Document:

exv10wg

Exhibit 10.g

AMENDED AND RESTATED

MASCO CORPORATION

RETIREMENT BENEFIT

RESTORATION PLAN

Effective January 1, 1995

With Subsequent Amendments

As Amended and Restated

Effective December 22, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	SECTION 1 — ADOPTION OF PLAN

	 	 	1	 
	1.1   Adoption

	 	 	1	 
	1.2   Purpose

	 	 	1	 
	1.3   Construction

	 	 	1	 
	SECTION 2 — COVERAGE

	 	 	2	 
	2.1   Covered Employees

	 	 	2	 
	2.2   Commencement and Cessation of Coverage

	 	 	2	 
	SECTION 3 — BENEFITS

	 	 	3	 
	3.1   Amount

	 	 	3	 
	3.2   Timing and Form of Payments

	 	 	4	 
	3.3   Forfeitability

	 	 	4	 
	3.4   No Payment During Employment

	 	 	4	 
	3.5   Delay of Payment

	 	 	4	 
	SECTION 4 — SOURCE OF BENEFITS AND CHANGE OF CONTROL

	 	 	5	 
	4.1   Cost of Plan

	 	 	5	 
	4.2   Option to Fund Informally

	 	 	5	 
	4.3   Physical Examinations

	 	 	5	 
	4.4   No Employee Contributions or Loans

	 	 	5	 
	4.5   Change of Control

	 	 	5	 
	SECTION 5 — ADMINISTRATION

	 	 	8	 
	5.1   Plan Administrator and Named Fiduciary

	 	 	8	 
	5.2   Claims Procedure

	 	 	8	 
	5.3   Arbitration

	 	 	9	 
	SECTION 6 — LIMITATION OF COVERED EMPLOYEE’S RIGHTS

	 	 	11	 
	6.1   No Contract of Employment

	 	 	11	 
	6.2   Unsecured Creditor

	 	 	11	 
	6.3   No Trust

	 	 	11	 
	SECTION 7 — AMENDMENT OR TERMINATION

	 	 	12	 
	7.1   Right to Amend or Terminate Plan

	 	 	12	 
	7.2   Limitations

	 	 	12	 
	7.3   Payment of Benefits Upon Termination

	 	 	12	 
	SECTION 8 — MISCELLANEOUS PROVISIONS

	 	 	13	 
	8.1 Independence of Benefits

	 	 	13	 
	8.2   Nonalienation of Benefits

	 	 	13	 
	8.3   Payments for the Benefit of Employee

	 	 	13	 
	8.4   Use of Words

	 	 	13	 
	8.5   Headings

	 	 	13	 
	8.6   Savings Clause

	 	 	13	 
	SECTION 9 — DEFINITIONS

	 	 	14	 
	9.1   Code

	 	 	14	 
	9.2   Company

	 	 	14	 
	9.3   ERISA

	 	 	14	 

i

 

	 	 	 	 	 
	9.4   Plan

	 	 	14	 
	9.5   Masco

	 	 	14	 
	9.6   Retirement

	 	 	14	 
	9.7   Change of Control

	 	 	14	 
	9.8   Deferred Compensation Trust

	 	 	15	 
	9.9   Beneficiary

	 	 	15	 
	9.10   Gross-Up Amount

	 	 	15	 
	9.11   Present Value

	 	 	15	 
	9.12   PBGC

	 	 	16	 
	9.13   Control Change

	 	 	16	 
	9.14   Covered Benefits

	 	 	16	 
	SECTION 10 — EXECUTION

	 	 	17	 

 

 

AMENDED AND RESTATED

MASCO CORPORATION RETIREMENT

BENEFIT RESTORATION PLAN

SECTION 1

ADOPTION OF PLAN

          1.1 Adoption. Masco Corporation (“Masco”) hereby adopts the Masco Corporation
Retirement Benefit Restoration Plan (“Plan”), originally effective January 1, 1995 (“Effective
Date”), as amended and restated herein effective October 22, 2008 (“Restatement Effective Date”).

1.2 Purpose. The sole purpose of the Plan is to provide benefits to a select group of
management or highly compensated employees, that would be provided to such employees who terminate
employment or retire after the Effective Date under certain retirement plans of Masco Corporation
and its subsidiaries, which plans are set forth in Appendix “A” hereto and are qualified plans
under Section 401(a) of the Internal Revenue Code of 1986, as amended (Code) (the “Qualified
Plans”, “Qualified Pension Plans” or “Qualified Profit Sharing Plans”), but for the benefit
limitations of the Code, in order to encourage the continued employment and diligent service of
such employees with Masco or the company (as hereinafter defined) following the Effective Date.
Accordingly (by way of example and not limitation), in no event shall the provisions of the Plan be
construed to benefit any employee whose termination of employment occurred prior to the Effective
Date. Effective as of the Restatement Effective Date, the Plan as amended and restated herein
shall apply to all those employees then eligible to participate hereunder, as well as to all
persons who terminated employment prior to such date who retain a deferred vested right to benefits
under the Plan or to whom retirement benefits are being paid under the Plan. Notwithstanding the
foregoing, effective as of January 1, 2010 the defined benefit Qualified Pension Plans set forth on
Appendix A are amended to provide that all credited service and salary accruals in such plans are
frozen as of January 1, 2010; consequently, no provision of this Plan shall be interpreted to
provide for accrual of any defined benefit pension hereunder with respect to any period following
January 1, 2010, and all defined benefit pension accruals under this Plan are to be frozen as of
January 1, 2010.

          1.3 Construction. The Plan shall be construed in accordance with Michigan law,
except where preempted by federal law. It is intended that the Plan, except as permitted herein,
shall be unfunded and maintained by Masco primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees, so that the Plan is
exempt from the requirements of Parts 2, 3 and 4 of the Employee Retirement Income Security Act of
1974, as amended (ERISA). All provisions of the Plan shall be interpreted in accordance with such
intentions.

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SECTION 2

COVERAGE

          2.1 Covered Employees. The coverage of the Plan shall be limited to
highly-compensated or management employees of Masco and of those subsidiaries of Masco the
Qualified Plans of which are listed in Appendix “A”, who individually (a) receives from Masco or
the subsidiary of Masco which is the employer of such person (“company”) annual compensation
otherwise eligible for coverage under the terms of such Qualified Plan which exceeds the applicable
limit as provided by Section 401(a)(17) of the Code, or (b) whose benefits or contributions under
the Qualified Plans are reduced due to the application of Section 415 of the Code (hereinafter,
“employee”).

          2.2 Commencement and Cessation of Coverage. An employee shall be covered under the
Plan commencing on the later of (a) the Effective Date or (b) the earlier of the date that his
plan-eligible compensation described in paragraph 2.1 first exceeds the annual limitation amount
described in paragraph 2.1 or the date his benefits or contributions under the Qualified Plans are
first reduced by the application of Code Section 415. An employee shall cease to be covered by the
Plan on his date of termination of employment from Masco or the company and any of their
subsidiaries. If prior to such termination an employee ceases to qualify for coverage under the
Plan due to some other event (by way of examples and not as limitation, a decrease in Plan-eligible
compensation or the commencement of employment with Masco or the company or any of their
subsidiaries, which employer has no Qualified Plan or has discontinued its Qualified Plan), his
coverage under the Plan shall cease as of the time such disqualifying event occurs and only the
benefits accrued hereunder up to such time shall be payable from this Plan. Notwithstanding the
foregoing, unless otherwise specified in Appendix A, coverage under any plan which from time to
time may be added to or deleted from Appendix A, shall be effective only from and after the date
when such plan is added to or deleted from Appendix A.

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SECTION 3

BENEFITS

          3.1 Amount. A covered employee shall be entitled hereunder to either or both, as
applicable, of the following supplemental retirement benefits:

     (a) An annual amount equal to the benefit which would have been payable to
the employee under any defined benefit (pension) Qualified Plan in which he is a
participant (“Qualified Pension Plan”), computed without regard to any benefit
limitations imposed by the Code on the computation or amount of such benefit, and
reduced (but not below zero) by any benefits which the employee is eligible to
receive, prior to giving effect to any qualified domestic relations order or tax
levy, under any such Qualified Pension Plan, each benefit being expressed for this
purpose in the normal form of payment under said Qualified Pension Plan;

     (b) A single sum amount equal to the difference between (1) the cumulative
total of employer contributions (other than contributions characterized as elective
deferrals under Code Section 401(k) or matching contributions under Section 401(m))
which from time to time would have been contributed to the account of the employee
with respect to periods after December 31, 1993 under any defined contribution
(profit sharing) Qualified Plan in which he is a participant computed without regard
to any limitations imposed by the Code on the determination or amount of such
employer contributions and (2) the actual employer profit sharing contributions made
during such periods prior to giving effect to any qualified domestic relations order
or tax levy, with such difference adjusted by the average of the investment earnings
(or losses) actually experienced for each such period in the Fidelity Freedom Funds
which are offered as investment choices in the Masco Corporation Future Service
Profit Sharing Plan (or in such other index fund or funds as Masco may determine
from time to time), as if the contributions in (1) above had been made
simultaneously with the actual contributions referenced in (2) above.
Notwithstanding the foregoing, on and after January 1, 2010 the term “profit
sharing” shall be deemed to include those 401(k) savings plans included thereafter
on Appendix A; and on and after January 1, 2010 the exclusion contained in the first
parenthetical in this Section 3.1(b) shall be ineffective with respect to employer
matching contributions described in Code Section 401(m) called for by the matching
formulae in those 401(k) savings plans included thereafter on Appendix A;
provided, however,the foregoing is not intended to permit any employee
elective deferrals in excess of the limit established from time to time by Code
Section 401(g)(1)(B) nor to provide employer matching contributions on other than
actual employee elective deferrals made under the qualified plans up to such limit
under Code Section 401(g)(1)(B); provided, further, effective on and after
December 22, 2010, any bonus paid in 2010 shall not be considered as eligible for
the purpose of determining the amount of matching contributions under this Plan, if
the amount

3

 

of such bonus was included for purposes of the Masco Corporation Supplemental
Executive Retirement Plan.

In no case shall there be any adjustments for forfeitures of any kind and no payment made pursuant
to this Plan shall have any gross-up for tax effect, other than as provided under paragraphs 4.5 or
4.6, and there shall be no defined benefit pension accruals under subsection 3.1(a) with respect to
any period following January 1, 2010, or otherwise, and all defined benefit pension accruals under
this Plan are frozen as of January 1, 2010.

