Document:

Exhibit 4.1

 

	
  

  	
  ORGANIZED UNDER
  THE LAWS OF THE STATE OF DELAWARE THIS CERTIFIES THAT is the owner of FULLY
  PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, $0.01 PAR VALUE, OF COBALT
  INTERNATIONAL ENERGY, INC. transferable on the books of the Corporation by
  the holder hereof in person or by duly authorized attorney upon the surrender
  of this Certificate properly endorsed. This Certificate is not valid until
  countersigned and registered by the Transfer Agent and Registrar. WITNESS the
  facsimile seal of the Corporation and the facsimile signatures of its duly
  authorized officers. Dated: COBALT INTERNATIONAL ENERGY, INC. SEAL 2009
  DELAWARE CORPORATE General Counsel and Executive Vice President Chairman of
  the Board of Directors and Chief Executive Officer CUSIP
  TO COME SEE REVERSE FOR CERTAIN DEFINITIONS S H A R E S CIE
  COUNTERSIGNED AND REGISTERED: CONTINENTAL STOCK TRANSFER & TRUST COMPANY
  (JERSEY CITY, NJ) TRANSFER AGENT AND REGISTRAR BY: AUTHORIZED SIGNATURE 

  

 

	
  

  	
  For value
  received, hereby sell, assign and transfer unto The following abbreviations,
  when used in the inscription on the face of this certificate, shall be
  construed as though they were written out in full according to applicable
  laws or regulations: TEN COM TEN ENT JT TEN – as
  tenants in common – as tenants by the entireties – as joint tenants with
  right of survivorship and not as tenants in common UNIF
  GIFT MIN ACT– Custodian (Cust) (Minor) under
  Uniform Gifts to Minors Act (State) THE SIGNATURE TO THIS ASSIGNMENT MUST
  CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN
  EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.
  PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
  ASSIGNEE Shares of the common stock represented by the within Certificate,
  and do hereby irrevocably constitute and appoint PLEASE INSERT SOCIAL
  SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE Attorney to transfer the
  said stock on the books of the within-named Corporation with full power of
  substitution in the premises. Dated, SIGNATURE(S) GUARANTEED: THE
  SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
  STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
  IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. Additional abbreviations may also be
  used though not in the above list. NOTICE:Exhibit
10.1

 

EMPLOYMENT AGREEMENT

 

 

dated as of November 12, 2009,

 

 

between

 

 

COBALT INTERNATIONAL ENERGY, INC.,

(the Company)

 

and

 

 

Joseph H. Bryant,

(Employee)

 

 

TABLE OF CONTENTS

 

 

	
   

  	
  PAGE

  
	
   

  	
   

  
	
  ARTICLE 1

  
	
  DEFINITIONS

  
	
   

  
	
  Section 1.01.  Definitions

  	
  1

  
	
   

  	
   

  
	
  ARTICLE 2

  
	
  EFFECTIVENESS; TERM OF AGREEMENT; TERMINATION OF SEVERANCE AGREEMENT

  
	
   

  
	
  Section 2.01.  Effectiveness; Term of Agreement;
  Termination of Severance Agreement

  	
  9

  
	
   

  	
   

  
	
  ARTICLE 3

  
	
  POSITIONS AND DUTIES

  
	
   

  
	
  Section 3.01.  Employment; Positions

  	
  9

  
	
  Section 3.02.  Duties and
  Services

  	
  9

  
	
  Section 3.03.  Other
  Interests

  	
  9

  
	
   

  	
   

  
	
  ARTICLE 4

  
	
  CERTAIN EMPLOYEE REPRESENTATIONS AND AGREEMENTS; IPO EQUITY GRANT[S]

  
	
   

  	
   

  
	
  Section 4.01.  Accredited
  Investor Representations

  	
  10

  
	
  Section 4.02.  Transfer
  Restrictions

  	
  10

  
	
  Section 4.03.  Life
  Insurance

  	
  10

  
	
  Section 4.04.  IPO Equity
  Grants

  	
  10

  
	
   

  	
   

  
	
  ARTICLE 5

  
	
  CONFIDENTIAL INFORMATION, INVENTIONS,

  
	
  BUSINESS OPPORTUNITIES AND GOODWILL

  
	
   

  	
   

  
	
  Section 5.01.  Confidential Information, Inventions,
  Business Opportunities and Goodwill

  	
  11

  
	
   

  	
   

  
	
  ARTICLE 6

  
	
  COMPENSATION AND BENEFITS

  
	
   

  	
   

  
	
  Section 6.01.  Base
  Salary

  	
  11

  
	
  Section 6.02.  Bonuses

  	
  11

  
	
  Section 6.03.  Other
  Benefits

  	
  11

  
	
  Section 6.04.  Expenses

  	
  12

  

 

 

	
  Section 6.05.  Vacation
  and Sick Leave

  	
  12

  
	
  Section 6.06.  Offices

  	
  12

  
	
   

  	
   

  
	
  ARTICLE 7

  
	
  TERMINATION OF EMPLOYMENT AND NOTICE OF TERMINATION OF EMPLOYMENT

  
	
   

  	
   

  
	
  Section 7.01.  Termination of Employment

  	
  12

  
	
  Section 7.02.  Notice of
  Termination of Employment

  	
  13

  
	
  Section 7.03.  Deemed
  Resignations

  	
  13

  
	
   

  	
   

  
	
  ARTICLE 8

  
	
  SEVERANCE BENEFITS

  
	
   

  	
   

  
	
  Section 8.01.  Death,
  Disability, Termination for Cause or Resignation Without Good Reason

  	
  14

  
	
  Section 8.02.  Involuntary Termination

  	
  14

  
	
  Section 8.03.  Death,
  Disability or Involuntary Termination After Agreement Termination Date

  	
  16

  
	
   

  	
   

  
	
  ARTICLE 9

  
	
  INTEREST ON LATE PAYMENTS

  
	
   

  	
   

  
	
  Section 9.01.  Interest
  on Late Payments

  	
  16

  
	
   

  	
   

  
	
  ARTICLE 10

  
	
  CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY

  
	
   

  	
   

  
	
  Section 10.01.  Gross-up
  Payment

  	
  16

  
	
  Section 10.02.  Disposition of Claims

  	
  17

  
	
   

  	
   

  
	
  ARTICLE 11

  
	
  COMPETITION.

  
	
   

  	
   

  
	
  Section 11.01.  Competition

  	
  18

  
	
   

  	
   

  
	
  ARTICLE 12

  
	
  NONDISCLOSURE OF CONFIDENTIAL AND PROPRIETARY INFORMATION

  
	
   

  	
   

  
	
  Section 12.01.  Nondisclosure
  of Confidential and Proprietary Information

  	
  20

  
	
   

  	
   

  
	
  ARTICLE 13

  
	
  INVENTIONS

  
	
   

  	
   

  
	
  Section 13.01.  Inventions

  	
  22

  

 

ii

 

	
  ARTICLE 14

  
	
  INJUNCTIVE RELIEF

  
	
   

  	
   

  
	
  Section 14.01.  Injunctive
  Relief

  	
  22

  
	
   

  	
   

  
	
  ARTICLE 15

  
	
  NON-DISPARAGEMENT

  
	
   

  	
   

  
	
  Section 15.01.  Non-Disparagement

  	
  22

  
	
   

  	
   

  
	
  ARTICLE 16

  
	
  GENERAL

  
	
   

  	
   

  
	
  Section 16.01.  Survivorship

  	
  23

  
	
  Section 16.02.  Arbitration

  	
  23

  
	
  Section 16.03.  Payment
  Obligations Absolute

  	
  24

  
	
  Section 16.04.  Successors

  	
  24

  
	
  Section 16.05.  Severability

  	
  24

  
	
  Section 16.06.  Non-alienation

  	
  24

  
	
  Section 16.07.  Notices

  	
  24

  
	
  Section 16.08.  Controlling
  Law and Waiver of Jury Trial

  	
  25

  
	
  Section 16.09.  Release and
  Delayed Payment Restriction

  	
  25

  
	
  Section 16.10.  Full
  Settlement

  	
  26

  
	
  Section 16.11.  Unfunded
  Obligation

  	
  26

  
	
  Section 16.12.  No Right
  to Continued Employment

  	
  26

  
	
  Section 16.13.  Withholding
  of Taxes and Other Employee Deductions

  	
  26

  
	
  Section 16.14.  Number and
  Gender

  	
  26

  
	
  Section 16.15.  Entire
  Agreement

  	
  27

  

 

Annexes and Exhibits

 

	
  Annex I

  	
  Accredited Investor
  Representations

  
	
  Annex II

  	
  Transfer Restrictions

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of Restricted
  Stock Award Agreement – Class C Interests

  
	
  Exhibit B

  	
  Form of Restricted
  Stock Award Agreement – Class D Interests

  
	
  Exhibit C

  	
  Form of Release

  

 

iii

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT
(this “Agreement”) dated as of October 23,
2009, is made by and between COBALT INTERNATIONAL ENERGY, INC., a Delaware
corporation (the “Company”), and
Joseph H. Bryant (“Employee”) and,
for the limited purpose of Article 2,
Cobalt International Energy, L.P. (the “Partnership”).

 

RECITALS

 

WHEREAS, the Company desires
to attract and retain certain key employee personnel and, accordingly, the
Board of Directors of the Company has approved the Company’s entering into this
Agreement with Employee to encourage Employee’s continued service to Cobalt;

 

WHEREAS, the terms and
conditions set forth in this Agreement are similar to the terms and conditions
set forth in an existing severance agreement between Employee and the
Partnership dated as of April 20, 2009 (the “Prior Severance Agreement”);

 

WHEREAS, upon the closing of
the IPO (as defined below), the Severance Agreement shall be terminated, and
this Agreement shall become effective.

 

AGREEMENT

 

NOW, THEREFORE, in consideration
of the foregoing and for other good and valuable consideration, the Company and
Employee agree as follows:

 

ARTICLE 1

DEFINITIONS

 

Section 1.01.  Definitions.

 

“Accrued Obligations” shall mean Employee’s base salary through
the Date of Termination of Employment not theretofore paid, any expenses owed
to Employee under the Company’s expense reimbursement policy as in effect from
time to time, any accrued vacation pay owed to Employee pursuant to the Company’s
vacation policy as in effect from time to time, any earned but unpaid annual
performance bonus with respect to a calendar year that has ended on or before
the Date of Termination of Employment (it being understood that a bonus will
not be considered to have been unearned merely because Employee has not
remained employed through the payment date so long as Employee has remained
employed through the end of the calendar year that has ended on or before the

 

 

Date of Termination of
Employment), any amount accrued and arising from Employee’s participation in,
or benefits accrued under, any employee benefit plans, programs or arrangements
maintained by the Company which amounts shall be payable in accordance with the
terms and conditions of such employee benefit plans, programs or arrangements,
and such other or additional benefits as may be, or become, due to Employee
under the applicable terms of applicable plans, programs, agreements, corporate
governance documents and other arrangements of the Company and its
subsidiaries.

 

“Actual Bonus” shall mean the full amount of the actual annual
bonus Employee would have been entitled to receive, based on the Company’s
actual performance through the end of the calendar year in which Employee’s
termination of employment with the Company occurred, determined as if he had
continued his employment with the Company through the end of such calendar
year.

 

“Actual Bonus Payment Date” shall mean, with respect to an
Actual Bonus for a particular calendar year, the date on which annual bonuses
for such calendar year are generally paid to employees of the Company who have
not terminated employment with the Company, but in no event earlier than January 1
of the year following such calendar year nor later than December 31 of the
year following such calendar year.

 

“Affiliate” shall mean any entity that owns or controls, is
owned or controlled by, or is under common control with, the Company.

 

“Agreement Termination Date” shall mean the fifth anniversary
of the closing of the IPO.

 

“Annual Bonus” shall have the meaning assigned to such term in Section 6.02.

