Document:

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                                                                   EXHIBIT 10.1

                            STOCK PURCHASE AGREEMENT

         This STOCK PURCHASE AGREEMENT (this "Agreement") dated as of May 18,
2005 is by and among Pride International, Inc., a Delaware corporation (the
"Company"), First Reserve Fund VII, Limited Partnership, a Delaware limited
partnership ("Fund VII"), First Reserve Fund VIII, L.P., a Delaware limited
partnership ("Fund VIII"), and First Reserve Fund IX, L.P., a Delaware limited
partnership ("Fund IX" and, together with Fund VII and Fund VIII, the "Funds").

         WHEREAS, the Funds own an aggregate of 5,976,251 shares of common
stock, par value $.01 per share, of the Company (the "Common Stock");

         WHEREAS, concurrently herewith the Company is entering into an
underwriting agreement dated the date hereof (the "Underwriting Agreement")
with the underwriter named therein (the "Underwriter") pursuant to which the
Company will issue and sell to the Underwriter for cash in connection with a
firm commitment underwriting (the "Public Offering") 5,976,251 shares of Common
Stock (the "Shares") (the closing of such issuance and sale pursuant to the
Underwriting Agreement is hereinafter referred to as the "Closing" and the date
of such Closing is hereinafter referred to as the "Closing Date"), pursuant to
the Company's registration statement on Form S-3 (No. 333-118106) (as amended
to the date hereof, the "Registration Statement") and a prospectus supplement
dated May 18, 2005 (together with the prospectus included in the Registration
Statement, the "Prospectus") filed or to be filed with the Securities and
Exchange Commission (the "Commission") pursuant to Rule 424 under the
Securities Act of 1933, as amended (the "Securities Act"); and

         WHEREAS, on the Closing Date, the Funds desire to sell to the Company,
and the Company desires to purchase from the Funds, an aggregate of 5,976,251
shares of Common Stock (such purchase and sale being hereinafter referred to as
the "Purchase").

         NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements set forth herein, the parties hereto
hereby agree as follows:

                                   ARTICLE 1

                   PURCHASE AND SALE OF COMMON STOCK; CLOSING

         Section 1.1 Purchase and Sale of Common Stock. On the basis of the
representations and warranties contained herein and upon the terms and subject
to the conditions hereof, on the Closing Date, each of the Funds agrees to sell
to the Company, and the Company agrees to purchase from each of the Funds, the
number of shares of Common Stock (the "FR Shares") set forth opposite such
Fund's name on Schedule A hereto at a price per share of $20.68 (the "Per Share
Price"), which price represents the price per share to be received by the
Company pursuant to the Underwriting Agreement.

                                       1

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         Section 1.2 Closing.

         (a) Subject to satisfaction or waiver of the conditions set forth
herein, the closing of the Purchase shall take place at the offices of Baker
Botts L.L.P., 910 Louisiana Street, Houston, Texas 77002 on the Closing Date
concurrently with or promptly following the Closing (or at such other time or
place as shall be mutually agreed upon by the parties hereto).

         (b) At the closing of the Purchase, each of the Funds shall deliver to
the Company the certificates representing the FR Shares to be sold to the
Company on such date by such Fund, duly endorsed in blank or accompanied by
separate stock powers so endorsed, or shall cause such FR Shares to be
delivered to the Company's account maintained by American Stock Transfer &
Trust Company, the transfer agent and registrar for the Common Stock, in
accordance with the procedures of the Depository Trust Company.

         (c) As part of the closing of the Purchase, the Company shall pay to
each of the Funds the Per Share Price for each FR Share to be purchased by the
Company from such Fund on such date by wire transfer of immediately available
funds to an account designated in advance in writing by such Fund.

                                   ARTICLE 2

                  REPRESENTATIONS AND WARRANTIES OF THE FUNDS

         Each of the Funds, severally and not jointly, represents and warrants
to the Company as follows:

         Section 2.1 Existence and Power. Such Fund has been duly formed and is
validly existing and in good standing as a limited partnership under the laws
of the State of Delaware, with the requisite power and authority to execute and
deliver this Agreement and consummate the transactions and perform each of its
obligations contemplated hereby.

