Document:

ex10_39.htm

    
      
        

      
Exhibit 10.39

       

      ROSETTA
RESOURCES INC.

      2005
LONG-TERM INCENTIVE PLAN

      

      PERFORMANCE
SHARE UNIT AWARD AGREEMENT

      

      THIS AGREEMENT, made and entered into
as of the ___ day of [MONTH], [YEAR], is entered into by and between ROSETTA
RESOURCES INC., a Delaware corporation (“Rosetta”), and [NAME], an employee,
outside director or other service provider of Rosetta or one of its Affiliates
(“Participant”).

      

      WHEREAS, the Compensation Committee of
Rosetta’s Board of Directors or such other committee designated by Rosetta’s
Board of Directors (the “Committee”), acting under Rosetta’s 2005 Long-Term
Incentive Plan, as amended from time to time (the “Plan”), has the authority to
award performance awards in the form of performance share units representing
hypothetical shares of Rosetta’s common stock (“PSUs”), with each PSU equal in
value to one share of the Company’s $0.001 par value per share (a “Share”), to
certain employees, directors or other individuals providing services to Rosetta
or an Affiliate; and

      

      WHEREAS, pursuant to the Plan, the
Committee has determined to make such an award to Participant on the terms and
conditions and subject to the restrictions set forth in the Plan and this
Agreement, and Participant desires to accept such award;

      

      NOW, THERFORE, in consideration of the
premises and mutual covenants and agreements contained herein, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

      

      1.         
  Performance Share Unit
Award.  On the terms and conditions and subject to the
restrictions, including forfeiture, hereinafter set forth, Rosetta hereby awards
to Participant, and Participant hereby accepts, a PSU award (the “Award”) of
[NUMBER] PSUs (the “Performance Units”).  The Award is made effective
as of the date of this Agreement (the “Effective Date”).

      

      2.          
  Vesting
and Forfeiture.

      

      (a)           Performance
Period.  The Performance Period in which the Performance
Objectives (as provided in paragraph (b)(i) of this Section 2) are measured
shall begin on [DATE] and end on [DATE].

      

      (b)           Restrictions

      

      (i)            Performance
Objectives.  The interest of the Participants in the
Performance Units shall vest as the Committee determines in its sole discretion,
to the extent that the “Performance Objectives” set forth in Appendix A are met
and after considering other circumstances, if any, that the Committee determines
should apply.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (ii)           Transfer
Restrictions.  The Performance Units shall be subject to
forfeiture by Participant to Rosetta as provided in this Agreement, and
Participant may not sell, transfer, pledge, exchange, hypothecate or otherwise
dispose of any of the Performance Units, other than by will or pursuant to the
applicable laws of descent and distribution(the “Transfer
Restrictions”).  Following the settlement of the Performance Units for
Shares, as the Committee determines in its discretion, the Participant shall be
free to sell, transfer, pledge, exchange, hypothecate or otherwise dispose of
such Shares, subject to applicable securities laws and the policies of Rosetta
then in effect.  Furthermore, Rosetta shall not be required to treat
as an owner of Performance Units, and associated benefits hereunder, any
transferee to whom such Performance Units or benefits shall have been so
transferred.

      

      (iii)           Service
Requirement.  Except as otherwise provided in this paragraph
(b)(iii) of Section 2, upon termination of Participant’s employment or service
with Rosetta or any Affiliate prior to the time that the Committee certifies the
extent to which the performance goals and other material terms of this Award has
been achieved or satisfied for the Performance Period, Participant shall forfeit
all Performance Units granted under this Award and any rights with respect
thereto (the “Service Requirement”).

      

      (A)           Termination with Good Reason or for
Reasons Other Than Cause.  If during the Performance Period
Participant’s employment is terminated by Rosetta other than for Cause, or by
Participant for Good Reason (“Cause” and/or “Good Reason,” as defined in the
Participant’s employment agreement with the Company, if applicable, or if the
Participant has not entered into an employment agreement with the Company, in
the Rosetta Resources Inc. Executive Severance Plan), the Committee may exercise
its discretion to accelerate the vesting of the Performance Units granted to
such Participant; provided that the condition to such acceleration of vesting
shall be that the Participant executes and delivers to Rosetta, and does not
revoke, a waiver and release agreement in a form satisfactory to Rosetta within
two months of Participant’s date of termination (an “Effective
Release”).