 

“Annualized Base Salary” shall mean an amount equal to the
greater of:

 

Employee’s annualized base
salary at the rate in effect on the date of his Involuntary Termination or
termination by reason of death or Disability, as applicable;

 

Employee’s annualized base
salary at the rate in effect 90 days prior to the date of his Involuntary
Termination or termination by reason of death or Disability, as applicable; or

 

Employee’s annualized base
salary at the rate in effect immediately prior to a Change in Control if, on
the date upon which such Change in Control occurs

 

2

 

or within two years
thereafter, Employee’s employment shall be subject to an Involuntary
Termination or be terminated by reason of death or Disability.

 

For the avoidance of doubt,
for all purposes of this Agreement, base salary specifically does not include
any (A) bonuses, (B) incentive compensation or (C) equity-based
compensation.

 

“Base Salary” shall have assigned to such term in Section 6.01.

 

“Board” shall mean the Board of Directors of the Company.

 

“Cause” shall mean (i) the willful failure of Employee to
substantially perform Employee’s duties as an employee of the Company (other
than any such failure resulting from Employee’s physical or mental incapacity),
(ii) Employee’s having engaged in willful misconduct, gross negligence or
a breach of fiduciary duty that results in material and demonstrable harm to
the Company or any of its Affiliates, (iii) Employee’s willful and
material breach of this Agreement (as amended from time to time) that results
in material and demonstrable harm to the Company or any of its Affiliates, (iv) Employee’s
having been convicted of, or having entered a plea bargain or settlement
admitting guilt or the imposition of unadjudicated probation 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 Employee would have, or would reasonably be
expected to have, a material adverse impact on the Company’s or any of its
Affiliates’ reputations, (v) Employee’s 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 Employee in which findings of facts
or any legal conclusions establishing liability are neither admitted nor denied,
(vi) Employee’s unlawful use (including being under the influence of) or
possession of illegal drugs on the Company’s premises or while performing
Employee’s duties and responsibilities as an employee of the Company, or (vii) Employee’s
commission of an act of fraud, embezzlement, or misappropriation, in each case,
against the Company or any of its Affiliates. 
If the Company desires to terminate Employee’s employment for Cause in
accordance herewith, it shall provide Employee with a Notice of Termination of
Employment in accordance with Section 5.02 and allow Employee 30 days
following the date of such notice to fully remedy, cure or rectify, if
possible, the situation giving rise to the Company’s allegations of Cause.  For purposes of this definition, no act, or
failure to act, on the part of Employee shall be considered “willful” unless it
is done, or omitted to be done, by Employee in bad faith or without reasonable
belief that Employee’s action or omission was in the best interests of the
Company.  Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by the Board
or upon the instructions of the Chief Employee Officer of the Company (other
than Employee if he is serving in

 

3

 

such capacity) or based upon
the advice of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, by Employee in good faith and in the best
interests of the Company.  The cessation of
employment of Employee shall not be deemed to be for Cause unless and until
there shall have been delivered to Employee a copy of a resolution duly adopted
by the affirmative vote of a majority of the entire membership of the Board
(excluding Employee, if Employee is a member of the Board) at a meeting of the
Board at which at least a quorum is present (after reasonable notice is
provided to Employee and Employee is given an opportunity, together with
counsel for Employee, to be heard before the Board) finding that, in the good
faith opinion of the Board, Employee is guilty of the conduct described in this
definition, and specifying the particulars thereof in detail.

 

(a)               “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 Securities Exchange Act of 1934 (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 IPO) 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

 

4

 

to any Person (other than an
Affiliate (as defined in the Company Long Term Incentive Plan)) 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 Employee if Employee 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.

 

“Cobalt Equity Payment” means the issuance of an equity
interest in Cobalt to Employee, the accelerated vesting of any such equity
interest or any other benefit conferred to Employee in connection with any such
equity interest that, in any such case, could potentially be subject to the
Excise Tax.

 

“Code” shall mean the Internal Revenue Code of 1986, as
amended.

 

“Date of Termination of Employment” shall mean (i) if
Employee’s employment with the Company is terminated by his death, the date of
Employee’s death, or (ii) if Employee’s employment with the Company is
terminated for any reason whatsoever other than Employee’s death, the earlier
of the date indicated in the Notice of Termination of Employment or the date
specified by the Company pursuant to Section
7.02.

 

“Disability” shall mean, at any time the Company or any
Affiliate sponsors a long-term disability plan that covers Employee and other
Employee employees of the Company, “disability” as defined in such long-term
disability plan for the purpose of determining a participant’s eligibility for
benefits; provided, however, if
the long-term disability plan contains multiple definitions of disability, then
“Disability” shall refer to that definition of disability which, if Employee
qualified for such disability benefits, would provide coverage for the longest
period of time.  The determination of
whether Employee has a Disability shall be made by the person or persons
required to make final disability determinations under the long-term disability
plan.  At any time the Company or any
Affiliate does not sponsor such a long-term disability plan, Disability shall

 

5

 

mean Employee’s inability to
perform, with or without reasonable accommodation, the essential functions of
his position with the Company for a total of three months during any six-month
period as a result of incapacity due to mental or physical illness, as
determined by a physician selected by the Company or its insurers and
acceptable to Employee or Employee’s legal representative, such agreement as to
acceptability not to be unreasonably withheld or delayed.  Any refusal by Employee to submit to a
medical examination for the purpose of determining Disability shall be deemed
to constitute conclusive evidence of Employee’s Disability.

 

“Effective Time” shall have the meaning assigned such term in
the Reorganization Agreement.

 

“Excise Tax” shall have the meaning assigned to such term in Section 10.01.

 

“Good Reason” shall mean the occurrence of any of the following
events: (i) a material diminution in Employee’s base salary, (ii) a
material diminution in Employee’s authority, duties, responsibility or roles as
set forth in Sections 3.01 and 3.02, (iii) a material breach of this
Agreement by the Company or (iv) relocation of the geographic location of
Employee’s principal place of employment by more than 75 miles from Houston,
Texas.

 

Notwithstanding the
preceding provisions of this definition or any other provision in this
Agreement to the contrary, any assertion by Employee of a termination of
employment for “Good Reason” shall not be effective unless all of the following
conditions are satisfied: (A) the condition described in clauses (i) or
(ii) of this definition giving rise to Employee’s termination of
employment must have arisen without Employee’s consent; (B) Employee must
provide written notice to the Company of such condition in accordance with Section 16.07
within 45 days of the initial existence of the condition; (C) the
condition specified in such notice must remain uncorrected for 30 days after
receipt of such notice by the Company; and (D) the date of Employee’s
termination of employment must occur within 90 days after the initial existence
of the condition specified in such notice.

 

“Gross-up Payment” shall have the meaning assigned to such term
in Section 10.01.

 

“Inventions” shall have the meaning assigned to such term in Article 13.

 

“IPO” shall mean the underwritten public offering of shares of
the Company’s common stock pursuant to Registration Statement No. 333-161734
on Form S-1 filed with the Securities and Exchange Commission.

 

6

 

“Involuntary Termination” shall mean any termination of
Employee’s employment with the Company (i) by the Company without Cause or
(ii) by Employee for Good Reason. 
For the avoidance of doubt, the term “Involuntary Termination” does not include
a termination of Employee’s employment with the Company for any other reason
whatsoever, including, without limitation, (A) by the Company for Cause, (B) by
Employee without Good Reason or (C) as a result of Employee’s death or
Disability.

 

“Non-Compete Period” shall have the meaning assigned to such
term in Section 11.01(b).

 

“Notice of Termination of Employment” shall have the meaning
assigned to such term in Section 7.02.

 

“Parachute Value” of a Payment shall mean the present value as
of the date of the change in ownership or effective control for purposes of Section 280G
of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of
the Code, as determined for purposes of determining whether and to what extent
the Excise Tax will apply to such Payment.

 

“Partnership Agreement” shall mean the Fourth Amended and
Restated Agreement of Limited Partnership of Cobalt International Energy, L.P.,
as amended.

 

“Payment” shall have the meaning assigned to such term in Section 10.01.

 

“Pro Rata Bonus” shall mean an amount equal to the product of (i) the
actual annual bonus Employee would have been entitled to receive, based on the
Company’s actual performance through the end of the calendar year in which
Employee’s termination of employment with the Company occurred, determined as
if he had continued his employment with the Company through the end of such
calendar year and (ii) a fraction, the numerator of which is the number of
days during the calendar year through the date of Employee’s termination of
employment with the Company and the denominator of which is 365.

 

“Pro Rata Bonus Payment Date” shall mean, with respect to a Pro
Rata Bonus for a particular calendar year, the date on which annual bonuses for
such calendar year are generally paid to employees of the Company who have not
terminated employment with the Company, but in no event earlier than January 1
of the year following such calendar year nor later than December 31 of the
year following such calendar year.

 

7

 

“Reorganization Agreement” shall mean the Reorganization
Agreement to be entered into prior to the IPO among the Partnership, the
Company and the other parties signatory thereto.

 

“Restricted Stock” shall mean the shares of restricted stock
issued to Employee in connection with the IPO.

 

“Safe Harbor Amount” shall mean 2.99 times Employee’s “base amount,” within the meaning of Section 280G(b)(3) of
the Code.

 

“Separation from Service” means, with respect to Employee, the (i) cessation
of all services performed by Employee for the Company or (ii) permanent
decrease in the level of services performed by Employee for the Company
(whether as an employee or as an independent contractor) to no more than 20
percent of the average level of services performed (whether as an employee or
an independent contractor) over the immediately preceding 36-month period (or
the full period of services to the Company, if Employee has been providing
services to the Company for less than 36 months).

 

“Severance Amount” shall mean the sum of:

 

(A)  Annualized Base
Salary multiplied by a fraction (1) the
numerator of which is the number of days in the period that begins on the day
immediately following the date of Employee’s Involuntary Termination and ends
on December 31 of the calendar year in which Employee’s Involuntary
Termination occurs and (2) the denominator of which is 365; and

 

(B)  two multiplied by Annualized Base Salary multiplied by the number of full calendar
years (if any) that remain during the Term following the calendar year in which
Employee’s Involuntary Termination occurs; and

 

(C)  two multiplied by Annualized Base Salary multiplied by a fraction (1) the
numerator of which is the number of days in the period that begins on January 1
of the calendar year that includes the Agreement Termination Date and ends on
the Agreement Termination Date and (2) the denominator of which is 365; provided, however, that this clause (C) shall
not apply if Employee’s Involuntary Termination occurs in the calendar year
that includes the Agreement Termination Date.

 

“Term” shall mean the period that begins on the date of the
closing of the IPO and ends on the Agreement Termination Date.

 

8

 

ARTICLE 2

EFFECTIVENESS; TERM OF AGREEMENT; TERMINATION
OF SEVERANCE AGREEMENT

 

Section 2.01.  Effectiveness; Term of Agreement; Termination
of Severance Agreement.  This Agreement
shall become effective upon the closing of the IPO.  Subject to an earlier termination of Employee’s
employment with the Company pursuant to Article
7, this Agreement shall terminate and be of no further force or effect
on the Agreement Termination Date.  Upon
the effectiveness of this Agreement, the Severance Agreement shall terminate
and be of no further force or effect.  If
the IPO does not close by March 31, 2010, this Agreement shall be void ab initio and the Severance Agreement
shall remain in full force and effect in accordance with its terms as of such
date.

 

ARTICLE 3

POSITIONS AND DUTIES

 

Section 3.01.  Employment; Positions; Reporting
Relationship.  Employee shall
serve as the Chairman of the Board and the Chief Executive Officer of the
Company.  Employee shall report directly
to the Board.

 

Section 3.02.  Duties and Services.  Employee agrees to serve in
the positions assigned pursuant to Section 3.01 and to perform diligently
and to the best of Employee’s abilities the duties and services pertaining to
such positions, as well as such additional duties and services consistent with
his position as Chairman of the Board and Chief Executive Officer that Employee
from time to time may be reasonably requested to perform by the Board.  Employee’s employment shall also be subject
to the policies maintained and established by the Company that are of general
applicability to the Company’s Employees, as such policies may be amended from
time to time.