         Section 2.2 Authority; Enforceability. The execution and delivery of
this Agreement by such Fund and the consummation by such Fund of each of the
transactions and the performance by such Fund of each of its obligations
contemplated hereby have been duly and properly authorized by all necessary
partnership action on the part of such Fund. This Agreement has been duly
executed and delivered by such Fund and constitutes the valid and legally
binding obligation of such Fund, enforceable against it in accordance with its
terms, except as the enforceability thereof may be subject to the effect of any
applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance or other laws affecting creditors' rights generally from time to
time in effect and general principles of equity (regardless of whether
considered in a proceeding in equity or at law), and except as rights to
indemnity and contribution hereunder may be limited by any applicable laws or
principles of public policy.

         Section 2.3 Ownership of FR Shares. Such Fund is the record and
beneficial owner of the number of FR Shares set forth below:

                                       2

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                   Fund                      FR Shares
                   ----                      ---------

                 Fund VII                      281,978
                 Fund VIII                   3,347,235
                 Fund IX                     2,347,038

All such FR Shares held by such Fund are held free and clear of all mortgages,
pledges, security interests, liens, claims, encumbrances, equities or other
restrictions (collectively, "Liens"). Upon payment for the FR Shares to be sold
by such Fund in accordance with the terms and conditions of this Agreement, the
Company will acquire good and valid title to such FR Shares free and clear of
all Liens.

         Section 2.4 No Conflicts. The execution and delivery of this Agreement
by such Fund and the consummation by such Fund of each of the transactions and
the performance by such Fund of each of its obligations contemplated hereby (i)
do not conflict with or violate (whether with or without notice or a lapse of
time or both), require the consent of any Person (as defined below) to or
otherwise result in a material detriment to such Fund under its partnership or
other organizational documents or any agreement to which it is a party or any
law or order applicable to it, in each case in a manner that could reasonably
be expected to materially hinder or impair the completion of any of the
transactions contemplated hereby; and (ii) do not impose any penalty or other
onerous condition on such Fund that could reasonably be expected to materially
hinder or impact the completion of any of the transactions contemplated hereby.
As used herein, the term "Person" means a natural person, corporation, limited
liability company, venture, partnership, trust, unincorporated organization,
association or other entity.

         Section 2.5 No Governmental Approvals. No approval from any
Governmental Entity (as defined below) is required by or with respect to such
Fund in connection with the execution and delivery by such Fund of this
Agreement or the consummation by such Fund of the transactions contemplated
hereby, except for any such approval the failure of which to be made or
obtained (i) has not impaired and could not reasonably be expected to impair
the ability of such Fund to perform its obligations under this Agreement in any
material respect and (ii) could not reasonably be expected to delay in any
material respect or prevent the consummation of any of the transactions
contemplated by this Agreement. As used herein, the term "Governmental Entity"
means any agency, bureau, commission, authority, department, official,
political subdivision, tribunal or other instrumentality of any government,
whether (i) regulatory, administrative or otherwise, (ii) federal, state or
local or (iii) domestic or foreign.

         Section 2.6 Independent Investigation. Such Fund (a) has the requisite
knowledge, sophistication and experience in order to fairly evaluate a
disposition of the FR Shares to be sold by such Fund hereunder, including the
risks associated therewith, and (b) has adequate information and has made its
own independent investigation and evaluation to the extent it deems necessary
or appropriate concerning the properties, business and financial condition of
the Company to make an informed decision regarding the sale of the FR Shares
pursuant to this Agreement.

                                       3

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                                   ARTICLE 3

                 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company hereby represents and warrants to each of the Funds as
follows:

         Section 3.1 Existence and Power. The Company has been duly formed and
is validly existing company in good standing under the laws of the State of
Delaware, with the requisite corporate power and authority to execute and
deliver this Agreement and consummate the transactions and perform each of its
obligations contemplated hereby.

Section 3.2 Authority; Enforceability. The execution and delivery of this
Agreement by the Company and the consummation by the Company of each of the
transactions and the performance by the Company of each of its obligations
contemplated hereby have been duly and properly authorized by all necessary
corporate action on the part of the Company. This Agreement has been duly
executed and delivered by the Company and constitutes the valid and legally
binding obligation of the Company, enforceable against it in accordance with
its terms, except as the enforceability thereof may be subject to the effect of
any applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance or other laws affecting creditors' rights generally from time to
time in effect and general principles of equity (regardless of whether
considered in a proceeding in equity or at law), and except as rights to
indemnity and contribution hereunder may be limited by any applicable laws or
principles of public policy.

