Exhibit 10.3

COBALT INTERNATIONAL ENERGY, INC.

2015 LONG TERM INCENTIVE PLAN

Performance Stock Unit Award Agreement

[_______] Grant

You have been granted an award of performance stock units (this “Award”) on the
following terms and subject to the provisions of Attachment A and the Cobalt
International Energy, Inc. 2015 Long Term Incentive Plan (the “Plan”). Unless
defined in this Award Agreement (including Attachment A, this “Agreement”),
capitalized terms will have the meanings assigned to them in the Plan. In the
event of a conflict among the provisions of the Plan, this Agreement and any
descriptive materials provided to you, the provisions of the Plan will prevail.

 

Participant

 

[Name]

 

 

 

Number of Shares Underlying Award

 

[_____] Shares (the “PSU Shares”), which may be settled in Shares, the cash
equivalent of Shares or a combination thereof

 

 

 

Grant Date

 

[____], 2016 (the “Grant Date”)

 

 

 

Vesting

 

Subject to Section 4 and Section 5 of Attachment A, the Award shall vest with
respect to one-third (1/3) of the underlying PSU Shares on each of: [_____],
[______] and [______] (each, a “Scheduled Vesting Date”) to the extent that both
the “Service Condition” and the “Performance Condition” (as such terms are
defined below) are satisfied as of the applicable Scheduled Vesting Date.  For
the avoidance of doubt, unless both the Performance Condition and Service
Condition (taking into account any accelerated vesting due to the Participant’s
death or Disability) are satisfied as of the applicable Scheduled Vesting Date,
the portion of the PSU Shares scheduled to vest on such date shall not vest and
shall be forfeited in its entirety without any payment to the Participant.

 

Please refer to Attachment A for special vesting provisions related to a Change
in Control.

 

 

 

Service Condition

 

The Service Condition shall be fully satisfied if the Participant does not
experience a Termination of Service at any time prior to the applicable
Scheduled Vesting Date (the “Service Condition”).

 

Please refer to Attachment A for special Service Condition provisions related to
the Participant’s death or Disability or a Change in Control.

 

 

 

Performance Condition

 

The Performance Condition shall be fully satisfied if, as of the applicable
Scheduled Vesting Date, the “Company Share Price Return” equals at least ninety
percent (90%) of the “Russell Index Price Return” (as such terms are defined
below) (the “Performance Condition”).

 

“Company Share Price Return” means the percentage equal to (x) the End Price of
a Share minus the Start Price of a Share, divided by (y) such Start Price and
multiplied by (z) 100.

 

“End Price” means the Fair Market Value of a Share on the day before the
applicable Scheduled Vesting Date.

 

“Start Price” means the Fair Market Value of a Share on (i) for the first
one-third (1/3) of the PSU Shares, on the Grant Date, (ii) for the second
one-third (1/3) of the PSU Shares, the first anniversary of the Grant Date and
(iii) for the last one-third (1/3) of the PSU Shares, the second anniversary of
the Grant Date.

 

“Russell Index Price Return” means the percentage equal to (x) the Russell Index
End Price minus the Russell Index Start Price, divided by (y) such Russell Index
Start Price and multiplied by (z) 100.

 

“Russell Index End Price” means the closing price of the Russell Midcap Energy
Index as of the day before the applicable Scheduled Vesting Date.

 

“Russell Index Start Price” means the closing price of the Russell Midcap Energy
Index as of (i) for the first one-third (1/3) of the PSU Shares, on the Grant
Date, (ii) for the second one-third (1/3) of the PSU Shares, the first
anniversary of the Grant Date and (iii) for the last one-third (1/3) of the PSU
Shares, the second anniversary of the Grant Date.

 

“Russell Midcap Energy Index” means the Russell Midcap Energy Index as reported
under the Bloomberg ticker “RGUMCE”, which represents the smallest energy
companies in the Russell 1000 Index.

 

“Share” means a share of common stock of the Company.

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Attachment A

Performance Stock Unit Award Agreement

Terms and Conditions

Grant to: [________]

Section 1.  Grant of Award.  Subject to the terms and conditions of the Plan and
this Agreement, the Company hereby grants this Award to the Participant on the
Grant Date on the terms set forth on the cover page of this Agreement, as more
fully described in this Attachment A. This Award is granted under the Plan,
which is incorporated herein by this reference and made a part of this
Agreement.

Section 2.  Conversion of Award.  The portion of this Award that vests on each
applicable Scheduled Vesting Date will convert into, as determined by the
Committee, (i) Shares, (ii) cash in an amount equal to the then Fair Market
Value of the Shares underlying the Award on such vesting date, or (iii) a
combination of Shares and cash, and will be distributed to the Participant on or
as soon as practicable after such date, but in no event later than 14 days after
such vesting date.

