General Obligations. Pride shall provide, or cause to be provided,
to Seahawk all participant information, forms or documents reasonably requested by Seahawk
to fulfill its obligations under this Section 2.1.

     (f) Pride Participation in Seahawk Plans. Unless the prior written consent of
Seahawk is obtained, Pride Employees shall not participate in any Seahawk Plans.

     SECTION 2.2 Pride Plans

     (a) Seahawk’s Participation in Pride Plans. Except as otherwise provided in
this Agreement or unless the prior written consent of Pride is obtained, on and after the
Distribution Date, employees of the Seahawk Group shall not participate in any Pride Plans.

     (b) Pride’s General Obligations During the Benefits Maintenance Period. With
respect to any Pride Plan or program that provided benefits to a Seahawk Employee prior to
the Distribution Date, Pride shall provide certain services with respect to the

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Pride Plans in accordance with the terms of the Transition Services Agreement and this
Agreement.

     (c) Seahawk’s General Obligations During the Benefits Maintenance Period. With
respect to any Pride Plan or program that provided benefits to a Seahawk Employee prior to
the Distribution Date or to a Continuing Seahawk Participant during the Benefits Maintenance
Period, Seahawk will cooperate with Pride and take any actions reasonably requested by Pride
on a timely basis with respect to such Pride Plans or programs, and Seahawk shall comply
with the terms as set forth in such Plans or any procedures adopted pursuant thereto,
including (without limitation): (i) assisting in the administration of claims under the
Pride Health and Welfare Plans, to the extent requested by the claims administrator of the
applicable plan; (ii) cooperating fully with Pride Plan auditors; (iii) the provision of
payroll processing support; (iv) preserving the confidentiality of all financial
arrangements Pride has or may have with any entity or individual with whom Pride has entered
into an agreement relating to said Pride Plan; and (v) preserving the confidentiality of
participant information to the extent not specified otherwise in this Agreement. In
addition, Seahawk shall provide, or cause to be provided, all participant information that
is necessary or appropriate or as reasonably requested by Pride for the efficient and
accurate administration of each Pride Plan or program that provides benefits to a Continuing
Seahawk Participant during the Benefits Maintenance Period. Pride and its respective
authorized agents shall, subject to all applicable laws, including laws of confidentiality
and data protection, be given reasonable and timely access to, and may make copies of, all
information relating to the subjects of this Agreement in the custody of the other party or
its agents, to the extent necessary or appropriate for the administration of said Plans or
programs.

     (d) Reporting and Disclosing Communications to Participants. Subject to the
provisions of the Transition Services Agreement, during the Benefits Maintenance Period: (a)
Pride, solely at its own expense, shall take, or cause to be taken, all actions necessary or
appropriate to accomplish the distribution of all Pride Plan-related communications and
materials to Pride Employees and their beneficiaries participating in Pride Plans and (b)
Seahawk, solely at its own expense, shall take, or cause to be taken, all actions necessary
or appropriate to accomplish the distribution of (i) all Pride Plan-related communications
and materials to Continuing Seahawk Participants and their spouses, dependents or
beneficiaries participating in Pride Plans and (ii) all Seahawk Plan-related communications
and materials to Seahawk Employees and their spouses, dependents or beneficiaries
participating in Seahawk Plans.

     (e) Pride Under No Obligation to Maintain Plans. Except as specified otherwise
in this Agreement, nothing in this Agreement shall preclude Pride, at any time, from
amending, merging, modifying, terminating, eliminating, reducing, or otherwise altering in
any respect any Pride Plan, any benefit under any Pride Plan or any trust, insurance policy
or funding vehicle related to any Pride Plan (to the extent permitted by law) in accordance
with the applicable governing plan documents.

     (f) Seahawk Obligation to Pay Own Expenses. Except to the extent otherwise
specified herein or in the Transition Services Agreement, Seahawk shall be responsible

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for, and Pride shall have no liability for, any costs associated with any actions
Seahawk is obligated to take to comply with the terms and provisions of this Agreement,
including, without limitation, this Article II.

ARTICLE III

DEFINED CONTRIBUTION PLANS

          SECTION 3.1 Seahawk Qualified Plan

     (a) Establishment of Plan. Prior to the Distribution Date, Seahawk shall
establish the Seahawk Qualified Plan with terms and provisions that are substantially
comparable to those of the Pride Qualified Plan. Seahawk shall timely take all necessary,
reasonable or appropriate actions to ensure the Seahawk Qualified Plan’s qualification under
the Section 401(a) of the Code and compliance with ERISA and any other applicable laws.

     (b) Continuation of Elections. As of the Distribution Date, Seahawk (acting
directly or through its Affiliates) shall cause the Seahawk Qualified Plan to recognize and
maintain all Pride Qualified Plan elections and designations including, but not limited to,
deferral, investment, and payment form elections, beneficiary designations, and the rights
of alternate payees under qualified domestic relations orders with respect to Seahawk
Employees, to the extent such election or designation is available under the Seahawk
Qualified Plan.

          SECTION 3.2 Spin-Off of Pride Qualified Plan Assets

     (a) Spin-Off of Assets. No later than sixty (60) days following the
Distribution Date (or such time as mutually agreed by the parties), Pride shall cause the
accounts (including any outstanding loan balances) in the Pride Qualified Plan attributable
to Seahawk Employees and all of the assets in the Pride Qualified Plan related thereto to be
spun-off and transferred in-kind to the Seahawk Qualified Plan, and Seahawk shall cause the
Seahawk Qualified Plan to accept such transfer of accounts and underlying assets and,
effective as of the date of such spin-off and transfer, to assume and to fully perform, pay
and discharge, all obligations of the Pride Qualified Plan relating to the accounts of
Seahawk Employees (to the extent the assets related to those accounts are actually
transferred from the Pride Qualified Plan to the Seahawk Qualified Plan) as of the date of
such spinoff. The transfer of assets shall be conducted in accordance with Section 414(l)
of the Code, Treasury Regulation § 1.414(l)-1, and Section 208 of ERISA.

     (b) Contributions as of the Distribution Date. All contributions payable to the
Pride Qualified Plan with respect to employee deferrals and contributions, matching
contributions and other contributions for participants who are Seahawk Employees through the
Distribution Date, determined in accordance with the terms and provisions of the Pride
Qualified Plan, ERISA and the Code, shall be paid by Pride to the Pride Qualified Plan, as
applicable, prior to the date of the asset transfer described in this Section 3.2.

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     (c) Form 5310-A. No later than thirty (30) days prior to the Distribution Date,
Pride and Seahawk (each acting directly or through their respective Affiliates) shall, to
the extent necessary, file IRS Forms 5310-A regarding the spinoff and transfer of assets and
liabilities from the Pride Qualified Plan to the Seahawk Qualified Plan as contemplated
under this Section 3.2.

ARTICLE IV

HEALTH AND WELFARE PLANS AND BENEFITS

          SECTION 4.1 Establishment of Seahawk Health and Welfare Plans

Except as specified otherwise in this Agreement, effective on or before the Distribution Date,
Seahawk shall establish the Seahawk Health and Welfare Plans. The Seahawk Health and Welfare Plans
in effect as of the Distribution Date shall be substantially comparable to the Pride Plans in
effect on the Distribution Date. Seahawk may modify, with prior written notice to Pride, the
seniority benefit allowance made available to Seahawk Employees for purposes of offsetting the cost
of welfare benefits.

          SECTION 4.2 Seahawk Employee Participation in Pride Health and Welfare Plans

As of the Distribution Date, Continuing Seahawk Participants shall be eligible to continue to
participate in the Pride Health and Welfare Plans in which such Continuing Seahawk Participants
participated immediately prior to the Distribution Date. Any Seahawk Employee hired or re-hired by
Seahawk on or after the Distribution Date shall be eligible to participate in the Seahawk Health
and Welfare Plans and shall not be eligible to participate in the Pride Health and Welfare Plans.
Continuing Seahawk Participants shall cease to be eligible to participate in Pride Health and
Welfare Plans upon the expiration of the Benefits Maintenance Period, and, except with respect to
claims incurred at or prior to the end of the Benefits Maintenance Period, Pride shall have no
further obligations with respect to the health and welfare benefits of Seahawk Employees after the
end of the Benefits Maintenance Period.

          SECTION 4.3 Pride Obligations with Respect to Seahawk Employee Participation in Pride
Health and Welfare Plans

Pride shall continue to administer, or cause to be administered, the Pride Health and Welfare Plans
in accordance with their terms as of the Distribution Date and applicable law. During the Benefits
Maintenance Period, Pride shall provide written notice to Seahawk of any amendment or termination
of any Pride Health and Welfare Plan, or any material feature thereof, including, but not limited
to, any stop-loss insurance, in which Seahawk Employees participate on or after the Distribution
Date, except to the extent such amendment or termination would not affect any benefits of Seahawk
Employees under such Plans.

          SECTION 4.4 Paid Time Off

As a result of the Distribution and from and after the Distribution Date, Pride has no obligation
to pay or provide any benefits in connection with any accrued paid time off with respect to any

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Seahawk Employee. With respect to Pride Employees who become Seahawk Employees due to the
Distribution, during the 2009 calendar year Seahawk shall administer the Seahawk paid time off
policies in a manner such that such employee’s service with Pride is deemed to be service with
Seahawk. Seahawk shall credit each Seahawk Employee with the amount of accrued but unused vacation
time, sick time and other time-off benefits as such Seahawk Employee had with the Pride Group as of
the Distribution Date. Notwithstanding the above, Seahawk shall not be required to credit any
Seahawk Employee with any accrual to the extent that a benefit attributable to such accrual is
provided by the Pride Group (it being understood that the Pride Group shall be under no obligation
to provide any such benefit). Nothing in this Agreement shall obligate Seahawk to continue, or
prevent Seahawk from modifying the terms of, the Seahawk paid time off policies after 2009.