         Section 3.3 No Conflicts. The execution and delivery of this Agreement
by the Company and the consummation of each of the transactions and the
performance of each of the obligations contemplated hereby (i) do not conflict
with or violate (whether with or without notice or a lapse of time or both),
require the consent of any Person to or otherwise result in a material
detriment to the Company under its organizational documents or any agreement to
which it is a party or any law or order applicable to it, in each case in a
manner that could reasonably be expected to materially hinder or impair the
completion of any of the transactions contemplated hereby or have a material
adverse effect on the business, properties, condition (financial or otherwise),
liabilities or prospects of the Company; and (ii) do not impose any penalty or
other onerous condition on the Company that could reasonably be expected to
materially hinder or impact the completion of any of the transactions
contemplated hereby.

         Section 3.4 No Governmental Approvals. No approval from any
Governmental Entity is required by or with respect to the Company in connection
with the execution and delivery by the Company of this Agreement or the
consummation by the Company of the transactions contemplated hereby, except (i)
such as may have previously been made or obtained or as may be required under
the Securities Act or state securities laws or (ii) for any such approval the
failure of which to be made or obtained (A) has not impaired and could not
reasonably be expected to impair the ability of the Company to perform its
obligations under this Agreement in any material respect and (B) could not
reasonably be expected to delay in any material respect or prevent the
consummation of any of the transactions contemplated by this Agreement.

                                       4

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                                   ARTICLE 4

                             CONDITIONS TO CLOSING

         Section 4.1 Conditions to Obligations of the Company. The obligation
of the Company to purchase any FR Shares hereunder is subject to the
satisfaction or waiver on or prior to the Closing Date of each the following
conditions:

         (a) No Governmental Entity shall have issued any injunction, judgment
     or order, which shall remain in effect, that would prevent the
     consummation of the transactions contemplated by this Agreement.

         (b) The Closing shall have occurred or be concurrently occurring in
     accordance with the terms of the Underwriting Agreement.

         (c) Each of the Funds shall have performed in all material respects
     all of its obligations hereunder required to be performed by it on or
     prior to the Closing Date.

         (d) The representations and warranties of each of the Funds contained
     in this Agreement and in any certificate or other writing delivered by
     each of the Funds pursuant hereto shall be true and correct in all
     material respects on and as of the date hereof and on and as of the
     Closing Date as though made on and as of such date.

         (e) The Company shall have received a certificate signed by a duly
     authorized representative of the general partner of each of the Funds to
     the effects set forth in Section 4.1(c) and (d) above.

         Section 4.2 Conditions to Obligations of the Funds. The obligation of
each of the Funds to sell the FR Shares to be sold by such Fund hereunder is
subject to the satisfaction or waiver on or prior to the Closing Date of each
the following conditions:

         (a) No Governmental Entity shall have issued any injunction, judgment
     or order, which shall remain in effect, that would prevent the
     consummation of the transactions contemplated by this Agreement.

         (b) The Closing shall have occurred or be concurrently occurring in
     accordance with the terms of the Underwriting Agreement.

         (c) The Company shall have performed in all material respects all of
     its obligations hereunder required to be performed by it on or prior to
     the Closing Date.

         (d) The representations and warranties of the Company contained in
     this Agreement and in any certificate or other writing delivered by the
     Company pursuant hereto shall be true and correct in all material respects
     on and as of the date hereof and on and as of the Closing Date as though
     made on and as of such date.

         (e) The Funds shall have received a certificate signed by a duly
     authorized officer of the Company to the effects set forth in Section
     4.2(c) and (d) above.

                                       5

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                                   ARTICLE 5

                     ACKNOWLEDGMENTS AND FURTHER AGREEMENTS

         Section 5.1 Shareholders Agreement; Waivers; Releases.

