Exhibit 10.32






Exhibit 10.32




NOBLE CORPORATION

2011 SHORT TERM INCENTIVE PLAN




Section 1. Purpose




The success of Noble Corporation (“Noble”) and its subsidiaries (collectively, unless the
context otherwise requires, the “Company”) is a result of the efforts of all key employees. In
order to focus each employee’s efforts on optimizing the Company’s overall results, operationally
and financially, the Company maintains this Short Term Incentive Plan (the “Plan”) to reward
employees for successful achievement of specific goals.



An effective incentive plan should both align employee interests with those of shareholders
and motivate and influence employee behavior. Key positions within the Company have the ability to
make a positive contribution to key factors that increase shareholder value. These factors can be
quantified and measured through achievement of various financial and operational targets, such as
safety, earnings per share and cash operating margins. The objectives of using such targets in the
formulation of the specific Company goals are to link an employee’s annual incentive award more
closely to the creation of shareholder wealth and to promote a culture of high performance and an
environment of team work.



Section 2. Participation and Eligibility




Full-time employees in salary classifications 18N and higher are eligible for consideration of
a bonus under the Plan, subject to the approval of the Compensation Committee (the “Committee”) of
the Board of Directors (the “Board”) of Noble. Each such employee will be considered either a
“corporate employee” or a “division employee” for purposes of adjustment of such employee’s target
bonus pursuant to Section 6. Full-time, non-exempt employees not in such salary classifications
are also eligible for consideration of a bonus under the Plan, subject to the discretion of the
Committee. The Plan year shall be the calendar year.



To be eligible to receive a bonus payment with respect to a Plan year, an employee must be
actively employed by the Company on the last day of such Plan year and must continue to be employed
through the date on which bonus payments for such Plan year are made. An employee shall not be
eligible to receive any bonus payment if the employee’s employment with the Company terminates for
any reason, either voluntarily or involuntarily, before that date on which bonus payments for a Plan year are
made.


 


 









 





Notwithstanding the foregoing, in the event of death, disability or retirement, the employee
or estate of the former employee may receive a pro-rated payment from the Plan, at the discretion
of the Committee and the Chie Executive Officer (the “CEO”). For purposes of the Plan,
“disability” means any termination of employment with the Company or an affiliate of the Company
because of a long-term or total disability, as determined by the Committee and CEO, and
“retirement” means a termination of employment with the Company on a voluntary basis by a person
if, immediately prior to such termination of employment, the sum of the age and the number years of
continuous service of such person with the Company (or affiliate) is equal to or greater than 60.



The total bonus paid for a Plan year shall not be greater than the aggregate bonus accruals
for all participating offices and divisions for such Plan year. If the accrual amount for a
specific participating office or division for a Plan year is greater than the bonus amount under
the Plan for such office or division, the excess accrual balance will not be distributed. If the
accrual amount for a specific participating office or division for a Plan year is less than the
bonus amount under the Plan, only the accrual balance will be distributed.



Section 3. Administrative Procedures 




During the fourth quarter of each year, the Company will commence preparation of budgets and
forecasts for the succeeding Plan year. The Board will approve the budget for the Plan year not
later than March 31st of such Plan year.



Goals for a Plan year for each of the categories in Section 5 will be compiled by management
and submitted to the Committee for approval at the first regularly scheduled Committee meeting of
each new Plan year. The specific goals established for the Plan year will be set forth in an Annex
II to this Plan for such Plan year, and the Annex II hereto for each Plan year shall be
incorporated into and made a part of this Plan for such Plan year.



If, after the establishment of goals for a Plan year, the budget changes substantially due to
subsequent events, such as the acquisition or sale of assets, then the CEO shall, at his
discretion, recommend to the Committee the adjustment of the respective goals in order that they may not be adversely impacted by such an event. Any such
revised goals shall be applicable to the Plan year from and after the time of their approval.


 


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Section 4. Target Bonus




A target bonus is determinable for each full-time employee in salary classification 18N or
higher. The target bonus for an employee is an amount equal to the employee’s salary at the end of
the Plan year multiplied times the target bonus percentage assigned to such employee’s salary
classification. 50 percent of this amount is eligible to be paid based on the achievement of the
stated goals under the Plan, as set forth below and on page 4, and 50 percent will be available at
the discretion of the Compensation Committee based on merit, individual and team performance and
additional selected criteria. Target bonus percentages range from 10 percent to 100 percent based
on salary classification, as follows:



	 	 	 	 	 
	Salary Classification	 	Target Bonus Percentage	 
	 
	18N
	 	 	10	%
	19N
	 	 	15	%
	20N through 22N
	 	 	20	%
	23N through 24N
	 	 	25	%
	25N
	 	 	30	%
	26C
	 	 	35	%
	27C through 28C
	 	 	40	%
	29C through 30C
	 	 	45	%
	31C through 32C
	 	 	50	%
	33C
	 	 	55	%
	34C
	 	 	65	%
	35C
	 	 	70	%
	36C
	 	 	75	%
	37C
	 	 	80	%
	38C
	 	 	90	%
	39C
	 	 	100	%






Section 5. Goal Categories and Weightings 




Goals for the following categories will be approved by the Committee for each Plan year. Such
goals will then be set forth in the Annex II to this Plan for such Plan year. The relative weighting assigned to each goal will be as set forth below subject to annual review by the
Committee.