          SECTION 4.5 Employees on Leave

Subject to Pride’s agreement to provide certain administrative services as specified in the
Transition Services Agreement, notwithstanding any other provision of this Agreement to the
contrary, effective as of the Distribution Date, Seahawk (acting directly or through its
Affiliates) shall assume, or shall have caused the Seahawk Health and Welfare plans to assume,
liability for payment of any salary continuation or short-term disability coverage or leave under
the Family & Medical Leave Act of 1993, as amended, or other leave of absence with respect to
Seahawk Employees, and Pride shall have no further responsibility for such disabled employees or
employees on such leave after the Distribution Date.

          SECTION 4.6 Retiree Medical

Pride and Seahawk acknowledge and agree that no Seahawk Employee is eligible for retiree medical
benefits from Pride. Nothing in this Agreement shall obligate Seahawk to establish, maintain or
continue to sponsor a retiree medical benefits plan for any Seahawk Employee.

          SECTION 4.7 Medical Reimbursement Account Plan

As of the Distribution Date, Seahawk Employees shall cease to participate in the FBP. Effective
prior to or as of the Distribution, Seahawk shall establish, and Seahawk Employees shall be
eligible to participate in, a Seahawk Plan with terms and provisions that are substantially
comparable to those of the FBP. Pride and Seahawk agree to reconcile claims and contributions
under the FBP as specified in the Transition Services Agreement.

          SECTION 4.8 Health Insurance Portability and Accountability Act of 1996

On or before the Distribution Date, Pride and Seahawk shall enter into reciprocal business
associate agreements providing for the confidentiality of protected health information in
compliance with the requirements of HIPAA.

          SECTION 4.9 Workers’ Compensation

Effective on and after the Distribution Date, Seahawk shall be responsible for the administration,
costs and funding of workers’ compensation claims with respect to Seahawk Employees.

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          SECTION 4.10 COBRA

Subject to Pride’s agreement to provide certain administrative services as specified in the
Transition Services Agreement, effective as of the Distribution Date, Seahawk (acting directly or
through its Affiliates) shall assume, or shall cause the Seahawk Health and Welfare Plans to
assume, responsibility for compliance with the health care continuation coverage requirements of
COBRA with respect to eligible Seahawk Employees who were Seahawk Employees at or after the
Distribution Date. Neither the Distribution nor any transfers of employment that occur as of the
Distribution Date shall constitute a COBRA qualifying event for purposes of COBRA.

          SECTION 4.11 Claims Experience

The parties (acting directly or through their Affiliates) shall take any action necessary to ensure
that any claims experience under the Pride Health and Welfare Plans attributable to Continuing
Seahawk Participants shall be allocated to the Seahawk Health and Welfare Plans.

ARTICLE V

EQUITY AND OTHER COMPENSATION

          SECTION 5.1 Executive and Non-Qualified Plans

Except as otherwise provided herein, upon the Distribution Date, Seahawk Employees shall be
considered terminated from employment for purposes of the Pride Non-Qualified Plans and such
Seahawk Employees’ benefits under the Pride Non-Qualified Plans shall be governed by the terms of
said Plans. Pride shall retain all liabilities for any benefits accrued by employees of the Pride
Group and the Seahawk Group under the Pride Non-Qualified Plans.

          SECTION 5.2 Pride International, Inc. Long-Term Incentive Plans

     (a) No Further Equity Awards to Seahawk Employees. Certain Seahawk Employees
have been granted options, restricted stock and/or restricted stock units under the Pride
International, Inc. 2007 Long-Term Incentive Plan and/or the Pride International, Inc. 1998
Long-Term Incentive Plan. No awards will be made under said Plans to Seahawk Employees
after the Distribution Date.

     (b) Distributions on and Replacement of Unvested Pride Restricted Stock Awards.
Seahawk Employees who hold, as of the Distribution Date, unvested Pride restricted stock
awards (the “Pride RSAs”) shall receive the number of shares of Seahawk Common Stock, free
of restrictions, that would have been distributed in the Distribution
on a like number of shares of Pride Common Stock covered by the Pride RSA. As of the Distribution Date but
immediately after any distributions described in this Section 5.2(b), Seahawk Employees
holding Pride RSAs will be considered terminated from employment with Pride pursuant to the
terms of the applicable Pride Plan, and such Pride RSAs shall be forfeited pursuant to the
terms of the applicable award agreement and the applicable Pride Plan. Effective as soon as
practicable on or after the Distribution Date, the Seahawk Board shall replace such
forfeited Pride RSAs with Seahawk restricted stock unit awards (the “Seahawk RSA Replacement
Award”). The Seahawk RSA Replacement

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Award shall take into account vesting service with Pride such that the Seahawk RSA
Replacement Award vests at the same time and subject to the same terms as the forfeited
Pride RSAs. The number of shares of Seahawk Common Stock subject to a Seahawk RSA
Replacement Award with respect to a Pride RSA shall be equal to (x) divided by (y) where (x)
is the Pride Distribution Date Value multiplied by the number of shares of Pride Common
Stock subject to the Pride RSA that are forfeited, and (y) is the Seahawk Distribution Date
Value, with the resulting number of shares subject to the Seahawk RSA Replacement Award
being rounded down to the nearest whole share. Seahawk shall be responsible for the
satisfaction of all tax reporting requirements in respect of the distribution of Seahawk
Common Stock to a Seahawk Employee or the vesting of a Seahawk RSA Replacement Award and
shall be responsible for remitting the appropriate tax or withholding amounts to the
appropriate taxing authorities in respect of the distribution and vesting of all such
restricted shares.

     (c) Distributions on and Replacement of Unvested Pride Restricted Stock Units
Granted Prior to 2009. Seahawk Employees who hold, as of the Distribution Date,
unvested Pride restricted stock unit awards granted prior to 2009 (the “Pride RSUs”) shall
receive a cash payment equal to the Seahawk Distribution Date Value of the number of shares
of Seahawk Common Stock that would have been distributed in the Distribution on the number
of shares of Pride Common Stock covered by the Pride RSU. As of the Distribution Date but
immediately after any distributions described in this Section 5.2(c), Seahawk Employees
holding Pride RSUs will be considered terminated from employment with Pride pursuant to the
terms of the applicable Pride Plan, and such Pride RSUs shall be forfeited pursuant to the
terms of the applicable award agreement and the applicable Pride Plan. Effective as soon as
practicable on or after the Distribution Date, the Seahawk Board shall replace such
forfeited Pride RSUs with Seahawk restricted stock unit awards (the “Seahawk RSU Replacement
Award”). The Seahawk RSU Replacement Award shall take into account vesting service with
Pride such that the Seahawk RSU Replacement Award vests at the same time and subject to the
same terms as the forfeited Pride RSUs. The number of shares of Seahawk Common Stock
subject to a Seahawk RSU Replacement Award with respect to a Pride RSU shall be equal to (x)
divided by (y) where (x) is the Pride Distribution Date
Value multiplied by the number of shares of Pride Common Stock subject to the Pride RSU that are forfeited, and (y) is the
Seahawk Distribution Date Value, with the resulting number of shares subject to the Seahawk
RSU Replacement Award being rounded down to the nearest whole share. Seahawk shall be
responsible for the satisfaction of all tax reporting requirements in respect of the
payments to a Seahawk Employee with respect to a Pride RSU or a Seahawk RSU Replacement
Award or the vesting of a Seahawk RSU Replacement Award and shall be responsible for
remitting the appropriate tax or withholding amounts to the appropriate taxing authorities
in respect of the payment and vesting of all such restricted stock units.

     (d) Replacement of Unvested Pride Restricted Stock Units Granted in 2009.
Seahawk Employees who hold, as of the Distribution Date, unvested Pride restricted stock
unit awards granted in 2009 (the “Pride 2009 RSUs”) shall not receive cash, shares or other
property with respect to the Pride 2009 RSUs as a result of the Distribution. As of the
Distribution Date, Seahawk Employees holding Pride 2009 RSUs will be considered terminated
from employment pursuant to the terms of the applicable Pride

-13-

 

Plan, and such Pride 2009 RSUs shall be forfeited pursuant to the terms of the
applicable award agreement and the applicable Pride Plan. Effective as soon as practicable
on or after the Distribution Date, the Seahawk Board shall replace such forfeited Pride 2009
RSUs with Seahawk restricted stock unit awards (the “Seahawk 2009 RSU Replacement Award”).
The Seahawk 2009 RSU Replacement Award shall take into account vesting service with Pride
such that the Seahawk 2009 RSU Replacement Award vests at the same time and subject to the
same terms as the forfeited Pride 2009 RSUs. The number of shares of Seahawk Common Stock
subject to a Seahawk 2009 RSU Replacement Award with respect to a Pride 2009 RSU shall be
equal to the sum of (x) divided by (y) plus (z), where (x) is the Pride Distribution Date
Value multiplied by the number of shares of Pride Common Stock subject to the Pride 2009 RSU
that are forfeited, (y) is the Seahawk Distribution Date Value,
and (z) is the number of shares of Seahawk Common Stock that would have been distributed in the Distribution with
respect to the number of shares of Pride Common Stock covered by the Pride 2009 RSU, with
the resulting number of shares subject to the Seahawk 2009 RSU Replacement Award being
rounded down to the nearest whole share. Seahawk shall be responsible for the satisfaction
of all tax reporting requirements in respect of the payments to a Seahawk Employee with
respect to a Seahawk 2009 RSU Replacement Award or the vesting of a Seahawk 2009 RSU
Replacement Award and shall be responsible for remitting the appropriate tax or withholding
amounts to the appropriate taxing authorities in respect of the payment and vesting of all
such restricted stock units.

     (e) Pride Stock Options. The exercise price and number of option shares with
respect to any awards of options to purchase Pride Common Stock that are outstanding on the
Distribution Date will be adjusted to reflect the Distribution as determined by the
Compensation Committee of the Pride Board pursuant to the terms of the applicable Pride
Plan. As of the Distribution Date, Seahawk Employees holding options granted under any
Pride Plan will be considered terminated from employment, and unvested options shall be
forfeited pursuant to the terms of the applicable award agreement and the applicable Pride
Plan. Options that were vested as of the Distribution Date shall remain exercisable for the
period specified in the applicable award agreement and applicable Pride Plan. The parties
recognize that Seahawk may, in its discretion, take action to make such equity-based award
or compensation as it deems appropriate with respect to options held by Seahawk Employees
under any Pride Plan which are forfeited, cancelled or expire unexercised as a result of
Seahawk Employees being considered terminated from employment with Pride under the Pride
Plans.