      

      (c)           Vesting

      

      (i)         
  Except for Performance Units that are earlier vested under paragraph
(b)(iii)(A) of this Section 2 or in the event of a Corporate Change (as defined
in the Plan), as provided in paragraph (d) of this Section 2, at the end of the
Performance Period, the Committee shall determine in its sole discretion whether
the Performance Objectives set forth in paragraph (b)(i) of this Section 2 have
been met and the number of Performance Units that will vest in accordance with
the level of achievement of such Performance Objectives.  Participant
may receive from zero percent (0%) to two hundred percent (200%) of the
Performance Units set forth in Section 1.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (ii)           Upon
the vesting of the Performance Units, Participant shall be entitled to receive,
as soon as administratively practicable, but not later than thirty (30) days
after such vesting event, Shares, cash or a combination of Shares and cash, as
the Committee determines in its sole discretion, equal to the number of
Performance Units that have vested.  If the Performance Units are
settled in cash, in full or in part, prior to the end of the Performance Period,
the cash settlement shall be based upon the Fair Market Value (as defined in the
Plan) of a Share on the date of vesting. If the Performance Units are settled in
cash, in full or in part, after the end of the Performance Period, the cash
value shall be based on the Fair Market Value of a Share as of the last trading
day of the Performance Period.

      

      (d)           Corporate
Change.  After a Corporate Change, the Performance Objectives
shall be deemed to be met at target; provided that the Transfer Restrictions and
Service Requirements will continue until the end of the Performance Period;
provided further that the Service Requirements shall end at the end of the
Performance Period and not at the time when the Committee certifies that the
Performance Objectives have been met.  For the avoidance of doubt,
after a Corporate Change, this grant of Performance Units shall convert to a
time-vested grant of Performance Units, rather than based on the achievement of
Performance Objectives and restrictions on the Performance Units shall lapse as
to the number of Performance Units set forth in Section 1 at the end of the
Performance Period if Participant remains employed by the Company until the end
of the Performance Period, unless earlier vested under paragraph (d)(i) of this
Section 2.

      

      (i)      
     Termination with Good Reason or for
Reasons Other Than Cause after a Corporate Change.  If after a
Corporate Change and prior to the end of the Performance Period Participant’s
employment is terminated by Rosetta other than for Cause, or by Participant for
Good Reason, all Performance Units granted to such Participant in Section 1
hereunder shall immediately be 100% vested conditioned  upon the
Participant providing to Rosetta an Effective Release.

      

      3.           
 No Rights as
Stockholder.

      

      (a)           PSUs
represent hypothetical Shares, subject to attainment of specified performance
conditions.  The Participant shall not be entitled to any of the
rights or benefits generally accorded to stockholders.

      

      (b)           Upon
the lapse of restrictions, if Rosetta determines, in its sole discretion, to
issue a Share for each vested Performance Unit pursuant to paragraph (c)(ii) of
Section 2, such Shares shall be released into an unrestricted book entry account
with Rosetta’s transfer agent; provided, however, that a portion of such Shares
shall be surrendered in payment of required withholding taxes, if necessary and
in accordance with Section 4 below, unless Rosetta, in its sole discretion,
establishes alternative procedures for the payment of required withholding
taxes.

      

      4.         
   Withholding
Taxes.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (a)           Participant
(or in the event of Participant’s death, the administrator or executor of
Participant’s estate) will pay to Rosetta or the appropriate Affiliate, or make
arrangements satisfactory to Rosetta or such Affiliate regarding payment of, any
federal, state or local taxes of any kind required by law to be withheld with
respect to the cash or Shares in settlement of the Performance
Units.

      

      (b)           Any
provision of this Agreement to the contrary notwithstanding, if Participant does
not satisfy his or her obligations under paragraph (a) of this Section 4,
Rosetta shall, to the extent permitted by law, have the right to deduct from any
payments made under the Plan, regardless of the form of such payment, or from
any other compensation payable to Participant, whether or not pursuant to this
Agreement or the Plan and regardless of the form of payment, any federal, state
or local taxes of any kind required by law to be withheld with respect to the
cash or Shares in settlement of the Performance Units.

      

      5.        
    Reclassification of
Performance Units.  In the event of any reorganization,
recapitalization, stock split, stock dividend, merger, consolidation,
combination of shares or other change affecting the Common Stock, the Committee
shall make such adjustments as it may deem appropriate with respect to the
Performance Units.  Any such adjustments made by the Committee shall
be conclusive.

      

      6.          
  Effect on
Employment.  Nothing contained in this Agreement shall confer
upon Participant the right to continue in the employment or service of Rosetta
or any Affiliate, or affect any right which Rosetta or any Affiliate may have to
terminate the employment or service of Participant.  This Agreement
does not constitute evidence of any agreement or understanding, express or
implied, that Rosetta or any Affiliate will retain Participant as a Participant
for any period of time or at any particular rate of compensation.

      

      7.          
  Assignment.  Rosetta
may assign all or any portion of its rights and obligations under this
Agreement.  The Award, the Performance Units and the rights and
obligations of Participant under this Agreement are subject to the Transfer
Restrictions in paragraph (c)(ii) of Section 2.

      

      8.           
Binding
Effect.  This Agreement shall be binding upon and inure to the
benefit of (i) Rosetta and its successors and assigns, and (ii) Participant and
his or her heirs, devisees, executors, administrators and personal
representatives.

