Document:

Exhibit
10.6

 

SEVERANCE AGREEMENT

 

dated as of October 23,
2009,

 

between

 

COBALT INTERNATIONAL ENERGY,
INC.,

(the
Company)

 

and

 

John P.
Wilkirson,

(Employee)

 

 

TABLE OF CONTENTS

 

	
   

  	
  PAGE

  
	
  Article 1

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  Section 1.01. Definitions

  	
  1

  
	
   

  	
   

  
	
  Article 2

  	
   

  
	
  EFFECTIVENESS; TERM OF AGREEMENT; PRIOR SEVERANCE
  AGREEMENT

  	
   

  
	
   

  	
   

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

  	
  8

  
	
   

  	
   

  
	
  Article 3

  	
   

  
	
  CERTAIN EMPLOYEE REPRESENTATIONS AND AGREEMENTS; IPO
  EQUITY GRANT

  	
   

  
	
   

  	
   

  
	
  Section 3.01. Services

  	
  8

  
	
  Section 3.02. Accredited Investor Representations

  	
  8

  
	
  Section 3.03. Transfer Restrictions

  	
  8

  
	
  Section 3.04. Life Insurance

  	
  8

  
	
  Section 3.05. IPO Equity Grants

  	
  9

  
	
   

  	
   

  
	
  Article 4

  	
   

  
	
  CONFIDENTIAL INFORMATION, INVENTIONS, BUSINESS
  OPPORTUNITIES AND GOODWILL

  	
   

  
	
   

  	
   

  
	
  Section 4.01. Confidential Information, Inventions, Business
  Opportunities and Goodwill

  	
  9

  
	
   

  	
   

  
	
  Article 5

  	
   

  
	
  TERMINATION OF EMPLOYMENT AND NOTICE OF TERMINATION
  OF EMPLOYMENT

  	
   

  
	
   

  	
   

  
	
  Section 5.01. Termination of Employment

  	
  9

  
	
  Section 5.02. Notice of Termination of Employment

  	
  10

  
	
  Section 5.03. Deemed Resignations

  	
  10

  
	
   

  	
   

  
	
  Article 6

  	
   

  
	
  SEVERANCE BENEFITS

  	
   

  
	
   

  	
   

  
	
  Section 6.01. Death, Disability, Termination for Cause or
  Resignation Without Good Reason

  	
  10

  
	
  Section 6.02. Involuntary Termination

  	
  11

  

 

i

 

	
  Section 6.03.
  Death, Disability or Involuntary Termination After Agreement Termination Date

  	
  12

  
	
   

  	
   

  
	
  Article 7

  	
   

  
	
  INTEREST ON LATE
  PAYMENTS

  	
   

  
	
   

  	
   

  
	
  Section 7.01.
  Interest on Late Payments

  	
  13

  
	
   

  	
   

  
	
  Article 8

  	
   

  
	
  CERTAIN ADDITIONAL
  PAYMENTS BY THE COMPANY

  	
   

  
	
   

  	
   

  
	
  Section 8.01.
  Gross-up Payment

  	
  13

  
	
  Section 8.02.
  Disposition of Claims

  	
  14

  
	
   

  	
   

  
	
  Article 9

  	
   

  
	
  COMPETITION

  	
   

  
	
   

  	
   

  
	
  Section 9.01.
  Competition

  	
  14

  
	
   

  	
   

  
	
  Article 10

  	
   

  
	
  NONDISCLOSURE OF
  CONFIDENTIAL AND PROPRIETARY INFORMATION

  	
   

  
	
   

  	
   

  
	
  Section 10.01.
  Nondisclosure of Confidential and Proprietary Information

  	
  17

  
	
   

  	
   

  
	
  Article 11

  	
   

  
	
  INVENTIONS

  	
   

  
	
   

  	
   

  
	
  Section 11.01.
  Inventions

  	
  18

  
	
   

  	
   

  
	
  Article 12

  	
   

  
	
  INJUNCTIVE RELIEF

  	
   

  
	
   

  	
   

  
	
  Section 12.01.
  Injunctive Relief

  	
  19

  
	
   

  	
   

  
	
  Article 13

  	
   

  
	
  NON-DISPARAGEMENT

  	
   

  
	
   

  	
   

  
	
  Section 13.01.
  Non-disparagement

  	
  19

  
	
   

  	
   

  
	
  Article 14

  	
   

  
	
  GENERAL

  	
   

  
	
   

  	
   

  
	
  Section 14.01.
  Survivorship

  	
  19

  
	
  Section 14.02.
  Arbitration

  	
  19

  
	
  Section 14.03.
  Payment Obligations Absolute

  	
  20

  
	
  Section 14.04.
  Successors

  	
  21

  

 

ii

 

	
  Section 14.05.
  Severability

  	
  21

  
	
  Section 14.06.
  Non-alienation

  	
  21

  
	
  Section 14.07.
  Notices

  	
  21

  
	
  Section 14.08.
  Controlling Law and Waiver of Jury Trial

  	
  21

  
	
  Section 14.09.
  Release and Delayed Payment Restriction

  	
  22

  
	
  Section 14.10.
  Full Settlement

  	
  22

  
	
  Section 14.11.
  Unfunded Obligation

  	
  22

  
	
  Section 14.12.
  Not a Contract of Employment

  	
  23

  
	
  Section 14.13.
  Withholding of Taxes and Other Employee Deductions

  	
  23

  
	
  Section 14.14.
  Number and Gender

  	
  23

  
	
  Section 14.15.
  Entire Agreement

  	
  23

  

 

Annexes
and Exhibits

 

	
  Annex
  I

  	
  Accredited
  Investor Representations

  
	
  Annex
  II

  	
  Transfer
  Restrictions

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of
  Restricted Stock Award Agreement — Class C Interests

  
	
  Exhibit B

  	
  Form of
  Restricted Stock Award Agreement — Class D Interests

  
	
  Exhibit C

  	
  Form of
  Release

  

 

iii

 

SEVERANCE AGREEMENT

 

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

 

RECITALS

 

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

 

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

 

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

 

AGREEMENT

 

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

 

ARTICLE
1

DEFINITIONS

 

Section 1.01.  Definitions.

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

(iii)          Employee’s annualized base salary at
the rate in effect immediately prior to a Change in Control if, on the date
upon which such Change in Control occurs or within two years thereafter,
Employee’s employment shall be subject to an Involuntary Termination or be
terminated by reason of death or Disability.

 

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

 

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

 

“Cause” shall
mean (i) the willful failure of Employee to substantially perform Employee’s
duties as an employee of the Company (other than any such failure resulting
from Employee’s physical or mental incapacity), (ii) Employee’s having
engaged in willful misconduct, gross negligence or a breach of fiduciary duty
that results in material and demonstrable harm to the Company or any of its
Affiliates, (iii) Employee’s willful and material breach of this Agreement
(as amended from time to time) that results in material and demonstrable harm
to the Company or any of its Affiliates, (iv) Employee’s having been
convicted of, or having entered a plea bargain or settlement admitting guilt or
the imposition of

 

2

 

unadjudicated probation for, any felony under
the laws of the United States, any state or the District of Columbia, where
such felony involves moral turpitude or where, as a result of such felony, the
continued employment of Employee would have, or would reasonably be expected to
have, a material adverse impact on the Company’s or any of its Affiliates’
reputations, (v) Employee’s having been the subject of any order, judicial
or administrative, obtained or issued by the Securities and Exchange
Commission, for any securities violation involving fraud including, for
example, any such order consented to by Employee in which findings of facts or
any legal conclusions establishing liability are neither admitted nor denied, (vi) Employee’s
unlawful use (including being under the influence of) or possession of illegal
drugs on the Company’s premises or while performing Employee’s duties and
responsibilities as an employee of the Company, or (vii) Employee’s
commission of an act of fraud, embezzlement, or misappropriation, in each case,
against the Company or any of its Affiliates. 
If the Company desires to terminate Employee’s employment for Cause in
accordance herewith, it shall provide Employee with a Notice of Termination of
Employment in accordance with Section 5.02 and allow Employee 30 days
following the date of such notice to fully remedy, cure or rectify, if
possible, the situation giving rise to the Company’s allegations of Cause.  For purposes of this definition, no act, or
failure to act, on the part of Employee shall be considered “willful” unless it is done, or omitted to be done, by
Employee in bad faith or without reasonable belief that Employee’s action or
omission was in the best interests of the Company.  Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or upon the instructions
of the Chief Employee Officer of the Company or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted
to be done, by Employee in good faith and in the best interests of the Company.  The cessation of employment of Employee shall
not be deemed to be for Cause unless and until there shall have been delivered
to Employee a copy of a resolution duly adopted by the affirmative vote of a
majority of the entire membership of the Board at a meeting of the Board at
which at least a quorum is present (after reasonable notice is provided to
Employee and Employee is given an opportunity, together with counsel for
Employee, to be heard before the Board) finding that, in the good faith opinion
of the Board, Employee is guilty of the conduct described in this definition,
and specifying the particulars thereof in detail.

 

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

 

(i)    any “person” (as defined in
Section 13(d) of the Securities Exchange Act of 1934 (the “Act”)),  other than an
employee benefit plan or trust maintained by the Company, becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Act), directly or indirectly,
of securities of

 

3

 

the
Company representing more than 50% of the combined voting power of the Company’s
outstanding securities entitled to vote generally in the election of directors
(other than the private equity sponsors of the Company and their respective
Affiliates);

 

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

 

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

 

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

 

“Cobalt Equity Payment”
means the issuance of an equity interest in Cobalt to Employee, the accelerated
vesting of any such equity interest or any

 

4

 

other benefit conferred to Employee in
connection with any such equity interest that, in any such case, could
potentially be subject to the Excise Tax.

 

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

 

“Date of Termination of
Employment” shall mean (i) if Employee’s employment with the
Company is terminated by his death, the date of Employee’s death, or (ii) if
Employee’s employment with the Company is terminated for any reason whatsoever
other than Employee’s death, the earlier of the date indicated in the Notice of
Termination of Employment or the date specified by the Company pursuant to Section 5.02.

 

“Disability”
shall mean, at any time the Company or any Affiliate sponsors a long-term
disability plan that covers Employee and other Employee employees of the
Company, “disability” as defined in such
long-term disability plan for the purpose of determining a participant’s
eligibility for benefits; provided, however, if the long-term disability plan contains multiple
definitions of disability, then “Disability”
shall refer to that definition of disability which, if Employee qualified for
such disability benefits, would provide coverage for the longest period of
time.  The determination of whether
Employee has a Disability shall be made by the person or persons required to
make final disability determinations under the long-term disability plan.  At any time the Company or any Affiliate does
not sponsor such a long-term disability plan, Disability shall mean Employee’s
inability to perform, with or without reasonable accommodation, the essential
functions of his position with the Company for a total of three months during
any six-month period as a result of incapacity due to mental or physical
illness, as determined by a physician selected by the Company or its insurers
and acceptable to Employee or Employee’s legal representative, such agreement
as to acceptability not to be unreasonably withheld or delayed.  Any refusal by Employee to submit to a
medical examination for the purpose of determining Disability shall be deemed
to constitute conclusive evidence of Employee’s Disability.

 

“Excise Tax”
shall have the meaning assigned to such term in Section 8.01.

 

“Good Reason”
shall mean the occurrence of any of the following events: (i) a material
diminution in Employee’s base salary; or (ii) relocation of the geographic
location of Employee’s principal place of employment by more than 75 miles from
Houston, Texas.

 

Notwithstanding the preceding provisions of this
definition or any other provision in this Agreement to the contrary, any
assertion by Employee of a termination of employment for “Good Reason”
shall not be effective unless all of the following conditions are satisfied: (A) the
condition described in clauses (i) or

 

5

 

(ii) of this definition giving rise to
Employee’s termination of employment must have arisen without Employee’s
consent; (B) Employee must provide written notice to the Company of such
condition in accordance with Section 14.07 within 45 days of the initial
existence of the condition; (C) the condition specified in such notice
must remain uncorrected for 30 days after receipt of such notice by the
Company; and (D) the date of Employee’s termination of employment must occur
within 90 days after the initial existence of the condition specified in such
notice.

 

“Gross-up Payment”
shall have the meaning assigned to such term in Section 8.01.

 

“Inventions”
shall have the meaning assigned to such term in Section 11.01.

 

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

 

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

 

“Non-Compete Period”
shall have the meaning assigned to such term in Section 9.01(b).

 

“Notice of Termination of
Employment” shall have the meaning assigned to such term in Section 5.02.

 

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

 

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

 

“Payment” shall
have the meaning assigned to such term in Section 8.01.

