Document:

Class C(2014-2) Terms Document

 Exhibit 4.2 
  

 
 DISCOVER CARD EXECUTION NOTE TRUST

 Issuer 
 and 

U.S. BANK NATIONAL ASSOCIATION 

Indenture Trustee 
 CLASS
C(2014-2) TERMS DOCUMENT 
 Dated as of April 30, 2014 

to 
 AMENDED AND RESTATED
INDENTURE SUPPLEMENT 
 Dated as of June 4, 2010 

for the DiscoverSeries Notes 
 to

 INDENTURE 
 Dated as of
July 26, 2007 
  
  

 TABLE OF CONTENTS 

 

							
	 	  	 	  	Page	 
	ARTICLE I	  	 	1	  
	Definitions and Other Provisions of General Application	  	 	1	  
	Section 1.01.	  	Definitions	  	 	1	  
	Section 1.02.	  	Representations and Warranties of Issuer	  	 	9	  
	Section 1.03.	  	Representations and Warranties of Indenture Trustee	  	 	10	  
	Section 1.04.	  	Limitations on Liability	  	 	10	  
	Section 1.05.	  	Governing Law	  	 	10	  
	Section 1.06.	  	Counterparts	  	 	11	  
	Section 1.07.	  	Ratification of Indenture and Indenture Supplement	  	 	11	  
	ARTICLE II	  	 	11	  
	The Class C(2014-2) Notes	  	 	11	  
	Section 2.01.	  	Creation and Designation	  	 	11	  
	Section 2.02.	  	Adjustments to Required Subordinated Percentage and Amount	  	 	11	  
	Section 2.03.	  	Interest Payment	  	 	11	  
	Section 2.04.	  	Notification of LIBOR	  	 	12	  
	Section 2.05.	  	Payments of Interest and Principal.	  	 	12	  
	Section 2.06.	  	Form of Delivery of Class C(2014-2) Notes; Denominations	  	 	12	  
	Section 2.07.	  	Delivery and Payment for the Class C(2014-2) Notes	  	 	13	  
	Section 2.08.	  	Targeted Deposits to the Accumulation Reserve Account	  	 	13	  
	Section 2.09.	  	Additional Issuances of Notes	  	 	13	  
	Section 2.10.	  	Designation of Additional Amounts to be included in the Excess Spread Amount for the DiscoverSeries Notes	  	 	14	  
	Section 2.11.	  	No Payments from Interest Funding Subaccount for accretion of principal of the Class C(2014-2) Notes	  	 	14	  
	Section 2.12.	  	Calculation of Class C(2014-2) Accreted Discount	  	 	15	  
	 Section 2.13.
	  	Variable Accumulation Period.	  	 	15	  

					
	
	 Exhibit
  

Exhibit
A                     Form of Class C Note

 THIS CLASS C(2014-2) TERMS DOCUMENT (this “Terms Document”), by and
between DISCOVER CARD EXECUTION NOTE TRUST, a statutory trust created under the laws of the State of Delaware (the “Issuer”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws
of the United States of America, as Indenture Trustee (the “Indenture Trustee”), is made and entered into as of April 30, 2014. 

Pursuant to this Terms Document, the Issuer shall create a new Tranche of Class C Notes of the DiscoverSeries and shall specify the principal
terms thereof. 
 ARTICLE I 

Definitions and Other Provisions of General Application 

Section 1.01. Definitions. For all purposes of this Terms Document, except as otherwise expressly provided or unless the context
otherwise requires: 
 (1) the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as
well as the singular; 
 (2) all other terms used herein which are defined in the Note Purchase Agreement, dated as of April 30,
2014, by and among Discover Card Execution Note Trust, Discover Bank and the Purchaser (as defined therein) (as may be amended, supplemented, restated, amended and restated or otherwise modified from time to time, the “Note Purchase
Agreement”), the Indenture Supplement or the Indenture, either directly or by reference therein, have the meanings assigned to them therein; 

(3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting
principles and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder means such accounting principles as are generally accepted
in the United States of America at the date of such computation; 
 (4) all references in this Terms Document to designated
“Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this Terms Document; the words “herein,” “hereof” and “hereunder” and other words of
similar import refer to this Terms Document as a whole and not to any particular Article, Section or other subdivision; 
 (5) in the event
that any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Indenture Supplement or the Indenture, the terms and provisions of this Terms Document shall be controlling, but solely
with respect to the Class C(2014-2) Notes; 
 (6) each capitalized term defined herein shall relate only to the Class C(2014-2) Notes and no
other Tranche of Notes issued by the Issuer; 

  
 1 

 (7) “including” and words of similar import will be deemed to be followed by
“without limitation”; and 
 (8) for purposes of determining any amount or making any calculation hereunder, such amount or
calculation, (x) if specified to be as of the first day of any Due Period, shall (a) include any Notes issued during such Due Period as if such Notes had been outstanding on the first day of such Due Period and (b) give effect to any
payments, deposits or other allocations made on the Distribution Date related to the prior Due Period, and (y) if specified to be as of the close of business on the last day of any Due Period shall give effect to any payments, deposits or other
allocations made on the related Distribution Date. 
 “Accumulation Amount” means $47,500,000; provided,
however, if the commencement of the Accumulation Period is delayed in accordance with Section 2.13 hereof, the Accumulation Amount shall be determined in accordance with the definition of “Accumulation Amount” in the Indenture
Supplement. 
 “Accumulation Commencement Date” means June 1, 2016, or such later date as the Calculation Agent
on behalf of the Issuer determines in accordance with Section 2.13 hereof. 
 “Accumulation Period” has the meaning
set forth in the Indenture Supplement. 
 “Accumulation Period Length” means 12 months; provided,
however, if the commencement of the Accumulation Period is delayed in accordance with Section 2.13 hereof, the Accumulation Period Length shall be determined in accordance with the definition of “Accumulation Period Length” in
the Indenture Supplement. 
 “Accumulation Reserve Funding Period” shall not apply if the Calculation Agent on
behalf of the Issuer notifies the Indenture Trustee that it expects the Accumulation Period Length to be adjusted to one (1) month, and otherwise shall mean a period commencing on the first Distribution Date on which a condition in the right
column of the following table was in effect on the immediately preceding Distribution Date, if the Distribution Date is a Distribution Date described in the corresponding left column of the following table, and ending on the Distribution Date
immediately preceding the earlier to occur of: 
 (x) the Expected Maturity Date for the Class C(2014-2) Notes and 

(y) the Principal Payment Date on which the Outstanding Dollar Principal Amount of the Class C(2014-2) Notes is paid in full. 

 

			
	 Distribution Date:
	  	 Condition:

	(a) The Distribution Date occurring three (3) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 2.13 hereof) and any following Distribution
Date	  	No condition.
		
	(b) The Distribution Date occurring four (4)	  	The three-month rolling average Excess

  
 2 

			
	calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 2.13 hereof) and any following Distribution Date	  	Spread Percentage is less than 4%.
		
	(c) The Distribution Date occurring six (6) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 2.13 hereof) and any following Distribution
Date	  	The three-month rolling average Excess Spread Percentage is less than 3%.
		
	(d) The Distribution Date occurring twelve (12) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 2.13 hereof) and any following Distribution
Date	  	The three-month rolling average Excess Spread Percentage is less than 2%.

 “Class C(2014-2) Accreted Discount” means, for any Distribution Date, the amount of
principal accreted on the Class C(2014-2) Notes in accordance with Section 2.12 hereof through the Monthly Principal Accretion Period ending on such Distribution Date. 

“Class C(2014-2) Adverse Event” means the occurrence of any of the following: (a) an Early Redemption Event with
respect to the Class C(2014-2) Notes or (b) an Event of Default and acceleration of the Class C(2014-2) Notes; provided, however, that if the only such event to have occurred is an Excess Spread Early Redemption Event for which an
Excess Spread Early Redemption Cure has occurred, a Class C(2014-2) Adverse Event shall not be treated as continuing from and after the date of such cure. 

“Class C(2014-2) Note” means any Note, in the form set forth in Exhibit A hereto, designated therein as a Class
C(2014-2) Note and duly executed and authenticated in accordance with the Indenture. 
 “Class C(2014-2)
Noteholder” means a Person in whose name a Class C(2014-2) Note is registered in the Note Register. 
 “Class
C(2014-2) Termination Date” means the earliest to occur of (a) the Principal Payment Date on which the Outstanding Dollar Principal Amount of the Class C(2014-2) Notes is paid in full, (b) the Legal Maturity Date and (c) the
date on which the Indenture is discharged and satisfied pursuant to Article VI thereof. 
 “Class C Tranche Interest
Allocation” notwithstanding anything to the contrary in the Indenture Supplement, for the Class C (2014-2) Notes shall be zero; provided that, if the Outstanding Dollar Principal Amount is not paid in full on or prior to the Expected
Maturity Date, for any Distribution Date after the Expected Maturity Date, the Class C Tranche Interest Allocation shall be the Class C Interest for the Class C(2014-2) Notes plus any Interest 

  
 3 

 
Allocation Shortfall from the prior Distribution Date. Following a Receivables Sale for the Class C (2014-2) Notes, the Class C Tranche Interest Allocation shall be zero. 

“Class C Reserve Account Percentage” means, for any Distribution Date on which a condition in the left column of the
following table was in effect on the immediately preceding Distribution Date, the percentage in the corresponding right column of the following table (or if more than one conditions were in effect on the immediately preceding Distribution Date, the
largest percentage). 
  

			
	 Condition:
  

The three-month rolling average Excess Spread Percentage is:
	  	Class C Reserve Account Percentage:
		
	 (a) 4.50% or greater
	  	0%
		
	 (b) 4.00% to 4.49%
	  	1.25%
		
	 (c) 3.50% to 3.99%
	  	2.00%
		
	 (d) 3.00% to 3.49%
	  	2.75%
		
	 (e) 2.50% to 2.99%
	  	3.50%
		
	 (f) 2.00% to 2.49%
	  	4.50%
		
	 (g) less than 2.00%, or
	  	6.00%
		
	an Early Redemption Event or Event of Default for the Class C(2014-2) Notes has occurred and is continuing.	  	

 “Discount Amount” means initially $17,876,340; provided that following any issuance of
additional Class C(2014-2) Notes in accordance with Section 2.09, the Discount Amount shall mean the amount specified in the Notice of Additional Issuance. 

“Encumbered Amount” means, for the Class C(2014-2) Notes, an amount equal to 

(a) the Nominal Liquidation Amount of the Class C(2014-2) Notes, divided by 

(b) the Nominal Liquidation Amount of all Tranches of Class C Notes in the DiscoverSeries, multiplied by 

(c) the sum of (i) the aggregate Required Subordinated Amount of Class C Notes for all Tranches of Class A Notes in the
DiscoverSeries with a Required Subordinated Amount of Class B Notes equal to zero and a Required Subordinated Amount of Class C Notes greater than 

  
 4 

 
zero and (ii) the aggregate Required Subordinated Amount of Class C Notes for all Tranches of Class B Notes in the DiscoverSeries with a Required Subordinated Amount of Class C Notes greater
than zero. 
 “Encumbered Required Subordinated Amount of Class D Notes” means, for the Class C(2014-2) Notes, the product
of 
 (a) the sum of (1) the aggregate Required Subordinated Amount of Class D Notes for all Tranches of Class A Notes in the
DiscoverSeries with a Required Subordinated Amount of Class D Notes greater than zero, plus (2) the aggregate Unencumbered Required Subordinated Amount of Class D Notes for all Tranches of Class B Notes in the DiscoverSeries with an
Unencumbered Required Subordinated Amount of Class D Notes greater than zero, multiplied by 
 (b) a percentage equivalent to a
fraction, the numerator of which is the Nominal Liquidation Amount of the Class C(2014-2) Notes, and the denominator of which is the Nominal Liquidation Amount of all Tranches of Class C Notes in the DiscoverSeries. 

“Excess Spread Percentage” for any Distribution Date means a fraction, the numerator of which is the Excess Spread Amount for
such Distribution Date multiplied by 12 and the denominator of which is the sum of the Nominal Liquidation Amounts of all Tranches of DiscoverSeries Notes as of the first day of the related Due Period. 

“Expected Maturity Date” means June 15, 2017. 

“Indenture” means the Indenture, dated as of July 26, 2007, by and between the Issuer and Indenture Trustee, as amended
by the First Amendment to Indenture, dated as of June 4, 2010, as such agreement may be further amended, supplemented, restated, amended and restated, replaced or otherwise modified from time to time. 

“Indenture Supplement” means the Amended and Restated Indenture Supplement for the DiscoverSeries Notes, dated as of
June 4, 2010, by and between the Issuer and the Indenture Trustee, as the same may be further amended, supplemented, restated, amended and restated, replaced or otherwise modified from time to time. 

“Initial Dollar Principal Amount” means $552,123,660, or such higher amount as is specified in any Notice of Additional
Issuance under Section 2.09. 
 “Interest Accrual Period” means, with respect to any Interest Payment Date, the period from
and including the previous Interest Payment Date to but excluding such Interest Payment Date (or, in the case of the first Interest Payment Date occurring after the Expected Maturity Date, from and including the Expected Maturity Date to but
excluding such Interest Payment Date). 
 “Interest Payment Date” means, if the Outstanding Dollar Principal Amount is not
paid in full on or prior to the Expected Maturity Date, the fifteenth day of each month commencing in July 2017, or if such fifteenth day is not a Business Day, the next succeeding Business Day. 