      

      9.        
   Notices.  All
notices between the parties hereto shall be in writing and given in the manner
provided in Section 15.7 of the Plan.  Notices to Participants shall
be given to Participant’s address as contained in Rosetta’s
records.  Notices to Rosetta shall be addressed to its General Counsel
at the principal executive offices of Rosetta as set forth in Section 15.7 of
the Plan.

      

      10.           Governing Law; Exclusive
Forum; Consent to Jurisdiction. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the
principles relating to conflicts of laws) of the State of Texas, except as
superseded by applicable federal law.  The exclusive forum for any
action concerning this Agreement or the transactions contemplated hereby shall
be in a court of competent jurisdiction in Harris County, Texas, with respect to
a state court, or the United States District Court for the Southern District of
Texas, Houston Division, with respect to a federal court.  PARTICIPANT
HEREBY CONSENTS TO THE EXERCISE OF JURISDICTION OF A COURT IN THE EXCLUSIVE
FORUM AND WAIVES ANY RIGHT HE OR SHE MAY HAVE TO CHALLENGE OR CONTEST THE
REMOVAL AT ANY TIME BY THE COMPANY OR ANY OF ITS AFFILIATES TO FEDERAL COURT OF
ANY SUCH ACTION HE OR SHE MAY BRING AGAINST IT IN STATE
COURT.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      11.           The
Plan.

      

      (a)           Agreement.  The
Plan is incorporated herein by reference. The Plan and this Agreement constitute
the entire agreement of the parties with respect to the subject matter hereof
and supersede in their entirety all prior undertakings and agreements of Rosetta
and Participant with respect to the subject matter hereof, and may not be
modified adversely to Participant’s interest except by means of a writing signed
by Rosetta and Participant.

      

      (b)           Receipt of the
Plan.  Participant acknowledges receipt of a copy of the Plan
currently in effect and the Plan prospectus and agrees to receive stockholder
information, including copies of any annual report, proxy and Form 10-K from the
investor relations section of Rosetta’s website at www.rosettaresources.com.  Alternatively,
Participant may request to receive the information in this Section 11 upon
written or telephonic request to Rosetta’s Corporate Secretary.

      

      IN
WITNESS WHEREOF, Rosetta and Participant have executed this Agreement as of the
date first written above.

      

      

      
        
          
            
              
                
                  
                    
                      
                        
                          	 	ROSETTA
      RESOURCES INC.
	 	 	 
      
	 	 	 
      
	 	 	 
      
	 	By:	
                                   

                                
	 	Randy
      L. Limbacher
	 	President
      and Chief Executive Officer
	 	 	 
      
	 	 	 
      
	 	 	 
      
	 	PARTICIPANT
	 	 	 
      
	 	 	 
      
	 	 	 
      
	 	 	
                                  [NAME]

                                

                        

                      

                    

                  

                

              

            

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      APPENDIX
A

      

      Performance
Objectives

      

      
        
          
            	
                    Performance Metric

                  	 	
                    Performance Goal on
  12/31/11

                  
	 
      	 	 
      
	
                    Mcfe
      Reserves per Share

                  	 	
                    9.7

                  
	 
      	 	 
      
	
                    Inventory
      / Proved Reserves Multiple

                  	 	
                    2.0

                  
	 
      	 	 
      
	
                    Percentage
      Change in Cash Flow Multiple

                  	 	
                    Higher
      Percentage Change than the

                  
	
                    S&P
      400 Oil & Gas Exploration &

                  	 	 
      
	
                    Production
      Indexex10_40.htm

    
      
        

      
Exhibit 10.40

       

      ROSETTA
RESOURCES, INC. EXECUTIVE CHANGE-IN-CONTROL PLAN

       

      This Rosetta Resources, Inc. Executive
Change-in-Control Plan (the “Plan”), is effective as of
July 1, 2008 (the “Effective
Date”).

       

      WHEREAS, Rosetta Resources, Inc. (the
“Employer”), wishes to
employ certain individuals in executive level positions;

       

      WHEREAS, it is the intent
of the Employer that the Plan shall constitute an unfunded severance
plan, and to the extent applicable, an unfunded nonqualified deferred
compensation arrangement; and

       

      WHEREAS, in order to retain the
services of such individuals, the Employer desires to provide certain severance
benefits as provided herein;

       

      NOW, THEREFORE, the Employer hereby
establishes the Plan as follows:

       

      ARTICLE
I

       

      DEFINITIONS.

       

      As used
in this Plan, the following terms have the following meanings:

       

      (a)           “Affiliate” means, with
respect to any entity, any other corporation, organization, association,
partnership, sole proprietorship or other type of entity, whether incorporated
or unincorporated, directly or indirectly controlling or controlled by or under
direct or indirect common control with such entity.

       

      (b)           “Base Salary” means the amount
of Executive’s regular annual salary, paid periodically and not based on
performance, as reflected in the Employer’s payroll records.

       

      (c)           “Board” means the Board of
Directors of the Employer.