Section 3.  Dividend Equivalents.  If a dividend is paid on Shares during the
period commencing on the Grant Date and ending on the date on which the PSU
Shares or a cash payment in respect thereof are distributed to the Participant,
the Participant shall be eligible to receive an amount equal to the amount of
the dividend that the Participant would have received had the PSU Shares been
distributed to the Participant as of the record date for which such dividend is
paid; it being understood that no such amount shall be payable with respect to
any PSU Shares that are forfeited.  Such amount shall be paid to the Participant
on the date on which the PSU Shares or a cash payment in respect thereof are
distributed to the Participant in the same form (cash, Shares or other property)
in which such dividend is paid to holders of Shares generally, or at the
election of the Committee, in cash.  Any Shares that the Participant is eligible
to receive pursuant to this Section 3 are referred to herein as “Dividend
Shares”.

Section 4.  Termination of Service.  

(a) Death or Disability. In the event of the Participant’s Termination of
Service at any time due to the Participant’s death or Disability, (x) the
Service Condition applicable the PSU Shares shall be deemed to be fully
satisfied as of the date of such termination and (y) if the Performance
Condition is satisfied as of the Scheduled Vesting Date or Schedule Vesting
Dates, as applicable, the PSU Shares scheduled to vest on such Scheduled Vesting
Date or Scheduled Vesting Dates shall fully vest as of such date or dates.  This
Award will convert into PSU Shares, a cash payment or a combination in respect
thereof and will be distributed to the Participant (or the Participant’s estate)
on or as soon as practicable after the date of such termination, but in no event
later than 14 days after the applicable Schedule Vesting Date.

(b) Any Other Termination of Service.  In the event of the Participant’s
Termination of Service at any time for any reason (other than due to the
Participant’s death or Disability or on or following a Change in Control), the
then unvested portion of this Award will be forfeited in its entirety as of the
date of such termination without any payment to the Participant.

(c) Committee Discretion.  Notwithstanding the foregoing, in the event of the
Participant’s Termination of Service other than by the Company for Cause, the
Committee may, in its sole discretion, accelerate the vesting or waive any term
or condition of this Agreement, subject to such terms and conditions as the
Committee deems appropriate, with respect to all or a portion of the Award.

Section 5.  Change in Control.

(a) The PSU Shares shall not vest in connection with a Change in Control unless
such Change in Control is accompanied by a “double trigger event”.  For this
purpose, a “double trigger event” occurs in connection with a Change in Control
if (A) the PSU Shares are not appropriately assumed nor an equivalent award
substituted by the surviving, continuing, successor or purchasing company or
other business entity or parent thereof, as the case may be, (B) cash or cash
equivalents are the sole or primary form of consideration to be received by the
Company’s shareholders, or (C) at the time of or following the Change in
Control, the Participant incurs a termination of employment without Cause or for
Good Reason, or within two years following the Change in Control, subject to the
Company’s right to cure (as expressed in the definition of “Good Reason”), the
Participant incurs a termination of employment for Good Reason.

(b) Upon a Change in Control “double trigger event”, the Service Condition shall
be deemed met in its entirety and the Performance Condition shall be deemed
satisfied in its entirety as of the date of such Change in Control.

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Section 6.  Additional Terms and Conditions.

(a) Issuance of Shares.  Upon distribution of PSU Shares and, if applicable, any
Dividend Shares, such Shares shall be evidenced by book-entry registration;
provided, however, that the Committee may determine that such Shares shall be
evidenced in such other manner as it deems appropriate, including the issuance
of a stock certificate or certificates.  

(b) Stockholder Rights. The Participant shall not have any rights of a
stockholder, including voting rights, with respect to the Award until PSU Shares
have been distributed to the Participant.  

(c) Transferability.  Unless and until PSU Shares and, if applicable, any
Dividend Shares are distributed to the Participant, this Award shall not be
assigned, sold, transferred or otherwise be subject to alienation by the
Participant.

(d) Section 409A.  

(i) If any provision of this Agreement fails to comply with Section 409A of the
Code or the regulations or Treasury guidance promulgated thereunder, or would
result in a recognition of income for United States federal income tax purposes
with respect to any amount payable under this Agreement before the date of
payment, or the imposition of interest or additional tax pursuant to Section
409A of the Code, the Company reserves the right to reform such provision;
provided that the Company shall maintain, to the maximum extent practicable, the
original intent of the applicable provision without violating the provisions of
Section 409A of the Code.

(ii) Notwithstanding anything else in this Agreement, if the Board considers the
Participant to be one of the Company’s “specified employees” under Section 409A
of the Code at the time of the Participant’s Termination of Service, any
distribution that otherwise would be made to the Participant with respect to
this Award as a result of such termination shall not be made until the date that
is six months after such termination, except to the extent that earlier
distribution would not result in the Participant’s incurring interest or
additional tax under Section 409A of the Code.

