Exhibit 10.1

ULTRA PETROLEUM CORP.

ANNUAL INCENTIVE PLAN

1.    Background and Purpose.

1.1    Purpose. The purpose of the Ultra Petroleum Corp. Annual Incentive Plan
(the “Plan”) is to enable the Company to attract and retain superior employees
by providing a competitive short-term cash-based incentive compensation program
that rewards outstanding performance.

1.2    Effective Date. The Plan is effective as of July 6, 2018 (the “Effective
Date”), and shall remain in effect until it has been terminated pursuant to
Section 7.6.

2.    Definitions. The following terms shall have the following meanings:

2.1    “Affiliate” means any Subsidiary and any other Person that, directly or
through one or more intermediaries, is controlled by the Company, as determined
by the Committee.

2.2    “Award” means an award granted pursuant to the Plan, the payment of which
shall be contingent on the attainment of Performance Goals and Key Performance
Indicators with respect to a Performance Period, as determined by the Committee
pursuant to Section 6.1.

2.3    “Base Salary” means the Participant’s annualized rate of base salary on
the last day of the Performance Period before (a) deductions for taxes or
benefits and (b) deferrals of compensation pursuant to any Company or
Affiliate-sponsored plans.

2.4    “Board” means the then-current Board of Directors of the Company.

2.5    “Code” means the U.S. Internal Revenue Code of 1986, as amended from time
to time, including any regulations or authoritative guidance promulgated
thereunder and successor provisions thereto.

2.6    “Committee” means the Compensation Committee of the Company.

2.7    “Company” means Ultra Petroleum Corp., a corporation organized under the
laws of Yukon, Canada, and any successor in interest thereto.

2.8    “Discretion” means the discretion of the Committee to increase, reduce or
eliminate the size of an Award in accordance with Section 6.1(c) of the Plan.

 

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2.9    “Key Performance Indicators” means the performance criteria upon which
the Performance Goals for a particular Performance Period are based as provided
on Exhibit A attached hereto, as such may be amended from time to time for each
applicable Performance Period under this Plan. Such Key Performance Indicators
may relate to the performance of the Company as a whole, a business unit,
division, department, individual or any combination of these and may be applied
on an absolute basis and/or relative to one or more peer group companies or
indices, or any combination thereof, as the Committee shall determine. In the
event the Committee uses the term “Performance Measure” in place of the term and
for the purpose of identifying the “Key Performance Indicators” in specific
awards or the program for a Performance Period, for purposes of such Performance
Period, the term “Performance Measures” should be understood as having the same
meaning as the term “Key Performance Indicator” as such term used in this Plan.

2.10    “Participant” means as to any Performance Period, the employees of the
Company or an Affiliate who are designated by the Committee to participate in
the Plan for that Performance Period.

2.11     “Performance Goals” means the goals selected by the Committee, in its
discretion to be applicable to a Participant for any Performance Period.
Performance Goals shall be based upon one or more Key Performance Indicators.
Performance Goals may include a threshold level of performance below which no
Award will be paid and levels of performance at which specified percentages of
the Target Award will be paid and may also include a maximum level of
performance above which no additional Award amount will be paid. In the event
the Committee uses the term “Performance Achievement” in place of the term and
for the purpose of identifying the “Performance Goals” in specific awards or the
program for any Performance Period, for purposes of such Performance Period, the
term “Performance Achievement” should be understood as having the same meaning
as the term “Performance Goals” as such term is used in this Plan.

2.12    “Performance Period” means the period for which performance is
calculated, which unless otherwise indicated by the Committee, shall be the Plan
Year.

2.13    “Person” means any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.

2.14    “Plan” means the Ultra Petroleum Corp Annual Incentive Plan, as
hereafter amended from time to time.

2.15    “Plan Year” means the Company’s fiscal year, which commences on January
1st and ends on December 31st.

2.16    “Pro-Rated Award” means an amount equal to the Award otherwise payable
to the Participant for a Performance Period in which the Participant was
actively employed by the Company or an Affiliate for only a portion thereof,
multiplied by a fraction, the numerator of which is the number of days the
Participant was actively employed by the Company or an Affiliate during the
Performance Period and the denominator of which is the number of days in the
Performance Period.