       

      (d)           “Cause” means a finding by the
Committee of acts or omissions while employed by the Employer, constituting, in
the Committee’s sole discretion, (i) a breach of duty by Executive in the course
of Executive’s employment involving fraud, acts of dishonesty (other than
inadvertent acts or omissions), disloyalty to Employer or its Affiliates, or
moral turpitude constituting criminal felony; (ii) conduct by Executive that is
materially detrimental to Employer, monetarily or otherwise, or reflects
unfavorably on Employer or Executive to such an extent that Employer’s best
interests reasonably require the termination of Executive’s employment;
(iii)  Executive’s failure to comply with or enforce Employer’s
policies concerning equal employment opportunity, including engaging in sexually
or otherwise harassing conduct; (iv) Executive’s repeated insubordination; (v)
Executive’s failure to comply with or enforce, in any material respect, all
other personnel policies of Employer or its Affiliates; (vi) Executive’s failure
to devote Executive’s full working time and best efforts to the performance of
Executive’s responsibilities
to Employer or its Affiliates; (vii) Executive’s conviction of, or entry of a
plea agreement or consent decree or similar arrangement with respect to a felony
or any violation of federal or state securities laws; or (viii) Executive’s
failure to cooperate with any investigation or inquiry authorized by the
Committee or conducted by a governmental authority related to the business or
Executive’s conduct.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (e)           “Change in Control” means a
Corporate Change in which (i) individuals who were directors of Employer
immediately prior to a Control Transaction shall cease, within two years of such
Control Transaction to constitute a majority of the Board of Directors of
Employer (or of the Board of Directors of any successor to Employer or to a
company which has acquired all or substantially all its assets) other than by
reason of an increase in the size of the membership of the applicable Board that
is approved by at least a majority of the individuals who were directors of
Employer immediately prior to such Control Transaction or (ii) any entity,
person or Group acquires shares of Employer in a transaction or series of
transactions that result in such entity, person or Group directly or indirectly
owning beneficially 50% or more of the outstanding shares of Common
Stock.

       

      (f)           “Code” means the Internal
Revenue Code of 1986, as amended.

       

      (g)           “Committee” means the
Compensation Committee of the Board of Directors.

       

      (h)           “Corporate Change” means (i)
the dissolution or liquidation of Employer; (ii) a reorganization, merger or
consolidation of Employer with one or more corporations (other than a merger or
consolidation effecting a reincorporation of Employer in another state or any
other merger or consolidation in which the shareholders of the surviving
corporation and their proportionate interests therein immediately after the
merger or consolidation are substantially identical to the shareholders of
Employer and their proportionate interests therein immediately prior to the
merger or consolidation) (collectively, a “Corporate Change Merger”); (iii) the
sale of all or substantially all of the assets of Employer or an affiliate as
defined in the Rosetta Resources Inc. 2005  Long-Term Incentive Plan;
or (iv) the occurrence of a Change in Control.

       

      (i)         
  “Control Transaction” means (i)
any tender offer for or acquisition of capital stock of Employer pursuant to
which any person, entity, or Group directly or indirectly acquires beneficial
ownership of 20% or more of the outstanding shares of Common Stock; (ii) any
Corporate Change Merger of Employer; (iii) any contested election of directors
of Employer; or (iv) any combination of the foregoing, any one of which results
in a change in voting power sufficient to elect a majority of the Board of
Directors of Employer.

       

      (j)     
      “Covered Termination” means:
(1) the termination of an Executive’s employment with the Employer for any
reason other than death, Inability to Perform, or for Cause; or (2) the
resignation of the Executive from such employment with Good Reason.

       

      (k)           “Eligible Executive” means an
Executive who has experienced a Covered Termination.

       

      (l)     
      “Employment Termination Date”
means the effective date of termination of Executive’s employment
pursuant to Employer policies and applicable law.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (m)           “Executive” means an
individual employed by the Employer in the position of Vice President or higher,
who has been designated by the Committee to be eligible to participate in the
Plan, or who
has accepted a written offer of employment which includes eligibility for
participation in this Plan, and who commences employment in such position and
capacity as a full-time employee of the Employer.   A list of all
individuals designated as Executives at any given time shall be appended as
Appendix A to the Plan.  Once designated on Appendix A as an Executive
under the Plan, such Executive shall remain so designated and shall continue to
be an Executive hereunder until the earliest to occur of (i) the date on which
such Executive is removed from Appendix A by action of the Committee or by the
Board, (ii) such Executive’s termination of employment for any reason, or (iii)
the death of the Executive.

