Exhibit 10.15

 

COBALT INTERNATIONAL ENERGY, INC.
LONG TERM INCENTIVE PLAN
(Amended and Restated as of February 21, 2013)

 

Section 1.    Purpose.    The purpose of the Cobalt International Energy, Inc.
Long Term Incentive Plan (as amended from time to time, the “Plan”) is to
motivate and reward those employees and other individuals who are expected to
contribute significantly to the success of Cobalt International Energy, Inc.
(together with its subsidiaries, the “Company”) and its Affiliates to perform at
the highest level and to further the best interests of the Company and its
shareholders.

 

Section 2.      Definitions.    As used in the Plan, the following terms shall
have the meanings set forth below:

 

(a)   “Act” means Securities Exchange Act of 1934.

 

(b)   “Affiliate” means (i) any entity that, directly or indirectly, is
controlled by the Company and (ii) any entity in which the Company has a
significant equity interest, in each case as determined by the Committee.

 

(c)   “Award” means any Option, SAR, Restricted Stock, RSU, Performance Award or
Other Stock-Based Award granted under the Plan.

 

(d)   “Award Document” means any agreement, contract or other instrument or
document evidencing any Award granted under the Plan, which may, but need not,
be executed or acknowledged by a Participant.

 

(e)   “Beneficiary” means a person entitled to receive payments or other
benefits or exercise rights that are available under the Plan in the event of
the Participant’s death. If no such person is named by a Participant, or if no
Beneficiary designated by the Participant is eligible to receive payments or
other benefits or exercise rights that are available under the Plan at the
Participant’s death, such Participant’s Beneficiary shall be such Participant’s
estate.

 

(f)    “Board” means the board of directors of the Company.

 

(g)   “Cause” means, with respect to any Participant, “cause” as defined such
Participant’s Employment Agreement, if any, or if not so defined, except as
otherwise provided in such Participant’s Award Document, such Participant’s:

 

(i)  having engaged in material mismanagement in providing services to the
Company or its Affiliates;

 

(ii)  having engaged in conduct that he or she knew would be materially
injurious to the Company or its Affiliates;

 

(iii)  material breach of any applicable Employment Agreement or Lock Up
Agreement;

 

(iv)  having been convicted of, or having entered a plea bargain or settlement
admitting guilt for, any felony under the laws of the United States, any state
or the District of Columbia where such felony involves moral turpitude or where,
as a result of such felony, the continued employment of the Participant would
have, or could reasonably be expected to have, a material adverse impact on the
reputation of the Company or any of its Affiliates; or

 

(v)  having been the subject of any order, judicial or administrative, obtained
or issued by the Securities and Exchange Commission for any securities violation
involving fraud including, for example, any such order consented to by the
Participant in which findings of facts or any legal conclusions establishing
liability are neither admitted nor denied.

 

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The occurrence of any such event that is susceptible to cure or remedy shall not
constitute Cause if such Participant cures or remedies such event within 30 days
after the Company provides notice to such Participant.

 

(h)   “Change in Control” means the occurrence of any one or more of the
following events:

 

(i)  any “person” (as defined in Section 13(d) of the Act), other than (A) an
employee benefit plan or trust maintained by the Company or (B) any of the
Sponsors (as defined in the Amended and Restated Certificate of Incorporation of
the Company as in effect immediately following the closing of the initial public
offering of Shares) or their respective affiliates, becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing more than 50% of the combined voting
power of the Company’s outstanding securities entitled to vote generally in the
election of directors;

 

(ii)  at any time during a period of 12 consecutive months, individuals who at
the beginning of such period constituted the Board and any new member of the
Board whose election or nomination for election was approved by a vote of at
least a majority 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
so approved, cease for any reason to constitute a majority of members of the
Board; or

 

(iii)  the consummation of (A) a merger or consolidation of the Company or any
of its subsidiaries with any other corporation or entity, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or being converted into voting
securities of the surviving entity or, if applicable, the ultimate parent
thereof) at least 50% of the combined voting power and total fair market value
of the securities of the Company or such surviving entity or parent outstanding
immediately after such merger or consolidation, or (B) any sale, lease, exchange
or other transfer to any Person (other than an Affiliate of the Company) of
assets of the Company and/or any of its subsidiaries, in one transaction or a
series of related transactions, having an aggregate fair market value of more
than 50% of the fair market value of the Company and its subsidiaries (the
“Company Value”) immediately prior to such transaction(s), but only to the
extent that, in connection with such transaction(s) or within a reasonable
period thereafter, the Company’s stockholders receive distributions of cash
and/or assets having a fair market value that is greater than 50% of the Company
Value immediately prior to such transaction(s).