          3.2 Timing and Form of Payments. (a) Retirement benefit payments hereunder which
are supplemental to a Qualified Pension Plan shall be made commencing at Retirement and shall be
payable either (i) for an employee who is unmarried at the time payments commence, in the form of a
single life annuity, (ii) for any employee who is married when payments commence, in the form of a
50% joint and survivor annuity with the employee’s spouse, or (iii) in an optional form which the
employee validly elects (pursuant to the same procedures, and for the same optional forms, as are
specified in the Qualified Pension Plan) for payment of benefits hereunder. Any optional form
selected shall be paid at such times and in such amounts as are in the aggregate, actuarially
equivalent to the Plan’s payments when made as a single life annuity (including, as applicable,
additional early commencement actuarial reduction for amounts payable under paragraph 3.1(a) which
commence prior to the Qualified Pension Plan’s normal retirement date, other than benefits (for
example, disability benefits) which by their terms would be payable prior to the normal retirement
date with no reduction for early commencement); such actuarial equivalents shall be computed using
the same formulas and actuarial factors as set forth for determinations of comparable optional
forms of benefits as are offered under the Qualified Pension Plan; for purposes of this paragraph
3.2(a), an employee’s marital status and spouse shall be determined in accordance with the
Qualified Pension Plan. Other than as provided in paragraphs 4.5 and 4.6 or in the case of a
benefit the Present Value of which is less than $5000, the Plan may not make an actuarially
equivalent payment in the form of a lump sum.

          (b) A sum payable hereunder which is supplemental to a Qualified Profit Sharing Plan shall
be paid in a single lump sum promptly following Retirement to the employee (or to the Beneficiary
named under the Qualified Profit Sharing Plan). Notwithstanding the foregoing, such payment shall
be subject to delay as described in paragraph 3.5 for those persons subject thereto.

          3.3 Forfeitability. Except as provided in paragraph 4.5(a)(i), the right to any
payment of benefits under the Plan shall be vested in the same manner and to the same extent as
benefits are vested under the Qualified Pension and Qualified Profit Sharing Plans.

          3.4 No Payment During Employment. Notwithstanding the foregoing, no periodic payments
computed under paragraph 3.1 shall be made until after termination of employment from Masco, the company or
any of their subsidiaries.

4

 

          3.5 Delay of Payment. Notwithstanding the foregoing, any payments of Covered Benefits
(those benefits subject to the provisions of Code Section 409A) otherwise payable hereunder to an
employee who is a person described in 26 CFR 1.409A-1(i) shall be delayed for the first six months
following termination of employment, and after six months such delayed payments shall be paid to
the employee in a single lump sum, with no interest adjustment for such delay.

SECTION 4

SOURCE OF BENEFITS AND CHANGE OF CONTROL

          4.1 Cost of Plan. Other than as provided in paragraphs 4.2, 4.5 and 4.6, the entire
cost of providing benefits under the Plan, including the costs of the Plan Administrator, shall be
paid by Masco out of its general assets, and Masco’s obligations under the Plan shall be an
unfunded and unsecured promise to pay. Other than as provided in paragraphs 4.2, 4.5 and 4.6,
Masco shall not be obligated to separately fund its obligations under the Plan.

          4.2 Option to Fund Informally. Notwithstanding paragraph 4.1, Masco may, at its sole
option, or by agreement, informally fund its obligations under the Plan in whole or in part,
provided, however, in no event shall such informal funding be construed to create any trust fund
(other than pursuant to paragraphs 4.5 and 4.6), escrow account or other security for an employee
with respect to the payment of benefits under the Plan. Furthermore, if Masco decides to informally
fund the Plan, in whole or in part, by procuring, as owner, life insurance for its own benefit on
the lives of employees, the form of such insurance and the amounts thereof shall be the sole
decision of Masco, and in no event shall an employee have any incidents of ownership in any such
policies of insurance.

          4.3 Physical Examinations. If a physical examination is required for Masco to obtain
insurance for covered employees under paragraph 4.2, each employee agrees to undergo such physical
examinations as may be required by the insurance carrier. Such physical examinations shall be
conducted by a physician approved by Masco, at the expense of Masco.

          4.4 No Employee Contributions or Loans. No loans or hardship distributions or
contributions by employees are permitted or required under the Plan.

          4.5 Change of Control. (a) Immediately upon the occurrence of any Change of
Control:

(i) If the employee is then employed by Masco or the company, if not already 100%,
vesting in all benefits hereunder shall be deemed for all purposes of this Plan to
be 100%.

5

 

(ii) Masco shall forthwith deposit to an account in the employee’s name (or that of
the employee’s Beneficiary if the employee is then deceased and the employee’s
Beneficiary is entitled to benefits hereunder) in the Deferred Compensation Trust,
which Masco shall theretofore have established, 110% of the sum of the Gross-Up
Amount plus:

(A) If the employee is then employed by Masco or the company, an amount
equal to the discounted Present Value of the benefits which would have been
payable under paragraphs 3.1 and 3.2 of this Plan upon Retirement at age 65
or attained age if greater, assuming for purposes of this clause, no
compensation increases and that if younger than age 65 the employee and the
employee’s Beneficiary had attained such age;

(B) If employment has previously been terminated but the employee or the
employee’s Beneficiary is then entitled in the future to receive benefits
under this Plan, an amount equal to the discounted Present Value of the
benefits which would have been so payable; and

(C) If the employee or the employee’s Beneficiary is then receiving payments
under paragraph 3.2 of this Plan, an amount equal to the Present Value of
those benefits payable in the future to the employee and the employee’s
Beneficiary.

(b) If the Deferred Compensation Trust is not established prior to or within thirty days
after the Change of Control, all payments which would otherwise have been made to the
employee or the employee’s Beneficiary from the Deferred Compensation Trust shall
immediately after such thirty day period be made to the employee or the employee’s
Beneficiary by Masco.

(c) Any deposit by Masco to an account in the employee’s name or that of the employee’s
Beneficiary in the Deferred Compensation Trust prior to the occurrence of the Change of
Control, together with all income then accrued thereon (but only to the extent of the value
of such deposited amount and the income accrued thereon on the day of any deposit under
clause (a)(ii) of this paragraph 4.5), shall reduce by an equal amount the obligations of
Masco to make the deposit required under clause (a)(ii) of this paragraph 4.5.

(d) At or prior to making the deposit required by clause (a)(ii) of this paragraph 4.5,
Masco shall deliver to the Trustee under the Deferred Compensation Trust a certificate
specifying that portion, if any, of the amount in the trust account, after giving effect to
the deposit, which is represented by the Gross-Up Amount. Payment of 90.91% of the amount
required by clause (a)(ii) of this paragraph 4.5 to be paid to the trust account, together
with any income accrued thereon from the date of the Change of Control, is to be made to the
employee or the employee’s Beneficiary, as applicable, under the terms of the Deferred
Compensation Trust, at the earlier of (1) immediately upon a Change of Control if the
employee then is deceased or has attained age 65, (2) the employee’s death

6

 

subsequent to the
Change of Control, or (3) the date which is one year after the Change of Control (subject,
in each case, to paragraph 3.5 if applicable); provided, however, that the
Trustee under the Deferred Compensation Trust is required promptly to pay to the employee or
the employee’s Beneficiary, as applicable, from the trust account from time to time amounts,
not exceeding in the aggregate the Gross-Up Amount, upon the employee’s or the employee’s
Beneficiary’s certification to the Trustee that the amount to be paid has been or within 60
days will be paid by the employee or the employee’s Beneficiary to a Federal, state or local
taxing authority as a result of the Change of Control and the imposition of the excise tax
under Section 4999 of the Code (or any successor provision) on the receipt of any portion of
the Gross-Up Amount. All amounts in excess of the amount required to be paid from the trust
account by the preceding sentence, after all expenses of the Deferred Compensation Trust
have been paid and the Deferred Compensation Trust has been terminated, shall revert to
Masco.

(e) Subject to the next sentence of this clause (e), the payment of the Gross-Up Amount to
the employee or the employee’s Beneficiary or the account in the employee’s or the
employee’s Beneficiary’s name in the Deferred Compensation Trust hereunder will thereby
discharge Masco from any obligations it may have under any present or future stock option or
stock award plan, retirement plan or otherwise, to make any other payment as a result of the
employee’s income becoming subject to the excise tax imposed by Section 4999 of the Code (or
any successor provision) or any interest or penalties with respect to such excise tax. As a
result of the uncertainty which will be present in the application of Section 4999 of the
Code (or any successor provision) at the time of the determination of the Gross-Up Amount
and the possibility that between the date of determination of the Gross-Up Amount and the
dates payments are to be made to the employee or the employee’s Beneficiary under this
Agreement, changes in applicable tax laws will result in an incorrect determination of the
Gross-Up Amount having been made, it is possible that (i) payment of a portion of the
Gross-Up Amount will not have been made by Masco which should have been made (an
“Underpayment”), or (ii) payment of a portion of the Gross-Up Amount will have been made
which should not have been made (an “Overpayment”), consistent with the calculations
required to be made hereunder. In the event of an Underpayment, such Underpayment shall be
promptly paid by Masco to or for the employee’s benefit. In the event that the employee or
the employee’s Beneficiary discovers that an Overpayment shall have occurred, the amount
thereof shall be promptly repaid by the employee or the employee’s Beneficiary to Masco.

(f) Prior to the occurrence of a Change of Control, any deposits made by Masco to an account
in the Deferred Compensation Trust may be withdrawn by Masco. Upon the occurrence of a
Change of Control, all further obligations of Masco under this Agreement
(other than under this paragraph 4.5 to the extent not theretofore performed) shall
terminate in all respects.

          4.6 Control Change. If a “Control Change” has occurred which is also a “Change of
Control” then all of the provisions of the Plan, including the foregoing provisions of this
paragraph 4, shall apply without change. However, if there is a “Control Change” which is not a
“Change of Control” then (a) the foregoing provisions of paragraph 4 shall apply with exception

7

 

of subparagraph 4.5(b), (b) in subparagraph 4.5(d)(3) the phrase “the date which is one year after the
Change of Control” is to be replaced by the phrase “in the amounts and upon the dates set forth in
paragraphs 3.1 and 3.2” and (c) for the purposes of this paragraph 4.6, all references to “Change
in Control” in subparagraphs 4.5(a), 4.5(c), 4.5(d), 4.5(e) and 4.5(f) shall be deemed to be
“Control Change”. If, for any reason, the monthly benefit paid by the Deferred Compensation Trust
to the employee or the employee’s Beneficiary is less than the monthly benefit used to calculate
the amount deposited under the next preceding sentence, Masco shall pay the deficiency directly to
the employee or the employee’s Beneficiary.

SECTION 5

ADMINISTRATION

          5.1 Plan Administrator and Named Fiduciary. The Plan Administrator and Named
Fiduciary of the Plan for purposes of ERISA shall be Masco Corporation whose business address is
21001 Van Born Road, Taylor, MI 48180, and whose telephone number is (313) 274-7400. Masco shall
have the right to change the Plan Administrator and Named Fiduciary of the Plan at any time, and to
change the address and telephone number of the same. Masco shall give each covered employee
written notice of any such change in the Plan Administrator and Named Fiduciary, or in the address
or telephone number of the same.