  
 5 

 “Issuance Date” means April 30, 2014 with respect to all Class C(2014-2)
Notes issued on the date hereof and, with respect to any additional Class C(2014-2) Notes issued pursuant to Section 2.09, any Issuance Date specified in the Notice of Additional Issuance delivered thereunder. 

“Legal Maturity Date” means December 16, 2019. 

“LIBOR” means, with respect to any LIBOR Determination Date, the rate for deposits in United States dollars with a duration
comparable to the relevant Interest Accrual Period which appears on Reuters Screen LIBOR01 as of 11:00 a.m., London time, on such day. If such rate does not appear on Reuters Screen LIBOR01, the rate will be determined by the Indenture Trustee on
the basis of the rates at which deposits in United States dollars are offered by major banks in the London interbank market, selected by the Indenture Trustee, at approximately 11:00 a.m., London time, on such day to prime banks in the London
interbank market with a duration comparable to the relevant Interest Accrual Period commencing on that day. The Indenture Trustee will request the principal London office of at least four banks to provide a quotation of its rate. If at least two
such quotations are provided, the rate will be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the rate for that day will be the arithmetic mean of the rates quoted by four major banks in New York City,
selected by the Trustee, at approximately 11:00 a.m., New York City time, on that day for loans in United States dollars to leading European banks with a duration comparable to the relevant Interest Accrual Period commencing on that day. If LIBOR
with respect to a LIBOR Determination Date is not determined pursuant to the foregoing, LIBOR with respect to such LIBOR Determination Date will be LIBOR with respect to the immediately prior LIBOR Determination Date. 

“LIBOR Business Day,” if applicable, shall mean a day other than a Saturday or a Sunday on which banking institutions in both
the City of London, England and in New York, New York are not required or authorized by law to be closed. 
 “LIBOR Determination
Date” means the second LIBOR Business Day immediately preceding the commencement of an Interest Accrual Period. 
 “Nominal
Liquidation Amount” means, notwithstanding anything to the contrary in the Indenture Supplement, with respect to the Class C(2014-2) Notes: 

(a) on the Issuance Date thereof, $570,000,000; 

(b) on any Distribution Date thereafter such amount as increased or decreased pursuant to Section 3.01 of the Indenture Supplement and
Section 2.09 hereof; 
 (c) on any date, other than a Distribution Date, on which Prefunding Excess Amount are withdrawn from the
applicable Principal Funding Subaccount pursuant to Section 4.04 of the Indenture Supplement, the Nominal Liquidation Amount as of the beginning of such date plus the Prefunding Excess Amount so withdrawn; and 

(d) on and after the date of a Receivables Sale for the Class C(2014-2) Notes, zero. 

  
 6 

 “Note Interest Rate” means zero; provided that if the Outstanding Dollar
Principal Amount is not paid in full on or prior to the Expected Maturity Date, the Note Interest Rate shall be LIBOR + 1.00% per annum, calculated on the basis of the actual number of days elapsed and a 360-day year. 

“Notice of Additional Issuance” has the meaning set forth in Section 2.09. 

“Outstanding Dollar Principal Amount” means, for the Class C(2014-2) Notes, notwithstanding anything to the contrary
in the Indenture Supplement, (a) prior to an issuance of additional Class C(2014-2) Notes, the sum of (i) the Initial Dollar Principal Amount of such Notes and (ii) the Class C(2014-2) Accreted Discount as determined in accordance
with Section 2.12 hereof, minus (i) the aggregate amount of principal paid with respect to the Class C(2014-2) Notes as of the relevant date of determination and (ii) any net losses of principal of funds on deposit in respect of
principal in the Principal Funding Account or the related Principal Funding Subaccount, as applicable, for the Class C(2014-2) Notes and (b) following the issuance of additional Class C(2014-2) Notes, the sum of (i) the Outstanding Dollar
Principal Amount of such Notes determined as of the date of such additional issuance and (ii) the Class C(2014-2) Accreted Discount accreted after the date of such additional issuance, as determined in accordance with Section 2.12 hereof,
minus (i) the aggregate amount, as of the relevant date of determination, of principal paid with respect to the Class C(2014-2) Notes after the date of such additional issuance and (ii) any net losses, as of the relevant date of
determination, of principal of funds on deposit in respect of principal in the Principal Funding Account or the related Principal Funding Subaccount, as applicable, for the Class C(2014-2) Notes after the date of such additional issuance.
Notwithstanding the foregoing, if a Receivables Sale has occurred with respect to the Class C(2014-2) Notes, the Outstanding Dollar Principal Amount shall be zero. 

“Required Daily Deposit Target Finance Charge Amount” means, for any day in a Due Period, an amount equal to the Class C
Tranche Interest Allocation for the related Distribution Date; provided, however, that for purposes of determining the Required Daily Deposit Target Finance Charge Amount on any day on which the Class C Tranche Interest Allocation
cannot be determined because the LIBOR Determination Date for the applicable Interest Accrual Period has not yet occurred, the Required Daily Deposit Target Finance Charge Amount shall be the Class C Tranche Interest Allocation determined based on a
pro forma calculation made on the assumption that LIBOR will be LIBOR for the applicable period determined on the first day of such calendar month, multiplied by 1.25. 

“Required Daily Deposit Target Principal Amount” means, for any day in a Due Period, (i) if such Due Period is in the
Accumulation Period for the Class C(2014-2) Notes, the Accumulation Amount, (ii) if such day is on or after the occurrence and during the continuance of a Class C(2014-2) Adverse Event, the lesser of (x) the Outstanding Dollar Principal
Amount of the Class C(2014-2) Notes and (y) the Nominal Liquidation Amount of the Class C(2014-2) Notes, and (iii) in all other circumstances, zero. 

“Required Subordinated Amount of Class D Notes” means, for the Class C(2014-2) Notes for any date of determination, an
amount equal to the sum of 

  
 7 

 (a) the Unencumbered Required Subordinated Amount of Class D Notes for such Class C(2014-2) Notes
and 
 (b) the Encumbered Required Subordinated Amount of Class D Notes for such Class C(2014-2) Notes; 

provided, however, that for any date of determination on or after the occurrence and during the continuation of a Class C(2014-2) Adverse Event, the
Required Subordinated Amount of Class D Notes for the Class C(2014-2) Notes will be the greater of 
 (x) the amount determined above for
such date of determination and 
 (y) the amount determined above for the date immediately prior to the date on which such Class C(2014-2)
Adverse Event shall have occurred. 
 “Required Subordinated Percentage of Class D Notes (Unencumbered)” means, for the
Class C(2014-2) Notes, 13.636364%, subject to adjustment in accordance with Section 2.02. 
 “Reuters Screen LIBOR01” means
the display page currently so designated on the Reuters Screen (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices). 

“Stated Principal Amount” means $570,000,000 or such higher amount as is specified in any Notice of Additional Issuance under
Section 2.09. 
 “Targeted Accumulation Reserve Subaccount Deposit” means, with respect to any Distribution Date
during the Accumulation Reserve Funding Period, an amount equal to (i) 0.5% of the Outstanding Dollar Principal Amount of the Class C(2014-2) Notes as of the close of business on the last day of the related Due Period or (ii) any other
amount designated by the Calculation Agent on behalf of the Issuer. 
 “Targeted Principal Deposit” means, for the Class
C(2014-2) Notes, notwithstanding anything to the contrary in the Indenture Supplement, 
 (a) During the Accumulation Period, beginning with
the Accumulation Commencement Date for the Class C(2014-2) Notes, (x) (i) the Accumulation Amount for the Class C(2014-2) Notes, plus (ii) any Accumulation Amount that was scheduled to be deposited on any previous Distribution Date in
the Accumulation Period that was not so deposited, minus (y) the amount on deposit in the Principal Funding Subaccount for the Class C(2014-2) Notes that was applied to the amount in clause (x) in accordance with Section 4.04(a), 

(b) If the Class C(2014-2) Notes have been accelerated after the occurrence of an Event of Default, or if an Early Redemption Event with
respect to the Class C(2014-2) Notes has occurred (other than an Excess Spread Early Redemption Event for which an Excess Spread Early Redemption Cure has occurred), with respect to each Distribution Date following the Due Period in which such Event
of Default or Early Redemption Event has occurred, the lesser of (x) the Outstanding Dollar Principal Amount of such Tranche and (y) the Nominal Liquidation Amount of such Tranche, in each case as of the last day of the preceding Due
Period, and 

  
 8 

 (c) If a Receivables Sale has occurred for the Class C(2014-2) Notes, zero. 

“Unencumbered Amount” means, for the Class C(2014-2) Notes, an amount equal to the Nominal Liquidation Amount of the Class
C(2014-2) Notes minus the Encumbered Amount for the Class C(2014-2) Notes. 
 “Unencumbered Required Subordinated Amount of
Class D Notes” means, for the Class C(2014-2) Notes, an amount equal to the product of 
 (a) the Unencumbered Amount for the Class
C(2014-2) Notes and 
 (b) the Required Subordinated Percentage of Class D Notes (Unencumbered) for the Class C(2014-2) Notes. 

Section 1.02. Representations and Warranties of Issuer. The Issuer represents and warrants that: 

(a) the Issuer has been duly formed and is validly existing as a statutory trust in good standing under the laws of the State of Delaware, and
has full power and authority to execute and deliver this Terms Document and to perform the terms and provisions hereof; 
 (b) the execution,
delivery and performance of this Terms Document by the Issuer have been duly authorized by all necessary corporate and statutory trust proceedings of any Beneficiary and the Owner Trustee, do not require any approval or consent of any governmental
agency or authority, and do not and will not conflict with any material provision of the Certificate of Trust or the Trust Agreement of the Issuer; 

(c) this Terms Document is the valid, binding and enforceable obligation of the Issuer, except as the same may be limited by receivership,
insolvency, reorganization, moratorium or other laws relating to the enforcement of creditors’ rights generally or by general equity principles; 

(d) to the best of the Issuer’s knowledge, this Terms Document will not conflict with any law or governmental regulation or court decree
applicable to it; 
 (e) the Issuer is not required to be registered under the Investment Company Act; 

(f) all information heretofore furnished by the Issuer in writing to the Indenture Trustee for purposes of or in connection with this Terms
Document or any transaction contemplated hereby is, and all such information hereafter furnished by the Issuer in writing to the Indenture Trustee will be, true and accurate in every material respect or based on reasonable estimates on the date as
of which such information is stated or certified; and 
 (g) to the best knowledge of the Issuer, there are no proceedings or investigations
pending against the Issuer before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality having jurisdiction over the Issuer (A) asserting the invalidity of this Terms Document, (B) seeking to
prevent the consummation of any of the transactions contemplated by this Terms Document or (C) seeking any determination or ruling 

  
 9 

 
which in the Issuer’s judgment would materially and adversely affect the performance by the Issuer of its obligations under this Terms Document or the validity or enforceability of this
Terms Document. 
 Section 1.03. Representations and Warranties of Indenture Trustee. The Indenture Trustee represents and
warrants and any successor trustee shall represent and warrant that: 
 (a) The Indenture Trustee is organized, existing and in good standing
under the laws of the United States of America; 
 (b) The Indenture Trustee has full power, authority and right to execute, deliver and
perform this Terms Document, and has taken all necessary action to authorize the execution, delivery and performance by it of this Terms Document; and 

(c) This Terms Document has been duly executed and delivered by the Indenture Trustee. 

Section 1.04. Limitations on Liability. 

(a) It is expressly understood and agreed by the parties hereto that (i) this Terms Document is executed and delivered by the Owner
Trustee not individually or personally but solely as Owner Trustee under the Trust Agreement, in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on
the part of the Issuer is made and intended not as a personal representation, undertaking or agreement by the Owner Trustee but is made and intended for the purpose of binding only the Issuer, (iii) nothing herein contained will be construed as
creating any liability on the Owner Trustee individually or personally, to perform any covenant of the Issuer either expressed or implied herein, all such liability, if any, being expressly waived by the parties to this Terms Document and by any
Person claiming by, through or under them and (iv) under no circumstances will the Owner Trustee be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Issuer under this Terms Document or any related documents. 
 (b) None of the
Indenture Trustee, the Owner Trustee, the Calculation Agent, any Beneficiary, the Depositor, any Master Servicer or any Servicer or any of their respective officers, directors, employees, incorporators or agents will have any liability with respect
to this Terms Document, and recourse may be had solely to the Collateral pledged to secure the Class C(2014-2) Notes under the Indenture, the Indenture Supplement and this Terms Document. 

Section 1.05. Governing Law. THIS TERMS DOCUMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATION LAW, WITHOUT REFERENCE TO ANY CONFLICT OF LAW PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER STATE. 

  
 10 

 Section 1.06. Counterparts. This Terms Document may be executed in any number of
counterparts, each of which when so executed will be deemed to be an original, but all such counterparts will together constitute but one and the same instrument. 

Section 1.07. Ratification of Indenture and Indenture Supplement. As supplemented by this Terms Document, each of the Indenture
and the Indenture Supplement is in all respects ratified and confirmed and the Indenture as supplemented by the Indenture Supplement and this Terms Document shall be read, taken and construed as one and the same instrument. 