 

Notwithstanding the foregoing, in no event shall a Change in Control be deemed
to have occurred with respect to a Participant if the Participant is part of a
“group” within the meaning of Section 13(d)(3) of the Act that consummates the
Change in Control transaction. In addition, for purposes of the definition of
Change in Control, a person engaged in business as an underwriter of securities
shall not be deemed to be the beneficial owner of, or to beneficially own, any
securities acquired through such person’s participation in good faith in a firm
commitment underwriting until the expiration of 40 days after the date of such
acquisition.

 

(i)    “Code” means the Internal Revenue Code of 1986, as amended from time to
time, and the rules, regulations and guidance thereunder. Any reference to a
provision in the Code shall include any successor provision thereto.

 

(j)    “Committee” means the Compensation Committee of the Board or such other
committee as may be designated by the Board. If the Board does not designate the
Committee, references herein to the “Committee” shall refer to the Board.

 

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(k)   “Covered Employee” means an individual who is (i) either a “covered
employee” or expected by the Committee to be a “covered employee,” in each case
within the meaning of Section 162(m)(3) of the Code or (ii) expected by the
Committee to be the recipient of compensation (other than
Section 162(m) Compensation) in excess of $1,000,000 for the tax year of the
Company with regard to which a deduction in respect of such individual’s Award
would be claimed.

 

(l)    “Disability” means, with respect to any Participant, “disability” as
defined in such Participant’s Employment Agreement, if any, or if not so
defined, except as otherwise provided in such Participant’s Award Document:

 

(i)  a permanent and total disability that entitles the Participant to
disability income payments under any long-term disability plan or policy
provided by the Company under which the Participant is covered, as such plan or
policy is then in effect; or

 

(ii)  if such Participant is not covered under a long-term disability plan or
policy provided by the Company at such time for whatever reason, then the term
“Disability” means a “permanent and total disability” as defined in
Section 22(e)(3) of the Code and, in this case, the existence of any such
Disability will be certified by a physician acceptable to the Company.

 

(m)  “Effective Date” means October 22, 2009.

 

(n)   “Employment Agreement” means any employment, severance, consulting or
similar agreement between the Company or any of its Affiliates and a
Participant.

 

(o)   “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, and the rules, regulations and guidance thereunder. Any reference
to a provision in the Exchange Act shall include any successor provision
thereto.

 

(p)   “Fair Market Value” means with respect to Shares, the closing price of a
Share on the date in question (or, if there is no reported sale on such date, on
the last preceding date on which any reported sale occurred) on the principal
stock market or exchange on which the Shares are quoted or traded, or if Shares
are not so quoted or traded, fair market value as determined by the Committee,
and with respect to any property other than Shares, the fair market value of
such property determined by such methods or procedures as shall be established
from time to time by the Committee.

 

(q)   “Good Reason” means, with respect to any Participant, “good reason” as
defined in such Participant’s Employment Agreement, if any, or if not so
defined, except as otherwise provided in such Participant’s Award Document, the
occurrence of any one or both of the following events:

 

(i)  a material reduction by the Company or any of its Affiliates of such
Participant’s base salary; or

 

(ii)  relocation by the Company or any of its Affiliates of the geographic
location of such Participant’s principal place of employment by more than 75
miles from Houston, Texas.

 

In each case, if such Participant desires to terminate his or her employment or
engagement with the Company or such Affiliate for Good Reason, he or she must
first give written notice of the facts and circumstances providing the basis for
Good Reason to the Company or such Affiliate and allow the Company or such
Affiliate 60 days from the date of such notice to remedy, cure or rectify the
situation giving rise to Good Reason, and in the absence of any such remedy,
cure or rectification, such Participant must terminate his or her employment or
engagement for such Good Reason within 120 days after delivery of such written
notice.

 

(r)   “Incentive Stock Option” means an option representing the right to
purchase Shares from the Company, granted pursuant to Section 6, that meets the
requirements of Section 422 of the Code.

 

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(s)   “Intrinsic Value” with respect to an Option or SAR Award means (i) the
price or implied price per Share in a Change in Control or other event over
(ii) the exercise or hurdle price of such Award multiplied by (iii) the number
of Shares covered by such Award.

 

(t)    “Lock Up Agreement” means any agreement between the Company or any of its
Affiliates and a Participant that provides for restrictions on the transfer of
Shares held by such Participant.

 

(u)   “Non-Qualified Stock Option” means an option representing the right to
purchase Shares from the Company, granted pursuant to Section 6, that is not an
Incentive Stock Option.

 

(v)   “Option” means an Incentive Stock Option or a Non-Qualified Stock Option.

 

(w)  “Other Stock-Based Award” means an Award granted pursuant to Section 10.

 

(x)   “Participant” means the recipient of an Award granted under the Plan.