         (a) The parties hereto agree that, effective upon the Closing Date,
the Registration Rights Agreement (the "Registration Rights Agreement") set
forth in Article 5 of the Second Amended and Restated Shareholders Agreement,
dated as of March 4, 2002 (the "Shareholders Agreement"), among the Company and
each of the Funds is terminated. For the avoidance of doubt, the parties hereto
acknowledge and agree that the respective covenants and agreements of the Funds
and the Company contained in the Shareholders Agreement, other than as set
forth in such Registration Rights Agreement, have terminated in accordance with
the terms thereof prior to the date hereof.

         (b) Except for the Company's indemnification obligations in favor of
William E. Macaulay as a former director of the Company and as otherwise
expressly provided herein, from and after the Closing Date, each of the Company
and the Funds hereby fully releases and forever discharges the other parties
from any and all claims and liabilities, whether known or unknown, foreseen or
unforeseen, in contract or tort, that either may have against the other related
either directly or indirectly to the Shareholders Agreement or the Registration
Rights Agreement.

         Section 5.2 Governmental Filings. Each of the Funds and the Company
shall make all filings with any Governmental Entity required to be made by such
Fund or the Company in accordance with applicable law in connection with the
execution and delivery by such Fund or the Company of this Agreement or the
consummation by such Fund or the Company of the transactions contemplated
hereby, including, without limitation, all filings with the Commission required
pursuant to the Securities Act, the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or the rules and regulations promulgated by the
Commission under either such Act.

                                   ARTICLE 6

                                INDEMNIFICATION

         Section 6.1 Indemnification by the Company. The Company agrees to
indemnify and hold harmless each of the Funds, its general partner, the general
partner of the general partner, and the officers and directors of such general
partner, and each Person, if any, who controls any of the Funds within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and expenses arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus, or any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities and
expenses are caused by any untrue statement or omission or alleged untrue
statement or omission based upon

                                       6

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information relating to a Fund furnished in writing to the Company by or on
behalf of such Fund expressly for use therein.

         Section 6.2 Indemnification by the Funds. The Funds agree to indemnify
and hold harmless the Company, its officers and directors, and each Person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to the Funds, but only with reference to
information relating to a Fund furnished in writing by or on behalf of such
Fund expressly for use in the Registration Statement or the Prospectus, or any
amendment or supplement thereto.

         Section 6.3 Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
Section 6.1 or Section 6.2 of this Agreement, such Person (the "Indemnified
Party") shall promptly notify the Person against whom such indemnity may be
sought (the "Indemnifying Party") in writing and the Indemnifying Party shall
have the right to assume the defense of such proceeding and retain counsel
reasonably satisfactory to such Indemnified Party to represent such Indemnified
Party and any others the Indemnifying Party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any Indemnified Party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such Indemnified Party unless (i) the Indemnifying Party and
the Indemnified Party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnified Party and the Indemnifying
Party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for all such Indemnified Parties, and that all
such fees and expenses shall be reimbursed as they are incurred. In the case of
any such separate firm for the Indemnified Parties, such firm shall be
designated in writing by the Indemnified Parties. The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent, or if there be a final judgment for
the plaintiff, the Indemnifying Party shall indemnify and hold harmless such
Indemnified Parties from and against any loss or liability (to the extent
stated above) by reason of such settlement or judgment.

         Section 6.4 Contribution.

         (a) If the indemnification provided for in this Agreement is
unavailable to an Indemnified Party in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each such Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the Company and the Funds in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities. The relative fault of the Company and the Funds shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to

                                       7

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information supplied by such party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.

         (b) The Company and the Funds agree that it would not be just and
equitable if contribution pursuant to this Section 6.4 were determined by a pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in Section 6.4(a). The amount paid
or payable by an Indemnified Party as a result of the losses, claims, damages
or liabilities referred to in Section 6.4(a) shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

                                   ARTICLE 7

                               GENERAL PROVISIONS

         Section 7.1 Notices. All notices, requests and other communications to
any party hereunder shall be given:

                  If to a Fund, to it:

                           c/o First Reserve Corporation
                           One Lafayette Place
                           Greenwich, Connecticut 06830
                           Attention:  Thomas R. Denison
                           Facsimile:  (203) 625-8520

                  If to the Company, to:

                           Pride International, Inc.
                           5847 San Felipe, Suite 3300
                           Houston, Texas  77057
                           Attention:  W. Gregory Looser
                           Facsimile:  (713) 914-9796

                           with a copy (which shall not constitute notice), to:

                           Baker Botts L.L.P.
                           910 Louisiana
                           Houston, Texas 77002
                           Attention:  J. David Kirkland, Jr.
                                       Tull R. Florey
                           Facsimile: (713) 229-2779

                                       8

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         Any notice or other communication required or permitted under this
Agreement shall be in writing or by telex, telephone or facsimile transmission
with subsequent written confirmation, and may be personally served or sent by
United States Postal Service or private delivery service and shall be deemed to
have been given upon receipt by the party notified. By notice given in
accordance with this Section 7.1 to the other party, any party may change its
address for the receipt of notices under this Agreement.

