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Exhibit 10.1
 

 

GulfSlope Energy, Inc.

2014 Omnibus Incentive Plan
 
Effective May 29, 2014
 

 
 
 
 
 

 
 
 
 
 

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Contents
 
 
Article 1. Establishment, Purpose and Duration
1
Article 2. Definitions
1
Article 3. Administration
6
Article 4. Shares Subject to This Plan and Maximum Awards
7
Article 5. Eligibility and Participation
8
Article 6. Stock Options
8
Article 7. Stock Appreciation Rights
10
Article 8. Restricted Stock
11
Article 9. Restricted Stock Units
12
Article 10. Performance Shares
13
Article 11. Performance Units
13
Article 12. Other Stock-Based Awards and Cash-Based Awards
13
Article 13. Restrictions on Transferability of Awards of Shares
14
Article 14. Performance-Based Compensation and Compliance with Code Section
162(m)
14
Article 15. Nonemployee Director Awards
16
Article 16. Effect of a Change in Control
17
Article 17. Dividend Equivalents
17
Article 18. Beneficiary Designation
17
Article 19. Rights of Participants
18
Article 20. Amendment and Termination
18
Article 21. Tax Withholding
19
Article 22. General Provisions
19

 
 
 

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GulfSlope Energy, Inc.
2014 Omnibus Incentive Plan

Article 1. Establishment, Purpose and Duration

1.1           Establishment. GulfSlope Energy, Inc., a Delaware corporation,
establishes an incentive compensation plan to be known as GulfSlope Energy, Inc.
2014 Omnibus Incentive Plan, as set forth in this document. This Plan permits
the grant of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
Shares, Performance Units, Cash-Based Awards and Other Stock-Based Awards. This
Plan shall become effective upon shareholder approval (the “Effective Date”) and
shall remain in effect as provided in Section 1.3.
 
1.2           Purpose of this Plan. The purpose of the Plan is to foster and
promote the long-term financial success of the Company and materially increase
shareholder value by (a) motivating superior performance by means of
performance-related incentives, (b) encouraging and providing for the
acquisition of an ownership interest in the Company by Employees as well as
Non-Employee Directors, and (c) enabling the Company to attract and retain
qualified and competent persons to serve as members of an outstanding management
team and the Board of Directors of the Company upon whose judgment, interest,
and performance are required for the successful and sustained operations of the
Company.
 
1.3           Duration of this Plan. Unless sooner terminated as provided
herein, this Plan shall terminate ten (10) years from the Effective Date. After
this Plan is terminated, no Awards may be granted but Awards previously granted
shall remain outstanding in accordance with their applicable terms and
conditions and this Plan’s terms and conditions.
 
Article 2. Definitions

Whenever used in this Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized.
 
2.1           “Annual Award Limit” or “Annual Award Limits” have the meaning set
forth in Section 4.3.
 
2.2           “Award” means, individually or collectively, a grant under this
Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock, Restricted Stock Units, Performance Shares,
Performance Units, Cash-Based Awards or Other Stock-Based Awards, in each case
subject to the terms of this Plan.
 
2.3           “Award Agreement” means either (i) a written or electronic
agreement entered into by the Company and a Participant setting forth the terms
and provisions applicable to an Award granted under this Plan, including any
amendment or modification thereof, or (ii) a written or electronic statement
issued by the Company to a Participant describing the terms and provisions of
such Award, including any amendment or modification thereof. The Committee may
provide for the use of electronic, Internet or other non-paper Award Agreements,
and the use of electronic, Internet or other non-paper means for the acceptance
thereof and actions thereunder by a Participant. The Committee shall have the
exclusive authority to determine the terms of an Award Agreement evidencing an
Award granted under this Plan, subject to the provisions herein. The terms of an
Award Agreement need not be uniform among all Participants or among similar
types of Awards.
 
2.4           “Beneficial Owner” or “Beneficial Ownership” shall have the
meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations
under the Exchange Act.
 
2.5           “Board” or “Board of Directors” means the Board of Directors of
the Company.

2.6           “Cash-Based Award” means an Award, denominated in cash, granted to
a Participant as described in Article 12.
 
 
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2.7           “Cause” means, unless otherwise specified in an Award Agreement or
in an applicable employment agreement between the Company and a Participant, any
one of the following:
 
(a)         willful and material misconduct of the Participant;
 
(b)         willful and continued failure of the Participant to substantially
perform his job duties;
 
(c)         the conviction of the Participant by a court of competent
jurisdiction of a felony or entering the plea of nolo contendere  to a felony by
the Participant;
 
(d)         the commission by the Participant of an act of theft, fraud, or
dishonesty against the Company or any Subsidiary; or
 
(e)         a material breach by the Participant of any material written policy
of the Company.
 
The existence of Cause under this Section 2.7 shall be determined in good faith
by the Committee.
 
2.8           A “Change in Control” means the occurrence of one or more of the
following events:
 
(a)         The acquisition by any Person of Beneficial Ownership of more than
50% of either (A) the then-outstanding Shares (“Outstanding Company Common
Stock”) or (B) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however,
that, for purposes of this Section 2.8(a) the following acquisitions shall not
constitute a Change in Control:
 
(i)         any acquisition by the Company,
 
(ii)         any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company,
 
(iii)         any entity controlled by the Company, or
 
(iv)         any acquisition by any entity pursuant to a transaction that
complies with Sections 2.8(c)(i), (ii) and (iii).
 
(b)         If during any period of two consecutive calendar years, the
“Incumbent Board” (as defined below) , shall cease for any reason to constitute
a majority of the Board.  The “Incumbent Board” for purposes of this section,
shall mean the Directors holding office at the beginning of the calendar year
two years prior to the event in question; provided, however, that any individual
becoming a Director subsequent to the Effective Date whose election, or
nomination for election by the Company’s shareholders, was approved by a vote of
at least a majority of the Directors then comprising the Incumbent Board shall
be considered as though such individual was a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of Directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board.
 