          SECTION 5.3 Employee Stock Purchase Plan

Effective as of the Distribution Date, Seahawk Employees shall cease to be eligible to participate
in the Pride International, Inc. Employee Stock Purchase Plan. Seahawk Employee will continue
contribute to the Pride International, Inc. Employee Stock Purchase Plan through the last payroll
date immediately preceding the Distribution Date (or such earlier time as mutually determined by
Pride and Seahawk) and any contributions made with respect to the purchase period in which the
Distribution occurs will be refunded or distributed to the Seahawk Employee in accordance with the
terms of such Plan.

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          SECTION 5.4 Annual Bonus Plan

Seahawk Employees shall not be eligible to participate in the Pride Annual Incentive Plan after the
Distribution Date. Seahawk acknowledges that Pride is under no obligation to pay any bonuses to
any Seahawk Employees with respect to the 2009 calendar year, and Seahawk hereby indemnifies Pride
with respect to any claims against Pride made by or on behalf of a Seahawk Employee with respect
bonus compensation payable with respect to the 2009 calendar year.

          SECTION 5.5 Deduction under Section 83(h) of the Code

The deduction attributable to equity-based compensation permitted under Section 83(h) of the Code
including, without limitation, the deduction attributable to the grant of stock, the vesting of
restricted stock, and the exercise of stock options shall generally be allocated to the employer as
of the date the amount is includible in the employee’s income, and the taxable income associated
with the compensation shall be reported by such employer. Where the issuer or payor of such
compensation is in the Pride Group or the Seahawk Group and the employer is in the other Group, the
employer will make a payment, or series of payments (including such payments reflected in
intercompany accounts), to the issuer or payor equal to the amount of the corresponding tax
deduction(s).

          SECTION 5.6 SEC Registration

The parties mutually agree to use commercially reasonable efforts to maintain effective
registration statements with the SEC with respect to the long-term incentive awards described in
this Article V, to the extent any such registration statement is required by applicable law.

          SECTION 5.7 Section 409A

Notwithstanding anything in this Agreement to the contrary (including the treatment of supplemental
and deferred compensation plans, outstanding long-term incentive awards and annual incentive awards
as described herein), upon Seahawk’s written request to Pride, Pride and Seahawk agree to negotiate
in good faith regarding the need for any treatment different from that otherwise provided herein to
comply with, to the extent permissible under applicable Law, Section 409A of the Code such that the
supplemental or deferred compensation or long-term incentive award, annual incentive award or other
compensation does not cause the imposition of a tax under Section 409A of the Code.

ARTICLE VI

CERTAIN TRANSITION MATTERS

          SECTION 6.1 Transition Services Agreement

On or about the date hereof, Pride and Seahawk shall enter into the Transition Services Agreement
covering the provisions of various services to be provided by Pride and its Affiliates to Seahawk.
The provisions of this Agreement shall be subject to the provisions of such Transition Services
Agreement and to the extent that any provision in this Agreement is inconsistent with a provision
in the Transition Services Agreement the provision in the Transition Services Agreement shall
control. Nothing in this Agreement is intended to expand

-15-

 

the scope of the “Services” as defined in the Transition Services Agreement, and each service
contemplated to be provided hereunder shall be subject to charges, reimbursement obligations and
other terms as set forth in the Transition Services Agreement.

          SECTION 6.2 Requests for IRS and DOL Opinions

Pride and Seahawk shall make such applications to regulatory agencies, including, without
limitation, the IRS and the DOL, as may be necessary or appropriate. Pride and Seahawk shall
cooperate fully with one another on any issue relating to the transactions contemplated by this
Agreement for which Pride and/or Seahawk elects to seek a determination letter or private letter
ruling from the IRS, an advisory opinion from the DOL or similar opinion or ruling from any other
regulatory agency, domestic or foreign.

          SECTION 6.3 Consent of Third Parties

If any provision of this Agreement is dependent on the consent of any third party (such as a
vendor) and such consent is withheld, Pride and Seahawk shall use their commercially reasonable
efforts to implement the applicable provisions of this Agreement to the fullest extent practicable.
If any provision of this Agreement cannot be implemented due to the failure of such third party to
consent, Pride and Seahawk shall negotiate in good faith to implement the provision in a mutually
satisfactory manner.

          SECTION 6.4 Tax Cooperation

In connection with the interpretation and administration of this Agreement, Pride and Seahawk shall
take into account the agreements and policies established pursuant to the Master Separation
Agreement and the Tax Sharing Agreement.

          SECTION 6.5 Plan Returns

Plan Returns shall be filed or caused to be filed by Pride or Seahawk, as the case may be, in
accordance with the principles established in the Tax Sharing Agreement. For purposes of this
Section 6.5, “Plan Returns” means any return, report, certificate, form or similar statement or
document required to be filed with a government agency with respect to an employee benefit plan or
program, domestic or foreign.

ARTICLE VII

EMPLOYMENT-RELATED MATTERS

          SECTION 7.1 Terms of Seahawk Employment

Employees of the Seahawk Group may be required to execute a new agreement regarding confidential
information and proprietary developments in a form approved by Seahawk. In addition, nothing in
this Agreement, the Master Separation Agreement, the Transition Services Agreement or the Tax
Sharing Agreement should be construed to change the at-will status of any of the employees of any
member of the Pride Group or the Seahawk Group.

-16-

 

          SECTION 7.2 Non-Termination of Employment; No Third-Party Beneficiaries

No provision of this Agreement shall be construed to create any right, or accelerate entitlement,
to any compensation or benefit whatsoever on the part of any Seahawk Employee or other future,
present or former employee of Pride, Seahawk, the Pride Group or the Seahawk Group under any Pride
Plan or Seahawk Plan or otherwise. Without limiting the generality of the foregoing: (a) except as
otherwise provided in this Agreement or applicable provisions of the Plans, neither the
Distribution nor the termination of the Participating Company status of Seahawk or any member of
the Seahawk Group shall cause any employee to be deemed to have incurred a termination of
employment; and (b) except as otherwise provided in this Agreement, no transfer of employment
between the Pride Group and the Seahawk Group before the Distribution Date shall be deemed a
termination of employment for any purpose hereunder.

ARTICLE VIII

GENERAL PROVISIONS

          SECTION 8.1 Approval by Pride As Sole Stockholder

Effective as of the Distribution Date, Seahawk shall have adopted the Seahawk Plans in order to
provide the benefits contemplated herein, including, without limitation, the Seahawk 2009 Stock
Incentive Plan (the “Seahawk Stock Plan”), which shall permit the issuance of options, restricted
stock, restricted stock units and other long-term incentive awards that have material terms and
conditions substantially similar to those long-term incentive awards issued under the Pride
International, Inc. 2007 Long-Term Incentive Plan in respect of which Seahawk long-term incentive
awards will be issued as required under Article V. The Seahawk Plans, including the Seahawk Stock
Plan, shall be approved prior to the Distribution Date by Pride as the sole stockholder of Seahawk.

          SECTION 8.2 Amendments

Prior to the Distribution Date, Pride shall amend the Pride Plans and the applicable Pride Stock
Plans and award agreements as described on Schedule 8.2 hereto.

          SECTION 8.3 Fiduciary Matters

The parties acknowledge that actions required to be taken pursuant to the Agreement may be subject
to fiduciary duties or standards of conduct under ERISA or other applicable law. Neither party
shall be deemed to be in violation of the Agreement if it fails to comply with any provision of the
Agreement based upon its good faith determination that to do so would violate such a fiduciary duty
or standard. Each party shall be responsible for taking such actions as are deemed necessary and
appropriate to comply with its own fiduciary responsibilities.

-17-

 

          SECTION 8.4 No Amendment of Plans

Unless explicitly designated otherwise, no provision of this Agreement is intended to be an
amendment of any Pride Plan or Seahawk Plan. If a person not entitled to enforce this Agreement
brings a lawsuit or other action to enforce any provision in this Agreement as an amendment to a
Plan or another agreement, plan, program or document, and that provision is construed to be such an
amendment despite not being explicitly designated as one in this Agreement, that provision shall
lapse retroactively, thereby precluding it from having any amendatory effect.

          SECTION 8.5 Effect if Separation does not Occur

Subject to Section 8.10, if the Distribution does not occur, then all actions and events that are,
under this Agreement, to be taken or occur effective prior to, as of or following the Distribution
Date, or otherwise in connection with the Distribution, shall not be taken or occur except to the
extent specifically agreed by the parties and neither party shall have any liability or further
obligation to the other party under this Agreement.

          SECTION 8.6 Limitation of Liability

TO THE EXTENT THAT PRIDE OR ANY MEMBER OF THE PRIDE GROUP PROVIDES SERVICES UNDER THIS AGREEMENT TO
SEAHAWK, AND SUCH SERVICES ARE NOT OTHERWISE ADDRESSED IN THE TRANSITION SERVICES AGREEMENT, SUCH
SERVICES SHALL BE PERFORMED WITH THE SAME GENERAL DEGREE OF CARE AS WHEN PERFORMED WITHIN THE PRIDE
ORGANIZATION. SEAHAWK HEREBY EXPRESSLY WAIVES ANY RIGHT SEAHAWK MAY OTHERWISE HAVE FOR ANY LOSSES,
TO ENFORCE SPECIFIC PERFORMANCE OR TO PURSUE ANY OTHER REMEDY AVAILABLE IN CONTRACT, AT LAW, OR IN
EQUITY IN THE EVENT OF ANY NON-PERFORMANCE, INADEQUATE PERFORMANCE, FAULTY PERFORMANCE OR OTHER
FAILURE OR BREACH BY PRIDE OR ANY MEMBER OF THE PRIDE GROUP UNDER OR RELATING TO THIS AGREEMENT,
NOTWITHSTANDING THE NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE) OF PRIDE OR
ANY MEMBER OF THE PRIDE GROUP OR ANY OTHER PERSON OR ENTITY INVOLVED IN THE PROVISION OF SERVICES
AND WHETHER DAMAGES ARE ASSERTED IN CONTRACT OR TORT, UNDER FEDERAL, STATE OR FOREIGN LAWS OR OTHER
STATUTE OR OTHERWISE; PROVIDED, HOWEVER, THAT THE FOREGOING WAIVER SHALL NOT EXTEND TO COVER, AND
PRIDE SHALL BE RESPONSIBLE FOR, SUCH LOSSES CAUSED BY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
PRIDE, ANY MEMBER OF THE PRIDE GROUP OR ANY THIRD PARTY SERVICE PROVIDER HEREUNDER.