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

“Severance Amount”
shall mean (i) if Employee incurs an Involuntary Termination prior to a
Change in Control or on or after the second anniversary of the Change in
Control (to the extent applicable), 50% of Annualized Base Salary and (ii) if
Employee incurs an Involuntary Termination on the date of the Change in Control
or prior to the second anniversary of the Change in Control, 50% of Annualized
Base Salary

 

7

 

ARTICLE
2

EFFECTIVENESS;
TERM OF AGREEMENT; PRIOR SEVERANCE AGREEMENT

 

Section 2.01.  Effectiveness; Term of Agreement; Prior
Severance Agreement.  This Agreement
shall become effective upon the closing of the IPO.  Subject to an earlier termination of Employee’s
employment with the Company pursuant to Article 5, this Agreement shall
terminate and be of no further force or effect on the Agreement Termination
Date.  Upon the effectiveness of this
Agreement, the Prior Severance Agreement shall terminate and be of no further
force or effect.  If the IPO does not
close by March 31, 2010, this Agreement shall be void ab initio
and the Prior Severance Agreement shall remain in full force and effect in
accordance with its terms as of such date.

 

ARTICLE
3

CERTAIN
EMPLOYEE REPRESENTATIONS AND AGREEMENTS; IPO EQUITY GRANT.

 

Section 3.01.  Services. 
Employee agrees that he will render services to the Company (as well as
any subsidiary thereof or successor thereto) during the period of his
employment to the best of his ability, in a prudent and businesslike manner and
consistent with the standards expected by the Company of an Employee-level
employee.  Employee also agrees that he
will devote substantially the same time, efforts and dedication to his duties
as heretofore devoted.

 

Section 3.02.  Accredited Investor Representations.  Employee hereby represents
to the Company that the representations set forth in Annex I to this Agreement (i) are
true and correct as of the date of this Agreement and (ii) shall be true
and correct as of the date of the closing of the IPO.

 

Section 3.03.  Transfer Restrictions.  Employee hereby represents
to the Company that he has read and understands, and agrees to be bound by, the
transfer restrictions set forth in Annex II to this Agreement.

 

Section 3.04.  Life Insurance.  This Agreement constitutes
written notice to Employee that (a) the Company or an Affiliate may insure
Employee’s life, (b) the Company or an Affiliate shall have the right to
determine the amount of insurance and the type of policies, and (c) the
Company or an Affiliate will be the beneficiaries of any proceeds payable under
such policies upon the death of Employee. 
Employee hereby irrevocably consents to being insured under the policies
described in the preceding sentence and to the coverage under such policies
continuing after the termination of this Agreement and/or Employee’s
termination of employment with the Company and its Affiliates.  Employee agrees and acknowledges that
Employee shall not have the right to designate the beneficiary or beneficiaries
of the death benefit payable pursuant to such policies, and neither Employee
nor any other person claiming through Employee shall have

 

8

 

any interest in such policies.  Employee shall (i) furnish any and all
information reasonably requested by the Company, any Affiliate or the insurer
to facilitate the issuance of the life insurance policy or policies described
in this paragraph or any adjustment to any such policy, and (ii) take such
physical examinations as the Company, any Affiliate or the insurer deems necessary.  Employee shall incur no financial obligation
by executing any required document pursuant to this Section 3.04, and
shall have no interest in any such policy.

 

Section 3.05.  IPO Equity Grants.  Immediately prior to the
Effective Time (as defined in the Reorganization Agreement), Employee received
1,000 units of Class C Interests (as defined in the Partnership Agreement)
and 1,500 units of Class D Interests (as defined in the Partnership
Agreement), which will at the Effective Time convert to restricted shares of
the Company’s common stock subject to the terms and conditions of the Company
Long Term Incentive Plan and the forms of Restricted Stock Award Agreements
attached as Exhibit A and Exhibit B to this Agreement.

 

ARTICLE
4

CONFIDENTIAL
INFORMATION, INVENTIONS, BUSINESS

OPPORTUNITIES
AND GOODWILL

 

Section 4.01.  Confidential Information, Inventions,
Business Opportunities and Goodwill.  The Company
shall (a) disclose to Employee, and place Employee in a position to have
access to or develop, confidential or proprietary information and Inventions of
the Company (or its Affiliates); (b) entrust Employee with business
opportunities of the Company (or its Affiliates); and (c) place Employee
in a position to develop business good will on behalf of the Company (or its
Affiliates).

 

ARTICLE
5

TERMINATION
OF EMPLOYMENT AND NOTICE OF TERMINATION OF EMPLOYMENT

 

Section 5.01.  Termination of Employment.  Employee’s employment with
the Company may be terminated by the Company or Employee under the following circumstances:
(a) Employee’s death; (b) Employee’s Disability; (c) termination
by the Company for Cause; (d) termination by the Company without Cause; (e) resignation
by Employee for Good Reason; or (f) resignation by Employee without Good
Reason.  For all purposes of this
Agreement, Employee shall be considered to have terminated employment with the
Company when Employee incurs a Separation from Service.

 

9

 

Section 5.02.  Notice of Termination of Employment.  Any termination of Employee’s
employment by the Company or by Employee (other than termination by reason of
Employee’s death) shall be communicated by a written notice to the other party
hereto indicating the specific termination provision in the first sentence of Section 5.01
relied upon, setting forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Employee’s employment under the
provision so indicated, and specifying a Date of Termination of Employment which,
if submitted by Employee, shall be at least 30 days following the date of such
notice (a “Notice of Termination of Employment”);
provided, however,
that in the case of any Notice of Termination of Employment submitted by
Employee, the Company may, in its sole discretion, advance the Date of
Termination of Employment to any date following the Company’s receipt of the
Notice of Termination of Employment (and, if the Date of Termination of
Employment is so advanced, it shall not change the basis for Employee’s
termination nor be construed or interpreted as a termination of Employee’s
employment by the Company for any reason whatsoever).  A Notice of Termination of Employment
submitted by the Company may provide for a Date of Termination of Employment on
the date Employee receives the Notice of Termination of Employment, or any date
thereafter elected by the Company in its sole discretion.  The failure by Employee or the Company to set
forth in the Notice of Termination of Employment any fact or circumstance which
contributes to a showing of Cause or Good Reason shall not waive any right of
Employee or the Company hereunder or preclude Employee or the Company from
asserting such fact or circumstance in enforcing Employee’s or the Company’s
rights hereunder.

 

Section 5.03.  Deemed Resignations.  Unless otherwise agreed to
in writing by the Company and Employee prior to the termination of Employee’s
employment, any termination of Employee’s employment shall constitute an
automatic resignation of Employee: (i) as an officer of the Company and
each Affiliate; (ii) as a member of the Board (if applicable); (iii) from
the board of directors or similar governing body of any Affiliate; and (iv) from
the board of directors or similar governing body of any corporation, limited
liability entity or other entity in which the Company or any Affiliate holds an
equity interest and with respect to which board or similar governing body
Employee serves as the Company’s or such Affiliate’s designee or other
representative.

 

ARTICLE
6

SEVERANCE
BENEFITS

 

Section 6.01.  Death, Disability, Termination for Cause or
Resignation Without Good Reason.  If Employee’s
employment with the Company is terminated by the Company for Cause or by
Employee without Good Reason, or

 

10

 

if such employment terminates by reason of
Employee’s death or Disability, then, upon such termination, Employee (or
Employee’s estate) shall be entitled to receive the Accrued Obligations (other
than in the case of a termination by the Company for Cause, any bonus or
incentive compensation that under the applicable plan requires Employee to be
employed on the date of payment).  If
Employee’s employment with the Company terminates by reason of death or
Disability, then the Company shall also pay to Employee (or Employee’s estate
or legal representatives, as applicable) on the Pro Rata Bonus Payment Date an
amount in cash equal to the Pro Rata Bonus.

 

Section 6.02.  Involuntary Termination.  If Employee’s employment
with the Company shall be subject to an Involuntary Termination, Employee shall
be entitled to receive the Accrued Obligations and, subject to the provisions
of Section 14.09, the Company will, as additional compensation for
services rendered to the Company (including its Affiliates), pay to Employee
the following amounts and take the following actions after the last day of
Employee’s employment with the Company:

 

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

 

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

 

(c)                        pay to Employee
on the Pro Rata Bonus Payment Date an amount in cash equal to the Pro Rata
Bonus; provided, however,
that if this paragraph applies with respect to a Pro Rata Bonus for a calendar
year beginning on or after January 1, 2010 and is intended to constitute
performance-based compensation within the meaning of, and for purposes of, Section 162(m) of
the Code, then this paragraph shall apply with respect to such Pro Rata Bonus
only to the extent the applicable performance criteria have been satisfied as
certified by a committee of the Board as required under Section 162(m) of
the Code; and

 

11

 

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

 

Notwithstanding the foregoing, if Employee is
entitled to receive severance payments under Section 6.02 (a) or (b),
as applicable, and under Section 6.02(c), the aggregate amount payable
pursuant to Sections 6.02 (a) or (b), as applicable, and Section 6.02(c) (the
“Aggregate Severance Amount”) shall be
reduced (but not below zero) by the fair market value, as of the Employee’s
Date of Termination of Employment, of the Restricted Stock held by Employee
that has then vested, or that may vest at any time after the Employee’s Date of
Termination of Employment (the “Carried Amount”).  If the Carried Amount exceeds the Aggregate
Severance Amount prior to the commencement of payment of any of the severance
benefits described in Section 6.02(a) or (b), as applicable, and Section 6.02(c),
then Executive shall not be entitled to receive any payments pursuant to 6.02(a) or
(b), as applicable, or Section 6.02(c). 
If the Carried Amount does not exceed the Aggregate Severance Amount
prior to the commencement of payment of any of the severance benefits described
in Sections 6.02(a) or (b), as applicable, and Section 6.02(c), then
the reduction shall be effected as follows: first, the payment provided for in Section 6.02(c) shall
be reduced by the Carried Amount if the Carried Amount or any portion thereof
has been paid prior to the payment date provided for in Section 6.02(c),
and if necessary, payments of the amounts provided for in Section 6.02(a) or
(b), as applicable, shall be reduced pro rata by any additional Carried
Amount.  If at any time after the
commencement of payment of the severance benefits described in Section 6.02(a) or
(b), as applicable, and Section 6.02(c), the Carried Amount not yet
applied as a reduction in the severance benefits exceeds the remaining
severance benefits to be paid, the Company shall cease to make any further
payments in respect of either severance benefit, but no amount previously paid
to Executive pursuant to Section 6.02(a) or (b), as applicable, and Section 6.02(c) shall
be repaid to the Company.

 

Section 6.03.  Death, Disability or Involuntary Termination
After Agreement Termination Date.  If, after the
Agreement Termination Date but prior to the payment date of the annual bonus
for the calendar year in which the Agreement Termination Date occurs, Employee’s
employment with the Company terminates by reason of the Employee’s death or by
reason of what would have otherwise qualified as Disability or Involuntary
Termination under this

 

12

 

Agreement if this Agreement was still in
effect at the time of such termination of employment, the Company shall pay to
Employee (or Employee’s estate or legal representatives, as applicable), subject
to the provisions of Section 14.09, on the Pro Rata Bonus Payment Date an
amount in cash equal to the Pro Rata Bonus.

 

ARTICLE
7

INTEREST
ON LATE PAYMENTS

 

Section 7.01.  Interest on Late Payments. If any payment
provided for in Section 6.02(a), (b) or (c) or Section 6.03
is not made when due, then the Company shall pay to Employee interest on the
amount payable from the date that such payment should have been made under such
Section until such payment is made, which interest shall be calculated at
5% plus the prime rate of interest announced by JPMorgan Chase Bank (or any
successor thereto) at its principal office in New York, and shall change when
and as any such change in such prime rate shall be announced by such bank.

