Document:

ex10_9.htm

    
      

    

    
      Exhibit
10.9

       

      EMPLOYMENT
AND NON-COMPETITION AGREEMENT

       

      This
Employment and Non-Competition Agreement (“Agreement”) is entered into as
of the 1st day of
May, 2008 (the “Effective Date”), between Vantage International Payroll Co., a
Cayman Island Company (“Company”), and Donald Munro (“Employee” or
“Executive”).

       

      R
E C I T A L S:

       

      WHEREAS,
Executive is to be employed as an integral part of its management who
participates in the decision-making process relative to short and long-term
planning and policy for the Company, will serve on the Company’s Executive
Management Committee;

       

      WHEREAS,
the Company desires to obtain assurances from the Executive that he will devote
his best efforts to the Company and will not enter into competition with the
Company, solicit its customers, or solicit employees of the Company after
termination of his employment;

       

      WHEREAS,
Executive will serve as a key employee with special and unique talents and
skills of peculiar benefit and importance to the Company; and

       

      WHEREAS,
Executive is desirous of committing himself to serve on the terms herein
provided; and

       

      NOW,
THEREFORE, in consideration of the foregoing and of the respective covenants and
agreements set forth below, the Parties agree as follows:

       

      
        1.     EMPLOYMENT
TERM AND DUTIES

      

       

      1.1           Term of
Employment.
Effective as of the Effective Date, the Company hereby agrees to employ
Executive as its Operations Manager and Executive hereby agrees to accept such
employment, on the terms and conditions set forth herein, for the period
commencing on the Effective Date and expiring as of May 1st, 2010 (the “Basic
Term”) (unless sooner terminated as hereinafter set forth). The Basic Term
shall be automatically extended for successive terms of one (1) year
commencing on each Anniversary of the effective Date thereafter (each such date
being a “Renewal Date”), so as to terminate one (1) year from such Renewal
Date, unless and until at least ninety (90) days prior to a Renewal Date
either party hereto gives written notice to the other that the Term should not
be further extended after the next Renewal Date (a “Notice of Non-Renewal”), in
which event the Termination Date shall not be less than one (1) year
following receipt of the Notice of Non-Renewal.

       

      1.2           Duties as Employee of the
Company.
Executive shall, subject to the supervision of the Chief Operating Officer, have
general management and control of operations in the ordinary course of its
business with all such powers with respect to such management and control as may
be reasonably incident to such responsibilities. Executive shall devote his
normal and regular business time, attention and skill to diligently attending to
the business of the Company during the Basic Term. During the Basic Term,
Executive shall not directly or indirectly render any services of a business,
commercial, or professional nature to any other person, firm, corporation, or
organization, whether for compensation or otherwise, without the prior written
consent of the Chairman of the Board. Notwithstanding the foregoing, it shall
not be a violation of the Agreement for Executive to (i) serve on
corporate, civic or charitable boards or committees, (ii) deliver lectures,
fulfill speaking engagements or teach at educational institutions, and
(iii) manage personal investments so long as such activities do not
materially interfere or conflict with the performance of his duties to the
Company hereunder. The conduct of such activity shall not be deemed to
materially interfere or conflict with Executive’s performance of his duties
until Executive has been notified in writing thereof and given a reasonable
period in which to cure the same.

       

      

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

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      1.3   Place of
Performance. During
the Employment Period, the Company shall maintain its executive offices in
Houston, Texas, but the Executive shall be located in other locations, as agreed
between Executive and the Company. During the Employment Period, the Company
shall provide the Executive with an office and staff and other such facilities
and services as shall be suitable to Executive’s position and adequate for the
performance of Executive’s duties hereunder.

       

      1.4           Fiduciary
Duty.
Executive acknowledges and agrees that he owes a fiduciary duty to the Company,
and further agrees to make full disclosure to the Company of all business
opportunities pertaining to the Company’s business and shall not act for his own
benefit concerning the subject matter of his fiduciary
relationship.

       

      1.5           Compliance.
Executive agrees that he will not take any action which he knows would not
comply with United States law as applicable to Executive’s employment,
including, but without limitation to the Foreign Corrupt Practices
Act.

       

      
        2.     COMPENSATION
AND RELATED MATTERS

      

       

      2.1   Base
Salary.
Executive shall receive a base salary (the “Base Salary”) paid by the
Company at the annual rate of $275,000 (Two Hundred And Seventy Five Thousand
Dollars), payable not less frequently than in substantially equal monthly
installments, with the opportunity to increases, from time to time thereafter
which are in accordance with the Company’s regular executive compensation
practices.

       

      2.2   Bonus
Payments. For
each full fiscal year of the Company that begins and ends during the Employment
Period, and for the portion of the fiscal year of the Company that begins in
2008 (“Fiscal Year 2008”), the Executive shall be eligible to earn an annual
cash bonus in such amount as shall be determined by the Compensation Committee
of the Board (the “Compensation Committee”) (the “Annual Bonus”) based
on the achievement by the Company of performance goals established by the
Compensation Committee for each such fiscal year (or portion of Fiscal Year
2008). The Compensation Committee shall establish objective criteria to be used
to determine the extent to which performance goals have been satisfied. For
purposes of this Agreement, net earnings per share is defined as the Company’s
consolidated net earnings per share as reported in the Company’s Annual Report
on Form 10-K. The Executive’s annual bonus potential target is 60 percent
(%) of Base Salary, but not to exceed 120 percent (%) of Base
Salary.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

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      2.3   Expenses. During
the Basic Term, Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by him in accordance with the policies and
procedures established by the Compensation Committee for the Company’s senior
executive officers in performing services hereunder, provided that Executive
properly accounts for such expenses in accordance with the Company’s policies
and procedures.

       

      2.4           Automobiles. The
Company shall provide the Executive with an automobile provided by the Company,
or, in the alternative, an automobile allowance consistent with the practices of
the Company.

       

      2.5           Business, Travel and
Entertainment Expenses. The
Company shall promptly reimburse the Executive for all business, travel and
entertainment expenses consistent with the Executive’s titles and the practices
of the Company.

       

      2.6           Vacation. The
Executive shall be entitled to five (5) weeks of vacation per year.
Vacation not taken during the applicable fiscal year (but not in excess of two
(2) weeks) shall be carried over to the next following fiscal
year.

       

      2.7           Welfare, Pension and
Incentive Benefit Plans. During
the Employment Period, the Executive (and his eligible spouse and
dependents) shall be entitled to participate in all the welfare benefit
plans and programs maintained by the Company from time-to-time for the benefit
of its senior executives including, without limitation, all medical,
hospitalization, dental, disability, accidental death and dismemberment and
travel accident insurance plans and programs. In addition, during the Employment
Period, the Executive shall be eligible to participate in all pension,
retirement, savings and other employee benefit plans and programs maintained
from time-to-time by the Company for the benefit of its senior executives, other
than any annual cash incentive plan.

       

      2.8           Dues. During
the Employment Period, the Company shall pay or promptly reimburse the Executive
for annual dues for membership in professional organizations relevant to
Executive’s job responsibilities.

       

      2.9           Other
Benefits.
Executive shall be entitled to participate in or receive benefits under any
compensatory employee benefit plan or other arrangement made available by the
Company now or in the future to its senior executive officers and key management
employees, subject to and on a basis consistent with the terms, conditions, and
overall administration of such plan or arrangement. Nothing paid to Executive
under any plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of the Base Salary payable to Executive
pursuant to Section 2.1 of this Agreement. The Company shall not make any
changes in any employee benefit plans or other arrangements in effect on the
date hereof or subsequently in effect in which Executive currently or in the
future participates (including, without limitation, each pension and retirement
plan, supplemental pension and retirement plan, savings and profit sharing plan,
stock or unit ownership plan, stock or unit purchase plan, stock or unit option
plan, life insurance plan, medical insurance plan, disability plan, dental plan,
health and accident plan, or any other similar plan or arrangement) that
would adversely affect Executive’s rights or benefits thereunder, unless such
change occurs pursuant to a program applicable to substantially all executives
of the Company and does not result in a proportionately greater reduction in the
rights of or benefits to Executive as compared with any other executive of the
Company. The Company shall recommend that Executive receive an annual restricted
stock or stock options in Vantage Energy Services, Inc. in the range of $400,000
to $550,000 based on market studies of industry executives, but Executive
recognizes and agrees that future years could vary significantly as market
conditions and industry compensation trends change.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

      Page 3 of
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      2.10       
Perquisites.
Executive shall be entitled to receive the perquisites and fringe benefits
appertaining to an executive officer of the Company, in accordance with any
practice established by the Compensation Committee. In addition to the other
benefits provided in this Agreement, Executive and his family shall be entitled
to receive medical insurance as that may be provided under the Company’s group
program, as such group program may be changed from time-to-time in the future,
and Executive shall be entitled to continue to be covered by such group program
or, if not permitted under the terms of the group program, then the Company
shall provide Executive with a medical insurance policy providing substantially
similar benefits as to the group program, for the period ending on the date of
the later to die of Executive or, if Executive is married on the date of his
death, Executive’s spouse. Executive shall be entitled to receive the medical
benefits defined herein at no cost to the Executive. However, Executive’s rights
pursuant to this subsection shall be void if Executive is terminated for Cause
or if Executive voluntarily terminates his employment.

       

      2.11       
Proration. Any
payments or benefits payable to Executive hereunder in respect of any calendar
year during which Executive is employed by the Company for less than the entire
year, unless otherwise provided in the applicable plan or arrangement, shall be
prorated in accordance with the number of days in such calendar year during
which he is so employed.

       

      2.12        Signing
Bonus.
Executive shall receive a signing bonus of $20,000 upon execution of this
Agreement within 30 days after the Effective Date.

       

      2.13        Additional
Payments.  

       

      2.13(a)  
Excise Tax; Gross-Up
Payment.
Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment or distribution by the Company to or for
benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section
(a “Payment”) would be subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended (the “Code”), or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then the Executive shall be
entitled to receive an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

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      2.13(b)    Accounting Firm
Determinations. All
determinations required to be made under this Section 2.12, including whether
and when Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determination, shall be
made by a reputable accounting firm selected by the Company (the “Accounting
Firm”), which shall provide detailed supporting calculations both to the Company
and the Executive within fifteen (15) business days after the receipt of
notice from the Executive that there has been a Payment, or such earlier time as
is requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting a Change of
Control of the Company, the Executive shall appoint another reputable accounting
firm to make the determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder), All fees and expenses of
the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
as determined pursuant to this Section, shall be paid by the Company to the
Executive within five (5) days after the receipt of the Accounting Firm’s
determination. If the Accounting Firm determines that no Excise Tax is payable
by the Executive, it shall furnish the Executive with a written opinion that
failure to report the Excise Tax on the Executive’s applicable federal income
tax return would not result in the imposition of a negligence or similar
penalty. Any determination by the Accounting Firm shall be binding upon the
Company and the Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments that will not
have been made by the Company should have been made (an “Underpayment”),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to this Section and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment and any
applicable penalty that has occurred and the amount of any such Underpayment and
any applicable penalty shall be promptly paid by the Company to or for the
benefit of the Executive.