 

Section 3.03.  Other Interests.  Employee agrees, during the
period of Employee’s employment by the Company, to devote substantially all of
Employee’s business time, energy and best efforts to the business and affairs
of the Company and its Affiliates. 
Notwithstanding the foregoing, the parties acknowledge and agree that
Employee may (a) engage in and manage Employee’s passive personal
investments and (b) engage in charitable and civic activities; provided, however, that such activities
shall be permitted so long as such activities do not conflict with the business
and affairs of the Company or interfere with Employee’s performance of Employee’s
duties hereunder.

 

9

 

ARTICLE 4

CERTAIN EMPLOYEE REPRESENTATIONS AND
AGREEMENTS; IPO EQUITY GRANTS

 

Section 4.01.  Accredited Investor Representations.  Employee hereby represents
to the Company that the representations set forth in Annex I to this Agreement (a) are
true and correct as of the date of this Agreement and (b) shall be true
and correct as of the date of the closing of the IPO.

 

Section 4.02.  Transfer Restrictions.   Employee hereby represents to the Company that
he has read and understands, and agrees to be bound by, the transfer
restrictions set forth in Annex II to this Agreement.

 

Section 4.03.  Life Insurance.  This Agreement constitutes
written notice to Employee that (a) the Company or an Affiliate may insure
Employee’s life, (b) the Company or an Affiliate shall have the right to
determine the amount of insurance and the type of policies, and (c) the
Company or an Affiliate will be the beneficiaries of any proceeds payable under
such policies upon the death of Employee. 
Employee hereby irrevocably consents to being insured under the policies
described in the preceding sentence and to the coverage under such policies
continuing after the termination of this Agreement and/or Employee’s
termination of employment with the Company and its Affiliates.  Employee agrees and acknowledges that
Employee shall not have the right to designate the beneficiary or beneficiaries
of the death benefit payable pursuant to such policies, and neither Employee
nor any other person claiming through Employee shall have any interest in such
policies.  Employee shall (i) furnish
any and all information reasonably requested by the Company, any Affiliate or
the insurer to facilitate the issuance of the life insurance policy or policies
described in this paragraph or any adjustment to any such policy, and (ii) take
such physical examinations as the Company, any Affiliate or the insurer deems necessary.  Employee shall incur no financial obligation
by executing any required document pursuant to this Section 4.03, and shall have no interest in any such policy.

 

Section 4.04.  IPO Equity Grants.  Immediately prior to the
Effective Time, Employee received 20,000 units of Class C Interests (as
defined in the Partnership Agreement) and 20,000 units of Class D
Interests (as defined in the Partnership Agreement), which will at the
Effective Time convert to restricted shares of the Company’s common stock
subject to the terms and conditions of the Company Long Term Incentive Plan and
the forms of Restricted Stock Award Agreements attached as Exhibit A and Exhibit B
to this Agreement.

 

10

 

ARTICLE 5

CONFIDENTIAL INFORMATION, INVENTIONS,

BUSINESS OPPORTUNITIES AND GOODWILL

 

Section 5.01.  Confidential Information, Inventions,
Business Opportunities and Goodwill.  The Company
shall (a) disclose to Employee, and place Employee in a position to have
access to or develop, confidential or proprietary information and Inventions of
the Company (or its Affiliates); (b) entrust Employee with business
opportunities of the Company (or its Affiliates); and (c) place Employee
in a position to develop business good will on behalf of the Company (or its
Affiliates).

 

ARTICLE 6

COMPENSATION AND BENEFITS

 

Section 6.01.  Base Salary. 
During Employee’s employment hereunder, Employee shall receive a
minimum, annualized base salary of $1,000,000 (the “Base Salary”).  Employee’s
Base Salary shall be reviewed periodically by the Board (or a committee
thereof) and, in the sole discretion of the Board (or a committee thereof), the
Base Salary may be increased (but not decreased) effective as of any date
determined by the Board (or a committee thereof).  Employee’s Base Salary shall be paid in equal
installments in accordance with the Company’s standard policy regarding payment
of compensation to Employees but no less frequently than monthly.

 

Section 6.02.  Bonuses. 
Employee shall be eligible to receive an annual, calendar-year bonus
(payable in a single lump sum) based on criteria determined in the discretion
of the Board (or a committee thereof) (the “Annual
Bonus”), it being understood that (a) the target bonus at planned
or targeted levels of performance shall equal 100% of Employee’s Base Salary
and (b) the actual amount of each Annual Bonus shall be determined in the
discretion of the Board (or a committee thereof).  The Company shall use commercially reasonable
efforts to pay each Annual Bonus with respect to a calendar year on or before March 15
of the following calendar year (and in no event shall an Annual Bonus be paid
after December 31 of the following calendar year).  If the Effective Time occurs after January 1,
2010, then the Annual Bonus for calendar year 2010 shall be determined as if
Employee’s employment with the Company commenced on January 1, 2010.

 

Section 6.03.  Other Benefits.  During Employee’s employment
hereunder, Employee shall be permitted to participate in all benefit plans and
programs of the Company, including improvements or modifications of the same,
which are now, or may hereafter be, available to other senior Employees of the
Company.  The Company shall not, however,
by reason of this Section 6.03, be obligated to

 

11

 

institute, maintain, or
refrain from changing, amending, or discontinuing, any such benefit plan or
program, so long as such changes are similarly applicable to other senior
employees generally.

 

Section 6.04.  Expenses. 
The Company shall reimburse Employee for all reasonable business
expenses incurred by Employee in performing services hereunder, including all
expenses of travel and living expenses while away from home on business or at
the request of and in the service of the Company; provided, in each case, that
such expenses are incurred and accounted for in accordance with the policies
and procedures established by the Company. 
Any such reimbursement of expenses shall be made by the Company upon or
as soon as practicable following receipt of supporting documentation reasonably
satisfactory to the Company (but in any event not later than the close of
Employee’s taxable year following the taxable year in which the expense is
incurred by Employee); provided, however,
that, upon Employee’s termination of employment with the Company, in no event
shall any additional reimbursement be made prior to the date that is six months
after Employee’s termination of employment with the Company to the extent such
payment delay is required under section 409A(a)(2)(B)(i) of the Code.

 

Section 6.05.  Vacation and Sick Leave.  During Employee’s employment
hereunder, Employee shall be entitled to (a) sick leave in accordance with
the Company’s policies applicable to its senior Employees and (b) five
weeks paid vacation each calendar year (none of which may be carried forward to
a succeeding year except to the extent permitted under the Company’s vacation
policy generally applicable to its salaried employees).  For the calendar year during which the
Effective Time occurs, Employee’s sick leave and vacation entitlement for the
portion of such year from and after the effective date of this Agreement shall
be equal to the entitlements described in the preceding sentence but reduced by
the amount of sick leave and vacation Employee used during the portion of such
year preceding the Effective Time while employed by the Partnership.

 

Section 6.06.  Offices. 
Subject to Articles 3 and 6, Employee agrees to serve without
additional compensation, if elected or appointed thereto, as a director of the
Company or any Affiliate and as a member of any committees of the board of
directors of any such entities, and in one or more Employee positions of any
Affiliate.

 

ARTICLE 7

TERMINATION OF EMPLOYMENT AND NOTICE OF
TERMINATION OF EMPLOYMENT

 

Section 7.01.  Termination of Employment.  Employee’s employment with
the Company may be terminated by the Company or Employee under the

 

12

 

following circumstances: (a) Employee’s
death; (b) Employee’s Disability; (c) termination by the Company for
Cause; (d) termination by the Company without Cause; (e) resignation
by Employee for Good Reason; or (f) resignation by Employee without Good
Reason.  For all purposes of this
Agreement, Employee shall be considered to have terminated employment with the
Company when Employee incurs a Separation from Service.

 

Section 7.02.  Notice of Termination of Employment.  Any termination of Employee’s
employment by the Company or by Employee (other than termination by reason of
Employee’s death) shall be communicated by a written notice to the other party
hereto indicating the specific termination provision in the first sentence of Section 7.02
relied upon, setting forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Employee’s employment under the
provision so indicated, and specifying a Date of Termination of Employment
which, if submitted by Employee, shall be at least 30 days following the date
of such notice (a “Notice of Termination of
Employment”); provided, however,
that in the case of any Notice of Termination of Employment submitted by
Employee, the Company may, in its sole discretion, advance the Date of
Termination of Employment to any date following the Company’s receipt of the
Notice of Termination of Employment (and, if the Date of Termination of
Employment is so advanced, it shall not change the basis for Employee’s
termination nor be construed or interpreted as a termination of Employee’s
employment by the Company for any reason whatsoever).  A Notice of Termination of Employment
submitted by the Company may provide for a Date of Termination of Employment on
the date Employee receives the Notice of Termination of Employment, or any date
thereafter elected by the Company in its sole discretion.  The failure by Employee or the Company to set
forth in the Notice of Termination of Employment any fact or circumstance which
contributes to a showing of Cause or Good Reason shall not waive any right of
Employee or the Company hereunder or preclude Employee or the Company from
asserting such fact or circumstance in enforcing Employee’s or the Company’s
rights hereunder.

 

Section 7.03.  Deemed Resignations.  Unless otherwise agreed to
in writing by the Company and Employee prior to the termination of Employee’s
employment, any termination of Employee’s employment shall constitute an
automatic resignation of Employee:  (i) as
an officer of the Company and each Affiliate; (ii) as a member of the
Board (if applicable); (iii) from the board of directors or similar
governing body of any Affiliate; and (iv) from the board of directors or
similar governing body of any corporation, limited liability entity or other
entity in which the Company or any Affiliate holds an equity interest and with
respect to which board or similar governing body Employee serves as the Company’s
or such Affiliate’s designee or other representative.

 

13

 

ARTICLE 8

SEVERANCE BENEFITS

 

Section 8.01.  Death, Disability, Termination for Cause or
Resignation Without Good Reason.  If Employee’s
employment with the Company is terminated by the Company for Cause or by
Employee without Good Reason, or if such employment terminates by reason of
Employee’s death or Disability, then, upon such termination, Employee (or
Employee’s estate) shall be entitled to receive the Accrued Obligations (other
than in the case of a termination by the Company for Cause, any bonus or
incentive compensation that under the applicable plan requires Employee to be
employed on the date of payment).  If
Employee’s employment with the Company terminates by reason of death or
Disability, then the Company shall also pay to Employee (or Employee’s estate
or legal representatives, as applicable) on the Pro Rata Bonus Payment Date an
amount in cash equal to the Pro Rata Bonus.

 

Section 8.02.  Involuntary Termination.  If Employee’s employment
with the Company shall be subject to an Involuntary Termination, Employee shall
be entitled to receive the Accrued Obligations and, subject to the provisions
of Section 16.09, the Company will, as additional compensation for
services rendered to the Company (including its Affiliates), pay to Employee
the following amounts and take the following actions after the last day of
Employee’s employment with the Company:

 

(a)        if the Involuntary
Termination occurs prior to a Change in Control or on or after the second
anniversary of the Change in Control, pay to Employee in equal monthly
installments an amount in cash equal to the Severance Amount, the first
installment to be paid on the date that is 60 days after the date of Employee’s
termination of employment with the Company and subsequent installments to be
paid on the first day of each of the next 11 calendar months thereafter or such
lesser number of installments such that no installment is paid after March 1st
of the year following the year in which Employee’s employment was terminated,
with each installment equal to the Severance Amount divided by the total number
of such installments to be paid;

 

(b)        if the Involuntary
Termination occurs on the date of a Change in Control or before the second
anniversary of the Change in Control, pay to Employee on the date that is 60
days after the date of Employee’s termination of employment with the Company a
lump sum cash payment in an amount equal to the Severance Amount;

 

(c)        if the Involuntary
Termination occurs during a calendar year prior to the calendar year in which
the Agreement Termination Date occurs, pay to Employee on the Actual Bonus
Payment Date an amount in cash equal to the Actual Bonus; provided, however, that if this paragraph
applies with respect to an

 

14

 

Actual Bonus for a calendar
year beginning on or after January 1, 2010 and is intended to constitute
performance-based compensation within the meaning of, and for purposes of, Section 162(m) of
the Code, then this paragraph shall apply with respect to such Actual Bonus
only to the extent the applicable performance criteria have been satisfied as
certified by a committee of the Board as required under Section 162(m) of
the Code;

 

(d)        if the Involuntary
Termination occurs during the calendar year in which the Agreement Termination
Date occurs, pay to Employee on the Pro Rata Bonus Payment Date an amount in
cash equal to the Pro Rata Bonus; provided,
however, that if the Pro Rata Bonus is intended to constitute
performance-based compensation within the meaning of, and for purposes of, Section 162(m) of
the Code, then this paragraph shall apply with respect to such Pro Rata Bonus
only to the extent the applicable performance criteria have been satisfied as
certified by a committee of the Board as required under Section 162(m) of
the Code; and

 

(e)        during the portion, if any,
of the 18-month period following the date of Employee’s termination of
employment with the Company that Employee elects to continue coverage for
Employee and Employee’s eligible dependents under the Company’s group health
plans under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and/or Sections 601 through 608 of the Employee Retirement Income
Security Act of 1974, as amended, the Company shall promptly reimburse Employee
on a monthly basis for the difference, if any, between (i) the amount
Employee pays to effect and continue such coverage and (ii) the amount
charged to a similarly situated active employee of the Company for similar
coverage.