 

(y)   “Performance Award” means an Award granted pursuant to Section 9.

 

(z)   “Performance Period” means the period established by the Committee at the
time any Performance Award is granted or at any time thereafter during which any
performance goals specified by the Committee with respect to such Award are
measured.

 

(aa) “Replacement Award” means an Award granted in assumption of, or in
substitution for, an outstanding award previously granted by a company acquired
by the Company or with which the Company combines.

 

(bb) “Restricted Stock” means any Share granted pursuant to Section 8.

 

(cc)  “RSU” means a contractual right granted pursuant to Section 8 that is
denominated in Shares. Each RSU represents a right to receive the value of one
Share (or a percentage of such value) in cash, Shares or a combination thereof.
Awards of RSUs may include the right to receive dividend equivalents.

 

(dd) “SAR” means any right granted pursuant to Section 7 to receive upon
exercise by a Participant or settlement, in cash, Shares or a combination
thereof, the excess of (i) the Fair Market Value of one Share on the date of
exercise or settlement over (ii) the exercise or hurdle price of the right on
the date of grant, or if granted in connection with an Option, on the date of
grant of the Option.

 

(ee) “Section 162(m) Compensation” means “qualified performance-based
compensation” under Section 162(m) of the Code.

 

(ff)  “Shares” means shares of the Company’s common stock.

 

(gg) “Termination of Service” means, in the case of a Participant who is an
employee of the Company or an Affiliate, cessation of the employment
relationship such that the Participant is no longer an employee of the Company
or Affiliate, or, in the case of a Participant who is an independent contractor,
the date the performance of services for the Company or an Affiliate has ended;
provided, however, that in the case of an employee, the transfer of employment
from the Company to an Affiliate, from an Affiliate to the Company, from one
Affiliate to another Affiliate or, unless the Committee determines otherwise,
the cessation of employee status but the continuation of the performance of
services for the Company or an Affiliate as a director of the Board or an
independent contractor shall not be deemed a cessation of service that would
constitute a Termination of Service; provided, further, that a Termination of
Service will be deemed to occur for a Participant employed by an Affiliate when
an Affiliate ceases to be an Affiliate unless such Participant’s employment
continues with the Company or another Affiliate.

 

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Section 3.    Eligibility.

 

(a)   Any employee, consultant or other advisor of, or any other individual who
provides services to, the Company or any Affiliate, other than any non-employee
director of the Company or any Affiliate, shall be eligible to be selected to
receive an Award under the Plan.

 

(b)   Holders of options and other types of awards granted by a company acquired
by the Company or with which the Company combines are eligible for grants of
Replacement Awards under the Plan.

 

Section 4.    Administration.

 

(a)    Administration of the Plan.    The Plan shall be administered by the
Committee. All decisions of the Committee shall be final, conclusive and binding
upon all parties, including the Company, its shareholders and Participants and
any Beneficiaries thereof. The Committee may issue rules and regulations for
administration of the Plan. It shall meet at such times and places as it may
determine.

 

(b)    Composition of Committee.    To the extent necessary or desirable to
comply with applicable regulatory regimes, any action by the Committee shall
require the approval of Committee members who are (i) independent, within the
meaning of and to the extent required by applicable rulings and interpretations
of the applicable stock market or exchange on which the Shares are quoted or
traded; (ii) a non-employee director within the meaning of Rule 16b-3 under the
Exchange Act; and (iii) an outside director pursuant to Section 162(m) of the
Code. The Board may designate one or more members of the Board as alternate
members of the Committee who may replace any absent or disqualified member at
any meeting of the Committee. To the extent permitted by applicable law, the
Committee may delegate to one or more officers of the Company the authority to
grant Awards, except that such delegation shall not be applicable to any Award
for a person then covered by Section 16 of the Exchange Act.

 

(c)    Authority of Committee.    Subject to the terms of the Plan and
applicable law, the Committee (or its delegate) shall have full power and
authority to: (i) designate Participants; (ii) determine the type or types of
Awards (including Replacement Awards) to be granted to each Participant under
the Plan; (iii) determine the number of Shares to be covered by (or with respect
to which payments, rights or other matters are to be calculated in connection
with) Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent and under what circumstances Awards may be
settled or exercised in cash, Shares, other Awards, other property, net
settlement, or any combination thereof, or canceled, forfeited or suspended, and
the method or methods by which Awards may be settled, exercised, canceled,
forfeited or suspended; (vi) determine whether, to what extent and under what
circumstances cash, Shares, other Awards, other property and other amounts
payable with respect to an Award under the Plan shall be deferred either
automatically or at the election of the holder thereof or of the Committee;
(vii) interpret and administer the Plan and any instrument or agreement relating
to, or Award made under, the Plan; (viii) establish, amend, suspend or waive
such rules and regulations and appoint such agents, trustees, brokers,
depositories and advisors and determine such terms of their engagement as it
shall deem appropriate for the proper administration of the Plan and due
compliance with applicable law, stock market or exchange rules and regulations
or accounting or tax rules and regulations; and (ix) make any other
determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan and due compliance with applicable
law, stock market or exchange rules and regulations or accounting or tax
rules and regulations.

