Exhibit 10.1

 

Cobalt International Energy, Inc.

Retention Bonus Agreement

Personal and Confidential

August 7, 2017

[Name]

Re: Retention Bonus

Dear [Name]:

On behalf of Cobalt International Energy, Inc. (the “Company”), I am pleased to
offer you the opportunity to receive a retention bonus, if you agree to the
terms and conditions contained in this Retention Bonus Agreement (this
“Agreement”), which shall be effective as of the date set forth below in Section
6 (the “Effective Date”).    

1.Retention Bonus.  Subject to the terms and conditions set forth herein, you
will receive a cash payment in the gross amount of [$______] (the “Retention
Bonus”), subject to the Company’s receipt of your countersignature on this
Agreement. As a condition to the receipt of your Retention Bonus, you agree to,
and hereby do, forfeit 100% of the long-term incentive equity grant made to you
on February 22, 2017.

Notwithstanding the foregoing, in the event you voluntarily terminate your
employment with the Company without Good Reason (defined below), or the Company
terminates your employment for Cause (defined below), in either case, before the
earlier of (x) the twelve-month anniversary of the Effective Date, and (y) a
Change in Control (as applicable, the “Retention Date”), you will be required to
promptly repay to the Company (and in any event no later than ten days of such
termination), an amount equal to the After-Tax Value of the Retention
Bonus.  The “After-Tax Value of the Retention Bonus” is equal to the Retention
Bonus, reduced by all taxes the Company actually withholds therefrom.  For the
avoidance of doubt, in the event of death or Disability prior to the Retention
Date, you (or your estate, as applicable), shall not be subject to the repayment
obligations of this Agreement.  For purposes of this Agreement, (i) “Change in
Control” means (A) the sale of all or substantially all of the assets of the
Company and its subsidiaries, on a consolidated basis or (B) the direct or
indirect acquisition by a person or group (whether or not acting in concert) of
a majority of the outstanding stock of the Company, in either of cases (A) or
(B), in one or more transactions (and regardless of the form of the transaction)
under Section 363 of the United States Bankruptcy Code or pursuant to a
confirmed chapter 11 plan or similar provision under the laws of any other
jurisdiction (such date, the “Retention Date”).  For the avoidance of doubt, you
will not be required to repay any portion of your Retention Bonus if you
terminate your employment anytime following a “Change in Control.”

For purposes of this Agreement, “Disability” means you have become entitled to
receive long-term disability benefits under the Company’s long-term disability
plan that covers you, as in effect from time to time; provided, however, that if
there is no such plan, “Disability” means you are unable to perform the
essential functions of your position (after accounting for reasonable
accommodation, if applicable), due to an illness or physical or mental
impairment or other incapacity that continues, or can reasonably be expected to
continue, for a period in excess of 120 days, whether or not consecutive.  

 

 

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For purposes of this Agreement, “Cause” means your (a) willful failure to
substantially perform your duties (other than any such failure resulting from
your physical or mental incapacity); (b) willful misconduct, gross negligence,
breach of fiduciary duty, fraud, theft or embezzlement, in each case, that
results in demonstrable harm to the Company or any of its Affiliates (defined
below); (c) material breach of this Agreement that results in demonstrable harm
to the Company or any of its Affiliates; (d) conviction of, or plea of nolo
contendere to, any felony (or state law equivalent) or any crime involving moral
turpitude; (e) commission of an act of fraud, embezzlement, or misappropriation,
in each case, against the Company or any of its Affiliates, or (f) material
breach of any material policy or code of conduct established by the Company or
any of its Affiliates (including policies relating to anti-corruption or trade
and economic sanctions), as such policies may be amended from time to time, that
results in material economic harm.  Notwithstanding the foregoing, except for a
failure, breach or refusal that, by its nature, cannot reasonably be expected to
be cured, you shall have 30 days following the delivery of written notice by the
Company or one of its Affiliates within which to cure any actions or omissions
described in clauses (a), (b), (c) or (f) constituting Cause; provided, however,
that, if the Company reasonably expects irreparable injury from a delay of 30
days, the Company or one of its Affiliates may give you notice of such shorter
period within which to cure as is reasonable under the circumstances, which may
include the termination of your employment without notice and with immediate
effect. 