       

      2.13(c)    Notification of
Claims. The
Executive shall notify the Company in writing of any claims by the Internal
Revenue Service that, if successful, would require the payment by the Company of
the Gross-Up Payment. Such notification shall be given as soon as practicable
but no later than thirty (30) days after the Executive actually receives
notice in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the thirty
(30) day period following the date on which the Executive gives such notice
to the Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies the Executive
in writing prior to the expiration of such period that it desires to contest
such claim, the Executive shall:

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

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      1.           
 give the Company any information reasonably requested by the Company
relating to such claim;

       

      2.              take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company;

       

      3.           
 cooperate with the Company in good faith in order to effectively contest
such claim; and

       

      4.           
 permit the Company to participate in any proceedings relating to such
claim; provided, however, that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section, the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at its sole option,
either direct the Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax {including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the
Company’s control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.

       

      2.13(d)    Refund. If,
after the receipt by the Executive of an amount advanced by the Company pursuant
to this Section, the Executive becomes entitled to receive any refund with
respect to such claim, the Executive shall (subject to the Company’s complying
with the requirements of this Section) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the Executive of an amount
advanced by the Company pursuant to this Section, a determination is made that
the Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of thirty (30) days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

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      2.13(e)    Insurance. The
Company may, from time to time, apply for and take out, in its own name and at
its own expense, naming itself or one or more of its affiliates as the
designated beneficiary (which it may change from time to time), policies for
life, health, accident, disability or other insurance upon the Executive in any
amount or amounts that it may deem necessary or appropriate to protect its
interest. The Executive agrees to aid the Company in procuring such insurance by
submitting to medical examinations and by completing, executing and delivering
such applications and other instruments in writing as may reasonably be required
by an insurance company or companies to which any application or applications
for insurance may be made by or for the Company.

       

      
        3.    
TERMINATION

      

       

      3.1           Definitions.  

       

      A.    “Cause”
shall mean:

       

      (i)          
 Material dishonesty which is not the result of an inadvertent or innocent
mistake of Executive with respect to the Company or any of its
subsidiaries;

       

      (ii)           Willful
misfeasance or nonfeasance of duty by Executive intended to injure or having the
effect of injuring in some material fashion the reputation, business, or
business relationships of the Company or any of its subsidiaries or any of their
respective officers, directors, or employees;

       

      (iii)          Material
violation by Executive of any material term of this Agreement; or

       

      (iv)          Conviction
of Executive of any felony, any crime involving moral turpitude or any crime
other than a vehicular offense which could reflect in some material fashion
unfavorably upon the Company or any of its subsidiaries.

       

      (v)           Violation
of Sections 1.3 or 1.4 above.

       

      3.1.2.       Notice to
Cure.
Executive may not be terminated for Cause unless and until there has been
delivered to Executive written notice from the Board supplying the particulars
of Executive’s acts or omissions that the Board believes constitute Cause, a
reasonable period of time (not less than 30 days) has been given to
Executive after such notice to either cure the same or to meet with the Board,
with his attorney if so desired by Executive, and following which the Board by
action of not less than two-thirds of its members furnishes to Executive a
written resolution specifying in detail its findings that Executive has been
terminated for Cause as of the date set forth in the notice to
Executive.

       

      3.1.3        For
purposes of this Agreement, no act or failure to act by the Executive shall be
considered “willful” if such act is done by the Executive in the good faith
belief that such act is or was to be beneficial to the Company or one or more of
its businesses, or such failure to act is due to the Executive’s good faith
belief that such action would be materially harmful to the Company or one of its
businesses. Cause shall not exist unless and until the Company has delivered to
the Executive a copy of a resolution duly adopted by a majority of the Board
(excluding the Executive for purposes of determining such majority) at a
meeting of the Board called and held for such purpose after reasonable (but in
no event less than thirty days’) notice to the Executive and an opportunity
for the Executive, together with his counsel, to be heard before the Board,
finding that in the good faith opinion of the Board that “Cause” exists, and
specifying the particulars thereof in detail. This Section shall not prevent the
Executive from challenging in an arbitration proceeding the Board’s
determination that Cause exists or that the Executive has failed to cure any act
(or failure to act) that purportedly formed the basis for the Board’s
determination.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

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      B.           
A “Change
of Control” shall be deemed to have occurred if:

       

      (i)          
 A reverse merger involving the Company or the Parent in which the Company
or the Parent, as the case may be, is the surviving corporation but the shares
of common stock of the Company or the Parent (the “Common
Stock”) outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise, and the shareholders of the Parent immediately prior to the
completion of such transaction hold, directly or indirectly, less than fifty
percent (50%) of the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act, or comparable successor rules) of the
surviving entity or, if more than one entity survives the transaction, the
controlling entity; or

       

      (ii)           Any
“person” or “group” (within the meaning of Sections 13(d) and
14(d)(2) of the securities Exchange Act of 1934) other than a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of 50% or more of the
Company’s then outstanding voting common stock; or

       

      (iii)           At
any time during the period of three (3) consecutive years (not including
any period prior to the date hereof), individuals who at the beginning of such
period constituted the Board (and any new director whose election by the Board
or whose nomination for election by the Company’s shareholders were approved by
a vote of at least two-thirds of the directors then still in office who either
were directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute
a majority thereof; or

       

      (iv)           The
shareholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation (a) in
which a majority of the directors of the surviving entity were directors of the
Company prior to such consolidation or merger, and (b) which would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being changed
into voting securities of the surviving entity) more than 50% of the
combined voting power of the voting securities of the surviving entity
outstanding immediately after such merger or consolidation; or

       

      

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

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      (v)         
 The shareholders approve a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company of all or substantially
all of the Company’s assets.

       

      C.           
A “Disability”
shall mean the absence of Executive from Executive’s duties with the Company on
a full-time basis for 180 consecutive days, or 180 days in a 365-day period, as
a result of incapacity due to mental or physical illness which results in the
Executive being unable to perform the essential functions of his position, with
or without reasonable accommodation.

       

      D.           
A “Good
Reason” shall mean any of the following (without Executive’s express
written consent):

       

      (i)          
 Following a Change of Control, a material alteration in the nature or
status of Executive’s title, duties or responsibilities, or the assignment of
duties or responsibilities inconsistent with Executive’s status, title, duties
and responsibilities;

       

      (ii)           A
failure by the Company to continue in effect any employee benefit plan in which
Executive was participating, or the taking of any action by the Company that
would adversely affect Executive’s participation in, or materially reduce
Executive’s benefits under, any such employee benefit plan, unless such failure
or such taking of any action adversely affects the senior members of corporate
management of the Company generally to the same extent;

       

      (iii)          Any
material breach by the Company of any provision of this Agreement;

       

      (iv)          Any
failure by the Company to obtain the assumption and performance of this
Agreement by any successor (by merger, consolidation, or otherwise) or
assign of the Company; or

       

      (v)           The
Company provides written notice of non-renewal to the Executive.

       

      However,
Good Reason shall exist with respect to an above specified matter only if such
matter is not corrected by the Company within thirty (30) days of its
receipt of written notice of such matter from Executive, and in no event shall a
termination by Executive occurring more than ninety (90) days following the
date of the event described above be a termination for Good reason due to such
event.

       

      3.2           “Termination
Date” shall
mean the date Executive is terminated for any reason pursuant to this
Agreement.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

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      3.3           “Constructive Termination
Without Cause” shall
mean:Notwithstanding
any other provision of this Agreement, the Executive’s employment under this
Agreement may be terminated during the Term by the Executive, which shall be
deemed to be constructive termination by the Company without Cause, if one of
the following events shall occur without the written consent of the Executive:
(i) a reduction in the Executive’s fixed salary; (ii) the failure of
the Company to continue to provide the Executive with office space, related
facilities and secretarial assistance that are commensurate with the Executive’s
responsibilities to and position with the Company; (iii) the notification
by the Company of the Company’s intention not to observe or perform one or more
of the obligations of the Company under this Agreement; or (iv) the failure
by the Company to indemnify, pay or reimburse the Executive at the time and
under the circumstances required by this Agreement. Any such termination
pursuant to this Section shall be made by the Executive providing written notice
to the Company specifying the event relied upon for such termination and given
within sixty (60) days after such event. Any constructive termination
pursuant to this Section shall be effective sixty (60) days after the date
the Executive has given the Company such written notice setting forth the
grounds for such termination with specificity; provided, however, that the
Executive shall not be entitled to terminate this Agreement in respect of any of
the grounds set forth above if within sixty (60) days after such notice the
action constituting such ground for termination has been cured and is no longer
continuing.

       

      3.4         
Termination Without
Cause or Termination For Good Reason or Constructive Termination Without Cause:
Benefits.  

       

      3.5          
Base
Salary. For a
period of twelve (12) months after the Termination Date Base Salary (as
defined herein), at the rate, and payable quarterly unless such termination is
by the Company without Cause, in which even such amount of Base Salary shall be
paid in a lump sum within ten (10) days of the Termination
Event.

       

      3.6          
Stock
Awards. If
there is a Change of Control or if there is a Termination Event, any stock
options (“Stock Awards”) which Executive has received under this Agreement
shall vest immediately and, if there is a Termination Event, all such Stock
Awards shall be exercisable from the date of such Termination Event for the
remainder of their term.

       

      3.7         
Other
Benefits. To the
extent not theretofore paid or provided, the Company shall timely pay or provide
to Executive any other amounts or benefits required to be paid or provided or
which Executive is eligible to receive under any plan, program, policy or
practice, or contract or agreement of the Company and its affiliated companies
for the period of time equal to the remainder of the Basic Term (such other
amounts and benefits shall be hereinafter referred to as the “Other Benefits”).
Without limiting the preceding sentence and without limiting any other provision
of this Agreement, through the remaining Basic Term, but under no condition less
than one (1) year, the Company, at its sole expense, shall continue to
provide (through its own plan and/or individual policies) Executive (and
Executive’s dependents) with health benefits no less favorable than the
group health plan benefits provided during such period to any senior executive
officer of the Company or any affiliated company (to the extent any such
coverage or benefits are taxable to Executive by reason of being provided under
a self-insured health plan of the Company or an affiliate, the Company shall
make Executive “whole” for the same on an after-tax basis). In any event, the
Other Benefits provided for pursuant to this Section shall be secondary to any
benefits and coverage Executive (or his dependents) receive from another
employer.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

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      3.8          
Expenses. All
accrued compensation and unreimbursed expenses through the Termination Date.
Such amounts shall be paid to Executive in a lump sum in cash within thirty
(30) days after the Termination Date; and

       

      3.9         
Mitigation.
Executive shall be free to accept other employment during such period, subject
to the limitation as set forth in Section 5 of this Agreement and there shall be
no offset of any employment compensation earned by Executive in such other
employment during such period against payments due Executive under this Section
3, and there shall be no offset in any compensation received from such other
employment against the Base Salary set forth above.

       

      3.10       
Maximum
Payments. It is
the objective of this Agreement to maximize the Executive’s Net After-Tax
Benefit (as defined herein) if payments or benefits provided under this
Section are subject to excise tax under Section 4999 of the Code. Therefore, in
the event it is determined that any payment or benefit by the Company to or for
the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Section or otherwise, including, by
example and not by way of limitation, acceleration by the Company or otherwise
of the date of vesting or payment or rate of payment under any plan, program or
arrangement of the Company, would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), the Company
shall first make a calculation under which such payments or benefits provided to
the Executive under this Agreement are reduced to the extent necessary so that
no portion thereof shall be subject to the excise tax imposed by Section 4999 of
the Code (the “4999
Limit”). The Company shall then compare (x) the Executive’s Net
After-Tax Benefit assuming application of the 4999 Limit with (y) the
Executive’s Net After-Tax Benefit without the application of the 4999 Limit and
the Executive shall be entitled to the greater of (x) or (y).