ARTICLE II 
 The Class C(2014-2)
Notes 
 Section 2.01. Creation and Designation. There is hereby created a Tranche of Class C Notes to be issued pursuant to the
Indenture, the Indenture Supplement, this Terms Document and the Note Purchase Agreement to be known as the “DiscoverSeries Class C(2014-2) Notes.” 

Section 2.02. Adjustments to Required Subordinated Percentage and Amount. 

(a) On any date, the Issuer may, at the direction of the Beneficiary, change the Required Subordinated Percentage of Class D Notes
(Unencumbered) for the Class C(2014-2) Notes, without the consent of any Noteholders; provided that the Issuer has received written confirmation from each applicable Note Rating Agency that the change in such percentage will not result in a
Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes. 
 (b) On any date, the Issuer may, at the direction of the Beneficiary,
replace all or a portion of the Required Subordinated Amount of Class D Notes for the Class C(2014-2) Notes with a different form of credit enhancement (including, without limitation, a cash collateral account, a letter of credit, a reserve account,
a surety bond, an insurance policy or a collateral interest, or any combination thereof) and may add such definitions and other terms and make such additional amendments to this Terms Document as shall be necessary for such replacement without the
consent of any Noteholders, provided that the Issuer has received written confirmation from each applicable Note Rating Agency that such replacement and such other amendments will not result in a Ratings Effect for any Tranche of Outstanding
DiscoverSeries Notes. 
 Section 2.03. Interest Payment. For each Interest Payment Date, the amount of interest due with respect
to the Class C(2014-2) Notes shall be an amount equal to 
  

	 	(i)	(A) a fraction, the numerator of which is the actual number of days in the related Interest Accrual Period and the denominator of which is 360, times 

 

	 	    	(B) the Note Interest Rate in effect with respect to such related Interest Accrual Period, times 

  
 11 

	 	(ii)	the Outstanding Dollar Principal Amount of the Class C(2014-2) Notes determined as of the first date of such related Interest Accrual Period, plus 

any Class C Tranche Interest Allocation Shortfall for such Class C(2014-2) Notes for the immediately preceding Distribution Date, together with interest
thereon at the Note Interest Rate in effect with respect to such related Interest Accrual Period, calculated on the basis of the actual number of days in the related Interest Accrual Period and a 360-day year. 

Section 2.04. Notification of LIBOR. On each LIBOR Determination Date, the Indenture Trustee shall send to the Issuer, the
Beneficiary, each applicable Master Servicer and any stock exchange on which the Class C(2014-2) Notes are then listed (if the rules of such exchange so require), by facsimile transmission or electronic transmission, notification of LIBOR for the
following Interest Accrual Period. 
 Section 2.05. Payments of Interest and Principal. 

(a) The Issuer will cause interest to be paid on each Interest Payment Date and principal to be paid on the Expected Maturity Date;
provided, however, that it shall not be an Event of Default if principal is not paid in full on such Expected Maturity Date unless funds for such payment have been allocated in accordance with Section 3.01 of the Indenture
Supplement; and provided, further, that if a Class C(2014-2) Adverse Event has occurred and is continuing, principal will instead be payable in monthly installments on each Principal Payment Date for the Class C(2014-2) Notes in
accordance with Sections 3.01 and 3.05 of the Indenture Supplement. All payments of interest and principal on the Class C(2014-2) Notes shall be made as set forth in Section 1102 of the Indenture. 

(b) The right of the Class C(2014-2) Noteholders to receive payments from the Issuer will terminate on the Class C(2014-2) Termination Date.

 (c) All payments of principal, interest or other amounts to the Class C(2014-2) Noteholders will be made pro rata based on the Stated
Principal Amount of their Class C(2014-2) Notes. 
 Section 2.06. Form of Delivery of Class C(2014-2) Notes; Denominations. 

(a) The Class C(2014-2) Notes shall be delivered in the form of a definitive Registered Note as provided in Section 201 of the Indenture.
The form of the Class C(2014-2) Notes is attached hereto as Exhibit A. 
 (b) The Class C(2014-2) Notes shall, until such time as the laws of
any jurisdiction in which they are offered or sold no longer restrict the transfer or sale thereof, bear a legend in substantially the following form: 

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE 

  
 12 

 
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A. THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF DISCOVER CARD EXECUTION NOTE TRUST AND DISCOVER BANK THAT (A) THIS NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT OR, IN THE CASE OF THE
INITIAL HOLDER HEREOF ONLY, ANOTHER APPLICABLE EXEMPTION UNDER THE SECURITIES ACT, (2) TO DISCOVER CARD EXECUTION NOTE TRUST, DISCOVER BANK OR THEIR AFFILIATES OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, IF APPLICABLE, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAW OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER FROM IT OF THE
RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. 
 No Class C(2014-2) Notes shall be transferred except in accordance with the transfer restrictions
described in the legend set forth above. 
 (c) The Class C(2014-2) Notes will be issued in minimum denominations of $200,000 and integral
multiples of $1,000 in excess of that amount. 
 Section 2.07. Delivery and Payment for the Class C(2014-2) Notes. The Issuer
shall execute and deliver the Class C(2014-2) Notes to the Indenture Trustee for authentication, and the Indenture Trustee shall deliver the Class C(2014-2) Notes when authenticated, each in accordance with Sections 203 and 303 of the Indenture.

 Section 2.08. Targeted Deposits to the Accumulation Reserve Account. The deposit targeted to be made to the Accumulation
Reserve Subaccount for the Class C(2014-2) Notes for any Due Period during the Accumulation Reserve Funding Period will be an amount equal to the Targeted Accumulation Reserve Subaccount Deposit minus any amount on deposit in the Accumulation
Reserve Subaccount for the Class C(2014-2) Notes. 
 Section 2.09. Additional Issuances of Notes. Subject to clauses (ii),
(iii), (iv) and (v) of Sections 2.02 and Section 2.03 of the Indenture Supplement, the Issuer may issue additional Class C(2014-2) Notes, so long as the following conditions precedent are satisfied: 

(a) the Issuer shall have given the Indenture Trustee written notice of such issuance of additional Class C(2014-2) Notes (the “Notice
of Additional Issuance”) at least one (1) Business Day in advance of the Issuance Date thereof, which notice shall include: 

  
 13 

	 	(i)	the Issuance Date of such additional Class C(2014-2) Notes; 

  

	 	(ii)	the amount of such additional Class C(2014-2) Notes being offered, the purchase price for such additional Class C(2014-2) Notes and the resulting Initial Dollar Principal Amount, Stated Principal Amount and Nominal
Liquidation Amount of Class C(2014-2) Notes; 

  

	 	(iii)	the Outstanding Dollar Principal Amount of the Class C(2014-2) Notes after giving effect to the issuance of the additional Class C(2014-2) Notes and all prior accretions of principal as determined in accordance with
Section 2.12; 

  

	 	(iv)	the Discount Amount after giving effect to such additional Class C(2014-2) Notes; and 

  

	 	(v)	any other terms that the Issuer set forth in such notice of issuance of additional Class C(2014-2) Notes to clarify the rights of Holders of such additional Class C(2014-2) Notes or the effect of such issuance of
additional Class C(2014-2) Notes on any calculations to be made with respect to the Class C(2014-2) Notes, Class C, or the Issuer. 

 All such
terms shall be incorporated into and form a part of this Terms Document on and after the effective date of such Class C(2014-2) Notes; and 

(b) no Class C(2014-2) Adverse Event has occurred and is continuing. 

The Issuer shall not have to satisfy the conditions set forth in Section 310 of the Indenture in connection with an issuance of
additional Class C(2014-2) Notes so long as such conditions were satisfied or waived in connection with the initial issuance of Class C(2014-2) Notes. 

Section 2.10. Designation of Additional Amounts to be included in the Excess Spread Amount for the DiscoverSeries Notes. At any
time that any outstanding Series of certificates issued by the Master Trust provides that the Series Principal Collections allocated to such Series will be deposited into the Group Finance Charge Collections Reallocation Account for the Master Trust
to the extent necessary for application to cover shortfalls for other Series issued by the Master Trust, an amount equal to (x) all Series Principal Collections allocated to such Series, multiplied by (y) a fraction, the numerator of which
is the sum of the Nominal Liquidation Amounts for each outstanding Tranche of the DiscoverSeries Notes (including these notes) and the denominator of which is (i) the Aggregate Investor Interest for the Master Trust minus (ii) the
sum of the Series Investor Interests for all such Series that provide that the Series Principal Collections allocated to such Series will be so deposited, is hereby designated to be included in the Excess Spread Amount and shall be treated as Series
Finance Charge Amounts for the DiscoverSeries. 
 Section 2.11. No Payments from Interest Funding Subaccount for accretion of
principal of the Class C(2014-2) Notes. Section 3.04(4) of the Indenture Supplement shall not apply to the Class C(2014-2) Notes. 

  
 14 

 Section 2.12. Calculation of Class C(2014-2) Accreted Discount. The amount of Class
C(2014-2) Accreted Discount as of the end of any Due Period shall be determined on a straight-line basis and shall be equal to the product of (x) a fraction the numerator of which shall be the number of Due Periods elapsed since the Note
Issuance Date (or if additional Class C(2014-2) Notes have been issued under Section 2.09, since the Issuance Date of such additional Notes) and the denominator of which shall be the number of Due Periods from the Note Issuance Date (or the
Issuance Date of such additional Notes) to and including the Due Period related to the Expected Maturity Date and (y) the Discount Amount. 

Section 2.13. Variable Accumulation Period. Notwithstanding anything to the contrary in Section 4.02 of the Indenture
Supplement, the Calculation Agent on behalf of the Issuer shall, by written notice to the Indenture Trustee, delay the commencement of the Accumulation Period for the Class C(2014-2) Notes and determine a new Accumulation Commencement Date, subject
to the conditions set forth in this Section 2.13; provided, however, that the Accumulation Period shall commence no later than the first day of the Due Period related to the Expected Maturity Date for the Class C(2014-2) Notes. Any such
delay by the Calculation Agent on behalf of the Issuer shall be made no later than the first day of the scheduled Due Period immediately preceding the first Due Period in the Accumulation Period (after giving effect to any prior delay in the
commencement of the Accumulation Period pursuant to this Section 2.13). 
 The Calculation Agent on behalf of the Issuer shall cause
such delay if the Calculation Agent determines in good faith that each of the following conditions will be satisfied: (i) the Calculation Agent on behalf of the Issuer delivers to the Indenture Trustee a certificate to the effect that the
Calculation Agent on behalf of the Issuer reasonably believes that, based on the payment rate and the anticipated availability of Series Principal Amounts and Reallocated Principal Amounts, the delay in the commencement of the Accumulation Period
for the Class C(2014-2) Notes will not result in any Tranche of Notes not being paid in full on the relevant Expected Maturity Date; (ii) such delay is permitted under the Series 2007-CC Series Supplement or any other applicable agreement
relating to any Additional Collateral Certificate; and (iii) the Accumulation Amount, the Accumulation Commencement Date and the Accumulation Period Length shall have been adjusted. The Calculation Agent on behalf of the Issuer shall not be
required to obtain confirmation from the applicable Note Rating Agencies that such delay in the commencement of the Accumulation Period will not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes, unless at the time of
such delay there is a Tranche of Outstanding DiscoverSeries Notes which were issued prior to January 1, 2009 and for which the commencement of the Accumulation Period for such Tranche of Notes has already been delayed pursuant to
Section 4.02 of the Indenture Supplement. If such confirmation from the applicable Note Rating Agency is not required, the Calculation Agent on behalf of the Issuer shall provide written notice to each applicable Note Rating Agency in the event
that the commencement of the Accumulation Period for the Class C(2014-2) Notes is delayed pursuant to this Section 2.13. 

[Remainder of page intentionally blank; signature page follows] 

  
 15 

 IN WITNESS WHEREOF, the parties hereto have caused this Terms Document to be duly executed, all
as of the day and year first above written. 
  

			
	DISCOVER CARD EXECUTION NOTE TRUST,
	 as Issuer

		
	By:	 	 Wilmington Trust Company,
 not in its individual
capacity but solely
 as Owner Trustee

		
	By:	 	 /s/ Jennifer A. Luce

		 	Name: Jennifer A. Luce
		 	Title: Vice President
	
	 U.S. BANK NATIONAL ASSOCIATION,

as Indenture Trustee

		
	By:	 	 /s/ Edwin J. Janis

		 	Name: Edwin J. Janis
		 	Title: Vice President

 [Signature Page to Class C(2014-2) Terms Document] 

 Exhibit A 

Form of Class C Note 
 See
attached. 

 DISCOVERSERIES CLASS C(2014-2) NOTE 

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A. THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF DISCOVER CARD EXECUTION NOTE TRUST AND DISCOVER BANK THAT (A) THIS NOTE
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT OR, IN THE CASE OF THE INITIAL HOLDER HEREOF ONLY, ANOTHER APPLICABLE EXEMPTION UNDER THE SECURITIES ACT, (2) TO DISCOVER CARD EXECUTION NOTE TRUST, DISCOVER BANK OR THEIR AFFILIATES, OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT, IF APPLICABLE, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAW OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY SUBSEQUENT PURCHASER FROM IT OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. 
 THE HOLDER OF THIS NOTE, BY ITS
ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT AT ANY TIME INSTITUTE AGAINST THE ISSUER, ANY MASTER TRUST OR ANY SPECIAL PURPOSE ENTITY THAT ACTS AS A DEPOSITOR WITH RESPECT TO ANY MASTER TRUST OR THE ISSUER, OR JOIN IN ANY INSTITUTION AGAINST THE
ISSUER, ANY MASTER TRUST OR ANY SPECIAL PURPOSE ENTITY THAT ACTS AS A DEPOSITOR WITH RESPECT TO ANY MASTER TRUST OR THE ISSUER, ANY RECEIVERSHIP, INSOLVENCY, BANKRUPTCY OR SIMILAR PROCEEDINGS, OR OTHER PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR
STATE BANKRUPTCY OR SIMILAR LAW IN CONNECTION WITH ANY OBLIGATIONS RELATING TO THE NOTES, THE INDENTURE, ANY DERIVATIVE AGREEMENT, ANY SUPPLEMENTAL CREDIT ENHANCEMENT AGREEMENT AND ANY SUPPLEMENTAL LIQUIDITY AGREEMENT. 