       

      (n)           “Good Reason” means any of the
following actions if taken without Executive’s prior written consent: (i)
following the designation of an Executive by the Compensation Committee on
Appendix A to the Plan, any reduction of the multiple or percentage applicable
to an Executive, or removal of Executive, through a subsequent amendment to
Appendix A to the Plan, (ii) a material diminution in Executive’s base
compensation; or (iii) any permanent relocation of Executive’s place of business
to a location 50 miles or more from the then-current location, provided such
relocation is a material change in geographic location at which Executive must
provide substantial services for purposes of Section 409A.  Neither a
transfer of employment among Employer and any of its Affiliates, a change in the
co-employment relationship, nor a mere change in job title constitutes “Good
Reason.”  To exercise the right
hereunder to terminate for Good Reason, Executive must provide Notice of
Termination to Employer of his belief that Good Reason exists within 60 days of
the initial existence of the Good Reason condition, and that notice shall
describe the condition(s) believed to constitute Good
Reason.  Employer shall have 30 days to remedy the Good Reason
condition(s).  If not remedied within that 30-day period, Executive may submit a
Notice of Termination; provided, however, that the Notice of Termination
invoking Executive’s right to terminate his employment for Good Reason must be
given no later than 100 days after the date the Good Reason condition first
arose; otherwise, Executive is deemed to have accepted the condition(s), or the
Employer’s correction of such condition(s), that may have given rise to the
existence of Good Reason.

       

      (o)           “Group” means persons who act
“in concert” as described in Sections 13(d)(3) and/or 14(d)(2) of the Securities
Exchange Act of 1934, as amended.

       

      (p)           “Inability to Perform” means
and shall be deemed to have occurred if Executive has been determined under
Employer’s long-term disability plan to be eligible for long-term disability
benefits.  In the absence of Executive’s participation in, application
for benefits under, or existence of such a plan, “Inability to Perform” means a
finding by the Committee in its sole discretion that Executive is, despite any
reasonable accommodation required by law, unable to perform the essential
functions of Executive’s position because of an illness or injury for
(i) 60% or more of the normal working days during six consecutive calendar
months or (ii) 40% or more of the normal working days during twelve consecutive
calendar months.

       

      (q)           “Notice of Termination” means
a written notice that shall (i) indicate the specific termination provision in
this Plan relied upon; (ii) in the case of a termination for Inability to
Perform, Cause, or Good Reason, set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s
employment under the provision invoked;
and (iii) if the termination is by Executive for Good Reason, or by Employer for
any reason, specify the Employment Termination Date.  The failure by
Employer or Executive to set forth in the Notice of Termination any fact or
circumstance that contributes to a showing of Cause or Good Reason shall not
waive any right of Employer or Executive or preclude either of them from
asserting such fact or circumstance in connection with a claim or appeal for
benefits under this Plan.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (r)      
     “Section 409A” means Section
409A of the Code and the regulations promulgated thereunder, and any other
applicable Treasury guidance, as in effect at the time any payment or other
action is to be taken under this Plan.

       

      (s)           “Separation Agreement” means a
general release agreement in a form acceptable to Employer which is not revoked
by Eligible Executive prior to the date it becomes effective.

       

      ARTICLE
II

       

      EMPLOYMENT.

       

      Executives
under this Plan shall be employed on an at-will basis, to the maximum extent
permitted by applicable law.  This Plan shall not, and shall not be
construed or interpreted as, creating a contract of employment with any
person.

       

      ARTICLE
III

       

      COMPENSATION
UPON TERMINATION OF EMPLOYMENT

       

      (a)           Termination of Employment
for Any Reason.  If Executive’s employment is terminated,
Employer shall pay to Executive (or in the case of death of Executive, to such
person as Executive shall designate in a written notice to Employer or, if no
such person is designated, to Executive’s estate) any unpaid portion of
Executive’s Base Salary through the Employment Termination Date, any earned but
unused vacation according to Employer’s policies then in effect, and any
unreimbursed business expenses, at the time and in the manner required by
applicable law, but in no event later than March 15 of the year following the
year of the Executive’s death or termination of employment.

       

      (b)           Termination Following
Corporate Change.

       

      (1)           If,
within the two-year period following a Corporate Change, Executive’s employment
with Employer or an Affiliate or successor of Employer is terminated due to a
Covered Termination, Executive will be paid the payments described in Section
(a) of Article III of this Plan.  In addition, if, within 21 or 45
days after the Employment Termination Date, as applicable, Executive has signed
a Separation Agreement and Executive does not revoke such Separation Agreement,
in lieu of any payments under Section (b) of Article III of the Rosetta
Resources Inc. Executive Severance Plan, Eligible Executive shall be entitled to
receive the following amounts:

       

      (A)           The
designated percentage or multiple, as set forth in Appendix A to the Plan as of
the Employment Termination Date of such Executive, multiplied
times the Eligible Executive’s Base Salary in effect on the Employment
Termination Date;

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (B)           The
designated percentage or multiple, as set forth in Appendix A to the Plan as of
the Employment Termination Date of such Executive, multiplied times the
Executive’s target performance bonus percentage for one year, utilizing the
greater of (i) the target performance bonus percentage for the performance
period in effect on the Employment Termination Date, or (ii) the target
performance bonus percentage for the performance period in effect on the day
preceding the date of the Corporate Change;

       

      (C)           Full
and immediate vesting of all Employer stock options and restricted stock awards
held by Eligible Executive as of the Employment Termination Date;

       

      (D)           With
respect to Employer stock options that are vested as of the Employment
Termination Date, Executive may exercise those options according to the terms of
the Rosetta Resources Inc. 2005 Long-Term Incentive Plan.