 

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2.17    “Shares” means the shares of the Company’s common stock.

2.18    “Subsidiary” means any corporation (whether now or hereafter existing)
which constitutes a “subsidiary” of the Company, as defined in Code
Section 424(f) or any other form of entity in which the Company (or an Affiliate
of the Company in which the Company owns a greater than 50% equity interest,
directly or indirectly) owns a greater than 50% equity interest.

2.19    “Target Award” means the target award payable under the Plan to a
Participant for a particular Performance Period, expressed as a percentage of
the Participant’s Base Salary. In special circumstances, the target award may be
expressed as a fixed amount of cash. In the event the Committee uses the term
“Target Value” in place of the term and for the purpose of identifying the
“Target Award” in specific awards or the program for any Performance Period, for
purposes of such Performance Period, the term “Target Value” should be
understood as having the same meaning as the term “Target Award” as such term is
used in this Plan.

3.    Administration.

3.1    Administration by the Compensation Committee. The Plan shall be
administered by the Committee.

3.2    Authority of the Committee. Subject to the provisions of the Plan and
applicable law, the Committee shall have the power, in addition to other express
powers and authorizations conferred on the Committee by the Plan, to:
(a) designate Participants; (b) determine the terms and conditions of any Award;
(c) determine whether, to what extent, and under what circumstances Awards may
be forfeited or suspended; (d) interpret, administer, reconcile any
inconsistency, correct any defect and/or supply any omission in the Plan or any
instrument or agreement relating to, or Award granted under, the Plan;
(e) establish, amend, suspend, or waive any rules for the administration,
interpretation and application of the Plan; (f) adopt such procedures and
subplans as are necessary or appropriate to permit participation in the Plan by
employees who are foreign nationals or employed outside of the United States;
and (g) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.

3.3    Decisions Binding. All determinations and decisions made by the
Committee, the Board, and any delegate of the Committee pursuant to the
provisions of the Plan shall be final, conclusive and binding on all persons,
and shall be given the maximum deference permitted by law.

3.4    Delegation by the Committee. The Committee, in its sole discretion, may
delegate all or part of its authority and powers under the Plan to one or more
directors and/or officers of the Company; provided, however, that the Committee
may not delegate its responsibility to make Awards to executive officers.

3.5    Agents; Limitation of Liability. The Committee may appoint agents to
assist in administering the Plan. The Committee and each member thereof shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to it or him by any officer or

 

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employee of the Company, the Company’s certified public accountants, consultants
or any other agent assisting in the administration of the Plan. Members of the
Committee and any officer or employee of the Company acting at the direction or
on behalf of the Committee shall not be personally liable for any action or
determination taken or made in good faith with respect to the Plan, and shall,
to the extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action or determination.

4.    Eligibility and Participation.

4.1    Eligibility. Employees of the Company and its Affiliates, are eligible to
participate in the Plan.

4.2    Participation. The Committee, in its discretion, shall select the persons
who shall be Participants for the Performance Period. Only eligible individuals
who are designated by the Committee to participate in the Plan with respect to a
particular Performance Period may participate in the Plan for that Performance
Period. An individual who is designated as a Participant for a given Performance
Period is not guaranteed or assured of being selected for participation in any
subsequent Performance Period.

4.3    New Hires; Newly Eligible Participants. A newly hired or newly eligible
Participant will be eligible to receive a Pro-Rated Award.

4.4    Leaves of Absence. If a Participant is on a leave of absence for a
portion of a Performance Period, the Participant will be eligible to receive a
Pro-Rated Award reflecting participation for the period during which he or she
was actively employed and not any period when he or she was on leave.

5.    Terms of Awards.

5.1    Determination of Target Awards. Prior to, or reasonably promptly
following the commencement of each Performance Period the Committee, in its sole
discretion, shall establish the Target Award for each Participant, the payment
of which shall be conditioned on the achievement of the Performance Goals for
the Performance Period.