 

Notwithstanding the
foregoing, if Employee is entitled to receive severance payments under Section 8.02(a) or
(b), as applicable, and under Section 8.02(c), the aggregate amount
payable pursuant to Sections 8.02(a) or (b), as applicable, and Section 8.02(c) (the
“Aggregate Severance Amount”)
shall be reduced (but not below zero) by the fair market value, as of the
Employee’s Date of Termination of Employment, of the Restricted Stock held by
Employee that has then vested, or that may vest at any time after the Employee’s
Date of Termination of Employment (the “Carried
Amount”).  If the Carried
Amount exceeds the Aggregate Severance Amount prior to the commencement of
payment of any of the severance benefits described in Section 8.02(a) or
(b), as applicable, and Section 8.02(c), then Employee shall not be
entitled to receive any payments pursuant to 8.02(a) or (b), as
applicable, or Section 8.02(c).  If
the Carried Amount does not exceed the Aggregate Severance Amount prior to the
commencement of payment of any of the severance benefits described in Sections
8.02(a) or (b), as applicable, and Section 8.02(c), then the
reduction shall be effected as follows: first, the payment provided for in Section 8.02(c) shall
be reduced by the Carried Amount if the Carried Amount or any portion thereof
has been paid prior to the payment date provided for in Section 8.02(c),
and if

 

15

 

necessary, payments of the
amounts provided for in Section 8.02(a) or (b), as applicable, shall
be reduced pro rata by any additional Carried Amount.   If at any time after the commencement of
payment of the severance benefits described in Section 8.02(a) or
(b), as applicable, and Section 8.02(c), the Carried Amount not yet
applied as a reduction in the severance benefits exceeds the remaining
severance benefits to be paid, the Company shall cease to make any further
payments in respect of either severance benefit, but no amount previously paid
to Employee pursuant to Section 8.02(a) or (b), as applicable, and Section 8.02(c) shall
be repaid to the Company.

 

Section 8.03.  Death, Disability or Involuntary Termination
After Agreement Termination Date.  If, after the
Agreement Termination Date but prior to the payment date of the Annual Bonus
for the calendar year in which the Agreement Termination Date occurs, Employee’s
employment with the Company terminates by reason of the Employee’s death or by
reason of what would have otherwise qualified as Disability or Involuntary
Termination under this Agreement if this Agreement was still in effect at the
time of such termination of employment, the Company shall pay to Employee (or
Employee’s estate or legal representatives, as applicable), subject to the
provisions of Section 16.09, on the Pro Rata Bonus Payment Date an amount
in cash equal to the Pro Rata Bonus.

 

ARTICLE 9

INTEREST ON LATE PAYMENTS

 

Section 9.01.  Interest on Late Payments.  If any payment provided for
in Section 8.02(a), (b) or (c) or Section 8.03 is not made
when due, then the Company shall pay to Employee interest on the amount payable
from the date that such payment should have been made under such Section until
such payment is made, which interest shall be calculated at 5% plus the prime
rate of interest announced by JPMorgan Chase Bank (or any successor thereto) at
its principal office in New York, and shall change when and as any such change
in such prime rate shall be announced by such bank.

 

ARTICLE 10

CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY

 

Section 10.01.  Gross-up Payment.  Notwithstanding anything to
the contrary in this Agreement (but subject to the remaining provisions of this
Article 10), in the event that any payment, benefit or distribution by the
Company to or for the benefit of Employee, whether paid, payable, provided,
distributed or distributable pursuant to the terms of this Agreement or
otherwise (a “Payment”), would be
subject to the excise tax imposed by Section 4999 of the Code or any

 

16

 

interest or penalties with
respect to such excise tax (such excise tax, together with any such interest or
penalties, are hereinafter collectively referred to as the “Excise Tax”), the Company shall pay to
Employee an additional payment (a “Gross-up
Payment”) in an amount such that after payment by Employee of all
taxes (including any interest or penalties imposed with respect to such taxes),
including any Excise Tax imposed on any Gross-up Payment, Employee retains an
amount of the Gross-up Payment equal to the Excise Tax imposed upon all Payments
except for the Cobalt Equity Payments. 
Notwithstanding the provisions of the preceding sentence, if it shall be
determined that Employee is entitled to the Gross-up Payment, but that the
Parachute Value of all Payments does not exceed 110% of the Safe Harbor Amount,
then no Gross-up Payment shall be made to Employee and the amounts payable
under Article 6 shall be reduced so that the Parachute Value of all
Payments, in the aggregate, equals the Safe Harbor Amount.  The reduction of the amounts payable under Article 8,
if applicable, shall be made by reducing Payments payable hereunder (including
reducing a Payment to zero) in the order in which such Payments would be made
(beginning with such Payment that would be made first in time and continuing,
to the extent necessary, through to such Payment that would be made last in
time).  For purposes of reducing the
Payments to the Safe Harbor Amount, only amounts payable under Article 8
(and no other Payments) shall be reduced. 
If the reduction of the amount payable under Article 6 would not
result in a reduction of the Parachute Value of all Payments to the Safe Harbor
Amount, then no amounts payable under Article 8 shall be reduced pursuant
to this Section 10.01.  The Company’s
obligation to make a Gross-up Payment under this Article 10 shall not be
conditioned upon Employee’s termination of employment.  The Gross-up Payment attributable to a
particular Payment shall be made at the time such Payment is made; provided, however, that in no event shall
the Gross-up Payment be made later than the end of Employee’s taxable year next
following Employee’s taxable year in which Employee remits the related
taxes.  The Company and Employee shall
make an initial determination as to whether a Gross-up Payment is required and
the amount of any such Gross-up Payment.

 

Section 10.02.  Disposition of Claims.  Employee shall notify the
Company immediately in writing of any claim by the Internal Revenue Service
which, if successful, would require the Company to make a Gross-up Payment (or
a Gross-up Payment in excess of that, if any, initially determined by the
Company and Employee) within five days of the receipt of such claim.  The Company shall notify Employee in writing
at least five days prior to the due date of any response required with respect
to such claim if it plans to contest the claim. 
If the Company decides to contest such claim, Employee shall cooperate
fully with the Company in such action; provided,
however, the Company shall bear and pay directly or indirectly all
costs and expenses (including additional interest and penalties) incurred in
connection with such action and shall indemnify and hold Employee harmless, on
an after-tax basis, for any Excise Tax or income tax,

 

17

 

including interest and
penalties with respect thereto, imposed as a result of the Company’s
action.  If, as a result of the Company’s
action with respect to a claim, Employee receives a refund of any amount paid
by the Company with respect to such claim, Employee shall promptly pay such
refund to the Company.  If the Company
fails to timely notify Employee whether it will contest such claim or the
Company determines not to contest such claim, then the Company shall
immediately pay to Employee the portion of such claim, if any, which it has not
previously paid to Employee.

 

ARTICLE 11

COMPETITION.

 

Section 11.01.  Competition.

 

(a)        Employee and the Company
agree to the restrictive covenants of this Article 11:  (i) in consideration for the confidential
information provided by the Company to Employee pursuant to Article 5 or
otherwise during the course of his employment; (ii) as part of the
consideration for the compensation and benefits to be paid to Employee by the
Company; (iii) to protect the (A) trade secrets and confidential
information of the Company disclosed or entrusted to Employee by the Company
and (B) business goodwill of the Company or its subsidiaries developed
through the efforts of Employee and/or the business opportunities disclosed or
entrusted to Employee by the Company; and (iv) as an additional incentive
for the Company to enter into this Agreement.

 

(b)        Subject to the exceptions
set forth in the last sentence of this Section 11.01(b), Employee shall
not at any time while employed by the Company and for a 1-year period following
the Date of Termination of Employment (the “Non-Compete
Period”), directly or indirectly engage in, have any equity interest
in, be affiliated with, or manage or operate any person, firm, corporation,
partnership, entity or business (whether as director, officer, employee, agent,
representative, partner, member, security holder, consultant or otherwise) that
engages in any business that competes with any Business (as defined below) of
the Company in the states within the United States (or District of Columbia, if
applicable) and in the geographic regions outside of the United States (i) in
which the Company conducts operations or (ii) with respect to which the
Company devotes more than de minimis
resources in the furtherance of the Business; provided,
however, that Employee shall be permitted to acquire a passive stock
interest in such a business if the stock acquired is publicly traded and is not
more than two percent of the outstanding interest in such business.  Notwithstanding the foregoing or anything to
the contrary in this Agreement, it shall not be a violation of this Article 11
for Employee to (A) provide services to any person or entity engaged in
the Business if Employee is not involved, directly or indirectly, in the
management, supervision or operations of the Business (including by reason of
any individual

 

18

 

reporting to Employee) and
the gross revenues generated by the Business do not constitute more than 33% of
the consolidated gross revenues of such person or entity and its affiliates and
(B) provide services to or otherwise be affiliated with a venture capital
or private equity firm that holds investments in entities engaged in the
Business if Employee is not involved, directly or indirectly, in the
identification, evaluation, recommendation, acquisition, management, operation,
supervision or disposition of such investments, and the gross revenues
generated by such Business do not constitute more than the 33% of the
consolidated gross revenues of such firm and its affiliates.

 

(c)        During the Non-Compete
Period, Employee shall not, directly or indirectly, recruit or otherwise
solicit or induce any employee of the Company, except on behalf of the Company,
(i) to terminate his or her employment with the Company, or (ii) to
establish any relationship with Employee or any of his affiliates for any
business purpose competitive with the Business of the Company, provided, however, that a general
solicitation of the public for employment shall not constitute a solicitation
hereunder so long as such general solicitation is not designed to target any
employee of the Company.

 

(d)        Employee and the Company
agree that the foregoing restrictions are reasonable under the circumstances,
are necessary to protect the Company’s legitimate business interests and that
any breach of such restrictions would cause irreparable injury to the
Company.  Employee understands that the
foregoing restrictions may limit Employee’s ability to engage in certain
businesses anywhere in the United States and outside the United States during
the Non-Compete Period but acknowledges that he will receive sufficiently high
remuneration and other benefits from the Company to justify such restrictions.  Further, Employee acknowledges that his
skills are such that he can be gainfully employed in non-competitive
employment, and that the agreement not to compete will not prevent him from
earning a living.  Nevertheless, in the
event the terms of this Article 11 shall be determined by any court of
competent jurisdiction to be unenforceable by reason of its extending for too
great a period of time or over too great a geographical area or by reason of
its being too extensive in any other respect, it will be interpreted to extend
only over the maximum period of time for which it may be enforceable, over the
maximum geographical area as to which it may be enforceable, or to the maximum
extent in all other respects as to which it may be enforceable, all as determined
by such court in such action.