       

      (2)           The
additional payments provided for in Sections (a) and (b) of this Article III
shall be paid in a single lump-sum payment no later than 60 days after the
Employment Termination Date, but in no event shall such single lump sum payment
be paid later than the March 15 of the year following the year in which the
Executive’s Termination of Employment occurs.

       

      (3)           In
the event that it is determined that any payment (other than the Gross-Up
Payment provided for in this Section (b)(3) of this Article III) or distribution
by Employer or any of its Affiliates to or for the benefit of Executive, whether
paid or payable or distributed or distributable pursuant to the terms of this
Plan or otherwise pursuant to or by reason of any other agreement, policy, plan,
program or arrangement, including without limitation any stock option or similar
right, or the lapse or termination of any restriction on or the vesting or
exercisability of any of the foregoing (a “Payment”), would be subject to
the excise tax imposed by Section 4999 of the Code (or any successor
provision thereto) by reason of being considered “contingent on a change in
ownership or control” of Employer, within the meaning of Section 280G of
the Code or any successor provision thereto (such tax being hereafter referred
to as the “Excise Tax”),
then Executive will be entitled to receive an additional payment or payments (a
“Gross-Up
Payment”).  The Gross-Up Payment will be in an amount such
that, after payment by Executive of all taxes, including any Excise Tax imposed
upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payment.  For purposes of
determining the amount of the Gross-Up Payment, Executive will be considered to
pay (x) federal income taxes at the highest rate in effect in the year in
which the Gross-Up Payment will be made and (y) state and local income
taxes at the highest rate in effect in the state or locality in which the
Gross-Up Payment would be subject to state or local tax, net of the maximum
reduction in federal income tax that could be obtained from deduction of such
state and local taxes.  The determination of whether an Excise Tax
would be imposed, the amount of such Excise Tax, and
the calculation of the amounts referred to in this Section (a)(3) of this
Article III will be made at the expense of Employer by Employer’s regular
independent accounting firm (the “Accounting Firm”), which shall
provide detailed supporting calculations.  Any determination by the
Accounting Firm will be binding upon Employer and Executive.  The
Gross-Up Payment will be paid to Executive as soon as administratively
practicable following, but no later than the end of the calendar year in which
falls the date on which Executive remits the related taxes, but in no event
later than December 31 of the second year following the year in which the
Executive’s termination of employment occurs.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (c)           COBRA
Reimbursement.  In addition, if Executive’s employment with
Employer or an Affiliate or successor of Employer is terminated or ends under
the circumstances set forth in Section (b) of this Article III, and if Executive
has signed a Separation Agreement and does not revoke such Separation Agreement
as provided therein, Executive will receive, in addition to any other payments
due under this Plan, the following benefit: if, at the time of the Employment
Termination Date, Executive participates in one or more group health plans
offered or made available by Employer and Executive is eligible for and elects
to receive continued coverage under such plans in accordance with the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or any successor law,
Employer will reimburse Executive during the 12-month period following the
Employment Termination Date, for the difference between the total amount of the
monthly COBRA premiums for the same coverage as in effect on the Employment
Termination Date, that are actually paid by Executive for such continued health
plan benefits and the total monthly amount of the same premiums charged to
active senior executives of Employer for health insurance
coverage.  Such reimbursement shall be made within the 90-day period
following Executive’s payment of each monthly COBRA
premium.  Provided, however, that Employer’s reimbursement obligation
under this Section (c) shall terminate upon the earlier of (i) the expiration of
the time period described above or (ii) the date Executive becomes eligible for
health insurance coverage under a subsequent employer’s group health plan
without being subject to any preexisting-condition exclusion under that plan,
which occurrence Executive shall promptly report to Employer.

       

      (d)           Exclusive Compensation and
Benefits.  The compensation and benefits described in this
Article, along with the associated terms for payment, constitute all of
Employer’s obligations to Executive with respect to the termination of
Executive’s employment with Employer and/or its Affiliates. However, nothing in
this Plan is intended to limit any earned, vested benefits that Executive may
have under the applicable provisions of any benefit plan of Employer in which
Executive is participating at the time of the termination of
employment.