       

      3.11       
“Net
After-Tax Benefit” shall
mean the sum of (i) all payments and benefits which the Executive receives
or is then entitled to receive from the Company, less (ii) the amount of
federal income taxes payable with respect to the payments and benefits described
in (i) above calculated at the maximum marginal income tax rate for each
year in which such payments and benefits shall be paid to the Executive (based
upon the rate for such year as set forth in the Code at the time of the first
payment of the foregoing), less (iii) the amount of excise taxes imposed
with respect to the payments and benefits described in (i) above by Section
4999 of the Code. The determination of whether a payment or benefit constitutes
an excess parachute payment shall be made by tax counsel selected by the Company
and reasonably acceptable to the Executive. The costs of obtaining this
determination shall be borne by the Company.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

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      3.12       
Termination In Event
of Death: Benefits. If
Executive’s employment is terminated by reason of Executive’s death during the
Basic Term, this Agreement shall terminate, except as provided herein, without
further obligation to Executive’s legal representatives under this Agreement,
other than for payment of all accrued compensation, unreimbursed expenses, the
timely payment or provision of Other Benefits through the date of death, one
(1) year’s Base Salary, and such cash or stock bonus as Executive would
otherwise have been awarded in year if Executive’s death had not occurred. Such
amounts shall be paid to Executive’s estate or beneficiary, as applicable, in a
lump sum in cash within ninety (90) days after the date of death. With
respect to the provision of Other Benefits, the term Other Benefits as used in
this Section shall include, without limitation, and Executive’s estate and/or
beneficiaries shall be entitled to receive, benefits at least equal to the most
favorable benefits provided by the Company to the estates and beneficiaries of
other executive level employees of the Company under such plans, programs,
practices, and policies relating to death benefits, if any, as in effect with
respect to other executives and their beneficiaries at any time during the
120-day period immediately preceding the date of death. Additionally, all Stock
Awards shall be vested immediately and shall be exercisable for the greater of
one year after the date of such vesting or the remaining term of such
option.

       

      3.13       
Termination In Event
of Disability: Benefits. If
Executive’s employment is terminated by reason of Executive’s Disability during
the Basic Term, this Agreement shall continue in full force for a period of one
(1) year following such Disability and if such Disability occurs on or
after January 1 of any year Executive shall be entitled to the same cash or
stock bonus in such year that Executive would have been awarded if such
Disability had not occurred. In addition, all outstanding Stock Awards shall
vest immediately upon such termination due to Disability.

       

      3.14       
Voluntary Termination
by Employee and Termination for Cause: Benefits.
Executive may terminate his employment with the Company without Good Reason by
giving written notice of his intent and stating an effective Termination Date at
least ninety (90) days after the date of such notice; provided, however,
that the Company may accelerate such effective date by paying Executive through
the proposed Termination Date and also vesting awards that would have vested but
for this acceleration of the proposed Termination Date and also vesting awards
that would have vested but for this acceleration of the proposed Termination
Date. Upon such a termination by Executive, except as provided in Section 5, or
upon termination for Cause by the Company, this Agreement shall terminate and
the Company shall pay to Executive all accrued compensation, unreimbursed
expenses and the Other Benefits through the Termination Date. Such amounts shall
be paid to Executive in a lump sum in cash within thirty (30) days after
the date of termination. In addition, all unvested stock options shall terminate
and all vested options will terminate one hundred twenty (120) days after
the Termination Date.

       

      3.15       
Termination
Procedure.  

       

      A.           
Notice of Termination. Any
termination of the Executive’s employment by the Company or by the Executive
during the Employment Period (other than pursuant to Section 3.5) shall be
communicated by written Notice of Termination to the other party. For purposes
of this Agreement, a “Notice of Termination” shall mean a notice indicating the
specific termination provision in this Agreement relied upon and setting forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under that provision.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

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      B.           
Date of Termination. “Date
of Termination” shall mean (i) if the Executive’s employment is terminated
by his death, the date of his death, (ii) if the Executive’s employment is
terminated pursuant to Section 3.6, thirty (30) days after the date of
receipt of the Notice of Termination (provided that the Executive does not
return to the substantial performance of his duties on a full-time basis during
such thirty (30) day period), and (iii) if the Executive’s employment
is terminated for any other reason, the date on which a Notice of Termination is
given or any later date (within thirty (30) days after the giving of such
notice) set forth in such Notice of Termination.

       

      C.            Mitigation. The
Executive shall not be required to mitigate damages with respect to the
termination of his employment under this Agreement by seeking other employment
or otherwise, and there shall be no offset against amounts due the Executive
under this Agreement on account of subsequent employment except as specifically
provided in this Agreement. Additionally, amounts owed to the Executive under
this Agreement shall not be offset by any claims the Company may have against
the Executive, and the Company’s obligation to make the payments provided for in
this Agreement, and otherwise to perform its obligations hereunder, shall not be
affected by any other circumstances, including, without limitation, any
counterclaim, recoupment, defense or other right which the Company may have
against the Executive or others.

       

      
        4.     DIRECTOR
POSITIONS

      

       

      4.1           Executive
agrees that upon termination of employment, for any reason, at the request of
the Chairman of the Board, he will immediately tender his resignation from any
and all Board positions held with the Company and/or any of its subsidiaries and
affiliates. If Executive remains as a director, at the election of the Board,
after such termination, Executive shall be compensated as an outside
director.

       

      
        5.    
NON-COMPETITION, NON-SOLICITATION, AND CONFIDENTIALITY

      

       

      5.1           The
Company shall provide Executive with its trade secrets, goodwill, and
confidential information of Company and contact with the Company’s customers and
potential customers. Executive also recognizes and agrees that the benefit of
not being employed at-will, is provided in consideration for, among other
things, the agreements contained in this Section, as well as the Stock Awards
granted to Executive pursuant to this Agreement. Executive agrees that the
business of the Company is highly competitive and that the trade secrets,
goodwill, and confidential information of the Company is of primary importance
to the success of the Company. In consideration of all of the foregoing, and in
recognition of these conditions, and specifically for being provided trade
secrets, goodwill, and confidential information, Executive agrees as
follows:

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

      Page 13
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      5.2         
Non-Competition During
Employment.
Executive agrees during the Basic Term he will not compete with the Company by
engaging in the conception, design, development, production, marketing, or
servicing of any product or service that is substantially similar to the
products or services which the Company provides, and that he will not work for,
in any capacity, assist, or became affiliated with as an owner, partner, etc.,
either directly or indirectly, any individual or business which offer or
performs services, or offers or provides products substantially similar to the
services and products provided by Company.

       

      5.3         
Conflicts of
Interest.
Executive agrees that during the Basic Term, he will not engage, either directly
or indirectly, in any activity (a “Conflict of Interest”) which might
adversely affect the Company or its affiliates, including ownership of a
material interest in any supplier, contractor, distributor, subcontractor,
customer or other entity with which the Company does business or accepting any
material payment, service, loan, gift, trip, entertainment, or other favor from
a supplier, contractor, distributor, subcontractor, customer or other entity
with which the Company does business, and that Executive will promptly inform
the Chairman of the Company as to each offer received by Executive to engage in
any such activity. Executive further agrees to disclose to the Company any other
facts of which Executive becomes aware which might in Executive’s good faith
judgment reasonably be expected to involve or give rise to a Conflict of
Interest or potential Conflict of Interest.

       

      5.4         
Non-Competition After
Termination. In
further consideration of the Company providing Employee confidential
information, executive agrees that Executive shall not, at any time during the
period of one (1) year after termination within the geographic area as
defined by this Section 5 that the Company has sold products or services or
formulated a plan to sell products or services into a market during the last
twelve (12) months of Executive’s employ, engage in or contribute
Executive’s knowledge to any work which is competitive with or similar to a
product, process, apparatus, services, or development on which Executive worked
or with respect to which Executive had access to Confidential Information while
employed by the Company. It is understood that the geographical area set forth
in this covenant is divisible so that if this clause is invalid or unenforceable
in an included geographic area, that area is severable and the clause remains in
effect for the remaining included geographic areas in which the clause is valid.
For purposes of this Section 5.4, the geographic area shall apply to the
territory or country where the Company conducts operations.

       

      5.5         
Non-Solicitation of
Customers. In
further consideration of the Company providing Employees confidential
information, Executive further agrees that for a period of one (1) year
after termination, he will not solicit or accept any business from any customer
or client or prospective customer or client with whom Executive dealt or
solicited while employed by Company during the last twelve (12) months of
his employment.

       

      5.6          Non-Solicitation of
Employees.
Executive agrees that for the duration of the Basic Term, and for a period of
one (1) year after the termination of the Basic Term, he will not either
directly or indirectly, on his own behalf or on behalf of others, solicit,
attempt to hire, or hire any person employed by Company to work for Executive or
for another entity, firm, corporation, or individual.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

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      5.7         
 Confidential
Information.
Executive further agrees that he will not, except as the Company may otherwise
consent or direct in writing, reveal or disclose, sell, use, lecture upon,
publish or otherwise disclose to any third party any Confidential Information or
proprietary information of the Company, or authorize anyone else to do these
things at any time either during or subsequent to his employment with the
Company. This Section shall continue in full force and effect after termination
of Executive’s employment and after the termination of this Agreement. Executive
shall continue to be obligated under the Confidential Information Section of
this Agreement not to use or to disclose Confidential Information of the Company
so long as it shall not be publicly available. Executive’s obligations under
this Section with respect to any specific Confidential Information and
proprietary information shall cease when that specific portion of the
Confidential Information and proprietary information becomes publicly known, in
its entirety and without combining portions of such information obtained
separately. It is understood that such Confidential Information and proprietary
information of the Company include matters that Executive conceives or develops,
as well as matters Executive learns from other employees of Company.
Confidential Information is defined to include information: (1) disclosed
to or known by the Executive as a consequence of or through his employment with
the Company; (2) not generally known outside the Company; and
(3) which relates to any aspect of the Company or its business, finances,
operation plans, budgets, research, or strategic development. “Confidential
Information” includes, but is not limited to the Company’s trade secrets,
proprietary information, financial documents, long range plans, customer lists,
employer compensation, marketing strategy, data bases, costing data, computer
software developed by the Company, investments made by the Company, and any
information provided to the Company by a third party under restrictions against
disclosure or use by the Company or others.

       

      5.8          
Original
Material. The
Executive agrees that any inventions, discoveries, improvements, ideas, concepts
or original works of authorship relating directly to the Company Business,
including without limitation information of a technical or business nature such
as ideas, discoveries, designs, inventions, improvements, trade secrets,
know-how, manufacturing processes, product formulae, design specifications,
writings and other works of authorship, computer programs, financial figures,
marketing plans, customer lists and data, business plans or methods and the
like, which relate in any manner to the actual or anticipated business or the
actual or anticipated areas of research and development of the Company and its
divisions and affiliates, whether or not protectable by patent or copyright,
that have been originated, developed or reduced to practice by the Executive
alone or jointly with others during the Executive’s employment with the Company
shall be the property of and belong exclusively to the Company. The Executive
shall promptly and fully disclose to the Company the origination or development
by the Executive of any such material and shall provide the Company with any
information that it may reasonably request about such material. Either during
the subsequent to the Executive’s employment, upon the request and at the
expense of the Company or its nominee, and for no remuneration in addition to
that due the Executive pursuant to the Executive’s employment by the Company,
but at no expense to the Executive, the Executive agrees to execute,
acknowledge, and deliver to the Company or its attorneys any and all instruments
which, in the judgment of the Company or its attorneys, may be necessary or
desirable to secure or maintain for the benefit of the Company adequate patent,
copyright, and other property rights in the United States and foreign countries
with respect to any such inventions, improvements, ideas, concepts, or original
works of authorship embraced within this Agreement.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

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      5.9          
Return of Documents,
Equipment, Etc. All
writings, records, and other documents and things comprising, containing,
describing, discussing, explaining, or evidencing any Confidential Information,
and all equipment, components, parts, tools, and the like in Executive’s custody
or possession that have been obtained or prepared in the course of Executive’s
employment with the Company shall be the exclusive property of the Company,
shall not be copied and/or removed from the premises of the Company, except in
pursuit of the business of the Company, and shall be delivered to the Company,
without Executive retaining any copies, upon notification of the termination of
Executive’s employment or at any other time requested by the Company. The
Company shall have the right to retain, access, and inspect all property of
Executive of any kind in the office, work area, and on the premises of the
Company upon termination of Executive’s employment and at any time during
employment by the Company upon termination of Executive’s employment and at any
time during employment by the Company to ensure compliance with the terms of
this Agreement.

