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Exhibit 10.2
 
U.S. Energy Corp.   
Performance Compensation Plan
2014 Performance Period Matrix
 

 
Plan Objectives

The objectives of the Performance Compensation Plan (the “Plan”) are to:

·  
incentivize top level managers and senior management of U.S. Energy Corp (“US
Energy” or the “Company”);

·  
to improve shareholder value by accomplishing aggressive, yet realistic,
financial and production objectives;

·  
encourage employees to contribute to the ultimate goal of improving shareholder
value by making participating employees eligible for an annual performance bonus
under the Plan; and

·  
heavily weighting the compensation of senior management towards performance
based incentives.

Performance Period

The Performance Period shall be from January 1, 2014 to December 31, 2014.

Award Determination

The Compensation Committee and the Board shall have the authority, in their
discretion, to determine whether any bonuses have been earned under the Plan for
a particular Performance Period.  In addition to the Financial and Operation
Factors defined below, the Compensation Committee and the Board shall have the
authority, in their discretion; to impose an activation trigger (the “Bonus
Trigger”) conditioning any awards under the Plan on the satisfaction of
designated performance criteria.  In the event the Bonus Trigger has not been
satisfied, the Compensation Committee and the Board shall have the authority, in
their discretion, to reduce or forgo any bonuses under the Plan.

2014 Award Levels

The Threshold, Target, and Maximum bonus awards (as a percentage of base salary)
for the 2014 Performance Period are provided on the below 2014 Bonus Award
Matrix Criteria.

2014 Performance Metrics

The performance metrics utilized for 2014 will be Earnings per Share (“EPS”),
Cash Flow from Operations (“Cash Flow”), Proved Reserves, and Production.  The
Compensation Committee will establish threshold, target, and maximum levels for
the performance metrics, the achievement of which will result in earned
incentives equal to 50%, 100%, or 150% of the participant’s target award amount,
respectively.  The Compensation
 
 
 
 

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Committee will establish the threshold, target, and maximum levels for each
metric comparative to the Company’s performance in the prior year. Performance
levels achieved in between the threshold, target and maximum levels will result
in awards being earned based on a straight-line pro-rata calculation between the
target and the maximum or threshold, as applicable, provided, however, the
Compensation Committee may not increase the amount of an award above the maximum
level under the Plan.  Additionally, the Compensation Committee, in its
discretion, may determine to reduce an award under the Plan even though certain
objectives have been met.  See below 2014 Bonus Award Matrix Criteria.

Payment of Awards

Payment of all bonuses under the Plan is to be made after the Form 10-K for the
year ended December 31, 2014 is filed, but before March 15, 2015.

2014 Bonus Award Matrix Criteria
 
Metric
 
% Allocated
 
Criteria
       
50% for 20% increase
Increase in 2014 Year-End Proved Reserves above Year-End 2013 Proved Reserves
    25%  
100% for 30% increase
         
150% for 40% increase
         
50% for 25% increase
Increase in Average BOE/day above 2013
    25%  
100% for 40% increase
         
150% for 55% increase
         
50% for $20 million
Cash Flow from Operations for 2014
    25%  
100% for $25 million
         
150% for $30 milliion
         
50% for $0.05/share
Earnings Per Share for 2014
    25%  
100% for $0.10/share
         
150% for $0.15/share
           

 
 
 
 

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