5.2    Determination of Performance Goals and Performance Formula. Prior to, or
reasonably promptly following the commencement of, each Performance Period, the
Committee, in its sole discretion, shall establish in writing the Performance
Goals for the Performance Period and shall prescribe a formula for determining
the percentage of the Target Award which may be payable based upon the level of
attainment of the Performance Goals for the Performance Period (the “Performance
Formula”). The Performance Goals shall be based on one or more Key Performance
Indicators, each of which may carry a different weight, and which may differ
from Participant to Participant.

5.3    Adjustments. The Committee is authorized, in its sole discretion, to
adjust or modify the calculation of a Performance Goal for a Performance Period
in connection with any one or more of the following events:

(a)    asset write-downs;

 

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(b)    significant litigation or claim judgments or settlements;

(c)    the effect of changes in tax laws, accounting standards or principles, or
other laws or regulatory rules affecting reporting results;

(d)    any reorganization and restructuring programs;

(e)    extraordinary nonrecurring items as described in Accounting Principles
Board Opinion No. 30 (or any successor pronouncement thereto) and/or in
management’s discussion and analysis of financial condition and results of
operations appearing in the Company’s annual report to shareholders for the
applicable year or period;

(f)    acquisitions or divestitures;

(g)    any other specific unusual or nonrecurring events or objectively
determinable category thereof;

(h)    foreign exchange gains and losses; and

(i)    a change in the Company’s fiscal year.

6.    Payment of Awards.

6.1    Determination of Awards; Certification.

(a)    Following the completion of each Performance Period, the Committee shall
determine the extent to which the Performance Goals have been achieved or
exceeded. If the minimum Performance Goals established by the Committee are not
achieved, then no payment will be made unless the Committee determines in its
Discretion that circumstances warrant a payment to be made.

(b)    To the extent that the Performance Goals are achieved, the Committee
shall certify the extent to which the Performance Goals applicable to each
Participant have been achieved and shall then determine, in accordance with the
prescribed formula, the amount of each Participant’s Award.

(c)    In determining the amount of each Award, the Committee may increase,
reduce or eliminate the amount of an Award by applying Discretion if, in its
sole discretion, such increase, reduction or elimination is appropriate.

6.2    Form and Timing of Payment. Except as otherwise provided herein, as soon
as practicable following the Committee’s certification pursuant to Section 6.1
for the applicable Performance Period, each Participant shall receive a cash
lump sum payment of his or her Award, less required withholding. In no event
shall such payment be made later than 2 1/2 months following the end of the
Performance Period.

 

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6.3    Employment Requirement. Except as otherwise determined by the Committee
in its sole discretion, no Award shall be paid to any Participant who is not
actively employed by the Company or an Affiliate on the date that Awards are
paid.

6.4    Deferral of Awards. The Committee, in its sole discretion, may permit a
Participant to defer the payment of an Award that would otherwise be paid under
the Plan. Any deferral election shall be subject to such rules and procedures as
shall be determined by the Committee in its sole discretion.

7.    General Provisions.

7.1    Compliance with Legal Requirements. The Plan and the granting of Awards
shall be subject to all applicable federal and state laws, rules and
regulations, and to such approvals by any regulatory or governmental agency as
may be required.

7.2    Non-transferability. A person’s rights and interests under the Plan,
including any Award previously made to such person or any amounts payable under
the Plan may not be assigned, pledged, or transferred, except in the event of
the Participant’s death, to a designated beneficiary in accordance with the
Plan, or in the absence of such designation, by will or the laws of descent or
distribution.

7.3    No Right to Employment. Nothing in the Plan or in any notice of Award
shall confer upon any person the right to continue in the employment of the
Company or any Affiliate or affect the right of the Company or any Affiliate to
terminate the employment of any Participant.

7.4    No Right to Award. Unless otherwise expressly set forth in an employment
agreement signed by the Company and a Participant, a Participant shall not have
any right to any Award under the Plan until such Award has been paid to such
Participant and participation in the Plan in one Performance Period Year does
not connote any right to become a Participant in the Plan in any future
Performance Period.

7.5    Withholding. The Company shall have the right to withhold from any Award,
any federal, state or local income and/or payroll taxes required by law to be
withheld and to take such other action as the Committee may deem advisable to
enable the Company and Participants to satisfy obligations for the payment of
withholding taxes and other tax obligations relating to an Award.