       

      (e)           Compliance
with Section 409A.  It is
the intent of this Plan to comply with the requirements of Section 409A so
that none of the payments and benefits to be provided hereunder will be subject
to the income recognition, additional tax and interest imposed under
Section 409A, and any ambiguities herein will be interpreted to so comply.
Employer shall not be liable to Executive for any adverse tax consequences
imposed upon Executive as a result of Section 409A.  Payments under
the Plan shall be made only on the date or dates provided herein, and no
acceleration or deferral of any such payments shall be made either by the
Employer or at the request of the Executive.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (f)        
   Specified Employee
Determination and Payment.  If Employer determines that Section
409A applies to payments to an Executive under this Plan, and such Executive is
a “specified employee” on the date of Executive’s “separation from service,” as
those terms are defined in and pursuant to Section 409A, then, notwithstanding
any provision of this Plan to the contrary, no payment of compensation under
this Plan which has been determined to be a payment of “deferred compensation”
within the meaning of Section 409A shall be made to Executive during the period
lasting six months from the date of Executive’s separation from service unless
Employer determines that there is no reasonable basis for believing that making
such payment would cause Executive to suffer adverse tax consequences pursuant
to Section 409A.  If any payment to Executive is delayed pursuant to
the foregoing sentence, such payment instead shall be paid, without interest, on
the first business day following the expiration of the six-month period referred
to in the prior sentence.

       

      (g)           Payment after Executive’s
Death.  In the event of Executive’s death after Executive
becomes entitled to a payment or payments pursuant to this Article III, any
remaining unpaid amounts shall be paid, at the time and in
the manner such payments otherwise would have been paid to Executive, to such person as Executive
shall designate in a written notice to Employer (or, if no such person is
designated, to Executive’s estate).  Notwithstanding anything
herein to the contrary, an Executive who has been determined to be a “specified
employee” who dies following such Executive’s “separation from service”, as
provided in Section 409A, but prior to the six (6) month anniversary of the
date of Executive’s “separation from service,” then any amounts payable under
this Plan which are determined by the Employer to be subject to Section 409A,
payment of which is delayed in accordance with this Article III, will be payable
in a lump sum as soon as administratively practicable after the date of
Executive’s death and all other amounts payable under this Plan will be payable
in accordance with the payment schedule applicable to each payment or
benefit.

       

      (h)           Offset.  To
the maximum extent permitted by applicable law, Employer may set off against,
and Executive authorizes Employer to deduct from, any payments due to the
Executive, or to Executive’s heirs, legal representatives, or successors, as a
result of the termination of the Executive’s employment any amounts which may be
due and owing to Employer or any of its Affiliates by the Executive, whether
arising under this Plan or otherwise; provided, however, that any such set off
and deduction shall be made in a manner that complies with Section 409A and
other laws, to the extent applicable.

       

      ARTICLE
IV

       

      NO
OBLIGATION TO PAY.

       

      With
regard to any payment due to Executive under this Plan, to the maximum extent
permitted by applicable law, it shall not be a breach of any provision of this
Plan for Employer to fail to make such payment to Executive if (i) Employer is
legally prohibited from making the payment; (ii) Employer would be legally
obligated to recover the payment if it was made; or (iii) Executive would be
legally obligated to repay the payment if it was made.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      ARTICLE
V

       

      DEDUCTIONS
AND WITHHOLDINGS

       

      With
respect to any payment to be made to the Executive, Employer shall deduct, where
applicable, any amounts authorized by Employee, and shall withhold and report
all amounts required to be withheld and reported by applicable law.

       

      ARTICLE
VI

       

      NOTICES.

       

      (a)           All
notices, requests, demands, and other communications required or permitted to be
given or made by either party shall be in writing and shall be deemed to have
been duly given or made (1) when delivered personally, or (2) when deposited in
the United States mail, first class registered or certified mail, postage
prepaid, return receipt requested, to the party for which intended at the
following addresses (or at such other addresses as shall be specified by the
parties by like notice, except that notices of change of address shall be
effective only upon receipt):

       

      (b)            If
to Employer, at:

       

      Rosetta Resources Inc.

      Attn: General Counsel

      717
Texas, Suite 2800

      Houston,
Texas 77002

       

      (c)     
      If to Executive, at Executive’s then-current
home address on file with Employer.

       

      ARTICLE
VII

       

      MITIGATION.

       

      Executive
shall not be required to mitigate the amount of any payment provided for in this
Plan by seeking other employment or otherwise, nor shall the amount of any
payment provided for in this Plan be reduced by any compensation earned by
Executive as the result of employment by another employer after the date of
termination of Executive’s employment with Employer, or otherwise.

       

      ARTICLE
VIII

       

      BENEFITS
UNASSIGNABLE.

       

      Executive
shall not have any right to pledge, hypothecate, anticipate, or in any way
create a lien upon any payments or other benefits provided under this Plan; and
no benefits payable under this Plan shall be assignable in anticipation of
payment either by voluntary or involuntary acts, or by operation of law, except
by will or pursuant to the laws of descent and distribution.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
IX

       

      AMENDMENT
AND TERMINATION.

       

      The
Employer may amend or terminate this Plan at any time by action of the Board,
subject to the rights of any Eligible Executive who has incurred a Covered
Termination as of the date of such amendment or termination.

       

      ARTICLE
X

       

      GOVERNING
LAW; VENUE.

       

      This Plan
shall be governed by the laws of the State of Texas except for its laws with
respect to conflict of laws, and except to the extent preempted by any federal
law.  The exclusive forum for any lawsuit arising from or related to
Executive’s employment or this Plan shall be a state or federal court in Harris
County, Texas.  To the extent this Plan is governed by federal law,
nothing herein shall prevent or prohibit Employer from removing to an
appropriate federal court any action brought in state court.