         Section 7.2 Amendments and Waivers. Any provision of this Agreement
may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective. No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.

         Section 7.3 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.

         Section 7.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York, without
reference to its conflict of laws principles that would apply the law of any
other state.

         Section 7.5 Section Headings. The captions and headings appearing at
the beginning of the various sections of this Agreement are for convenience of
reference only and shall not be given any effect whatsoever in the construction
or interpretation of this Agreement.

         Section 7.6 Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
parties and the matter, this being in addition to any other remedy to which
they are entitled at law or in equity.

         Section 7.7 Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.

         Section 7.8 Expenses. The Company shall pay the following expenses
incurred in connection with the transactions contemplated hereby: (i) filing
fees with the Commission; (ii) fees and expenses of compliance with securities
or blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the

                                       9

<PAGE>

Shares); (iii) printing expenses; (iv) fees and expenses incurred in connection
with the listing of the Shares; (v) fees and expenses of counsel for and the
independent registered public accounting firm of the Company; (vi) the
reasonable fees and expenses of any additional experts retained by the Company
in connection herewith and (vii) the reasonable fees and expenses of a single
firm of attorneys for the Funds in connection with the transactions
contemplated hereby.

         Section 7.9 Termination. Notwithstanding any provision in this
Agreement to the contrary, this Agreement (other than the terms of this Article
7, which shall remain in full force and effect) shall terminate upon the
earlier of (i) the date upon which the parties hereto mutually agree in writing
to terminate this Agreement and (ii) the date on which the Underwriting
Agreement is terminated in accordance with its terms.

         Section 7.10 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any party may execute
this Agreement by the delivery of a facsimile signature, which signature shall
have the same force and effect as an original signature.

         Section 7.11 Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof.

                           [Signature page follows.]

                                      10

<PAGE>

         IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer as of the date first
written above.

                                    PRIDE INTERNATIONAL, INC.

                                          By: /s/ Steven Oldham
                                              ---------------------------------
                                          Name: Steven Oldham
                                          Title: Vice President

                                    FIRST RESERVE FUND VII, LIMITED PARTNERSHIP

                                    By:  First Reserve GP VII, L.P.,
                                          its General Partner

                                          By:  First Reserve Corporation,
                                               its General Partner

                                               By: /s/ Tim Day
                                                   ----------------------------
                                               Name: Tim Day
                                               Title: Vice President

                                    FIRST RESERVE FUND VIII, L.P.

                                     By:  First Reserve GP VIII, L.P.,
                                           its General Partner

                                          By:  First Reserve Corporation,
                                               its General Partner

                                               By: /s/ Tim Day
                                                   ----------------------------
                                               Name: Tim Day
                                               Title: Vice President

                                      11

<PAGE>

                                    FIRST RESERVE FUND IX, L.P.

                                    By:  First Reserve GP IX, L.P.,
                                          its General Partner

                                         By:  First Reserve GP IX, Inc.,
                                               its General Partner

                                              By: /s/ Tim Day
                                                  -----------------------------
                                              Name: Tim Day
                                              Title: Vice President

                                      12

<PAGE>
                                                                     Schedule A

     FUND                                                            FR SHARES
     ----                                                            ---------
     Fund VII.......................................                   281,978
     Fund VIII......................................                 3,347,235
     Fund IX........................................                 2,347,038
                                                                     ---------
          Total.....................................                 5,976,251
                                                                     =========exv10w2

 

Exhibit 10.2

FORM OF

HYDRIL COMPANY

NON-EMPLOYEE DIRECTOR’S DEFERRED SHARE UNIT AGREEMENT

     This
Non-Employee Director’s Deferred Share Unit Agreement (the “Agreement”) is entered
into by and between Hydril Company (the “Company”) and                                          (the
“Director”) as of                                          (the “Date of Grant”), pursuant to the terms
and conditions set forth in this Agreement.