 

(e)        Employee hereby represents
to the Company that he has read and understands, and agrees to be bound by, the
terms of this Article 11.  Employee
acknowledges that the geographic scope and duration of the covenants contained
in this Article 11 are the result of arm’s-length bargaining and are fair
and reasonable in light of (i) the nature and wide geographic scope of the
Company’s operations of, and in, the Business, (ii) Employee’s level of
control over and contact with the Company’s operations of, and in, the Business
in all jurisdictions

 

19

 

in which it is conducted, (iii) the
geographic breadth in which the Company conducts the Business and (iv) the
amount of consideration (including confidential information and trade secrets)
that Employee is receiving from the Company.

 

(f)         As used in this Article 11,
(i) the term “Company” shall
include the Company and its subsidiaries and (ii) the term “Business” shall mean the exploration for,
and the development and production of, oil and natural gas and the acquisition
of leases and other real property in connection therewith, as such business may
be expanded or altered by the Company during the period of Employee’s employment
by the Company; provided, that
any business or endeavor shall cease to be the “Business” if the Company is not
or ceases to be engaged in such business or endeavor.

 

(g)        In consideration of the
Company’s promises herein, during the Non-Compete Period, Employee promises to
disclose to the Company any employment, consulting, or other service
relationship that Employee enters into after the termination of Employee’s
employment with the Company for any reason. 
Such disclosure shall be made within seven business days after Employee
enters into such employment, consulting or other service relationship.  Employee expressly consents to and authorizes
the Company to disclose both the existence and terms of this Agreement to any
future employer or recipient of Employee’s services and to take any steps the
Company deems necessary to enforce this Agreement.

 

ARTICLE 12

NONDISCLOSURE OF CONFIDENTIAL AND PROPRIETARY
INFORMATION

 

Section 12.01.  Nondisclosure of Confidential and Proprietary
Information.  (a)   Except in connection with the faithful
performance of Employee’s duties for the Company or pursuant to Section 12.01(c) or
(e), Employee shall, in perpetuity, maintain in confidence and shall not
directly, indirectly or otherwise, (i) use, disseminate, disclose or publish,
or use for his benefit or the benefit of any person, firm, corporation or other
entity, any (A) confidential or proprietary information or trade secrets
of or relating to the Company (including, without limitation, intellectual
property in the form of patents, trademarks and copyrights and applications
therefor, ideas, inventions, works, discoveries, improvements, information,
documents, formulae, practices, processes, methods, developments, source code,
modifications, technology, techniques, data, programs, other know-how or
materials, in each case, that are confidential and/or proprietary and owned,
developed or possessed by the Company, whether in tangible or intangible form)
or (B) confidential or proprietary information with respect to the Company’s
operations, processes, products, inventions, business practices, strategies,
business plans, finances, principals, vendors, suppliers, customers, potential
customers, marketing methods, costs, prices, contractual relationships,
regulatory status,

 

20

 

prospects and compensation
paid to employees or other terms of employment or (ii) deliver to any
person, firm, corporation or other entity any document, record, notebook,
computer program or similar repository of or containing any such confidential
or proprietary information or trade secrets. 
The parties hereby stipulate and agree that as between them the
foregoing matters are important, material and confidential proprietary
information and trade secrets and materially affect the successful conduct of
the businesses of the Company (and any successor or assignee of the Company).

 

(b)        Upon the termination of
Employee’s employment with the Company for any reason, Employee will promptly
deliver to the Company all correspondence, drawings, manuals, letters, notes,
notebooks, reports, programs, plans, proposals, financial documents and
electronically stored information, in each case, that are confidential or
proprietary to the Company, or any other confidential or proprietary documents
(including electronically stored information) concerning the Company’s
customers, business plans, strategies, products or processes.

 

(c)        Employee may respond to a
lawful and valid subpoena or other legal process relating to the business of
the Company or the performance of his duties on behalf of the Company but shall
(i) give the Company prompt notice thereof, (ii) make available to
the Company and its counsel the documents and other information sought that are
not subject to a binding confidentiality agreement and (iii) assist such
counsel at Company’s expense in resisting or otherwise responding to such
process.

 

(d)        As used in this Article 12
and Article 13, the term “Company”
shall include the Company and its subsidiaries.

 

(e)        Nothing in this Agreement
shall prohibit Employee from (i) disclosing information and documents when
required by law, subpoena, court order or legal process, (ii) disclosing
information and documents to his immediate family members or, for the purpose
of securing legal or tax advice, attorney or tax adviser (provided that the
persons to whom such disclosures are made shall be informed of their obligation
to maintain the strict confidentiality of any information provided to them), (iii) disclosing
the post-employment restrictions in this Agreement in confidence to any
potential new employer or person or entity to whom he may provide consulting
services, or (iv) retaining, at any time, his personal correspondence and
rolodex or address book and documents related to his own personal benefits,
entitlements and obligations.

 

21

 

ARTICLE 13

INVENTIONS

 

Section 13.01.  Inventions. 
All rights to discoveries, inventions, improvements and innovations
(including all data and records pertaining thereto) related to the business of
the Company, whether or not patentable, copyrightable, registrable as a
trademark, or reduced to writing, that Employee may discover, invent or
originate during the period of his employment with the Company, either alone or
with others and whether or not during working hours or by the use of the
facilities of the Company (“Inventions”),
shall be the exclusive property of the Company. 
Employee shall promptly disclose all Inventions to the Company, shall
execute at the request of the Company any assignments or other documents the
Company may deem reasonably necessary to protect or perfect its rights therein,
and shall assist the Company, upon reasonable request and at the Company’s
expense, in obtaining, defending and enforcing the Company’s rights
therein.  Employee hereby appoints the
Company as his attorney-in-fact to execute on his behalf any assignments or
other documents reasonably deemed necessary by the Company to protect or
perfect its rights to any Inventions.

 

ARTICLE 14

INJUNCTIVE RELIEF

 

Section 14.01.  Injunctive Relief.  It is recognized and
acknowledged by Employee that a breach of the covenants contained in Articles
11, 12, 13 and 15 will cause irreparable damage to Company and its Affiliates
and their goodwill, the exact amount of which will be difficult or impossible
to ascertain, and that the remedies at law for any such breach will be
inadequate.  Accordingly, Employee agrees
that in the event of a breach of any of the covenants contained in Articles 11,
12 ,13 and 15, in addition to any other remedy which may be available at law or
in equity, the Company will be entitled to specific performance and injunctive
relief.

 

ARTICLE 15

NON-DISPARAGEMENT

 

Section 15.01.  Non-Disparagement.  During Employee’s employment
with the Company and following termination of his employment with the Company
for any reason, (a) Employee agrees not to disparage in any material
respect the Company, its subsidiaries, any of their products or practices, or
any of their directors, officers, agents, representatives, members, partners or
stockholders, either orally or in writing, and (b) the Company agrees that
it and its subsidiaries will (i) not make any statements that disparage in
any material respect Employee

 

22

 

and (ii) use
commercially reasonable efforts to advise its directors and officers not to
disparage in any material respect Employee.

 

ARTICLE 16

GENERAL

 

Section 16.01.  Survivorship. 
The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary for the
intended preservation of such rights and obligations.

 

Section 16.02.  Arbitration. 
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before an
arbitrator in Houston, Texas in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association then
in effect.  Judgment may be entered on
the arbitration award in any court having jurisdiction; provided, however, that the Company shall
be entitled to seek a restraining order or injunction in any court of competent
jurisdiction to prevent any violation or continuation of any violation of the
provisions of Articles 11, 12, 13 or 15 of this Agreement and Employee hereby
consents that such restraining order or injunction may be granted without
requiring the Company to post a bond. 
Only individuals who are on the AAA register of arbitrators shall be
selected as an arbitrator.  Within 20
days of the conclusion of the arbitration hearing, the arbitrator(s) shall
prepare written findings of fact and conclusions of law.  It is mutually agreed that the written
decision of the arbitrator(s) shall be valid, binding, final and
non-appealable; provided however,
that the parties hereto agree that the arbitrator shall not be empowered to
award punitive damages against any party to such arbitration.  The Company shall bear all administrative
fees and expenses of the arbitration and each party shall bear its own counsel
fees and expenses except as otherwise provided in this paragraph.  If Employee makes a claim against the Company
relating to the performance of, or the rights and obligations of, the Company
arising under, relating to or in connection with this Agreement (a “Covered Claim by the Employee”), the
arbitrators shall award Employee his reasonable legal fees and expenses if
Employee prevails on one material Covered Claim by the Employee (as determined
by the arbitrator).  If a claim is made
by the Company against Employee relating to the performance of, or the rights
and obligations of, Employee arising under, relating to or in connection with
this Agreement (a “Covered Claim by the
Company”), the arbitrators shall award Employee his reasonable legal
fees and expenses; provided that
if such Covered Claim by the Company relates to Employee’s performance or
obligations under Articles 11, 12, 13 or 15, the arbitrators shall award
Employee his legal fees and expenses only if the Company does not prevail on
any Covered Claim by the Company relating to any such Section (as
determined by the arbitrator).  Any

 

23

 

reimbursement of reasonable
legal fees and expenses required under this Section 16.02 and any
reimbursement of expenses included in the Accrued Obligations payable to
Employee under Article 6 shall be made not later than the close of
Employee’s taxable year following the taxable year in which Employee incurs the
expense; provided, however, that,
upon Employee’s termination of employment with the Company, in no event shall
any additional reimbursement be made prior to the date that is six months after
the date of Employee’s termination of employment to the extent such payment
delay is required under Section 409A(a)(2)(B)(i) of the Code.  In no event shall any reimbursement be made
to Employee for such fees and expenses incurred after the date that is 10 years
after the date of Employee’s termination of employment with the Company.

 

Section 16.03.  Payment Obligations Absolute.  The Company’s obligation to
pay Employee the amounts and to make the arrangements provided herein shall be
absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company (including its subsidiaries) may have against him
or anyone else.  All amounts payable by
the Company shall be paid without notice or demand.  Employee shall not be obligated to seek other
employment in mitigation of the amounts payable or arrangements made under any
provision of this Agreement, and the obtaining of any such other employment
shall in no event effect any reduction of the Company’s obligations to make (or
cause to be made) the payments and arrangements required to be made under this
Agreement.

 

Section 16.04.  Successors. 
This Agreement shall be binding upon and inure to the benefit of the
Company and any successor of the Company, by merger or otherwise.  This Agreement shall also be binding upon and
inure to the benefit of Employee and his estate.  If Employee shall die prior to full payment
of amounts due pursuant to this Agreement, such amounts shall be payable
pursuant to the terms of this Agreement to his estate.

 

Section 16.05.  Severability. 
Any provision in this Agreement which is prohibited or unenforceable in
any jurisdiction by reason of applicable law shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

Section 16.06.  Non-alienation.  Employee shall not have any
right to pledge, hypothecate, anticipate or assign this Agreement or the rights
hereunder, except by will or the laws of descent and distribution.

 

Section 16.07.  Notices. 
Any notices or other communications provided for in this Agreement
shall be sufficient if in writing.  In
the case of Employee, such notices or communications shall be effectively
delivered if hand-delivered to

 

24

 

Employee at his principal
place of employment or if sent by registered or certified mail to Employee at
the last address he has filed with the Company. 
In the case of the Company, such notices or communications shall be
effectively delivered if sent by registered or certified mail to the Company at
its principal Employee offices.

 

Section 16.08.  Controlling Law and Waiver of Jury
Trial.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Texas.  With respect to any claim or
dispute related to or arising under this Agreement, Employee and the Company
hereby consent to the exclusive jurisdiction, forum and venue of the state and
federal courts located in Harris County, Texas. 
Notwithstanding the foregoing, Section 4.02 and the transfer
restrictions set forth in Annex II shall be governed by, and construed in
accordance with, the laws of the State of Delaware.  Furthermore, with respect to any claim or
dispute related to or arising under Section 4.02 and the transfer
restrictions set forth in Annex II, Employee and the Company hereby consent to
the exclusive jurisdiction, forum and venue of the Court of Chancery of the
State of Delaware.  Each of the parties
hereto hereby 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.

 

Section 16.09.  Release and Delayed Payment Restriction.

 

(a)        As a condition to the
receipt of any benefit under Article 5 hereof (except in the case of the
termination of Employee’s employment with the Company by reason of Employee’s
death or Disability and except for the Accrued Obligations), Employee shall
first execute a release in the form attached hereto as Exhibit C (with
such changes therein as the Company may reasonably require to reflect changes
in applicable law), releasing the Company and certain other persons and
entities from certain claims and other liabilities.