(c)         Consummation of a reorganization, merger, statutory share exchange
or consolidation or similar corporate transaction involving the Company and/or
any entity controlled by the Company, or a sale or other disposition of all or
substantially all of the assets of the Company, or the acquisition of assets or
stock of another entity by the Company or any entity controlled by the Company
(each, a “Business Combination”), in each case, provided, however, that, for
purposes of this Section 2.8(c) a Business Combination shall not constitute a
Change in Control if following such Business Combination:

(i)         all or substantially all of the individuals and entities that were
the Beneficial Owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the then-outstanding
shares of common stock and more than 50% of the combined voting power of the
then-outstanding voting securities entitled
 
 
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to vote generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without
limitation, an entity that, as a result of such transaction, owns the Company or
all or substantially all of the Company’s assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be; and
 
(ii)         no Person (excluding any entity resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such entity resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then-outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then-outstanding voting
securities of such corporation, except to the extent that such ownership existed
prior to the Business Combination; and
 
(iii)         at least a majority of the members of the board of directors of
the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination .
 
(d)         The complete liquidation or dissolution of the Company.
 
Notwithstanding anything in this Plan or any Agreement to the contrary, to the
extent any provision of this Plan or an Agreement would cause a payment of an
Award that is not exempt from the requirements of Code Section 409A to be made
because of the occurrence of a Change in Control, then such payment shall not be
made unless such Change in Control also constitutes a “change in ownership”,
“change in effective control” or “change in ownership of a substantial portion
of the Company’s assets” within the meaning of Code section 409A.  Any payment
that would have been made except for the application of the preceding sentence
shall be made in accordance with the payment schedule that would have applied in
the absence of a Change in Control (and other Participant rights that are tied
to a Change in Control, such as vesting, shall not be affected by this
paragraph).
 
2.9           “Code” means the U.S. Internal Revenue Code of 1986, as amended
from time to time. For purposes of this Plan, references to sections of the Code
shall be deemed to include references to any applicable regulations thereunder
and any successor or similar provision.
 
2.10           “Commission” means the Securities and Exchange Commission.
 
2.11           “Committee” means the Compensation Committee of the Board or a
subcommittee thereof or any other committee designated by the Board to
administer this Plan. The members of the Committee shall be appointed from time
to time by and shall serve at the discretion of the Board. If the Committee does
not exist or cannot function for any reason, the Board may take any action under
the Plan that would otherwise be the responsibility of the Committee. The
Committee shall be constituted to comply with the requirements of Rule 16b-3
promulgated by the Commission under the Securities Exchange Act of 1934, or such
rule or any successor rule thereto which is in effect from time to time, Section
162(m) of the Code and any applicable listing or governance requirements of any
securities exchange on which the Company’s common shares are listed.
 
2.12           “Company” means GulfSlope Energy, Inc., and any successor thereto
as provided in Section 22.21.

2.13           “Covered Employee” means any Employee who is or may become a
“Covered Employee,” as defined in Code Section 162(m), and who is designated,
either as an individual Employee or class of Employees, by the Committee within
the shorter of (i) 90 days after the beginning of the Performance Period, or
(ii) 25% of the Performance Period has elapsed, as a “Covered Employee” under
this Plan for such applicable Performance Period.
 
2.14           “Director” means any individual who is a member of the Board of
Directors of the Company.
 
2.15           “Disability” means a Participant’s eligibility to receive group
long-term disability benefits under a plan sponsored by the Company or a
Subsidiary, or if no such plan is applicable, a Participant’s inability to
perform the essential functions of his or her duties due to a medically
determinable physical or mental impairment,
 
 
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illness or injury, which can be expected to result in death or to be of
long-continued and indefinite duration as determined in the sole discretion of
the Committee, except in the case of any Option that is an Incentive Stock
Option, if and to the extent required in order for the Option to satisfy the
requirements of Section 422 of the Code, the term “Disability” means disabled
within the meaning of Section 22(e)(3) of the Code. Notwithstanding the
preceding provisions of this Section 2.15 or anything in any Award Agreement to
the contrary, to the extent any provision of this Plan or an Award Agreement
would cause a payment not to be exempt from Code Section 409A to be made because
of the Participant’s Disability, then there shall not be a Disability that
triggers payment until the date (if any) that the Participant is disabled within
the meaning of Code section 409A(a)(2)(C).  Any payment that would have been
made except for the application of the preceding sentence shall be made in
accordance with the payment schedule that would have applied in the absence of a
Disability (and other Participant rights that are tied to a Disability, such as
vesting, shall not be affected by the prior sentence).
 
2.16           “Dividend Equivalent” has the meaning set forth in Section 18.
 
2.17           “Effective Date” has the meaning set forth in Section 1.1.
 
2.18           “Employee” means any individual performing services for the
Company or a Subsidiary and designated as an employee of the Company or the
Subsidiary on its payroll records. An Employee shall not include any individual
during any period he or she is classified or treated by the Company or
Subsidiary as an independent contractor, a consultant or an employee of an
employment, consulting or temporary agency or any other entity other than the
Company or Subsidiary, without regard to whether such individual is subsequently
determined to have been, or is subsequently retroactively reclassified, as a
common-law employee of the Company or Subsidiary during such period. An
individual shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company and any Subsidiaries. For purposes of Incentive
Stock Options, no such leave may exceed 90 days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment
upon expiration of a leave of absence approved by the Company is not so
guaranteed, then three months following the 91st day of such leave, any
Incentive Stock Option held by a Participant shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonqualified
Stock Option. Neither service as a Director nor payment of a director’s fee by
the Company shall be sufficient to constitute “employment” by the Company.
 
2.19           “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
 
2.20           “Fair Market Value” means, on any given date (i) if the Shares
are listed on a national or regional securities exchange on the given date or
traded on an over-the-counter exchange, Fair Market Value on such date shall be
the closing price for a Share on such securities exchange on the immediately
preceding day on which sales were made on such exchange; or (ii) if Shares are
not listed on such an exchange, the fair market value of a Share on that date
shall be determined in good faith by the Committee; provided, however, the
Committee, in its discretion, may use an alternative definition of Fair Market
Value including, but not limited to, a price that is based on the opening,
actual, high, low, or average selling prices of a Share on the securities
exchange on which Shares are listed or traded on the given date, the trading
date preceding the given date, the trading date next succeeding the given date,
or an average of trading days. Notwithstanding the foregoing, (i) in the case of
an Option or SAR, Fair Market Value shall be determined in accordance with a
definition of fair market value that permits the Award to be exempt from Code
section 409A; and (ii) in the case of an Option that is intended to qualify as
an ISO under Code section 422 or an Award that is intended to qualify as
performance-based compensation under Code section 162(m), Fair Market Value
shall be determined by the Committee in accordance with the requirements of Code
section 422 or Code section 162(m), as applicable.