     1.     Grant of Deferred Share Units. The Company hereby grants to the
Director ___Deferred Share Units of the Company’s common stock, which shall
be credited to a bookkeeping account with the Company. Each such Deferred
Share Unit will be equal in value to one of the Company’s currently outstanding
shares of common stock, par value $0.50 per share (a “Share”).

     2.     Vesting and Settlement. This grant vests and becomes payable in full
                                         from the Date of Grant, if the Director remains a member of the
Company’s Board of Directors (“Board”) at such time, or upon termination of the
Director’s status as a member of the Board other than by reason of either cause
or voluntary resignation without the consent of the Board, if earlier. Unless
the Director elects to defer payment hereunder in accordance with Paragraph 3,
upon full vesting the Director shall be entitled to a payment equal to the fair
market value of ___Shares calculated as of the applicable of the expiration
of the                                          term or termination of status as a director (the “Settlement
Date”), determined for this purpose in the same manner as “Fair Market Value”
is determined in the Hydril Company 2000 Incentive Plan (the
“Incentive Plan”). Such payment shall be made solely in
cash. Notwithstanding the foregoing, if at any time prior to full vesting as
described above, the Company should cancel or settle its obligations under the
Incentive Plan as a result of a corporate transaction, the Director’s grant
hereunder shall immediately vest and, unless the Director elects to defer
payment hereunder in accordance with Paragraph 3, a cash payment shall be made
to the Director in an amount to be determined as of that date in accordance
with the valuation procedures outlined in the Incentive Plan.

     3.     Deferral of Payment. Subject to the provisions in and procedures
established by the Company’s Board of Directors, the Director may be afforded
the opportunity to elect to defer the receipt of payment hereunder prior to the
date this grant vests.

     4.     Dividends. An amount equivalent to the value of any dividends paid on
___Shares during the period beginning on the Date of Grant and ending on the
Settlement Date of the Company’s obligations hereunder shall be credited to the
bookkeeping account maintained for the Director and, unless the Director elects
to defer such payment in accordance with Paragraph 3, paid in cash to the
Director when the Company’s obligation under this Agreement is otherwise
satisfied pursuant to Paragraph 2.

1

 

Exhibit 10.2

     5.     Adjustments. In the event of any subdivision or consolidation of
outstanding Shares or a declaration of a dividend payable in Shares, or a
capital reorganization, reclassification or other transaction involving an
increase or decrease in the number of outstanding Shares, an appropriate
adjustment, in the manner provided in Paragraph 15(b) of the Incentive Plan,
shall be made to the grant or number of Shares subject to the grant under this
Agreement.

     6.     Assignability. Neither the grant nor any other rights of the Director
under this Agreement shall be assignable or otherwise transferable except by
will or by the laws of descent and distribution.

Notwithstanding the foregoing, the Deferred Share Units are transferable by the
Director to (a) the spouse, parent, brother, sister, children or grandchildren
(including adopted and stepchildren and grandchildren) of the Director
(“Immediate Family Members”), (b) a trust or trusts for the exclusive benefit
of such Immediate Family Members, or (c) a partnership or partnerships in which
such Immediate Family Members have at least 99% of the equity, profit and loss
interests. Subsequent transfers of transferred Directed Share Units shall be
prohibited except by will or the laws of descent and distribution, unless such
transfers are made to the original Director a person to whom the original
Director could have made a transfer in the manner described herein. Following
transfer, the Directed Share Units 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 “Director” shall be deemed to
refer to the transferee.

     7.     Governing Law. This Agreement and all determinations made and actions
taken pursuant hereto shall be governed by and construed in accordance with the
laws of the State of Delaware.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and the Director has
hereunto set his hand as of the day and year first above written.

	 	 	 
	 

	 	HYDRIL COMPANY
	 
	 	 
	

	 	By: 

	 
	 	 
	

	 	Name:

	 
	 	 
	

	 	Title:

	 	 	 
	 

	 	DIRECTOR
	 
	 	 
	

	 	By:

	 
	 	 
	

	 	Date:

2

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