 

(b)        The release described in Section 16.09(a) hereof
must be effective and irrevocable within 55 days after the date of the
termination of Employee’s employment with the Company.  Notwithstanding any provision in this
Agreement to the contrary, if the payment of any amount or benefit under this
Agreement would be subject to additional taxes and interest under Section 409A
of the Code because the timing of such payment is not delayed as provided in Section 409A(a)(2)(B)(i) of
the Code and the regulations thereunder, then any such payment or benefit that
Employee would otherwise be entitled to during the first six months following
the date of Employee’s termination of employment shall be accumulated and paid
or provided, as applicable, on the date that is six months after the date of
Employee’s termination of employment (or if such date does not fall on a
business day of the Company, the next following business day of the Company),
or such earlier date upon which such amount can be paid or provided under Section 409A
of the Code without being subject to such additional

 

25

 

taxes and interest.  If this Section 16.09(b) becomes
applicable such that the payment of any amount is delayed, any payments that
are so delayed shall accrue interest on a non-compounded basis, from the date
such payment would have been made had this Section 16.09(b) not
applied to the actual date of payment, at the prime rate of interest announced
by JPMorgan Chase Bank (or any successor thereto) at its principal office in
New York on the date of Employee’s termination of employment (or the first
business day following such date if such termination does not occur on a
business day) and shall be paid in a lump sum on the actual date of payment of
the delayed payment amount.  Employee
hereby agrees to be bound by the Company’s determination of its “specified
employees” (as such term is defined in Section 409A of the Code) in
accordance with any of the methods permitted under the regulations issued under
Section 409A of the Code.

 

Section 16.10.  Full Settlement.  If Employee is entitled to
and receives the benefits provided hereunder, performance of the obligations of
the Company hereunder will constitute full settlement of all claims that
Employee might otherwise assert against the Company on account of his
termination of employment.

 

Section 16.11.  Unfunded Obligation.  The obligation to pay
amounts under this Agreement is an unfunded obligation of the Company, and no
such obligation shall create a trust or be deemed to be secured by any pledge
or encumbrance on any property of the Company.

 

Section 16.12.  No Right to Continued Employment.  Employee and the Company
recognize and agree that subject to the terms of this Agreement (including the
notice provisions of Section 7.02), (i) the Company may terminate
Employee’s employment at any time, for any reason or no reason at all and (ii) Employee
may terminate his employment at any time, for any reason or no reason at all.

 

Section 16.13.  Withholding of Taxes and Other Employee
Deductions.  The Company may
withhold from any benefits and payments made pursuant to this Agreement
(whether actually or constructively made to Employee or treated as included in
Employee’s income under Section 409A of the Code) all federal, state,
city, foreign and other applicable taxes and withholdings as may be required
pursuant to any law or governmental regulation or ruling and all other
customary deductions made with respect to the Company’s employees generally.

 

Section 16.14.  Number and Gender.  Wherever appropriate herein,
words used in the singular shall include the plural and the plural shall
include the singular.  The masculine
gender where appearing herein shall be deemed to include the feminine gender.

 

26

 

Section 16.15.  Entire Agreement.  This Agreement, including
the Annexes and Exhibits attached hereto, constitutes the entire agreement of
the parties with regard to the subject matter hereof and supersedes any and all
prior understandings, agreements or correspondence between the parties.  Any modification of this Agreement will be
effective only if it is in writing and signed by the party to be charged.

 

27

 

IN WITNESS WHEREOF, the
parties hereto have executed this Agreement on the date and year first written
above.

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOSEPH H. BRYANT

  
	
   

  	
   

  	
  Name:

  	
  Joseph H. Bryant

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COBALT
  INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ GREGORY A. BEARD

  
	
   

  	
   

  	
  Name:

  	
  Gregory A. Beard

  
	
   

  	
   

  	
  Title:

  	
  Chairman of the
  Compensation Committee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COBALT
  INTERNATIONAL ENERGY, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ KENNETH A. PONTARELLI

  
	
   

  	
   

  	
  Name:

  	
  Kenneth A. Pontarelli

  
	
   

  	
   

  	
  Title:

  	
  Chairman of the
  Compensation Committee

  

 

28

 

ANNEX I

 

ACCREDITED INVESTOR REPRESENTATIONS

 

Employee hereby represents
and warrants that he qualifies as an “accredited
investor” (as defined in Regulation D of the Securities Act of 1933)
by satisfying one or more of the following criteria:

 

(i)                                     Employee’s
individual net worth or joint net worth with Employee’s spouse exceeds
$1,000,000; or

 

(ii)                                  Employee has
individual income in excess of $200,000 in each of the two most recent years or
joint income with Employee’s spouse in excess of $300,000 in each of those
years and has a reasonable expectation of reaching the same income level in the
current year.

 

Employee is acquiring
interests in the Partnership and / or shares of Company common stock for
investment for his own account and not with a view to, or for sale in
connection with, any distribution thereof and hereby agrees not to sell any
shares of Company common stock in violation of the Federal securities laws.

 

I-1

 

ANNEX II

 

TRANSFER RESTRICTIONS

 

Employee agrees not to
Transfer prior to the Termination Date the Specified Number of the shares of
Company common stock issued to the Employee upon conversion of Class A and
Class B Interests (as defined in the Partnership Agreement) in connection
with the IPO.  Employee will have the
discretion to determine, from time to time, which specific shares of Company
common stock are subject to this limitation.

 

For purposes of this
agreement, the following terms have the following meanings:

 

“Specified Number” means, as of any date, a
number of shares equal to the sum of

 

(a) the
product of 90% (or on or after a Change in Control, the lesser of 90% and the
remainder set forth in (x) below) and the aggregate number of shares of
Company common stock issued to Employee upon conversion of Class B
Interests in connection with the IPO, plus

 

(b) the
product of (x) one minus a fraction, the numerator of which is the
aggregate number of shares of Company common stock owned by the Sponsors
immediately after the closing of the IPO and sold by the Sponsors after the
closing of the IPO and prior to such date (other than with respect to any
shares of common stock sold by any Sponsor to any of its Affiliates), and the
denominator of which is the aggregate number of shares of Company common stock
owned by the Sponsors immediately after the closing of the IPO, and (y) the
aggregate number of shares of Company common stock issued to Employee upon
conversion of Class A Interests in connection with the IPO.

 

If,
at any time prior to the Termination Date, the outstanding shares of Company
common stock shall be changed into a different number of shares or a different
class (including by reason of any reclassification, recapitalization, stock
split (including reverse stock split) or combination, exchange or readjustment
of shares, or any stock dividend or distribution paid in stock thereon with a
record date during such period or any similar transaction), the calculation of
the Specified Number shall be appropriately adjusted.

 

“Sponsors” shall have the meaning as set
forth in the Company’s certificate of incorporation as of the closing of the
IPO.

 

II-1

 

“Termination Date” means the earliest of (i) the
fifth anniversary of the closing of the IPO, (ii) the date of termination
of employment with the Company other than a termination by the Company for
Cause, (iii) the first date on which a Change in Control occurs; provided that if prior to the date of such
Change in Control, the Company or the acquiror requests in writing that
Employee continue to provide services to the Company (or the successor or
surviving entity) for a specified period not to exceed 12 months after the
Change in Control, the Termination Date shall not expire on the date of the
Change in Control but shall expire on the earliest of (x) the last day of
the requested period, (y) the date provided in clause (i) or (z) the
date, if any, of the termination of employment by the Company (or the successor
or surviving entity) without Cause, by Employee for Good Reason or due to
Employee’s death or Disability or (iv) the first date on which the
Sponsors have sold a number of shares of Company common stock equal to the
aggregate number owned by the Sponsors immediately after the closing of the IPO
(other than with respect to any shares of common stock sold by any Sponsor to
any of its Affiliates).

 

“Transfer” means (a) offer, sell,
pledge, or hypothecate any legal or beneficial interest, including the grant of
an option or other right or otherwise transfer or enter into an agreement to do
so or (b) entry into any hedge, swap or any other agreement that
transfers, in whole or in part, any of the economic consequences of ownership
(whether such transaction is settled by delivery of cash, shares or otherwise).

 

All capitalized terms
defined in the agreement to which this Annex is attached and used but not
otherwise defined herein are used as therein defined.

 

Notwithstanding the
foregoing, Employee may Transfer:

 

(i)                                                         any shares of
Company common stock issued to Employee upon conversion of Class A and Class B
Interests in connection with the IPO in excess of the Specified Number, so long
as such shares are not Restricted Shares (as defined in the Award Agreement).

 

(ii)                                                      any shares of
Company common stock issued to Employee upon conversion of Class A and Class B
Interests in connection with the IPO (including all or a portion of the
Specified Number of such shares):

 

(a) by will or the laws
of descent and distribution,

 

(b) by gift to a
spouse, former spouse, lineal ancestor, lineal descendant, legally adopted
child, sibling or lineal

 

2

 

descendant or legally
adopted child of a sibling of Employee or a trust or other entity for the
primary benefit of Employee or any such persons if the transferee agrees in
writing to be bound by the provisions of this agreement, or

 

(c) to any institution
qualified as tax-exempt under Section 501(c)(3) of the Internal
Revenue Code of 1986 if the institution agrees in writing to be bound by the
provisions of this agreement.

 

(iii)                                                   with the
consent of the Compensation Committee of the Company’s board of directors
(which consent will not be unreasonably withheld), a number of shares of
Company common stock, in addition to the shares otherwise transferable pursuant
to (i) above, necessary to pay income taxes arising from the vesting of
any Restricted Shares issued to Employee upon conversion of Class B
Interests in connection with the IPO.

 

(iv)                                                  if the Company’s
board of directors (or a committee thereof) in its reasonable judgment makes a
good faith determination that Employee has incurred an unforeseeable emergency
resulting in severe financial hardship, then Employee may sell a number of
shares of Company common stock reasonably necessary to satisfy the emergency
need (which may include amounts necessary to pay Federal, state, local or
foreign income and employment taxes reasonably anticipated to result from the
sale), such number to be determined through the good faith consultation of the
Company’s board of directors and Employee; provided
that, in all cases, any such sale shall be made only from shares of Company
common stock with respect to which Employee has a 100% vested and
nonforfeitable interest.

 

3

 

EXHIBIT A

 

FORM OF RESTRICTED STOCK AWARD AGREEMENT – CLASS C INTERESTS

 

COBALT INTERNATIONAL ENERGY, INC.

LONG TERM INCENTIVE PLAN

 

Restricted Stock Award Agreement

IPO
Award – Class C Interests

 

You have been granted restricted
stock (this “Award”) on the
following terms and subject to the provisions of Attachment A and the Cobalt
Energy International, Inc. 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

  	
   

  	
  [Full name]

  
	
   

  	
   

  	
   

  
	
  Number of
  Shares Underlying Award

  	
   

  	
  [·] Shares (the
  “Restricted Shares”)

  
	
   

  	
   

  	
   

  
	
  Grant
  Date

  	
   

  	
  [Date of closing of IPO]

  
	
   

  	
   

  	
   

  
	
  Vesting

  	
   

  	
  Subject to Section 3
  of Attachment A, the Restricted Shares shall fully vest on [January 1,
  2013](1) [fifth anniversary of closing of IPO](2) (the “Scheduled Vesting Date”) if the
  Participant does not experience a Termination of Service at any time prior to
  the Scheduled Vesting Date (the “Service
  Condition”).

  

 

(1) For Class C
Interests currently outstanding.

 

(2) For Class C
Interests available for grant in connection with IPO.

 

A-1

 

Attachment A

 

Restricted Stock Award Agreement

Terms and Conditions

 

Grant to:  [Full name]

 

Section 1.  Grant of
Restricted Stock Award. 
Subject to the terms and conditions of the Plan and this Agreement, the
Company hereby grants Restricted Stock 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.  Issuance
of Shares.