       

      5.10         Reaffirm
Obligations. Upon
termination of his employment with the Company, Executive, if requested by
Company, shall reaffirm in writing Executive’s recognition of the importance of
maintaining the confidentiality of the company’s Confidential Information and
proprietary information, and reaffirm any other obligations set forth in this
Agreement.

       

      5.11        
Prior
Disclosure.
Executive represents and warrants that he has not used or disclosed any
Confidential Information he may have obtained from Company prior to signing this
Agreement, in any way inconsistent with the provisions of this
Agreement.

       

      5.12        Confidential Information of
Prior Companies.
Executive will not disclose or use during the period of his employment with the
Company any proprietary or Confidential Information or Copyright Works which
Executive may have acquired because of employment with an employer other than
the Company or acquired from any other third party, whether such information is
in Executive’s memory or embodied in a writing or other physical
form.

       

      5.13       
Rights Upon
Breach. If the
Executive breaches, any of the provisions contained in Section 5 of this
Agreement (the “Restrictive Covenants”), the Company shall have the following
rights and remedies, each of which rights and remedies shall be independent of
the others and severally enforceable, and each of which is in addition to, and
not in lieu of, any other rights and remedies available to the Company under law
or in equity:

       

      (a)          
Specific
Performance. The right and remedy to have the Restrictive Covenants
specifically enforced by any court of competent jurisdiction, it being agreed
that any breach of the Restrictive Covenants would cause irreparable injury to
the Company and that money damages would not provide an adequate remedy to the
Company.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

      Page 16
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      (b)          
Accounting.
The right and remedy to require the Executive to account for and pay over to the
Company all compensation, profits, monies, accruals, increments or other
benefits derived or received by the Executive as the result of any action
constituting a breach of the Restrictive Covenants.

       

      5.14        
Remedies For Violation
of Non-Competition or Confidentiality 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 agreed that:

       

      (a)           
the skills, experience and contacts of Employee are of a special, unique,
unusual and extraordinary character which give them a peculiar
value;

       

      (b)           
because of the business of the Company, the restrictions agreed to by
Employee as to time and area contained in the Agreement are reasonable;
and

       

      (c)          
the injury suffered by the Company by a violation of any obligation or
covenant in the Agreement resulting from loss of profits created by (i) the
competitive use of such skills, experience contacts and otherwise and/or
(ii) the use or communication of any information deemed confidential herein
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 the
Agreement, accordingly:

       

      (i)           the
Company shall be entitled to injunctive relief to prevent violations thereof and
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 ay nature to employee, subject to the other provisions
hereof.

      

      (d)           employee
waives any objection to the enforceability of the restrictive covenants and
agrees to be estopped from denying the legality and enforceability of these
provisions.

       

      5.15       
Severability of
Covenants. The
Executive acknowledges and agrees that the Restrictive Covenants are reasonable
and valid in duration and geographical scope and in all other respects. If any
court determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive Covenants shall not
thereby be affected and shall be given full effect without regard to the invalid
portions.

       

      5.16        Court
Review. If any
court determines that any of the Restrictive Covenants, or any part thereof, is
unenforceable because of the duration or geographical scope of, or scope of
activities restrained by, such provision, such court shall have the power to
reduce the duration or scope of such provision, as the case may be, and, in its
reduced form, such provision shall then be enforceable.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

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      5.17       
Enforceability in
Jurisdictions. The
Company and the Executive intend to and hereby confer jurisdiction to enforce
the Restrictive Covenants upon the courts of any jurisdiction within the
geographical scope of such Restrictive Covenants. If the courts of any one or
more of such jurisdictions hold the Restrictive Covenants unenforceable by
reason of the breadth of such scope or otherwise, it is the intention of the
Company that such determination not bar or in any way affect the right of the
Company to the relief provided above in the courts of any other jurisdiction
within the geographical scope of such Restrictive Covenants, as to breaches of
such Restrictive Covenants in such other respective jurisdictions, such
Restrictive Covenants as they relate to each jurisdiction being, for this
purpose, severable into diverse and independent covenants.

       

      5.18       
Extension of
Post-Employment Restrictions. In the
event Executive breaches Section 5 above, the restrictive time periods contained
in those provisions will be extended by the period of time Executive was in
violation of such provisions.

       

      
        6.    
INDEMNIFICATION

      

       

      6.1           General. The
Company agrees that if the Executive is made a party or is threatened to be made
a party to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), by reason of the fact that the
Executive is or was a trustee, director or officer of the Company, the Company,
or any predecessor to the Company (including any sole proprietorship owned by
the Executive) or any of their affiliates or is or was serving at the
request of the Company, the Company, any predecessor to the Company (including
any sole proprietorship owned by the Executive), or any of their affiliates as a
trustee, director, officer, member, employee or agent of another corporation or
a partnership, joint venture, limited liability company, trust or other
enterprise, including, without limitation, service with respect to employee
benefit plans, whether or not the basis of such Proceeding is alleged action in
an official capacity as a trustee, director, officer, member, employee or agent
while serving as a trustee, director, officer, member, employee or agent, the
Executive shall be indemnified and held harmless by the Company to the fullest
extent authorized by Texas or Delaware law, as the same exists or may hereafter
be amended, against all Expenses incurred or suffered by the Executive in
connection therewith, and such indemnification shall continue as to the
Executive even if the Executive has ceased to be an officer, director, trustee
or agent, or is no longer employed by the Company and shall inure to the benefit
of his heirs, executors and administrators.

       

      6.2          
Expenses. As used
in this Section, the term “Expenses” shall include, without limitation, damages,
losses, judgments, liabilities, fines, penalties, excise taxes, settlements, and
costs, attorneys’ fees, accountants’ fees, and disbursements and costs of
attachment or similar bonds, investigations, and any expenses of establishing a
right to indemnification under this Agreement.

       

      

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

      Page 18
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      6.3         
Enforcement. If a
claim or request under this Section 6 is not paid by the Company or on its
behalf, within thirty (30) days after a written claim or request has been
received by the Company, the Executive may at any time thereafter bring an
arbitration claim against the Company to recover the unpaid amount of the claim
or request and if successful in whole or in part, the Executive shall be
entitled to be paid also the expenses of prosecuting such suit. All obligations
for indemnification hereunder shall be subject to, and paid in accordance with,
applicable Texas or Delaware law.

       

      6.4         
Partial
Indemnification. If the
Executive is entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of any Expenses, but not, however, for the
total amount thereof, the Company shall nevertheless indemnify the Executive for
the portion of such Expenses to which the Executive is entitled.

       

      6.5         
Advances of
Expenses.
Expenses incurred by the Executive in connection with any Proceeding shall be
paid by the Company in advance upon request of the Executive that the Company
pay such Expenses, but only in the event that the Executive shall have delivered
in writing to the Company (i) an undertaking to reimburse the Company for
Expenses with respect to which the Executive is not entitled to indemnification
and (ii) a statement of his good faith belief that the standard of conduct
necessary for indemnification by the Company has been met.

       

      6.6          
Notice of
Claim. The
Executive shall give to the Company notice of any claim made against him for
which indemnification will or could be sought under this Agreement. In addition,
the Executive shall give the Company such information and cooperation as it may
reasonably require and as shall be within the Executive’s power and at such
times and places as are convenient for the Executive.

       

      6.7          
Defense of
Claim. With
respect to any Proceeding as to which the Executive notifies the Company of the
commencement thereof:

       

      (a)           
The Company will be entitled to participate therein at its own
expense;

       

      (b)           
Except as otherwise provided below, to the extent that it may wish, the
Company will be entitled to assume the defense thereof, with counsel reasonably
satisfactory to the Executive, which in the Company’s sole discretion may be
regular counsel to the Company and may be counsel to other officers and
directors of the Company or any subsidiary. The Executive also shall have the
right to employ his own counsel in such action, suit or proceeding if he
reasonably concludes that failure to do so would involve a conflict of interest
between the Company and the Executive, and under such circumstances the fees and
expenses of such counsel shall be at the expense of the Company.

       

      (c)          
The Company shall not be liable to indemnify the Executive under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent. The Company shall not settle any action or claim in
any manner which would impose any penalty that would not be paid directly or
indirectly by the Company or limitation on the Executive without the Executive’s
written consent. Neither the Company nor the Executive will unreasonably
withhold or delay their consent to any proposed settlement.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

      Page 19
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      6.8          
Non-exclusivity. The
right to indemnification and the payment of expenses incurred in defending a
Proceeding in advance of its final disposition conferred in this Section 6 shall
not be exclusive of any other right which the Executive may have or hereafter
may acquire under any statute or certificate of incorporation or by-laws of the
Company or any subsidiary, agreement, vote of shareholders or disinterested
directors or trustees or otherwise.

       

      
        7.     LEGAL FEES
AND EXPENSES

      

       

      If any
contest or dispute shall arise between the Company and the Executive regarding
any provision of this Agreement, the Company shall reimburse the Executive for
all legal fees and expenses reasonably incurred by the Executive in connection
with such contest or dispute, but only if the Executive prevails to a
substantial extent with respect to the Executive’s claims brought and pursued in
connection with such contest or dispute. Such reimbursement shall be made as
soon as practicable following the resolution of such contest or dispute (whether
or not appealed) to the extent the Company receives reasonable written
evidence of such fees and expenses. The Company shall advance the Executive
reasonable attorney’s fees during any arbitration proceedings if brought by the
Executive, up to but not to exceed Three Hundred Thousand Dollars
($300,000.00).

       

      
        8.     BREACH

      

       

      Executive
agrees that any breach of restrictive covenants above cannot be remedied solely
by money damages, and that in addition to any other remedies Company may have,
Company is entitled to obtain injunctive relief against Executive. Nothing
herein, however, shall be construed as limiting Company’s right to pursue any
other available remedy at law or in equity, including recovery of damages and
termination of this Agreement and/or any payments that may be due pursuant to
this Agreement.

       

      
        9.     RIGHT TO
ENTER AGREEMENT

      

       

      Executive
represents and covenants to Company that he has full power and authority to
enter into this Agreement and that the execution of this Agreement will not
breach or constitute a default of any other agreement or contract to which he is
a party or by which he is bound.