7.6    Amendment or Termination of the Plan. The Board or the Committee may, at
any time, amend, suspend or terminate the Plan in whole or in part.
Notwithstanding the foregoing, no amendment shall adversely affect the rights of
any Participant to Awards allocated prior to such amendment, suspension or
termination.

7.7    Unfunded Status. Nothing contained in the Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind or a fiduciary relationship between the Company and any Participant,
beneficiary or legal representative or any other person. To the extent that a
person acquires a right to receive payments under the Plan, such right shall be
no greater than the right of an unsecured general creditor of the Company. All
payments to be made hereunder shall be paid from the general funds of the

 

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Company and no special or separate fund shall be established and no segregation
of assets shall be made to assure payment of such amounts except as expressly
set forth in the Plan. The Plan is not intended to be subject to the Employee
Retirement Income Security Act of 1974, as amended (ERISA).

7.8    Governing Law. The Plan shall be construed, administered and enforced in
accordance with the laws of Colorado without regard to conflicts of law.

7.9    Beneficiaries. To the extent that the Committee permits beneficiary
designations, any payment of Awards due under the Plan to a deceased Participant
shall be paid to the beneficiary duly designated by the Participant in
accordance with the Company’s practices. If no such beneficiary has been
designated or survives the Participant, payment shall be made by will or the
laws of descent or distribution.

7.10    Section 409A of the Code. It is intended that payments under the Plan
qualify as short-term deferrals exempt from the requirements of Section 409A of
the Code. In the event that any Award does not qualify for treatment as an
exempt short-term deferral, it is intended that such amount will be paid in a
manner that satisfies the requirements of Section 409A of the Code. The Plan
shall be interpreted and construed accordingly.

7.11    Expenses. All costs and expenses in connection with the administration
of the Plan shall be paid by the Company.

7.12    Section Headings. The headings of the Plan have been inserted for
convenience of reference only and in the event of any conflict, the text of the
Plan, rather than such headings, shall control.

7.13    Severability. In the event that any provision of the Plan shall be
considered illegal or invalid for any reason, such illegality or invalidity
shall not affect the remaining provisions of the Plan, but shall be fully
severable, and the Plan shall be construed and enforced as if such illegal or
invalid provision had never been contained therein.

7.14    Gender and Number. Except where otherwise indicated by the context,
wherever used, the masculine pronoun includes the feminine pronoun; the plural
shall include the singular, and the singular shall include the plural.

7.15    Non-exclusive. Nothing in the Plan shall limit the authority of the
Company, the Board or the Committee to adopt such other compensation
arrangements, as it may deem desirable for any Participant.

7.16    Notice. Any notice to be given to the Company or the Committee pursuant
to the provisions of the Plan shall be in writing and sent and directed to the
SECRETARY of the Company at the then location of the headquarters of the
Company.

7.17    Successors. All obligations of the Company under the Plan with respect
to Awards granted hereunder shall be binding upon any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation or otherwise, of all or substantially all of the
assets of the Company.

 

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7.18    Clawback. In the event the Board determines that a significant
restatement of the Company’s financial results or other Company metrics for any
of the three prior fiscal years for which audited financial statements have been
prepared is required and (i) such restatement is the result of fraud or willful
misconduct and (ii) the Participant’s Award amount would have been lower had the
results or metrics been properly calculated, the Committee has the authority to
obtain reimbursement from any Participant responsible for the fraud or willful
misconduct resulting in the restatement. Such reimbursement shall consist of any
portion of any Award previously paid that is greater than it would have been if
calculated based upon the restated financial results or metrics.

The action permitted to be taken by the Board under this Section 7.18 is in
addition to, and not in lieu of, any and all other rights of the Board and/or
the Company under applicable law and shall apply notwithstanding anything to the
contrary in the Plan.

<signature page follows>

 

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IN WITNESS WHEREOF, the Company has caused this Plan to be duly executed in its
name and on its behalf by its duly authorized officer effective as of the
Effective Date.

 

ULTRA PETROLEUM CORP. By:   /s/ Brad Johnson Name: Brad Johnson Title: Interim
Chief Executive Officer

 

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