          SECTION 8.7 Relationship of Parties

Nothing in this Agreement shall be deemed or construed by the parties or any third party as
creating a fiduciary relationship, a relationship of principal and agent, partnership or joint
venture between the parties, the understanding and agreement being that no provision contained
herein, and no act of the parties, shall be deemed to create any relationship between the parties

-18-

 

other than the relationship set forth herein. This Agreement shall be binding upon and inure
solely to the benefit of and be enforceable by each party and its respective successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended to or shall confer
upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of
this Agreement.

          SECTION 8.8 Incorporation of Master Separation Agreement Provisions

If a dispute, claim or controversy results from or arises out of or in connection with this
Agreement, the parties agree to use the procedures set forth in Article V of the Master Separation
Agreement in lieu of other available remedies, to resolve same. The provisions of Sections 7.1
(Limitation of Liability) and Section 7.5 (Notices) of the Master Separation Agreement are hereby
incorporated herein by reference, and unless otherwise expressly specified herein, such provisions
shall apply as if fully set forth herein (references in this Section 8.8 to an “Article” or a
“Section” shall mean Articles or Sections of the Master Separation Agreement, and, except as
expressly set forth herein, references in the material incorporated herein by reference shall be
references to the Master Separation Agreement).

          SECTION 8.9 Governing Law

To the extent not preempted by applicable federal law, this Agreement shall be governed by,
construed and interpreted in accordance with the laws of the State of Texas, irrespective of the
choice of law principles of the State of Texas, as to all matters, including matters of validity,
construction, effect, performance and remedies.

          SECTION 8.10 Severability

If any term or other provision of this Agreement or the application thereof to any Person or
circumstances is determined by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable under any rule of law or public policy, all other terms and provisions of this
Agreement, or application of such provision to Persons or circumstances other than those as to
which it has been held invalid, void, illegal or unenforceable, shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to either party. Upon such determination that any
term or other provision is invalid, illegal, void or unenforceable, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original intent of the parties
as closely as possible and in an acceptable manner to the end that transactions contemplated hereby
are fulfilled to the fullest possible extent.

          SECTION 8.11 Amendment

Pride and Seahawk may mutually agree to amend, modify or supplement the provisions of this
Agreement at any time or times, either prospectively or retroactively, to such extent and in such
manner as the Boards mutually deem advisable. Each Board may delegate its amendment power, in
whole or in part, to one or more Persons or committees as it deems advisable.

-19-

 

          SECTION 8.12 Assignment

Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned,
in whole or in part, directly or indirectly, by a party without the prior written consent of the
other party, and any attempt to assign any rights or obligations arising under this Agreement
without such consent shall be void, except that a party may at any time assign any or all of its
rights or obligations hereunder to one of its wholly owned subsidiaries (but no such assignment
shall relieve such party of any of its obligations under this Agreement).

          SECTION 8.13 No Strict Construction; Cooperation of the Parties

The language this Agreement uses shall be deemed to be the language the parties hereto have chosen
to reflect their mutual intent, and no rule of strict construction or presumption based upon the
party that has drafted this Agreement shall be applied against any party hereto. The parties
acknowledge that the names used for Plans under this Agreement may not be the sole name designated
for such Plans, but the parties acknowledge and agree to recognize the Plans under the names used
herein. To the extent that issues arise related to the subject matter hereof that are not
specifically addressed by this Agreement, the parties will cooperate to address such issues in the
same manner and using the same principles provided in this Agreement.

          SECTION 8.14 Termination

This Agreement may be terminated at any time prior to the Distribution Date by Pride in its sole
discretion (without the approval of Seahawk). This Agreement may be terminated at any time after
the Distribution Date by mutual consent of Pride and Seahawk. In the event of termination pursuant
to this Section 8.14, no party shall have any liability of any kind under this Agreement to the
other party.

          SECTION 8.15 Conflict

In the event of any conflict between the provisions of this Agreement and the Master Separation
Agreement or any Plan, the provisions of this Agreement shall control. In the event of any
conflict between the provisions of this Agreement and the Transition Services Agreement, the
provisions of this Agreement shall control.

          SECTION 8.16 Counterparts

This Agreement may be executed in two or more counterparts each of which shall be deemed to be an
original, but all of which together shall constitute but one and the same Agreement.

          SECTION 8.17 Successor Employer

The parties agree that Seahawk shall be treated as a successor employer with respect to each
Seahawk Employee in the calendar year that contains the Distribution Date, and, in connection with
the foregoing, the parties agree to follow the “Alternative Procedures” set forth in Section 5 of
Revenue Procedure 2004-53 with respect to Form W-2 reporting obligations and social security,
unemployment and other U.S. payroll taxes. The parties understand and agree that Seahawk, as the
successor employer, shall assume the entire Form W-2 reporting obligations for

-20-

 

such Seahawk Employees for the calendar year that contains the Effective Date. Pride shall
provide all information required by Seahawk in order for Seahawk to complete its Form W-2 reporting
obligations. Seahawk agrees to indemnify Pride with respect to any liabilities, costs and expenses
incurred by Pride that are directly related to the treatment of Seahawk as a successor employer for
the Seahawk Employees, including without limitation the Form W-2 reporting obligations.

-21-

 

          IN WITNESS WHEREOF, each of the parties has caused this Employee Matters Agreement to be
executed on its behalf by its officers thereunto duly authorized on the day and year first above
written.

	 	 	 	 	 
	 	PRIDE INTERNATIONAL, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	SEAHAWK DRILLING, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

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Schedule 1

Pride Health and Welfare Plans

	 	 	 	 	 
	U.S. Employee Benefit	 	Plan Name	 	Provider / Vendor
	Self-funded Medical, Dental
	 	Pride
International, Inc.

Group Health &
Dental Plan

	 	UMR
	Stop Loss Coverage
(applicable only to
medical benefits)
	 	Pride
International, Inc. 

Group Health &
Dental Plan

	 	Symetra
	Pharmacy Benefit Manager
	 	Pride
International, Inc. 

Group Health &
Dental Plan

	 	CVS/Caremark
	Long Term Disability
	 	Pride
International, Inc. 

Long Term
Disability Plan

	 	MetLife
	Short Term Disability
	 	Pride
International, Inc. 

Short Term
Disability Plan

	 	MetLife
	Life, Accidental Death &
Dismemberment (AD&D), and
Disability
	 	Pride
International, Inc.
Life and Accidental
Death &
Dismemberment
Insurance Plan

	 	MetLife
	Vision Coverage
	 	Pride
International, Inc. 

Group Health &
Dental Plan

	 	Superior Vision
	Employee Assistance Program
	 	Pride
International, Inc. 

Group Health &
Dental Plan

	 	United Behavioral Health
	Business Travel Accident
	 	Pride
International, Inc. 

Business Travel
Accident Plan

	 	CIGNA
	Life, Accidental Death

(Personal &

Work-Related)1
	 	Pride
International, Inc.
Life and Accidental
Death &
Dismemberment
Insurance Plan

	 	Mobility Benefits - Previnter

 

			
	1	 	Former International Technical Services LLC (ITS)
employees only.

-23-

 

	 	 	 	 	 
	Non-U.S. Employee Benefit	 	Plan Name	 	Provider
	Medical, Dental & Vision
(including prescription
coverage and employee
assistance program)
(Personal & Work-Related)
	 	Pride
International, Inc. 

Group Health &
Dental Plan

	 	Mobility Benefits
— Previnter
	Life, Accidental Death

(Personal & Work-Related)
	 	Pride
International, Inc.
Life and Accidental
Death &
Dismemberment
Insurance Plan
	 	 
	Short-Term Disability

(Personal & Work-Related)
	 	Pride
International, Inc. 

Short Term
Disability Plan
	 	 
	Long-Term Disability

(Personal & Work-Related)
	 	Pride
International, Inc. 

Long Term
Disability Plan
	 	 
	Business Travel Accident
	 	Pride
International, Inc. 

Business Travel
Accident Plan

	 	CIGNA
	Savings
	 	Investment Savings
Plan (ISP)

	 	Legal & General Bank

-24-exv10w8

Exhibit
10.8

SEAHAWK DRILLING, INC.

2009 LONG-TERM INCENTIVE PLAN

     1. Plan. The Seahawk Drilling, Inc. 2009 Long-Term Incentive Plan (the “Plan”) was adopted by
the Board of Directors of Seahawk Drilling, Inc., a Delaware corporation (the “Company”), and was
approved on                     , 2009 by Pride International, Inc. as the sole stockholder of the Company, to
reward certain officers, employees and directors of the Company and its Subsidiaries by providing
for certain cash benefits and by enabling them to acquire shares of Common Stock of the Company.
The Plan is effective as of the date of the Distribution as defined below.

     2. Objectives. The Plan is designed to attract and retain officers, employees and directors
of the Company and its Subsidiaries, to encourage the sense of proprietorship of such officers,
employees and directors and to stimulate the active interest of such persons in the development and
financial success of the Company and its Subsidiaries. These objectives are to be accomplished by
making Awards under this Plan and thereby providing Participants with a proprietary interest in the
growth and performance of the Company and its Subsidiaries.