THE HOLDER OF THIS NOTE, BY ACCEPTANCE OF THIS NOTE, AND EACH HOLDER OF A BENEFICIAL INTEREST IN THIS NOTE, BY THE ACQUISITION OF A BENEFICIAL
INTEREST THEREIN, AGREE TO TREAT THE NOTES AS INDEBTEDNESS FOR APPLICABLE FEDERAL, STATE, AND LOCAL INCOME AND FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX IMPOSED ON OR MEASURED BY INCOME. 

 THIS NOTE HAS BEEN ISSUED WITH “ORIGINAL ISSUE DISCOUNT” (WITHIN THE MEANING OF SECTION
1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED). UPON WRITTEN REQUEST TO DISCOVER BANK, 12 READ’S WAY, NEW CASTLE, DELAWARE, 19720, ATTENTION: TREASURER, DISCOVER BANK WILL PROMPTLY MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE THE FOLLOWING
INFORMATION: (1) THE ISSUE PRICE AND ISSUE DATE OF THE NOTE, (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE AND (3) THE YIELD TO MATURITY OF THE NOTE. 

DISTRIBUTIONS OF PRINCIPAL AND INTEREST TO THE HOLDER OF THIS CLASS C NOTE ARE SUBORDINATE TO THE PAYMENT ON EACH DISTRIBUTION DATE OF
PRINCIPAL OF AND INTEREST ON THE CLASS A NOTES AND CLASS B NOTES OF THE DISCOVERSERIES AND THE PAYMENT OF CERTAIN OTHER AMOUNTS, TO THE EXTENT AND AS DESCRIBED IN THE INDENTURE AND INDENTURE SUPPLEMENT REFERRED TO HEREIN. 

			
	REGISTERED	  	$570,000,000*
	 No. 1
	  	

 DISCOVER CARD EXECUTION NOTE TRUST 

Floating Rate 
 DISCOVERSERIES
CLASS C(2014-2) NOTE 
 DISCOVER CARD EXECUTION NOTE TRUST, a statutory trust created under the laws of the State of Delaware (herein
referred to as the “Issuer” or the “Note Issuance Trust”), for value received, hereby promises to pay to             , or registered assigns, subject to
the following provisions, a principal sum of $570,000,000 (five hundred seventy million dollars) payable on the June 15, 2017 Payment Date (the “Expected Maturity Date”), except as otherwise provided below or in the Indenture
or the Indenture Supplement (as defined on the reverse hereof); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the December 16, 2019 Payment Date (the “Legal Maturity Date”).
If the Outstanding Dollar Principal Amount is not paid in full on or prior to the Expected Maturity Date, interest will accrue on this Note at the rate of one-month LIBOR + 1.00% per annum, as more specifically set forth in the Class C(2014-2)
Terms Document dated as of April 30, 2014 (the “Terms Document”), between the Issuer and U.S. Bank National Association, as Indenture Trustee (the “Indenture Trustee”, which term includes any successor
Indenture Trustee under the Indenture), and shall be due and payable on each Interest Payment Date from and including the previous Interest Payment Date to but excluding such Interest Payment Date (or, in the case of the first Interest Payment Date
for the Class C(2014-2) Notes occurring after the Expected Maturity Date, from and including the Expected Maturity Date to but excluding such Interest Payment Date). Interest will be computed on the basis of the actual number of days elapsed and a
360-day year. Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof. 
 The principal may
be payable monthly, and may be payable earlier or later than the Expected Maturity Date, following an Event of Default or while an Early Redemption Event has occurred and is continuing. The interest is payable monthly on each Interest Payment Date
if the Outstanding Dollar Principal Amount is not paid in full on or prior to the Expected Maturity Date. No principal or interest will be distributed on the Note following the distribution of proceeds of a Receivables Sale. 

Series Principal Amounts allocated to these Class C(2014-2) Notes will be applied first to pay shortfalls in interest on Class A Notes
and Class B Notes, then to pay any shortfalls in Series Servicing Fees allocable to the DiscoverSeries, and then to make Targeted Principal Deposits to the Principal Funding Subaccounts for Class A Notes and Class B Notes, including Targeted
Prefunding Deposits, before being applied to make Targeted Principal Deposits to the Principal Funding Subaccounts of Subordinate Notes, including these Class C(2014-2) Notes. Principal will not be paid on these Class C(2014-2) Notes prior to their
Legal Maturity Date unless each of the Class A Usage of Class C Notes and the Class B Usage of Class C Notes is zero for each Tranche of Class A Notes and Class B Notes of the DiscoverSeries and the required level of subordination for the
Class A Notes and Class B Notes of the DiscoverSeries is available after giving effect to such payment. 

 The principal of and interest on this Note are payable in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of public and private debts. 
 The Initial Dollar Principal Amount
of this Note is $552,123,660. 
 The Stated Principal Amount of this Note is $570,000,000. 

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note. 
 Unless the certificate of authentication hereon has been executed by the Indenture Trustee, whose name
appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, Indenture Supplement or the Terms Document referred to on the reverse hereof, or be valid or obligatory for any purpose. 

 

	*	Denominations of $200,000 and in integral multiples of $1,000 in excess thereof. 

 IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile,
by its Authorized Officer. 
  

			
	 DISCOVER CARD EXECUTION NOTE TRUST, as Issuer

		
	By:	 	WILMINGTON TRUST COMPANY, not in its individual capacity, but solely as Owner Trustee
		
	By:	 	  

		 	Name:
		 	Title:
		
		 	Date: April 30, 2014

 INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

This is one of the Notes designated above and referred to in the within-mentioned Indenture. 

 

			
	 US BANK NATIONAL ASSOCIATION,

not in its individual capacity but solely as

Indenture Trustee

		
	By:	 	  

		 	Name:
		 	Title:
		
		 	Date: April 30, 2014

 REVERSE OF NOTE 

This Note is one of the Notes of a duly authorized issue of Notes of the Issuer, designated as its Class C(2014-2) DiscoverSeries Notes
(herein called the “Class C(2014-2) Notes”), all issued under an Indenture, dated as of July 26, 2007, as amended by the First Amendment to Indenture, dated as of June 4, 2010 (such Indenture, as may be further amended,
restated, amended and restated, supplemented, replaced or otherwise modified from time to time, is herein called the “Indenture”), as supplemented by an Amended and Restated Indenture Supplement for the DiscoverSeries Notes, dated
as of June 4, 2010 (such Indenture Supplement, as may be further amended, restated, amended and restated, supplemented, replaced or otherwise modified from time to time, is herein called the “Indenture Supplement”), between the
Issuer and Indenture Trustee, to which Indenture and Indenture Supplement reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes. The Class
C(2014-2) Notes are subject to all terms of the Indenture, the Indenture Supplement and the Terms Document. All terms used in this Class C(2014-2) Note that are defined in the Indenture, the Indenture Supplement and the Terms Document shall have the
meanings assigned to them in or pursuant to the Indenture, the Indenture Supplement and the Terms Document. 
 The Class A Notes, the
Class B Notes and the Class D Notes of the DiscoverSeries and other tranches of Class C Notes of the DiscoverSeries will also be issued under the Indenture and the Indenture Supplement. 

The Class C(2014-2) Notes are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the
Indenture and the Indenture Supplement. 
 The Class C(2014-2) Notes are subordinated in right of payment of principal and interest to the
Class A Notes and the Class B Notes and provide loss protection to the Class A Notes and the Class B Notes of the DiscoverSeries, to the extent set forth in the Indenture Supplement. Principal Amounts allocable to the Class
C(2014-2) Notes may be applied to pay the Class A Interest Allocation and Class B Interest Allocation or the Series Servicing Fees of the DiscoverSeries, to the extent set forth in the Indenture Supplement. 

The Stated Principal Amount of the Class C(2014-2) Notes will be payable on the Expected Maturity Date in an amount described on the face
hereof. 
 As described above, the entire unpaid Stated Principal of this Class C(2014-2) Note shall be due and payable on the Legal
Maturity Date. Notwithstanding the foregoing, the entire unpaid Outstanding Dollar Principal Amount of the Class C(2014-2) Notes shall be due and payable on the date on which an Event of Default relating to the Class C(2014-2) Notes shall have
occurred and be continuing and, except in the event of an insolvency related default, the Indenture Trustee or the Majority Holders of the applicable Series, Class or Tranche of Outstanding Dollar Principal Amount of the Outstanding Notes have
declared the Class C(2014-2) Notes to be immediately due and payable in the manner provided in Section 702 of the Indenture; provided, however, that such acceleration of the entire unpaid Outstanding Dollar Principal Amount
of the Notes may be rescinded by the Majority Holders of such applicable Series, Class or Tranche of Notes. 
 On any day occurring on or
after the date on which the aggregate Nominal Liquidation Amount of any Tranche of Notes is reduced to less than 5% of its highest Outstanding Dollar 

 
Principal Amount, the Depositor or any Affiliate thereof has the right, but not the obligation, to redeem such Tranche of Notes in whole but not in part, pursuant to Section 1202 of
the Indenture. The redemption price will be an amount equal to the Outstanding Dollar Principal Amount of such Tranche, plus accrued, unpaid and additional interest, if any, or principal accreted and unpaid on such Tranche to but excluding the date
of redemption. 
 Subject to the terms and conditions of the Indenture, the Beneficiary, on behalf of the Note Issuance Trust, may from time
to time issue, or direct the Owner Trustee, on behalf of the Note Issuance Trust, to issue, one or more Series, Classes or Tranches of Notes. 

On each Payment Date, the Paying Agent shall distribute to each Holder of Class C(2014-2) Notes of record on the related Record Date (except
for the final distribution with respect to these Class C(2014-2) Notes) the pro rata share for such Holder of Class C(2014-2) Notes of the amounts held by the Paying Agent that are allocated and available on such Payment Date to pay interest (only
if the Outstanding Dollar Principal Amount is not paid in full on or prior to the Expected Maturity Date) and principal on the Class C Notes. 

Payments of interest on this Class C(2014-2) Note due and payable on each Payment Date, together with any installment of principal, if any, to
the extent not in full payment of this Class C(2014-2) Note, shall be made by check mailed to the Person whose name appears as the Registered Holder of this Class C(2014-2) Note on the Note Register as of the close of business on each Record Date,
except that with respect to Class C(2014-2) Notes registered on the Record Date in the name of the nominee of a clearing agency, payments will be made by wire transfer in immediately available funds to the account designated by such nominee. Such
checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Class C(2014-2) Note be submitted for notation of payment. Any
reduction in the principal amount of this Class C(2014-2) Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Class C(2014-2) Note and of any Class C(2014-2)
Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Class C(2014-2) Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed within five days of such Payment Date and the amount then due and payable shall be payable only upon presentation and surrender of this Class C(2014-2) Note at the Indenture Trustee’s principal Corporate Trust Office or at the
office of the Indenture Trustee’s agent appointed for such purposes located in the City of New York. On any payment of interest or principal being made, details of such payment shall be entered by the Indenture Trustee on behalf of the Issuer
in Schedule A hereto. 
 As provided in the Indenture and subject to certain limitations set forth therein and as set forth in the first
legend on the face hereof, the transfer of this Class C(2014-2) Note may be registered on the Note Register upon surrender of this Class C(2014-2) Note for registration of transfer at the office or agency designated by the Issuer pursuant to the
Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by a
commercial bank or trust company located, or having a correspondent located, in the City of New York or the city in which the Corporate Trust Office is located, or a 

 
member firm of a national securities exchange, and such other documents as the Indenture Trustee may require, and thereupon one or more new Class C(2014-2) Notes of authorized denominations and
in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Class C(2014-2) Note, but the transferor may be required to pay
a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange. 

To the fullest extent permitted by applicable law, each Noteholder or Note Owner, by acceptance of a Class C(2014-2) Note or, in the case of a
Note Owner, a beneficial interest in a Class C(2014-2) Note, covenants and agrees that by accepting the benefits of the Indenture that it will not at any time institute against the Issuer, any Master Trust or any special purpose entity that acts as
a depositor with respect to any Master Trust or the Issuer, or join in any institution against the Issuer, any Master Trust or any special purpose entity that acts as a depositor with respect to any Master Trust or the Issuer of, any receivership,
insolvency, bankruptcy or other similar proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture, any Derivative Agreement, any
Supplemental Credit Enhancement Agreement and any Supplemental Liquidity Agreement. 
 Prior to the due presentment for registration of
transfer of this Class C(2014-2) Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Class C(2014-2) Note (as of the day of determination or as of such other date as
may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Class C(2014-2) Note be overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary.

