Each one in plain English, with the numbers worked through for a shareholder.
8 Mar 2005financial restatement▼ BadMajor
On March 2, 2005, Pride concluded it will restate its financial statements for 2000-2003 and the 2003 and 2004 quarters to correct errors, mostly from transactions recorded in 1999-2002. These include the valuation of debt assumed when it bought the rest of the Pride Carlos Walter and Pride Brazil rigs in 2001, and under- and over-depreciation of rigs. The estimated effects on net income are small (about $1.3 million, $1.1 million and $1.2 million higher for the nine months to September 2004 and for 2003 and 2002; about $2.0 million lower for 2001; about $0.2 million higher for 2000). Pride also expects to report a material weakness in internal control over financial reporting in its 2004 annual report, and investors are told not to rely on the old statements until the corrections are filed.
On February 17, 2005, the board amended the 1998 Long-Term Incentive Plan: no repricing of awards without shareholder approval, no options below fair market value, no company loans to pay option exercise prices, and no new awards after May 12, 2008. It also made the executive retirement plan (SERP) more generous: benefits now count the target bonus, three years are added to age and service on a non-cause firing, and those terminated without cause get a lump sum. The first set of changes limits how awards can be handled for shareholders, while the second raises executive retirement benefits.
On January 28, 2005, Pride signed retirement-plan (SERP) participation agreements with Lonnie Bane and Gregory Looser, and amended those of Paul Bragg, Louis Raspino and John Blocker. The plan pays 50% of final salary for life from age 62 (earlier retirement is allowed from age 55, with a reduction), vesting in five annual installments from January 1, 2006, plus retiree medical and dental cover. After a change in control, a termination brings a lump sum of five times salary instead. This is a cost to the company rather than a change to the business.
20 Jan 2005material agreement termination● Neutral
Pride signed an employment agreement with Carlos Etcheverry, who becomes Vice President of E&P Services on February 1, 2005, and amended John Blocker's contract (he is Executive Vice President of Operations) to double his severance and extend his change-in-control protections to three years. Marcelo Guiscardo, the previous Vice President of E&P Services, left on January 14, 2005 and is entitled to one year of base salary and benefits, a target bonus, and immediate vesting of his options and awards.
Pride signed an employment agreement with Bruce Kain, Vice President of Quality, Health, Safety and Environment, running to January 3, 2007 with one-year automatic renewals. It gives one year of pay and benefits on a non-cause firing and two years of pay with larger bonus terms if he is terminated after a change in control. The filing also furnishes a January 10, 2005 press release about reducing outstanding debt in 2004 and rig contract status information, but the text gives no figures for either.
On January 3, 2005, Pride granted stock options and restricted stock to its nonemployee directors and 14 executive officers. Each director got 2,720 restricted shares and options on 6,800 shares. CEO Paul Bragg received options on 130,000 shares and 52,000 restricted shares, and the options have an exercise price of $20.07, the January 3 closing price. These grants may dilute existing shareholders slightly (an inference, as the filing gives no share count).
Pride amended its registration for the swap of its $500 million 7 3/8% Senior Notes due 2014, with terms unchanged and the expiration date still blank. The update shows the fleet as of September 30, 2004 at 328 rigs, with 10 semisubmersibles (11 in the earlier filing) and 32 tender-assisted, barge and platform rigs (31 earlier). This continues the August filing and still has no effect on common stock.
14 Oct 2004material agreement termination● Neutral
Pride signed a separation agreement with John C.G. O'Leary, a former executive officer who left in September 2004, replacing his 1999 employment agreement. He gets $1,000,000 separation pay, a $550,000 bonus, a prorated 2004 bonus of $188,650, up to two years of insurance benefits, and immediate vesting of his stock options and restricted stock. He also gets a pension-plan payment of $3,333 a month from age 62.
On September 9, 2004, Pride signed an employment, non-competition and confidentiality agreement with Jonathan R.A.S. Talbot, an executive officer. The filing gives no pay or other terms in the text; they are in an attached exhibit.
Pride filed a registration to swap its $500 million of 7 3/8% Senior Notes due 2014, issued July 7, 2004 in a private placement, for identical notes registered with the SEC that can be freely traded. The filing says the swap is required under a registration rights agreement with the initial buyers. It describes a fleet of 328 rigs as of June 30, 2004, and doesn't change shareholders' stock.