     3. Definitions. As used herein, the terms set forth below shall have the following respective
meanings:

          “Authorized Officer” means the Chief Executive Officer of the Company (or any other senior
officer of the Company to whom the Chief Executive Officer delegates the authority to execute any
Award Agreement, where applicable).

          “Award” means an Employee Award or a Director Award.

          “Award Agreement” means a written or electronic agreement setting forth the terms, conditions
and limitations applicable to an Award, to the extent the Committee determines such agreement is
necessary.

          “Board” means the Board of Directors of the Company.

          “Cash Award” means an award denominated in cash.

          “Change in Control” means, and shall be deemed to have occurred on the date of the first to
occur of any of the following:

     (i) any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act) is or becomes a beneficial owner, directly or indirectly, of securities of the Company
representing 30 percent (30%) or more of the combined voting power of the Company’s
then-outstanding securities;

     (ii) during any period of 12 consecutive months, individuals who, as of the date of the
Distribution, 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 any director who was nominated for election

-1-

 

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;

     (iii) the consummation of any transaction (including any merger, amalgamation,
consolidation or scheme of arrangement), the result of which is that less than 50 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

     (v) the Company shall have sold, transferred or exchanged all, or substantially all, of
its assets to another corporation or other entity or person.

          “Code” means the Internal Revenue Code of 1986, as amended from time to time.

          “Committee” means the Compensation Committee of the Board.

          “Common Stock” means the Common Stock, par value $0.01 per share, of the Company.

          “Company” has the meaning set forth in Section 1.

          “Director” means an individual serving as a member of the Board who is not an Employee.

          “Director Award” means any Non-qualified Stock Option, SAR, Stock Award, Restricted Stock Unit
Award, Cash Award or Performance Award (other than a Qualified Performance Award) granted, whether
singly, in combination or in tandem, to a Participant who is a Director pursuant to such applicable
terms, conditions and limitations (including treatment as a Performance Award) as the Committee may
establish in order to fulfill the objectives of the Plan.

          “Distribution” means the distribution by Pride International, Inc., on a pro-rata basis to the
holders of the common stock of Pride International, Inc., of all of the outstanding shares of
Common Stock owned by Pride International, Inc.

          “Dividend Equivalents” means, with respect to Restricted Stock Units, an amount equal to all
dividends and other distributions (or the economic equivalent thereof) that are payable to
stockholders of record during the Restriction Period on a like number of shares of Common Stock
granted in the Award.

          “Employee” means a person employed by the Company or any of its Subsidiaries as a common law
employee, including an officer, as such term is defined in Rule 16a-1 of the Exchange Act, of the
Company or any of its Subsidiaries and including a member of the Board who is also an Employee.

          “Employee Award” means any Option, SAR, Stock Award, Restricted Stock Unit Award, Cash Award
or Performance Award granted, whether singly, in combination or in tandem, to a Participant who is
an Employee pursuant to such applicable terms, conditions and

-2-

 

limitations (including treatment as a Performance Award) as the Committee may establish in
order to fulfill the objectives of the Plan.

          “Equity Award” means any Option, SAR, Stock Award, or Performance Award (other than a
Performance Award denominated in cash) granted to a Participant under the Plan.

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

          “Fair Market Value” means, as of a particular date, (i) if the shares of Common Stock are
listed on a national securities exchange, the mean between the highest and lowest sales price per
share of Common Stock on the consolidated transaction reporting system for the primary national
securities exchange on which shares of Common Stock are listed on that date, or, if there shall
have been no such sale so reported on that date, on the last preceding date on which such a sale
was so reported, (ii) if the shares of Common Stock are not so listed but are quoted by The NASDAQ
Stock Market, Inc., the mean between the highest and lowest sales price per share of Common Stock
on the consolidated transaction reporting system for The NASDAQ Stock Market, Inc. on that date,
or, if there shall have been no such sale so reported on that date, on the last preceding date on
which such a sale was so reported, (iii) if the Common Stock is not so listed or quoted, the mean
between the closing bid and asked price on that date, or, if there are no quotations available for
such date, on the last preceding date on which such quotations shall be available, as reported by
The NASDAQ Stock Market, Inc., or, if not reported by The NASDAQ Stock Market, Inc., by the
National Quotation Bureau, Inc., or (iv) if none of the above are applicable, the fair market value
of a share of Common Stock as determined in good faith by the Committee under a method or means
which shall comply with the requirements of a reasonable valuation method as described under
Section 409A of the Code.

          “Grant Date” means the date an Award is granted to a Participant pursuant to the Plan. The
“Grant Date” of an Option or SAR Award shall be the date the Company completes the corporate action
constituting an offer of stock for sale to a holder under the terms and conditions of the Option or
SAR; provided that (i) such corporate action shall not be considered complete until the date on
which the maximum number of shares that can be purchased or exercised under the Option or SAR and
the minimum Grant Price are fixed or determinable; (ii) if such corporate action contemplates an
immediate offer of stock for sale to a class of individuals, then the Grant Date of an Option or
SAR is the time or date of that corporate action, if the offer is to be made immediately; and/or
(iii) if such corporate action contemplates a particular date on which the offer is to be made,
then the Grant Date is the contemplated date of the offer.

          “Grant Price” means the price at which a Participant may exercise his or her right to receive
cash or Common Stock, as applicable, under the terms of an Award.

          “Incentive Stock Option” means an Option that is intended to comply with the requirements set
forth in Section 422 of the Code.

          “Non-qualified Stock Option” means an Option that is not an Incentive Stock Option.

-3-

 

          “Option” means a right to purchase a specified number of shares of Common Stock at a specified
Grant Price, which may be an Incentive Stock Option or a Non-qualified Stock Option.

          “Participant” means an Employee or Director to whom an Award has been granted under this Plan.

          “Performance Award” means an Award made pursuant to this Plan that is subject to the
attainment of one or more performance goals.

          “Performance Goal” means a standard established by the Committee to determine in whole or in
part whether a Qualified Performance Award shall be earned.

          “Plan” has the meaning set forth in Section 1.

          “Qualified Performance Award” means a Performance Award made to a Participant who is an
Employee that is intended to qualify as qualified performance-based compensation under Section
162(m) of the Code, as described in Section 8(a)(vii)(B) of the Plan.

          “Restricted Stock” means Common Stock that is restricted or subject to forfeiture provisions.

          “Restricted Stock Unit” means a unit evidencing the right to receive in specified
circumstances one share of Common Stock or equivalent value in cash that is restricted or subject
to forfeiture provisions.

          “Restricted Stock Unit Award” means an Award in the form of Restricted Stock Units.

          “Restriction Period” means a period of time beginning as of the Grant Date of an Award of
Restricted Stock or Restricted Stock Units and ending as of the date upon which the Common Stock
subject to such Award is issued (if not previously issued), no longer restricted or subject to
forfeiture provisions.

          “Stock Appreciation Right” or “SAR” means a right to receive a payment, in cash or Common
Stock, equal to the excess of the Fair Market Value or other specified valuation of a specified
number of shares of Common Stock on the date the right is exercised over a specified Grant Price.

          “Stock Award” means an Award in the form of, or denominated in, or by reference to, shares of
Common Stock, including an award of Restricted Stock.

          “Subsidiary” means (i) with respect to any Awards other than Incentive Stock Options, any
corporation, limited liability company or similar entity of which the Company directly or
indirectly owns shares representing more than 50 percent (50%) of the voting power of all classes
or series of equity securities of such entity, which have the right to vote generally on matters
submitted to a vote of the holders of equity interests in such entity, and (ii) with

-4-

 

respect to Awards of Incentive Stock Options, any subsidiary within the meaning of Section
424(f) of the Code or any successor provision.

     4. Eligibility. All Employees are eligible for Employee Awards under this Plan. All
Directors are eligible for Director Awards under the Plan. The Committee shall select the
Participants in the Plan from time to time by the grant of Awards under the Plan.

     5. Common Stock Available for Awards. Subject to the provisions of Section 16 hereof, no
Award shall be granted if it shall result in the aggregate number of shares of Common Stock issued
under the Plan plus the number of shares of Common Stock covered by or subject to Awards then
outstanding (after giving effect to the grant of the Award in question) to exceed ten percent (10%)
of the issued and outstanding shares of Common Stock on the date of the Distribution. No more than
                    shares of Common Stock shall be available for Incentive Stock Option Awards. No more than
                    shares of Common Stock shall be available for Awards other than Options or SARs. The
number of shares of Common Stock that are the subject of Awards under this Plan that are forfeited,
terminated or expire unexercised shall again immediately become available for Awards hereunder.
Notwithstanding the foregoing, the number of shares of Common Stock reserved for issuance shall be
reduced by the total number of Options or SARs exercised, and the number of shares of Common Stock
reserved for issuance under the Plan shall not be increased by (i) any shares tendered or Award
surrendered in connection with the purchase of shares of Common Stock upon the exercise of an
Option as described in Section 12 or (ii) any shares of Common Stock deducted from an Award payment
in connection with the Company’s tax withholding obligations as described in Section 13. The
Committee may from time to time adopt and observe such procedures concerning the counting of shares
against the Plan maximum as it may deem appropriate. The Board and the appropriate officers of the
Company shall from time to time take whatever actions are necessary to file any required documents
with governmental authorities, stock exchanges and transaction reporting systems to ensure that
shares of Common Stock are available for issuance pursuant to Awards.