 

ARTICLE
8

CERTAIN
ADDITIONAL PAYMENTS BY THE COMPANY

 

Section 8.01.  Gross-up Payment.  Notwithstanding anything to
the contrary in this Agreement (but subject to the remaining provisions of this
Section 8.01), in the event that any payment, benefit or distribution by
the Company to or for the benefit of Employee, whether paid, payable, provided,
distributed or distributable pursuant to the terms of this Agreement or
otherwise (a “Payment”), would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties
with respect to such excise tax (such excise tax, together with any such
interest or penalties, are hereinafter collectively referred to as the “Excise Tax”), the Company shall pay to Employee an
additional payment (a “Gross-up Payment”)
in an amount such that after payment by Employee of all taxes (including any
interest or penalties imposed with respect to such taxes), including any Excise
Tax imposed on any Gross-up Payment, Employee retains an amount of the Gross-up
Payment equal to the Excise Tax imposed upon all Payments except for the Cobalt
Equity Payments.  Notwithstanding the
provisions of the preceding sentence, if it shall be determined that Employee
is entitled to the Gross-up Payment, but that the Parachute Value of all
Payments does not exceed 110% of the Safe Harbor Amount, then no Gross-up
Payment shall be made to Employee and the amounts payable under Article 6
shall be reduced so that the Parachute Value of all Payments, in the aggregate,
equals the Safe Harbor Amount.  The
reduction of the amounts payable under Article 6, if applicable, shall be
made by reducing Payments payable hereunder (including reducing a Payment to
zero) in the order in which such Payments would be made (beginning

 

13

 

with such Payment that would be made first in
time and continuing, to the extent necessary, through to such Payment that
would be made last in time).  For
purposes of reducing the Payments to the Safe Harbor Amount, only amounts
payable under Article 6 (and no other Payments) shall be reduced.  If the reduction of the amount payable under Article 6
would not result in a reduction of the Parachute Value of all Payments to the
Safe Harbor Amount, then no amounts payable under Article 6 shall be
reduced pursuant to this Section 8.01. 
The Company’s obligation to make a Gross-up Payment under this Section 8.01
shall not be conditioned upon Employee’s termination of employment.  The Gross-up Payment attributable to a
particular Payment shall be made at the time such Payment is made; provided, however, that in no event shall the Gross-up
Payment be made later than the end of Employee’s taxable year next following
Employee’s taxable year in which Employee remits the related taxes.  The Company and Employee shall make an
initial determination as to whether a Gross-up Payment is required and the
amount of any such Gross-up Payment.

 

Section 8.02.  Disposition of Claims.  Employee shall notify the
Company immediately in writing of any claim by the Internal Revenue Service
which, if successful, would require the Company to make a Gross-up Payment (or
a Gross-up Payment in excess of that, if any, initially determined by the
Company and Employee) within five days of the receipt of such claim.  The Company shall notify Employee in writing
at least five days prior to the due date of any response required with respect
to such claim if it plans to contest the claim. 
If the Company decides to contest such claim, Employee shall cooperate
fully with the Company in such action; provided, however,
the Company shall bear and pay directly or indirectly all costs and expenses
(including additional interest and penalties) incurred in connection with such
action and shall indemnify and hold Employee harmless, on an after-tax basis,
for any Excise Tax or income tax, including interest and penalties with respect
thereto, imposed as a result of the Company’s action.  If, as a result of the Company’s action with
respect to a claim, Employee receives a refund of any amount paid by the Company
with respect to such claim, Employee shall promptly pay such refund to the
Company.  If the Company fails to timely
notify Employee whether it will contest such claim or the Company determines
not to contest such claim, then the Company shall immediately pay to Employee
the portion of such claim, if any, which it has not previously paid to
Employee.

 

ARTICLE
9

COMPETITION

 

Section 9.01.  Competition. 
(a) Employee and the Company agree to the restrictive covenants of
this Article  9: (i) in consideration for the confidential
information provided by the Company to Employee pursuant to Section 4.01
or

 

14

 

otherwise during the course of his
employment; (ii) as part of the consideration for the compensation and benefits
to be paid to Employee by the Company; (iii) to protect the (A) trade
secrets and confidential information of the Company disclosed or entrusted to
Employee by the Company and (B) business goodwill of the Company developed
through the efforts of Employee and/or the business opportunities disclosed or
entrusted to Employee by the Company; and (iv) as an additional incentive
for the Company to enter into this Agreement.

 

(b)                       Subject to the
exceptions set forth in the last sentence of this Section 9.01(b),
Employee shall not at any time while employed by the Company and for a 6-month
period following the Date of Termination of Employment (the “Non-Compete Period”), directly or indirectly engage in, have
any equity interest in, be affiliated with, or manage or operate any person,
firm, corporation, partnership, entity or business (whether as director,
officer, employee, agent, representative, partner, member, security holder,
consultant or otherwise) that engages in any business that competes with any Business
(as defined below) of the Company in the states within the United States (or
District of Columbia, if applicable) and in the geographic regions outside of
the United States (i) in which the Company conducts operations or (ii) with
respect to which the Company devotes more than de minimis
resources in the furtherance of the Business; provided,
however, that Employee shall be
permitted to acquire a passive stock interest in such a business if the stock
acquired is publicly traded and is not more than two percent of the outstanding
interest in such business. 
Notwithstanding the foregoing or anything to the contrary in this
Agreement, it shall not be a violation of this Article 9 for Employee to (A) provide
services to any person or entity engaged in the Business if Employee is not
involved, directly or indirectly, in the management, supervision or operations
of the Business (including by reason of any individual reporting to Employee)
and the gross revenues generated by the Business do not constitute more than
33% of the consolidated gross revenues of such person or entity and its
affiliates and (B) provide services to or otherwise be affiliated with a
venture capital or private equity firm that holds investments in entities
engaged in the Business if Employee is not involved, directly or indirectly, in
the identification, evaluation, recommendation, acquisition, management,
operation, supervision or disposition of such investments, and the gross
revenues generated by such Business do not constitute more than the 33% of the
consolidated gross revenues of such firm and its affiliates.

 

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

 

15

 

(d)                       Employee and
the Company agree that the foregoing restrictions are reasonable under the
circumstances, are necessary to protect the Company’s legitimate business
interests and that any breach of such restrictions would cause irreparable
injury to the Company.  Employee
understands that the foregoing restrictions may limit Employee’s ability to
engage in certain businesses anywhere in the United States and outside the
United States during the Non-Compete Period but acknowledges that he will
receive sufficiently high remuneration and other benefits from the Company to
justify such restrictions.  Further,
Employee acknowledges that his skills are such that he can be gainfully
employed in non-competitive employment, and that the agreement not to compete
will not prevent him from earning a living. 
Nevertheless, in the event the terms of this Article 9 shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of its extending for too great a period of time or over too great a geographical
area or by reason of its being too extensive in any other respect, it will be
interpreted to extend only over the maximum period of time for which it may be
enforceable, over the maximum geographical area as to which it may be
enforceable, or to the maximum extent in all other respects as to which it may
be enforceable, all as determined by such court in such action.

 

(e)                        Employee hereby
represents to the Company that he has read and understands, and agrees to be
bound by, the terms of this Article 9. 
Employee acknowledges that the geographic scope and duration of the
covenants contained in this Article 9 are the result of arm’s-length
bargaining and are fair and reasonable in light of (i) the nature and wide
geographic scope of the Company’s operations of, and in, the Business, (ii) Employee’s
level of control over and contact with the Company’s operations of, and in, the
Business in all jurisdictions in which it is conducted, (iii) the
geographic breadth in which the Company conducts the Business and (iv) the
amount of consideration (including confidential information and trade secrets)
that Employee is receiving from the Company.

 

(f)                          As used in this
Article 9, (i) the term “Company” shall
include the Company and its subsidiaries and (ii) the term “Business” shall mean the exploration for, and the
development and production of, oil and natural gas and the acquisition of
leases and other real property in connection therewith, as such business may be
expanded or altered by the Company during the period of Employee’s employment
by the Company; provided, that any business or
endeavor shall cease to be the “Business” if
the Company is not or ceases to be engaged in such business or endeavor.

 

(g)                       In
consideration of the Company’s promises herein, during the Non-Compete Period,
Employee promises to disclose to the Company any employment, consulting, or
other service relationship that Employee enters into after the termination of
Employee’s employment with the Company for any reason.  Such disclosure shall be made within seven
business days after Employee enters into 

 

16

 

ARTICLE
10

NONDISCLOSURE
OF CONFIDENTIAL AND PROPRIETARY INFORMATION

 

such employment, consulting or other service
relationship.  Employee expressly
consents to and authorizes the Company to disclose both the existence and terms
of this Agreement to any future employer or recipient of Employee’s services
and to take any steps the Company deems necessary to enforce this Agreement.

 

Section 10.01.  Nondisclosure of Confidential and Proprietary
Information.  (a) Except
in connection with the faithful performance of Employee’s duties for the
Company or pursuant to Section 10.01(c) or (e), Employee shall, in
perpetuity, maintain in confidence and shall not directly, indirectly or
otherwise, (i) use, disseminate, disclose or publish, or use for his
benefit or the benefit of any person, firm, corporation or other entity, any (A) confidential
or proprietary information or trade secrets of or relating to the Company
(including, without limitation, intellectual property in the form of patents,
trademarks and copyrights and applications therefor, ideas, inventions, works,
discoveries, improvements, information, documents, formulae, practices, processes,
methods, developments, source code, modifications, technology, techniques,
data, programs, other know-how or materials, in each case, that are
confidential and/or proprietary and owned, developed or possessed by the
Company, whether in tangible or intangible form) or (B) confidential or
proprietary information with respect to the Company’s operations, processes,
products, inventions, business practices, strategies, business plans, finances,
principals, vendors, suppliers, customers, potential customers, marketing
methods, costs, prices, contractual relationships, regulatory status, prospects
and compensation paid to employees or other terms of employment or (ii) 
deliver to any person, firm, corporation or other entity any document, record,
notebook, computer program or similar repository of or containing any such
confidential or proprietary information or trade secrets.  The parties hereby stipulate and agree that
as between them the foregoing matters are important, material and confidential
proprietary information and trade secrets and materially affect the successful
conduct of the businesses of the Company (and any successor or assignee of the
Company).

 

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

 

17

 

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

 

(d)                       As used in this
Article 10 and Article 11, the term “Company”
shall include the Company and its subsidiaries.

 

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

 

ARTICLE
11

INVENTIONS

 

Section 11.01.  Inventions. 
All rights to discoveries, inventions, improvements and innovations
(including all data and records pertaining thereto) related to the business of
the Company, whether or not patentable, copyrightable, registrable as a
trademark, or reduced to writing, that Employee may discover, invent or
originate during the period of his employment with the Company, either alone or
with others and whether or not during working hours or by the use of the
facilities of the Company (“Inventions”),
shall be the exclusive property of the Company. 
Employee shall promptly disclose all Inventions to the Company, shall
execute at the request of the Company any assignments or other documents the
Company may deem reasonably necessary to protect or perfect its rights therein,
and shall assist the Company, upon reasonable request and at the Company’s
expense, in obtaining, defending and enforcing the Company’s rights
therein.  Employee hereby appoints the
Company as his attorney-in-fact to execute on his behalf any assignments or
other documents reasonably deemed necessary by the Company to protect or
perfect its rights to any Inventions.

 

18

 

ARTICLE
12

INJUNCTIVE
RELIEF

 

Section 12.01.  Injunctive Relief.   It is recognized and acknowledged by Employee
that a breach of the covenants contained in Articles 9, 10, 11 and 13 will
cause irreparable damage to Company and its Affiliates and their goodwill, the
exact amount of which will be difficult or impossible to ascertain, and that
the remedies at law for any such breach will be inadequate.  Accordingly, Employee agrees that in the
event of a breach of any of the covenants contained in Articles 9, 10, 11 and
13, in addition to any other remedy which may be available at law or in equity,
the Company will be entitled to specific performance and injunctive relief.

 

ARTICLE 13

NON-DISPARAGEMENT

 

Section 13.01.  Non-disparagement.  During Employee’s employment
with the Company and following termination of his employment with the Company
for any reason, (a) Employee agrees not to disparage in any material
respect the Company, its subsidiaries, any of their products or practices, or
any of their directors, officers, agents, representatives, members, partners or
stockholders, (b) either orally or in writing and (c) the Company
agrees that it and its subsidiaries will (i) not make any formal
statements that disparage in any material respect Employee and (ii) use
commercially reasonable efforts to advise its directors and officers not to
disparage in any material respect Employee.

 

ARTICLE
14

GENERAL

 

Section 14.01.  Survivorship. 
The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary for the
intended preservation of such rights and obligations.