 

(d)    Dodd-Frank Clawback.    The Committee shall have full authority to
implement any policies and procedures necessary or desirable to comply with
Section 10D of the Exchange Act

 

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and any rules promulgated thereunder. Without limiting the foregoing, the
Committee may provide in any Award Document that, in event of a financial
restatement that reduces the amount of previously awarded incentive compensation
that would not have been earned had results been properly reported, outstanding
Awards will be cancelled and the Company may clawback (i.e., recapture) realized
Option/SAR gains and realized value for vested Restricted Stock or RSUs or
earned Performance Awards within 12 months preceding the financial restatement.

 

(e)    Restrictive Covenants.    The Committee may impose restrictions on any
Award with respect to non-competition, confidentiality and other restrictive
covenants as it deems necessary or appropriate in its sole discretion.

 

Section 5.    Shares Available for Awards.

 

(a)   Subject to adjustment as provided in Section 5(c) and except for
Replacement Awards, (i) the maximum number of Shares available for issuance
under the Plan shall not exceed 10,741,862 Shares and (ii) no Participant may
receive under the Plan in any calendar year (A) Options and SARs that relate to
more than 5,370,931 Shares; (B) Restricted Stock and RSUs that relate to more
than 5,370,931 Shares or (C) Performance Awards and Other Stock-Based Awards
that relate to more than 5,370,931 Shares.

 

(b)   Any Shares subject to an Award (other than a Replacement Award or IPO
Award), that expires, is canceled, forfeited or otherwise terminates without the
delivery of such Shares, including (i) the number of Shares surrendered or
withheld in payment of any grant, purchase, exercise or hurdle price of an Award
or taxes related to an Award and (ii) any Shares subject to an Award to the
extent that Award is settled without the issuance of Shares, shall again be, or
shall become, available for issuance under the Plan.

 

(c)   In the event that the Committee determines that, as a result of any
dividend or other distribution (whether in the form of cash, Shares or other
securities), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase or exchange
of Shares or other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company, issuance of Shares
pursuant to the anti-dilution provisions of securities of the Company, or other
similar corporate transaction or event affecting the Shares, or of changes in
applicable laws, regulations or accounting principles, an adjustment is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall adjust equitably any or all of:

 

(i)  the number and type of Shares (or other securities) which thereafter may be
made the subject of Awards, including the aggregate and individual limits
specified in Section 5(a);

 

(ii)  the number and type of Shares (or other securities) subject to outstanding
Awards; and

 

(iii)  the grant, purchase, exercise or hurdle price with respect to any Award
or, if deemed appropriate, make provision for a cash payment to the holder of an
outstanding Award;

 

provided, however, that the number of Shares subject to any Award denominated in
Shares shall always be a whole number.

 

(d)   Any Shares delivered pursuant to an Award may consist, in whole or in
part, of authorized and unissued Shares or Shares acquired by the Company.

 

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Section 6.    Options.    The Committee is authorized to grant Options to
Participants with the following terms and conditions and with such additional
terms and conditions, in either case not inconsistent with the provisions of the
Plan, as the Committee shall determine.

 

(a)   The exercise price per Share under an Option shall be determined by the
Committee; provided, however, that, except in the case of Replacement Awards,
such exercise price shall not be less than the Fair Market Value of a Share on
the date of grant of such Option.

 

(b)   The term of each Option shall be fixed by the Committee but shall not
exceed 10 years from the date of grant of such Option.

 

(c)   The Committee shall determine the time or times at which an Option may be
exercised in whole or in part.

 

(d)   The Committee shall determine the method or methods by which, and the form
or forms, including cash, Shares, other Awards, other property, net settlement,
broker assisted cashless exercise or any combination thereof, having a Fair
Market Value on the exercise date equal to the relevant exercise price, in which
payment of the exercise price with respect thereto may be made or deemed to have
been made.

 

(e)   The terms of any Incentive Stock Option granted under the Plan shall
comply in all respects with the provisions of Section 422 of the Code.

 

Section 7.    Stock Appreciation Rights.    The Committee is authorized to grant
SARs to Participants with the following terms and conditions and with such
additional terms and conditions, in either case not inconsistent with the
provisions of the Plan, as the Committee shall determine.