       

      
        10.   COMPLIANCE WITH
SECTION 409A

      

       

      10.1           It
is the intention of the Company and the Executive that this Agreement not result
in unfavorable tax consequences to the Executive under Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”). The Company and the
Executive acknowledge that Section 409A of the Code was enacted pursuant to the
American Jobs Creation Act of 2004, generally effective with respect to amounts
deferred after January 1, 2005, and only limited guidance has been issued by the
Internal Revenue Service with respect to the application of Code Section 409A to
certain arrangements, such as this Agreement. The Internal Revenue Service has
indicated that it will provide further guidance regarding interpretation and
application of Section 409A of the Code during 2005. The Company and the
Executive acknowledge further that the full effect of Section 409A of the Code
on potential payments pursuant to this Agreement cannot be fully determined at
the time that the Company and the Executive are entering into this Agreement.
The Company and the Executive agree to work together in good faith in an effort
to comply with Section 409A of the Code including, if necessary, amending the
Agreement based on further guidance issued by the Internal Revenue Service from
time to time, provided that the Company shall not be required to assume any
increased economic burden.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

      Page 20
of 25

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      10.2       
Certain
Definitions. As used
in this Agreement, the following terms have the following meanings unless the
context otherwise requires:

       

      (a)           
“affiliate” means
any person controlled by or under common control with the Company but shall not
include any stockholder or director of the Company, as such.

       

      (b)           
“person” means
any individual, corporation, partnership, limited liability company, firm, joint
company, association, joint-stock company, trust, unincorporated organization,
governmental or regulatory body or other entity.

       

      10.3       
Delay in
Payments.
Notwithstanding anything to the contrary in this Agreement, (i) if upon the
date of Executive’s termination of employment with the Company, Executive is a
“specified employee” within the meaning of Section 409A of the Internal Revenue
Code of 1986, as amended, or any regulations or Treasury guidance promulgated
thereunder (the “Code”) and the deferral of any amounts otherwise payable
under this Agreement as a result of Executive’s termination of employment is
necessary in order to prevent any accelerated or additional tax to Executive
under Code Section 409A, then the Company will defer the payment of any such
amounts hereunder until the date that is six months following the date of
Executive’s termination of employment with the Company, at which time any such
delayed amounts will be paid to Executive in a single lump sum, with interest
from the date otherwise payable at the prime rate as published in The Wall
Street Journal on the date of Executive’s termination of employment with the
Company, and (ii) if any other payments of money or other benefits due to
Executive hereunder could cause the application of an accelerated or additional
tax under Code Section 409A, such payments or other benefits shall be deferred
if deferral will make such payment or other benefits compliant under Code
Section 409A.

       

      10.4       
Reformation. If any
provision of this Agreement would cause Executive to occur any additional tax
under Code Section 409A, the parties will in good faith attempt to reform the
provision in a manner that maintains, to the extent possible, the original
intent of the applicable provision without violating the provision of Code
Section 409A.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

      Page 21
of 25

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        11.   ENFORCEABILITY

      

       

      The
agreements contained in the restrictive covenant provisions of this Agreement
are independent of the other agreements contained herein. Accordingly, failure
of the Company to comply with any of its obligations outside of such Sections do
not excuse Executive from complying with the agreements contained
herein.

       

      
        12.   SURVIVABILITY

      

       

      The
agreements contained in Sections 5 shall survive the termination of this
Agreement for any reason.

       

      
        13.   ASSIGNMENT

      

       

      This
Agreement cannot be assigned by Executive. The Company may assign this Agreement
only to a successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and
assets of the Company provided such successor expressly agrees in writing
reasonably satisfactory to Executive to assume and perform this Agreement in the
same manner and to the same extent that the Company would be required to perform
it if no such succession and assignment had taken place. Failure of the Company
to obtain such written agreement prior to the effectiveness of any such
succession shall be a material breach of this Agreement.

       

      
        14.   BINDING
AGREEMENT

      

       

      Executive
understands that his obligations under this Agreement are binding upon
Executive’s heirs, successors, personal representatives, and legal
representatives.

       

      
        15.          NOTICES

      

       

      All
notices pursuant to this Agreement shall be in writing and sent certified mail,
return receipt requested, addressed as set forth below, or by delivering the
same in person to such party, or by transmission by facsimile to the number set
forth below. Notice deposited in the manner described hereinabove, shall be
effective upon deposit. Notice given in any other manner shall be effective only
if and when received:

       

      If to
Executive:

       

      
        
          
            
              
                
                  
                    
                      
                        	
                                 

                              	 
      
	 
      	 
      
	
                                Singapore

                              	 
      

                      

                    

                  

                

              

            

          

        

      

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

      Page 22
of 25

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      If to
Company:

      with a
copy (which shall

      not
constitute notice) to:

      

      Vantage
International Payroll Company

      C/o
Vantage Energy Services, Inc.

      777 Post
Oak Blvd., Suite 610

      Houston,
Texas 77056

      

      
        16.          WAIVER

      

       

      No waiver
by either party to this Agreement of any right to enforce any term or condition
of this Agreement, or of any breach hereof, shall be deemed a waiver of such
right in the future or of any other right or remedy available under this
Agreement. The Executive’s or the Company’s failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 3.2 hereof, shall not be deemed
to be a waiver of such provision or right or any other provision or right of
this Agreement.

       

      
        17.         
SEVERABILITY

      

       

      If any
provision of this Agreement is determined to be void invalid, unenforceable, or
against public policy, such provisions shall be deemed severable from the
Agreement, and the remaining provisions of the Agreement will remain unaffected
and in full force and effect. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.

       

      
        18.   ARBITRATION

      

       

      In the
event any dispute arises out of Executive’s employment with or by the Company,
or separation/termination therefrom, whether as an employee, which cannot be
resolved by the Parties to this Agreement, such dispute shall be submitted to
final and binding arbitration. The arbitration shall be conducted in accordance
with the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association (“AAA”). If the Parties cannot agree on an
arbitrator, a list of seven (7) arbitrators will be requested from AAA, and
the arbitrator will be selected using alternate strikes with Executive striking
firm. The cost of the arbitration will be borne solely by the Company.
Arbitration of such disputes is mandatory and in lieu of any and all civil
causes of action and lawsuits either party may have against the other arising
out of Executive’s employment with Company, or separation therefrom. Such
arbitration shall be held in Houston, Texas. This provision shall not, however,
preclude the Company from obtaining injunctive relief in any court of competent
jurisdiction to enforce Section 5 of this Agreement.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

      Page 23
of 25

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        19.   ENTIRE
AGREEMENT

      

       

      The terms
and provisions contained herein shall constitute the entire agreement between
the parties with respect to Executive’s employment with Company during the time
period covered by this Agreement. This Agreement replaces and supersedes any and
all existing Agreements entered into between Executive and the Company relating
generally to the same subject matter, if any, except the offer of employment to
Executive, dated October 31, 2007, and shall be binding upon Executive’s heirs,
executors, administrators, or other legal representatives or
assigns.

       

      
        20.   SECTION
HEADINGS

      

       

      The
section headings in this Employment Agreement are for convenience of reference
only, and they form no part of this Agreement and shall not affect its
interpretation.

       

      
        21.   MODIFICATION OF
AGREEMENT

      

       

      This
Agreement may not be changed or modified or released or discharged or abandoned
or otherwise terminated, in whole or in part, except by an instrument in writing
signed by the Executive and an officer or other authorized executive of
Company.

       

      
        22.   UNDERSTANDING OF
AGREEMENT

      

       

      Executive
represents and warrants that he has read and understood each and every provision
of this Agreement, and Executive understands that he has the right to obtain
advice from legal counsel of choice, if necessary and desired, in order to
interpret any and all provisions of this Agreement, and that Executive has
freely and voluntarily entered into this Agreement.

       

      
        23.   GOVERNING
LAW

      

       

      This
Agreement shall be governed by and construed in accordance with the laws of the
State of Texas.

       

      
        24.   WITHHOLDING

      

       

       All
payments hereunder shall be subject to any required withholding of Federal,
state and local taxes pursuant to any applicable law or regulation, except as
provided in any tax equalization program or policy adopted by the Company for
expatriate employees.

       

      
        25.   JURISDICTION AND
VENUE.

      

       

      With
respect to any litigation regarding this Agreement, Executive agrees to venue in
the state or federal courts in Harris County, Texas and agrees to waive and does
hereby waive any defenses and/or arguments based upon improper venue and/or lack
of personal jurisdiction. By entering into this Agreement, Executive agrees to
personal jurisdiction in the state and federal courts in Harris County,
Texas.

       

       

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

      Page 24
of 25

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        26.   NO PRESUMPTION
AGAINST INTEREST.

      

       

      This
Agreement has been negotiated, drafted, edited and reviewed by the respective
parties, and therefore, no provision arising directly or indirectly herefrom
shall be construed against any party as being drafted by said
party.

       

      IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.

       

      EXECUTIVE

       

      

      
        
          
            
              
                
                  
                    
                      	
                              /s/ Donald Munro

                            	 
      
	
                              DONALD
      MUNRO

                            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                              VANTAGE
      INTERNATIONAL PAYROLL COMPANY

                            	 
      
	 
      	 
      	 
      
	
                              By:

                            	
                              /s/ Paul A. Bragg

                            	 
      
	
                              Name:

                            	
                              Paul A. Bragg

                            	 
      
	
                              Title:

                            	
                              Chief Executive Officer

                            	 
      

                    

                  

                

              

            

          

        

      

      

      

      VANTAGE
INTERNATIONAL PAYROLL CO. EMPLOYMENT AGREEMENT

      Page 25
of 25ex10_1.htm

    
      

    

     Exhibit 10.1

       

      PRIDE
INTERNATIONAL, INC.

      SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

      

      (As
Amended and Restated Effective January 1, 2009)

      

      

      This
Pride International, Inc. Supplemental Executive Retirement Plan (the “Plan”)
constitutes an amendment and restatement in its entirety of the Pride
International, Inc. Supplemental Executive Retirement Plan originally effective
January 1, 1996, as thereafter amended and restated effective May 18, 2004,
February 17, 2005, and January 1, 2007.

      

      SECTION
1

      PURPOSES
OF PLAN, EFFECTIVE DATE AND DEFINITIONS

      

      1.1           Purpose.  The
purpose of the Plan is to provide specified benefits to a select group of
management and highly compensated employees of Pride International, Inc. (the
“Company”) and its Affiliates who contribute materially to the continued growth,
development and future business success of the Company.  The Plan
shall be an unfunded deferred compensation arrangement.

      

      1.2           Effective
Date.  The
Plan, as amended and restated herein, shall be effective as of January 1,
2009.

      

      1.3           Definitions.  For
purposes of this Plan, the following phrases or terms shall have the indicated
meanings unless otherwise clearly apparent from the context or unless
alternative definitions are provided in a Participation Agreement.

      

      (a)           “Actuarial
Equivalent” means a benefit of equivalent value as computed on the basis of an
interest rate assumption and applicable mortality table as described in Appendix A hereto, with such
appendix hereby incorporated by reference as part of the Plan, as may be amended
from time to time by the Committee.

      

      (b)           “Affiliate”
means any corporation that has adopted the Plan and the shares of which are
owned or controlled, directly or indirectly, by the Company representing fifty
percent (50%), or more, of the voting power of the issued and outstanding
capital stock of such corporation.

      

      (c)           “Beneficiary”
means the person or persons designated by a Participant to receive the benefits
that are payable under the Plan upon or after the death of the
Participant.

      

      (d)           “Benefit
Percentage” means the percentage provided in the applicable Participation
Agreement for purposes of calculating the SERP Benefit.