 

Section 14.02.  Arbitration. 
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before an
arbitrator in Houston, Texas in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association then
in effect.  Judgment may be entered on
the arbitration award in any court having jurisdiction; provided,
however, that the Company shall be
entitled to seek a restraining order or injunction in any court of competent
jurisdiction to prevent any violation or continuation of any violation of the
provisions of Articles 9, 10, 11 or 13 of this Agreement and Employee hereby

 

19

 

consents that such restraining order or
injunction may be granted without requiring the Company to post a bond.  Only individuals who are on the AAA register
of arbitrators shall be selected as an arbitrator.  Within 20 days of the conclusion of the
arbitration hearing, the arbitrator(s) shall prepare written findings of
fact and conclusions of law.  It is
mutually agreed that the written decision of the arbitrator(s) shall be
valid, binding, final and non-appealable; provided however, that the parties
hereto agree that the arbitrator shall not be empowered to award punitive
damages against any party to such arbitration. 
The Company shall bear all administrative fees and expenses of the
arbitration and each party shall bear its own counsel fees and expenses except
as otherwise provided in this paragraph. 
If Employee makes a claim against the Company relating to the
performance of, or the rights and obligations of, the Company arising under,
relating to or in connection with this Agreement (a “Covered
Claim by the Employee”), the arbitrators shall award Employee his
reasonable legal fees and expenses if Employee prevails on one material Covered
Claim by the Employee (as determined by the arbitrator).  If a claim is made by the Company against
Employee relating to the performance of, or the rights and obligations of,
Employee arising under, relating to or in connection with this Agreement (a “Covered Claim by the Company”), the arbitrators shall award
Employee his reasonable legal fees and expenses; provided
that if such Covered Claim by the Company relates to Employee’s performance or
obligations under Articles 9, 10, 11 or 13, the arbitrators shall award
Employee his legal fees and expenses only if the Company does not prevail on
any Covered Claim by the Company relating to any such Section (as
determined by the arbitrator).  Any
reimbursement of reasonable legal fees and expenses required under this Section 14.02
and any reimbursement of expenses included in the Accrued Obligations payable
to Employee under Article 6 shall be made not later than the close of Employee’s
taxable year following the taxable year in which Employee incurs the expense; provided, however, that,
upon Employee’s termination of employment with the Company, in no event shall
any additional reimbursement be made prior to the date that is six months after
the date of Employee’s termination of employment to the extent such payment
delay is required under Section 409A(a)(2)(B)(i) of the Code.  In no event shall any reimbursement be made
to Employee for such fees and expenses incurred after the date that is 10 years
after the date of Employee’s termination of employment with the Company.

 

Section 14.03.  Payment Obligations Absolute.  The Company’s obligation to
pay Employee the amounts and to make the arrangements provided herein shall be
absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense
or other right which the Company (including its subsidiaries) may have against
him or anyone else.  All amounts payable
by the Company shall be paid without notice or demand.  Employee shall not be obligated to seek other
employment in mitigation of the amounts payable or arrangements made under any
provision of

 

20

 

this Agreement, and the obtaining of any such
other employment shall in no event effect any reduction of the Company’s
obligations to make (or cause to be made) the payments and arrangements
required to be made under this Agreement.

 

Section 14.04.  Successors. 
This Agreement shall be binding upon and inure to the benefit of the
Company and any successor of the Company, by merger or otherwise.  This Agreement shall also be binding upon and
inure to the benefit of Employee and his estate.  If Employee shall die prior to full payment
of amounts due pursuant to this Agreement, such amounts shall be payable
pursuant to the terms of this Agreement to his estate.

 

Section 14.05.  Severability. 
Any provision in this Agreement which is prohibited or unenforceable in
any jurisdiction by reason of applicable law shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

Section 14.06.  Non-alienation.  Employee shall not have any
right to pledge, hypothecate, anticipate or assign this Agreement or the rights
hereunder, except by will or the laws of descent and distribution.

 

Section 14.07.  Notices. 
Any notices or other communications provided for in this Agreement
shall be sufficient if in writing.  In
the case of Employee, such notices or communications shall be effectively
delivered if hand-delivered to Employee at his principal place of employment or
if sent by registered or certified mail to Employee at the last address he has
filed with the Company.  In the case of
the Company, such notices or communications shall be effectively delivered if
sent by registered or certified mail to the Company at its principal Employee
offices.

 

Section 14.08.  Controlling Law and Waiver of Jury
Trial.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Texas.  With respect to any claim or
dispute related to or arising under this Agreement, Employee and the Company
hereby consent to the exclusive jurisdiction, forum and venue of the state and
federal courts located in Harris County, Texas. 
Notwithstanding the foregoing, Section 3.03 and the transfer
restrictions set forth in Annex II shall be governed by, and construed in
accordance with, the laws of the State of Delaware.  Furthermore, with respect to any claim or
dispute related to or arising under Section 3.03 and the transfer
restrictions set forth in Annex II, Employee and the Company hereby consent to
the exclusive jurisdiction, forum and venue of the Court of Chancery of the
State of Delaware.  Each of the parties
hereto hereby irrevocably waives any and all right to trial by jury in any
legal proceeding arising out of or related to this Agreement or the
transactions contemplated hereby.

 

21

 

Section 14.09.  Release and Delayed Payment Restriction.  (a) As a condition to
the receipt of any benefit under Article 6 hereof (except in the case of
the termination of Employee’s employment with the Company by reason of Employee’s
death or Disability and except for the Accrued Obligations), Employee shall
first execute a release in the form attached hereto as Exhibit B (with
such changes therein as the Company may reasonably require to reflect changes
in applicable law and the circumstances relating to the termination of Employee’s
employment), releasing the Company and certain other persons and entities from
certain claims and other liabilities.

 

(b)                       The release
described in Section 14.09(a) hereof must be effective and
irrevocable within 55 days after the date of the termination of Employee’s
employment with the Company. 
Notwithstanding any provision in this Agreement to the contrary, if the
payment of any amount or benefit under this Agreement would be subject to
additional taxes and interest under Section 409A of the Code because the
timing of such payment is not delayed as provided in Section 409A(a)(2)(B)(i) of
the Code and the regulations thereunder, then any such payment or benefit that
Employee would otherwise be entitled to during the first six months following
the date of Employee’s termination of employment shall be accumulated and paid
or provided, as applicable, on the date that is six months after the date of
Employee’s termination of employment (or if such date does not fall on a
business day of the Company, the next following business day of the Company),
or such earlier date upon which such amount can be paid or provided under Section 409A
of the Code without being subject to such additional taxes and interest.  If this Section 14.09(b) becomes
applicable such that the payment of any amount is delayed, any payments that
are so delayed shall accrue interest on a non-compounded basis, from the date
such payment would have been made had this Section 14.09(b) not
applied to the actual date of payment, at the prime rate of interest announced
by JPMorgan Chase Bank (or any successor thereto) at its principal office in
New York on the date of Employee’s termination of employment (or the first
business day following such date if such termination does not occur on a
business day) and shall be paid in a lump sum on the actual date of payment of
the delayed payment amount.  Employee
hereby agrees to be bound by the Company’s determination of its “specified employees” (as such term is defined in Section 409A
of the Code) in accordance with any of the methods permitted under the
regulations issued under Section 409A of the Code.

 

Section 14.10.  Full Settlement.  If Employee is entitled to
and receives the benefits provided hereunder, performance of the obligations of
the Company hereunder will constitute full settlement of all claims that
Employee might otherwise assert against the Company on account of his
termination of employment.

 

Section 14.11.  Unfunded Obligation.  The obligation to pay
amounts under this Agreement is an unfunded obligation of the Company, and no
such obligation

 

22

 

shall create a trust or be deemed to be
secured by any pledge or encumbrance on any property of the Company.

 

Section 14.12.  Not a Contract of Employment.  This Agreement shall not be
deemed to constitute a contract of employment and shall in no way change the
at-will nature of Employee’s employment. 
Employee and the Company thus recognize and agree that subject to the
notice provisions of Section 5.02, (a) the Company may terminate
Employee’s employment at any time, for any reason or no reason at all; and (b) Employee
may terminate his employment at any time, for any reason or no reason at all.

 

Section 14.13.  Withholding of Taxes and Other Employee Deductions.  The Company may withhold
from any benefits and payments made pursuant to this Agreement (whether
actually or constructively made to Employee or treated as included in Employee’s
income under Section 409A of the Code) all federal, state, city, foreign
and other applicable taxes and withholdings as may be required pursuant to any
law or governmental regulation or ruling and all other customary deductions
made with respect to the Company’s employees generally.

 

Section 14.14.  Number and Gender.  Wherever appropriate herein,
words used in the singular shall include the plural and the plural shall
include the singular.  The masculine
gender where appearing herein shall be deemed to include the feminine gender.

 

Section 14.15.  Entire Agreement.  This Agreement, including
the Annexes and Exhibits attached hereto, constitutes the entire agreement of
the parties with regard to the subject matter hereof and supersedes any and all
prior understandings, agreements or correspondence between the parties.  Any modification of this Agreement will be
effective only if it is in writing and signed by the party to be charged.

 

23

 

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

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/  JOHN P.
  WILKIRSON

  
	
   

  	
  John
  P. Wilkirson

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COBALT
  INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  SAMUEL H. GILLESPIE

  
	
   

  	
   

  	
  Name:

  	
  Samuel
  H. Gillespie

  
	
   

  	
   

  	
  Title:
  

  	
  General
  Counsel and Executive Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COBALT
  INTERNATIONAL ENERGY, L.P.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  SAMUEL H. GILLESPIE

  
	
   

  	
   

  	
  Name:

  	
  Samuel
  H. Gillespie

  
	
   

  	
   

  	
  Title:

  	
  General
  Counsel and Executive Vice President

  

 

24

 

ANNEX I

 

ACCREDITED INVESTOR
REPRESENTATIONS

 

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

 

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

 

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

 

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

 

1

 

ANNEX II

 

TRANSFER RESTRICTIONS

 

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

 

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

 

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

 

(a) the product of 80% (or on or after a Change in
Control, the lesser of 80% and the remainder set forth in (x) below) and
the aggregate number of shares of Company common stock issued to Employee upon
conversion of Class B Interests in connection with the IPO, plus

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

Notwithstanding the foregoing, Employee may
Transfer:

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

3

EXHIBIT
A

 

FORM OF RESTRICTED STOCK AWARD AGREEMENT
— CLASS C INTERESTS

 

COBALT
INTERNATIONAL ENERGY, INC.

LONG TERM INCENTIVE PLAN

 

Restricted Stock Award Agreement

IPO Award — Class C Interests

 

You have been granted restricted stock (this “Award”) on the following terms and subject
to the provisions of Attachment A and the Cobalt Energy
International, Inc. Long Term Incentive Plan (the “Plan”). 
Unless defined in this Award agreement (including Attachment A, this “Agreement”), capitalized terms will have
the meanings assigned to them in the Plan. 
In the event of a conflict among the provisions of the Plan, this
Agreement and any descriptive materials provided to you, the provisions of the
Plan will prevail.

 

	
  Participant

  	
  [Full name]

  
	
   

  	
   

  
	
  Number of Shares Underlying Award

  	
  [·] Shares (the
  “Restricted Shares”)

  
	
   

  	
   

  
	
  Grant Date

  	
  [Date of closing of IPO]

  
	
   

  	
   

  
	
  Vesting

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

  

 

(1) For Class C
Interests currently outstanding.

 

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

 

A-1

 

Attachment A

 

Restricted Stock Award Agreement

Terms and Conditions

 

Grant to:  [Full name]

 

Section 1.  Grant of
Restricted Stock Award. 
Subject to the terms and conditions of the Plan and this Agreement, the
Company hereby grants Restricted Stock to the Participant on the Grant Date on
the terms set forth on the cover page of this Agreement, as more fully
described in this Attachment A.  This
Award is granted under the Plan, which is incorporated herein by this reference
and made a part of this Agreement.

 

Section 2.  Issuance
of Shares.

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

(f)            Withholding
Requirements.  The Company may
withhold any tax (or other governmental obligation) that becomes due with
respect to the Restricted Shares (or any dividend or distribution thereon), and
the Participant shall make arrangements satisfactory to the Company to enable
the Company to satisfy all such withholding requirements.  Notwithstanding the foregoing, the Committee
may permit, in its sole discretion, the Participant to satisfy any such
withholding requirement by transferring to the Company pursuant to such
procedures as the Committee may require, effective as of the date on which a
withholding obligation arises, a number of vested Shares owned and designated
by the Participant having an aggregate fair market value as of such date that
is equal to the minimum amount required to be withheld.  If the Committee permits the Participant to
satisfy any such withholding requirement pursuant to the preceding sentence,
the Company shall remit to the Internal Revenue Service and appropriate state
and local revenue agencies, for the credit of the Participant, an amount of
cash withholding equal to the fair market value of the Shares transferred to
the Company as provided above.

 

Section 3.  Vesting of
Restricted Shares.

 

(a)           Termination of Service.

 

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

 

(ii)           Any Other Termination of Service. 
In the event of the Participant’s Termination of Service at any time for
any reason (other than due to the Participant’s death or Disability), the
Restricted Shares shall be forfeited in their entirety as of the date of such
termination without any payment to the Participant.

 

Notwithstanding
the foregoing, in the event of the Participant’s Termination of Service other
than by the Company for Cause, the Committee may, in its sole discretion,
accelerate the vesting or waive any term or condition (including the Service
Condition) of this Agreement, subject to such terms and

 

3

 

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

 

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

 

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

 

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

 

Section 4.  Miscellaneous
Provisions.