 

(a)   SARs may be granted under the Plan to Participants either alone
(“freestanding”) or in addition to other Awards granted under the Plan
(“tandem”) and may, but need not, relate to a specific Option granted under
Section 6.

 

(b)   The exercise or hurdle price per Share under a SAR shall be determined by
the Committee; provided, however, that, except in the case of Replacement
Awards, such exercise or hurdle price shall not be less than the Fair Market
Value of a Share on the date of grant of such SAR.

 

(c)   The term of each SAR shall be fixed by the Committee but shall not exceed
10 years from the date of grant of such SAR.

 

(d)   The Committee shall determine the time or times at which a SAR may be
exercised or settled in whole or in part.

 

Section 8.    Restricted Stock and RSUs.    The Committee is authorized to grant
Awards of Restricted Stock and RSUs to Participants with the following terms and
conditions and with such additional terms and conditions, in either case not
inconsistent with the provisions of the Plan, as the Committee shall determine.

 

(a)   Shares of Restricted Stock and RSUs shall be subject to such restrictions
as the Committee may impose (including any limitation on the right to vote a
Share of Restricted Stock or the right to receive any dividend, dividend
equivalent or other right), which restrictions may lapse separately or in
combination at such time or times, in such installments or otherwise, as the
Committee may deem appropriate.

 

(b)   Any share of Restricted Stock granted under the Plan may be evidenced in
such manner as the Committee may deem appropriate, including book-entry
registration or issuance of a stock certificate or certificates. In the event
any stock certificate is issued in respect of shares of Restricted Stock granted
under the Plan, such certificate shall be registered in the name of the

 

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Participant and shall bear an appropriate legend referring to the terms,
conditions and restrictions applicable to such Restricted Stock.

 

(c)   If the Committee intends that an Award granted under this Section 8 shall
constitute or give rise to Section 162(m) Compensation, such Award shall be
structured in accordance with the requirements of Section 9, including the
performance criteria and the Award limitation set forth therein, and any such
Award shall be considered a Performance Award for purposes of the Plan.

 

(d)   The Committee may provide in an Award Document that an Award of Restricted
Stock is conditioned upon the Participant making or refraining from making an
election with respect to the Award under Section 83(b) of the Code. If a
Participant makes an election pursuant to Section 83(b) of the Code with respect
to an Award of Restricted Stock, the Participant shall be required to file
promptly a copy of such election with the Company.

 

Section 9.    Performance Awards.    The Committee is authorized to grant
Performance Awards to Participants with the following terms and conditions and
with such additional terms and conditions, in either case not inconsistent with
the provisions of the Plan, as the Committee shall determine:

 

(a)   Performance Awards may be denominated as a cash amount, number of Shares
or units or a combination thereof and are Awards which may be earned upon
achievement or satisfaction of performance conditions specified by the
Committee. In addition, the Committee may specify that any other Award shall
constitute a Performance Award by conditioning the grant to a Participant or the
right of a Participant to exercise the Award or have it settled, and the timing
thereof, upon achievement or satisfaction of such performance conditions as may
be specified by the Committee. The Committee may use such business criteria and
other measures of performance as it may deem appropriate in establishing any
performance conditions. Subject to the terms of the Plan, the performance goals
to be achieved during any Performance Period, the length of any Performance
Period, the amount of any Performance Award granted and the amount of any
payment or transfer to be made pursuant to any Performance Award shall be
determined by the Committee.

 

(b)   Every Performance Award shall include, if the Committee intends that such
Award should constitute Section 162(m) Compensation, a pre-established formula,
such that payment, retention or vesting of the Award is subject to the
achievement during a Performance Period or Performance Periods, as determined by
the Committee, of a level or levels of, or increases in, in each case as
determined by the Committee, one or more of the following performance measures
with respect to the Company: captured prospects, licenses or leases acquired,
contracts executed, operated prospects matured to drill ready, drilling programs
commenced, wells commenced, successful wells, drillable prospects, exploratory
and appraisal drilling performance, capabilities and critical path items
established, operating or total budget, cash management, liquidity measurements,
capital raised, captured net risked resource potential, acquisition cost
efficiency, central lease sale position, acquisitions of oil and gas interests,
measurements of proved, probable or possible reserves, measurements of
resources, finding and development costs, overhead costs, general and
administration expense, market price of a Share, cash flow, reserve value, net
asset value, earnings, net income, value or number of asset dispositions,
operating income, cash from operations, revenue, margin, EBITDA (earnings before
interest, taxes, depreciation and amortization), EBITDAX (earnings before
interest, taxes, depreciation, amortization and exploration expense), net
capital employed, return on assets, stockholder return, reserve replacement,
return on equity, return on capital employed, production, assets, unit volume,
sales, market share, safety and environmental performance objectives, accidents,
injuries or fatalities, or strategic business criteria consisting of one or more
objectives based on meeting specified goals relating to acquisitions or
divestitures, each as determined in accordance with generally accepted
accounting principles, where applicable, as consistently applied by the Company.
Performance criteria may be measured on an absolute (e.g., plan or budget) or
relative basis. Relative performance may be measured against a