      

      (e)           “Board”
means the Board of Directors of the Company.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      (f)           “Cause”
means “cause” within the meaning of the Participant’s employment agreement in
effect with the Employer at the time of the Participant’s Separation from
Service (or, if the Participant does not then have an employment agreement, the
Participant’s severance agreement then in effect with the
Employer).  If there is no such agreement in effect at the time of the
Participant’s Separation from Service, then “Cause” shall
mean:  (i) the Participant’s continued failure to perform his or
her 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 or her by the Board which specifically identifies the
manner in which the Board believes he or she has not performed his or her
duties; (ii) gross negligence or willful misconduct which causes injury,
monetary or otherwise, to the Company or its affiliates; (iii) intentional
action which causes injury, monetary or otherwise, to the Company or its
affiliates and which the Participant knows would not comply with the laws of the
United States or any other jurisdiction applicable to the Participant’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) material violation
of any covenant not to compete that is applicable to the
Participant.  For this purpose, no act or failure to act by the
Participant shall be considered “willful” unless done or omitted to be done by
him or her not in good faith and without reasonable belief that his or her
action or omission was in the best interest of the Company.

      

      (g)           “Change
in Control” shall mean a change in control within the meaning of the
Participant’s employment agreement with the Employer (or, if the Participant
does not have an employment agreement, the Participant’s severance agreement) as
in effect at the time of the change in control event.  If there is no
such agreement then in effect, then “Change in Control” shall mean (and shall be
deemed to have occurred on) the date of the first to occur of any of the
following:

      

      (i)           there
occurs a change in control of the Company of the nature that would be required
to be reported in response to item 6(e) of Schedule 14A of Regulation 14A or
Item 1 of Form 8(k) promulgated under the Securities Exchange Act of 1934 as in
effect on the date of this Plan, 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;

      

      (ii)           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;

      

      (iii)           individuals
who, as of the date hereof, constitute the members of the Board (the “Incumbent
Directors”) cease for any reason other than due to death or disability to
constitute at least a majority of the members of the Board, provided that any
director who was nominated for election 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-

          
            

          

        

        
           

        

      

      (iv)           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;

      

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

      

      (vi)           a
Merger Protection Change in Control shall have occurred.

      

      (h)           “Change
in Control Termination” means Separation from Service with the Employer (other
than for Cause or death) within the period of
time, not to exceed two (2) years, following a Change in Control described in
the Participant’s employment agreement in effect with the Employer at the time
of the Change in Control (or, if the Participant does not then have an
employment agreement, the Participant’s severance agreement then in effect),
which entitles the Participant to enhanced separation payments under such
agreement including, without limitation, any enhanced separation payments
payable under such agreement due to a voluntary termination within the
applicable window period.  If there is no such agreement then in
effect, “Change in Control Termination” shall mean an involuntary Separation
from Service (other than for Cause, death or Disability) (i) within two (2)
years following a Change in Control which occurs other than because of a Merger
Protection Change in Control or within one (1) year following a Merger
Protection Change in Control, or (ii) such other definition as shall be set
forth in the Participation Agreement.

      

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

      

      (j)  
         “Committee” means the
Compensation Committee of the Board.

      

      (k)           “Company”
means Pride International, Inc. and its successors.

      

      (l) 
          “Disabled” or
“Disability” means a condition that, under the Company’s employee benefit plan
providing long-term disability benefits, entitles the Participant to receive
long-term disability benefits and which satisfies the definition of disability
under Section 409A.

      

      (m)           “Early
Retirement Date” means the date the Participant has both attained age 55 and
completed 15 years of Service or such other date as is specified in the
Participant’s Participation Agreement.

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      (n)           “Effective
Date” means the date set forth in Section 1.2.

      

      (o)           “Employee”
means any person who is employed by the Company or an Affiliate on a regular
full-time basis determined by the personnel rules and practices of the Company
or Affiliate, as applicable.

      

      (p)           “Employer”
means the Company, its successors and assigns and each Affiliate that has
adopted or which adopts the Plan with the approval of the Board.

      

      (q)           “Final
Annual Salary” means the Participant’s base annual salary and target award under
the Company’s annual bonus plan as in effect on the Participant’s last day of
active employment (if the Company has not specified a target award for such
year, the most recent target award will be considered continued in effect);
provided, however, in the event of a Change in Control Termination, the Final
Annual Salary shall be the greater of the Final Annual Salary as calculated
immediately preceding the Change in Control or the Final Annual Salary as
calculated on the Participant’s last day of active employment.

      

      (r)           “Merger
Protection Change in Control” of the Company shall mean, and shall be deemed to
have occurred on, the date the Company shall have merged into or consolidated
with another corporation, or merged another corporation into the Company, on a
basis whereby at least fifty percent (50%) but not more than 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.

      

      (s)           “Minimum
Normal Retirement Benefit” means the amount, if applicable, set forth in the
Participant’s Participation Agreement as the minimum normal retirement benefit
as described in Section 4.9(a)(ii).

      

      (t)
           “Normal
Retirement Date” means the date a Participant attains age 62, or such other date
as is specified in the Participant’s Participation Agreement.

      

      (u)           “Participant”
means an Employee who has satisfied and continues to satisfy the eligibility
requirements to participate in the Plan, including proper execution of a
Participation Agreement.

      

      (v)           “Participation
Agreement” means an agreement between an Employer and an Employee, in the form
and subject to the conditions prescribed by the Committee, pursuant to which the
Employee is granted the right to participate in the Plan.

      

      (w)          “Plan”
means the Pride International, Inc. Supplemental Executive Retirement Plan as
set forth herein and as may be amended from time to time.

      

      (x)           “Section
409A” means Section 409A of the Code and applicable Treasury
authorities.

      

      (y)           “Section
409A Change in Control” means a Change in Control that satisfies the
requirements of a change in the ownership or effective control of a corporation
or a change in the ownership of a substantial portion of the assets of a
corporation under Treasury Regulation § 1.409A-3(i)(5) (or any successor
regulation).

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      (z) 
          “SERP Benefit” means
any benefit payable or paid to a Participant, a surviving spouse or
Beneficiary(ies) under the terms and conditions of this Plan.

      

      (aa)          “Separation
from Service” means a Participant’s termination of employment and “separation
from service” with all Employers within the meaning of Treasury Regulation §
1.409A-1(h) (or any successor regulation).

      

      (bb)         “Service”
means, for purposes of Early Retirement Date, the period of continuous
employment with the Employer(s) from the Employee’s last date of hire by an
Employer.

      

      SECTION
2

      ADMINISTRATION
OF THE PLAN

      

      2.1           Committee
Powers.  The
Committee shall have full power and authority to interpret the provisions of the
Plan and may from time to time establish rules for the administration of the
Plan that are not inconsistent with the provisions and purposes of the
Plan.

      

      2.2           Committee
Action.  A
majority of the members of the Committee shall constitute a quorum for the
transaction of business.  All action taken by the Committee at a
meeting shall be by the vote of a majority of those present at such meeting, but
any action may be taken by the Committee without a meeting upon written consent
signed by a majority of the members of the Committee.

      

      2.3           Committee Determinations
Conclusive.  All
determinations of the Committee shall be final, binding and conclusive upon all
persons.  The determination of the Committee as to any disputed
question arising under the Plan, including questions of construction and
interpretation, shall be final, binding and conclusive upon all
persons.  Without limiting the generality of the foregoing, the
determination of the Committee as to whether a Participant has a Separation from
Service and the date thereof, or the cause to which Separation from Service is
attributable, shall be final, binding and conclusive upon all
persons.

      

      2.4           Committee
Liability.  No
member of the Committee shall be liable for any act done or determination made
in good faith.

      

      SECTION
3

      ELIGIBILITY
AND PARTICIPATION

      

      3.1           Eligibility.  Only
Employees who are approved by the Committee and who, individually and
collectively, constitute a select group of management or highly compensated
employees shall be eligible to participate in this Plan.

      

      3.2           Participation.  An
eligible Employee who is selected by the Committee for participation in the Plan
may become a Participant by properly executing a Participation Agreement that,
together with the Plan, shall govern the Participant’s rights under the
Plan.  Participation in the Plan shall automatically cease upon a
Participant’s Separation from Service with all Employers, except to the extent
that the Participant is then eligible to receive a Normal Retirement Benefit or
an Early Retirement Benefit under this Plan or otherwise has a vested right to a
Plan benefit, each as described in Section 4.  The terms,
conditions and provisions of a Participation Agreement may modify or provide
alternative terms than those contained in the Plan.

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

      SECTION
4

      BENEFITS

      

      4.1           Normal Retirement
Benefit.  In
the event of a Participant’s Separation from Service (including by reason of
death) on or after his or her Normal Retirement Date, the Company shall pay or
cause to be paid to the Participant a benefit in the form and at the time as
provided in Section 4.9 hereof, subject to any applicable vesting schedule set
forth in the Participation Agreement; provided, however, that in the event (a)
the Company does not pay or (b) the Company and the Employer who employed the
Participant agree that the Employer will pay, then the Employer who employed the
Participant shall pay such benefit to the Participant.

      

      4.2           Early Retirement
Benefit.

      

      (a)           Benefit.  In
the event of a Participant’s Separation from Service (including by reason of
death) on or after his or her Early Retirement Date but prior to his or her
Normal Retirement Date, the Company shall pay or cause to be paid to the
Participant a benefit at the time as provided in Section 4.9 hereof, with such
benefit determined by application of the Applicable Reduction Factor set forth
in Section 4.8 and subject to any
applicable vesting schedule set forth in the Participation Agreement; provided,
however, that in the event (a) the Company does not pay or (b) the Company and
the Employer who employed the Participant agree that the Employer will pay, then
the Employer who employed the Participant shall pay such benefit to the
Participant.

      

      (b)           Involuntary
Termination.  Except as otherwise set forth in a Participation
Agreement, if a Participant is terminated prior to his or her Normal Retirement
Date by the Company involuntarily and not due to Cause, (i) three years shall be
added to the Participant’s age and Service for purposes of determining whether
the Participant has reached his or her “Early Retirement Date”, and (ii) three
years shall be added to the Participant’s age for purposes of determining the
Applicable Reduction Factor set forth in Section 4.8.

      

      4.3           Other Terminations of
Employment.  Except
as otherwise provided herein, if a Participant has a Separation from Service
prior to the Participant’s Normal or Early Retirement Date for any reason other
than a Change in Control Termination, death, Disability or termination for
Cause, the right of the Participant to a Plan benefit in the form and at the
time as provided in Section 4.9 hereof, if any, shall be determined based on the
terms and conditions of his or her Participation Agreement, and in accordance
with the vesting schedule set forth in that agreement.  The
Participant shall forfeit any right to a SERP Benefit to the extent the benefit
is not vested under the terms of the Participation Agreement.

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

      4.4           Change in
Control.

       

      (a)           Vesting.  In
the event the Participant has a Change in Control Termination, the SERP Benefit
shall immediately become fully vested.

      

      (b)           Section 409A Change in
Control.  Notwithstanding anything herein to the contrary, if a
Participant has a Change in Control Termination and the Change in Control is a
Section 409A Change in Control, then the Participant shall be entitled to a lump
sum payment as determined under Section 4.4(d) on the later of (i) the date that
is 60 days after the date of the Participant’s Change in Control Termination, or
(ii) the date that complies with Section 8.11 hereof.