     6. Administration.

     (a) Authority of the Committee. This Plan shall be administered by the Committee
except as otherwise provided herein. Subject to the provisions hereof, the Committee shall
have full and exclusive power and authority to administer this Plan and to take all actions
that are specifically contemplated hereby or are necessary or appropriate in connection with
the administration hereof. The Committee shall also have full and exclusive power to
interpret this Plan and to adopt such rules, regulations and guidelines for carrying out
this Plan as it may deem necessary or proper, all of which powers shall be exercised in the
best interests of the Company and in keeping with the objectives of this Plan. Subject to
Section 6(d) hereof, the Committee may, in its discretion, impose such conditions and/or
restrictions on any Award granted pursuant to the Plan as it may deem advisable including,
without limitation, a requirement that Participants pay a stipulated purchase price for each
share of Common Stock issued under an Award, including Stock Awards or Restricted Stock
Units, restrictions based upon the achievement of specific performance goals, time-based
restrictions on vesting following the attainment of the performance goals, time-based
restrictions, and/or restrictions under applicable laws or under the requirements of any
stock exchange or

-5-

 

market upon which such shares of Common Stock are listed or traded, or holding
requirements or sale restrictions placed on the shares of Common Stock by the Company as the
Committee deems appropriate and provide for the extension of the exercisability of an Award,
accelerate the vesting or exercisability of an Award, eliminate or make less restrictive any
restrictions contained in an Award, waive any restriction or other provision of this Plan
(insofar as such provision relates to Awards) or an Award or otherwise amend or modify an
Award in any manner that is (i) not adverse to the Participant to whom such Award was
granted, (ii) consented to by such Participant or (iii) authorized by Section 16(c) hereof;
provided, however, that no such action shall permit the term of any Option to be greater
than ten (10) years from the applicable Grant Date. The Committee may correct any defect or
supply any omission or reconcile any inconsistency in this Plan or in any Award in the
manner and to the extent the Committee deems necessary or desirable to further the Plan
purposes. Any decision of the Committee, with respect to Awards, in the interpretation and
administration of this Plan shall lie within its sole and absolute discretion and shall be
final, conclusive and binding on all parties concerned.

     (b) Indemnification. No member of the Committee or officer of the Company to whom the
Committee has delegated authority in accordance with the provisions of Section 7 of this
Plan shall be liable for anything done or omitted to be done by him or her, by any member of
the Committee or by any officer of the Company in connection with the performance of any
duties under this Plan, except for his or her own willful misconduct or as expressly
provided by statute.

     (c) Authority of the Board. The Board shall have the same powers, duties, and
authority to administer the Plan as the Committee.

     (d) Prohibition on Repricing of Awards. No Option or SAR may be repriced, replaced,
regranted through cancellation or modified without stockholder approval (except in
connection with a change in the Company’s capitalization), if the effect would be to reduce
the Grant Price for the shares underlying such Award.

     7. Delegation of Authority. The Committee may delegate to the Authorized Officer and to other
senior officers of the Company its duties under this Plan in accordance with applicable law and
pursuant to such conditions or limitations as the Committee may establish with respect to Awards,
except that the Committee may not delegate to any person the authority to grant Awards to, or take
other action with respect to, Participants who are subject to Section 16 of the Exchange Act. The
Committee may engage or authorize the engagement of a third party administrator to carry out
administrative functions under the Plan.

     8. Awards.

     (a) Employee Awards. The Committee shall determine the type or types of Employee
Awards to be made under this Plan and shall designate from time to time the Employees who
are to be the recipients of such Employee Awards. Each Employee Award shall evidenced in
such communications as the Committee deems appropriate, including in an Award Agreement,
shall contain such terms, conditions and limitations as

-6-

 

shall be determined by the Committee in its sole discretion and may be signed by an
Authorized Officer for and on behalf of the Company. Employee Awards may consist of those
listed in this Section 8(a) and may be granted singly, in combination or in tandem. Awards
may also be granted in combination or in tandem with, in replacement of, or as alternatives
to, grants or rights under this Plan or any other employee plan of the Company or any of its
Subsidiaries, including the plan of any acquired entity; provided, however, that, except as
contemplated in Section 16 hereof, no Option may be issued in exchange for the cancellation
of an Option with a higher Grant Price nor may the Grant Price of any Option be reduced.
All or part of an Employee Award may be subject to conditions established by the Committee.
Upon the termination of employment or service by a Participant, any unexercised, deferred,
unvested or unpaid Awards shall be treated as set forth in the applicable Award Agreement or
in any other agreement between the Company and the Participant.

     (i) Option. An Employee Award may be in the form of an Option consisting of
either an Incentive Stock Option or a Non-qualified Stock Option. An Option Award
Agreement also shall specify whether the Option is intended to be an Incentive Stock
Option or a Non-qualified Stock Option. On the Grant Date, the Grant Price of an
Option shall be not less than the Fair Market Value of the Common Stock subject to
such Option. The term of the Option shall extend no more than ten (10) years after
the Grant Date. Options may not include provisions that “reload” the option upon
exercise. Subject to the foregoing provisions, the terms, conditions and
limitations applicable to any Options awarded to Employees pursuant to this Plan,
including the Grant Price, the term of the Options, the number of shares subject to
the Option and the date or dates upon which they become exercisable, shall be
determined by the Committee.

     (ii) Incentive Stock Options. Incentive Stock Options may be granted only to
eligible Employees of the Company or of any Subsidiary. With respect to an
Incentive Stock Option granted to an Employee who, at the time the Incentive Stock
Option is granted, owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Subsidiary as
determined for purposes of Section 422 of the Code, the Grant Price must not be less
than 110 percent (110%) of the Fair Market Value of the shares of Common Stock on
the Grant Date and the Incentive Stock Option must not be exercisable later than the
fifth (5th) anniversary of the Grant Date. In addition, to the extent
that the aggregate Fair Market Value of shares of Common Stock with respect to which
Incentive Stock Options first become exercisable by a Participant in any calendar
year exceeds $100,000, taking into account both shares of Common Stock subject to
Incentive Stock Options under the Plan and Common Stock subject to Incentive Stock
Options under all other plans of the Company, such Options shall be treated as
Non-qualified Stock Options. For this purpose, the “Fair Market Value” of the
shares of Common Stock subject to Options shall be determined as of the Grant Date
of the Options. In reducing the number of Options treated as Incentive Stock
Options to meet the $100,000 limit, the most recently granted Options shall be
reduced first. To the extent a reduction of simultaneously granted Options is
necessary to meet the $100,000 limit, the

-7-

 

Committee may, in the manner and to the extent permitted by law, designate
which shares of Common Stock are to be treated as shares acquired pursuant to the
exercise of an Incentive Stock Option.

     (iii) Stock Appreciation Rights. An Employee Award may be in the form of an
SAR. On the Grant Date, the Grant Price of an SAR shall be not less than the Fair
Market Value of the Common Stock subject to such SAR. The holder of a tandem SAR
may elect to exercise either the option or the SAR, but not both. The exercise
period for an SAR shall extend no more than ten (10) years after the Grant Date.
SARs may not include provisions that “reload” the SAR upon exercise. Subject to the
foregoing provisions, the terms, conditions and limitations applicable to any SARs
awarded to Employees pursuant to this Plan, including the Grant Price, the term of
any SARs and the date or dates upon which they become exercisable, shall be
determined by the Committee.

     Notwithstanding any other provision of this Plan to the contrary, with respect
to a SAR granted in tandem with an Incentive Stock Option: (a) the tandem SAR will
expire no later than the expiration of the underlying Incentive Stock Option; (b)
the value of the payout with respect to the tandem SAR may be for no more than 100
percent (100%) of the excess of the Fair Market Value of the shares of Common Stock
subject to the underlying Incentive Stock Option at the time the tandem SAR is
exercised over the Grant Price of the underlying Incentive Stock Option; and (c) the
tandem SAR may be exercised only when the Fair Market Value of the shares of Common
Stock subject to the Incentive Stock Option exceeds the Grant Price of the Incentive
Stock Option.

     (iv) Stock Award. An Employee Award may be in the form of a Stock Award. The
terms, conditions and limitations applicable to any Stock Award, including, but not
limited to, vesting or other restrictions, shall be determined by the Committee.

     (v) Restricted Stock Unit Awards. An Employee Award may be in the form of a
Restricted Stock Unit Award. The terms, conditions and limitations applicable to a
Restricted Stock Unit Award, including, but not limited to, the Restriction Period
and the right to Dividend Equivalents, shall be determined by the Committee.

     (vi) Cash Award. An Employee Award may be in the form of a Cash Award. The
terms, conditions and limitations applicable to any Cash Awards granted to Employees
pursuant to this Plan, including, but not limited to, vesting or other restrictions,
shall be determined by the Committee.

     (vii) Performance Award. Without limiting the type or number of Awards that
may be made under the other provisions of this Plan, an Award may be in the form of
a Performance Award. The terms, conditions and limitations applicable to an Award
that is a Performance Award shall be determined by the Committee. The Committee
shall set performance goals in its discretion which,

-8-

 

depending on the extent to which they are met, will determine the value and/or
amount of Performance Awards that will be paid out to the Participant and/or the
portion that may be exercised.

     (A) Non-qualified Performance Awards. Performance Awards granted to
Employees or Directors that are not intended to qualify as qualified
performance-based compensation under Section 162(m) of the Code shall be
based on achievement of such goals and be subject to such terms, conditions
and restrictions as the Committee or its delegate shall determine.

     (B) Qualified Performance Awards. Performance Awards granted to
Employees under the Plan that are intended to qualify as qualified
performance-based compensation under Section 162(m) of the Code shall be
paid, vested or otherwise deliverable solely on account of the attainment of
one or more pre-established, objective Performance Goals established by the
Committee prior to the earlier to occur of (x) 90 days after the
commencement of the period of service to which the Performance Goal relates
or (y) the lapse of 25% of the period of service (as scheduled in good faith
at the time the goal is established), and in any event while the outcome is
substantially uncertain. A Performance Goal is objective if a third party
having knowledge of the relevant facts could determine whether the goal is
met. Such a Performance Goal may be based on one or more business criteria
that apply to the Employee, one or more business segments, units, or
divisions of the Company, or the Company as a whole, and if so desired by
the Committee, by comparison with a peer group of companies. A Performance
Goal may include one or more of the following:

	 	•	 	Stock price measures (including but not limited to growth
measures and total stockholder return);
	 
	 	•	 	Earnings per share (actual or targeted growth);
	 
	 	•	 	Earnings before interest, taxes, depreciation, and
amortization (“EBITDA”);
	 
	 	•	 	Economic value added (“EVA”);
	 
	 	•	 	Net income measures (including but not limited to income
after capital costs and income before or after taxes);
	 
	 	•	 	Operating income;
	 
	 	•	 	Cash flow measures;
	 
	 	•	 	Return measures (including but not limited to return on
capital employed, return on equity, return on investment and
return on assets);
	 
	 	•	 	Operating measures (including but not limited to
productivity, efficiency, and scheduling measures);

-9-

 

	 	•	 	Expense targets (including but not limited to finding and
development costs and general and administrative expenses);
	 
	 	•	 	Margins;
	 
	 	•	 	Revenue or Sales; and
	 
	 	•	 	Corporate values measures (including but not limited to
diversity commitment, ethics compliance, environmental, and
safety).

