Document:

exv10w11

 

Exhibit 10.11

First Amendment to

Mariner Energy, Inc.

Equity Participation Plan

     This First Amendment to Mariner Energy, Inc. Equity Participation Plan (the “Plan”) is made
effective March 16, 2006, the date the amendments set forth herein were approved by the Board of
Directors of Mariner Energy, Inc., a Delaware corporation (the “Company”). Undefined capitalized
terms used herein have the meaning given them in the Plan.

     Section 1. Amendments.

     (a) The definition of “Fair Market Value” in Section 2 of the Plan is hereby amended to be and
read in its entirety as follows:

“Fair Market Value” shall mean, as of any applicable date, the last reported sales price for
a Share on the principal securities exchange on which the Shares are traded on the
applicable date as reported by such reporting service approved by the Committee; provided,
however, that if Shares shall not have been quoted or traded on such applicable date, Fair
Market Value shall be determined based on the next preceding date on which they were quoted
or traded, or, if deemed appropriate by the Committee, in such other manner as it may
determine to be appropriate; and provided further, however, for purposes of Section 6(b)(vi)
of the Plan, the Fair Market Value of Shares withheld to satisfy tax withholding upon
expiration of a Restricted Period applicable to Restricted Stock shall be the last reported
sales price for a Share on the principal securities exchange on which the Shares are traded
on the first trading day preceding the expiration of the Restricted Period. In the event
the Shares are not publicly traded at the time a determination of its Fair Market Value is
required to be made hereunder, the determination of Fair Market Value shall be made in good
faith by the Committee.

     (b) Section 6(b)(vi) of the Plan is hereby amended to add as the last sentence thereof the
following sentence: “Notwithstanding the foregoing, for purposes of this Section 6(b)(vi), the
Fair Market Value of Shares withheld to satisfy tax withholding upon expiration of a Restricted
Period applicable to Restricted Stock shall be the last reported sales price for a Share on the
principal securities exchange on which the Shares are traded on the first trading day preceding the
expiration of the Restricted Period.”

     Section 2. General Provisions.

     (a) The validity, construction, and effect of this First Amendment shall be determined in
accordance with the laws of the State of Delaware and applicable federal law.

     (b) If any provision of this First Amendment is or becomes or is deemed to be invalid,
illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the
Plan, as amended hereby, or any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee, materially altering
the intent of the Plan, as amended hereby, or the Award, such provision shall be stricken as to
such jurisdiction, Person or Award and the remainder of this First Amendment and any such Award
shall remain in full force and effect.<PAGE>
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                                                                   EXHIBIT 10.12

                           RESTRICTED STOCK AGREEMENT

                              MARINER ENERGY, INC.
                            EQUITY PARTICIPATION PLAN

<TABLE>
<S>                                    <C>
Employee:                              ______________

Date of Grant:                         March 11, 2005

RS Grant Number:                       ______________

Number of Restricted Shares Granted:   ______________
</TABLE>

     1. Notice of Grant. Subject to the terms and conditions of the Plan and
this Agreement and subject to your execution of this Agreement within 14 days
after the Date of Grant, you are hereby granted pursuant to the Mariner Energy,
Inc. Equity Participation Plan (the "Plan") the above number of restricted
shares of Common Stock ("Restricted Stock") of Mariner Energy, Inc. (the
"Company"). If you fail to execute this Agreement within 14 days after the Date
of Grant, the grant of Restricted Stock and this Agreement shall be void as of
the Date of Grant.

     2. Vesting of Restricted Stock. Subject to the further provisions of this
Agreement, the shares of Restricted Stock shall become 100% vested upon the
earlier of: (i) the later to occur of: (A) the first anniversary of the Date of
Grant and (B) the Public Sale Date (as defined below) and (ii) the second
anniversary of the Date of Grant. For purposes of this Agreement, the "Public
Sale Date" shall mean the earlier to occur of: (a) the 90th day following the
date on which the Common Stock is listed on the New York Stock Exchange or
admitted to trading and quoted on the Nasdaq National Market or Nasdaq SmallCap
Market and (b) the first date on which both of the following conditions are met:
(1) a registration statement covering the resale of the Restricted Stock has
been declared effective by the Securities and Exchange Commission, and no stop
order suspending the effectiveness of such registration statement is in effect
and (2) the Common Stock is listed on the New York Stock Exchange or admitted to
trading and quoted on the Nasdaq National Market or Nasdaq SmallCap Market;
provided, however, that if upon the occurrence of any event described in clauses
(a) and (b) the Restricted Stock is subject to restrictions on resale as a
result of a lock-up agreement or arrangement applicable to such shares in
connection with a public offering of stock, the Public Sale Date shall be the
earlier of the first business day following the date of expiration of the
lock-up period and a date 181 days from the date the lock-up period commenced.