      

      (c)           Change in Control Other than
a Section 409A Change in Control.  Notwithstanding anything
herein to the contrary, if a Participant has a Change in Control Termination and
the Change in Control is not a Section 409A Change in Control, then the
Participant shall be entitled to a lump sum payment as determined under Section
4.4(d) on the later of (i) the date the Participant attains
age 55, (ii) the date that is 60 days after the date of the Participant’s Change
in Control Termination, or (iii) the date that complies with Section 8.11
hereof.

      

      (d)           Amount of
Payment.  The lump sum payment under Sections 4.4(b) and 4.4(c)
shall be in an amount equal to the Actuarial Equivalent, as of the payment date,
of the benefit that would have been payable on the first to occur of the
Participant’s Normal or Early Retirement Date (with Early Retirement Date
determined as if the Participant had remained in Service until the later of the
payment date or attainment of his Early Retirement Date).  The lump
sum payment under Section 4.4(b) or 4.4(c) shall be in lieu of any other SERP
Benefit hereunder and neither the Participant nor any surviving spouse or
Beneficiary of the Participant shall be entitled to any other payment pursuant
to this Plan or the Participation Agreement following a Change in Control
Termination.

      

      (e)           Rabbi
Trust.  In the event of a Change in Control, an amount
sufficient to pay the maximum aggregate potential benefits to which each
Participant could be entitled based on Final Annual Salary as of the date of the
Change in Control or, if earlier, Separation from Service shall be deposited no
later than three (3) days prior to the Change in Control into an irrevocable
grantor trust, established with a duly authorized bank or corporation with trust
powers designated by the Company’s Chief Executive Officer (“Rabbi
Trust”).  Any amounts subsequently due to such Participants under this
Plan shall first be satisfied by the Rabbi Trust and the remaining obligations
shall be satisfied by the Company, in accordance with the terms of the
Plan.

      

      (f)           Alternative
Benefit.  Notwithstanding anything herein to the contrary, a
Participation Agreement may provide for a different amount of SERP Benefit in
lieu of the amount set forth in Section 4.4(b) or 4.4(c).

      

      4.5           Death
Benefits.  In
the event of the Participant’s Separation from Service due to death, the SERP
Benefit shall immediately become fully vested.  If a Participant has a
Separation from Service due to death before reaching his or her Early or Normal
Retirement Date, or dies after Separation from Service with the right to receive
a SERP Benefit and before receipt of such SERP Benefit, the Participant’s
surviving spouse or Beneficiary shall receive a benefit in an amount equal to
the Actuarial Equivalent, as of the payment date, of the benefit that would
otherwise have been payable due to the Separation from Service, and payment of
such SERP Benefit shall be made on the date that is 60 days after the date of
the Participant’s death.

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

      4.6           Disability.  If
a Participant becomes Disabled prior to the commencement of the payment of any
benefits hereunder and prior to his or her Normal Retirement Date, the Company
shall pay or cause to be paid to the Participant a benefit in the form as
provided in Section 4.9(a) hereof, with such benefit determined by application
of the Applicable Reduction Factor set forth in Section 4.8 (“Disability
Benefit”).  The Disability Benefit shall be reduced by the amount of
any Employer or government provided disability benefits.  In the event
(i) the Company does not pay or (ii) the Company and the Employer who employed
the Participant agree that the Employer will pay, then the Employer who employed
the Participant shall pay the Disability Benefit to the
Participant.  The Disability Benefit shall immediately become fully
vested, unless otherwise provided in the applicable Participation Agreement, and
shall be paid no later than 60 days after the date of the Participant’s
Disability.

      

      4.7           Separation from Service for
Cause.  Notwithstanding
anything to the contrary in this Plan or the Participation Agreement, a
Participant shall forfeit all rights to any benefits under this Plan, whether or
not vested, upon a Separation from Service due to Cause.

      

      4.8           Payment of SERP Benefit
Before Normal Retirement Date.  In
the event a SERP Benefit is paid under Section 4.2 or Section 4.6 hereof before
the Participant’s Normal Retirement Date, or in the event the benefit under
Section 4.4(d) is determined based on the Actuarial Equivalent of the benefit
that would have been payable on the Participant’s Early Retirement Date, the
applicable reduction factor (“Applicable Reduction Factor”) shall be as set
forth below:

      

       

      
        
          
            
              
                
                  	
                          Number of Years Prior to Normal Retirement
      Date

                        	 	
                          Reduction Factor

                        
	
                          less
      than 1

                        	 	
                          0.96

                        
	
                          1
      but less than 2

                        	 	
                          0.92

                        
	
                          2
      but less than 3

                        	 	
                          0.88

                        
	
                          3
      but less than 4

                        	 	
                          0.84

                        
	
                          4
      but less than 5

                        	 	
                          0.80

                        
	
                          5
      but less than 6

                        	 	
                          0.76

                        
	
                          6
      but less than 7

                        	 	
                          0.72

                        
	
                          7
      but less than 8

                        	 	
                          0.68

                        
	
                          8
      but less than 9

                        	 	
                          0.64

                        
	
                          9
      but less than 10

                        	 	
                          0.60

                        
	
                          10
      but less than 11

                        	 	
                          0.56

                        
	
                          11
      but less than 12

                        	 	
                          0.52

                        
	
                          12
      or more

                        	 	
                          0.50

                        

                

              

            

          

        

      

      

        
          
             

          

          
            -8-

            
              

            

          

          
             

          

        

      

       

      4.9           Payment
of Benefits.
 

      
        	
                 
      

              	
                (a)

              	
                Amount and Form of
      Benefit.

              

      

      

      (i)           General
Rule.  The SERP Benefit will be in the form of a lump sum cash
payment in an amount equal to the Actuarial Equivalent, as of the “Date of
Payment” (as defined in Section 4.9(b)), of an annual benefit (i) equal to the
Benefit Percentage of the Participant’s Final Annual Salary, (ii) commencing on
the Participant’s Determination Date, and (iii) payable in the form of a
ten-year certain and single life annuity benefit based on the Participant’s
life.  Notwithstanding the foregoing, the Applicable Reduction Factor
shall apply for purposes of determining the SERP Benefit with respect to any
Participant who is entitled to a SERP Benefit described in Section
4.8.  For purposes of this Section 4.9, the “Determination Date” with
respect to a Participant means the applicable of the Participant’s Normal
Retirement Date or, if later, the date of the Participant’s Separation from
Service, provided, however, that (a) if the Participant is eligible for an early
retirement benefit under Section 4.2 or a disability benefit under Section 4.6,
the “Determination Date” shall be the Date of Payment and (b) if the Participant
is eligible for a benefit under Section 4.4 that is determined based on the
Participant’s Early Retirement Date, the “Determination Date” shall mean the
later of the Date of Payment or the date the Participant would have attained his
Early Retirement Date.

      

      (ii)           Minimum Normal Retirement
Benefit.  If it would result in a greater benefit, the amount
of the lump sum SERP Benefit shall not be less than the Minimum Normal
Retirement Benefit amount, if applicable.

      

      (iii)          Adjustments.  Notwithstanding
any other provisions hereof, the amount of the SERP Benefit in Section 4.9(a)(i)
shall be subject to all other provisions of the Plan and Participation
Agreement, including, without limitation, applicable vesting provisions and
disability adjustment, and provisions regarding payment as a result of the
application of Section 4.4(b) or (c), and the Minimum Normal Retirement Benefit
in Section 4.9(a)(ii) shall be subject to any applicable vesting
schedules.

      

      (b)           Time of Payment of
Benefit.  Unless the terms of a Participation Agreement provide
otherwise, the “Date of Payment” with respect to a Participant means the date
the Participant’s SERP Benefit is paid to the Participant (or the Participant’s
Beneficiary) as follows:

      

      (i)           Normal
Retirement.  With respect to a SERP Benefit paid pursuant to
Section 4.1, the “Date of Payment” is the later of (i) the date that is 60 days
after the date of the Participant’s Separation from Service, or (ii) the date
that complies with Section 8.11 hereof;

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

      (ii)           Early
Retirement.  With respect to a SERP Benefit paid pursuant to
Section 4.2, the “Date of Payment” is later of (i) the date the Participant
attains age 55, (ii) the date that is 60 days after the date of the
Participant’s Separation from Service, or (iii) the date that complies with
Section 8.11 hereof;

      

      (iii)           Change in
Control.  With respect to a SERP Benefit paid pursuant to
Section 4.4, the “Date of Payment” means the date of payment specified in
Section 4.4(b) or Section 4.4(c), as applicable;

      

      (iv)           Death.  With
respect to a SERP Benefit paid pursuant to Section 4.5, the “Date of Payment”
means the date that is 60 days after the date of the Participant’s death;
and

      

      (v)           Disability.  With
respect to a SERP Benefit paid pursuant to Section 4.6, the “Date of Payment”
means the date that is 60 days after the date of the Participant’s
Disability.

      

      4.10           Adjustments.  Notwithstanding
anything herein to the contrary, all benefits paid under this Plan shall be
offset by other Employer provided defined benefit retirement benefits, if any,
paid or payable to a Participant or that would have been payable to the
Participant except for an award of the benefit to an alternate payee pursuant to
a domestic relations order qualified under Code Section 414(p) or other
applicable law; provided, however, that any such other benefit is payable under
its terms in the same calendar year and in the same form, within the meaning of
Section 409A, as the corresponding benefit payable under this
Plan.  For purposes of this Plan, any SERP Benefit that is completely
offset under this Section 4.10 or Section 4.6 shall be deemed to have commenced
on the date it would have first become payable in the absence of any
reductions.

      

      4.11           Conditions for Payment of
Benefits.  Notwithstanding
anything herein to the contrary, benefits payable under this Plan shall be paid
to a Participant only if the Participant abides by the confidentiality and
noncompete provisions of such Participant’s employment agreement and severance
agreement, as applicable.

      

      4.12           Beneficiary
Designations.  The
person or persons to whom the benefits under this Plan are to be paid upon a
Participant’s death shall be the person or persons designated by the Participant
to receive benefits under the procedure established by the Committee for
designating Beneficiaries.  In the event no valid designation of a
Beneficiary exists at the time of a Participant’s death, the benefit provided
for in this Section shall be payable to the Participant’s surviving spouse or,
if no surviving spouse, to the Participant’s estate.  This provision
enabling each Participant to designate one or more Beneficiaries shall
constitute a nontestamentary payment provision covered by Section 450 of the
Texas Probate Code.  Any payment made by the Employer in good faith
and in accordance with the provision of this Plan shall fully discharge the
Employer from all further obligations with respect to such payment.

      

      4.13           Payments to Minors and
Incompetents.  Should
the Participant become incompetent or should the Participant designate a
Beneficiary who is a minor or incompetent, the Employer shall be authorized to
pay such funds to a parent or guardian of the estate of such minor or
incompetent, or directly to such minor or incompetent, whichever manner the
Committee shall determine in its sole discretion.

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

      4.14           Withholding of
Taxes.  The
Employer paying benefits hereunder shall deduct from the amount of all benefits
paid under the Plan any taxes required to be withheld by the federal or any
state or local government.

      

      SECTION
5

      SOURCE OF
BENEFITS

      

      5.1           Benefits Payable From
General Assets.  Amounts
payable hereunder shall be paid exclusively from the general assets of the
Employer, and no person entitled to payment hereunder shall have any claim,
right, security interest or other interest in any fund, trust (other than the
Rabbis Trust described in Section 4.4(e) hereof), account, insurance contract or
asset of the Employer that may be looked to for such payment.  The
Employer’s liability for the payment of benefits hereunder shall be evidenced
only by this Plan.