Unless otherwise stated, such a Performance Goal need not be based upon an
increase or positive result under a particular business criterion and could
include, for example, maintaining the status quo or limiting economic losses
(measured, in each case, by reference to specific business criteria). In
interpreting Plan provisions applicable to Performance Goals with respect to
Qualified Performance Awards, it is the intent of the Plan to conform with
the standards of Section 162(m) of the Code and Treasury Regulation
§1.162-27(e)(2)(i), as to grants to those Employees whose compensation is,
or is likely to be, subject to Section 162(m) of the Code, and the Committee
in establishing such goals and interpreting the Plan shall be guided by such
provisions. Prior to the payment of any compensation based on the
achievement of Performance Goals under Qualified Performance Awards, the
Committee must certify in writing that applicable Performance Goals and any
of the material terms thereof were, in fact, satisfied. None of the
Committee or the Board may increase the amount of compensation payable under
a Qualified Performance Award. If the time at which a Qualified Performance
Award will be paid is accelerated for any reason, the amount payable under
the Qualified Performance Award shall be reduced to the extent required
pursuant to Department of Treasury Regulation section 1.162-27(e)(2)(iii) to
reasonably reflect the time value of money. Subject to the foregoing
provisions, the terms, conditions and limitations applicable to any
Qualified Performance Awards made pursuant to this Plan shall be determined
by the Committee.

     (viii) Vesting. Unless otherwise provided in a Participant’s Award Agreement
or otherwise determined at any time by the Committee, any Employee Award that (a) is
not a Performance Award shall have a minimum vesting period or Restriction Period of
three years from the Grant Date or (b) is a Performance Award shall have a minimum
vesting period or Restriction Period of one year from the Grant Date; provided,
however, that (1) the Committee may provide for earlier vesting upon an Employee’s
termination of employment by reason of death, disability or retirement, (2) such
three-year or one-year minimum vesting period or Restriction Period, as applicable,
shall not apply to an Employee Award that is granted in lieu of salary or bonus
(provided that the Employee is given the opportunity to accept cash in lieu of such
Award) or to new hires to replace forfeited awards from a prior employer, and (3)
vesting of, or the lapse of

-10-

 

restrictions under, an Employee Award may occur incrementally over the
three-year or one-year minimum vesting period or Restriction Period, as applicable.

     (b) Award Limitations. Notwithstanding anything to the contrary contained in this
Plan, the following limitations shall apply to any Employee Awards made hereunder:

     (i) no Employee may be granted, during any calendar year, Awards consisting of,
relating to, denominated in or exercisable for more than                     shares of Common
Stock (the limitation set forth in this Section 8(b)(i) being hereinafter referred
to as “Stock Based Awards Limitations”); and

     (ii) the maximum cash payment to be made to any one individual pursuant to any
Cash Award during any calendar year shall not exceed $                    .

If an Award is cancelled, the cancelled Award shall continue to be counted toward the Award
limitations provided in this Section 8(b).

     (c) Director Awards. The Committee may grant a Director one or more Director Awards
and establish the terms thereof consistent with the foregoing provisions of this Section 8
for granting awards to Employees and subject to such terms, conditions and limitations as
shall be determined by the Committee in its sole discretion.

     9. Change in Control. Notwithstanding the provisions of Section 8 hereof, unless otherwise
expressly provided in the applicable Award Agreement, or as otherwise specified in the terms of an
Equity Award, in the event of a Change in Control during a Participant’s employment or service with
the Company or one of its Subsidiaries, each Equity Award granted under this Plan to the
Participant shall become immediately vested and fully exercisable, with performance-based equity
awards vested at target level.

     Notwithstanding any other provision of this Section 9 to the contrary, to the extent a payment
under or vesting of an Award is subject to Section 409A of the Code, then any such payment or
vesting of an amount that is otherwise accelerated under this Section 9 shall be delayed until the
earliest time that such payment would be permitted under Section 409A of the Code such that the
payment would not be subject to the additional tax or interest applicable under Section 409A of the
Code.

     10. Non-United States Participants. Notwithstanding any provision of the Plan to the
contrary, the Committee may grant awards to persons outside the United States under such terms and
conditions as may, in the judgment of the Committee, with the advice of legal counsel, be necessary
or advisable to comply with the laws of the applicable foreign jurisdictions and, to that end, may
(i) determine which Subsidiaries shall be covered by the Plan; (ii) determine which Employees
employed outside the United States are eligible to participate in the Plan; (iii) amend or vary the
terms and provisions of the Plan and the terms and conditions of any Award granted to persons who
reside outside the United States; (iv) establish sub-plans, modified option exercise procedures and
other terms and procedures to the extent such actions may be necessary or advisable, provided that
any subplans and modifications to Plan terms and procedures established under this Section 10 by
the Committee shall be attached to the Plan document as

-11-

 

Appendices. Notwithstanding the above, the Committee may not take any actions hereunder, and
no Awards shall be granted, that would violate the Exchange Act, the Code, any securities law, any
governing statute or regulation, or any other applicable law.

     11. Payment of Awards.

     (a) General. Payment of Awards may be made in the form of cash or Common Stock, or a
combination thereof, and may include such restrictions as the Committee shall determine,
including, but not limited to, in the case of Common Stock, restrictions on transfer and
forfeiture provisions. For an Award of Restricted Stock, the certificates evidencing the
shares of such Restricted Stock (to the extent that such shares are so evidenced) shall
contain appropriate legends and restrictions that describe the terms and conditions of the
restrictions applicable thereto. For an Award of Restricted Stock Units, the shares of
Common Stock that may be issued at the end of the Restriction Period shall be evidenced by
book entry registration or in such other manner as the Committee may determine.

     (b) Deferral. With the approval of the Committee, amounts payable in respect of Awards
may be deferred and paid either in the form of installments or as a lump-sum payment;
provided, however, that if deferral is permitted, each provision of the Award shall be
interpreted to permit the deferral only as allowed in compliance with the requirements of
Section 409A of the Code, and any provision that would conflict with such requirements shall
not be valid or enforceable. The Committee may permit selected Participants who are members
of a “select group of management or highly compensated employees” to elect to defer payments
of some or all types of Awards in accordance with procedures established by the Committee.
If a deferral is permitted under this Section 11(b), even though the Plan is not intended to
be subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), in
accordance with the Department of Labor Regulation § 2520.104-23, the Company shall file a
“protective” letter with the Department of Labor that would serve as the alternative method
of compliance with the reporting and disclosure requirements of Part I of Title I of ERISA
in the event the Plan were to be construed as subject to ERISA. Any deferred payment
pursuant to an Award, whether elected by the Participant or specified by the Award Agreement
or the terms of the Award or by the Committee, may be forfeited if and to the extent that
the Award Agreement or the terms of the Award so provide.

     (c) Dividends and Interest. Rights to (i) dividends will be extended to and made part
of any Stock Award and (ii) Dividend Equivalents may be extended to and made part of any
Restricted Stock Unit, subject in each case to such terms, conditions and restrictions as
the Committee may establish. The Committee may also establish rules and procedures for the
crediting of interest on deferred cash payments for Awards.

     12. Option Exercise. The Grant Price shall be paid in full at the time of exercise in cash,
certified check, bank draft or postal or express money order or, if elected by the Participant, the
Participant may purchase such shares by means of tendering Common Stock held by the Participant for
at least six (6) months (or such other period to avoid accounting charges against the Company’s
earnings) valued at Fair Market Value on the date of exercise, or any

-12-

 

combination thereof. The Committee shall determine acceptable methods for Participants to
tender Common Stock or other Awards. The Committee may provide for procedures to permit the
exercise or purchase of such Awards by use of the proceeds to be received from the sale of Common
Stock issuable pursuant to an Award (including “cashless exercise”). The Committee may adopt
additional rules and procedures regarding the exercise of Options from time to time, provided that
such rules and procedures are not inconsistent with the provisions of this Section 12.

     13. Taxes. The Company or its designated third party administrator shall have the right to
deduct applicable taxes from any Award payment or other compensation payable to the Participant and
withhold, at the time of delivery or vesting of cash or shares of Common Stock under this Plan, an
appropriate amount of cash or number of shares of Common Stock or a combination thereof for payment
of taxes or other amounts required by law or to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for withholding of such taxes. The Committee may
also permit withholding to be satisfied by a payment of such sums for taxes directly to the Company
or its designated third party administrator in cash or by check or by the transfer to the Company
of shares of Common Stock theretofore owned by the holder of the Award with respect to which
withholding is required, each at such time as required by the Committee. If shares of Common Stock
are used to satisfy tax withholding, such shares shall be valued based on the Fair Market Value
when the tax withholding is required to be made.

     14. Amendment, Modification, Suspension or Termination of the Plan. The Board may amend,
modify, suspend or terminate this Plan for the purpose of meeting or addressing any changes in
legal requirements or for any other purpose permitted by law, except that (i) no amendment or
alteration that would adversely affect the rights of any Participant under any Award previously
granted to such Participant shall be made without the consent of such Participant and (ii) no
amendment or alteration shall be effective prior to its approval by the stockholders of the Company
to the extent such approval is required by applicable legal requirements or the requirements of the
securities exchange on which the Company’s stock is listed.

