Long Term Stock Incentive Plan



 Exhibit 10.26 
 ENERGY PARTNERS, LTD. 
 2006 Long Term Stock Incentive Plan 
 NONQUALIFIED STOCK OPTION 
 [Date]
GRANT 
  

							
	 Name
	  	Number of Shares	  	Exercise Price Per share	  	Expiration Date
	[Employee]	  	[Shares]	  	[Price]	  	[Date]

 This Agreement (this “Agreement”) confirms the award of a stock option to you by Energy
Partners, Ltd. (the “Company”) under the Company’s 2006 Long Term Stock Incentive Plan (the “Plan”), to purchase [Shares] shares of the Company’s Common Stock, $.01 par value per share, (the “Common Stock”) at
the exercise price of [Price] per share, upon the terms and conditions outlined below and the terms and conditions of the Plan (this “Option”). A copy of the Plan has been delivered to you and is available upon request. 
 This Option is awarded as a nonqualified stock option and is not an incentive stock option pursuant to Section 422 of the Internal Revenue Code of
1986, as amended. The terms used in this Agreement shall have the same meaning as in the Plan, unless the context requires otherwise. 
 A
summary of the terms and conditions of this Option follows: 
  

	1.	Date of Grant 

 [Date]. 
  

	2.	Expiration Date 

 Your right to exercise this
Option (to the extent vested) shall continue in effect through the day that is ten (10) years from the Date of Grant: [Date] (the “Expiration Date”), subject to earlier termination under certain circumstances, as outlined in
Paragraph 7 of this Agreement. 








	3.	Vesting and Exercise 

 Your right to purchase
shares of Company Common Stock under this Option shall be exercisable only to the extent that this Option has vested. This Option shall vest and become exercisable upon the following schedule: 
 VESTING SCHEDULE 
  

	 	 a)
	 One third (1/3) of the shares covered by this Option vests on 1st anniversary of the Date of Grant; 


  

	 	 b)
	 One third (1/3) of the shares covered by this Option vests on the 2nd anniversary of the Date of Grant; and 


  

	 	 c)
	 The final one third (1/3) of the shares covered by this Option vests on the 3rd anniversary of the Date of Grant. 


  

	4.	Notice of Exercise 

 Exercise of this Option
shall be by written notice delivered or mailed to the Corporate Secretary of the Company at its executive offices, which are presently at 201 St. Charles Avenue, Suite 3400, New Orleans, Louisiana 70170. This Option may not be exercised as to less
than 100 shares at any one time unless the remaining shares then exercisable under this Option total less than 100 shares. The Notice of Exercise shall be made on a form the same as Exhibit “A” to this Agreement. 
  

	5.	Date of Exercise 

 The Date of Exercise of
this Option shall be the date on which the Notice of Exercise, accompanied by full payment of the Purchase Price as set forth in Paragraph 6 below, are received by the Company. 
  

	6.	Payment of Purchase Price 

 Each Notice of
Exercise shall be accompanied by a check payable to the order of the Company (“Cash Payment”) in the amount of the number of shares to be purchased under this Option multiplied by the Exercise Price per share of this Option (the
“Purchase Price”). 
 As alternatives to a Cash Payment, the Purchase Price for the shares covered by this Option may also be paid
as follows: 
  

	 	a)	In-Kind Exercise – In lieu of part, or all, of a Cash Payment, the Purchase Price may be paid in shares of the Company’s Common Stock owned by you for at
least six months having a fair market value (determined in accordance with the Plan) as of the Date of Exercise equal to the Purchase Price. Procedures for ‘In-Kind’ Exercise may be specified by the Company from time to time and will be
available upon request from the Corporate Secretary of the Company. Procedures for ‘In-Kind’ Exercise may differ for “executive officers” of the Company, as defined under Section 16(b) of the Securities and Exchange Act of
1934, as amended. 

  

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	 	b)	Cashless Exercise – In lieu of part, or all, of a Cash Payment, you may deliver a properly executed Notice of Exercise, together with irrevocable instructions to
a broker to deliver to the Company the total Cash Payment. Procedures for ‘Cashless Exercise’ may be specified by the Company from time to time and will be available upon request from the Corporate Secretary of the Company.