2.21           “Grant Date” means the date an Award is granted to a Participant
pursuant to the Plan.
 
2.22           “Grant Price” means the price established at the time of grant of
an SAR pursuant to Article 7.
 
2.23           “Incentive Stock Option” or “ISO” means an Award granted pursuant
Article 6 that is designated as an Incentive Stock Option and that is intended
to meet the requirements of Code Section 422 or any successor provision.
 
 
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2.24           “Insider” shall mean an individual who is, on the relevant date,
an officer (as defined in Rule 16a-1(f) (or any successor provision) promulgated
by the Commission under the Exchange Act) or Director of the Company, or a more
than 10% Beneficial Owner of any class of the Company’s equity securities that
is registered pursuant to Section 12 of the Exchange Act, as determined by the
Board in accordance with Section 16 of the Exchange Act.
 
2.25           “Nonemployee Director” means a Director who is not an Employee.
 
2.26           “Nonqualified Stock Option” or “NQSO” means an Award granted
pursuant to Article 6 that is not intended to meet the requirements of Code
Section 422, or that otherwise does not meet such requirements.
 
2.27           “Option” means an Award granted to a Participant pursuant to
Article 6, which Award may be an Incentive Stock Option or a Nonqualified
Stock Option.
 
2.28           “Option Price” means the price at which a Share may be purchased
by a Participant pursuant to an Option.
 
2.29           “Other Stock-Based Award” means an equity-based or equity-related
Award not otherwise described by the terms of this Plan that is granted pursuant
to Article 12.
 
2.30           “Participant” means any eligible individual as set forth in
Article 5 to whom an Award is granted.
 
2.31           “Performance-Based Compensation” means compensation under an
Award that is intended to satisfy the requirements of Code Section 162(m) for
certain performance-based compensation paid to Covered Employees.
Notwithstanding the foregoing, nothing in this Plan shall be construed to mean
that an Award that does not satisfy the requirements for performance-based
compensation under Code Section 162(m) does not constitute performance-based
compensation for other purposes, including Code Section 409A.
 
2.32           “Performance Measures” means measures, as described in Article
14, upon which performance goals are based and that are approved by the
Company’s shareholders pursuant to this Plan to qualify Awards as
Performance-Based Compensation.
 
2.33           “Performance Period” means the period of time during which
pre-established performance goals must be met to determine the degree of payout
and/or vesting with respect to an Award.
 
2.34           “Performance Share” means an Award granted pursuant to
Article 10.

2.35           “Performance Unit” means an Award granted pursuant to Article 11.
 
2.36           “Period of Restriction” means the period when Restricted Stock or
Restricted Stock Units are subject to a substantial risk of forfeiture (based on
the passage of time, the achievement of performance goals or upon the occurrence
of other events as determined by the Committee, in its discretion) as provided
in Articles 8 and 9.
 
2.37           “Person” shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a “group” as defined in Section 13(d) thereof.
 
2.38           “Plan” means GulfSlope Energy, Inc. 2014 Omnibus Incentive Plan,
as the same may be amended from time to time.
 
2.39           “Restricted Stock” means an Award granted pursuant to Article 8.
 
2.40           “Restricted Stock Unit” means an Award granted pursuant to
Article 9.

 
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2.41           “Share” means a share of common stock of the Company.
 
2.42           “Stock Appreciation Right” or “SAR” means an Award granted
pursuant to Article 7.
 
2.43           “Subsidiary” means any corporation or other entity, whether
domestic or foreign, in which the Company has or obtains, directly or
indirectly, an interest of more than 50% by reason of stock ownership or
otherwise.
 
2.44           “Third-Party Service Provider” means any consultant, agent,
advisor or independent contractor who renders bona fide services to the Company
or a Subsidiary that (a) are not in connection with the offer and sale of the
Company’s securities in a capital raising transaction, (b) do not directly or
indirectly promote or maintain a market for the Company’s securities, and (c)
are provided by a natural person who has contracted directly with the Company or
Subsidiary to render such services.
 
Article 3. Administration

3.1           General. The Committee shall be responsible for administering this
Plan, subject to this Article 3 and the other provisions of this Plan. The
Committee may employ attorneys, consultants, accountants, agents and other
individuals, any of whom may be an Employee, and the Committee, the Company, and
its officers and Directors shall be entitled to rely upon the advice, opinions
or valuations of any such individuals. All actions taken and all interpretations
and determinations made by the Committee shall be final and binding upon the
Participants, the Company or Subsidiary, and all other interested individuals.
 
3.2           Authority of the Committee. Subject to any express limitations set
forth in the Plan, the Committee shall have full and exclusive discretionary
power and authority to take such actions as it deems necessary and advisable
with respect to the administration of the Plan including, but not limited to,
the following:
 
(a)           To determine from time to time which of the persons eligible under
the Plan shall be granted Awards, when and how each Award shall be granted, what
type or combination of types of Awards shall be granted, the provisions of each
Award granted (which need not be identical), including the time or times when a
person shall be permitted to receive Shares pursuant to an Award and the number
of Shares subject to an Award;
 
(b)           To construe and interpret the Plan and Awards granted under it,
and to establish, amend, and revoke rules and regulations for its
administration. The Committee, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in an Award Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective;

(c)           To approve forms of Award Agreements for use under the Plan;
 
(d)           To determine Fair Market Value of a Share in accordance with
Section 2.20 of the Plan;
 
(e)           To amend the Plan or any Award Agreement as provided in the Plan;
 
(f)           To adopt sub-plans and/or special provisions applicable to stock
awards regulated by the laws of a jurisdiction other than and outside of the
United States. Such sub-plans and/or special provisions may take precedence over
other provisions of the Plan, but unless otherwise superseded by the terms of
such sub-plans and/or special provisions, the provisions of the Plan shall
govern;
 
(g)           To authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Award previously granted by the
Board;
 
(h)           To determine whether Awards will be settled in shares of common
stock, cash or in any combination thereof;
 
(i)           To determine whether Awards will provide for Dividend Equivalents;
 
 
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(j)           To establish a program whereby Participants designated by the
Committee may reduce compensation otherwise payable in cash in exchange for
Awards under the Plan;
 
(k)           To authorize a program permitting eligible Participants to
surrender outstanding Awards in exchange for newly granted Awards subject to any
applicable shareholder approval requirements set forth in Section 21.1 of the
Plan;
 
(l)           To impose such restrictions, conditions or limitations as it
determines appropriate as to the timing and manner of any resales by a
Participant or other subsequent transfers by a Participant of any Shares,
including, without limitation, restrictions under an insider trading policy and
restrictions as to the use of a specified brokerage firm for such resales or
other transfers; and
 
(m)           To provide, either at the time an Award is granted or by
subsequent action, that an Award shall contain as a term thereof, a right,
either in tandem with the other rights under the Award or as an alternative
thereto, of the Participant to receive, without payment to the Company, a number
of Shares, cash or a combination thereof, the amount of which is determined by
reference to the value of Shares.
 