     15. Assignability. Except as otherwise provided herein, no Award granted under this Plan
shall be sold, transferred, pledged, assigned or otherwise alienated or hypothecated by a
Participant other than by will or the laws of descent and distribution, and during the lifetime of
a Participant, any Award shall be exercisable only by him, or, in the case of a Participant who is
mentally incapacitated, the Award shall be exercisable by his guardian or legal representative.
The Committee may prescribe and include in applicable Award Agreements other restrictions on
transfer. Any attempted assignment or transfer in violation of this Section 15 shall be null and
void. Upon the Participant’s death, the personal representative or other person entitled to
succeed to the rights of the Participant (the “Successor Participant”) may exercise such rights. A
Successor Participant must furnish proof satisfactory to the Company of his or her right to
exercise the Award under the Participant’s will or under the applicable laws of descent and
distribution.

     Subject to approval by the Committee in its sole discretion, all or a portion of the Awards
granted to a Participant under the Plan which are not intended to be Incentive Stock Options may

-13-

 

be transferable by the Participant, to the extent and only to the extent specified in such
approval, to (i) the children or grandchildren of the Participant (“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 ninety-nine percent (99%) of the equity, profit and loss interests
(“Immediate Family Member Partnerships”); provided that the Award Agreement pursuant to which such
Awards are granted (or an amendment thereto) must expressly provide for transferability in a manner
consistent with this Section 15. Subsequent transfers of transferred Awards shall be prohibited
except by will or the laws of descent and distribution, unless such transfers are made to the
original Participant or a person to whom the original Participant 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 Awards 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 “Participant” shall be deemed to refer to the transferee.

     16. Adjustments.

     (a) The existence of outstanding Awards shall not affect in any manner the right or
power of the Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the capital stock of the Company or
its business or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock (whether or not such issue is prior to, on a
parity with or junior to the existing Common Stock) or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding of any kind, whether or not of a character similar to that of
the acts or proceedings enumerated above.

     (b) In the event of any subdivision or consolidation of outstanding shares of Common
Stock, declaration of a dividend payable in shares of Common Stock or other stock split,
then (i) the number of shares of Common Stock reserved under this Plan, (ii) the number of
shares of Common Stock covered by outstanding Awards in the form of Common Stock or units
denominated in Common Stock, (iii) the Grant Price or other price in respect of such Awards,
(iv) the appropriate Fair Market Value and other price determinations for such Awards, and
(v) the Stock Based Awards Limitations shall each be proportionately adjusted by the Board
as appropriate to reflect such transaction. In the event of any other recapitalization or
capital reorganization of the Company, any consolidation or merger of the Company with
another corporation or entity, the adoption by the Company of any plan of exchange affecting
Common Stock or any distribution to holders of Common Stock of securities or property (other
than normal cash dividends or dividends payable in Common Stock), the Board shall make
appropriate adjustments to (i) the number of shares of Common Stock covered by Awards in the
form of Common Stock or units denominated in Common Stock, (ii) the Grant Price or other
price in respect of such Awards, (iii) the appropriate Fair Market Value and other price
determinations for such Awards, and (iv) the Stock Based Awards Limitations to reflect such
transaction; provided that such adjustments shall only be such as are necessary to

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maintain the proportionate interest of the holders of the Awards and preserve, without
increasing, the value of such Awards.

     (c) In the event of a corporate merger, consolidation, acquisition of property or
stock, separation, reorganization or liquidation, the Board may make such adjustments to
Awards or other provisions for the disposition of Awards as it deems equitable, and shall be
authorized, in its discretion, (1) to provide for the substitution of a new Award or other
arrangement (which, if applicable, may be exercisable for such property or stock as the
Board determines) for an Award or the assumption of the Award, regardless of whether in a
transaction to which Section 424(a) of the Code applies, (2) to provide, prior to the
transaction, for the acceleration of the vesting and exercisability of, or lapse of
restrictions with respect to, the Award and, if the transaction is a cash merger, provide
for the termination of any portion of the Award that remains unexercised at the time of such
transaction, or (3) to cancel any such Awards and to deliver to the Participants cash in an
amount that the Board shall determine in its sole discretion is equal to the fair market
value of such Awards on the date of such event, which in the case of Options or SARs shall
be the excess of the Fair Market Value of Common Stock on such date over the Grant Price of
such Award.

     17. Restrictions. No Common Stock or other form of payment shall be issued with respect to
any Award unless the Company shall be satisfied based on the advice of its counsel that such
issuance will be in compliance with applicable federal and state securities laws. Certificates
evidencing shares of Common Stock delivered under this Plan (to the extent that such shares are so
evidenced) may be subject to such stop transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations and other requirements of the Securities and Exchange
Commission, any securities exchange or transaction reporting system upon which the Common Stock is
then listed or to which it is admitted for quotation and any applicable federal or state securities
law. The Committee may cause a legend or legends to be placed upon such certificates (if any) to
make appropriate reference to such restrictions.

     18. Unfunded Plan. Insofar as it provides for Awards of cash, Common Stock or rights thereto,
this Plan shall be unfunded. Although bookkeeping accounts may be established with respect to
Participants who are entitled to cash, Common Stock or rights thereto under this Plan, any such
accounts shall be used merely as a bookkeeping convenience. The Company shall not be required to
segregate any assets that may at any time be represented by cash, Common Stock or rights thereto,
nor shall this Plan be construed as providing for such segregation, nor shall the Company, the
Board or the Committee be deemed to be a trustee of any cash, Common Stock or rights thereto to be
granted under this Plan. Any liability or obligation of the Company to any Participant with
respect to an Award of cash, Common Stock or rights thereto under this Plan shall be based solely
upon any contractual obligations that may be created by this Plan and any Award Agreement, and no
such liability or obligation of the Company shall be deemed to be secured by any pledge or other
encumbrance on any property of the Company. Neither the Company nor the Board nor the Committee
shall be required to give any security or bond for the performance of any obligation that may be
created by this Plan. The Plan is not intended to be subject to ERISA.

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     19. Section 409A of the Code. It is intended that any Awards under the Plan satisfy the
requirements of Section 409A of the Code to avoid imposition of applicable taxes thereunder. Thus,
notwithstanding anything in this Plan to the contrary, if any Plan provision or Award under the
Plan would result in the imposition of an applicable tax under Section 409A of the Code and related
regulations and Treasury pronouncements, that Plan provision or Award will be reformed to avoid
imposition of the applicable tax and no action taken to comply with Section 409A of the Code shall
be deemed to adversely affect the Participant’s rights to an Award.

     An Award Agreement shall provide that the payment thereunder will be made (1) by a date that
is no later than the date that is two and one-half (2 1/2) months after the end of the year in
which the Award payment is no longer subject to a substantial risk of forfeiture as determined for
purposes of Section 409A of the Code or (2) at a time that would not subject the compensation at
issue to be subject to the additional tax or interest applicable under Section 409A of the Code.

     Notwithstanding any other provision of this Plan, if a Participant is a “specified employee”
(within the meaning of Section 409A of the Code), , then no payment of any amounts that are
deferred compensation (within the meaning of Section 409A of the Code) shall be made under the
Award due to a “separation from service” (within the meaning of Section 409A of the Code) for any
reason before the date that is the earlier of (i) six (6) months after the date on which the
Participant incurs such separation from service, (ii) the date of the Participant’s death or (iii)
such other date as complies with the requirements of Section 409A of the Code.

     20. Parachute Payment Limitation. Notwithstanding any contrary provision of the Plan, the
Committee may provide in the Award Agreement or in any other agreement with the Participant for a
limitation on the acceleration of vesting and exercisability of unmatured Awards to the extent
necessary to avoid or mitigate the impact of the golden parachute excise tax under Section 4999 of
the Code on the Participant or may provide for a supplemental payment to be made to the Participant
as necessary to offset or mitigate the impact of the golden parachute excise tax on the
Participant. In the event the Award Agreement or other agreement with the Participant does not
contain any contrary provision regarding the method of avoiding or mitigating the impact of the
golden parachute excise tax under Section 4999 of the Code on the Participant, then notwithstanding
any contrary provision of this Plan, the aggregate present value of all parachute payments payable
to or for the benefit of a Participant, whether payable pursuant to this Plan or otherwise, shall
be limited to three times the Participant’s base amount less one dollar and, to the extent
necessary, the exercisability of an unmatured Award shall be reduced in order that this limitation
not be exceeded. For purposes of this Section 20, the terms “parachute payment,” “base amount” and
“present value” shall have the meanings assigned thereto under Section 280G of the Code. It is the
intention of this Section 20 to avoid excise taxes on the Participant under Section 4999 of the
Code or the disallowance of a deduction to the Company pursuant to Section 280G of the Code.

     21. No Right to Continued Employment or Service. Nothing in the Plan or an Award Agreement
shall interfere with or limit in any way the right of the Company to terminate any Participant’s
employment or other service relationship at any time, nor confer upon any Participant any right to
continue in the capacity in which he or she is employed or otherwise serves the Company.

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     22. Retirement and Welfare Plans. Neither Awards made under the Plan nor shares of Common
Stock or cash paid pursuant to such Awards, may be included as “compensation” for purposes of
computing the benefits payable to any Participant under the Company’s or any Subsidiary’s
retirement plans (both qualified and non-qualified) or welfare benefit plans unless such other plan
expressly provides that such compensation shall be taken into account in computing a participant’s
benefit.

     23. Successors. All obligations of the Company under the Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the existence of such successor
is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.

     24. Governing Law. This Plan and all determinations made and actions taken pursuant hereto,
to the extent not otherwise governed by mandatory provisions of the Code or the securities laws of
the United States, shall be governed by and construed in accordance with the laws of the State of
Texas. Unless otherwise provided in the Award Agreement, Participants are deemed to submit to the
exclusive jurisdiction and venue of the federal or state courts of located in Harris County, Texas,
to resolve any and all issues that may arise out of or relate to the Plan or any related Award
Agreement.

     25. Effectiveness. The Plan was approved by the Board of Directors of Pride International, Inc., as
the sole stockholder of the Company, on                     , 2009. The Plan will be submitted to the
stockholders of the Company for approval at the first annual meeting of the Company’s stockholders
that convenes more than 12 months after the Distribution.

-17-

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