 

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group of peer companies, a financial market index or other acceptable objective
and quantifiable indices. Except in the case of an award intended to qualify as
Section 162(m) Compensation, if the Committee determines that a change in the
business, operations, corporate structure or capital structure of the Company,
or the manner in which the Company conducts its business, or other events or
circumstances render the performance objectives unsuitable, the Committee may
modify the performance objectives or the related minimum acceptable level of
achievement, in whole or in part, as the Committee deems appropriate and
equitable. Performance measures may vary from Performance Award to Performance
Award, respectively, and from Participant to Participant, and may be established
on a stand-alone basis, in tandem or in the alternative. The Committee shall
have the power to impose such other restrictions on Awards subject to this
Section 9(b) as it may deem necessary or appropriate to ensure that such Awards
satisfy all requirements for Section 162(m) Compensation. Notwithstanding any
provision of the Plan to the contrary, the Committee shall not be authorized to
increase the amount payable under any Award to which this Section 9(b) applies
upon attainment of such pre-established formula.

 

(c)   Settlement of Performance Awards shall be in cash, Shares, other Awards,
other property, net settlement, or any combination thereof, in the discretion of
the Committee. The Committee shall specify the circumstances in which, and the
extent to which, Performance Awards shall be paid or forfeited in the event of a
Participant’s Termination of Service.

 

(d)   Performance Awards will be settled only after the end of the relevant
Performance Period. The Committee may, in its discretion, increase or reduce the
amount of a settlement otherwise to be made in connection with a Performance
Award but may not exercise discretion to increase any amount payable to a
Covered Employee in respect of a Performance Award intended to qualify as
Section 162(m) Compensation. Any settlement that changes the form of payment
from that originally specified shall be implemented in a manner such that the
Performance Award and other related Awards do not, solely for that reason, fail
to qualify as Section 162(m) Compensation.

 

(e)   The maximum dollar value that may be earned by any Participant for each
12 months in a Performance Period with respect to Performance Awards that are
intended to constitute Section 162(m) Compensation and are denominated in cash
is $20 million. If an Award is cancelled, the cancelled Award shall continue to
be counted toward the applicable limitation set forth in this Section 9(e).

 

Section 10.    Other Stock-Based Awards.    The Committee is authorized, subject
to limitations under applicable law, to grant to Participants such other Awards
that may be denominated or payable in, valued in whole or in part by reference
to, or otherwise based on, or related to, Shares or factors that may influence
the value of Shares, including convertible or exchangeable debt securities,
other rights convertible or exchangeable into Shares, purchase rights for
Shares, Awards with value and payment contingent upon performance of the Company
or business units thereof or any other factors designated by the Committee. The
Committee shall determine the terms and conditions of such Awards. Shares
delivered pursuant to an Award in the nature of a purchase right granted under
this Section 10 shall be purchased for such consideration, paid for at such
times, by such methods and in such forms, including cash, Shares, other Awards,
other property, or any combination thereof, as the Committee shall determine.
Cash awards, as an element of or supplement to any other Award under the Plan,
may also be granted pursuant to this Section 10.

 

Section 11.    Effect of Termination of Service or a Change in Control on
Awards.

 

(a)   The Committee may provide, by rule or regulation or in any Award Document,
or may determine in any individual case, the circumstances in which, and the
extent to which, an Award may be exercised, settled, vested, paid or forfeited
in the event of a Participant’s Termination of Service prior to the end of a
Performance Period or exercise or settlement of such Award.

 

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(b)   The Committee may set forth the treatment of an Award upon a Change in
Control in the applicable Award Document.

 

(c)   In the case of an Option or SAR Award, except as otherwise provided in the
applicable Award Document, upon a Change in Control, a merger or consolidation
involving the Company or any other event with respect to which the Committee
deems it appropriate, the Committee may cause such Award to be canceled in
consideration of (i) the full acceleration of such Award and either (A) a period
of at least ten days prior to the effective date of such Change in Control to
exercise the Award or (B) a payment in cash or other consideration to the
Participant who holds such Award in an amount equal to the Intrinsic Value of
such Award (which may be equal to but not less than zero), which, if in excess
of zero, shall be payable upon the effective date of such Change in Control,
merger, consolidation or other event or (ii) a substitute award (which
immediately upon grant shall have an Intrinsic Value equal to the Intrinsic
Value of such Award or the value otherwise permitted under Section 409A of the
Code).