 

(a)           Notices.
All notices, requests and other communications under this Agreement shall be in
writing and shall be delivered in person (by courier or otherwise), mailed by
certified or registered mail, return receipt requested, or sent by facsimile transmission,
as follows:

 

if
to the Company, to:

 

Cobalt
International Energy, Inc.

Two
Post Oak Central

1980
Post Oak Blvd., Suite 1200

Attention:
[General Counsel]

Facsimile:
[number]

 

4

 

if
to the Participant, to the address that the Participant most recently provided
to the Company,

 

or
to such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto.  All such notices, requests and other communications
shall be deemed received on the date of receipt by the recipient thereof if
received prior to 5:00 p.m. on a business day in the place of
receipt.  Otherwise, any such notice,
request or communication shall be deemed received on the next succeeding
business day in the place of receipt.

 

(b)           Entire
Agreement.  This Agreement,
the Plan, and any other agreements referred to herein and therein and any
schedules, exhibits and other documents referred to herein or therein,
constitute the entire agreement and understanding between the parties in
respect of the subject matter hereof and supersede all prior and
contemporaneous arrangements, agreements and understandings, both oral and
written, whether in term sheets, presentations or otherwise, between the
parties with respect to the subject matter hereof.

 

(c)           Amendment;
Waiver.  No amendment or
modification of any provision of this Agreement shall be effective unless
signed in writing by or on behalf of the Company and the Participant, except
that the Company may amend or modify the Agreement without the Participant’s
consent in accordance with the provisions of the Plan or as otherwise set forth
in this Agreement.  No waiver of any
breach or condition of this Agreement shall be deemed to be a waiver of any
other or subsequent breach or condition whether of like or different
nature.  Any amendment or modification of
or to any provision of this Agreement, or any waiver of any provision of this
Agreement, shall be effective only in the specific instance and for the
specific purpose for which made or given.

 

(d)           Assignment.  Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by the Participant.

 

(e)           Successors
and Assigns; No Third Party Beneficiaries.  This Agreement shall inure to the benefit of
and be binding upon the Company and the Participant and their respective heirs,
successors, legal representatives and permitted assigns.  Nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the Company and the
Participant, and their respective heirs, successors, legal representatives and
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.

 

(f)            Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

 

5

 

(g)           Participant
Undertaking.  The Participant
agrees to take whatever additional action and execute whatever additional
documents the Company may deem necessary or advisable to carry out or give
effect to any of the obligations or restrictions imposed on either the
Participant or the Restricted Shares pursuant to the provisions of this
Agreement.

 

(h)           Plan.  The Participant acknowledges and understands
that material definitions and provisions concerning the Restricted Shares and
the Participant’s rights and obligations with respect thereto are set forth in
the Plan.  The Participant has read
carefully, and understands, the provisions of the Plan.

 

(i)            Governing Law.  The Agreement shall be governed by the laws
of the State of Delaware, without application of the conflicts of law
principles thereof.

 

(j)            Jurisdiction.  The parties hereto agree that any suit,
action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby (whether brought by any party or any of its affiliates or
against any party or any of its affiliates) shall be brought in the Delaware
Chancery Court or, if such court shall not have jurisdiction, any federal court
located in the State of Delaware or other Delaware state court, and each of the
parties hereby irrevocably consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.  Process in any such suit, action
or proceeding may be served on each party anywhere in the world, whether within
or without the jurisdiction of any such court. 
Without limiting the foregoing, each party agrees that service of
process on such party as provided in Section 4(a) shall be deemed
effective service of process on such party.

 

(k)           WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

6

 

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

 

 

	
   

  	
  COBALT
  INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name
  of Participant]

  

 

7

 

Attachment
B

 

SECTION 83(b) ELECTION

 

 

 

 

 

	
   

  	
   

  	
   

  
	
   

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

  
	
   

  	
   

  	
   

  
	
  (1)

  	
  The
  taxpayer performing the services is:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
  Social
  Security Number:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (2)

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

  
	
   

  	
   

  	
   

  
	
  (3)

  	
  The
  Restricted Shares were transferred on                                                            .

  
	
   

  	
   

  	
   

  
	
  (4)

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

  
	
   

  	
   

  	
   

  
	
  (5)

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

  
	
   

  	
   

  	
   

  
	
  (6)

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

  
	
   

  	
   

  	
   

  
	
  (7)

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

  
	
   

  	
   

  	
   

  
	
  (8)

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

  
	
   

  	
   

  	
   

  
	
  (9)

  	
  This
  statement is executed on                                                        .

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   Spouse
  (if any)

  	
  Taxpayer

  
	
   

  	
   

  
	
   

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

  
									

 

8

 

	
   

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

  

 

9

EXHIBIT B

 

FORM OF RESTRICTED STOCK AWARD AGREEMENT
— CLASS D INTERESTS

 

COBALT
INTERNATIONAL ENERGY, INC.

LONG TERM INCENTIVE PLAN 

Restricted Stock Award Agreement

IPO Award — Class D Interests

 

You have been granted restricted stock (this “Award”) on the following terms and subject
to the provisions of Attachment A and the Cobalt Energy
International, Inc. Long Term Incentive Plan (the “Plan”). 
Unless defined in this Award agreement (including Attachment A, this “Agreement”), capitalized terms will have
the meanings assigned to them in the Plan. 
In the event of a conflict among the provisions of the Plan, this
Agreement and any descriptive materials provided to you, the provisions of the
Plan will prevail.

 

	
  Participant

  	
  [Full name]

  
	
   

  	
   

  
	
  Number of Shares Underlying Award

  	
  [·] Shares (the
  “Restricted Shares”)

  
	
   

  	
   

  
	
  Grant Date

  	
  [Date of closing of IPO]

  
	
   

  	
   

  
	
  Vesting

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

   

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

   

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

  

 

B-1

 

	
   

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

  

 

2

 

Attachment A

 

Restricted Stock Award Agreement

Terms and Conditions

 

Grant to:  [Full name]

 

Section 1.  Grant of
Restricted Stock Award. 
Subject to the terms and conditions of the Plan and this Agreement, the
Company hereby grants Restricted Stock to the Participant on the Grant Date on
the terms set forth on the cover page of this Agreement, as more fully described
in this Attachment A.  This Award is
granted under the Plan, which is incorporated herein by this reference and made
a part of this Agreement.

 

Section 2.  Issuance
of Shares.

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

(f)            Withholding
Requirements.  The Company
may withhold any tax (or other governmental obligation) that becomes due with
respect to the Restricted Shares (or any dividend or distribution thereon), and
the Participant shall make arrangements satisfactory to the Company to enable
the Company to satisfy all such withholding requirements.  Notwithstanding the foregoing, the Committee
may permit, in its sole discretion, the Participant to satisfy any such
withholding requirement by transferring to the Company pursuant to such
procedures as the Committee may require, effective as of the date on which a
withholding obligation arises, a number of vested Shares owned and designated
by the Participant having an aggregate fair market value as of such date that
is equal to the minimum amount required to be withheld.  If the Committee permits the Participant to
satisfy any such withholding requirement pursuant to the preceding sentence,
the Company shall remit to the Internal Revenue Service and appropriate state
and local revenue agencies, for the credit of the Participant, an amount of
cash withholding equal to the fair market value of the Shares transferred to
the Company as provided above.

 

Section 3.  Vesting of Restricted
Shares.

 

(a)           Termination of Service.

 

(i)            Death
or Disability.  In the
event of the Participant’s Termination of Service at any time due to the
Participant’s death or Disability, (x) the Service Condition shall be
deemed to be satisfied as of the date of such termination and (y) if the
Value Condition is satisfied as of the Scheduled Vesting Date, the Restricted
Shares shall fully vest as of such date.

 

(ii)           Any
Other Termination of Service.  In the event of the Participant’s Termination
of Service at any time for any reason (other than due to the Participant’s
death or Disability), the Restricted Shares shall be forfeited in their
entirety as of the date of such termination without any payment to the
Participant.

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

Section 4.  Miscellaneous
Provisions.

 

(a)           Notices. All notices,
requests and other communications under this Agreement shall be in writing and
shall be delivered in person (by courier or otherwise), mailed by certified or
registered mail, return receipt requested, or sent by facsimile transmission,
as follows:

 

if
to the Company, to:

 

Cobalt
International Energy, Inc.

Two
Post Oak Central

1980
Post Oak Blvd., Suite 1200

Attention:
[General Counsel]

Facsimile:
[number]

 

if
to the Participant, to the address that the Participant most recently provided
to the Company,

 

or
to such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto.  All such notices, requests and other
communications shall be deemed received on the date of receipt by the recipient
thereof if received prior to 5:00 p.m. on a business day in the place of
receipt.  Otherwise, any such notice,
request or communication shall be deemed received on the next succeeding
business day in the place of receipt.

 

(b)           Entire
Agreement.  This
Agreement, the Plan, and any other agreements referred to herein and therein
and any schedules, exhibits and other

 

6

 

documents
referred to herein or therein, constitute the entire agreement and
understanding between the parties in respect of the subject matter hereof and
supersede all prior and contemporaneous arrangements, agreements and
understandings, both oral and written, whether in term sheets, presentations or
otherwise, between the parties with respect to the subject matter hereof.

 

(c)           Amendment;
Waiver.  No amendment or modification
of any provision of this Agreement shall be effective unless signed in writing
by or on behalf of the Company and the Participant, except that the Company may
amend or modify the Agreement without the Participant’s consent in accordance
with the provisions of the Plan or as otherwise set forth in this
Agreement.  No waiver of any breach or
condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition whether of like or different nature.  Any amendment or modification of or to any
provision of this Agreement, or any waiver of any provision of this Agreement,
shall be effective only in the specific instance and for the specific purpose
for which made or given.

 

(d)           Assignment.  Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by the Participant.

 

(e)           Successors
and Assigns; No Third Party Beneficiaries.  This Agreement shall inure to the benefit of
and be binding upon the Company and the Participant and their respective heirs,
successors, legal representatives and permitted assigns.  Nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the Company and the
Participant, and their respective heirs, successors, legal representatives and
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.

 

(f)            Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

 

(g)           Participant
Undertaking.  The
Participant agrees to take whatever additional action and execute whatever
additional documents the Company may deem necessary or advisable to carry out
or give effect to any of the obligations or restrictions imposed on either the
Participant or the Restricted Shares pursuant to the provisions of this
Agreement.

 

(h)           Plan.  The Participant acknowledges and understands
that material definitions and provisions concerning the Restricted Shares and
the Participant’s rights and obligations with respect thereto are set forth in
the Plan.  The Participant has read
carefully, and understands, the provisions of the Plan.

 

7

 

(i)            Governing Law.  The Agreement shall be governed by the laws
of the State of Delaware, without application of the conflicts of law
principles thereof.

 

(j)            Jurisdiction.  The parties hereto agree that any suit,
action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby (whether brought by any party or any of its affiliates or
against any party or any of its affiliates) shall be brought in the Delaware
Chancery Court or, if such court shall not have jurisdiction, any federal court
located in the State of Delaware or other Delaware state court, and each of the
parties hereby irrevocably consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.  Process in any such suit, action
or proceeding may be served on each party anywhere in the world, whether within
or without the jurisdiction of any such court. 
Without limiting the foregoing, each party agrees that service of
process on such party as provided in Section 4(a) shall be deemed
effective service of process on such party.

 

(k)           WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

8

 

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

 

	
   

  	
  COBALT
  INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name
  of Participant]

  

 

9

 

Attachment B

 

SECTION 83(b) ELECTION

 

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

 

(1)             The taxpayer
performing the services is:

 

                           Name:

                           Address:

                           Social Security Number:

 

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

 

(3)             The Restricted Shares were
transferred on
                      .

 

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

 

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

 

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

 

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

 

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

 

(9)             This statement is executed
on
                      .

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Spouse
  (if any)

  	
   

  	
  Taxpayer

  

 

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

 

10

 

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

 

11

 

EXHIBIT C

 

FORM OF RELEASE

 

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

 

C-1

 

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

 

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

 

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

 

C-2

 

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

 

	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  [Employee]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cobalt
  International Energy, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

C-3Exhibit
10.19

 

DIRECTOR INDEMNIFICATION AGREEMENT

 

Indemnification Agreement (this “Agreement”), dated as of
              ,
2009 between Cobalt International Energy, Inc., a Delaware corporation
(the “Company”), and
                  
(“Indemnitee”).

 

W I T N E S S E T H:

 

WHEREAS, highly competent persons have become more
reluctant to serve as directors of publicly held corporations unless they are
provided with adequate protection through insurance and indemnification against
risks of claims and actions against them arising out of their service to and
activities on behalf of the corporation.