3.3           Delegation. The Committee may delegate to one or more of its
members or to one or more officers of the Company or any Subsidiary or to one or
more agents or advisors such administrative duties or powers as it may deem
advisable, and the Committee or any individuals to whom it has delegated duties
or powers as aforesaid may employ one or more individuals to render advice with
respect to any responsibility the Committee or such individuals may have under
this Plan. To the extent permitted by applicable law, the Committee may, by
resolution, authorize one or more officers of the Company to do one or both of
the following on the same basis as can the Committee: (a) designate Employees to
be recipients of Awards; and (b)   determine the size of any such
Awards;  provided ,  however , (i) the Committee shall not delegate such
responsibilities to any such officer for Awards granted to an Employee who is
considered an Insider; (ii) the resolution providing such authorization sets
forth the total number of Awards such officer(s) may grant; and (iii) the
officer(s) shall report periodically to the Committee regarding the nature and
scope of the Awards granted pursuant to the authority delegated.
 
Article 4. Shares Subject to This Plan and Maximum Awards

4.1           Number of Shares Authorized and Available for Awards. Subject to
adjustment as provided under the Plan, the total number of Shares that are
available for Awards under the Plan shall be 37,500,000 Shares. Such Shares may
be authorized and unissued Shares, treasury Shares, Shares purchased in the open
market or in private transactions, or any combination of the foregoing, as may
be determined from time to time by the Board or by the Committee. Any of the
authorized Shares may be used for any type of Award under the Plan, and any or
all of the Shares may be allocated to Incentive Stock Options.

4.2           Share Usage. The Committee shall determine the appropriate method
for determining the number of Shares available for grant under the Plan, subject
to the following:
 
(a)           Any Shares related to an Award granted under this Plan that
terminates by expiration, forfeiture, cancellation or otherwise without the
issuance of the Shares, are settled in cash in lieu of Shares, or are exchanged
with the Committee’s permission, prior to the issuance of Shares, for Awards not
involving Shares shall be available again for grant under this Plan.
 
(b)           Any Shares tendered (by either actual delivery or attestation) (i)
to pay the Option Price of an Option granted under this Plan or Prior Plan or
(ii) to satisfy tax withholding obligations associated with an Award granted
under this Plan, shall become available again for grant under this Plan.
 
(c)           Any Shares that were subject to an SAR granted under this Plan
that were not issued upon the exercise of such SAR shall become available again
for grant under this Plan.
 
4.3           Annual Award Limits. Subject to Section 4.4, the maximum number of
Shares for which Options or SARs may be granted to any Participant in any
calendar year shall be 3,750,000 Shares and the maximum number of Shares that
may be paid to any Participant in any calendar year under an Award of Restricted
Stock, Restricted
 
 
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Stock Units, Performance Shares or Other Stock Based Awards, in each case that
are Performance-Based Compensation, shall be 3,750,000 Shares, in the aggregate.
The maximum amount that may be paid to any Participant in any calendar year
under an Award of Performance Units, Cash-Based Awards or any other Award that
is payable in cash, in each case that are Performance-Based Compensation, shall
be $750,000, in the aggregate.
 
4.4           Adjustments in Authorized Shares. Adjustment in authorized Shares
available for issuance under the Plan or under an outstanding Award and
adjustments in Annual Award Limits shall be subject to the following provisions:
 
(a)           In the event of any corporate event or transaction such as a
merger, consolidation, reorganization, recapitalization, separation, partial or
complete liquidation, stock dividend, stock split, reverse stock split, split
up, spin-off, distribution of stock or property of the Company, combination of
Shares, exchange of Shares, dividend in kind, extraordinary cash dividend or any
other similar corporate event or transaction (“Corporate Transactions”), the
Committee, in order to prevent dilution or enlargement of Participants’ rights
under this Plan, shall substitute or adjust, as applicable, (1) the number and
kind of Shares that may be issued under this Plan or under particular forms of
Awards, (2) the number and kind of Shares subject to outstanding Awards, (3) the
Option Price or Grant Price applicable to outstanding Awards, and (4) the Annual
Award Limits and other value determinations applicable to outstanding Awards.
The Committee, in its discretion, shall determine the methodology or manner of
making such substitution or adjustment.
 
(b)           In addition to the adjustments permitted under paragraph (a)
above, the Committee, in its sole discretion, may make such other adjustments or
modifications in the terms of any Awards that it deems appropriate to reflect
any Corporate Transaction, including, but not limited to, modifications of
performance goals and changes in the length of Performance Periods, subject to
the limitations set forth in Section 14.4.
 
(c)           The determination of the Committee as to the foregoing
adjustments, if any, shall be conclusive and binding on Participants under this
Plan.

Article 5. Eligibility and Participation

5.1           Eligibility to Receive Awards. Individuals eligible to participate
in this Plan include all Employees, Directors and Third-Party Service Providers.
 
5.2           Participation in the Plan. Subject to the provisions of this Plan,
the Committee may, from time to time, select from all individuals eligible to
participate in the Plan, those individuals to whom Awards shall be granted and
shall determine, in its sole discretion, the nature of any and all terms
permissible by law and the amount of each Award.
 
Article 6. Stock Options

6.1           Grant of Options. Options may be granted to Participants in such
number, and upon such terms, and at any time and from time to time as shall be
determined by the Committee, in its sole discretion. Each grant of an Option
shall be evidenced by an Award Agreement which shall specify whether the Option
is in the form of a Nonqualified Stock Option or an Incentive Stock Option.
 