          5.2 Claims Procedure. The Plan Administrator has the power to interpret all
provisions of the Plan and make final determinations concerning the meaning of the Plan and the
right of any person to benefits under the Plan.

          Each covered employee, or other person claiming through the employee, must file a written
claim for benefits with the Plan Administrator as a prerequisite to the payment of benefits under
the Plan. Any denial by the Plan Administrator of a claim for benefits under the Plan by an
employee or other person (collectively referred to as “claimant”) shall be stated in writing by the
Plan Administrator and delivered or mailed to the claimant within 90 days after receipt of the
claim, unless special circumstances require an extension of time for processing the claim. If such
an extension of time is required, written notice of the extension shall be furnished to the
claimant prior to the termination of the initial 90-day period. In no event shall such extension
exceed a period of 90 days from the end of the initial period.

     Any notice of denial shall set forth the specific reasons for the denial, specific reference
to pertinent provisions of the Plan upon which the denial is based, a description of any additional
material or information necessary for the claimant to perfect his claim, with an explanation of why
such material or information is necessary, and any explanation of claim review procedures under the
Plan, written to the best of the Plan Administrator’s ability in a manner that may be understood
without legal or actuarial counsel.

8

 

          A claimant whose claim for benefits has been wholly or partially denied by the Plan
Administrator may request, within 90 days following the date of such denial, in a writing addressed
to the Plan Administrator, a review of such denial. The claimant shall be entitled to submit such
issues or comments in writing or otherwise, as he shall consider relevant to a determination of his
claim, and may include a request for a hearing in person before the Plan Administrator. Prior to
submitting his request, the claimant shall be entitled to review such documents as the Plan
Administrator shall agree are pertinent to his claim. The claimant may, at all stages of review,
be represented by counsel, legal or otherwise, of his choice, provided that the fees and expenses
of such counsel shall be borne by the claimant.

          All requests for review shall be promptly resolved. The Plan Administrator’s decision with
respect to any such review shall be set forth in writing and shall be mailed to the claimant not
later than 60 days following receipt by the Plan Administrator of the claimant’s request unless
special circumstances, such as the need to hold a hearing, require an extension of time for
processing, in which case the Plan Administrator’s decision shall be so mailed not later than 120
days after receipt of such request.

          5.3 Arbitration. Exhaustion of the claim and claim review procedures of Section 5.2
is prerequisite to any further consideration of a claim. In the event that any claim remains fully
or partially unresolved after exhaustion of the claim and claim review procedures of Section 5.2,
any remaining dispute shall be deemed to have been finally adjudicated under the procedure provided
in paragraph 5.2 unless the claimant or Masco shall have submitted its claim in accordance with the
following procedure:

          Masco and the claimant must first attempt to resolve the dispute through facilitative
mediation conducted by the American Arbitration Association in accordance with its Rules for the
Mediation of Employment Disputes. A Request for Mediation must be received by the American
Arbitration Association within 60 calendar days of the decision which is being appealed or the
claim will be deemed waived. If the dispute is not resolved through mediation, the dispute shall
be resolved by exclusive, final and binding arbitration by the AAA before a single, neutral
Arbitrator knowledgeable in employment law whose decision shall be final and binding upon the Plan,
Masco and the claimant. A Request for Arbitration must be received by the American Arbitration
Association within 60 calendar days from the date the mediation was conducted or the claim will be
deemed waived. The proceedings for the arbitration shall be governed by the Association’s Rules
for the Arbitration of Employment Disputes. Judgment upon an award rendered by the Arbitrator may
be entered in any court having jurisdiction. Masco will pay all of the expenses and fees of the
Mediator. Masco will also pay the AAA’s mediation administrative fees. Masco will pay all of the
expenses and fees of the Arbitrator. Masco will also pay the AAA’s arbitration administrative
fees. Notwithstanding any provision
to the contrary in the Rules of the American Arbitration Association, the Mediation and
Arbitration shall be held in the Detroit metropolitan area unless agreed to otherwise by the
parties in writing. Any claim shall be deemed waived unless presented within the time limits
specified in Section 5.2 and this Section 5.3. The Arbitrator shall not have jurisdiction or
authority to change, add to or subtract from any of the provisions of the Plan. The Arbitrator’s
sole authority shall be to interpret and review the Plan Administrator’s decision from which the
appeal to arbitration is taken, utilizing an arbitrary and capricious standard of review of the
Plan

9

 

Administrator’s decision. If the Arbitrator finds that the Plan Administrator’s decision was
not arbitrary and capricious, the Arbitrator shall affirm the Plan Administrator’s decision. The
Arbitrator shall not conduct a de novo review of the claim and the Plan
Administrator’s decision pertaining thereto, unless the Arbitrator shall have found that the Plan
Administrator’s decision was arbitrary and capricious. Because arbitration is the exclusive remedy
with respect to any claim hereunder, neither Masco, the claimant nor any other party has the right
to resort to any federal, state or local court or administrative agency concerning any claim, and
the decision of the Arbitrator shall be a complete defense to any suit, action or proceeding
instituted in any federal, state or local court or before any administrative agency with respect to
any dispute which is arbitrable as herein set forth. The arbitration provisions hereof shall, with
respect to any claim, survive the termination of the Plan.

10

 

SECTION 6

LIMITATION OF COVERED EMPLOYEE’S RIGHTS

          6.1 No Contract of Employment. The Plan shall not be deemed to create a contract of
employment between Masco or any Masco subsidiary, the company or any affiliate of Masco, and any
covered employee and shall create no right in any covered employee to continue in the employ of
Masco or any of its subsidiaries, , the company or any affiliate of Masco for any specific period
of time, or to create any other rights in any covered employee or obligations on the part of Masco,
the company or any affiliate of Masco, except as are set forth explicitly herein or in a written
employment contract. In consideration of his coverage hereunder each covered employee shall be
deemed to have agreed that Masco, the company or any affiliate of Masco has the right to terminate
him at any time, with or without cause, and nothing in the Plan shall restrict the right of any
covered employee to terminate his employment.

          6.2 Unsecured Creditor. The rights of any employee or any person claiming through
the employee under the Plan shall be solely those of an unsecured general creditor of Masco. Any
employee, Beneficiary or any person claiming through the employee, shall only have the right to
receive from Masco those payments hereunder as are specified herein. Each covered employee agrees
that he or any person claiming through him shall have no rights or interests in any specific asset
of Masco, including any insurance policies or contracts which Masco may possess to informally fund
the Plan.

          6.3 No Separately Identified Assets. Other than as provided in paragraphs 4.2, 4.5
and 4.6 and permitted by rules established under IRS Rev. Proc. 92-64, as modified by IRS Notice
2000-56, no asset used or acquired by Masco in connection with the liabilities it has assumed under
the Plan shall be deemed to be held under any trust for the benefit of any employee nor shall any
such asset be considered security for the performance of the obligations of Masco, but shall be,
and remain, a general unpledged and unrestricted asset of Masco, except as may be provided by
separate agreement and as permitted under Internal Revenue Service and Department of Labor rules
and regulations for deferred compensation and unfunded supplemental retirement plans.

11

 

SECTION 7

AMENDMENT OR TERMINATION

          7.1 Right to Amend or Terminate Plan. Masco reserves the right to amend the Plan in
any manner deemed appropriate by Masco’s Board of Directors, and Masco reserves the right to
terminate the Plan for any reason and at any time in whole or part by action of the Board of
Directors.

          7.2 Limitations. Notwithstanding paragraph 7.1, no such amendment or termination
shall reduce or otherwise affect the benefits payable to or on behalf of any covered employee that
have accrued prior to such amendment or termination without the written consent of the employee (or
Beneficiary, if applicable). In addition, the complete or partial termination of this Plan, should
it occur or be deemed by facts and circumstances to have occurred, shall have the same effect on
the vesting of benefits accrued to date under this Plan as in the case of a complete or partial
termination of a Qualified Plan.

          7.3 Payment of Benefits Upon Termination. Other than as provided in paragraphs 4.5
and 4.6, upon termination or partial termination of the Plan Masco may elect the method by which
benefits accrued through the date of such termination or partial termination shall be provided.
Such election may include the payment of the present value of all such accrued benefits directly to
covered employees (or beneficiaries, if applicable) or any other method of payment or funding
permissible under law which Masco may, in its sole discretion, determine; provided, however, no
such payment method or funding shall be utilized, the effect of which would be to subject the
recipients of such payment or funding to adverse tax consequences under Section 409A of the Code.

12

 

SECTION 8

MISCELLANEOUS PROVISIONS

          8.1 Independence of Benefits. Except as otherwise provided herein or pursuant to the
terms of any separate agreement by Masco or the company with an employee, the benefits payable
under the Plan shall be independent of, and in addition to, any other benefits or compensation,
whether by salary, or bonus or otherwise. The Plan does not involve a reduction in salary or
foregoing of an increase in future salary by any employee, nor (other than by a separate agreement
with the employee) does the Plan in any way affect or reduce the existing and future compensation
and other benefits of any employee.

          8.2 Nonalienation of Benefits. Except insofar as this provision may be contrary to
applicable law (such as a domestic relations or medical support order of a court with
jurisdiction), no sale, transfer, alienation, assignment, pledge, collateralization, or attachment
of any benefits under the Plan shall be valid or recognized by Masco.

          8.3 Payments for the Benefit of Employee. In the event that Masco shall find that
any person to whom a benefit is payable under the Plan is unable to care for his affairs because of
illness or accident, is otherwise mentally or physically incompetent, or is unable to give a valid
receipt, Masco may cause the payments becoming due to such person to be paid to another individual
for such person’s benefit, without responsibility on the part of Masco to follow application of
such payment. Any such payment shall be a payment on account of such person and shall operate as a
complete discharge of Masco from all liability under the Plan.

          8.4 Use of Words. Wherever any words are used in the Plan in the masculine gender,
they shall be construed as though they also were used in the feminine gender in all cases where
they would so apply, and wherever any words are used in the Plan in the singular forms they shall
be construed as though they also were used in the plural form in all cases where they would so
apply, and vice versa.

          8.5 Headings. Headings of paragraphs herein are inserted for convenience of
reference. They constitute no part of the Plan and are not to be considered in the construction of
the Plan.

          8.6 Savings Clause. If any provisions of the Plan shall be for any reason invalid or
unenforceable, the remaining provisions nevertheless shall be carried into effect.

13

 

SECTION 9

DEFINITIONS

          Terms capitalized in the text of this Plan shall have the meanings referred to below, unless
the context requires otherwise. Terms not defined herein shall be construed in reference to the
same or similar terms as used in the applicable Qualified Plan.