 

WHEREAS, directors are increasingly being subjected
to expensive and time-consuming litigation relating to, among other things,
matters that traditionally would have been brought only against the corporation
itself.

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain
qualified individuals, the Company will attempt to maintain on an ongoing
basis, at its sole expense, liability insurance to protect persons serving the
Company and its subsidiaries from certain liabilities.  At the same time, the Board recognizes the
limitations on the protection provided by liability insurance and the
uncertainties as to the scope and level of such coverage that may be available
in the future.

 

WHEREAS, the Company’s directors have certain
existing indemnification arrangements pursuant to the Company’s certificate of
incorporation and bylaws and may be entitled to indemnification pursuant to the
General Corporation Law of the State of Delaware (“DGCL”).  At the same time, the Board recognizes the
limitations on the protection provided by such indemnification and the
uncertainties as to its availability in any particular situation.

 

WHEREAS, the Board believes that in light of the
limitations and uncertainties about the protection provided by the Company’s
liability insurance and existing indemnification arrangements and the impact
these uncertainties may have on the Company’s ability to attract and retain
qualified individuals to serve as directors, the Company should act to assure
such persons that there will be increased certainty of protection in the
future.

 

WHEREAS, it is reasonable, prudent and necessary for
the Company contractually to obligate itself to indemnify, and to advance
expenses on behalf of, such persons to the fullest extent permitted by
applicable law so that they will

 

 

serve or continue to serve the Company free
from undue concern that they will not be adequately protected.

 

WHEREAS, Indemnitee is concerned that the protection
provided under the Company’s liability insurance and existing indemnification
arrangements may not be adequate and may not be willing to serve as a director
of the Company without greater certainty concerning such protection, and the
Company desires Indemnitee to serve in such capacity and is willing to provide
such greater certainty.

 

[WHEREAS, Indemnitee has certain rights to
indemnification and/or insurance provided by the Sponsor Indemnitors (as
defined below) which Indemnitee and the Sponsor Indemnitors intend to be
secondary to the primary obligation of the Company to indemnify Indemnitee as
provided herein, with the Company’s acknowledgement and agreement to the
foregoing being a material condition to Indemnitee’s willingness to serve on
the Board.]*

 

NOW, THEREFORE, in consideration of the premises and
the covenants contained herein, the Company and Indemnitee do hereby covenant
and agree as follows:

 

ARTICLE
1

CERTAIN
DEFINITIONS

 

(a) As used in this Agreement:

 

“Change of Control”
means any one of the following circumstances occurring after the date hereof: (i) there
shall have occurred an event required to be reported with respect to the
Company in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any other schedule or form) under the Exchange
Act, regardless of whether the Company is then subject to such reporting
requirement; (ii) any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act) shall have become, without prior
approval of a majority of the Continuing Directors, the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing a majority or more of the combined
voting power of the Company’s then outstanding voting securities (provided that
for purposes of this clause (ii), the term “person” shall exclude a trustee or
other fiduciary holding securities under an employee benefit plan of the
Company); (iii) there occurs a merger or consolidation of the Company with
any other entity, other than a merger or consolidation which would result in
the voting securities of

 

* Bracketed language to be included in
indemnification agreements between the Company and the Sponsor Indemnitors’
designees.

 

2

 

the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving or
resulting entity) more than 51% of the combined voting power of the voting
securities of the surviving or resulting entity outstanding immediately after
such merger or consolidation and with the power to elect at least a majority of
the board of directors or other governing body of such surviving or resulting
entity; (iv) all or substantially all the assets of the Company are sold
or otherwise disposed of in a transaction or series of related transactions; (v) the
approval by the stockholders of the Company of a complete liquidation of the
Company; or (vi) the Continuing Directors cease for any reason to
constitute at least a majority of the members of the Board.

 

“Continuing Directors”
means the directors who are on the Board on the date hereof and any new
directors whose election or nomination for election by the Company’s
stockholders was approved by a vote of at least a majority of the directors
then still in office who were directors on the date hereof or whose election or
nomination was so approved.

 

“Corporate Status”
means the status of a person who is or was a director, officer, employee,
consultant or agent of the Company or who is or was serving at the request of
the Company as a director, officer, employee, consultant or agent of any other
Enterprise.

 

“Disinterested Director”
means a director of the Company who is not and was not a party to the
Proceeding in respect of which indemnification or advancement of expenses is
sought by Indemnitee.

 

“Enterprise”
means any corporation, limited liability company, partnership, joint venture,
trust, employee benefit plan or other person or enterprise.

 

“Exchange Act”
means the Securities Exchange Act of 1934.

 

“Expenses” means
all  costs and expenses (including fees and
expenses of counsel, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, any federal, state, local or
foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt
of any payments under this Agreement) incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing
to be a witness in, or otherwise participating in, a Proceeding.  Expenses shall also include expenses incurred
in connection with any appeal resulting from any Proceeding (including the
premium, security for and other costs relating to any cost bond, supersedeas bond
or other appeal bond or its equivalent). 
Expenses, however, shall not include Liabilities.

 

3

 

“Independent Counsel”
means a law firm, or a partner or member of a law firm, that is experienced in
matters of corporate law and neither currently is, nor in the five years
previous to its selection or appointment has been, retained to represent (i) the
Company or Indemnitee in any matter material to either such party  (provided that acting as an Independent Counsel under this
Agreement or in a similar capacity with respect to any other indemnification
arrangements between the Company and its present or former directors shall not
be deemed a representation of the Company or Indemnitee) or (ii) any other
party to the Proceeding giving rise to a claim for indemnification or
advancement of expenses hereunder. 
Notwithstanding the foregoing, the term “Independent Counsel” shall not
include any person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee’s rights under this
Agreement.

 

“Liabilities”
means all judgments, fines (including any excise taxes assessed with
respect to any employee benefit plan), penalties and amounts paid in settlement
and other liabilities (including all interest, assessments and other charges
paid or payable in connection with or in respect of any such amounts) arising
out of or in connection with any Proceeding; provided
that Liabilities shall not include any Expenses.

 

“person” means
an individual, corporation, partnership, limited liability company,
association, trust or other entity or organization.

 

“Proceeding” includes any threatened, pending or completed
action, suit or other proceeding (which shall include an arbitration or other
alternate dispute resolution mechanism or an inquiry, investigation or
administrative hearing), whether civil, criminal, administrative, legislative
or investigative (formal or informal) in nature (including any and all appeals
therefrom) and whether instituted by or on behalf of the Company or any other
party, in any such case, in which Indemnitee was, is or may be involved as a
party or otherwise by reason of any Corporate Status of Indemnitee or by reason
of any action taken (or failure to act) by him or on his part while serving in
any Corporate Status or any inquiry or investigation that Indemnitee in good
faith believes might lead to the institution of any such action, suit or other
proceeding; provided that Proceeding shall not
include an action, suit or other proceeding contemplated by Section 8.06(b).

 

(b)                                 For the purposes of this
Agreement:

 

References to the “Company”
shall include, in addition to the surviving or resulting corporation in any
merger or consolidation, any constituent corporation (including any constituent
of a constituent) absorbed in a merger or consolidation which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, employees or agents, so that if Indemnitee is or was a
director, officer, employee, consultant or agent of such constituent
corporation or is or was serving at the request of such constituent

 

4

 

corporation as a director, officer, employee,
consultant or agent of another Enterprise, then Indemnitee shall stand in the
same position under the provisions of this Agreement with respect to the
surviving or resulting corporation as Indemnitee would have with respect to
such constituent corporation if its separate existence had continued.

 

References to “director, officer,
employee, consultant or agent” shall include, in addition to
directors, officers, employees, consultants and agents, a trustee, general
partner, manager, managing member, fiduciary or member of a committee of a
board of directors.

 

References to “serving at the request of
the Company” shall include any service as a director, officer,
employee, consultant or agent of the Company or any other Enterprise which
imposes duties on, or involves services by, such director, officer, employee,
consultant or agent with respect to an employee benefit plan, its participants
or beneficiaries;  and a person who acted in good
faith and in a manner such person reasonably believed to be in the best
interests of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner “not opposed to the best interests of
the Company” as used herein.

 

References to “hereof”, “herein” and “hereunder” and
words of like import shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. 
References to “includes” or “including” shall be deemed to be followed by the words “without
limitation”, whether or not they are in fact followed by those words or words
of like import.  Unless otherwise
expressly stated herein, references to any statute shall be deemed to refer to
such statute as amended from time to time and to any rules or regulations
promulgated thereunder.

 

ARTICLE
2

SERVICES
BY INDEMNITEE

 

Section 2.01.  Services by
Indemnitee.  Indemnitee hereby
agrees to serve or continue to serve as a director of the Company, for so long
as Indemnitee is duly elected or appointed or until Indemnitee tenders his
resignation or is removed.

 

ARTICLE
3

INDEMNIFICATION

 

Section 3.01. 
General.  (a) The Company hereby agrees to
and shall indemnify Indemnitee and hold Indemnitee harmless, to the fullest
extent permitted by applicable law, from and against any and all Expenses and

 

5

 

Liabilities actually and reasonably incurred
by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding.  The phrase “to the fullest extent permitted
by applicable law” shall include:

 

(i)                                     to the fullest
extent permitted by the DGCL as in effect on the date of this Agreement, and

 

(ii)                                  to the fullest
extent authorized or permitted by any amendments to or replacements of the DGCL
adopted after the date of this Agreement.

 

(b)                                 To the extent that
Indemnitee is a party to (or a participant in) and is successful, on the merits
or otherwise, in the defense of any Proceeding or any claim, issue or matter
therein, in whole or in part, the Company shall indemnify Indemnitee against
all Expenses actually and reasonably incurred by him or on his behalf in
connection therewith.  If Indemnitee is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in any Proceeding, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter
and any claim, issue or matter related to each such successfully resolved claim,
issue or matter.  For purposes of this Section 3.01(b) and
without limitation, the termination of any Proceeding or any claim, issue or
matter in a Proceeding by dismissal, with or without prejudice, shall be deemed
to be a successful result as to such Proceeding, claim, issue or matter.  Nothing in this Section 3.01(b) is
intended to limit Indemnitee’s rights provided for in Section 3.01(a).

 

(c)                                  To the extent that
Indemnitee is, by reason of his Corporate Status, a witness in or is otherwise
asked to participate in any Proceeding to which Indemnitee is not a party, he
shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith. 
Nothing in this Section 3.01(c) is intended to limit Indemnitee’s
rights provided for in Section 3.01(a).

 

(d)                                 If Indemnitee is entitled
under any provision of this Agreement to indemnification by the Company for
some or a portion of Expenses, but not, however, for the total amount thereof,
the Company shall nevertheless indemnify Indemnitee for the portion thereof to
which Indemnitee is entitled.

 

Section 3.02. Exclusions.  Notwithstanding
any provision of this Agreement to the contrary (including Section 3.01),
the Company shall not be obligated under this Agreement to indemnify in
connection with:

 

(a)                                  any claim made against
Indemnitee for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company pursuant to Section 16(b) of
the Exchange Act or similar provisions of state statutory law or common law;

 

6

 

(b)                                 except for an action, suit
or other proceeding contemplated by Section 8.06(b), any action, suit or
other proceeding (or part thereof) initiated by Indemnitee against the Company
or its directors, officers, employees, agents or other indemnitees unless (i) the
Board authorizes the action, suit or other proceeding (or part thereof), (ii) the
Company provides the indemnification or advancement of Expenses, in its sole
discretion, pursuant to the powers vested in the Company under applicable law,
or (iii) such indemnification or advancement of Expenses is otherwise
required under the DGCL; or

 

(c)                                  any claim, issue or matter
in a Proceeding by or in the right of the Company to procure a judgment in its
favor as to which Indemnitee shall have been finally adjudged by a court of
competent jurisdiction to be liable to the Company unless and only to the
extent the Delaware Chancery Court or the court in which such Proceeding was
brought shall determine upon application that, despite the adjudication of
liability but in view of all circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnity for such expenses which the Delaware
Chancery Court or such other court shall deem proper.

 

ARTICLE
4

ADVANCEMENT
OF EXPENSES; DEFENSE OF CLAIMS

 

Section 4.01.  Advances. The Company shall advance any
Expenses that shall be actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with any Proceeding within 20 days after
receipt by the Company of a written request for advancement of Expenses, which
request may be delivered to the Company at such time and from time to time as
Indemnitee deems appropriate in his sole discretion (whether prior to or after
final disposition of any such Proceeding). 
Advances shall be made without regard to Indemnitee’s ability to repay
such amounts and without regard to Indemnitee’s ultimate entitlement to
indemnification under this Agreement or otherwise.  Any such advances shall be made on an
unsecured basis and be interest free. 
Nothing in this Section 4.01 shall require the Company to advance
Expenses in any case in which indemnification would not be permitted under Section 3.02(a) or
(b) or following the entry of a final, nonappealable judgment of the type
described in Section 3.02(c).