6.2           Option Price. The Option Price for each grant of an Option shall
be determined by the Committee in its sole discretion and shall be specified in
the Award Agreement evidencing such Option;  provided ,  however , the Option
Price must be at least equal to 100% of the Fair Market Value of a Share as of
the Option’s Grant Date, subject to adjustment as provided for under Section
4.4.
 
6.3           Term of Option. The term of an Option granted to a Participant
shall be determined by the Committee, in its sole discretion; provided, however,
no Option shall be exercisable later than the tenth anniversary date of
its grant. Notwithstanding the foregoing, for Nonqualified Stock Options granted
to Participants outside the United States, the Committee has the authority to
grant Nonqualified Stock Options that have a term greater than ten years.
 
 
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6.4           Exercise of Option. An Option shall be exercisable at such times
and be subject to such restrictions and conditions as the Committee shall in
each instance approve, which terms and restrictions need not be the same for
each grant or for each Participant.
 
6.5           Payment of Option Price. An Option shall be exercised by the
delivery of a notice of exercise to the Company or an agent designated by the
Company in a form specified or accepted by the Committee, or by complying with
any alternative procedures that may be authorized by the Committee, setting
forth the number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares. A condition of the issuance of the
Shares as to which an Option shall be exercised shall be the payment of the
Option Price. The Option Price of any exercised Option shall be payable to the
Company in accordance with one of the following methods:
 
(a)           In cash or its equivalent;
 
(b)           By tendering (either by actual delivery or attestation) previously
acquired Shares having an aggregate Fair Market Value at the time of exercise
equal to the Option Price;
 
(c)           By a cashless (broker-assisted) exercise;
 
(d)           By “net settlement” (i.e., the Company withholds Shares with a
Fair Market Value equal to the aggregate Option Price in respect of the portion
of the Option to be exercised from any Shares that would have otherwise been
received by the Participant).
 
(e)           By any combination of (a), (b), (c) and (d); or

(f)           Any other method approved or accepted by the Committee in its sole
discretion.
 
Unless otherwise determined by the Committee, all payments under all of the
methods indicated above shall be paid in United States dollars or Shares, as
applicable.
 
6.6           Special Rules Regarding ISOs. Notwithstanding any provision of the
Plan to the contrary, an Option granted in the form of an ISO to a Participant
shall be subject to the following rules:
 
(a)           Special ISO definitions:
 
(i)           “Parent Corporation” shall mean as of any applicable date a
corporation in respect of the Company that is a parent corporation within the
meaning of Code Section 424(e).
 
(ii)           “ISO Subsidiary” shall mean as of any applicable date any
corporation in respect of the Company that is a subsidiary corporation within
the meaning of Code Section 424(f).
 
(iii)           A “10% Owner” is an individual who owns stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or its Parent Corporation or any ISO Subsidiary.
 
(b)           Eligible employees. An ISO may be granted solely to eligible
Employees of the Company, Parent Corporation, or ISO Subsidiary.
 
(c)           Specified as an ISO. An Award Agreement evidencing the grant of an
ISO shall specify that such grant is intended to be an ISO.
 
(d)           Option price. The Option Price for each grant of an ISO shall be
determined by the Committee in its sole discretion and shall be specified in the
Award Agreement; provided, however, the Option Price must be at least equal 100%
of the Fair Market Value of a Share as of the ISO’s Grant Date (in the case of
 
 
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10% owners, the Option Price may not be not less than 110% of such Fair Market
Value), subject to adjustment provided for under Section 4.4.
 
(e)           Right to exercise. Any ISO granted to a Participant shall be
exercisable during his or her lifetime solely by such Participant.
 
(f)           Exercise period. The period during which a Participant may
exercise an ISO shall not exceed ten years (five years in the case of a
Participant who is a 10% owner) from the date on which the ISO was granted.
 
(g)           Termination of employment. In the event a Participant terminates
employment due to death or Disability, the Participant (or, in the case of
death, the person(s) to whom the Option is transferred by will or the laws of
descent and distribution) shall have the right to exercise the Participant’s ISO
award during the period specified in the applicable Award Agreement solely to
the extent the Participant had the right to exercise the ISO on the date of his
death or Disability; as applicable, provided, however, that such period may not
exceed one year from the date of such termination of employment or if shorter,
the remaining term of the ISO. In the event a Participant terminates employment
for reasons other than death or disability, the Participant shall have the right
to exercise the Participant’s ISO during the period specified in the applicable
Award Agreement solely to the extent the Participant had the right to exercise
the ISO on the date of such termination of employment; provided, however, that
such period may not exceed three months from the date of such termination of
employment or if shorter, the remaining term of the ISO.

(h)           Dollar limitation. To the extent that the aggregate Fair Market
Value of (a) the Shares with respect to which Options designated as Incentive
Stock Options plus (b) the shares of stock of the Company, Parent Corporation
and any ISO Subsidiary with respect to which other Incentive Stock Options are
exercisable for the first time by a holder of such Incentive Stock Options
during any calendar year under all plans of the Company and ISO Subsidiary
exceeds $100,000, such Options shall be treated as Nonqualified Stock Options.
For purposes of the preceding sentence, (a) Options shall be taken into account
in the order in which they were granted, and (b) the Fair Market Value of the
Shares shall be determined as of the time the Option or other incentive stock
option is granted.
 
(i)           Duration of plan. No ISO may be granted more than ten years after
the earlier of (a) adoption of this Plan by the Board and (b) the Effective
Date.
 
(j)           Notification of disqualifying disposition. If any Participant
shall make any disposition of Shares issued pursuant to the exercise of an ISO,
such Participant shall notify the Company of such disposition within 30 days
thereof. The Company shall use such information to determine whether a
disqualifying disposition as described in Code section 421(b) has occurred.
 
(k)           Transferability. No ISO may be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution;  provided ,  however , that at the discretion
of the Committee, an ISO may be transferred to a grantor trust under which
Participant making the transfer is the sole beneficiary.
 
Article 7. Stock Appreciation Rights

7.1           Grant of SARs. SARs may be granted to Participants in such number,
and upon such terms, and at any time and from time to time as shall be
determined by the Committee, in its sole discretion. Each grant of SARs shall be
evidenced by an Award Agreement.
 