 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing not less than 66 2/3% of the Outstanding Dollar Principal Amount of each
adversely affected Series, Class or Tranche of Notes. The Indenture also contains provisions permitting the Holders of Notes representing specified percentages of the Outstanding Dollar Principal Amount of the Notes, on behalf of the Holders of all
the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Class C(2014-2) Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Class C(2014-2) Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon
this Class C(2014-2) Note. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder. 

The term “Issuer” as used in this Class C(2014-2) Note includes any successor to the Issuer under the Indenture. 

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee
and the Holders of Notes under the Indenture. 

 The Class C(2014-2) Notes are issuable only in registered form in denominations as provided in
the Indenture, subject to certain limitations therein set forth. 
 THIS CLASS C(2014-2) NOTE AND THE INDENTURE WILL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATION LAW, WITHOUT REFERENCE TO ANY CONFLICT OF LAW PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER STATE. 

No reference herein to the Indenture and no provision of this Class C(2014-2) Note or of the Indenture shall alter or impair the obligation of
the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Class C(2014-2) Note at the times, place, and rate, and in the coin or currency herein prescribed. 

No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer or any successor or assign of the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Owner Trustee has no such obligations in its individual capacity). The Holder of this Class C(2014-2) Note by the acceptance hereof agrees that, except as expressly provided in the Indenture and the Indenture Supplement
in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Class C(2014-2) Note. 

 ASSIGNMENT 

Social Security or taxpayer I.D. or other identifying number of assignee 
  

 
 FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto 
 (name and address of assignee) 

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises. 
  

									
	Dated:	 	  
	 		 	  
	 	*
		 		 		 	Signature Guaranteed:	 	

  
  

	*	NOTE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.

 SCHEDULE A 

PART I 
 INTEREST
PAYMENTS 
  

									
	 Interest
Payment Date
	 	 Date of
Payment
	 	 Total Amount
of Interest
Payable
	 	 Amount of
Interest Paid
	 	 Confirmation of
payment by or
on
behalf of the Note
Issuance
Trust

	1.	 		 		 		 	
	2.	 		 		 		 	
	3.	 		 		 		 	
	4.	 		 		 		 	
	5.	 		 		 		 	
	6.	 		 		 		 	
	7.	 		 		 		 	
	8.	 		 		 		 	
	9.	 		 		 		 	
	10.	 		 		 		 	
	11.	 		 		 		 	
	12.	 		 		 		 	
	13.	 		 		 		 	
	14.	 		 		 		 	
	15.	 		 		 		 	
	16.	 		 		 		 	
	17.	 		 		 		 	
	18.	 		 		 		 	
	19.	 		 		 		 	
	20.	 		 		 		 	
	21.	 		 		 		 	
	22.	 		 		 		 	
	23.	 		 		 		 	
	24.	 		 		 		 	

 PART II 

PRINCIPAL PAYMENTS 
  

									
	 Principal
Payment Date
	 	 Date of
Payment
	 	 Total Amount
of Principal
Payable
	 	 Total
Amount Paid
	 	 Confirmation of
payment by or
on
behalf of the Note
Issuance
Trust

	1.	 		 		 		 	
	2.	 		 		 		 	
	3.	 		 		 		 	
	4.	 		 		 		 	
	5.	 		 		 		 	
	6.	 		 		 		 	
	7.	 		 		 		 	
	8.	 		 		 		 	
	9.	 		 		 		 	
	10.	 		 		 		 	
	11.	 		 		 		 	
	12.EX-10.1

 EXHIBIT 10.1 

EMPLOYMENT AGREEMENT 

THIS EMPLOYMENT AGREEMENT (together with its Exhibits, this “Agreement”) is made as of the 12th day of February, 2014 (the “Signing Date”), by and between Diamond Offshore Drilling, Inc., a Delaware corporation (together with its successors and assigns, the
“Company”), and Marc Edwards (the “Executive,” and, together with the Company, a “Party”);  

W I T N E S S E T H: 

WHEREAS, the Company wishes to employ the Executive as the President and Chief Executive Officer of the Company and to retain the
Executive to serve as a member of the Company’s Board of Directors (the “Board”) and the Executive wishes to accept, as of the Commencement Date, and agrees to such employment and service under the terms and conditions set
forth herein. 
 NOW, THEREFORE, in consideration of the foregoing premises and the promises and covenants herein, the Parties
agree as follows:  
  

	1.	Employment Term. The Company shall employ the Executive under this Agreement, and the Executive shall accept such employment, for the Term. The “Term” shall commence on March 3, 2014 (the
“Commencement Date”) and shall end on December 31, 2016, subject to renewals thereafter, if any, upon mutual written agreement by the Parties. Notwithstanding the foregoing, the Executive’s employment hereunder, and the
Term, may be terminated at any time in accordance with Section 6 below. 

  

	2.	Duties of the Executive and Place of Business. 

  

	 	(a)	 Throughout the Term, the Executive shall serve as the President and Chief Executive Officer of the Company and shall be nominated by the Company to
serve as a member of the Board and shall serve as a member of the Board if elected to such position, as is the intention of the Parties. The Board shall appoint the Executive as a director effective as of the Commencement Date. Throughout the Term,
the Executive shall also serve as the Chief Executive Officer of such other subsidiaries of the Company as the Board may require. As the President 

  
 1 

	 	
and Chief Executive Officer of the Company, the Executive shall have all authorities, duties and responsibilities customarily exercised by an individual serving in that position at an entity of
the size and nature of the Company and shall have such additional duties and responsibilities, consistent with the foregoing, as may be from time to time reasonably be assigned to him by the Board; and shall report solely and directly to the
Company’s Board. 

  

	 	(b)	Throughout the Term, the Executive shall diligently and to the best of his abilities assume, perform, and discharge his duties and responsibilities hereunder as a member of the Board and the President and Chief
Executive Officer of the Company; and shall devote substantially all of his business time and effort to the business and affairs of the Company and its subsidiaries. However, nothing in this Agreement shall preclude the Executive from:
(i) engaging in civic, charitable or community services or (ii) devoting a reasonable amount of time to private investments and personal affairs, so long as such activities or services do not interfere with the Executive’s
responsibilities to the Company. 

  

	 	(c)	The Executive shall maintain a residence in the Houston, Texas metropolitan area during the Term. The Executive’s principal place of business shall be at the Company’s headquarters in the Houston, Texas
metropolitan area. 

  

	3.	Compensation. 

  

	 	(a)	During the Term, the Company shall pay the Executive an annualized base salary of $1,000,000.00 (the “Base Salary”). The Base Salary shall be paid in accordance with the regular payroll practices
applicable to senior executives of the Company generally, but no less frequently than monthly. The Base Salary shall not be decreased without the Executive’s prior written consent. 

 

	         (b) 
	(i)	 For each calendar year (a “Performance Year”) during the Term, the Executive shall be entitled to receive an annual
incentive cash award (an “Annual Bonus”) under the Company’s Incentive Compensation Plan for Executive Officers (the “Plan”) as set forth in this Section 3(b). The Executive’s Annual Bonus shall be
based upon attainment of EBITDA goals to be set annually by the Compensation Committee of the Board (the “Compensation Committee”), which for 2014 shall be on terms no less favorable than those established for other executives under
the Plan and which, for subsequent years, will be established in consultation with the Executive (subject to adjustment in accordance with the Plan). 

  
 2 

	 	(ii)	Subject to Section 3(b)(iii), for each full Performance Year during the Term, the Executive’s threshold Annual Bonus (paid upon attainment of 50% of target) shall be $500,000, his target Annual Bonus (paid
upon attainment of 100% of target) shall be $1,500,000, and his maximum Annual Bonus (paid upon attainment of 150% or more of target) shall be $2,500,000. Linear interpolation shall be applied to determine payments in the event of performance
falling between the levels stated in the prior sentence. Attainment of less than 50% of target will result in no Annual Bonus payment unless otherwise determined by the Compensation Committee. The Compensation Committee may exercise negative
discretion under the Plan to decrease or eliminate any portion of the Executive’s Annual Bonus for any Performance Year. The Executive’s target Annual Bonus will not be decreased without the prior written approval of the Executive.

  

	 	(iii)	The amount of the Executive’s Annual Bonus for 2014 shall (to the extent earned) be pro-rated for the portion of 2014 during which the Executive is employed by the Company. Notwithstanding anything in this
Section 3(b) to the contrary, Annual Bonus amounts earned for any year that are in excess of $1,000,000 shall be subject to shareholder approval of an amendment to the Plan to increase the Plan’s maximum permissible award, which the
Company shall adopt and submit to shareholders for approval at the Company’s 2014 annual meeting. If shareholder approval is not obtained, the Company will seek to obtain shareholder approval of a different form of compensation to compensate
the Executive for any portion of the Annual Bonus for 2014 (and for any subsequent years) that is not paid because such shareholder approval was not so obtained. 

  

	 	(iv)	Annual Bonus payments shall be made to the Executive in cash no later than corresponding bonus payments are made to senior executive officers of the Company generally, and in no event later than 70 days after the end of
the Performance Year to which they relate. 

  

	         (c) 
	(i)	 Each calendar year during the Term, the Executive shall be granted restricted stock units (“RSUs”) with respect to the
common stock of the Company having a target grant date value of not less than $3,000,000. The grant date value of the RSUs granted in 2014 will be determined based upon the volume weighted average price of the Company’s common stock on the New
York Stock Exchange (“VWAP”) during the ten (10) trading days immediately preceding the Commencement Date and will for subsequent years be determined in accordance with the applicable

  
 3 

	 	
Company plan document. The first grant (the “Initial RSU Grant”) shall be made on the Commencement Date and the value of such grant shall be pro-rated for the portion of 2014
during which the Executive is to be employed by the Company. The Executive shall be given a reasonable period of time to review and comment upon the grant agreement for the initial RSU grant. All grants of RSUs described in this Section 3(c)
shall be subject to shareholder approval of a new equity compensation plan, which the Company shall adopt and submit to shareholders for approval at the Company’s 2014 annual meeting. If shareholder approval is not obtained, the Company will
seek to obtain shareholder approval of a different form of compensation to compensate Executive for any portion of the RSU grants that are not made because such shareholder approval was not obtained. 

 

	 	(ii)	The performance component (or “earn-out”) of each grant of RSUs described in this Section 3(c) shall be subject to achievement of applicable performance goals (including strategic goals) to be set by the
Compensation Committee, in consultation with the Executive. For the grant made in 2014, the performance goals will be based on performance in 2014. For grants made in 2015 and each subsequent year, the performance goals will be based on a multi-year
plan based on long-term strategic plan goals that shall be presented by the Executive for approval by the Compensation Committee. The level of performance against such goals shall govern the earn-out of the applicable RSU award based on the schedule
in the table below. Linear interpolation shall be applied to determine payments in the event of performance falling between the levels stated in the table below. 

 

					
	% of Goal Achievement	  	 RSUs Earned (based

on grant date value)
	 
	 >50% (threshold)
	  	$	2.0M	  
	 100% (target)
	  	$	3.0M	  
	 150% (maximum)
	  	$	4.0M	  

 Attainment of less than 50% of the goal will result in no RSUs being earned unless otherwise determined by
the Compensation Committee. Notwithstanding the foregoing, the Compensation Committee may exercise negative discretion under the new equity compensation plan to decrease or eliminate any portion of the RSU award. 

  
 4 

	 	(iii)	To the extent earned under paragraph (ii) above, the Initial RSU Grant shall vest (and thus become non-forfeitable) in equal installments on each of the first three anniversaries of the date of grant, provided that
the Executive is employed by the Company on such date, except as otherwise provided in this Agreement. RSUs granted for 2015 and subsequent years will vest as provided in the multi-year plan referenced in Section 3(c)(ii) but in no event over a
period longer than four years from the date of grant or such earlier period consistent with the vesting schedule generally applicable to other senior executives of the Company. All RSUs shall be settled in common stock of the Company within thirty
(30) days after the later of the date of determination of earn-out or date of vesting. 

  

	 	(iv)	All rights with regard to unvested RSUs (including RSUs that have not yet been earned) shall, except to the extent otherwise provided in Section 6 or pursuant to the terms of the applicable Company plan under which
the RSUs are granted, terminate upon termination of the Executive’s employment with the Company. 

  

	 	(v)	Upon the Company’s payment of a cash dividend or stock dividend (to the extent, under the applicable plan or RSU agreement terms, such stock dividend does not result in an adjustment to the number of RSUs awarded)
in respect of its outstanding Company common stock, the Executive shall be credited with a number of additional RSUs in respect of RSUs outstanding on the record date for such dividend, with such number of additional RSUs to equal the aggregate
dividend payable with respect to the shares subject to the RSUs with respect to which the dividend is paid, divided by the VWAP for the ten (10) trading days immediately preceding the dividend record date, rounded down to the nearest whole
share. Such additional RSUs shall vest on the same schedule as the original RSU grant to which the additional RSUs are attributable. 

  

	 	(d)	All payments due to the Executive under this Agreement shall be subject to withholding as required by law or as authorized by the Executive in writing. 