 

Section 4.02.  Repayment of Advances or Other
Expenses.  Indemnitee agrees
that Indemnitee shall reimburse the Company for all amounts advanced by the
Company pursuant to Section 4.01 if it is ultimately determined, by a
court of competent jurisdiction in a final judgment, not subject to appeal,
that Indemnitee is not entitled to be indemnified by the Company for such
Expenses.  If Indemnitee seeks a judicial
adjudication or an arbitration pursuant to Section 6.01(a), or if the
Company initiates an action, suit or other proceeding against Indemnitee to
recover any amounts advanced by the Company pursuant to Section 4.01,
Indemnitee shall not be required to reimburse the Company pursuant to this

 

7

 

Section 4.02 until a final determination
(as to which all rights of appeal have been exhausted or lapsed) has been made.

 

Section 4.03.  Defense Of Claims.  (a) If a Change of Control
shall not have occurred, the Company shall be entitled to assume the defense of
any Proceeding with counsel reasonably acceptable to Indemnitee upon delivery
of written notice to the Indemnitee. 
After the Company assumes the defense, the Company will not be liable to
Indemnitee under this Agreement for any fees or expenses of counsel
subsequently incurred by Indemnitee with respect to such Proceeding; provided that (i) Indemnitee shall have the right to
employ separate counsel in respect of any Proceeding at Indemnitee’s expense
and (ii) if the employment of counsel by Indemnitee has been previously
authorized in writing by the Company or Indemnitee shall have reasonably
concluded upon the advice of counsel that (x) there is a conflict of interest
between the Company and Indemnitee in the conduct of the defense of such
Proceeding or (y) Indemnitee has one or more legal defenses available to
him which are different from or additional to those available to the Company in
such Proceeding, then, in each such case, the fees and expenses of Indemnitee’s
counsel shall be at the Company’s expense. 
The Company shall not settle any Proceeding (in whole or in part) which
would impose any Expense, Liability or limitation on Indemnitee without
Indemnitee’s prior written consent, such consent not to be unreasonably
withheld.  Indemnitee shall not settle
any Proceeding (in whole or in part) which would impose any Expense, Liability
or limitation on the Company without the Company’s prior written consent, such consent
not to be unreasonably withheld.

 

(b)  If a Change of Control shall have
occurred, the Company shall not have the right to assume the defense of any
Proceeding; provided, however, that the Company will
be entitled to participate in any Proceeding at its own expense.

 

ARTICLE
5

REQUEST
FOR INDEMNIFICATION AND DETERMINATION OF ENTITLEMENT

 

Section 5.01. 
Notification; Request For Indemnification.  (a) As
soon as reasonably practicable after receipt by Indemnitee of written
notice that Indemnitee is a party to or a participant (as a witness or
otherwise) in any Proceeding or of any other matter in respect of which
Indemnitee intends to seek indemnification or advancement of Expenses
hereunder, Indemnitee shall provide to the Company written notice thereof
(including the nature and facts underlying such matter).  The omission by Indemnitee to so notify the
Company will not relieve the Company from any liability which it may have to
Indemnitee under this Agreement or otherwise than under this Agreement.  Any delay in so notifying the Company shall
not constitute a waiver by Indemnitee of any rights under this Agreement or
otherwise than under this Agreement.

 

(b)                                 To obtain indemnification
under this Agreement, Indemnitee shall deliver to the Company a written request
for indemnification, including therewith

 

8

 

such information as is reasonably available to
Indemnitee and reasonably necessary to determine Indemnitee’s entitlement to
indemnification hereunder.  Such request(s) may
be delivered at such times and from time to time as Indemnitee deems
appropriate in his sole discretion. 
Indemnitee’s entitlement to indemnification shall be determined
according to Section 5.02 of this Agreement and applicable law.

 

Section 5.02. 
Determination of Entitlement.  (a) Except with
respect to requests for indemnification pursuant to Sections 3.01(b) or
(c), in which case payment of indemnification shall be made by the Company
automatically within 10 days of receipt by the Company of a written request
therefor, as soon as reasonably practicable (but in no event later than 60
days) after the later of request for indemnification pursuant to Section 5.01(b) and
the final disposition of the matter that is the subject of the request for
indemnification, a determination shall be made with respect to Indemnitee’s
entitlement thereto in the specific case. 
If a Change in Control shall not have occurred, such determination shall
be made (i) by a majority vote of the Disinterested Directors or of a
committee of Disinterested Directors designated by a majority vote of the
Disinterested Directors (in either case, even though less than a quorum of the
Board) or (ii) if there are no Disinterested Director or the Disinterested
Directors so direct, by Independent Counsel. 
If a Change in Control shall have occurred, such determination shall be
made by Independent Counsel.  Any
determination made by Independent Counsel pursuant to this Section 5.02(a) shall
be in the form of a written opinion to the Board, a copy of which shall be
delivered to Indemnitee.  Indemnitee
shall reasonably cooperate with the person or persons making such determination
including providing to such person or persons upon reasonable advance request
any documentation or information which is not privileged or otherwise protected
from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination.  Any
costs or expenses (including fees and expenses of counsel) incurred by
Indemnitee in so cooperating with the person or persons making such
determination shall be deemed “Expenses” hereunder and shall be borne by the
Company (irrespective of the determination as to Indemnitee’s entitlement to
indemnification) and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom. 
Indemnification for the Expenses referred to in the immediately
preceding sentence shall be made by the Company automatically within 10 days of
receipt by the Company of a written request therefor.

 

(b)                                 If the determination is to
be made by Independent Counsel, such Independent Counsel shall be selected as
provided in this Section 5.02(b). 
If a Change in Control shall not have occurred, the Independent Counsel
shall be selected by the Board, and the Company shall give written notice to
Indemnitee advising him of the identity of the Independent Counsel so
selected.  If a Change in Control shall
have occurred, the Independent Counsel shall be selected by Indemnitee (unless
Indemnitee shall request that such selection be made by the Board, in which
event the preceding sentence shall apply), and Indemnitee shall

 

9

 

give written notice to the Company advising it of
the identity of the Independent Counsel so selected.  In either case, the party receiving the
notice may, within 10 days after receipt thereof, deliver to the other a
written objection to such selection; provided that
such objection may be asserted only on the ground that the Independent Counsel
so selected does not meet the requirements of “Independent Counsel” as defined
in Article 1 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion.  Absent a proper and timely objection, the
person so selected shall act as Independent Counsel.  If a proper and timely objection is made, the
counsel selected may not serve as Independent Counsel unless and until such
objection is withdrawn or a court of competent jurisdiction  (or,
at Indemnitee’s option pursuant to Section 6.01, an arbitration) has
determined that such objection is without merit.  If, within 20 days after the later of the
receipt by the Company of a request for indemnification pursuant to Section 5.01(b) and
the final disposition of the matter, no Independent Counsel shall have been
selected and not objected to, either the Company or Indemnitee may petition a
court of competent jurisdiction (or, at Indemnitee’s option pursuant to Section 6.01,
an arbitration) for resolution of any objection which shall have been made to
the selection of Independent Counsel and/or for the appointment of another
person as Independent Counsel, and the person with respect to whom all
objections are so resolved or the person so appointed shall act as Independent
Counsel.  The Company agrees to pay the
reasonable fees and expenses of any Independent Counsel appointed pursuant to
this Section and to fully indemnify such counsel against any and all
Expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.

 

(c)                                  If it is determined that
Indemnitee is entitled to indemnification, payment to Indemnitee shall be made
within 10 days after such determination.

 

Section 5.03.  Presumptions
and Burdens of Proof; Effect of Certain Proceedings.  (a) In making any determination as to Indemnitee’s
entitlement to indemnification hereunder, Indemnitee shall, to the fullest
extent not prohibited by law, be entitled to a presumption that he is entitled
to indemnification under this Agreement if Indemnitee has submitted a request
for indemnification in accordance with Section 5.01(b), and the Company
shall, to the fullest extent not prohibited by law, have the burdens of coming
forward with evidence and of persuasion to overcome that presumption.

 

(b)                                 The termination of any
Proceeding or of any claim, issue or matter therein by judgment, order,
settlement or conviction, or upon a plea of guilty, nolo contendere or its
equivalent shall not  of itself
create a presumption (i) that Indemnitee did not act in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the Company, (ii) that with respect to any criminal
Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful
or (iii) that Indemnitee did not otherwise satisfy the applicable standard
of conduct to be indemnified pursuant to this Agreement.

 

10

 

(c)        For purposes of any determination of good faith, Indemnitee
shall be deemed to have acted in good faith if Indemnitee’s action is based (i) on
the records or books of account of the Company or other Enterprise, as
applicable, including financial statements, (ii) on information supplied
to Indemnitee by the officers of the Company or other Enterprise, as
applicable, in the course of their duties, (iii) on the advice of legal
counsel for the Company or other Enterprise, as applicable, or counsel selected
by any committee of the board of directors of such entity, or (iv) on
information or records given or reports made to the Company or other
Enterprise, as applicable, by an independent certified public accountant or an
appraiser, investment banker or other expert selected with reasonable care by
such entity or the board of directors or any committee of the board of
directors of such entity.  The provisions
of this Section 5.03(c) shall not be deemed to be exclusive or to
limit in any way other circumstances in which Indemnitee may be deemed or found
to  have met the applicable standard of
conduct to be indemnified pursuant to this Agreement.

 

(d)        The knowledge or actions or failure to act of any other
director, officer, employee, consultant or agent of the Company or other
Enterprise, as applicable, shall not be imputed to Indemnitee for purposes of
determining Indemnitee’s right to indemnification under this Agreement.

 

(e)        If a determination as to Indemnitee’s entitlement to
indemnification shall not have been made pursuant to this Agreement within 60
days after the later of the request for indemnification pursuant to Section 5.01(b) and
the final disposition of the matter that is the subject of the request for
indemnification, the requisite determination of entitlement to indemnification
shall, to the fullest extent not prohibited by law, be deemed to have been made
in favor of Indemnitee, and Indemnitee shall be entitled to such
indemnification, absent a misstatement by Indemnitee of a material fact or an omission
by Indemnitee of a material fact necessary in order to make the information
provided not misleading in connection with the request for indemnification; provided that such 60-day period may be extended for a
reasonable time, not to exceed an additional 30 days, if the person or persons
making the determination in good faith requires such additional time to obtain
or evaluate any documentation or information relating thereto.

 

ARTICLE 6

REMEDIES OF INDEMNITEE

 

Section 6.01.  Adjudication or
Arbitration.  (a) Indemnitee shall be entitled
to an adjudication (by a court of competent jurisdiction or, at Indemnitee’s
option, through an arbitration conducted by a single arbitrator pursuant to the
Commercial Arbitration Rules of the American Arbitration Association) of
any determination pursuant to Section 5.02 that Indemnitee is not entitled
to indemnification under this Agreement. 
Any such adjudication shall be conducted 

 

11

 

in all respects as a de novo
trial or arbitration on the merits, and any prior adverse determination shall
not be referred to or introduced into evidence, create a presumption that
Indemnitee is not entitled to indemnification or advancement of expenses, be a
defense or otherwise adversely affect Indemnitee.  In addition, neither the failure of the
Company, the Disinterested Directors, a committee of the Disinterested
Directors or Independent Counsel to have made a determination prior to the
commencement of any such adjudication that indemnification under this Agreement
is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company, the
Disinterested Directors, a committee of the Disinterested Directors or Independent
Counsel that Indemnitee has not met such applicable standard of conduct, shall
be a defense to the action or create a presumption that Indemnitee has not met
the applicable standard of conduct in such adjudication.  In any such judicial proceeding or arbitration,
the provisions of Section 5.03 (including the presumption in favor of
Indemnitee and the burdens on the Company) shall apply.

 

(b)        Indemnitee shall also be entitled to an adjudication (by a
court of competent jurisdiction or, at Indemnitee’s option, through an
arbitration as described above) of any other disputes under this Agreement,
including any disputes arising because (i) advancement of Expenses is not
timely made pursuant to Section 4.01, (ii) no determination of
entitlement to indemnification shall have been made pursuant to Section 5.02
of this Agreement within the required time period, (iii) payment of
indemnification is not made pursuant to Section 3.01(b) or (c) or
the last two sentences of Section 5.02(a) within 10 days after
receipt by the Company of written request therefor, (iv) payment of
indemnification pursuant to Section 3.01(a) is not made within 10
days after a determination has been made that Indemnitee is entitled to
indemnification, or (v) the Company takes or threatens to take any action
to declare this Agreement void or unenforceable, or institutes any litigation
or other action or Proceeding designed to deny, or to recover from, the
Indemnitee the benefits provided or intended to be provided to the Indemnitee
hereunder.