7.2           Grant Price. The Grant Price for each grant of an SAR shall be
determined by the Committee and shall be specified in the Award Agreement
evidencing the SAR;  provided ,  however , the Grant Price must be at least
equal to 100% of the FAIR MARKET VALUE of a Share as of the Grant Date, subject
to adjustment as provided for under Section 4.4.
 
 
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7.3           Term of SAR. The term of an SAR granted to a Participant shall be
determined by the Committee, in its sole discretion; provided, however, no SAR
shall be exercisable later than the tenth anniversary date of its grant.
Notwithstanding the foregoing, for SARs granted to Participants outside the
United States, the Committee has the authority to grant SARs that have a term
greater than ten years.
 
7.4           Exercise of SAR. An SAR shall be exercisable at such times and be
subject to such restrictions and conditions as the Committee shall in each
instance approve, which terms and restrictions need not be the same for each
grant or for each Participant.
 
7.5           Notice of Exercise. An SAR shall be exercised by the delivery of a
notice of exercise to the Company or an agent designated by the Company in a
form specified or accepted by the Committee, or by complying with any
alternative procedures that may be authorized by the Committee, setting forth
the number of Shares with respect to which the SAR is to be exercised.
 
7.6           Settlement of SARs. Upon the exercise of an SAR, pursuant to a
notice of exercise properly completed and submitted to the Company in accordance
with Section 7.5, a Participant shall be entitled to receive payment from the
Company in an amount equal to the product of (a) and (b) below:
 
(a)           The excess of the Fair Market Value of a Share on the date of
exercise over the Grant Price.
 
(b)           The number of Shares with respect to which the SAR is exercised.
 
Payment shall be made in cash, Shares or a combination thereof as provided for
under the applicable Award Agreement.

Article 8. Restricted Stock

8.1           Grant of Restricted Stock. Restricted Stock may be granted to
Participants in such number, and upon such terms, and at any time and from time
to time as shall be determined by the Committee, in its sole discretion. Each
grant of Restricted Stock shall be evidenced by an Award Agreement.
 
8.2           Nature of Restrictions. Each grant of Restricted Stock shall be
subject to a Restriction Period that shall lapse upon the satisfaction of such
conditions and restrictions as are determined by the Committee in its sole
discretion and set forth in an applicable Award Agreement. Such conditions or
restrictions may include, without limitation, one or more of the following:
 
(a)           Restrictions based upon the achievement of specific performance
goals;
 
(b)           Time-based restrictions on vesting following the attainment of the
performance goals;
 
(c)           Time-based restrictions;
 
(d)           Restrictions under applicable laws and restrictions under the
requirements of any stock exchange or market on which such Shares are listed or
traded; and
 
(e)           A requirement that a Participant pay a stipulated purchase price
for each Share of Restricted Stock.
 
8.3           Issuance of Shares. To the extent deemed appropriate by the
Committee, the Company may retain the certificates representing Shares of
Restricted Stock in the Company’s possession until such time as all conditions
or restrictions applicable to such Shares have been satisfied or lapse. Shares
of Restricted Stock covered by each Restricted Stock grant shall become freely
transferable by the Participant after all conditions and restrictions applicable
to such Shares have been satisfied or lapsed (including satisfaction of any
applicable tax withholding obligations).
 
 
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8.4           Certificate Legend. In addition to any legends placed on
certificates pursuant to Section 8.2, each certificate representing Shares of
Restricted Stock granted pursuant to this Plan may bear a legend such as the
following or as otherwise determined by the Committee in its sole
discretion:  The sale or transfer of Shares of stock represented by this
certificate, whether voluntary, involuntary or by operation of law, is subject
to certain restrictions on transfer as set forth in the GulfSlope Energy, Inc
2014 Omnibus Incentive Plan, and in the associated Award Agreement. A copy of
this Plan and such Award Agreement may be obtained from GulfSlope Energy, Inc.
 
8.5           Voting and Dividend Rights. Unless otherwise determined by the
Committee and set forth in a Participant’s applicable Award Agreement, to the
extent permitted or required by law, as determined by the Committee, a
Participant holding Shares of Restricted Stock granted hereunder shall be
granted the right to exercise full voting rights with respect to those Shares
and the right to receive dividends declared on those Shares during the Period of
Restriction. Notwithstanding the foregoing, the Committee may require that any
dividends on such Shares of Restricted Stock shall be automatically deferred and
reinvested in additional Restricted Stock subject to the same restrictions on
vesting as the underlying Award, or may require that dividends and other
distributions on Restricted Stock shall be paid to the Company for the account
of the Participant and held pending and subject to the same restrictions on
vesting as the underlying Award; provided, however, that to the extent that any
dividends are deferred, reinvested or otherwise not paid when such dividends
would otherwise normally be paid, (i) all terms and conditions for such delayed
payment shall be included in the Agreement, and (ii) such deferral, reinvestment
or delay in payment of the dividends shall only be allowed to the extent it
complies with, or is exempt from, the requirements of Code section 409A.

Article 9. Restricted Stock Units

9.1           Grant of Restricted Stock Units. Restricted Stock Units may be
granted to Participants in such number, and upon such terms, and at any time and
from time to time as shall be determined by the Committee, in its sole
discretion. A grant of a Restricted Stock Unit or Restricted Stock Units shall
not represent the grant of Shares but shall represent a promise to deliver a
corresponding number of Shares or the value of each Share based upon the
completion of service, performance conditions, or such other terms and
conditions as specified in the applicable Award Agreement over the Restriction
Period. Each grant of Restricted Stock Units shall be evidenced by an Award
Agreement.
 
9.2           Nature of Restrictions. Each grant of Restricted Stock Units shall
be subject to a Restriction Period that shall lapse upon the satisfaction of
such conditions and restrictions as are determined by the Committee in its sole
discretion and set forth in an applicable Award Agreement. Such conditions or
restrictions may include, without limitation, one or more of the following:
 
(a)           Restrictions based upon the achievement of specific performance
goals;
 
(b)           Time-based restrictions on vesting following the attainment of the
performance goals;
 
(c)           Time-based restrictions;
 
(d)           Restrictions under applicable laws and restrictions under the
requirements of any stock exchange or market on which such Shares underlying the
Restricted Stock Unit are listed or traded; and
 
(e)           A requirement that a Participant pay a stipulated purchase price
for each Restricted Stock Unit.
 