 

	 	(e)	 It is the Parties’ intention that all payments, benefits and entitlements received by the Executive under this Agreement and any agreement
providing for the grant of RSUs (“RSU Agreement”) be provided in a manner that does not impose any additional taxes, interest or penalties on the Executive with respect to such payments, benefits and entitlements under
Section 409A of the Code, and its implementing regulations (“Section 409A”), and the provisions of this Agreement and any RSU Agreement shall be construed and administered in accordance with such intent. Each of the Parties has
used, and will continue to 

  
 5 

	 	
use, its best reasonable efforts to avoid the imposition of such additional taxes, interest or penalties, and the Parties agree to work together in good faith to amend this Agreement, and to
structure any payment, benefit or other entitlement received by the Executive, in a manner that avoids imposition of such additional taxes, interest or penalties while preserving the affected payment, benefit or entitlement to the maximum extent
practicable and maintaining the basic financial provisions of this Agreement without violating any applicable requirement of Section 409A. For purposes of this Agreement, “Code” shall mean the Internal Revenue Code of 1986, as
amended, and any reference to a particular section of the Code shall include any provision that modifies, replaces or supersedes such section. 

  

	 	(f)	The Company intends to structure and administer all awards to the Executive under Section 3(b) and 3(c) hereof in such a manner as to preserve deductibility under Section 162(m) of the Code, provided that the
Company does not intend to adversely affect the Executive’s rights hereunder. 

  

	4.	Other Benefits. During the Term, the Executive shall be entitled to participate in all benefit and perquisite plans, programs and arrangements of the Company that are made available to senior executives of
the Company generally, in each case on terms and conditions no less favorable to the Executive than those that apply to other senior executives of the Company generally. The Executive’s entitlement to participate in any such plan, program or
arrangement and the benefits provided thereunder shall, in each case, be subject to the terms and conditions of such plan, program or arrangement that apply to senior executives of the Company generally and nothing in this Agreement shall restrict
the Company’s ability to amend or terminate any plan, program or arrangement. The Executive acknowledges that, unless otherwise determined by the Compensation Committee, he will not be receiving any grants of stock appreciation rights from the
Company in connection with his employment. 

  

	5.	Expense Reimbursement. The Executive shall be entitled to prompt reimbursement by the Company for all reasonable and customary travel and other business expenses he incurs in connection with carrying out
his duties under this Agreement, in accordance with the general travel and business reimbursement policies then applying to senior executives of the Company generally except that, without regard to such policies as may then be in effect,
international air travel shall be by first class compartment. The Executive shall report all such expenditures not less frequently than monthly, accompanied by adequate records and such other documentary evidence as required by the Company or by
Federal or state tax statutes or regulations governing the substantiation of such expenditures. 

  
 6 

	6.	Termination of Employment 

  

	6.1	Death and Disability 

  

	 	(a)	In the event that the Executive’s employment hereunder terminates due to his death or Permanent Disability (as defined below), the Term shall expire, and he shall be entitled to the following: 

 

	 	(i)	Full vesting, as of the date the Executive’s employment terminates (the “Termination Date”), of all outstanding RSUs with respect to which the applicable performance goals have been attained (and
which were subject only to the continued employment requirement at the Termination Date). 

  

	 	(ii)	Pro-rata vesting (based on the portion of the year which has elapsed as of the Termination Date), of those RSUs outstanding and subject to the attainment of performance goals at the Termination Date, subject to and
based upon the attainment of the applicable performance goals. 

  

	 	(iii)	Pro-rata payment of the Annual Bonus as if there had been achievement of 100% of the target as specified in Section 3(b)(iii) hereof. 

 

	 	(iv)	The benefits described in Section 6.6 below. 

  

	 	(b)	For purposes of this Agreement, the term “Permanent Disability” shall mean that the Executive has been unable, due to physical or mental incapacity, to substantially perform his duties and
responsibilities under this Agreement for 90 days out of any 180 consecutive days. 

  
 7 

	6.2	Termination for Cause by the Company. 

  

	 	(a)	The Company may terminate the Executive’s employment hereunder for Cause. Prior to any such termination of employment for Cause, the Company shall provide the Executive with written notice of termination for Cause
(a “Notice of Termination”). Prior to a termination of employment for Cause, the Executive shall be provided with an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board at a
meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive). A termination of employment for Cause shall require a resolution duly adopted by the Board finding that, in
the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause provided in Section 6.2(c) hereof. 

 

	 	(b)	In the event that the Executive’s employment hereunder is terminated for Cause in accordance with Section 6.2(a), the Term shall expire and he shall be entitled only to the benefits described in
Section 6.6. 

  

	 	(c)	For purposes of this Agreement, “Cause” shall mean that: (i) the Executive is convicted of, or pleads guilty or nolo contendere to, a felony, (ii) the Executive engages in conduct that
constitutes either (x) a material and willful breach of this Agreement, (y) willful, or reckless, material misconduct in the performance of the Executive’s duties under this Agreement, or (z) willful, habitual neglect of the
Executive’s material duties under this Agreement; provided, however, that for purposes of clauses (ii)(y) and (ii)(z) of this paragraph, Cause shall not include any act or omission believed by the Executive in good faith to have been in
or not opposed to the interest of the Company (without any intent by the Executive to gain, directly or indirectly, a profit to which he is not legally entitled). 

 

	6.3	Termination by the Company Without Cause / Termination by the Executive for Good Reason. 

  

	 	(a)	In the event that the Executive’s employment hereunder is terminated during the Term (x) by the Company other than for Permanent Disability in accordance with Section 6.1 or for Cause
in accordance with Section 6.2 or (y) by the Executive with Good Reason in accordance with Section 6.3(b) (and within thirty (30) days following the expiration of the cure period set forth in Section 6.3(b)), the Term shall
expire and the Company shall provide the Executive with the following (in lieu of separation payments under any other Company severance plan, policy or arrangement): 

  
 8 

	 	(i)	A pro-rata Annual Bonus for the year in which the Termination Date occurs (based upon the portion of the year in which the Executive was employed by the Company), based on actual performance for the year in which the
Termination Date occurs, as approved and certified by the Compensation Committee, paid on the date that it would have been paid if the Executive’s employment hereunder had not terminated. 

 

	 	(ii)	Separation payments at a rate of $208,333 per month, commencing with the month following the month in which the “Revocation Period” as defined in the release referred to in Section 6.3(c) ends (and
thereafter on the first Company payroll date of each month), but subject to deferral as provided in Section 6.3(c) and Section 6.7 hereof, with such termination payments to be made in substantially equal installments, not less frequently
than monthly, through the end of the then scheduled Term; provided, however, that such payments shall be made for a period of no less than twelve (12) months and no more than twenty-four (24) months. 

 

	 	(iii)	Continued eligibility for vesting of those RSUs outstanding and subject to the attainment of performance goals at the Termination Date, subject to and based upon the attainment of the applicable performance goals, and
full vesting of any RSUs with respect to which the applicable performance goals have been attained and which are subject only to time-vesting requirements as of the Termination Date. 

 

	 	(iv)	The Executive and his dependents shall be entitled to continued participation (at the Company’s expense), for a period of twenty four (24) months following the Termination Date (which shall be concurrent with
any health care continuation benefits under COBRA), in the group medical plan of the Company in which they were participating as of such date. 

  

	 	(v)	The Company shall, at its sole expense as incurred, provide the Executive with customary outplacement services commensurate with Executive’s position but in no event shall the provision of such services exceed
twelve (12) months or $25,000. 

  

	 	(vi)	The benefits described in Sections 6.1(a)(i), 6.1(a)(ii) and 6.6. 

  

	 	(b)	 “Good Reason” shall mean the occurrence of any of the following events, without the Executive’s prior written consent and
without cure by the Company within thirty (30) days after the Executive gives notice of such event to the 

  
 9 

	 	
Company requesting cure, such notice to be given within ninety (90) days after the Executive learns that such event has occurred: (i) the assignment to the Executive of duties that are
materially inconsistent with his position (including his status, offices, titles and reporting relationships), authority, duties or responsibilities, all as in effect on the Commencement Date, (ii) actions by the Company that have resulted in a
substantial diminution in his position, authority, duties or responsibilities as compared to his position, authority, duties or responsibilities at the Commencement Date; (iii) a substantial breach by the Company of any material obligation to
the Executive, under this Agreement; (iv) any failure to elect or appoint the Executive as President and Chief Executive Officer of the Company or to maintain him in such position throughout the Term; (v) any reduction in Base Salary or
target Annual Bonus opportunity from the amounts set forth in Sections 3(a) and 3(b) hereof, (vi) any failure by the Company to nominate the Executive as a director at each election during the Term in which his board seat is up for election or
reelection as applicable; or (vii) any failure of the Company to obtain the assumption in writing of its obligation to perform this Agreement by any successor to all or substantially all of the business or assets of the Company within fifteen
(15) calendar days after a merger, consolidation, sale or similar transaction. 

  

	 	(c)	Upon termination of his employment hereunder in a termination governed by this Section 6.3, the Executive shall be entitled to the benefits described in Section 6.3(a), but only if, except in the case of
benefits described in Section 6.6, he executes, and delivers to the Company within 21 days after the Termination Date, a Release substantially in the form attached hereto as Exhibit A, which Release he does not revoke during the
“Revocation Period” as defined in such Release. 

  

	6.4	Voluntary Resignation by the Executive. In the event that the Executive terminates his employment hereunder prior to the then-scheduled expiration of the Term, other than in a termination
governed by Section 6.1 or 6.3, the Term shall expire and he shall be entitled only to the benefits described in Section 6.6 . 

  

	6.5	Expiration of Term. Upon the expiration of the Term on December 31, 2016 (or on such later expiration date as the Parties may have agreed upon in accordance with Section 1), the Executive’s
employment with the Company hereunder shall terminate and the Executive shall be entitled to the benefits described in Section 6.6. 

  
 10 

 6.6 Any Termination of Employment. 

 

	 	(a)	Upon any termination of the Executive’s employment hereunder, the Company shall provide the Executive: 

  

	 	(i)	Unpaid Base Salary through the Termination Date paid no later than the next following payment date in accordance with the Company’s normal payroll payment practices. 

 

	 	(ii)	The balance of any unpaid Annual Bonus in respect of any Performance Year that ended on or before the Termination Date, paid on the date that it would have been paid if the Executive’s employment hereunder had not
terminated (or, if such date has already passed, as soon as practicable following the Termination Date). 

  

	 	(iii)	Other or additional benefits in accordance with the then applicable terms of any applicable Company Arrangement, provided that this shall not result in a duplication of benefits or payments to the Executive or his
beneficiaries, as the case may be. 

  

	 	(b)	For purposes of this Agreement, “Company Arrangement” shall mean any plan, program, corporate governance document, policy, agreement or other arrangement of the Company or any of its subsidiaries.

  

	 	(c)	Upon any termination of his employment hereunder, the Executive shall be deemed to have resigned from all offices, and Board memberships, that he holds pursuant to this Agreement, and the Executive shall promptly
execute any documents reasonably requested by the Company to evidence or effectuate such resignation. 

  

	 	(d)	Upon any termination of employment hereunder, Executive shall continue to be bound by the covenants set forth herein at Sections 7 through 13 (and the other related provisions of this Agreement) subsequent to the date
of such termination for such periods of time as provided for in said Sections respectively. 

  

	 	(e)	No Mitigation; No Offset. In the event of any termination of the Executive’s employment hereunder, the Executive shall be under no obligation to seek other employment or otherwise mitigate the obligations of the
Company under this Agreement or otherwise, and there shall be no offset against amounts or benefits due the Executive under this Agreement or otherwise on account of (x) any Claim that the Company or its affiliates may have against him or
(y) any remuneration or other benefit earned or received by the Executive after such termination. For purposes of this Agreement, “Claim” shall mean any claim, demand, request, investigation, dispute, controversy, threat, discovery
request, or request for testimony or information. 

  
 11 

	6.7	Section 409A. All payments to be made to the Executive hereunder, to the extent they constitute a deferral of compensation subject to the requirements of Section 409A (after taking into account
all exclusions applicable to such payments under Section 409A), shall be made no later, and shall not be made any earlier, than at the time or times specified herein for such payments to be made, except as otherwise permitted or required under
Section 409A. The date of the Executive’s “separation from service”, as defined in Section 409A (and as determined by applying the default presumptions in Treas. Reg. §1.409A-1(h)(1)(ii)), shall be treated as the date
of the Executive’s termination of employment for purposes of determining the time of payment of any amount that becomes payable to the Executive hereunder upon the Executive’s termination of employment and that is properly treated as a
deferral of compensation subject to Section 409A after taking into account all exclusions applicable to such payment under Section 409A. In addition, no such payment or distribution of deferred compensation shall be made to the Executive
prior to the earlier of (a) the expiration of the six (6) month period measured from the date of the Executive’s “separation from service”, or (b) the date of the Executive’s death, if the Executive is deemed at
the time of such separation from service to be a “specified employee” within the meaning of Section 409A and if such delayed commencement is otherwise required to avoid additional tax under Section 409A(a)(2) of the Code. All
payments and benefits that are delayed pursuant to the immediately preceding sentence shall be paid to the Executive in a lump sum upon the first business day immediately following the earlier of (x) the expiration of such six (6) month
period or (y) the Executive’s date of death, without interest. Each individual installment payment that becomes payable under this Agreement, including each payment under Section 6.3(a)(ii), shall be treated as a right to receive a
series of “separate payments” for purposes of Section 409A and Treasury Reg. §1.409A-2(b)(2)(iii). To the extent that the payment or reimbursement of any expense or the provision of any in-kind benefits under this
Agreement would be considered deferred compensation under Section 409A (after taking into account all exclusions applicable to such reimbursements and benefits under Section 409A): (i) the payment or reimbursement of such expenses or
the provision of in-kind benefits in one of the Executive’s taxable years shall not affect the payment or reimbursement of any expense or payment of in-kind benefits in any other taxable year of the Executive; (ii) any payment or
reimbursement for expenses under this Agreement shall be made in accordance with the Company’s applicable plans and policies as soon as soon as administratively practicable after such expense has been incurred, but in any event on or before the
last day of the Executive’s taxable year following the taxable year in which the expense was incurred; and (iii) any such payment or reimbursement or in-kind benefit may not be liquidated or exchanged for any other benefit.