 

Section 12.    General Provisions Applicable to Awards.

 

(a)   Awards shall be granted for no cash consideration or for such minimal cash
consideration as may be required by applicable law.

 

(b)   Awards may, in the discretion of the Committee, be granted either alone or
in addition to or in tandem with any other Award or any award granted under any
other plan of the Company. Awards granted in addition to or in tandem with other
Awards, or in addition to or in tandem with awards granted under any other plan
of the Company, may be granted either at the same time as or at a different time
from the grant of such other Awards or awards.

 

(c)   Subject to the terms of the Plan, payments or transfers to be made by the
Company upon the grant, exercise or settlement of an Award may be made in the
form of cash, Shares, other Awards, other property, net settlement, or any
combination thereof, as determined by the Committee in its discretion at the
time of grant, and may be made in a single payment or transfer, in installments
or on a deferred basis, in each case in accordance with rules and procedures
established by the Committee. Such rules and procedures may include provisions
for the payment or crediting of reasonable interest on installment or deferred
payments or the grant or crediting of dividend equivalents in respect of
installment or deferred payments.

 

(d)   Except as may be permitted by the Committee (except with respect to
Incentive Stock Options) or as specifically provided in an Award Document,
(i) no Award and no right under any Award shall be assignable, alienable,
saleable or transferable by a Participant otherwise than by will or pursuant to
Section 12(e) and (ii) during a Participant’s lifetime, each Award, and each
right under any Award, shall be exercisable only by the Participant or, if
permissible under applicable law, by the Participant’s guardian or legal
representative. The provisions of this Section 12(d) shall not apply to any
Award that has been fully exercised or settled, as the case may be, and shall
not preclude forfeiture of an Award in accordance with the terms thereof.

 

(e)   A Participant may designate a Beneficiary or change a previous Beneficiary
designation at such times prescribed by the Committee by using forms and
following procedures approved or accepted by the Committee for that purpose.

 

(f)    All certificates for Shares and/or other securities delivered under the
Plan pursuant to any Award or the exercise thereof shall be subject to such stop
transfer orders and other restrictions as the Committee may deem advisable under
the Plan or the rules, regulations and other requirements of the Securities and
Exchange Commission, any stock market or exchange upon which such Shares or
other securities are then quoted, traded or listed, and any applicable
securities laws, and the Committee may cause a legend or legends to be put on
any such certificates to make appropriate reference to such restrictions.

 

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(g)   The Committee may impose restrictions on any Award with respect to
non-competition, confidentiality and other restrictive covenants as it deems
necessary or appropriate in its sole discretion.

 

Section 13.    Amendments and Termination.

 

(a)    Amendment or Termination of Plan.    Except to the extent prohibited by
applicable law and unless otherwise expressly provided in an Award Document or
in the Plan, the Board may amend, alter, suspend, discontinue or terminate the
Plan or any portion thereof at any time; provided, however, that no such
amendment, alteration, suspension, discontinuation or termination shall be made
without (i) shareholder approval if such approval is required by applicable law
or the rules of the stock market or exchange, if any, on which the Shares are
principally quoted or traded or (ii) the consent of the affected Participant, if
such action would materially adversely affect the rights of such Participant
under any outstanding Award, except (x) to the extent any such amendment,
alteration, suspension, discontinuance or termination is made to cause the Plan
to comply with applicable law, stock market or exchange rules and regulations or
accounting or tax rules and regulations or (y) to impose any “clawback” or
recoupment provisions on any Awards in accordance with Section 4(d) of the Plan.
Notwithstanding anything to the contrary in the Plan, the Committee may amend
the Plan, or create sub-plans, in such manner as may be necessary to enable the
Plan to achieve its stated purposes in any jurisdiction in a tax-efficient
manner and in compliance with local rules and regulations. The Committee may
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or any Award in the manner and to the extent it shall deem desirable to
carry the Plan into effect.

 

(b)    Terms of Awards.    The Committee may waive any conditions or rights
under, amend any terms of, or amend, alter, suspend, discontinue or terminate
any Award theretofore granted, prospectively or retroactively, without the
consent of any relevant Participant or holder or Beneficiary of an Award;
provided, however, that no such action shall materially adversely affect the
rights of any affected Participant or holder or Beneficiary under any Award
theretofore granted under the Plan, except (x) to the extent any such action is
made to cause the Plan to comply with applicable law, stock market or exchange
rules and regulations or accounting or tax rules and regulations, or (y) to
impose any “clawback” or recoupment provisions on any Awards in accordance with
Section 4(d) of the Plan; and provided further, that the Committee’s authority
under this Section 13(b) is limited in the case of Awards subject to
Section 9(b), as provided in Section 9(b).