For purposes of this Agreement, “Good Reason” means any of the following, in
each case, without your consent: (a) the assignment of duties materially
inconsistent with your title or position or the removal of substantially all of
your duties and responsibilities, (b) a reduction of 20% or more of your annual
base salary as in effect on the Effective Date or as the same may be increased
from time to time, (c) a relocation of the geographic location of your principal
place of employment by more than 75 miles from Houston, Texas or  (d) a
breach by the Company of any material obligation owed to you in connection with
your employment with the Company, including without limitation, any
indemnification obligations, to which you may be entitled from time to time.

The occurrence of an event that would otherwise constitute Good Reason will
cease to be an event constituting Good Reason, if you do not timely provide
notice to the Company within thirty (30) days of the date on which you first
become aware of the occurrence of that event.  The Company shall have fifteen
(15) days following receipt of your written notice in which to correct in all
material respects the circumstances constituting Good Reason, and you must
terminate employment within thirty (30) days following expiration of the
Company’s fifteen-day cure period.  Otherwise, any claim of such circumstances
constituting “Good Reason” shall be deemed irrevocably waived by you.  

You acknowledge and agree that the definitions of “Cause” and “Good Reason” set
forth above (along with the notice and cure provisions) is deemed to be
incorporated by reference into any employment agreement, severance arrangement,
or other similar agreement with the Company or its Affiliates to which you are
party that includes such terms (or any similar term) and will supersede and
replace any such definition.

For purposes of this Agreement, “Affiliate” means with respect to any person,
any other person that directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with, the person in
question. As used herein, the term “control” means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a person, whether through ownership of voting securities, by
contract or otherwise.

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In the event you become entitled to a Severance Payment under Section [__]
“Qualifying Termination Within a CIC Protection Period” of the [Name of
Plan/Agreement] due to a qualifying termination of employment before the
Retention Date, such Severance Payments will be reduced by the amount of the
Retention Bonus (but in no case below zero).

2.Taxes. The Company may withhold from any and all amounts payable to you
hereunder such federal, state and local taxes as the Company determines in its
sole discretion may be required to be withheld pursuant to any applicable law or
regulation.

3.No Right to Continued Employment.  Nothing in this Agreement will confer upon
you any right to continued employment with the Company (or its subsidiaries or
their respective successors) or to interfere in any way with the right of the
Company (or its subsidiaries or their respective successors) to terminate your
employment at any time.

4.Other Benefits.  The Retention Bonus is a special payment to you and will not
be taken into account in computing the amount of salary or compensation for
purposes of determining any bonus, incentive, pension, retirement, death or
other benefit under any other bonus, incentive, pension, retirement, insurance
or other employee benefit plan of the Company, unless such plan or agreement
expressly provides otherwise.

5.No Assignments; Successors.  This Agreement is personal to each of the parties
hereto.  Except as provided in this paragraph, no party may assign or delegate
any right or obligation hereunder without first obtaining the written consent of
the other party hereto.  The Company may assign this Agreement to any successor
to all or substantially all of the business and/or assets of the Company;
provided that the Company will require such successor to expressly assume and
agree to 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 had taken
place.  

6.Effectiveness.  This Agreement shall be effective August 7, 2017.

7.Governing Law.  This Agreement will be governed by, and construed under and in
accordance with, the internal laws of the State of Texas, without reference to
rules relating to conflicts of laws.

8.Costs of Enforcement. In the event a party commences any legal action
(regardless of whether or not a lawsuit is actually brought) to protect any
rights under, or to enforce any provisions of this Agreement (including, but not
limited to, the collection the After-Tax Value of the Retention Bonus), the
prevailing party shall be entitled to recover from the losing party all
reasonable costs, expenses, and attorneys' fees incurred by the party in
connection with such proceedings, including, attorneys' fees incurred for
consultation and other legal services performed prior to the filing of such
proceeding.

