NOBLE CORPORATION
2009 SHORT TERM INCENTIVE PLAN
The success of Noble Corporation
(“Noble”) and its subsidiaries (collectively, unless
the context otherwise requires, the “Company”) is a
result of the efforts of all key employees. In order to focus each
employee’s efforts on optimizing the Company’s overall
results, operationally and financially, the Company maintains this
Short Term Incentive Plan (the “Plan”) to reward
employees for successful achievement of specific goals.
An effective incentive plan should both align
employee interests with those of shareholders and motivate and
influence employee behavior. Key positions within the Company have
the ability to make a positive contribution to key factors that
increase shareholder value. These factors can be quantified and
measured through achievement of various financial and operational
targets, such as safety, earnings per share and cash operating
margins. The objectives of using such targets in the formulation of
the specific Company goals are to link an employee’s annual
incentive award more closely to the creation of shareholder wealth
and to promote a culture of high performance and an environment of
team work.
Section 2. Participation and
Eligibility
Full-time employees in salary classifications
18N and higher are eligible for consideration of a bonus under the
Plan, subject to the approval of the Compensation Committee (the
“Committee”) of the Board of Directors (the
“Board”) of Noble. Each such employee will be
considered either a “corporate employee” or a
“division employee” for purposes of adjustment of such
employee’s target bonus pursuant to Section 6.
Full-time, non-exempt employees not in such salary classifications
are also eligible for consideration of a bonus under the Plan,
subject to the discretion of the Committee. The Plan year shall be
the calendar year.
To be eligible to receive a bonus payment with
respect to a Plan year, the person must be actively employed on the
last day of such Plan year and must continue to be employed through
the date on which bonus payments for such Plan year are
made.
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In the event of death, disability or retirement,
the employee or estate of the former employee may receive a
pro-rated payment from the Plan, at the discretion of the Committee
and the CEO. For purposes of the Plan, “disability”
means any termination of employment with the Company or an
affiliate of the Company because of a long-term or total
disability, as determined by the Committee and CEO, and
“retirement” means a termination of employment with the
Company on a voluntary basis by a person if, immediately prior to
such termination of employment, the sum of the age and the number
years of continuous service of such person with the Company (or
affiliate) is equal to or greater than 60.
The total bonus paid for a Plan year shall not
be greater than the aggregate bonus accruals for all participating
offices and divisions for such Plan year. If the accrual amount for
a specific participating office or division for a Plan year is
greater than the bonus amount under the Plan for such office or
division, the excess accrual balance will not be distributed. If
the accrual amount for a specific participating office or division
for a Plan year is less than the bonus amount under the Plan, only
the accrual balance will be distributed.
Section 3. Administrative
Procedures
During the fourth quarter of each year, the
Company will commence preparation of budgets and forecasts for the
succeeding Plan year. The Board will approve the budget for the
Plan year not later than March 31 st of
such Plan year.
Goals for a Plan year for each of the categories
in Section 5 will be compiled by management and submitted to
the Committee for approval no later than the second quarter meeting
of the Board in such Plan year. The specific goals established for
the Plan year will be set forth in an Annex II to this Plan for
such Plan year, and the Annex II hereto for each Plan year shall be
incorporated into and made a part of this Plan for such Plan
year.
If, after the establishment of goals for a Plan
year, the budget changes substantially due to subsequent events,
such as the acquisition or sale of assets, then the Chief Executive
Officer of Noble (the “CEO”) shall, at his discretion,
recommend to the Committee the adjustment of the respective goals
in order that they may not be adversely impacted by such an event.
Any such revised goals shall be applicable to the Plan
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