	 	9.1	 	Code. See paragraph 1.2.
	 
	 	9.2	 	Company. See paragraph 2.1.
	 
	 	9.3	 	ERISA. See paragraph 1.3.
	 
	 	9.4	 	Plan. See paragraph 1.1.
	 
	 	9.5	 	Masco. See paragraph 1.1.
	 
	 	9.6	 	Retirement shall mean an employee’s termination of
employment with Masco or the company on a retirement date under any of Masco’s
or the company’s Qualified Plans. Termination of employment for all purposes
under this Plan shall mean a “separation from service” under Section 409A of
the Code which shall only occur if any services which the employee may continue
to provide to Masco or the company as an employee or as a consultant after
termination of employment are not in excess of 49% of the employee’s prior
service level, all as determined in accordance with the regulations under
Section 409A of the Code.
	 
	 	9.7	 	Change of Control shall be deemed to have occurred if,
during any period of twelve consecutive calendar months, the individuals who at
the beginning of such period constitute Masco’s Board of Directors, and any new
directors (other than Excluded Directors) whose election by such Board or
nomination for election by stockholders was approved by a vote of at least a
majority of the members of such Board who were either directors on such Board
at the beginning of the period or whose election or nomination for election as
directors was previously so approved, for any reason cease to constitute at
least a majority of the members thereof. Excluded Directors are directors
whose election by the Board or approval by the Board for stockholder election
occurred within one year after any “person” or “group of persons” as such terms
are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934
commencing a tender offer for, or becoming the beneficial owner of, voting
securities representing 30 percent or more of the combined voting power of all
outstanding voting securities of Masco, other than pursuant to a tender offer
approved by the Board prior to its commencement or pursuant to

14

 

	 	 	 	stock acquisitions approved by the Board prior
to their representing 30 percent or more of such combined voting power.
	 
	 	9.8	 	Deferred Compensation Trust shall mean any trust
created by Masco to receive the deposit referred to in clause (a)(ii) of
paragraph 4.5.
	 
	 	9.9	 	Beneficiary shall mean the person or persons designated
by an employee under the applicable provisions of the Qualified Plans.
	 
	 	9.10	 	Gross-Up Amount (i) shall be determined if any payment
or distribution by Masco to or for the employee’s benefit, whether paid,
distributed, payable or distributed or distributable pursuant to the terms of
this Plan, any stock option or stock award plan, retirement plan or otherwise
(such payment or distribution, other than an Excise Tax Adjustment Payment
under clause (ii), is referred to herein as a “Payment”), would be subject to
the excise tax imposed by Section 4999 of the Code (or any successor provision)
or any interest or penalties with respect to such excise tax (such excise tax
together with any such interest or penalties are referred to herein as the
“Excise Tax”), and (ii) shall mean an additional payment (the “Excise Tax
Adjustment Payment”) in an amount such that after subtracting from the Excise
Tax Adjustment Payment the employee’s payment of all applicable Federal, state
and local taxes (computed at the maximum marginal rates and including any
interest or penalties imposed with respect to such taxes), including any Excise
Tax imposed upon the Excise Tax Adjustment Payment, the balance will be equal
to the Excise Tax imposed upon the Payments. All determinations required to be
made with respect to the “Gross-Up Amount”, including whether an Excise Tax
Adjustment Payment is required and the amount of such Excise Tax Adjustment
Payment, shall be made by PricewaterhouseCoopers LLP, or such national
accounting firm as Masco may designate prior to a Change of Control, which
shall provide detailed supporting calculations to Masco and the employee.
Except as provided in clause (e) of paragraph 4.5, all such determinations
shall be binding upon the employee, Masco and the company.
	 
	 	9.11	 	Present Value of future benefits means the discounted
present value of those benefits (including therein the benefits, if any, the
employee’s Beneficiary would be entitled to receive under this Plan upon the
employee’s death), using the UP-1984 Mortality Table and discounted by the
interest rate used, for purposes of determining the present value of a lump sum
distribution on plan termination, by the PBGC on the first day of the month
which is four months prior to the
month in which a Change of Control occurs (or if the PBGC has ceased
publishing such interest rate, such other interest rate as Masco’s Board of
Directors deems is an appropriate substitute). The above PBGC interest rate
is intended to be

15

 

	 	 	 	determined based on PBGC methodology and regulations in
effect on September 1, 1993 (as contained in 29 CFR Part 2619).
	 
	 	9.12	 	PBGC shall mean the Pension Benefit Guaranty Corporation.
	 
	 	9.13	 	Control Change shall be deemed to have occurred if,
during any period of twenty-four consecutive calendar months, the individuals
who at the beginning of such period constitute Masco’s Board of Directors, and
any new directors (other than Excluded Directors) whose election by such Board
or nomination for election by stockholders was approved by a vote of at least
two-thirds of the members of such Board who were either directors on such Board
at the beginning of the period or whose election or nomination for election as
directors was previously so approved, for any reason cease to constitute at
least a majority of the members thereof. Excluded Directors are directors
whose election by the Board or approval by the Board for stockholder election
occurred within one year after any “person” or “group of persons” as such terms
are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934
commencing a tender offer for, or becoming the beneficial owner of, voting
securities representing 25 percent or more of the combined voting power of all
outstanding voting securities of Masco, other than pursuant to a tender offer
approved by the Board prior to its commencement or pursuant to stock
acquisitions approved by the Board prior to their representing 25 percent or
more of such combined voting power.
	 
	 	9.14	 	Covered Benefits. See paragraph 3.5.

16

 

SECTION 10

EXECUTION

          IN WITNESS WHEREOF, Masco Corporation has caused this amended and restated Plan to be executed
effective as of December 22, 2010.

	 	 	 	 	 
	 	Masco Corporation

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 
	 	Its:  	 	 
	 	 	 	 
	 	 	 	 

Date: __________________________________

17

 

APPENDIX A — As Amended Effective January 1, 2010

QUALIFIED PLANS LIST

MASCO CORPORATION

	 	 	 	 
	DEFINED BENEFIT QUALIFIED	 	DEFINED CONTRIBUTION QUALIFIED	
	PENSION PLANS (Frozen	 	PROFIT SHARING PLANS	
	Effective January 1, 2010)	 	 	
	 
	 	 	
	Masco Corporation Pension Plan

	 	Masco Building Products Corporation Salaried Retirement Plan
	 
	 	 	
	Arrow Fastener Co., Inc.

Employees’ Pension Trust

	 	Masco Corporation Future Service
Profit Sharing Plan
	 
	 	 	
	 

	 	Masco Corporation Master Defined Contribution Plan

DEFINED CONTRIBUTION QUALIFIED

          401(k) SAVINGS PLAN

Masco Corporation 401(k) Plan

18Exhibit 10.49

Exhibit 10.49

PRIDE INTERNATIONAL, INC.

AMENDED AND RESTATED SEPARATION/

NON-COMPETITION/CONFIDENTIALITY AGREEMENT

BRADY K. LONG

 

 

 

AMENDED AND RESTATED SEPARATION/

NON-COMPETITION/CONFIDENTIALITY AGREEMENT

	 	 	 
	DATE:

	 	The date of execution set forth below.
	 
	 	 
	COMPANY/EMPLOYER:

	 	Pride International, Inc.,

a Delaware corporation

5847 San Felipe, Suite 3300

Houston, Texas 77057
	 
	 	 
	EMPLOYEE:

	 	Brady K. Long

This Amended and Restated Separation/Non-Competition/Confidentiality Agreement by and between
Pride International, Inc. (the “Company” and as further defined below) and Brady K. Long
(“Employee”) (together the “Parties”), effective as of the date set forth in Section 2.08 below
(the “Agreement”), is made on the terms as herein provided.

PREAMBLE

WHEREAS, the Parties have entered into a Change In Control Agreement effective as of March 16,
2007 (the “Prior Agreement”) and wish to hereby supersede the Prior Agreement and amend and restate
the rights and obligations of the Parties with regard to Employee’s separation with the Company in
this Agreement; and

WHEREAS, Employee is willing to enter into this Agreement upon the terms and conditions and
for the consideration set forth herein.

NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and obligations
contained herein, the Parties agree as follows:

AGREEMENT

	I.	 	PRIOR AGREEMENTS/CONTRACTS

As of the Effective Date, the Prior Agreement is hereby amended, modified and superseded by
this Agreement insofar as future separation benefits, non-competition and confidentiality
are concerned. This Agreement does not relieve Employee of any prior non-competition or
confidentiality obligations and agreements and the same are hereby modified and amended as
to future matters and future confidentiality even as to matters accruing prior to the
Effective Date hereof.

 

 

 

	II.	 	DEFINITION OF TERMS

Words used in the Agreement in the singular shall include the plural and in the plural the
singular, and the gender of words used shall be construed to include whichever may be
appropriate under any particular circumstances of the masculine, feminine or neuter genders.

	 	2.01	 	BASE SALARY. The term “Base Salary” shall mean, on the date of determination,
twelve (12) times the then current monthly salary in effect for Employee (but not less
than the highest annual base salary paid to Employee during any of the three (3) years
immediately preceding the date of his termination from employment with the Company).

	 	2.02	 	CAUSE. The term “Cause” shall mean (i) Employee’s failure to perform his
duties and responsibilities with the Company (other than any failure due to physical or
mental incapacity) after a written demand for performance is delivered to him by the
Company which specifically identifies the manner in which the Company believes he has
not performed his duties, (ii) misconduct which causes material injury, monetary or
otherwise, to the Company or its affiliates, (iii) intentional action, materially and
demonstrably injurious to the Company, which Employee knows would not comply with the
laws of the United States or any other jurisdiction applicable to Employee’s actions on
behalf of the Company, and/or any of its subsidiaries or affiliates, including
specifically, without limitation, the United States Foreign Corrupt Practices Act,
generally codified in 15 USC 78 (the “FCPA”), as the FCPA may hereafter be amended,
and/or its successor statutes, or (iv) violation of one or more of the covenants in
Article V (except violation of the covenant not to compete after termination after
Change in Control as discussed herein).

	 	2.03	 	CHANGE IN CONTROL. The term “Change in Control” of the Company shall mean, and
shall be deemed to have occurred on the date of the first to occur of any of the
following:

	 	a.	 	there occurs a change in control of the Company of the nature
that would be required to be reported in response to item 6(e) of Schedule 14A
of Regulation 14A or Item 5.01 of Form 8-K promulgated under the Securities
Exchange Act of 1934 as in effect on the date of the Agreement, or if neither
item remains in effect, any regulations issued by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934 which serve similar
purposes;

	 	b.	 	any “person” (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) is or becomes a beneficial
owner, directly or indirectly, of securities of the Company representing twenty
percent (20%) or more of the total voting power of the Company’s then
outstanding securities;

	 	c.	 	individuals who, as of the date hereof, constitute the members
of the Board of Directors of the Company (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 of Directors of the Company (the “Board”),
provided that any director who was nominated for election or was elected with
the approval of at least a majority of the members of the Board who are at the
time Incumbent Directors shall be considered an
Incumbent Director unless such individual’s initial assumption of office
occurs as a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than
the Board;

 

-2-

 

	 	d.	 	the Company shall have merged into or consolidated with another
corporation, or merged another corporation into the Company, on a basis whereby
less than fifty percent (50%) of the total voting power of the surviving
corporation is represented by shares held by former stockholders of the Company
prior to such merger or consolidation;

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

	 	f.	 	a Merger Protection Change in Control (as hereinafter defined)
shall have occurred.