     Notwithstanding the above vesting schedule, but subject to the further
provisions hereof, upon the occurrence of the following events the unvested
shares of Restricted Stock shall vest or be forfeited as provided below:

          (a) Disability. If you are entitled to benefits under Section 7(d) of
     your Employment Agreement entered into with the Company, dated February 7,
     2005 ("Employment Agreement") or if the Employment Agreement has
     terminated, your employment with the Company terminates by reason of a
     disability that entitles you to benefits under the Company's or an
     affiliate's long-term disability plan, the unvested shares of Restricted
     Stock shall become fully vested.

<PAGE>

          (b) Death. If you die while in the employ of the Company, the unvested
     shares of Restricted Stock shall become fully vested.

          (c) By the Company other than for Cause. If your employment with the
     Company is terminated by the Company for any reason other than for Cause
     (as defined below), the unvested shares of Restricted Stock shall become
     fully vested. For purposes of this Section 2, the term "Cause" shall have
     the meaning ascribed to such term in your Employment Agreement, or if the
     Employment Agreement has terminated, shall mean (i) a material failure to
     perform your duties, (ii) your conviction of or plea of nolo contendere for
     any felony or any misdemeanor involving moral turpitude, dishonesty, fraud
     or breach of trust, (iii) your willful engagement in gross misconduct in
     the performance of your duties, your substance abuse, (iv) your
     misappropriation of funds, or (v) your disparagement of the Company or any
     affiliate or any of their respective managements or employees.

          (d) Termination for Cause or other than for Good Reason. Except as
     otherwise provided in Section 2(f) below, if your employment with the
     Company is terminated by the Company for Cause or by you other than for a
     Good Reason (as defined below), the unvested shares of Restricted Stock
     shall be forfeited without consideration. For purposes of this Section 2,
     the term "Good Reason" shall have the meaning ascribed to such term in your
     Employment Agreement, or if the Employment Agreement has terminated, shall
     mean (i) a material adverse change in the nature or scope of your
     authorities, powers, duties and functions performed; (ii) a material
     reduction in your base salary or in the cash bonus opportunities made
     available to you, excluding opportunities under (A) any plan, program,
     arrangement or agreement providing for compensation in the form of
     overriding royalty interests or income from overriding royalty interests,
     (B) any equity-based compensation plans, programs, arrangements or
     agreements, including, but not limited to, stock options, and (C) 401(k)
     and profit-sharing plans; or (iii) your permanent place of employment with
     the Company is changed to a location that is more than 50 miles from your
     location prior to such change.

          (e) For Good Reason. If your employment with the Company is terminated
     by you for a Good Reason, the unvested shares of Restricted Stock shall
     become fully vested.

          (f) Change of Control. Upon the occurrence of a Change of Control (as
     defined in your Employment Agreement) that occurs while you are employed by
     the Company or within nine months following a termination of your
     employment with the Company that entitles you to severance under Section
     7(c) of your Employment Agreement, the unvested shares of Restricted Stock
     shall become fully vested.

     For purposes of this Agreement, "employment with the Company" shall include
being an employee of the Company or a Parent Entity or Subsidiary.

     All shares of Restricted Stock that are not vested on or before your
termination of employment with the Company as provided above shall be
automatically cancelled and forfeited without consideration upon your
termination, except that if your employment with the Company terminates and you
are entitled to severance benefits under Section 7(c) of your Employment

                                       -2-

<PAGE>

Agreement, then the unvested shares of Restricted Stock, if any, shall not be
cancelled or forfeited until the date following the date that is nine months
after your termination from the Company. If a Change of Control occurs during
such nine-month period, the unvested shares of Restricted Stock shall become
vested on such Change of Control. Notwithstanding anything in this Agreement
seemingly to the contrary, no additional vesting shall occur during such
nine-month period except upon a Change of Control as provided above.