  
 12 

	7.	Confidentiality. The Executive agrees that, during the Term and at all times thereafter, he shall not reveal or utilize Confidential Information (as defined in this Agreement) that he acquired during the course
of or as a result of his employment with the Company and that relates to (x) the Company and any of its subsidiaries or (y) the Company’s and its subsidiaries, customers, employees, agents and vendors. The Executive acknowledges that
all such Confidential Information is commercially valuable and is the property of the Company. Upon the termination of his employment hereunder, the Executive shall immediately return all such Confidential Information to the Company, whether it
exists in written, electronic, computerized or other form. Notwithstanding anything elsewhere to the contrary, the Executive (a) may disclose Confidential Information (i) to the Company and its subsidiaries and affiliates, or to any
authorized agent or representative of any of them, (ii) in confidence to any attorney or accountant actually retained by Executive for the purpose of securing professional advice (but not the Company’s privileged information), or
(iii) when required to do so by law or by a court, governmental agency, legislative body, arbitrator or other Person with jurisdiction to order him to divulge, disclose or make accessible such information, and (b) may disclose or use
Confidential Information (i) with the Company’s prior written consent, (ii) in connection with performing his duties hereunder or (iii) in connection with any Proceeding under Section 14 or 21. In the event that the
Executive is required to disclose any Confidential Information pursuant to clause (a)(iii) or (b)(iii) of the immediately preceding sentence, he shall (A) promptly give the Company advance notice that such disclosure may be made and
(B) not oppose and affirmatively cooperate with the Company, at its reasonable request and sole expense, in seeking to protect the confidentiality of the Confidential Information.For purposes of this Agreement “Confidential
Information” shall mean information, knowledge or data (whether or not a trade secret or protected by laws pertaining to intellectual property and including, without limitation, information relating to data, finances, marketing, pricing,
profit margins, claims, legal matters, loss control, marketing and business plans, software, processing, vendors, administrators, customers or prospective customers, products, brokers and employees), other than information, knowledge or data that
(x) has previously been disclosed to the public, or is in the public domain, other than as a result of the Executive’s breach of this Section 7, or (y) is known or generally available to the public. 

 

	8.	Competition. The Executive hereby agrees that, during the Term and for 12 months thereafter, he will not, directly or indirectly, perform services for, prepare or take steps to prepare to perform services for, or
otherwise have any involvement with (other than in connection with performing services hereunder), in each case, whether as an officer, director, partner, consultant, security holder, owner, employee, independent contractor or otherwise, any Person
that competes (whether directly or indirectly) with the Company or its subsidiaries in the Business in the world as of the Termination Date (any such Person, a “Competitor”); provided, however, that the Executive may in any event
own up to a 2% passive ownership interest in any public entity or through a private, non-operating 

  
 13 

	 	
investment vehicle and may become employed by or otherwise affiliated with a Competitor if the Executive works in a business unit thereof that does not compete with the Company or any subsidiary
in connection with the Business and he does not communicate about the Business with any employee in a business unit of such Competitor that does so compete with the Company or any of its subsidiaries. For purposes of this Agreement, the term
“Business” shall mean the offshore oil and gas drilling business. Upon the written request of the Executive, the Board will reasonably determine whether a business or other entity constitutes a “Competitor” for purposes of this
Section 8; provided that the Board may require the Executive to provide such information as the Board reasonably determines to be necessary to make such determination; and provided, further that the current and continuing effectiveness of such
determination may be conditioned upon the accuracy of such information, and upon such other factors as the Board may reasonably determine. 

  

	9.	Solicitation/Hire. The Executive agrees that, during the Term and for 24 months thereafter, he will not, directly or indirectly, (a) solicit any individual (other than his own personal assistant) who
is then an employee of the Company or any of its subsidiaries to terminate such employee’s employment with the Company or its subsidiaries or to accept employment elsewhere, other than in connection with terminating, or altering, the employment
of such employee in connection with performing services hereunder, or (b) hire or offer to hire any such employee. Notwithstanding the foregoing, if the Executive places general advertisements seeking to hire individuals and such advertisements
are not targeted at employees of the Company or its subsidiaries, such placement of advertisements, by itself, shall not be treated as a solicitation under this Section 9. 

 

	10.	Non-interference. The Executive agrees that, during the Term and for 24 months thereafter, he will not, directly or indirectly, other than in connection with performing services hereunder and in the interest of
the Company, (a) solicit any Person that to his knowledge had a business relationship with the Company or its subsidiaries or from which the Company or any subsidiary solicited business, in either case, at any time during the 12-month period
preceding the Termination Date to terminate, reduce or adversely change any such business relationship, or (b) conduct business with any such Person on behalf of himself or any third party to the extent that such business relates to the
Business of the Company or any of its subsidiaries. 

  

	11.	Return of Materials. The Executive shall, at any time upon the written request of a duly authorized officer of the Company, and in any event immediately following the Termination Date, return and surrender to the
Company all property of the Company, including but not limited to originals and all copies, regardless of medium, of property belonging to the Company created or obtained by the Executive as a result of or in the course of or in connection with his
employment with the Company regardless of whether 

  
 14 

 
such items constitute proprietary information; provided, however, that the Executive shall be under no obligation to return written materials acquired from third parties that are generally
available to the public. Notwithstanding anything to the contrary in this Agreement or elsewhere, the Executive shall be entitled to retain: (i) his home computer, (ii) papers and other materials of a personal nature, including, but not
limited to, photographs, correspondence, personal diaries, calendars and Rolodexes, personal files and phone books (including information on personal and professional contacts in whatever form maintained), (iii) information relating to his
compensation or to reimbursement of expenses, (iv) information that he reasonably believes may be needed for tax purposes, and (v) any other documents or information that relate to his personal entitlements or obligations. 

 

	12.	Non-Disparagement. The Executive agrees that he shall not make any public statement at any time during or after the Term that disparages the Company, its subsidiaries or affiliates, or any of their respective
officers or directors. Notwithstanding the foregoing, nothing in this Agreement or elsewhere shall prevent the Executive from making any truthful statement to the extent (i) reasonably necessary in connection with any litigation, arbitration or
mediation, (ii) required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with apparent jurisdiction to order such Person to disclose or make accessible such information or
(iii) reasonably necessary to respond publicly to an incorrect or disparaging public statement made by the Company or its subsidiaries or by any officer or director thereof. 

 

	13.	Scope of Covenants. 

  

	 	(a)	The Executive acknowledges that: (i) as a senior executive of the Company, he will have access to confidential information concerning the entire range of businesses in which the Company and its subsidiaries were
and are engaged; (ii) that the Company’s and its subsidiaries’ businesses are conducted world-wide; and (iii) that the Company’s and its subsidiaries’ confidential information, if disclosed or utilized without its
authorization, would irreparably harm the Company and its subsidiaries in: (1) selling new business; (2) maintaining and establishing existing and new relationships with employees, agents, brokers and vendors; and (3) other ways
arising out of the conduct of the businesses in which the Company and its subsidiaries are engaged. 

  

	 	(b)	To protect such information and such existing and prospective relationships, and for other significant business reasons, the Executive agrees that it is reasonable and necessary that: (i) the scope of this
Agreement be world-wide; (ii) its breadth include those segments of the entire offshore oil and gas drilling industry in which the Company and its subsidiaries conduct business; and (iii) the duration of the restrictions upon the Executive
be as indicated herein. 

  
 15 

	 	(c)	The Executive agrees that the provisions of Sections 7, 8, 9, 10, 11 and 12 of this Agreement, and the Company’s enforcement of them, are reasonably necessary to protect the Company’s and its
subsidiaries’ legitimate business and property interests and relationships, especially those that he was responsible for developing or maintaining. 

  

	 	(d)	If any one or more of the provisions contained in Sections 7, 8, 9, 10, 11 or 12 shall be held to be excessively broad as to duration, geographic scope, activity or subject, such provisions shall be construed by
limiting and reducing them so as to be enforceable to the maximum extent allowed by applicable law. 

  

	14.	Equitable Relief. Each Party agrees that any actual or threatened breach of the covenants set forth in Sections 7, 8, 9, 10 11 or 12 above could cause the other Party irreparable harm. Therefore, in the
event of any actual or threatened breach by either Party (the “Breaching Party”) of the provisions of Sections 7, 8, 9, 10 11 or 12 above, the other Party shall be entitled to seek, through arbitration in accordance with
Section 21 or from any court with jurisdiction over the matter and the defendant(s), temporary, preliminary and/or permanent equitable/injunctive relief restraining the Breaching Party from violating such provisions and to seek, in addition,
but solely through arbitration in accordance with Section 21, money damages, together with any and all other remedies available under applicable law. 

  

	15.	Representations.  

  

	 	(a)	The Executive represents and warrants to the Company that he (i) has the legal right to enter into this Agreement and to perform all of the obligations to be performed by him hereunder in accordance with its terms,
(ii) is not a party to any agreement or understanding, written or oral, that would prevent him from entering into this Agreement or performing his obligations under it, and (iii) has not materially breached any of his fiduciary duties to
his current employer or its affiliates. The Executive represents and warrants to the Company that he is not a party to any non-compete or non-solicitation obligations with any Person which would be violated by performing his duties hereunder.

  
 16 

	 	(b)	The Company represents and warrants that (i) it is fully authorized by action of its Board (and of any other Person or body whose action is required) to enter into this Agreement and to perform its obligations
under it, (ii) the execution, delivery and performance of this Agreement by it does not violate any applicable law, regulation, order, judgment or decree, or any agreement, arrangement, plan or corporate governance document to which it is a
party or by which it is bound and (iii) upon the execution and delivery of this Agreement by the Parties, this Agreement shall be its valid and binding obligation, enforceable against it in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally. 

  

	16.	Indemnification/D&O Insurance. 

  

	 	(a)	If the Executive is made a party, is threatened to be made a party, or reasonably anticipates being made a party, to any Proceeding by reason of the fact that he is or was a director, officer, member, employee, agent,
manager, trustee, consultant or representative of the Company or any of its subsidiaries, or is or was serving at the request of the Company or any of its subsidiaries, or in connection with his service hereunder, as a director, officer, member,
employee, agent, manager, trustee, consultant or representative of another Person, or if any Claim is made, is threatened to be made, or is reasonably anticipated to be made, that arises out of or relates to the Executive’s service in any of
the foregoing capacities, then the Executive shall promptly be indemnified and held harmless to the fullest extent permitted or authorized by the Certificate of Incorporation or Bylaws of the Company, or if greater, by applicable law, against any
and all reasonable and appropriately documented costs, expenses, liabilities and losses incurred or suffered by the Executive in connection therewith, and such indemnification shall continue as to the Executive even if he has ceased to be a
director, officer, member, employee, agent, manager, trustee, consultant or representative of the Company or of any of its subsidiaries or other Person and shall inure to the benefit of his heirs, executors and administrators. The Executive shall be
entitled to prompt advancement of any and all appropriately documented costs and expenses (including, without limitation, attorneys’ and other professional fees and charges) reasonably incurred by him in connection with any such Proceeding or
Claim, any such advancement to be made within 15 days after the Executive gives written notice, supported by reasonable documentation, requesting such advancement. Such notice shall include an undertaking by the Executive to repay the amounts
advanced to the extent that he is ultimately determined not to be entitled to indemnification against such costs and expenses. Nothing in this Agreement or elsewhere shall operate to limit or extinguish any right to indemnification, advancement of
expenses, or contribution that the Executive would otherwise have (including, without limitation, by agreement or under applicable law). For purposes of this Agreement, “Proceeding” shall mean any actual, threatened or reasonably
anticipated action, suit or proceeding, whether civil, criminal, administrative, investigative, appellate, formal, informal or other. 

  
 17 

	 	(b)	The Company shall maintain directors and officers liability insurance covering the Executive in his respective capacities as an officer and director of the Company (and, if applicable, of any of its subsidiaries) on the
same basis that the Company provides such insurance to other officers and directors of the Company generally. 

  

	17.	Severability. Each of the terms and provisions of this Agreement shall be deemed severable in whole and in part. To the extent that any provision or portion of this Agreement shall be determined to be invalid or
unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall remain in full force and effect so as to achieve the intentions of the Parties, as set forth in this Agreement, to the maximum extent possible.

  

	18.	Assignment. 

  

	 	(a)	This Agreement shall be binding upon, and inure to the benefit of, the Parties and their respective successors, heirs (in the case of the Executive) and assigns. 

 

	 	(b)	No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company except that such rights and obligations may be assigned or transferred pursuant to a merger,
consolidation or other combination in which the Company is not the continuing entity, or a sale or liquidation of all or substantially all of the business and assets of the Company, provided that the assignee or transferee is the successor to
all or substantially all of the business and assets of the Company and such assignee or transferee expressly assumes the liabilities, obligations and duties of the Company as set forth in this Agreement. 