	 	2.04	 	CHANGE IN CONTROL TERMINATION. The term “Change in Control Termination” shall
mean a Termination (i) within two (2) years following the date of a Change in Control
which occurs for any reason other than a Merger Protection Change in Control or (ii)
within one (1) year following the date of a Merger Protection Change in Control.

	 	2.05	 	COMPANY. The term “Company” means Pride International, Inc., a Delaware
corporation, as the same presently exists, as well as any and all successors and
assigns, regardless of the nature of the entity or the state or nation of organization,
whether by reorganization, merger, consolidation, absorption or dissolution. For the
purpose of the Agreement, Company includes all subsidiaries and affiliates of the
Company to the extent such subsidiary and/or affiliate is carrying on any portion of
the business of the Company or a business similar to that being conducted by the
Company.

	 	2.06	 	CONSTRUCTIVE TERMINATION. The term “Constructive Termination” means
termination of employment by reason of Employee’s resignation for any one or more of
the following events:

	 	a.	 	Employee’s resignation or retirement is requested by the
Company other than for Cause;

	 	b.	 	A significant and material diminution in Employee’s duties and
responsibilities and which diminution would degrade, embarrass or otherwise
make it unreasonable for Employee to remain in the employment of the Company;

	 	c.	 	Any reduction in Employee’s Base Salary from the level then in
effect immediately prior to such reduction, unless such reduction is generally
applicable to all similarly situated executives of the Company;

 

-3-

 

	 	d.	 	Within two (2) years after a Change in Control, any requirement
of the Company that Employee relocate more than 50 miles from the location at
which Employee is performing the majority of his duties immediately prior to
such Change in Control; or

	 	e.	 	Notice by the Company of non-renewal of the Agreement contrary
to the wishes of Employee, if such non-renewal would be effective prior to the
expiration of the Term during which Employee attains age 65.

Notwithstanding any provision to the contrary, in order for Employee’s resignation
to be deemed a Constructive Termination, (A) Employee must provide a written notice
to the Company that Employee intends to terminate his employment with the Company
within 60 days following the occurrence of the event that Employee claims
constitutes a Constructive Termination; (B) the written notice must describe the
event constituting the Constructive Termination in reasonable detail and (C) within
30 days after receiving such notice from Employee, the Company must fail to
reinstate Employee to the position he was in, or otherwise cure the circumstances
giving rise to the Constructive Termination.

	 	2.07	 	CUSTOMER. The term “Customer” includes all persons, firms or entities that are
purchasers or end-users of services or products offered, provided, developed, designed,
sold or leased by the Company during the relevant time periods, and all persons, firms
or entities which control, or which are controlled by, the same person, firm or entity
which controls such purchase.

	 	2.08	 	EFFECTIVE DATE. The Agreement becomes effective and binding as of December 31,
2008.

	 	2.09	 	MERGER PROTECTION CHANGE IN CONTROL. The term “Merger Protection Change in
Control” shall mean, and shall be deemed to have occurred on, the date the Company
shall have merged into or consolidated with another corporation, or merged another
corporation into the Company, on a basis whereby at least fifty percent (50%) but not
more than sixty-six percent (66%) of the total voting power of the surviving
corporation is represented by shares held by former stockholders of the Company
immediately prior to such merger or consolidation.

	 	2.10	 	TARGET BONUS. The term “Target Bonus” shall mean Employee’s target bonus under
the Company’s annual bonus incentive plan for the fiscal year in which Termination
occurs or, if the Company has not specified a target bonus for such year, for the last
year in which the Company had specified such a target bonus.

 

-4-

 

	 	2.11	 	TERMINATION. The term “Termination” shall mean a termination of Employee’s
employment with the Company for any reason other than (i) Cause, (ii) Voluntary
Resignation or (iii) by reason of death or disability. Termination includes
Constructive Termination and termination at the end of any “Term” due to non-renewal or
failure to extend this Agreement for any reason except for
Cause or because Employee has reached age 65 prior to the end of the Term.
Notwithstanding any provision hereof to the contrary, the Company shall have the
right to terminate Employee’s employment at any time during the Term (including any
extended term), and the Company has no obligation to deliver advance notice of
termination, except such notice as is otherwise required for a termination for Cause
under Section 2.02.

	 	2.12	 	VOLUNTARY RESIGNATION. The term “Voluntary Resignation” means termination of
employment with the Company by Employee for any reason other than Constructive
Termination.

	III.	 	DUTIES/SEPARATION BENEFITS

	 	3.01	 	DUTIES. Except as otherwise provided in the Agreement, the Company hereby
agrees to continue Employee in its employ, and Employee hereby agrees to remain in the
employ of the Company, for the Term (as defined in Section 3.03 below). During the
Term, Employee shall exercise such position and authority and perform such
responsibilities as are commensurate with the position to which he is assigned and as
directed by his supervisor.

	 	3.02	 	BEST EFFORTS AND OTHER OBLIGATIONS OF EMPLOYEE.

	 	a.	 	Employee agrees that he will at all times faithfully,
industriously and to the best of his ability, experience and talents, perform
all of the duties that may be required of and from him pursuant to the express
and implicit terms hereof, to the reasonable satisfaction of the Company.

	 	b.	 	Employee shall devote his normal and regular business time,
attention and skill to the business and interests of the Company, and the
Company shall be entitled to all of the benefits, profits or other issue
arising from or incident to all work, services and advice of Employee performed
for the Company. Such employment shall be considered “full time” employment.

	 	c.	 	During the Term and after the termination of Employee’s
employment for any reason, Employee agrees not to make any disparaging comments
about the Company, any affiliates, or any current or former officer, director
or employee of the Company or any affiliate or to take any action (or assist
any person in taking any other action), in each case, that is materially
adverse to the interests of the Company or any affiliate or inconsistent with
fostering the goodwill of the Company and its affiliates; provided, however,
that nothing in the Agreement shall apply to or restrict in any way the
communication of information by Employee to any state or federal law
enforcement agency or regulatory body or require notice to the Company thereof,
and Employee will not be in breach of the covenant contained above solely by
reason of his testimony which is compelled by process of law. Company and its
affiliates, officers and directors agree

 

-5-

 

to refrain from any disparaging
comments about Employee; provided, however, that nothing in the Agreement shall apply to or restrict in any way
the communication of information by the Company and its affiliates, officers
and directors to any state or federal law enforcement agency or regulatory
body or require notice to Employee thereof, and the Company and its
affiliates, officers and directors will not be in breach of the covenant
contained above solely by reason of testimony which is compelled by process
of law. Nothing in this Section, express or implied, is intended to or
shall confer upon any person other than Employee, the Company or any
subsidiary or affiliate of the Company any right benefit or remedy of any
nature whatsoever under or by reason of this Agreement.

	 	3.03	 	TERM OF AGREEMENT. The term of the Agreement will continue for a term ending
at 12:00 o’clock midnight on December 31, 2009 (the “Term”); thereafter, the Term will
be automatically extended for successive terms of one (1) year commencing on December
31st of each year; unless the Company or Employee gives written notice to
the other that the Agreement will not be renewed or continued after the next scheduled
expiration date which is not less than one (1) year after the date that the notice of
non-renewal was given. Notwithstanding the above, this Agreement will automatically
expire at the end of the Term during which Employee attains age 65. Immediately upon
termination of employment with the Company, Employee agrees to resign from all officer
and director positions held with the Company and its affiliates.

	 	3.04	 	TERMINATION WITHOUT CHANGE IN CONTROL. Notwithstanding anything herein to the
contrary, the Company shall have the right to terminate Employee’s employment at any
time during the Term. In the event of a Termination that does not otherwise entitle
Employee to payments and benefits under Article IV, the Company shall, sixty (60) days
following such Termination, or at such other time(s) specified in this Section 3.04 or
Section 6.04, and in exchange for a full and complete release of claims against the
Company, its affiliates, officers and directors (“Release”), pay or provide (or cause
to be paid or provided) to Employee (or his designee or estate, as determined under
Section 6.10, in the event of death after Termination and prior to satisfaction of the
Company’s obligations in this Section 3.04):

	 	a.	 	An amount equal to the sum of (i) his Base Salary and (ii) his
Target Bonus.

	 	b.	 	An amount equal to a prorated portion of the award for the year
in which Termination occurs, if any, earned by the achievement of performance
goals set under the Company’s annual bonus incentive plan and paid at the same
time the Company pays bonuses to similarly situated employees under such plan,
based on the number of full months of employment completed within the year of
Termination.

 

-6-

 

	 	c.	 	If Employee experiences a Termination on or after January 1st,
but before the date on which awards are paid, if any, pursuant to achievement
of
performance goals set under the Company’s annual bonus incentive plan for
the year immediately preceding the year in which Employee’s Termination
occurs, an amount, subject to the Company’s discretion as set forth under
the Company’s annual bonus incentive plan and paid at the same time the
Company pays bonuses to similarly situated employees under such plan, equal
to the amount Employee would have earned if Employee had remained employed
with the Company until the date such awards would otherwise have been paid.

	 	d.	 	The Company shall provide to Employee, Employee’s spouse and
Employee’s eligible dependents for a period of one (1) full year following the
date of Employee’s Termination, health care, life, accident and disability
insurance which are not less than the highest benefits furnished during the
term of the Agreement at a cost to Employee as if he had remained a full time
employee. If Employee dies during such term, health insurance coverage will be
provided to Employee’s spouse and eligible dependents until the date that is
one (1) year after the date of Employee’s Termination at the same cost to
Employee’s spouse and eligible dependents as the cost of such coverage charged
to similarly situated employees and their dependents. If Section 6.04a.
applies to the provision of any of the insurance coverage described in this
Section 3.04d., then Employee shall pay the cost of such insurance premiums in
the amount and for the period of time proscribed by the application of Section
6.04a., subject to reimbursement by the Company described therein.

	 	e.	 	The Company’s obligation under this Section to pay or provide
health care, life, accident and disability insurance to Employee, Employee’s
spouse and Employee’s dependents shall be reduced when and to the extent any
such benefits are paid or provided to Employee by another employer. Apart from
this subparagraph, Employee shall have and be subject to no obligation to
mitigate.