     Any distributions on a share of Restricted Stock shall be held by the
Company without interest until the Restricted Stock with respect to which the
distribution was made becomes vested or is forfeited and then such withheld
distribution shall be paid or forfeited, as the case may be.

     3. Book Entry. A book entry evidencing the shares of Restricted Stock shall
be made in your name in the books of the Company maintained by its transfer
agent, pursuant to which you shall have all of the rights of a shareholder of
the Company (except with respect to distributions as provided above) with
respect to the shares of Restricted Stock, including, without limitation, voting
rights. The book entry shall reflect the restrictions on transfer set forth in
Section 4 below. Upon vesting, the Company will cause the book entry to be
amended to remove any restrictions (except for any restrictions required
pursuant to applicable securities laws or any other agreement to which you are a
party) with respect to the shares of Restricted Stock that have vested.

     4. Nontransferability of Restricted Stock. Prior to vesting, you may not
sell, transfer, pledge, exchange, hypothecate or dispose of the shares of
Restricted Stock in any manner otherwise than by will or by the laws of descent
or distribution. A breach of the terms of this Agreement shall cause a
forfeiture of all shares of unvested Restricted Stock.

     5. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan, this Agreement, and your Employment Agreement constitute
the entire agreement of the parties with respect to the subject matter hereof
and thereof and supersede in their entirety all prior undertakings and
agreements of the Company and you with respect to the subject matter hereof and
thereof, and may not be modified adversely to your interest except by means of a
writing signed by the Company and you. This Agreement is governed by the
internal substantive laws, but not the choice of law rules, of the State of
Texas.

     6. Withholding of Tax. To the extent that the receipt of the shares of
Restricted Stock or the vesting thereof results in income to you for federal,
state or other tax purposes, unless the Company agrees otherwise, you shall
either pay the Company an amount of cash equal to the Company's tax withholding
obligations or have the Company withhold and cancel from the number of shares of
Restricted Stock awarded you such number of shares of Restricted Stock as the
Company determines to be necessary to satisfy the tax required to be withheld by
the Company; provided however, that if you fail to satisfy the Company's tax
withholding obligations, the Company, in its sole discretion, may withhold and
cancel from the number of shares of Restricted Stock awarded you such number of
shares of Restricted Stock as it determines to be necessary to satisfy the tax
required to be withheld by the Company.

     7. Amendment. Except as provided below, this Agreement may not be modified
in any respect by any verbal statement, representation or agreement or by any
employee, officer, or representative of the Company or by any written agreement
unless signed by you and by an

                                       -3-

<PAGE>

officer of the Company who is expressly authorized by the Company to execute
such document. Notwithstanding anything in the Plan or this Agreement to the
contrary, if the Committee determines that the terms of this grant do not, in
whole or in part, satisfy the requirements of Section 409A of the Internal
Revenue Code, to the extent applicable, the Committee, in its sole discretion,
may unilaterally modify this Agreement in such manner as it deems appropriate to
comply with such section and any regulations or guidance issued thereunder.

     8. Status of Stock. You agree that the shares of Restricted Stock issued
under this Agreement will not be sold or otherwise disposed of in any manner
that would constitute a violation of the terms and provisions of any applicable
federal or state securities laws. You also agree that (i) the book entry made
(or the certificates, if any are issued) representing the shares of Restricted
Stock may bear such restriction, restrictions, legend or legends as the
Committee deems appropriate, (ii) the Company may refuse to register the
transfer of the Restricted Stock on the stock transfer records of the Company if
such proposed transfer would, in the opinion of counsel satisfactory to the
Company, be contrary to the terms and provisions of any applicable securities
law, and (iii) the Company may give related instructions to its transfer agent,
if any, to stop registration of the transfer of the Restricted Stock.

     9. General. You agree that the shares of Restricted Stock are granted under
and governed by the terms and conditions of the Plan and this Agreement. In the
event of any conflict, the terms of the Plan shall control. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined
meanings in this Restricted Stock Agreement.

                                       MARINER ENERGY, INC.

                                       By:
                                           -------------------------------------
                                           Scott D. Josey
                                           Chief Executive Officer and President

                                       [NAME]

                                       -----------------------------------------
                                       Signature

                                       -4-

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