  

	7.	Limitations on Vesting and Exercise  

  

	 	a)	Termination of Employment 

 Except for the
circumstances provided for in Paragraph 7 (b) below, if your employment with the Company terminates for any reason whatsoever, all shares that have not vested under this Option as of the date your employment terminates shall be immediately
forfeited. This Option may be exercised as to any shares that have vested under this Option as of the date your employment terminates, but only for a period of thirty (30) days from the date your employment with the Company terminates (and in
no event beyond the Expiration Date). Any shares vested under this Option which are not exercised on or before the earlier of the Expiration Date or thirty (30) days after the date of termination of employment are forfeited and this Option
shall be null and void and without further effect. 
  

	 	b)	Death, Disability or Retirement 

 If you die, become disabled (as defined below), or retire (as defined below) while employed by the
Company, the period during which this Option may vest will be extended through December 31st of the year in
which you die, become disabled or retire. All shares that will not have vested under this Option on or before December 31st of the year in which you die, become disabled or retire shall be forfeited as of the date you die, become disabled or retire. With respect to all shares vested under this Option on or before December 31st of the year in which you die, become disabled or retire, this Option may be exercised for a period of three (3) years
from the date that you die, become disabled, or retire (but in no event beyond the Expiration Date). Any shares vested under this 

  

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Option but not exercised on or before the earlier of the Expiration Date or the date that is three (3) years from the date of your death, disability or
retirement are forfeited and this Option shall be null and void and without further effect. 
 In the event of your death, your beneficiary(s)
(as defined below), may exercise this Option. 
 If you become disabled, this Option may be exercised by your legal representative.

  

	 	c)	Definitions 

 For purposes of this Option,
“beneficiary” is defined as the person(s) or trust(s) designated by you in a writing filed with the Company or, if no such designation is made, the person(s) or trust(s) entitled by will or by the laws of descent and distribution to
receive the benefits of this Option. 
 For purposes of this Option, “disability” is defined as your inability, due to physical or
mental impairment, for ninety (90) days, whether or not consecutive, during any 360-day period, to perform the duties and functions for which you were employed by the Company, or such other circumstances as the Compensation Committee shall
determine in its discretion. 
 For purposes of this Option, “retirement” is defined as voluntary termination of employment at or
after age 55 with at least 5 years of service. 
  

	8.	Change of Control 

 Notwithstanding anything
to the contrary contained in this Option, if a Change of Control (as defined in the Plan) occurs, this Option, or any portion thereof, which has not vested as of the date of such Change of Control and which was not forfeited prior to the date of the
Change of Control shall immediately vest and all shares that are the subject of this Option shall, as of the date of such Change of Control, become immediately exercisable and may be exercised through the Expiration Date of this Option. 

 

	9.	Non-transferable  

 This Option is not
transferable or assignable, except to your beneficiary in the event of your death, as provided in Paragraph 7 of this Agreement. 
  

	10.	Rights as Shareholder  

 You shall not be
deemed for any purpose to be, or have rights as, a shareholder of the Company with respect to the shares covered by this Option until you exercise this 

  

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Option. No adjustments shall be made for cash dividends, distributions or other similar rights for which the record date is prior to the date on which the
shares covered by this Option are actually issued to you. Certificates evidencing shares acquired by you pursuant to this Option will be forwarded to you by the Company’s Transfer Agent as soon as reasonably practicable after your exercise of
this Option. 
  

	11.	Miscellaneous 

 This Agreement (a) shall
be binding upon and inure to the benefit of any successor of the Company; (b) shall be governed by the laws of the State of Delaware, and any applicable laws of the United States; (c) may not be amended except in writing; (d) shall in
no way affect your participation or benefits under any other plan or benefit program maintained or provided by the Company; and (e) shall not be construed as giving you any right to continued employment with the Company. This Agreement does
not, nor shall it be construed to, alter, modify or amend the Plan. In the event of any inconsistency or conflict between any term, condition or provision of this Agreement and the Plan, the Plan shall control and govern. 
  

	12.	Compliance with Applicable Law 

 Notwithstanding anything herein to the contrary, this Option shall not be exercisable and the Company shall not be obligated to issue or deliver any certificate evidencing shares covered by this Option, if the Company determines that the
exercise of such Option and/or the issuance and delivery of such certificate may be in violation of any law or regulation of any governmental or regulatory authority. Without limitation on the foregoing, the Company shall in no event be obligated to
register any securities pursuant to the Securities Act of 1933, as amended, or to take any other action in order to cause the exercise of this Option and/or the issuance and delivery of any share certificate to comply with any federal, state or
other law or regulation. 
  

	13.	Withholding 

 The Company, if required, will
withhold taxes on any income as a result of the exercise of this Option or will take a cash payment from you for the withholding. The Company will permit you to elect whether to pay cash to cover the withholding or have shares withheld to cover the
withholding. 
  

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	 ENERGY PARTNERS, LTD.

		
	 By:
	 	  

		 	Richard A. Bachmann
		 	Chairman and Chief Operating Officer

  

			
		 	Attest:
		
		 	  

		 	John H. Peper
		 	Corporate Secretary

 I ACCEPT THE OPTION GRANT AND EACH OF THE TERMS AND CONDITIONS THEREOF AS STATED ABOVE AND IN THE PLAN:

  

			
	  

	 [Employee]

		
	Date:	 	  


  

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