 

(a)           The Restricted Shares shall
be evidenced by book-entry registration; provided,
however, that the Committee may determine that the Restricted Shares
shall be evidenced in such other manner as it deems appropriate, including the
issuance of a stock certificate or certificates.  In the event that any stock certificate is
issued in respect of the Restricted Shares, such certificate shall (i) be
registered in the name of the Participant, (ii) bear an appropriate legend
referring to the terms, conditions and restrictions applicable to the
Restricted Shares and (iii) be held in custody by the Company.

 

(b)           Voting
Rights.  The Participant shall have
voting rights with respect to the Restricted Shares.

 

(c)           Dividends.  All cash and other dividends and
distributions, if any, that are paid with respect to any Restricted Shares
shall be withheld by the Company and paid to the Participant, without interest,
only when, and if, the Restricted Shares become vested in accordance with this
Agreement.

 

(d)           Transferability.  Unless and until the Restricted Shares become
vested in accordance with this Agreement, the Restricted Shares shall not be
assigned, sold, transferred or otherwise be subject to alienation by the
Participant.

 

(e)           Section 83(b) Election.  If the Participant chooses, the Participant
may make an election under Section 83(b) of the Code with respect to
the  Restricted Shares, which would cause
the Participant currently to recognize income for U.S. federal income tax
purposes in an amount equal to the excess (if any) of the fair market value of
the Restricted Shares (determined as of the Grant Date) over the amount, if
any, that the Participant paid for the Restricted Shares, which excess will be
subject to U.S. federal income tax.  The
form for making a Section 83(b) election is attached as Attachment B.  The
Participant

 

2

 

acknowledges
that (i) the Participant is solely responsible for the decision whether or
not to make a Section 83(b) election, and the Company is not making
any recommendation with respect thereto, (ii) it is his or her sole responsibility
to timely file the Section 83(b) election within 30 days after the
Grant Date, if the Participant decides to make such election, and (iii) if
the Participant does not make a valid and timely Section 83(b) election,
the Participant will be required to recognize ordinary income at the time of
vesting on any future appreciation on the Restricted Shares.

 

(f)            Withholding
Requirements.  The Company
may withhold any tax (or other governmental obligation) that becomes due with
respect to the Restricted Shares (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 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.  If the Committee permits the Participant 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 transferred to the
Company as provided above.

 

Section 3.  Vesting of
Restricted Shares.

 

(a)           Termination
of Service.

 

(i)            Death or
Disability.  In the
event of the Participant’s Termination of Service at any time due to the
Participant’s death or Disability, the Restricted Shares shall fully vest as of
the date of such termination.

 

(ii)           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), the Restricted
Shares shall be forfeited in their entirety as of the date of such termination
without any payment to the Participant.

 

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 (including the Service Condition) of
this Agreement, subject to such terms and

 

3

 

conditions as the Committee
deems appropriate, with respect to all or a portion of the Restricted Shares.

 

(b)           Change in
Control.  If a Change in Control occurs
at any time, the Restricted Shares shall fully vest as of the date of such
Change in Control.

 

(c)           Committee’s
Failure to Grant Specified Awards.  The Restricted Shares shall fully vest as of
the third anniversary of the IPO if, during the period commencing on the Grant
Date and ending on the third anniversary of the IPO, the Committee has not
granted Awards under the Plan with terms substantially similar to the terms set
forth in the form of restricted stock award agreement appended to the
Reorganization Agreement as Exhibit A-3 (other than Section 4(c) of
such agreement) with respect to [insert number equal to 95% of the excess of the
total number of Shares issuable with respect to 100,000 Class D Units less
the number of shares issued to Class D holders upon the IPO] Shares in the
aggregate.  For the avoidance of doubt,
IPO Awards granted under the Plan shall not constitute Awards granted for
purposes of this Section 4(c)).

 

(d)           Effect of
Vesting.  Subject to the provisions of
this Agreement, upon the vesting of Restricted Shares, the restrictions under
this Award with respect to such Shares shall lapse, and subject to any
applicable Lock Up Agreement, such Shares shall be fully assignable, saleable
and transferable by the Participant, and the Company shall deliver such Shares,
along with any dividends and other distributions that were paid with respect to
such Shares but withheld pending vesting, to the Participant.  Subject to any applicable Lock Up Agreement,
such Shares shall be delivered by transfer to the Depository Trust Company for
the benefit of the Participant or by delivery of a stock certificate registered
in the Participant’s name.

 

Section 4.  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.

Two Post Oak Central

1980 Post Oak Blvd., Suite 1200

Attention: [General Counsel]

Facsimile: [number]

 

4

 

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 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 the 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.

 

5

 

(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 the Restricted Shares pursuant to the provisions of this
Agreement.

 

(h)           Plan.  The Participant acknowledges and understands
that material definitions and provisions concerning the Restricted Shares 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)            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 4(a) shall be deemed
effective service of process on such party.

 

(k)           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.

 

6

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first written
above.

 

 

	
   

  	
   

  	
  COBALT
  INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Name of Participant]

  

 

7

 

Attachment B

 

SECTION 83(b) ELECTION

 

 

 

	
   

  	
   

  	
  This statement is being
  made under Section 83(b) of the Internal Revenue Code, pursuant to
  Treas. Reg. Section 1.83-2.

  
	
   

  	
   

  	
   

  
	
  (1)

  	
   

  	
  The taxpayer performing
  the services is:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
  Social Security Number:

  
	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
  The property with respect
  to which the election is being made is
                      
  shares (the “Restricted Shares”)
  of common stock, par value $.01 per share, of Cobalt International
  Energy, Inc. (the “Company”)

  
	
   

  	
   

  	
   

  
	
  (3)

  	
   

  	
  The Restricted Shares were
  transferred
  on                         .

  
	
   

  	
   

  	
   

  
	
  (4)

  	
   

  	
  The taxable year in which
  the election is being made is the calendar year
                   .

  
	
   

  	
   

  	
   

  
	
  (5)

  	
   

  	
  The Restricted Shares are
  not transferable and are subject to a substantial risk of forfeiture within
  the meaning of Section 83(c)(1) of the Internal Revenue Code until
  and unless specified conditions are satisfied or a specified event occurs, in
  each case as set forth in the Company’s Long Term Incentive Plan and the
  Restricted Stock Award Agreement pursuant to which the Restricted Shares were
  issued.

  
	
   

  	
   

  	
   

  
	
  (6)

  	
   

  	
  The fair market value of
  the Restricted Shares at the time of transfer (determined without regard to
  any restriction other than a restriction which by its terms will never lapse)
  is $              per share.

  
	
   

  	
   

  	
   

  
	
  (7)

  	
   

  	
  The amount paid by the
  taxpayer for the Restricted Shares is
  $                    per share.

  
	
   

  	
   

  	
   

  
	
  (8)

  	
   

  	
  A copy of this statement
  has been furnished to the Company, for whom the taxpayer will be performing
  services underlying the transfer of the Restricted Shares.

  
	
   

  	
   

  	
   

  
	
  (9)

  	
   

  	
  This statement is executed
  on.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Spouse (if any)

  	
   

  	
  Taxpayer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  This statement must be
  filed with the Internal Revenue Service Center with which you filed your last
  U.S. federal income tax return within 30 days after the grant date of the
  Restricted Stock Award Agreement.  This
  filing should be made by registered or certified mail, return receipt
  requested.  You are also required to (i) deliver
  a copy of this statement to the Company and (ii) attach a copy of this
  statement to your federal income tax return for the taxable year that
  includes the grant date (and may also be required to

  

 

8

 

	
   

  	
   

  	
  attach a copy of this
  statement to your state income tax return for such year).  You should also retain a copy of this
  statement for your records.

  

 

9

 

EXHIBIT B

 

FORM OF RESTRICTED STOCK AWARD AGREEMENT – CLASS D INTERESTS

 

COBALT INTERNATIONAL ENERGY, INC.

LONG TERM INCENTIVE PLAN 

Restricted Stock Award Agreement

IPO
Award – Class D Interests

 

You have been granted
restricted stock (this “Award”) on
the following terms and subject to the provisions of Attachment A and the
Cobalt Energy International, Inc. 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

  	
   

  	
  [Full name]

  
	
   

  	
   

  	
   

  
	
  Number of
  Shares Underlying Award

  	
   

  	
  [·] Shares (the
  “Restricted Shares”)

  
	
   

  	
   

  	
   

  
	
  Grant
  Date

  	
   

  	
  [Date of closing of IPO]

  
	
   

  	
   

  	
   

  
	
  Vesting

  	
   

  	
  Subject to Section 3
  of Attachment A, the Restricted Shares shall fully vest on [fifth anniversary
  of closing of IPO] (the “Scheduled Vesting
  Date”) if each of the following conditions is satisfied:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  the Participant does not
  experience a Termination of Service at any time prior to the Scheduled
  Vesting Date (the “Service Condition”);
  and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·

  	
  the average of the volume
  weighted average price of a Share for each trading day during the 90-day
  period ending on the day before the Scheduled Vesting Date equals or exceeds
  $[price to public in IPO] (the “Value
  Condition”). The “volume weighted average price” of a Share shall
  be computed based on composite trading between 9:30 a.m. and
  4:00 p.m. New York City time on the applicable date (i) as reported
  by The Bloomberg Professional Service on the Company’s page under the
  “VWAP” field, at 4:00 p.m. on such date; or (ii) if the volume
  weighted

  

 

B-1

 

	
   

  	
   

  	
   

  	
  average price is not
  available from The Bloomberg Professional Service in such manner, as reported
  from a different third party source to which the Company has access on such
  date or, if the Company does not have access to such a third party source,
  the high and low sale prices (regular way) of a Share on such date.

  

 

2

 

Attachment A

 

Restricted Stock Award Agreement

Terms and Conditions

 

Grant to:  [Full name]

 

Section 1.  Grant of
Restricted Stock Award. 
Subject to the terms and conditions of the Plan and this Agreement, the
Company hereby grants Restricted Stock 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.  Issuance
of Shares.

 

(a)           The Restricted Shares shall
be evidenced by book-entry registration; provided,
however, that the Committee may determine that the Restricted Shares
shall be evidenced in such other manner as it deems appropriate, including the
issuance of a stock certificate or certificates.  In the event that any stock certificate is
issued in respect of the Restricted Shares, such certificate shall (i) be
registered in the name of the Participant, (ii) bear an appropriate legend
referring to the terms, conditions and restrictions applicable to the
Restricted Shares and (iii) be held in custody by the Company.

 

(b)           Voting
Rights.  The Participant shall have
voting rights with respect to the Restricted Shares.

 

(c)           Dividends.  All cash and other dividends and
distributions, if any, that are paid with respect to any Restricted Shares
shall be withheld by the Company and paid to the Participant, without interest,
only when, and if, the Restricted Shares become vested in accordance with this
Agreement.

 

(d)           Transferability.  Unless and until the Restricted Shares become
vested in accordance with this Agreement, the Restricted Shares shall not be
assigned, sold, transferred or otherwise be subject to alienation by the
Participant.

 

(e)           Section 83(b) Election.  If the Participant chooses, the Participant
may make an election under Section 83(b) of the Code with respect to
the  Restricted Shares, which would cause
the Participant currently to recognize income for U.S. federal income tax
purposes in an amount equal to the excess (if any) of the fair market value of
the Restricted Shares (determined as of the Grant Date) over the amount, if
any, that the Participant paid for the Restricted Shares, which excess will be
subject to U.S. federal income tax.  The
form for making a Section 83(b) election is attached as Attachment B.  The
Participant

 

3

 

acknowledges
that (i) the Participant is solely responsible for the decision whether or
not to make a Section 83(b) election, and the Company is not making
any recommendation with respect thereto, (ii) it is his or her sole
responsibility to timely file the Section 83(b) election within 30 days
after the Grant Date, if the Participant decides to make such election, and (iii) if
the Participant does not make a valid and timely Section 83(b) election,
the Participant will be required to recognize ordinary income at the time of
vesting on any future appreciation on the Restricted Shares.

 

(f)            Withholding
Requirements.  The Company
may withhold any tax (or other governmental obligation) that becomes due with
respect to the Restricted Shares (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 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.  If the Committee permits the Participant 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 transferred to the
Company as provided above.