9.3           Voting Rights. A Participant shall have no voting rights with
respect to any Restricted Stock Units granted hereunder or the Shares
corresponding to any Restricted Stock Units granted hereunder.
 
9.4           Settlement and Payment Restricted Stock Units. Unless otherwise
elected by the Participant or otherwise provided for in the Award Agreement,
Restricted Stock Units shall be settled upon the date such Restricted Stock
Units vest. Such settlement may be made in Shares, cash or a combination
thereof, as specified in the Award Agreement.
 
 
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Article 10. Performance Shares

10.1           Grant of Performance Shares. Performance Shares may be granted to
Participants in such number, and upon such terms and at any time and from time
to time as shall be determined by the Committee, in its sole discretion. Each
grant of Performance Shares shall be evidenced by an Award Agreement.
 
10.2           Value of Performance Shares. Each Performance Share shall have an
initial value equal to the Fair Market Value of a Share on the Grant Date. The
Committee shall set performance goals in its discretion that, depending on the
extent to which they are met over the specified Performance Period, shall
determine the number of Performance Shares that shall be paid to a Participant.
 
10.3           Earning of Performance Shares. After the applicable Performance
Period has ended, the number of Performance Shares earned by the Participant
over the Performance Period shall be determined as a function of the extent to
which the applicable corresponding performance goals have been achieved. This
determination shall be made solely by the Committee.

10.4           Form and Timing of Payment of Performance Shares. The Committee
shall pay at the close of the applicable Performance Period, or as soon as
practicable thereafter, any earned Performance Shares in the form of cash or in
Shares or in a combination thereof, as specified in a Participant’s applicable
Award Agreement. Any Shares paid to a Participant under this Section 10.4 may be
subject to any restrictions deemed appropriate by the Committee.
 
Article 11. Performance Units

11.1           Grant of Performance Units. Subject to the terms and provisions
of this Plan, Performance Units may be granted to a Participant in such number,
and upon such terms and at any time and from time to time as shall be determined
by the Committee, in its sole discretion. Each grant of Performance Units shall
be evidenced by an Award Agreement.
 
11.2           Value of Performance Units. Each Performance Unit shall have an
initial notional value equal to a dollar amount determined by the Committee, in
its sole discretion. The Committee shall set performance goals in its discretion
that, depending on the extent to which they are met over the specified
Performance Period, will determine the number of Performance Units that shall be
settled and paid to the Participant.
 
11.3           Earning of Performance Units. After the applicable Performance
Period has ended, the number of Performance Units earned by the Participant over
the Performance Period shall be determined as a function of the extent to which
the applicable corresponding performance goals have been achieved. This
determination shall be made solely by the Committee.
 
11.4           Form and Timing of Payment of Performance Units. The Committee
shall pay at the close of the applicable Performance Period, or as soon as
practicable thereafter, any earned Performance Units in the form of cash or in
Shares or in a combination thereof, as specified in a Participant’s applicable
Award Agreement. Any Shares paid to a Participant under this Section 11.4 may be
subject to any restrictions deemed appropriate by the Committee.
 
Article 12. Other Stock-Based Awards and Cash-Based Awards

12.1           Grant of Other Stock-Based Awards and Cash-Based Awards.
 
(a)           The Committee may grant Other Stock-Based Awards not otherwise
described by the terms of this Plan, including, but not limited to, the grant or
offer for sale of unrestricted Shares and the grant of deferred Shares or
deferred Share units, in such amounts and subject to such terms and conditions,
as the Committee shall determine, in its sole discretion. Such Awards may
involve the transfer of actual Shares to Participants, or payment in cash or
otherwise of amounts based on the value of Shares.
 
 
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(b)           The Committee, at any time and from time to time, may grant
Cash-Based Awards to a Participant in such amounts and upon such terms as the
Committee shall determine, in its sole discretion.
 
(c)           Each grant of Other Stock-Based Awards and Cash-Based Awards shall
be evidenced by an Award Agreement.
 
12.2           Value of Other Stock-Based Awards and Cash-Based Awards.
 
(a)           Each Other Stock-Based Award shall be expressed in terms of Shares
or units based on Shares, as determined by the Committee, in its sole
discretion.
 
(b)           Each Cash-Based Award shall specify a payment amount or payment
range as determined by the Committee, in its sole discretion. If the Committee
exercises its discretion to establish performance goals, the value of Cash-Based
Awards that shall be paid to the Participant will depend on the extent to which
such performance goals are met.

12.3           Payment of Other Stock-Based Awards and Cash-Based Awards.
Payment, if any, with respect to Cash-Based Awards and Other Stock-Based Award
shall be made in accordance with the terms of the applicable Award Agreement, in
cash, Shares or a combination of both as determined by the Committee in its sole
discretion.
 
Article 13. Restrictions on Transferability of Awards and Shares

13.1           Transferability of Awards. Except as provided in Section 13.2,
during a Participant’s lifetime, Options and SARs shall be exercisable only by
the Participant. Awards shall not be transferable other than by will or the laws
of descent and distribution or, subject to the consent of the Committee,
pursuant to a domestic relations order entered into by a court of competent
jurisdiction; no Awards shall be subject, in whole or in part, to attachment,
execution or levy of any kind; and any purported transfer in violation of this
Section 13.1 shall be null and void. The Committee may establish such procedures
as it deems appropriate for a Participant to designate a beneficiary to whom any
amounts payable or Shares deliverable in the event of, or following, the
Participant’s death may be provided.
 
13.2           Committee Action. Except as provided in Section 6.6(k), the
Committee may, in its discretion, determine that notwithstanding Section 13.1,
any or all Awards shall be transferable, without compensation to the transferor,
to and exercisable by such transferees, and subject to such terms and
conditions, as the Committee may deem appropriate;  provided ,  however , no
Award may be transferred for value without shareholder approval.
 
13.3           Restrictions on Share Transferability. The Committee may impose
such restrictions on any Shares acquired by a Participant under the Plan as it
may deem advisable, including, without limitation, minimum holding period
requirements, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed or traded or under any blue sky or state securities laws applicable to
such Shares.
 