A sample form of Release is attached as Exhibit A. Employee acknowledges that the Company
retains the right to modify the required form of the Release as the Company deems necessary
in order to effectuate a full and complete release of claims against the Company, its
affiliates, officers and directors. Notwithstanding any provision herein to the contrary,
if Employee has not delivered to the Company an executed Release on or before the fiftieth
(50th) day after the date of Termination, Employee shall forfeit all of the payments and
benefits described in this Section 3.04, other than the benefit, if any, described in
Section 3.04c., subject to Employee’s rights under Section 6.01b.; provided, however, that
Employee shall not forfeit such amounts if the Company has not delivered to Employee the
required form of Release on or before the 25th day following the date of Termination.

 

-7-

 

Nothing in this Section is intended, nor shall be deemed or interpreted, to be an amendment
to any compensation, benefit or other plan of the Company. In the event of Employee’s
Termination without a Change in Control, Employee is entitled only to the
termination payments and benefits described in this Section 3.04 pursuant to this Agreement,
without limiting rights, if any, under any other plan or arrangement. To the extent the
Company’s performance under this Section includes the performance of the Company’s
obligations to Employee under any other plan or under another agreement between the Company
and Employee, the rights of Employee under such other plan or other agreement, which are
discharged under the Agreement, are discharged, surrendered, or released pro tanto.

	IV.	 	CHANGE IN CONTROL

	 	4.01	 	EXTENSION OF TERM. The Term shall be immediately and without further action
extended for a term of two (2) years following the effective date of the Change in
Control and will expire at 12:00 o’clock midnight on the last day of the month
following two (2) years after the Change in Control; provided, however, that if the
Change in Control is solely on account of a Merger Protection Change in Control, the
Term shall be extended for one (1) year following the effective date of the Merger
Protection Change in Control. Thereafter, the Term will be extended for successive
terms of one (1) year each, unless terminated, all in the manner specified in Section
3.03.

	 	4.02	 	CHANGE IN CONTROL TERMINATION PAYMENTS AND BENEFITS. In the event Employee has
a Change in Control Termination, the Company shall pay or provide (or cause to be paid
or provided) to Employee all of the payments and benefits specified in Section 3.04
(the “Termination Without Change in Control” Section) at the same time and in the same
manner therein specified except as amended and modified below:

	 	a.	 	The salary and benefits described in Section 3.04a. will be
based on an amount equal to one hundred and fifty percent (150%) of the sum of
(i) his Base Salary and (ii) his Target Bonus.

	 	b.	 	An amount equal to a prorated portion of the Target Bonus based
on the number of full months of employment completed within the year of Change
in Control Termination, instead of the benefits described in Section 3.04b.
hereof.

	 	c.	 	Instead of the benefits described in Section 3.04d. hereof, the
Company shall provide to Employee, Employee’s spouse and Employee’s eligible
dependents for a period of eighteen (18) months following the date of
Employee’s Change in Control Termination, health care, life, accident and
disability insurance which are not less than the highest benefits furnished
during the term of the Agreement at a cost to Employee as if he had remained a
full time employee. If Employee dies during such term, health insurance
coverage will be provided to Employee’s spouse and eligible dependents until
the date that is eighteen (18) months after the date of Employee’s Change in
Control Termination at the same cost to Employee’s spouse and eligible
dependents as the cost of such coverage
charged to similarly situated employees and their dependents. If Section
6.04a. applies to the provision of any of the insurance coverage described
in this Section 4.02c., then Employee shall pay the full cost of such
insurance premiums for the period of time proscribed by the application of
Section 6.04a. and subject to reimbursement by the Company described
therein.

 

-8-

 

	 	d.	 	The Company’s obligation under this Section to continue to pay
or provide health care, life, accident and disability insurance to Employee,
Employee’s spouse and Employee’s dependents shall be reduced when and to the
extent any such benefits are paid or provided to Employee by another employer.
Apart from this subparagraph, Employee shall have and be subject to no
obligation to mitigate.

In the event of Employee’s Change in Control Termination, Employee is entitled only to the
termination payments and benefits described in this Section 4.02.

The Parties agree that in the event of a Change in Control, no later than the date of, but
prior to, the Change in Control, the Company shall deposit the amounts specified in Section
4.02a. and Section 4.02b. into an irrevocable grantor trust, established by the Company
prior to the Change in Control with a duly authorized bank or corporation with trust powers
(“Rabbi Trust”). The expenses of such Rabbi Trust shall be paid by the Company. Any
amounts due to Employee under this Section 4.02 shall first be satisfied by the Rabbi Trust
and the remaining obligations shall be satisfied by the Company at the same time and in the
same manner described in Section 3.04.

	V.	 	NON COMPETITION AND PROTECTION OF CONFIDENTIAL INFORMATION

	 	5.01	 	CONSIDERATION. Employee recognizes and agrees that all of the businesses in
which the Company is engaged are highly competitive and that the Company’s trade
secrets and other confidential information, along with personal contacts, are of
critical importance in securing and maintaining business prospects, in retaining the
accounts and goodwill of present Customers and protecting the business of the Company.

	 	a.	 	Employee, therefore, agrees that in exchange for the Company
providing and continuing to provide trade secrets and other confidential
information, Employee agrees to the non-competition and confidentiality
obligations and covenants outlined in this Article V and that absent his
agreement to these obligations and covenants, the Company will not now provide
and will not continue to provide him with trade secrets and other confidential
information.

	 	b.	 	In addition to the consideration described in Section 5.01a.,
the parties agree that (i) fifteen percent (15%) of Employee’s base salary and
bonus, if any, paid and to be paid to Employee and (ii) one hundred percent
(100%) of the payments and benefits, including Employee’s right to
receive the same, under Sections 3.04 and 4.02, as applicable, shall
constitute additional consideration for the non-competition and
confidentiality agreements set forth herein.

 

-9-

 

	 	5.02	 	NON-COMPETITION. In exchange for the consideration described above in Section
5.01, Employee agrees that during his employment with the Company and for a period of
six (6) months after he is no longer employed by the Company (unless his employment is
terminated after a Change in Control with the right to receive payments and benefits
under Article IV, in which event there will be no covenant not to compete and the
noncompete covenants and obligations herein will terminate on the date of termination
of Employee), Employee will not, directly or indirectly, either as an individual,
proprietor, stockholder (other than as a holder of up to one percent (1%) of the
outstanding shares of a corporation whose shares are listed on a stock exchange or
traded in accordance with the automated quotation system of the National Association of
Securities Dealers), partner, officer, employee or otherwise:

	 	a.	 	work for, become an employee of, invest in, provide consulting
services to or in any way engage in any business which (i) is primarily engaged
in the drilling and workover of oil and gas wells within the geographical area
described in this Section 5.02 and (ii) actually competes with the Company; or

	 	b.	 	provide, sell, offer to sell, lease, offer to lease, or solicit
any orders for any products or services which the Company provided and with
regard to which Employee had direct or indirect supervision or control, within
two (2) years preceding Employee’s termination of employment, to or from any
person, firm or entity which was a Customer for such products or services of
the Company during the two (2) years preceding such termination from whom the
Company had solicited business during such two (2) years; or

	 	c.	 	solicit, aid, counsel or encourage any officer, director,
employee or other individual to (i) leave his or her employment or position
with the Company, (ii) compete with the business of the Company, or (iii)
violate the terms of any employment, non-competition or similar agreement with
the Company; or

	 	d.	 	directly or indirectly (i) influence the employment of, or
engagement in any contract for services or work to be performed by, or (ii)
otherwise use, utilize or benefit from the services of any officer, director,
employee or any other individual holding a position with the Company within one
(1) year after the date of termination of employment of Employee with the
Company or within one (1) year after such officer, director, employee or
individual terminated employment with the Company, whichever period expires
earlier.

 

-10-

 

The geographical area within which the non-competition obligations and covenants of the
Agreement shall apply is that territory within two hundred (200) miles of (i) any of the
Company’s present offices, (ii) any of the Company’s present rig yards or rig operations and
(iii) any additional location where the Company, as of the date of any action taken in
violation of the non-competition obligations and covenants of the Agreement, has an office,
a rig yard, a rig operation or definitive plans to locate an office, a rig operation or a
rig yard or has recently conducted rig operations. Notwithstanding the foregoing, if the
two hundred (200) mile radius extends into another country or its territorial waters and the
Company is not then doing business in that other country, there will be no territorial
limitations extending into such other country.

	 	5.03	 	CONFIDENTIALITY/PROTECTION OF INFORMATION. Employee acknowledges that his
employment with the Company has in the past and will, of necessity, continue to provide
him with specialized knowledge which, if used in competition with the Company, or
divulged to others, could cause serious harm to the Company. Accordingly, Employee
will not at any time during or after his employment by the Company, directly or
indirectly, divulge, disclose, use or communicate to any person, firm or corporation in
any manner whatsoever any information concerning any matter specifically affecting or
relating to the Company or the business of the Company. While engaged as an employee
of the Company, Employee may only use information concerning any matters affecting or
relating to the Company or the business of the Company for a purpose which is necessary
to the carrying out of Employee’s duties as an employee of the Company, and Employee
may not make any use of any information of the Company after he is no longer an
employee of the Company. Employee agrees to the foregoing without regard to whether
all of the foregoing matters will be deemed confidential, material or important, it
being stipulated by the parties that all information, whether written or otherwise,
regarding the Company’s business, including, but not limited to, information regarding
Customers, Customer lists, costs, prices, earnings, products, services, formulae,
compositions, machines, equipment, apparatus, systems, manufacturing procedures,
operations, potential acquisitions, new location plans, prospective and executed
contracts and other business plans and arrangements, and sources of supply, is prima
facie presumed to be important, material and confidential information of the Company
for the purposes of the Agreement, except to the extent that such information may be
otherwise lawfully and readily available to or known by the general public, in any case
other than as a result of Employee’s breach of this covenant. Employee further agrees
that he will, upon termination of his employment with the Company, return to the
Company all books, records, lists and other written, electronic, typed or printed
materials, whether furnished by the Company or prepared by Employee, which contain any
information relating to the Company’s business, and Employee agrees that he will
neither make nor retain any copies of such materials after termination of employment.
Notwithstanding any of the foregoing, nothing in the Agreement shall prevent Employee
from complying with applicable federal and/or state laws. Notwithstanding any of the
foregoing, Employee will not be liable for any breach of these confidentiality
provisions if Employee discloses any such information as required by any subpoena or
other
legal process or notice or in any disposition, judicial or administrative hearing,
or trial or arbitration (though Employee shall, to the extent permitted, give the
Company notice of any such subpoena, process, or notice and will cooperate with all
reasonable requests of the Company to obtain a protective order regarding, or to
narrow the scope of, the information required to be disclosed).