      

      SECTION
6

      RIGHTS OF
PARTICIPANTS

      

      6.1           Limitation of
Rights.  Nothing
in this Plan or the Participation Agreement shall be construed to:

      

      (a)           Limit
in any way the right of the Employer to terminate a Participant’s employment
with the Employer at any time;

      

      (b)           Give
a Participant or any other person any interest in any fund or in any specific
asset or assets of the Employer; or

      

      (c)           Be
evidence of any agreement of understanding, express or implied, that the
Employer will employ a Participant in any particular position or at any
particular rate of remuneration.

      

      6.2           Nonalienation of
Benefits.  No
right or benefit under this Plan shall be subject to anticipation, alienation,
sale, assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber or charge the same will be
void.  No right or benefit hereunder shall in any manner be liable for
or subject to any debts, contracts, liabilities or torts of the person entitled
to such benefits.  In the event of a divorce, if a court awards
benefits payable under this Plan to the Participant’s spouse, the Committee may
authorize payment of such benefits to the spouse; provided, however, in no event
shall an Employer be obligated to pay a benefit under the Plan in an amount or
form to which the Participant and/or survivor is not otherwise entitled under
the terms and conditions of the Plan.  If any Participant, spouse or
Beneficiary hereunder shall become bankrupt or attempt to anticipate, alienate,
assign, sell, pledge, encumber or charge any right of benefit hereunder, or if
any creditor shall attempt to subject the same to a writ of garnishment,
attachment, execution, sequestration or any other form of process or involuntary
lien or seizure, then such right or benefit shall be held by the Employer for
the sole benefit of the Participant, spouse or Beneficiary, his or her spouse,
children or other dependents, or any of them in such manner and in such
proportion as the Committee shall deem proper, free and clear of the claims of
any other party whatsoever.

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

      6.3           Prerequisites to
Benefits.  No
Participant, or any person claiming through a Participant, shall have any right
or interest in the Plan or any benefits hereunder unless and until all the
terms, conditions and provisions of the Plan that affect such Participant or
such other person shall have been complied with as specified
herein.  The Participant shall complete such forms and furnish such
information as the Committee may require in the administration of the
Plan.

      

      SECTION
7

      CLAIM
PROCEDURE

      

      7.1           Filing Original
Claim.  Any
person who believes he or she has been wrongfully denied benefits under the Plan
may submit a written claim for benefits to the Committee.  If any
portion of the claim for benefits is denied, the Committee shall give notice
stating the reason for the denial, a reference to the Plan provision,
regulation, procedure, determination or other matter on which the denial was
based, a description of any additional information or materials necessary to
complete the claims procedure, and an explanation of this review
procedure.  This notice shall be sent to the address stated on the
Employee’s claim within a reasonable period of time after receipt of
claim.

      

      7.2           Appeal to
Committee.  Any
Employee, or former Employee, or spouse or Beneficiary of either, who has been
denied a benefit under the Plan by a decision of the Committee shall be entitled
to request the Committee to give further consideration to his or her claim by
filing with the Committee a written request for a review of the decision of
denial.  Such request, together with a written statement of the
reasons why the claimant believes his or her claim should be allowed, shall be
filed with the Committee no later than 60 days after receipt of the written
notification of the denial of the claim for benefits.  The Committee
shall consider a claim as promptly as practicable and will attempt to make its
decision within 60 days of receipt of the request for review, and no later than
120 days after the date.

      

      SECTION
8

      MISCELLANEOUS

      

      8.1           Amendment or Termination of
the Plan.  The
Board may, in its sole discretion, terminate, suspend or amend the Plan at any
time or from time to time, in whole or in part.  In addition, the
Committee may amend the Plan by its own action, provided that such amendment is
permissible under the authority granted to the Committee by the Board as set
forth in the Committee’s charter.  Any such amendment or termination
shall not, however, without the written consent of the affected Participant,
adversely affect the rights of a Participant with respect to any benefits which
the Participant is or may become entitled to receive under the terms of the
Participation Agreement, whether or not then vested.

      

      Any
termination of the Plan shall be in compliance with the applicable termination
provisions of Section 409A.  Furthermore, after termination of the
Plan, the Board may, in its sole discretion, commence distribution of the
Participant’s SERP Benefit (determined as if the Participant retired on the
termination date) if the termination of the Plan occurs within the 30 days
preceding or the 12 months following a Section 409A Change of Control or if, and
as, otherwise permitted under Section 409A.

      
        
           

        

        
          -12-

          
            

          

        

        
           

        

      

      8.2           Parachute Payment
Limitation.  Notwithstanding
any contrary provision of the Plan, the Committee may provide in the
Participation Agreement or in any other agreement with the Participant for a
limitation on the acceleration of vesting and payment of benefits under this
Plan to the extent necessary to avoid or mitigate the impact of the golden
parachute excise tax under Section 4999 of the Code on the Participant, or may
provide for a supplemental payment (a “gross-up payment”) to be made to the
Participant as necessary to offset or mitigate the impact of the golden
parachute excise tax on the Participant.  If, and only if, neither the
Participation Agreement nor any other agreement with the Participant contains
any contrary provision regarding the method of avoiding or mitigating the impact
of the golden parachute excise tax under Section 4999 of the Code on the
Participant, then, notwithstanding any contrary provision of this Plan, the
aggregate present value of all parachute payments payable to or for the benefit
of a Participant, whether payable pursuant to this Plan or otherwise, shall be
limited to three times the Participant’s base amount less one dollar and, to the
extent necessary the payment of benefits shall be reduced, first under this Plan
and next so as to provide the Participant with the greatest net economic
benefit, and, to the extent economically equivalent, payments shall be reduced
pro-rata.  For purposes of this Section 8.2, the terms “parachute
payment,” “base amount” and “present value” shall have the meanings assigned
thereto under Section 280G of the Code.  It is the intention of this
Section 8.2, in the absence of any agreement with the Participant to the
contrary, to avoid excise taxes on the Participant under Section 4999 of the
Code or the disallowance of a deduction to the Company pursuant to Section 280G
of the Code.

      

      8.3           Reliance Upon
Information.  The
Board and the Committee may rely upon any information supplied to them by an
officer of the Employer, the Employer’s legal counsel or by the Employer’s
independent public accountants in connection with the administration of the
Plan, and shall not be liable for any decision or action in reliance
thereon.

      

      8.4           Governing
Law.  The
place of administration of the Plan shall be conclusively deemed to be within
the State of Texas, and the validity, construction, interpretation and effect of
the Plan and all rights of any and all persons having or claiming to have any
interest in the Plan shall be governed by the laws of the State of Texas to the
extent such laws are not preempted by federal law.

      

      8.5           Severability.  All
provisions herein are severable, and in the event any one of them shall be held
invalid by any court of competent jurisdiction, the Plan shall be interpreted as
if such invalid provision was not contained herein.

      

      8.6           Headings.  The
headings of the sections of this Plan are inserted for convenience only and
shall not be deemed to constitute a part of this Plan.

      

      8.7           Word
Usage.  Words
used in the masculine shall apply to the feminine where applicable and vice
versa, and wherever the context of the Plan dictates, the plural shall be read
as the singular and the singular as the plural.  The words “herein,”
“hereof,” “hereinafter” and other conjunctive uses of the word “here” shall be
construed as reference to another portion of this Plan document.  The
terms “Section” or “Article,” when used as a cross-reference, shall refer to
other Sections or Articles contained in the Plan and not to another instrument,
document or publication unless specifically stated otherwise.

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

      8.8           Nonwaiver.  Failure
on the part of any party in any one or more instances to enforce any of its
rights that arise in connection with this Plan, or to insist upon the strict
performance of any of its terms, conditions, or covenants of this Plan, shall
not be construed as a waiver or a relinquishment for the future of any such
rights, terms, conditions or covenants.  No waiver of any condition of
this Plan shall be valid unless it is in writing.

      

      8.9           Plan on
File.  The
Employer shall place this Plan on file in the office of its principal place of
business.

      

      8.10           Notices.  Any
notices to be given hereunder by either party to the other may be effected
either by personal delivery in writing or by mail, registered or certified,
postage prepaid, with return receipt requested.  Notices delivered
personally shall be deemed communicated as of actual receipt.  Mailed
notices shall be deemed communicated as of three (3) days after
mailing.

      

      8.11           Section
409A.  Notwithstanding
any provision of the Plan or a Participation Agreement to the contrary, the
following provisions shall apply for purposes of complying with Section
409A:

      

      (a)           If
the Participant is a “specified employee,” as such term is defined in Section
409A as of the date of the Participant’s Separation from Service, any payments
or benefits payable as a result of the Participant’s Separation from Service
(other than death) shall not be payable before the earlier of (i) the date
that is six months after the date of the Participant’s Separation from Service,
(ii) the date of the Participant’s death, or (iii) the date that otherwise
complies with the requirements of Section 409A.  With respect to
payments due hereunder, this Section 8.11(a) shall be applied by accumulating
all payments and benefits that otherwise would have been paid within six months
of the Participant’s Separation from Service and paying such accumulated
amounts, or if applicable reimbursing the Participant for the
employer-portion of any insurance premiums paid by Employee during such period
at the earliest date which complies with the requirements of Section
409A.

      

      (b)           It
is intended that the Plan and the Participation Agreements satisfy the
requirements of Section 409A, and any ambiguous provision will be construed in a
manner that is compliant with or exempt from the application of Section
409A.

      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

      The Plan, as amended and restated
effective January 1, 2009, was originally executed on December 31,
2008.  The Plan is further amended and restated in the form hereof in
order to incorporate certain clarifying changes to the Plan as evidenced by its
execution below this 30th day of April, 2009, but effective as of January 1,
2009.

      

      
        
          
            
              
                	 
      	 
      	
                        PRIDE
      INTERNATIONAL, INC.

                      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                        Attest:

                      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                        /s/ W. Gregory Looser

                      	 
      	
                        By:

                      	
                        /s/ Louis A.
      Raspino

                      	 
      
	
                        W.
      Gregory Looser

                      	 
      	 
      	
                        Louis
      A. Raspino

                      	 
      
	
                        Senior
      Vice President - Legal, Information

                      	 
      	
                        President
      and Chief Executive Officer

                      	 
      
	
                        Strategy
      and General Counsel

                      	 
      	 
      	 
      

              

            

          

        

      

      

        
          
             

          

          
            -15-

            
              

            

          

          
             

          

        

      

       

      PRIDE
INTERNATIONAL, INC.

      SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

      (As
Amended and Restated Effective January 1, 2009)

      

      APPENDIX
A

      

      Actuarial
Equivalent

      

      This
Appendix A forms part
of the Pride International, Inc. Supplemental Executive Retirement Plan, as
amended and restated effective January 1, 2009 (the “Plan”).  Terms
used in this Appendix A
shall have the meanings ascribed to them in the Plan, unless the context
clearly indicates otherwise.  The provisions of this Appendix A govern the
interest rate assumption and applicable mortality table assumptions under the
definition of “Actuarial Equivalent” in Section 1.3(a) of the Plan, as permitted
under such section, as follows:

      

      The
interest rate assumption shall be the “applicable interest rate” as defined in
Section 417(e)(3)(C) of the Code for the third month prior to the beginning of
the calendar quarter in which the benefits commence, and the mortality table
shall be the “applicable mortality table” prescribed by the Secretary of the
Treasury pursuant to Section 417(e)(3)(B) of the Code.

       
  

    

     -16-

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