 

Section 3.  Vesting of
Restricted Shares.

 

(a)           Termination
of Service.

 

(i)            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 shall be
deemed to be satisfied as of the date of such termination and (y) if the
Value Condition is satisfied as of the Scheduled Vesting Date, the Restricted
Shares shall fully vest as of such date.

 

(ii)           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), the
Restricted Shares shall be forfeited in their entirety as of the date of such
termination without any payment to the Participant.

 

Notwithstanding the
foregoing, in the event of the Participant’s Termination of Service other than
by the Company for Cause, the Committee may,

 

4

 

in its sole discretion,
accelerate the vesting or waive any term or condition (including the Service Condition
and/or Value Condition) of this Agreement, subject to such terms and conditions
as the Committee deems appropriate, with respect to all or a portion of the
Restricted Shares.

 

(b)           Change in
Control.  If a Change in Control occurs
at any time and the Value Condition is satisfied as of the date of such Change
in Control (as described below), the Restricted Shares shall fully vest as of
the date of such Change in Control; provided
that if prior to the date of such Change in Control, the Company or
the acquirer requests in writing that the Participant continue to provide
services to the Company (or the successor or surviving entity) for a specified
period not to exceed 12 months after such Change in Control, the Restricted
Shares shall vest as of the earliest of (x) the last day of such requested
period, (y) the Scheduled Vesting Date or (z) the date, if any, of
the Participant’s Termination of Service by the Company (or the successor or
surviving entity) without Cause, by the Participant for Good Reason or due to
the Participant’s death or Disability (such earliest date, the “Change in
Control Vesting Date”).  The Restricted
Shares shall be forfeited in their entirety without any payment to the
Participant upon his or her Termination of Service by the Company (or the
successor or surviving entity) for Cause or by the Participant without Good
Reason at any time prior to the Change in Control Vesting Date.  If a Change in Control occurs at any time and
the Value Condition is not satisfied as of the date of such Change in Control,
the Restricted Shares shall be forfeited in their entirety as of the date of
such Change in Control without any payment to the Participant.

 

If a Change in Control
results from the occurrence of an event within the meaning of:

 

(i)            clause (i) or (iii) of
the definition of “Change in Control,” the Value Condition shall be deemed to
be satisfied as of the date of such Change in Control if the price or implied
price per Share in such Change in Control equals or exceeds $[price to public in
IPO]; or

 

(ii)           clause (ii) of the
definition of “Change in Control,” the Value Condition shall be deemed to be
satisfied if the average of the volume weighted average price of a Share for
each trading day during the 90-day period ending on the day before such Change
in Control equals or exceeds $[price to public in IPO].

 

(c)           Committee’s
Failure to Grant Specified Awards.  The Restricted Shares shall fully vest as of
the third anniversary of the IPO if, during the period commencing on the Grant
Date and ending on the third anniversary of the IPO, the Committee has not
granted Awards under the Plan with terms substantially similar to the terms set
forth in this Agreement (other than this Section 4(c)) with

 

5

 

respect to [insert number
equal to 95% of the excess of the total number of Shares issuable with respect
to 100,000 Class D Units less the number of Shares issued to Class D
holders upon the IPO] Shares in the aggregate. 
For the avoidance of doubt, IPO Awards granted under the Plan shall not
constitute Awards granted for purposes of this Section 4(c)).

 

(d)           Effect of
Vesting.  Subject to the provisions of
this Agreement, upon the vesting of Restricted Shares, the restrictions under
this Award with respect to such Shares shall lapse, and subject to any
applicable Lock Up Agreement, such Shares shall be fully assignable, saleable
and transferable by the Participant, and the Company shall deliver such Shares,
along with any dividends and other distributions that were paid with respect to
such Shares but withheld pending vesting, to the Participant.  Subject to any applicable Lock Up Agreement,
such Shares shall be delivered by transfer to the Depository Trust Company for
the benefit of the Participant or by delivery of a stock certificate registered
in the Participant’s name.

 

Section 4.  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.

Two Post Oak Central

1980 Post Oak Blvd., Suite 1200

Attention: [General Counsel]

Facsimile: [number]

 

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 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

 

6

 

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 the 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 the Restricted Shares pursuant to the provisions of this
Agreement.

 

(h)           Plan.  The Participant acknowledges and understands
that material definitions and provisions concerning the Restricted Shares 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.

 

7

 

(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)            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 4(a) shall be deemed
effective service of process on such party.

 

(k)           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.

 

8

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first written
above.

 

 

	
   

  	
   

  	
  COBALT
  INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Name of Participant]

  

 

9

 

Attachment B

 

SECTION 83(b) ELECTION

 

	
   

  	
   

  	
  This statement is being
  made under Section 83(b) of the Internal Revenue Code, pursuant to
  Treas. Reg. Section 1.83-2.

  
	
   

  	
   

  	
   

  
	
  (1)

  	
   

  	
  The taxpayer performing
  the services is:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
  Social Security Number:

  
	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
  The property with respect
  to which the election is being made is
                      
  shares (the “Restricted Shares”)
  of common stock, par value $.01 per share, of Cobalt International
  Energy, Inc. (the “Company”)

  
	
   

  	
   

  	
   

  
	
  (3)

  	
   

  	
  The Restricted Shares were
  transferred
  on                             .

  
	
   

  	
   

  	
   

  
	
  (4)

  	
   

  	
  The taxable year in which
  the election is being made is the calendar year
                     .

  
	
   

  	
   

  	
   

  
	
  (5)

  	
   

  	
  The Restricted Shares are
  not transferable and are subject to a substantial risk of forfeiture within
  the meaning of Section 83(c)(1) of the Internal Revenue Code until
  and unless specified conditions are satisfied or a specified event occurs, in
  each case as set forth in the Company’s Long Term Incentive Plan and the
  Restricted Stock Award Agreement pursuant to which the Restricted Shares were
  issued.

  
	
   

  	
   

  	
   

  
	
  (6)

  	
   

  	
  The fair market value of
  the Restricted Shares at the time of transfer (determined without regard to
  any restriction other than a restriction which by its terms will never lapse)
  is
  $                    per share.

  
	
   

  	
   

  	
   

  
	
  (7)

  	
   

  	
  The amount paid by the
  taxpayer for the Restricted Shares is
  $                    per share.

  
	
   

  	
   

  	
   

  
	
  (8)

  	
   

  	
  A copy of this statement
  has been furnished to the Company, for whom the taxpayer will be performing
  services underlying the transfer of the Restricted Shares.

  
	
   

  	
   

  	
   

  
	
  (9)

  	
   

  	
  This statement is executed
  on
                                
  .

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Spouse (if any)

  	
   

  	
  Taxpayer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  This statement must be
  filed with the Internal Revenue Service Center with which you filed your last
  U.S. federal income tax return within 30 days after the grant date of the
  Restricted Stock Award Agreement.  This
  filing should be made by registered or certified mail, return receipt
  requested.  You are also required to (i) deliver
  a copy of this statement to the Company and (ii) attach a copy of this
  statement to your federal income tax return for the taxable year that
  includes the grant date (and may also be required to

  

 

10

 

	
   

  	
   

  	
  attach a copy of this
  statement to your state income tax return for such year).  You should also retain a copy of this
  statement for your records.

  

 

11

 

EXHIBIT C

 

FORM OF
RELEASE

 

For and in consideration of
certain payments and other benefits due to [·] (“Employee”) pursuant to the Employment
Agreement (the “Employment Agreement”)
dated as of [·], 20    , between Cobalt
International Energy, Inc., (the “Company”)
and Employee, and for other good and valuable consideration, Employee hereby
agrees, for Employee, Employee’s spouse and child or children (if any),
Employee’s heirs, beneficiaries, devisees, executors, administrators,
attorneys, personal representatives, successors and assigns, to forever
release, discharge and covenant not to sue the Company and its divisions,
affiliates, subsidiaries, parents, branches, predecessors, successors, assigns,
and, with respect to such entities, their officers, directors, trustees,
employees, agents, shareholders, administrators, general or limited partners,
members, representatives, attorneys, insurers and fiduciaries, past, present
and future (the “Released Parties”)
from any and all claims of any kind arising out of, or related to, his
employment with the Company, its affiliates or subsidiaries (collectively, with
the Company, the “Affiliated Entities”)
or Employee’s separation from employment with the Affiliated Entities, which
Employee now has or may have against the Released Parties, whether known or
unknown to Employee, by reason of facts which have occurred on or prior to the
date that Employee has signed this Release. 
Such released claims include, without limitation, any and all claims
relating to the foregoing under federal, state or local laws pertaining to
employment, including, without limitation, the Age Discrimination in Employment
Act, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e
et seq., the Fair Labor Standards
Act, as amended, 29 U.S.C. Section 201 et
seq., the Americans with Disabilities Act, as amended, 42 U.S.C. Section 12101
et seq. the Reconstruction Era
Civil Rights Act, as amended, 42 U.S.C. Section 1981 et seq., the Rehabilitation Act of 1973,
as amended, 29 U.S.C. Section 701 et
seq., the Family and Medical Leave Act of 1992, 29 U.S.C. Section 2601
et seq., and any and all state or
local laws regarding employment discrimination, the payment of wages and/or
federal, state or local laws of any type or description regarding employment,
including but not limited to any claims arising from or derivative of Employee’s
employment with the Affiliated Entities, as well as any and all such claims
under state contract or tort law.  By
signing this Release, Employee is bound by it. 
Anyone who succeeds to Employee’s rights and responsibilities, such as
heirs or the executor of Employee’s estate, is also bound by this Release.  This Release also applies to any claims
brought by any person or agency or class action under which Employee may have a
right or benefit.  Notwithstanding this release
of liability, nothing in this Release prevents Employee from filing any
non-legally waivable claim (including a challenge to the validity of this
Release) with the Equal Employment Opportunity Commission (the “EEOC”) or comparable state or local agency
or participating in any

 

C-1

 

investigation or proceeding
conducted by the EEOC or comparable state or local agency; however, Employee
understands and agrees that Employee is waiving any and all rights to recover
any monetary or personal relief or recovery as a result of such EEOC or
comparable state or local agency proceeding or subsequent legal actions.

 

Employee has read this
Release carefully, acknowledges that Employee has been given at least [21] [45]
days to consider all of its terms and has been and is hereby advised to consult
with an attorney and any other advisors of Employee’s choice prior to executing
this Release, and Employee fully understands that by signing below Employee is
voluntarily giving up any right which Employee may have to sue or bring any
other claims against the Released Parties, including any rights and claims
under the Age Discrimination in Employment Act. 
Employee also understands that Employee has a period of seven days after
signing this Release within which to revoke his agreement, and that neither the
Company nor any other person is obligated to make any payments or provide any
other benefits to Employee pursuant to the Employment Agreement until eight
days have passed since Employee’s signing of this Release without Employee’s
signature having been revoked other than any accrued obligations or other
benefits payable pursuant to the terms of the Company’s normal payroll
practices or employee benefit plans. 
Finally, Employee expressly represents that he has not been forced or
pressured in any manner whatsoever to sign this Release, and Employee agrees to
all of its terms voluntarily.

 

Notwithstanding anything
else herein to the contrary, this Release shall not affect: (i) the
Company’s obligations under any compensation or employee benefit plan, program
or arrangement (including, without limitation, obligations to Employee under
the Employment Agreement or any stock option, stock award or agreements or
obligations under any pension, deferred compensation or retention plan)
provided by the Affiliated Entities where Employee’s compensation or benefits
are intended to continue or Employee is to be provided with compensation or
benefits, in accordance with the express written terms of such plan, program or
arrangement, beyond the date of Employee’s termination and (ii) rights to
indemnification Employee may have under (A) applicable law, (B) any
other agreement between Employee and a Released Party and (C) as an
insured under any director’s and officer’s liability insurance policy now or
previously in force.

 

C-2

 

This Release is final and
binding and may not be changed or modified except in a writing signed by both
parties.

 

	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  [Employee]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cobalt
  International Energy, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

C-3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}]]