 

-11-

 

	 	5.04	 	COMPANY REMEDIES FOR VIOLATION OF NON-COMPETITION OR CONFIDENTIALITY/PROTECTION
OF INFORMATION PROVISIONS. Without limiting the right of the Company to pursue all
other legal and equitable rights available to it for violation of any of the
obligations and covenants made by Employee herein, it is expressly agreed that:

	 	a.	 	the terms and provisions of this Agreement are reasonable and
constitute an otherwise enforceable agreement to which the provisions of this
Article V are ancillary or a part of as contemplated by TEX. BUS. & COM. CODE
ANN. Sections 15.50-15.52;

	 	b.	 	the consideration provided by the Company under this Agreement
is not illusory;

	 	c.	 	the consideration given by the Company under this Agreement,
including, without limitation, the provision and continued provision by the
Company of trade secrets and other confidential information to Employee, gives
rise to the Company’s interest in restraining and prohibiting Employee from
engaging in the unfair competition prohibited by Section 5.02 and Employee’s
promise not to engage in the unfair competition prohibited by Section 5.02 is
designed to enforce Employee’s consideration (or return promises), including,
without limitation, Employee’s promise to not use or disclose confidential
information or trade secrets; and

	 	d.	 	the injury suffered by the Company by a violation of any
obligation or covenant in this Article V of the Agreement will be difficult to
calculate in damages in an action at law and cannot fully compensate the
Company for any violation of any obligation or covenant in this Article V of
the Agreement, accordingly:

	 	(i)	 	the Company shall be entitled to injunctive
relief without the posting of a bond or other security to prevent
violations thereof and to prevent Employee from rendering any services
to any person, firm or entity in breach of such obligation or covenant
and to prevent Employee from divulging any confidential information;
and

	 	(ii)	 	compliance with the Agreement is a condition
precedent to the Company’s obligation to make payments of any nature to
Employee, subject to the other provisions hereof.

 

-12-

 

	 	5.05	 	TERMINATION OF BENEFITS FOR VIOLATION OF NON-COMPETITION AND
CONFIDENTIALITY/PROTECTION OF INFORMATION PROVISIONS. If Employee materially violates
the confidentiality/protection of information and/or non-competition obligations and
covenants herein or any other related agreement he may have signed as an employee of
the Company, Employee agrees there shall be no obligation on the part of the Company to
provide any payments or benefits (other than payments or benefits already earned or
accrued) described in Section 3.04 of the Agreement, subject to the provision of
Section 6.01 hereof. If Employee is terminated after a Change in Control with the
right to receive payments and benefits under Article IV, there will be no withholding
of benefits or payments due to a violation of the non-competition obligations hereof
and Employee will not be bound by the non-competition provisions hereof.

	 	5.06	 	REFORMATION OF SCOPE. If the provisions of the confidentiality and/or
non-competition obligations and covenants should ever be deemed by a court of competent
jurisdiction to exceed the time, geographic or occupational limitations permitted by
the applicable law, such court may reform such provisions to the maximum time,
geographic or occupational limitations permitted by the applicable law. Employee and
the Company agree that such provisions as reformed shall be and are hereby binding and
enforceable and the determination of whether Employee violated such obligation and
covenant will be based solely on the limitation as reformed.

	 	5.07	 	RETURN OF CONSIDERATION. Employee specifically recognizes and affirms that the
non-competition obligations set out in Section 5.02 are material and important terms of
this Agreement, and Employee further agrees that should all or any part of the
non-competition obligations described in Section 5.02 be held or found invalid or
unenforceable for any reason whatsoever by a court of competent jurisdiction in a legal
proceeding between Employee and the Company, the Company shall be entitled to the
immediate return and receipt from Employee of all consideration described in Section
5.01b., including interest on all amounts paid to Employee under Section 5.01b. at the
maximum lawful rate. For the avoidance of doubt, the parties intend that for the
purposes of the preceding sentence, return of consideration by Employee shall not be
required unless the Employee, or anyone acting in concert with Employee or acting on
his behalf, has attempted to challenge in any way the enforceability of the
non-competition obligations described in Section 4.02 in such legal proceeding, or has
attempted in any way in such legal proceeding to declare Section 4.02 void, voidable or
invalid.

 

-13-

 

	VI.	 	GENERAL

	 	6.01	 	INDEMNIFICATION.

	 	a.	 	If Employee shall obtain a final judgment in his favor with
respect to any litigation brought by Employee or the Company to enforce or
interpret any provision of the Agreement, the Company, to the fullest extent
permitted
by applicable law, hereby indemnifies Employee for his reasonable attorney’s
fees and disbursements incurred in such litigation and hereby agrees to
indemnify Employee in connection with such litigation (i) if Employee has
experienced a termination of employment within two (2) years after a Change
in Control, in full for all such fees and disbursements or (ii) up to a
maximum of one hundred fifty thousand dollars ($150,000). Any
reimbursement to Employee under this Section 6.01 shall be made no later
than the end of the calendar year in which final judgment is obtained.
Employee shall not be entitled to reimbursement under this Section 6.01 if
he has executed a Release and the request for reimbursement relates to
claims waived or released under the Release.

	 	b.	 	In the event of a bona fide dispute regarding the right to, or
amount of, benefits potentially payable to Employee pursuant to this Agreement,
failure to timely execute a Release as described in Section 3.04 shall not
cause the forfeiture of such benefits, pending a full or partial settlement of
the matter between the Company and Employee or a final nonappealable judgment
thereon.

	 	6.02	 	INCOME, EXCISE OR OTHER TAX LIABILITY.

	 	a.	 	The Company may withhold from any benefits and payments made
pursuant to this Agreement all federal, state, city and other taxes as may be
required pursuant to any law or governmental regulation or ruling and all other
normal employee deductions made with respect to the Company’s employees
generally.

	 	b.	 	Employee will be liable for and will pay all income tax
liability by virtue of any payments made to Employee under the Agreement, as if
the same were earned and paid in the normal course of business and not the
result of a Change in Control and not otherwise triggered by the “golden
parachute” or excess payment provisions of the Internal Revenue Code of the
United States, which would cause additional tax liability to be imposed.
Notwithstanding any contrary provisions in any plan, program or policy of the
Company, if all or any portion of the benefits payable under the Agreement,
either alone or together with other payments and benefits which Employee
receives or is entitled to receive from the Company, would constitute a
“parachute payment” within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the “Code”), the Company shall reduce Employee’s
payments and benefits payable under the Agreement to the extent necessary so
that no portion thereof shall be subject to the excise tax imposed by Section
4999 of the Code, but only if, by reason of such reduction, the net after-tax
benefit shall exceed the net after-tax benefit if such reduction were not made.
The parachute payments reduced shall be those that provide Employee the best
economic benefit and to the extent any parachute payments are economically
equivalent with each other, each shall be reduced pro rata.

 

-14-

 

“Net after-tax benefit” for these purposes shall mean the sum of (i) the
total amount payable to Employee under the Agreement, plus (ii) all other
payments and benefits which Employee receives or is then entitled to receive
from the Company that, alone or in combination with the payments and
benefits payable under the Agreement, would constitute a “parachute payment”
within the meaning of Section 280G of the Code (each such benefit
hereinafter referred to as an “Additional Parachute Payment”), less (iii)
the amount of federal income taxes payable with respect to the foregoing
calculated at the maximum marginal income tax rate for each year in which
the foregoing shall be paid to Employee (based upon the rate in effect for
such year as set forth in the Code at the time of the payment under the
Agreement), less (iv) the amount of excise taxes imposed with respect to the
payments and benefits described in (i) and (ii) above by Section 4999 of the
Code.

	 	6.03	 	PAYMENT OF BENEFITS UPON TERMINATION FOR CAUSE. If the termination of Employee
is not within two (2) years after a Change in Control and is for Cause, the Company
will have the right to withhold all payments other than (i) what is accrued and owing
under the terms of any employee benefit plan maintained by the Company, and (ii) those
specified in Section 6.01; provided however, that if a final judgment is entered
finding that Cause did not exist for Employee’s termination, the Company will pay all
benefits to Employee to which he would have been entitled had Employee’s termination
not been for Cause, plus interest on all amounts withheld from Employee at the rate
specified for judgments under Article 5069-1.05 V.A.T.S. but not less than ten percent
(10%) per annum. If the termination for Cause occurs within two (2) years after a
Change in Control (other than a Merger Protection Change in Control) or within one (1)
year after a Merger Protection Change in Control, the Company shall not have the right
to suspend or withhold payments to Employee under any provision of the Agreement until
or unless a final judgment is entered upholding the Company’s determination that the
termination was for Cause, in which event Employee will be liable to the Company for
all amounts paid, plus interest at the rate allowed for judgments under Article
5069-1.05 V.A.T.S.

 

-15-

 

	 	6.04	 	SECTION 409A. The Agreement is intended to comply with the provisions of
Section 409A of the Code and applicable Treasury authorities (“Section 409A”) and,
wherever possible, shall be construed and interpreted to ensure that any payments that
may be paid, distributed provided, reimbursed, deferred or settled under this Agreement
will not be subject to any additional taxation under Section 409A. Notwithstanding any
provision of the Agreement to the contrary, the following provisions shall apply for
purposes of complying with Section 409A:

	 	a.	 	With respect to life insurance coverage, Employee shall pay the
full cost of such coverage and the Company shall reimburse to Employee the
amount of the cost of the coverage that is excess of the then active employee
cost for such coverage. With respect to any group health plan, for the period
of time during which Employee would be entitled (or
would, but for this Agreement, be entitled) to continuation coverage under a
group health plan of the Company under Section 4980B of the Code if Employee
elected such coverage and paid the applicable premiums (generally, 18
months), Employee shall pay the then active employee cost of the benefits as
determined under the then current practices of the Company on a monthly
basis, and thereafter, Employee shall pay the full cost of the benefits as
determined under the then current practices of the Company on a monthly
basis, provided that the Company shall reimburse Employee the excess of
costs, if any, above the then active employee cost for such benefits. Any
reimbursements by the Company to Employee required under this paragraph
shall be made on a regular, periodic basis within thirty (30) days after
such reimbursable amounts are incurred by Employee; provided that, before
such reimbursement, Employee has submitted or the Company possesses the
applicable and appropriate evidence of such expense(s). Any reimbursements
provided during one taxable year of Employee shall not affect the expenses
eligible for reimbursement in any other taxable year of Employee (with the
exception of applicable lifetime maximums applicable to medical expenses or
medical benefits described in Section 105(b) of the Code) and the right to
reimbursement under this paragraph shall not be subject to liquidation or
exchange for another benefit or payment.

	 	b.	 	Notwithstanding anything herein to the contrary, if Employee is
a “specified employee,” as such term is defined in Section 409A, at the time of
his termination of employment, any payments, reimbursements or benefits payable
as a result of Employee’s Termination or Change in Control Termination shall
not be payable before the earlier of (i) the date that is six months after
Employee’s Termination or Change in Control Termination, as applicable, (ii)
the date of Employee’s death, or (iii) the date that otherwise complies with
the requirements of Section 409A. Any payments or reimbursements that
otherwise would have been paid following Employee’s Termination and that are
subject to this delay of payment under Section 409A shall, during such delay
period, be accumulated and paid in a lump sum at the earliest date which
complies with the requirements of Section 409A. In the case of a Change in
Control Termination, such amounts shall be accumulated in the grantor trust as
provided in Section 4.02 and paid in a lump sum as provided in Section 4.02, at
the earliest date which complies with the requirements of Section 409A.

	 	c.	 	Employee and the Company agree that no revision of the
Agreement intended to comply with the terms of Section 409A and to avoid
imposition of the applicable tax thereunder shall be deemed to adversely affect
Employee’s rights or benefits in the Agreement.