       

      ARTICLE
XI

       

      ADMINISTRATION,
CLAIMS, APPEALS, EXHAUSTION REQUIREMENT.

       

      (a)           Plan
Administrator.  The overall responsibility for the
administration and control of this Plan resides with the Committee.

       

      (b)           Powers.  The
Committee has the following authority with respect to the Plan:

       

      (1)           The
responsibility for the day to day administration and operation of the
Plan;

       

      (2)           The
authority to issue and implement such rules as the Committee deems appropriate
to administer the Plan;

       

      (3)           The
authority to interpret the Plan’s provisions, and to make factual determinations
under the Plan, including but not limited to, the power to determine eligibility
for payments hereunder, and the right to resolve and determine ambiguities,
inconsistencies, and omissions in the provisions hereof;

       

      (4)           The
authority to appoint or designate such person or persons as the Committee deems
necessary or advisable to carry out the administrative duties
hereunder.

       

      (c)           Claims.   The
Committee shall have the power and authority to determine claims for payments
under the Plan, and shall make all factual determinations under the Plan in
relation to any claim, or as otherwise required in this Plan.  Except
as otherwise provided herein, the Executive (“claimant”) may make a claim
for payment hereunder, or a claim contesting a factual determination hereunder,
within 30 days of receipt of notice of such factual determination, or of any
event giving rise to the existence of a right of payment under this
Plan.  The Committee shall make a determination on a claim hereunder
within 30 days of the receipt of a claim for payments under this Plan, and the
claimant shall have the right to submit documentation or other evidence to the
Committee in support of such claim.  The Committee may, by written
notice to the claimant within the original 30 day claim period, have an
additional 30 days in which to make a decision on the initial
claim.  If the Committee does not provide a notice of extension or a
decision on the initial claim within the time limits provided in this Article,
the claim will be deemed denied for purposes of this Article.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (d)           Appeal of Denied
Claim.  If a claim under Section (c) of this Article is denied
or deemed denied, the claimant may file a written appeal with the full
Board.  The claimant shall have the right to submit any additional
documentation or other evidence to the Board in support of such
appeal.  The Board shall make its decision and provide notice thereof
in writing to the claimant within 30 days of the receipt of the
appeal.  Provided, however, the Board may, by written notice to the
claimant within the original 30 day appeal  period, have an additional
30 days  in which to make a decision on the initial
appeal.  If the Board does not provide a notice of extension or a
decision on the initial appeal within the time limits provided in this Article,
the claim will be deemed denied for purposes of this Article.

       

      (e)           Contents of Notice of Denied
Claim or Appeal.   Notice of any denied claim or appeal
provided by the Committee or the Board, as appropriate, shall be in writing, and
shall contain the following, at a minimum:

       

      (1)           The
facts determined, claim determination made or decision on appeal (herein, the
“determination”);

       

      (2)           A
summary of the facts on which the determination was based;

       

      (3)           The
relevant provisions of this Plan on which the determination was
based;

       

      (4)           If
appropriate, a description of any information or documentation required to
complete the claimant’s claim; and

       

      (5)           A
description of the claimant’s appeal rights, if any.

       

      (f)       
    Exhaustion of Administrative
Remedy Required.  Executive may not bring a proceeding in any
court under this Plan, or intended to enforce any provision of this Plan,
without first having exhausted the administrative remedies provided
herein.

       

      (g)           Limitation of
Actions.   No action may be brought to enforce any
provision of this Plan after twelve (12) months following the denial of the
later of: (i) the claimant’s claim under Section (c) of this Article XI, or (ii)
the denial of the appeal provided for in Section (d) of this Article
XI.

       

      ARTICLE
XII

       

      TREATMENT
OF PLAN UNDER ERISA.

       

      Is the
intent of the Employer, and this Plan shall be interpreted, construed and
operated such that, this Plan shall be a “top-hat” plan exempt from certain
provisions of ERISA, as provided in and within the meaning of Sections 201(2),
301(a)(3), and 401(a)(1) of ERISA, as appropriate.  Benefits under
this Plan shall be paid solely out of the general assets of the Employer and
shall constitute an unsecured obligation of the Employer.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
WITNESS WHEREOF, Employer has caused this Plan to be executed on its behalf by
its duly authorized officer, and such duly authorized officer has executed this
Plan, effective as of the Effective Date first set forth above.

       

      
        
          
            
              
                
                  
                    
                      
                        	EMPLOYER	 
	 	 
      	 
	ROSETTA
      RESOURCES INC.	 
	 	 
      	 
	 	
                                 
      

                              	 
	By:	 	
                                 

                              	 
	 	 
      	 
	RANDY
      L. LIMBACHER	 
	PRESIDENT
      & CHIEF EXECUTIVE OFFICER

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