 

(c)        If a determination shall have been made pursuant to Section 5.02
that Indemnitee is entitled to indemnification, the Company shall be bound by
such determination in any judicial proceeding or arbitration commenced pursuant
to this Section 6.01, absent a misstatement by Indemnitee of a material
fact or an omission by Indemnitee of a material fact necessary in order to make
the information provided not misleading in connection with the request for
indemnification.

 

(d)        In connection with any judicial proceeding or arbitration
commenced pursuant to this Section 6.01, the Company shall not oppose
Indemnitee’s right to seek such adjudication, shall be precluded from asserting
that the procedures and presumptions of this Agreement are not valid, binding
or enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all of the provisions of this
Agreement.

 

12

 

ARTICLE 7

DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE

 

Section 7.01.  D&O Liability
Insurance.  (a) The Company shall obtain and
maintain a policy or policies of insurance (“D&O
Liability Insurance”) with reputable insurance companies providing
liability insurance for directors of the Company in their capacities as such
(and for any capacity in which any director of the Company serves any other
Enterprise at the request of the Company), in respect of acts or omissions
occurring while serving in such capacity, on terms with respect to coverage and
amount (including with respect to the payment of expenses) no less favorable
than those of such policy in effect on the date hereof; provided
that such coverage and amounts are available on commercially reasonable terms.

 

(b)        Indemnitee shall be covered by the Company’s D&O
Liability Insurance policies as in effect from time to time in accordance with
the applicable terms to the maximum extent of the coverage available for any
other director under such policy or policies. 
The Company shall, promptly after receiving notice of a Proceeding as to
which Indemnitee is a party or a participant (as a witness or otherwise), give
notice of such Proceeding to the insurers under the Company’s D&O Liability
Insurance policies in accordance with the procedures set forth in the respective
policies.  The Company shall thereafter
take all necessary or desirable actions to cause such insurers to pay, on
behalf of Indemnitee, all amounts payable as a result of such Proceeding in
accordance with the terms of such policies. 
The failure or refusal of any such insurer to pay any such amount shall
not affect or impair the obligations of the Company under this Agreement.

 

(c)        Upon request by Indemnitee, the Company shall provide to
Indemnitee copies of the D&O Liability Insurance policies as in effect from
time to time.  The Company shall promptly
notify Indemnitee of any material changes in such insurance coverage.

 

[(d)      The Company hereby acknowledges that Indemnitee has certain
rights to indemnification, advancement of expenses and/or insurance provided by
[Insert name of applicable Sponsor] and/or certain of its affiliates
(collectively,the “Sponsor Indemnitors”).  The Company hereby agrees (i) that it is
the indemnitor of first resort (i.e., its obligations to Indemnitee are primary
and any obligation of the Sponsor Indemnitors to advance expenses or to provide
indemnification for the same expenses or liabilities incurred by Indemnitee are
secondary), (ii) that it shall be required to advance the full amount of
Expenses incurred by Indemnitee and shall be liable for the full amount of all
Expenses and Liabilities to the extent legally permitted and as required by the
terms of this Agreement and the Company’s certificate of incorporation and
bylaws (or any other agreement between the Company and Indemnitee), without
regard to any rights Indemnitee may have against the Sponsor Indemnitors, and, (iii) that
it irrevocably waives, relinquishes and releases the Sponsor Indemnitors from
any 

 

13

 

and all claims against the
Sponsor Indemnitors for contribution, subrogation or any other recovery of any
kind in respect thereof.  The Company
further agrees that no advancement or payment by the Sponsor Indemnitors on
behalf of Indemnitee with respect to any claim for which Indemnitee has sought
indemnification from the Company shall affect the foregoing and the Sponsor
Indemnitors shall have a right of contribution and/or be subrogated to the
extent of such advancement or payment to all of the rights of recovery of
Indemnitee against the Company.  The
Company and Indemnitee agree that the Sponsor Indemnitors are express third
party beneficiaries of the terms of this Section 7.01(d).]*

 

ARTICLE 8

MISCELLANEOUS

 

Section 8.01. 
Nonexclusivity of Rights.  The
rights of indemnification and advancement of Expenses provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may at any time be entitled to under applicable law, the Company’s certificate
of incorporation or bylaws, any other agreement, any vote of stockholders or
resolution of directors or otherwise.  No
amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee in his Corporate Status prior
to such amendment, alteration or repeal. 
To the extent that a change in Delaware law, whether by statute or
judicial decision, permits greater indemnification or advancement of Expenses
than would be afforded currently under this Agreement, it is the intent of the
parties hereto that Indemnitee shall be entitled under this Agreement to the
greater benefits so afforded by such change. 
No right or remedy herein conferred is intended to be exclusive of any
other right or remedy, and every right and remedy shall be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. 
The assertion or employment of any right or remedy hereunder or
otherwise shall not prevent the concurrent assertion or employment of any other
right or remedy.

 

Section 8.02.  Subrogation,
etc.  (a) [Except as provided in Section 7.01(d),]
in the event of any payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee [(other than against the Sponsor Indemnitors)], who shall execute
all papers required and take all actions necessary to secure such rights,
including execution of such documents as are necessary to enable the Company to
bring suit to enforce such rights.

 

* Bracketed language to be
included in indemnification agreements between the Company and the Sponsor Indemnitors’
designees.

 

14

 

(b)        [Except as provided
in Section 7.01(d),] the Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder (or
for which advancement is provided hereunder) if and to the extent that
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.

 

(c)        [Except as provided
in Section 7.01(d),] the Company’s obligation to indemnify or
advance Expenses hereunder to Indemnitee who is or was serving at the request
of the Company as a director, officer, employee, consultant or agent of any
other Enterprise shall be reduced by any amount Indemnitee has actually
received as indemnification or advancement of Expenses from such Enterprise.

 

Section 8.03.  Contribution.  To the fullest extent permissible
under applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee
or on his behalf, whether for Liabilities and/or Expenses in connection with a
Proceeding or other expenses relating to an indemnifiable event under this
Agreement, in such proportion as is deemed fair and reasonable in light of all
of the circumstances in order to reflect (i) the relative benefits
received by the Company and Indemnitee as a result of the event(s) and/or
transaction(s) giving rise to such action, suit or other proceeding;
and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).

 

Section 8.04. 
Amendment.  This
Agreement may not be modified or amended except by a written instrument executed
by or on behalf of each of the parties hereto.

 

Section 8.05. 
Waivers.  The
observance of any term of this Agreement may be waived (either generally or in
a particular instance and either retroactively or prospectively) only by a
writing signed by the party against which such waiver is to be asserted.  Unless otherwise expressly provided herein,
no delay on the part of any party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of any party hereto of any right, power or privilege hereunder operate
as a waiver of any other right, power or privilege hereunder nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder.

 

Section 8.06.  Expenses.  (a) The Company shall pay all
costs and expenses (including fees and expenses of counsel) incurred by the
Company and Indemnitee in connection with the preparation of this Agreement.

 

(b)        The Company shall indemnify and hold Indemnitee harmless from
any and all Expenses (including fees and expenses of counsel and expenses
incurred in connection with the preparation and forwarding of statements to the

 

15

 

Company to support an
advancement of Expenses hereunder) actually and reasonably incurred by
Indemnitee or on his behalf in seeking (whether through a judicial proceeding
or arbitration (including any and all appeals resulting therefrom) or
otherwise) to enforce, interpret or defend any rights against the Company for
indemnification or advancement of Expenses (whether under this Agreement or
otherwise) or to recover under any liability insurance policy maintained by any
person for the benefit of Indemnitee in connection with the performance of his
duties for or on behalf of the Company. 
The Company shall pay (or reimburse Indemnitee for the payment of) any
such Expenses within 10 days after receipt by the Company of a written request
for the payment of such amounts, which request may be delivered to the Company
at such time or from time to time as Indemnitee deems appropriate in his sole
discretion (whether prior to or after final disposition of any such matter).  Indemnitee shall have no obligation to
reimburse any amounts paid by the Company pursuant to this Section 8.06(b).

 

Section 8.07.  Entire
Agreement.  This Agreement
constitutes the entire agreement between the parties hereto with respect to the
matters covered herein and supersedes all prior oral, written or implied
understandings or agreements with respect to the matters covered herein.  This Section 8.07 shall not be construed
to limit any other rights Indemnitee may have under the Company’s certificate
of incorporation or bylaws, applicable law or otherwise.

 

Section 8.08. 
Severability.  If any
provision or provisions of this Agreement shall be held to be invalid, illegal
or unenforceable for any reason whatsoever: 
(a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including each portion of any Section of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby and shall remain enforceable to the
fullest extent permitted by applicable law; (b) such provision or
provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (c) to the fullest extent possible, the provisions of this
Agreement (including each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.

 

Section 8.09.  Notices.  All notices, requests and other
communications under this Agreement shall be in writing (including facsimile
transmission or electronic mail (“e-mail”) transmission so long as a
confirmation of receipt of such e-mail is requested and received).  All such notices, requests and other
communications shall be deemed received on the date of receipt by the recipient
thereof if received prior to 5:00 p.m. on a business day in the place of
receipt.  Otherwise, any such notice,
request or communication shall be deemed to have been received on the next
succeeding business day in the place of receipt.  The address for notice to a party is as shown
on the signature page of this Agreement, 

 

16

 

or such other address as any party shall have
given by written notice to the other party as provided above.

 

Section 8.10.  Binding
Effect.  (a) The Company expressly
confirms and agrees that it has entered into this Agreement and assumed the
obligations imposed on it hereby in order to induce Indemnitee to serve as a
director of the Company, and the Company acknowledges that Indemnitee is
relying upon this Agreement in serving as a director of the Company.

 

(b)        This Agreement shall be binding upon and inure to the benefit
of and be enforceable by the parties hereto and their respective successors and
permitted assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, heirs, executors, administrators or other
successors.  The Company shall require
and cause any successor (whether direct or indirect by purchase, merger,
consolidation or otherwise) to all or substantially all or a substantial part
of the business or assets of the Company, by written agreement in form and
substance reasonably satisfactory to Indemnitee, expressly to assume and agree
to perform this Agreement in the manner and to the same extent that the Company
would be required to perform if no such succession had taken place.

 

(c)        The indemnification and advancement of expenses provided by
this Agreement shall continue as to a person who has ceased to be a director,
officer, employee, consultant or agent or is deceased and shall inure to the
benefit of the heirs, executors, administrators or other successors of the
estate of such person.

 

Section 8.11.  Governing
Law.  This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware, without regard to its conflict of laws rules.

 

Section 8.12.  Consent To Jurisdiction.  Except with respect to any
arbitration commenced by Indemnitee pursuant to Section 6.01, the Company
and Indemnitee hereby irrevocably and unconditionally (i) agree that any
action, suit or other proceeding arising out of or in connection with this
Agreement shall be brought only in the Delaware Chancery Court and any court to
which an appeal may be taken in such action, suit or other proceeding (the “Delaware Court”), and not in any other state or federal
court in the United States of America or any court in any other country, (ii) consent
to submit to the exclusive jurisdiction of the Delaware Court for purposes of
any action, suit or other proceeding arising out of or in connection with this
Agreement, (iii) appoint, to the extent such party is not otherwise
subject to service of process in the State of Delaware, The Corporation Trust
Company, Wilmington, Delaware as its agent in the State of Delaware as such
party’s agent for acceptance of legal process in connection with any such
action or proceeding against such party with the same legal force and validity
as if served upon such party personally within the State of Delaware, (iv) waive
any objection to the laying of venue of any such action, suit or other
proceeding in the Delaware Court, and (v) waive, and agree not to plead or
to 

 

17

 

make, any claim that any such action, suit or
other proceeding brought in the Delaware Court has been brought in an improper
or inconvenient forum.

 

Section 8.13. 
Headings.  The Article and
Section headings in this Agreement are for convenience of reference only,
and shall not be deemed to alter or affect the meaning or interpretation of any
provisions hereof.

 

Section 8.14. 
Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall for
all purposes be deemed to be an original but all of which together shall
constitute one and the same Agreement. 
Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.

 

18

 

IN WITNESS WHEREOF, this Agreement has been duly
executed and delivered to be effective as of the date first above written.

 

 

	
   

  	
  COBALT
  INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  Facsimile:

  
	
   

  	
  Attention:

  
	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  Facsimile:

  
	
   

  	
  Attention:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [INDEMNITEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  Facsimile:

  
	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  Facsimile:

  
	
   

  	
  Attention:

  

 

19

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