 

-16-

 

	 	d.	 	The Parties agree to cooperate to the fullest extent in pursuit
of any available corrective relief, as provided under the terms of Internal
Revenue Service Notice 2008-113 or any corresponding subsequent guidance,
from the Section 409A additional income tax and premium interest tax.

	 	6.05	 	REFORMATION DUE TO LAW DEVELOPMENTS. Employee acknowledges that the Company’s
tax consequences as a result of Employee’s compensation under this Agreement are of
significant interest to the Company and that developments involving relevant tax laws,
rules and regulations could unfavorably impact the Company’s tax consequences.
Employee agrees that he is obligated to consider in good faith any proposal by the
Company to revise or reform his compensation structure hereunder if the Company advises
Employee that such compensation structure has or will result in unfavorable tax
consequences to the Company.

	 	6.06	 	NON-EXCLUSIVE AGREEMENT. The specific arrangements referred to herein are not
intended to exclude or limit Employee’s participation in other benefits available to
Employee or personnel of the Company generally, or to preclude or limit other
compensation or benefits as may be authorized by the Board at any time, or to limit or
reduce any compensation or benefits to which Employee would be entitled but for the
Agreement. Employee shall have no rights or interest under any other plans, policies
or arrangements of the Company providing severance pay, including, but not limited, to
the Pride International, Inc. Change in Control Severance Plan.

	 	6.07	 	NOTICES. Notices, requests, demands and other communications provided for by
the Agreement shall be in writing and shall either be personally delivered by hand or
sent by: (i) Registered or Certified Mail, Return Receipt Requested, postage prepaid,
properly packaged, addressed and deposited in the United States Postal System; (ii) via
facsimile transmission or electronic mail if the receiver acknowledges receipt; or
(iii) via Federal Express or other expedited delivery service provided that
acknowledgment of receipt is received and retained by the deliverer and furnished to
the sender, if to Employee, at the last address he has filed, in writing, with the
Company, or if to the Company, to its Corporate Secretary at its principal executive
offices.

	 	6.08	 	NON-ALIENATION. Employee shall not have any right to pledge, hypothecate,
anticipate, or in any way create a lien upon any amounts provided under the Agreement,
and no payments or benefits due hereunder shall be assignable in anticipation of
payment either by voluntary or involuntary acts or by operation of law. So long as
Employee lives, no person, other than the Parties hereto, shall have any rights under
or interest in the Agreement or the subject matter hereof. Upon the death of Employee,
his beneficiary designated under Section 6.10 or, if none, his executors,
administrators, devisees and heirs, in that order, shall have the right to enforce the
provisions hereof, to the extent applicable.

 

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	 	6.09	 	ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire agreement
of the Parties with respect of the subject matter hereof. The Prior
Agreement is hereby superseded and revoked by execution of the Agreement. No
provision of the Agreement may be amended, waived, or discharged except by the
mutual written agreement of the Parties. The consent of any other person(s) to any
such amendment, waiver or discharge shall not be required.

	 	6.10	 	SUCCESSORS AND ASSIGNS. The Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns, by operation of law or otherwise,
including, without limitation, any corporation or other entity or persons which shall
succeed (whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company, and the
Company will require any successor, by agreement in form and substance satisfactory to
Employee, expressly to assume and agree to perform the Agreement. Except as otherwise
provided herein, the Agreement shall be binding upon and inure to the benefit of
Employee and his legal representatives, heirs and assigns; provided, however, that in
the event of Employee’s death prior to payment or distribution of all amounts,
distributions and benefits due him hereunder, if any, each such unpaid amount and
distribution shall be paid in accordance with the Agreement to the person or persons
designated by Employee to the Company to receive such payment or distribution and if
Employee has made no applicable designation, to his estate. If the Company should
split, divide or otherwise become more than one entity, all liability and obligations
of the Company shall be the joint and several liability and obligation of the parties.

	 	6.11	 	GOVERNING LAW. Except to the extent required to be governed by the laws of the
State of Delaware because the Company is incorporated under the laws of said State, the
validity, interpretation and enforcement of the Agreement shall be governed by the laws
of the State of Texas.

	 	6.12	 	VENUE. To the extent permitted by applicable state or federal law, venue for
all proceedings hereunder will be in the U.S. District Court for the Southern District
of Texas, Houston Division.

	 	6.13	 	HEADINGS. The headings in the Agreement are inserted for convenience of
reference only and shall not affect the meaning or interpretation of the Agreement.

	 	6.14	 	SEVERABILITY; PARTIAL INVALIDITY. If any part, provision, portion or section
of the Agreement is determined to be invalid or unenforceable for any reason, the
remaining provisions of the Agreement shall be unaffected thereby, shall remain in full
force and effect and shall be binding upon the parties hereto, and the Agreement will
be construed to give meaning to the remaining provisions of the Agreement in accordance
with the intent of the Agreement.

	 	6.15	 	COUNTERPARTS. The Agreement may be executed in one or more counterparts, each
of which shall be deemed to be original, but all of which together constitute one and
the same instrument.

 

-18-

 

	 	6.16	 	NO WAIVER. Employee’s or the Company’s failure to insist upon strict
compliance with any provision of the Agreement or the failure to assert any right
Employee or the Company may have hereunder, shall not be deemed to be a waiver of such
provision or right or any other provision or right of the Agreement.

	 	6.17	 	TERMS OF EQUITY AWARDS. The Company agrees that during and after the term of
this Agreement, the provisions of any equity award between Employee and the Company,
whether outstanding at the Effective Date or subsequently awarded, shall be deemed
modified by the express provisions of this Agreement pertaining to equity awards
including, but not limited to, for purposes of determining whether a stock option award
is forfeited due to “serious misconduct,” serious misconduct shall be determined in
accordance with the standards and definition of “Cause” as defined herein.

IN WITNESS WHEREOF, Employee has hereunto set his hand and, pursuant to the authorization from
its Board and the Compensation Committee of such Board, the Company has caused these presents to be
executed in its name and on its behalf.

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

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Brady K. Long	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Date:
	 	                    	 	 
	 
	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	PRIDE INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By:	 	 	 	 
	 

W. Gregory Looser

Senior Vice President -
Legal, Information 

Strategy and General
Counsel

	 	 	 	 	 	 

Louis A. Raspino 

President and Chief Executive Officer
	 	 
	 

	 	 	 	Date:
	 	December 31, 2008	 	 

 

-19-

 

EXHIBIT A

Waiver And Release

Pursuant to the terms of my Separation Agreement with Pride International, Inc. effective
December 31, 2008, and in exchange for the payment of $_____ 
which is the cash amount
payable pursuant to [Section
 _____] of the Agreement and benefits as provided in [Section
 _____]
of the Agreement, as applicable (the “Separation Benefits”), I hereby waive all claims against and
release (i) Pride International, Inc. and its directors, officers, employees, agents, insurers,
predecessors, successors and assigns (collectively referred to as the “Company”), (ii) all of the
affiliates (including all parent companies and all wholly or partially owned subsidiaries) of the
Company and their directors, officers, employees, agents, insurers, predecessors, successors and
assigns (collectively referred to as the “Affiliates”), and (iii) the Company’s and its Affiliates’
employee benefit plans and the fiduciaries and agents of said plans (collectively referred to as
the “Benefit Plans”) from any and all claims, demands, actions, liabilities and damages arising out
of or relating in any way to my employment with or separation from employment with the Company and
its Affiliates other than amounts due pursuant to [Section
 _____] of the Agreement, rights under
[Section
 _____] of the Agreement and rights and benefits I am entitled to under the Benefit Plans.
(The Company, its Affiliates and the Benefit Plans are sometimes hereinafter collectively referred
to as the “Released Parties.”)

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

In exchange for the payment to me of the Separation Benefits, (1) I agree not to sue in any
local, state and/or federal court regarding or relating in any way to my employment with or
separation from employment with the Company and its Affiliates, and (2) I knowingly and voluntarily
waive all claims and release the Released Parties from any and all claims, demands, actions,
liabilities, and damages, whether known or unknown, arising out of or relating in any way to my
employment with or separation from employment with the Company and its Affiliates, except to the
extent that my rights are vested under the terms of any employee benefit plans sponsored by the
Company and its Affiliates and except with respect to such rights or claims as may arise after the
date this Waiver and Release is executed. This Waiver and Release includes, but is not limited to,
claims and causes of action under: Title VII of the Civil Rights Act of 1964, as amended; the Age
Discrimination in Employment Act of 1967, as amended, including the Older Workers Benefit
Protection Act of 1990; the Civil Rights Act of 1866, as amended; the Civil Rights Act of 1991; the
Americans with Disabilities Act of 1990; the Workers Adjustment and Retraining Notification Act of
1988; the Pregnancy Discrimination Act of 1978; the Employee Retirement Income Security Act of
1974, as amended; the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended; the
Family and Medical Leave Act of 1993; the Fair Labor Standards Act; the Occupational Safety and
Health Act; the Texas Labor Code §21.001 et. seq.; the Texas Labor Code; claims in connection with
workers’ compensation,
retaliation or “whistle blower” statutes; and/or contract, tort, defamation, slander, wrongful
termination or any other state or federal regulatory, statutory or common law. Further, I
expressly represent that no promise or agreement which is not expressed in this Waiver and Release
has been made to me in executing this Waiver and Release, and that I am relying on my own judgment
in executing this Waiver and Release, and that I am not relying on any statement or representation
of the Company or its Affiliates or any of their agents. I agree that this Waiver and Release is
valid, fair, adequate and reasonable, is with my full knowledge and consent, was not procured
through fraud, duress or mistake and has not had the effect of misleading, misinforming or failing
to inform me. I acknowledge and agree that the Company will withhold minimum amount of any taxes
required by federal or state law from the Separation Benefits otherwise payable to me.

 

A-1

 

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

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

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

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

 

A-2

 

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

	 	 	 	 	 	 	 
	 

Employee’s Printed Name

	 	 	 	 

Company’s Representative
	 	 
	 
	 	 	 	 	 	 
	 

Employee’s Signature

	 	 	 	 

Company’s Execution Date
	 	 
	 
	 	 	 	 	 	 
	 

Employee’s Signature Date

	 	 	 	 

	 	 

 

A-3

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