(e) Withholding.  The Company may withhold any tax (or other governmental
obligation) that becomes due with respect to the Award upon vesting and
conversion (as applicable), or any dividend or distribution thereon, and the
Participant shall make arrangements satisfactory to the Company to enable the
Company to satisfy all such withholding requirements.  Notwithstanding the
foregoing, the Committee may permit, in its sole discretion, the Participant to
satisfy (at the Participant’s election) any such withholding requirement by
transferring to the Company pursuant to such procedures as the Committee may
require, effective as of the date on which a withholding obligation arises, a
number of vested Shares owned and designated by the Participant having an
aggregate fair market value as of such date that is equal to the minimum amount
required to be withheld and/or cash in such amount.  If the Committee permits
the Participant (at the Participant’s election) to satisfy any such withholding
requirement pursuant to the preceding sentence, the Company shall remit to the
Internal Revenue Service and appropriate state and local revenue agencies, for
the credit of the Participant, an amount of cash withholding equal to the fair
market value of the Shares and/or cash transferred to the Company as provided
above.

Section 7.  Miscellaneous Provisions.  

(a) Notices. All notices, requests and other communications under this Agreement
shall be in writing and shall be delivered in person (by courier or otherwise),
mailed by certified or registered mail, return receipt requested, or sent by
facsimile transmission, as follows:

if to the Company, to:

Cobalt International Energy, Inc.

Cobalt Center

920 Memorial City Way, Suite 100

Houston, TX 77024

Attention: General Counsel

Facsimile: 713-579-9184

if to the Participant, to the address that the Participant most recently
provided to the Company,

or to such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto.  All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if

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received prior to 5:00 p.m. on a business day in the place of
receipt.  Otherwise, any such notice, request or communication shall be deemed
received on the next succeeding business day in the place of receipt.

(b) Entire Agreement. This Agreement, the Plan, and any other agreements
referred to herein and therein and any schedules, exhibits and other documents
referred to herein or therein, constitute the entire agreement and understanding
between the parties in respect of the subject matter hereof and supersede all
prior and contemporaneous arrangements, agreements and understandings, both oral
and written, whether in term sheets, presentations or otherwise, between the
parties with respect to the subject matter hereof.

(c) Amendment; Waiver. No amendment or modification of any provision of this
Agreement shall be effective unless signed in writing by or on behalf of the
Company and the Participant, except that the Company may amend or modify this
Agreement without the Participant’s consent in accordance with the provisions of
the Plan or as otherwise set forth in this Agreement.  No waiver of any breach
or condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition whether of like or different nature.  Any
amendment or modification of or to any provision of this Agreement, or any
waiver of any provision of this Agreement, shall be effective only in the
specific instance and for the specific purpose for which made or given.

(d) Assignment. Neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof shall be assignable by the
Participant.

(e) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall
inure to the benefit of and be binding upon the Company and the Participant and
their respective heirs, successors, legal representatives and permitted
assigns.  Nothing in this Agreement, expressed or implied, is intended to confer
on any person other than the Company and the Participant, and their respective
heirs, successors, legal representatives and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.

(f) Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

(g) Participant Undertaking.  The Participant agrees to take whatever additional
action and execute whatever additional documents the Company may deem necessary
or advisable to carry out or give effect to any of the obligations or
restrictions imposed on either the Participant or this Award pursuant to the
provisions of this Agreement.

(h) Plan.  The Participant acknowledges and understands that material
definitions and provisions concerning this Award and the Participant’s rights
and obligations with respect thereto are set forth in the Plan.  The Participant
has read carefully, and understands, the provisions of the Plan.

(i) Governing Law.  The Agreement shall be governed by the laws of the State of
Delaware, without application of the conflicts of law principles thereof.

(j) No Right to Continued Service.  The granting of the Award evidenced hereby
and this Agreement shall impose no obligation on the Company or any Affiliate to
continue the service of the Participant and shall not lessen or affect the right
that the Company or any Affiliate may have to terminate the service of such
Participant.  

(k) Jurisdiction.  The parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby (whether
brought by any party or any of its affiliates or against any party or any of its
affiliates) shall be brought in the Delaware Chancery Court or, if such court
shall not have jurisdiction, any federal court located in the State of Delaware
or other Delaware state court, and each of the parties hereby irrevocably
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum.  Process in any such suit,
action or proceeding may be served on each party anywhere in the world, whether
within or without the jurisdiction of any such court.  Without limiting the
foregoing, each party agrees that service of process on such party as provided
in Section 7(a) shall be deemed effective service of process on such party.

(l) WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

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