Corporate Goals



	 	 	 	 	 
	 	 	Assigned Weight	 
	 
	1. Safety Results
	 	 	25	%
	2. Earnings per Share
	 	 	35	%
	3. Cash Operating Margin
	 	 	40	%





 


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Operating Division Goals




Gulf Coast, Mexico, Middle East (including India), West Africa, North Sea, Brazil and
Hibernia:



	 	 	 	 	 
	1. Safety Results
	 	 	35	%
	2. Cash Operating Margin
	 	 	65	%






Section 6. Adjustment of Target Bonus




The respective employee target bonuses determined pursuant to Section 4 for a Plan year are
subject to adjustment as set forth in this Section to reflect the levels of achievement of the
specific, predetermined goals for such Plan year. Any bonus multiplier achieved will be applied to
the stated corporate and division goals, pursuant to the terms of the Plan. In situations where
the goal achievement calculation falls between two adjacent ranges, percentages ending in .5 or
higher will round up to the next range, where as percentages below .5 will round down. In
addition, a maximum bonus multiplier of 2.0 may be applied to the discretionary portion of the STIP
award, subject to the approval of the Committee and CEO, as stated in Section 7 of this document.




Corporate Employees. In order to promote cooperation between the corporate office and the
divisions, the target bonus for a corporate employee will be weighted 25 percent for
achievement of the corporate goals, 25 percent for the cumulative average achievement of
the division goals and 50 percent will be based on merit, individual and team performance
and additional selected criteria, as determined by the Compensation Committee.




Operating Division Employees. In order to promote cooperation among the operating
divisions and recognition by each division of its contribution to the Company’s overall performance, the target bonus for a division employee will be weighted 25
percent for achievement of the applicable division goals, 25 percent for achievement of the
corporate goals and 50 percent will be based on merit, individual and team performance and
additional selected criteria, as determined by the Compensation Committee.


 


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Subject to the determination by the Board of a sufficient bonus pool for a Plan year pursuant
to Section 7, the bonus payable to an eligible employee in salary classification 18N or higher will
be an amount equal to such employee’s target bonus amount multiplied times the applicable
multiplier determined under the following schedule:



	 	 	 	 	 
	Combined Weighted	 	Applicable Multiplier	 
	Percentage of Goal Achievement	 	to Calculate Bonus Payable	 
	 
	 	 	 	 
	Greater than 160%
	 	 	2.00	 
	141 – 160%
	 	 	1.75	 
	131 – 140%
	 	 	1.50	 
	121 – 130%
	 	 	1.40	 
	106 – 120%
	 	 	1.20	 
	96 – 105%
	 	 	1.00	 
	76 – 95%
	 	 	.75	 
	65 – 75%
	 	 	.50	 
	Below 65%
	 	 	.00	 






Section 7. Allocation of Bonus Payable 




After the end of each Plan year, the Board, in its best business judgment, will determine the
total bonus pool for such Plan year, giving due consideration to the aggregate target bonus
amounts, overall Company performance, and levels of attainment of the specific, predetermined
corporate or division goals for such Plan year. In determining overall Company performance, the
Board will consider the Company’s performance in relation to both the predetermined corporate and
division goals and the prevailing market conditions in the industry during the Plan year.



The total bonus pool authorized by the Board for a Plan year may be an amount equal to, less
than, or greater than the aggregate amount of the bonuses payable to all eligible employees in
salary classifications 18N through 39C (the “Aggregate Calculated Pool”).


 


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All eligible employees in salary classifications 18N through 39C will receive a bonus as
calculated in accordance with Section 6, provided the Board has determined and authorized a total
bonus pool in an amount equal to or greater than the Aggregate Calculated Pool. If the Board
authorizes a total bonus pool in an amount less than the Aggregate Calculated Pool, then the Board
shall also determine the percentage of such bonus pool (which may be any percentage up to 100
percent) that shall be allocated to the eligible employees in salary classifications 18N through
39C, and the bonuses otherwise payable to such employees, subject to the last sentence of the next
succeeding paragraph, will be prorated accordingly based on the amount so allocated. In such
event, the percentage of the total bonus pool not so allocated, if any, shall be available for
payment to the eligible full-time, non-exempt employees not in salary classifications 18N through
39C based upon merit. If the Board authorizes a total bonus pool in an amount greater than the
Aggregate Calculated Pool, then the excess amount will be allocated to eligible full-time,
non-exempt employees not in salary classifications 18N through 39C, subject to the discretion of
the Committee. Managers having responsibility for recommending the allocation of bonuses to
eligible full-time, non-exempt employees not in salary classifications 18N through 39C shall submit
their recommended bonus based on their performance and contributions to the Executive Vice
President and the CEO for review and approval.



All bonus calculations, allocations and recommendations are subject to review and approval by
the Committee. Notwithstanding anything otherwise contained in this Plan, the Committee and the
CEO (and any delegated designee of the CEO) shall have the authority to adjust individual bonus
amounts as deemed to be appropriate for any reason, including, but not limited to, company or
division performance, individual employee performance, employee conduct, etc.



Section 8. At-Will Employment




Nothing in the Plan guarantees or constitutes a contract for any specific term of employment
or otherwise limits the Company’s or an employee’s right to terminate the employment relationship
for any reason at any time.




 


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