 

	 	(c)	No rights or obligations of the Executive under this Agreement may be assigned or transferred by the Executive other than his rights to compensation and benefits, which may be transferred only by will or by operation of
law. Notwithstanding the foregoing, the Executive shall be entitled, to the extent permitted under applicable law and applicable Company Arrangements, to select and change a beneficiary or beneficiaries to receive any compensation or benefit
hereunder following the Executive’s death by giving written notice thereof to the Company. In the event of the Executive’s death or a judicial determination of his incompetence, references in this Agreement to the Executive shall be
deemed, where appropriate, to refer to his beneficiary, estate or other legal representative. In the event that Executive dies before all payments he may be entitled to have been paid, all remaining payments shall be made to the beneficiary
specifically designated by the Executive in writing prior to his death, or, if no such beneficiary was designated (or the Company is unable in good faith to determine the beneficiary designated), to his personal representative or estate.

  
 18 

	19.	Miscellaneous. 

  

	 	(a)	This Agreement shall be governed, interpreted, performed and enforced in accordance with its express terms, and otherwise in accordance with the laws of the State of Texas (without regard to choice of law or conflict of
laws principles), to the extent not displaced by federal law. 

  

	 	(b)	Except as otherwise expressly set forth herein, this Agreement contains the entire agreement of the Parties with regard to the subject matter hereof, and supersedes all prior agreements and understandings, written or
oral, with respect to such subject matter. 

  

	 	(c)	No provision in this Agreement may be amended unless such amendment is set forth in a writing that expressly refers to the provision of this Agreement that is being amended and that is signed by the Executive and by an
authorized officer of the Company. No waiver by any Person of any breach of any condition or provision contained in this Agreement shall be deemed a waiver of any similar or dissimilar condition or provision at the same or any prior or subsequent
time. To be effective, any waiver must be set forth in a writing signed by the waiving Person and must specifically refer to the condition(s) or provision(s) of this Agreement being waived. In the event of any conflict between any provision of this
Agreement and any provision of any Company Arrangement, the provisions of this Agreement shall control unless the Executive otherwise agrees in a writing that expressly refers to the provision of this Agreement whose control he is waiving.

  

	 	(d)	To the extent necessary to effect the purposes of this Agreement, the respective rights and obligations of the Parties (including, without limitation, those set forth in Sections 6 through 17 above, and 22 below) shall
survive any termination or expiration of the Term or termination of the Executive’s employment. 

  

	 	(e)	All numbers and headings contained in this Agreement are for reference only and are not intended to qualify, limit or otherwise affect the meaning or interpretation of any provision contained in this Agreement.

  
 19 

	 	(f)	As soon as practicable following the Commencement Date or within thirty (30) days following receipt of an invoice for services performed after the Commencement Date, the Company shall reimburse the Executive for
all reasonable, appropriately documented attorneys’ fees incurred in entering into this Agreement and reviewing any equity or other ancillary documentation relating to compensation or benefits provided hereunder or awarded in connection with
this Agreement, provided, however, that the amount reimbursed under this Section 19(f) shall not exceed $50,000. 

  

	20.	Notices. Any notice, consent, demand, request, or other communication given to a Person in connection with this Agreement shall be in writing and shall be deemed to have been given to such Person (x) when
delivered personally to such Person or (y), provided that a written acknowledgment of receipt is obtained, five days after being sent by prepaid certified or registered mail, or two days after being sent by a nationally recognized overnight courier,
to the address (if any) specified below for such Person (or to such other address as such Person shall have specified by ten days’ advance notice given in accordance with this Section 20) or (z) on the first business day after it is
sent by facsimile to the facsimile number (if any) set forth below (or to such other facsimile number as shall have specified by ten days’ advance notice given in accordance with this Section 20), with a confirmatory copy sent by certified
or registered mail or by overnight courier in accordance with this Section 20. 

 If to the Company: 

Diamond Offshore Drilling, Inc. 

15415 Katy Freeway, Suite 100 

Houston, Texas 77094 
 Attn:
Corporate Secretary 
 If to the Executive: 

The address of his principal residence as it appears in the Company’s records, 

with a copy to him (during the Term) at his office in Houston, Texas. 

With a copy to: 
 Henry I.
Morgenbesser, Esq. 
 Katzke & Morgenbesser LLP 

1345 Avenue of the Americas, 11th Floor 

New York, New York 10105 
  

	21.	 Arbitration of All Disputes. Any Claim between the Executive and the Company or any of its subsidiaries, including any Claim arising out of or
relating to this Agreement, any other agreement or arrangement between the Executive and the Company or any of its 

  
 20 

	 	
subsidiaries, the Executive’s employment with the Company, or any termination thereof (a “Covered Claim”) shall (except to the extent otherwise provided in Section 14
with respect to certain requests for injunctive relief) be resolved by binding confidential arbitration, to be held in Houston Texas, in accordance with the Commercial Arbitration Rules (and not the National Rules for Resolution of Employment
Disputes) of the American Arbitration Association and this Section 21. Judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. 

 

	22.	Section 280G. 

  

	 	(a)	 In the event that any payment or benefit made or provided to or for the benefit of the Executive under this Agreement, or under any plan, agreement,
program or arrangement of the Company, of any Person effecting a change in control of the Company (a “280G Change in Control”), or any affiliates of any of the foregoing (a “Payment”) is determined to be subject to
any excise tax (“Excise Tax”) imposed by Section 4999 of the Code, or any comparable state or local tax provision, the Company shall reduce the amount of such Payment to the greatest amount that can be paid to the Executive
without any portion of the Payment being subject to the Excise Tax; provided however, that such reduction shall be made only to the extent that the reduction results in the Executive retaining a greater “After Tax Amount” (as
defined below) of the Payments following the reduction than the After Tax Amount of the Payments the Executive would have retained if no such reduction had taken place. For purposes of the foregoing, (i) the “After Tax Amount” of the
Executive’s Payments, as computed with and as computed without the reduction provided for in this Section 22, shall mean the amount of the Payments, as so computed, that the Executive would retain after payment of all taxes (including any
federal, state or local income taxes, the Excise Tax or other excise taxes, any employment, social security or Medicare taxes, and any other taxes) imposed with respect to such Payments in the year or years in which payable and (ii) the amount
of such taxes shall be computed at the rates in effect under the applicable tax laws in the year in which the applicable 280G Change in Control occurs, or if then ascertainable, the rates in effect in any later year in which any Payment is expected
to be paid, and in the case of any income taxes, by using the combined federal, state and (if applicable) local income tax rates then in effect under such laws. The determination of whether any Payment is subject to the Excise Tax and, if so, the
amount of any reduction shall be made by an independent, nationally recognized United States public accounting firm (the “Auditor”). The Auditor shall be selected by the Company (subject to the Executive’s approval, which shall
not be unreasonably withheld or delayed), and shall be paid for by the Company. Such determination shall be made no later than fifteen (15) days following the closing of the transaction or the occurrence of the event that constitutes the 280G
Change in Control, or as soon thereafter as administratively practicable. The Auditor shall provide a written report of its determinations hereunder, including detailed supporting calculations, both to the

  
 21 

	 	
Executive and to the Company. In the absence of manifest error, the determinations made by the Auditor hereunder shall be binding upon the Executive and the Company. The Parties shall cooperate
with each other in connection with any Proceeding or Claim relating to the existence or amount of any liability for any Excise Tax. 

  

	 	(b)	Any reductions in the Executive’s Payments required to be made pursuant to this Section 22 above shall be made in the following order: (i) payments that are payable in cash that are valued at full value
under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under
Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that are payable in
cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity valued at
less than full value under Treasury Regulation Section 1.280G-1, Q&A 24 will next be reduced; (v) all other non-cash benefits not otherwise described in clauses (ii) or (iv) will be next reduced pro-rata. Within ten
(10) days following such determination hereunder, the Company shall pay or distribute to or for the benefit of the Executive such amounts as are then due to the Executive under this Agreement and shall promptly pay or distribute to or for the
benefit of the Executive such amounts as become due to the Executive under, and in accordance with the terms of, this Agreement. 

[Remainder of the page intentionally left blank.] 

  
 22 

	23.	Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original copy of this Agreement and all of which, when taken together, shall be deemed to
constitute one and the same agreement. Signatures delivered by facsimile shall be deemed effective for all purposes. 

 IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Signing Date. 
 DIAMOND OFFSHORE DRILLING, INC. 

 

			
	By:	 	 /s/ William C. Long

		 	Name: William C. Long
		 	 Title: Senior Vice President, General Counsel

          and Secretary

  

	
	MARC EDWARDS
	
	 /s/ Marc Edwards

  
 23 

 EXHIBIT A 

FORM OF RELEASE 
 THIS
RELEASE OF CLAIMS (this “Release”) is entered into as of                     [the date the Executive signs this Release following a
termination without Cause or a resignation for Good Reason] (the “Release Date”), by and between Marc Edwards (the “Executive”) and Diamond Offshore Drilling, Inc. (the “Company”). Capitalized terms
used but not defined herein shall have the meanings ascribed to such terms in the Employment Agreement by and between the Company and the Executive, dated as of February 12th, 2014 (the
“Employment Agreement”). 
 1. Release. 

(a) The Executive, on behalf of himself and his beneficiaries, estate and legal representatives (collectively, with the Executive, the
“Executive Releasors”) hereby releases, acquits and forever discharges the Company, its parents, subsidiaries, and each of their respective successors, assigns, officers, directors, and employees (collectively, the “Company
Released Parties”) from any and all claims, causes of actions, demands, suits, costs, expenses and damages of whatsoever nature and kind, whether known or unknown, whether now existing or hereafter arising, at law or in equity, that any
Executive Releasor may have, or may have had, or may hereafter have, and that are based in whole or in part on facts, whether or not now known, existing prior to the Release Date, and that arise out of or relate to the Executive’s employment
with or services for the Company or its subsidiaries, or the termination of such employment or services, other than the right to payment or benefits under Section 6 of the Employment Agreement, for which execution of this Release is, in part, a
condition precedent, and the right to indemnification, advancement of expenses and insurance pursuant to Section 16 of the Employment Agreement. Notwithstanding the foregoing, this release does not apply (i) to any vested benefits under
any benefits plan, program, policies or agreements of the Company or any of its affiliates which the Executive may have as may be in effect from time to time; (ii) to the Executive’s right to obtain contribution as permitted by law in the
event of any judgment against the Executive as a result of any act or failure to act for which the Executive and the Company (or any of its subsidiaries or affiliates) are held jointly liable; (iii) to any rights the Executive holds as an
individual stockholder of the Company; (iv) to any claim that cannot be waived by law; (v) to the Executive’s right to enforce the terms of this Release; and (vi) to any right or claim that arises after the date of the execution
of this Release. 
 (b) The claims released by the Executive include, to the extent set forth in Section 1(a), any and all claims under
federal, state or local laws pertaining to employment, including the Age Discrimination in Employment Act of 1967, as amended, 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., the Sarbanes-Oxley Act, as amended, the Dodd-Frank Act, as amended and any and all state or local laws
regarding employment discrimination and/or U.S. federal, state or local laws of any type or description regarding employment, including but not limited to any claims in any way arising from or derivative of the Executive’s employment with the
Company or any of its subsidiaries or the termination of such employment, as well as any claims under state contract or tort law or otherwise. 

2. Representation by the Executive. The Executive represents that he has not been convicted of, or pleaded guilty to or nolo contendere
to, any felony and has not engaged in conduct that constitutes Cause under the Employment Agreement. 
 3. Incorporation of Specific
Provisions. The following Sections of the Employment Agreement shall be deemed incorporated by reference in this Release and shall be treated as if set forth in full herein, except that references in them to this “Agreement” shall be
deemed to be references to this “Release”: Sections 19(a), 19(b), 19(c), 19(e), 20, 21 and 23. 
 4. Review and Revocation
Period. The Executive hereby represents that he has read this Release carefully and fully understands the terms hereof, and that he has been advised to consult with an attorney and has had the opportunity to consult with an attorney prior to
signing this Release. The Executive acknowledges that he is executing this Release voluntarily and knowingly, without duress or coercion, and that he has not relied on any representations, promises or agreements of any kind, other than those set
forth in this Release. The Executive further represents that he has had 21 days to review this Release. If the Executive has executed this Release in fewer than 21 days after its delivery, the Executive hereby acknowledges that his decision to
execute this Release prior to the expiration of such 21-day period was entirely voluntary. The Executive may revoke his acceptance of this Release within seven days after he has signed it and delivered it to the Company (the “Revocation
Period”) by sending written notice to the Company that the Executive wishes to revoke his acceptance of it and not be bound by it. If the Executive timely revokes this Release, the Company shall have no obligation to provide to the
Executive the benefits described or referenced in Sections 6.3(a) of the Employment Agreement (other than those described in Section 6.6). This Release shall become effective on the seventh
(7th) day after the Executive signs it unless revoked in accordance with the procedure set forth in the prior sentence. This Release shall be null and void if not countersigned by the
Company, and delivered to the Executive, within seven (7) days after the expiration of the Revocation Period. 
 IN WITNESS WHEREOF,
the Parties have executed this Release as of the date and year first above written. 
  

	
	 Marc Edwards
  

	  
 Date:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00230-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00230-of-00352.parquet"}]]