 

(c)    No Repricing.    Notwithstanding the foregoing, except as provided in
Section 5(c), no action shall directly or indirectly, through cancellation and
regrant or any other method, reduce, or have the effect of reducing, the
exercise price of any Award established at the time of grant thereof without
approval of the Company’s shareholders.

 

Section 14.    Miscellaneous.

 

(a)   No employee, Participant or other person shall have any claim to be
granted any Award under the Plan, and there is no obligation for uniformity of
treatment of employees, Participants or holders or Beneficiaries of Awards under
the Plan. The terms and conditions of Awards need not be the same with respect
to each recipient. Any Award granted under the Plan shall be a one-time Award
that does not constitute a promise of future grants. The Company, in its sole
discretion, maintains the right to make available future grants under the Plan.

 

(b)   The grant of an Award shall not be construed as giving a Participant the
right to be retained in the employ of, or to continue to provide services to,
the Company or any Affiliate. Further, the Company or the applicable Affiliate
may at any time dismiss a Participant, free from any liability, or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any

 

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Award Document or in any other agreement binding the parties. The receipt of any
Award under the Plan is not intended to confer any rights on the receiving
Participant except as set forth in the applicable Award Document.

 

(c)   Nothing contained in the Plan shall prevent the Company from adopting or
continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.

 

(d)   The Company shall be authorized to withhold from any Award granted or any
payment due or transfer made under any Award or under the Plan or from any
compensation or other amount owing to a Participant the amount (in cash, Shares,
other Awards, other property, net settlement, or any combination thereof) of
applicable withholding taxes due in respect of an Award, its exercise or
settlement or any payment or transfer under such Award or under the Plan and to
take such other action (including providing for elective payment of such amounts
in cash or Shares by the Participant) as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such taxes; provided that
if the Committee allows the withholding or surrender of Shares to satisfy a
Participant’s tax withholding obligations, the aggregate Fair Market Value of
such withheld or surrendered Shares shall not exceed the minimum statutory
withholding amount for federal and state tax purposes, including payroll taxes.

 

(e)   If any provision of the Plan or any Award Document is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any
person or Award, or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the intent
of the Plan or the Award Document, such provision shall be stricken as to such
jurisdiction, person or Award, and the remainder of the Plan and any such Award
Document shall remain in full force and effect.

 

(f)    Neither the Plan nor any Award shall create or be construed to create a
trust or separate fund of any kind or a fiduciary relationship between the
Company and a Participant or any other person. To the extent that any person
acquires a right to receive payments from the Company pursuant to an Award, such
right shall be no greater than the right of any unsecured general creditor of
the Company.

 

(g)   No fractional Shares shall be issued or delivered pursuant to the Plan or
any Award, and the Committee shall determine whether cash or other securities
shall be paid or transferred in lieu of any fractional Shares, or whether such
fractional Shares or any rights thereto shall be canceled, terminated or
otherwise eliminated.

 

Section 15.    Effective Date of the Plan.    The Plan shall be effective as of
the Effective Date.

 

Section 16.    Term of the Plan.    No Award shall be granted under the Plan
after the earliest to occur of (i) the tenth year anniversary of the Effective
Date, (ii) the maximum number of Shares available for issuance under the Plan
have been issued or (iii) the Board terminates the Plan in accordance with
Section 13(a). However, unless otherwise expressly provided in the Plan or in an
applicable Award Document, any Award theretofore granted may extend beyond such
date, and the authority of the Committee to amend, alter, adjust, suspend,
discontinue or terminate any such Award, or to waive any conditions or rights
under any such Award, and the authority of the Board to amend the Plan, shall
extend beyond such date.

 

Section 17.    Section 409A of the Code.    With respect to Awards subject to
Section 409A of the Code, the Plan is intended to comply with the requirements
of Section 409A of the Code, and the provisions of the Plan and any Award
Document shall be interpreted in a manner that satisfies the requirements of
Section 409A of the Code, and the Plan shall be operated accordingly. If any
provision

 

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of the Plan or any term or condition of any Award would otherwise frustrate or
conflict with this intent, the provision, term or condition will be interpreted
and deemed amended so as to avoid this conflict. Notwithstanding any of the
foregoing, the Company makes no representations or warranty and shall have no
liability to the Participant or any other person if any provisions or payments,
compensation or other benefits under the Plan are determined to constitute
nonqualified deferred compensation subject to Section 409A of the Code but do
not satisfy the provisions thereof.

 

Section 18.    Governing Law.    The Plan and each Award Document shall be
governed by the laws of the State of Delaware, without application of the
conflicts of law principles thereof.

 

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