9.No Unauthorized Use or Disclosure.  For purposes of this Section 9, “Company”
shall include the Company and each of its Affiliates. The term “Confidential
Information” shall mean any and all confidential or proprietary information and
materials, as well as all trade secrets, belonging to the Company. Confidential
Information includes, regardless of whether such information or materials are
expressly identified or marked as confidential or proprietary, and whether or
not patentable: (1) technical information and materials of the Company; (2)
business information and materials of the Company; (3) any information or
material that gives the Company an advantage with respect to its competitors by
virtue of not being known by those

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competitors; and (4) other valuable, confidential information and materials
and/or trade secrets of the Company. All Confidential Information shall be the
sole and exclusive property of the Company. Upon termination of your employment
with the Company, for any reason, you shall promptly deliver all documents and
materials (including electronically stored information) containing or reflecting
Confidential Information, and all copies thereof, to the Company.
Notwithstanding the preceding provisions of this Section 9, the term
Confidential Information does not include (i) any information that, at the time
of disclosure by the Company, is available to the public other than as a result
of any unauthorized act by you, or (ii) any information that becomes available
to you on a non-confidential basis from a source other than the Company or any
of its respective directors, officers, employees, agents or advisors; provided,
that such source is not known by you to be bound by a confidentiality agreement
with or other obligation of secrecy to the Company regarding the information.  

You agree to preserve and protect the confidentiality of all Confidential
Information. You agree that you will not, at any time during your term of
employment or thereafter, make any unauthorized disclosure of Confidential
Information, or make any use thereof, except, in each case, in the carrying out
your responsibilities to the Company. You further agree to preserve and protect
the confidentiality of all confidential information of third parties provided to
the Company by such third parties with an expectation of confidentiality. You
shall use commercially reasonable efforts to cause all persons or entities to
whom any Confidential Information shall be disclosed by you hereunder to
preserve and protect the confidentiality of such Confidential Information. You
shall have no obligation hereunder to keep confidential any Confidential
Information if and to the extent disclosure thereof is specifically required by
applicable laws; provided, however, that in the event disclosure is required by
applicable laws and you are making such disclosure, you shall provide the
Company with prompt notice of such requirement prior to making any such
disclosure, so that the Company may seek an appropriate protective order.  

Nothing in this Agreement will prevent you from: (a) making a good faith report
of possible violations of applicable law to any governmental agency or entity;
or (b) making disclosures that are protected under the whistleblower provisions
of applicable law.

10.Counterparts.  This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.

11.Entire Agreement; Amendment.  This Agreement constitutes the entire agreement
between you and the Company with respect to the Retention Bonus and supersedes
any and all prior agreements or understandings between you and the Company with
respect to the Retention Bonus, whether written or oral.  This Agreement may be
amended or modified only by a written instrument executed by you and the
Company.

12.Section 409A Compliance.  Although the Company does not guarantee the tax
treatment of the Retention Bonus, the intent of the parties is that the
Retention Bonus be exempt from the requirements of Section 409A of the Internal
Revenue Code and the regulations and guidance promulgated thereunder, and
accordingly, to the maximum extent permitted, this Agreement shall be
interpreted in a manner consistent therewith.

[Signature Page Follows]

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This Agreement is intended to be a binding obligation on you and the
Company.  If this Agreement accurately reflects your understanding as to the
terms and conditions of the Retention Bonus, please sign and date one copy of
this Agreement no later than August 14, 2017 and return the same to me for the
Company’s records.  The Company reserves the right to withdraw this Agreement if
you have not executed and returned a signed copy back to me by such date, in
which case this Agreement shall be null and void. You should make a copy of the
executed Agreement for your records.

 

 

 

Very truly yours,

 

 

 

 

 

 

 

 

 

 

 

Cobalt International Energy, Inc.

 

 

 

 

 

 

 

The above terms and conditions accurately reflect our understanding regarding
the terms and conditions of the Retention Bonus, and I hereby confirm my
agreement to the same.

 

 

 

Dated:

[Name]

 

 

[Job Title]

 

 

 

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