Article 14. Performance-Based Compensation and Compliance with Code Section
162(m)

14.1           Compliance with Section 162(m). The provisions of the Plan are
intended to ensure that all Options and SARs granted hereunder to any
Participant who is or may be a Covered Employee at the time of exercise of such
Option or SAR qualify for exemption from the limitation on deductibility imposed
by Section 162(m) of the Code that is set forth in Section 162(m)(4)(c) of the
Code and that such Options and SARs shall therefore be considered
Performance-Based Compensation and this Plan shall be interpreted and operated
consistent with that intention. The Committee may designate any Award (other
than an Option or SAR) as Performance-Based Compensation upon grant, in each
case based upon a determination that (i) the Participant is or may be a Covered
Employee with respect to such Award, and (ii) the Committee wishes such award to
qualify for exemption from the limitation on deductibility imposed by Section
162(m) of the Code that is set forth in Section 162(m)(4)(c). The
 
 
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Committee shall have the sole authority to specify which Awards are to be
granted in compliance with Section 162(m) and treated as Performance-Based
Compensation.
 
14.2           Performance Measures. The performance goals upon which the
payment or vesting of an Award to a Covered Employee that is intended to qualify
as Performance-Based Compensation shall be limited to one or a combination of
two or more of the following:
 
(a)           Book value;
 
(b)           Cash flow (including funds from operations and cash available for
distribution);

(c)           Debt;
 
(d)           Earnings (either in aggregate or on a per-share basis);
 
(e)           Earnings before or after either, or any combination of, interest,
taxes, depreciation, or amortization (“EBITDA”);
 
(f)           Economic value added;
 
(g)           Expenses/costs (including any combination of: finding costs,
development costs, acquisition costs, production costs, operating costs,
transportation costs, selling expenses, general and administrative expenses);
 
(h)           Gross or net income;
 
(i)           Gross or net operating margins;
 
(j)           Gross or net profits;
 
(k)           Gross or net revenues;
 
(l)           Market share;
 
(m)           Net asset value (NAV);
 
(n)           Net income;
 
(o)           Operating income;
 
(p)           Operational performance measures;
 
(q)           Pre-tax Income;
 
(r)           Production levels;
 
(s)           Profitability ratios;
 
(t)           Reserves (including the volumes of, or the discounted present
value of, proved, probable and/or possible reserve levels and/or additions to
reserves);
 
(u)           Return measures (including return on assets, return on equity,
return on investment, return on capital, return on capital employed, return on
invested capital, gross profit return on investment, gross margin return on
investment);
 
(v)           Revenue;
 
 
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(w)           Share price (including growth in share price and total shareholder
return);
 
(x)           Strategic business objectives (including, but not limited to,
objective project milestones, development and refinement of exploration prospect
portfolio, and partnering success);
 
(y)           Transactions relating to acquisitions or divestitures; or
 
(z)           Working capital.

Any Performance Measure(s) may, as the Committee, in its sole discretion deems
appropriate, (i) be expressed in absolute amounts or on a per unit basis (e.g.,
per share, per barrel, per MCF), (ii) relate to the performance of the Company
or any Subsidiary as a whole or any business unit or division of the Company or
any Subsidiary or any combination thereof, (iii) be compared to the performance
of a group of comparator companies, or published or special index, (iv) be based
on change in the Performance Measure over a specified period of time and such
change may be measured based on an arithmetic change over the specified period
(e.g., cumulative change or average change), or percentage change over the
specified period (e.g., cumulative percentage change, average percentage change
or compounded percentage change), (v) relate to or be compared to one or more
other Performance Measures, or (vi) any combination of the foregoing. The
Committee also has the authority to provide for accelerated vesting of any Award
based on the achievement of performance goals pursuant to the Performance
Measures specified in this Article 14.
 
14.3           Evaluation of Performance. The Committee may provide in any Award
intended to qualify as Performance-Based Compensation that any evaluation of
performance may include or exclude the impact, if any, on reported financial
results of any of the following events that occurs during a Performance Period:
(a) asset write-downs, (b) litigation or claim judgments or settlements, (c)
changes in tax laws, accounting principles or other laws or provisions, (d)
reorganization or restructuring programs, (e) acquisitions or divestitures, (f)
foreign exchange gains and losses, and (g) gains and losses that are treated as
extraordinary items under Financial Accounting Standard No. 145 (Accounting
Standards Codification Topic 225-20). To the extent such inclusions or
exclusions affect Awards to Covered Employees; they shall be prescribed in a
form that meets the requirements of Code Section 162(m) for deductibility.
 
14.4           Adjustment of Performance-Based Compensation. Awards that are
intended to qualify as Performance-Based Compensation may not be adjusted
upward. The Committee shall retain the discretion to adjust such Awards
downward, either on a formula or discretionary basis or any combination, as the
Committee determines, in its sole discretion.
 
14.5           Committee Discretion. In the event that applicable tax or
securities laws change to permit Committee discretion to alter the governing
Performance Measures or permit flexibility with respect to the terms of any
Award or Awards to be treated as Performance-Based Compensation without
obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards that shall not qualify as Performance-Based Compensation, the
Committee may make such grants without satisfying the requirements of Code
Section 162(m) and base vesting on Performance Measures other than those set
forth in Section 14.2.
 
Article 15. Nonemployee Director Awards

15.1           Awards to Nonemployee Directors. The Board or Committee shall
determine and approve all Awards to Nonemployee Directors. The terms and
conditions of any grant of any Award to a Nonemployee Director shall be set
forth in an Award Agreement.
 
15.2           Awards in Lieu of Fees. The Board or Committee may permit a
Nonemployee Director the opportunity to receive an Award in lieu of payment of
all or a portion of future director fees (including but not limited to cash
retainer fees and meeting fees) or other type of Awards pursuant to such terms
and conditions as the Board or Committee may prescribe and set forth in an
applicable sub-plan or Award Agreement.
 
 
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Article 16. Effect of a Change in Control
 
Notwithstanding any other provision of this Plan to the contrary, the provisions
of this Article 16 shall apply in the event of a Change in Control, unless
otherwise determined by the Committee in its sole discretion, and set forth in
the applicable Award Agreement:

(a)           Outstanding Options and SARs. Upon a Change in Control, a
Participant’s then-outstanding Options and SARs that are not vested shall
immediately become fully vested (and, to the extent applicable, all performance
conditions shall be deemed satisfied) and exercisable over the exercise period
set forth in the applicable Award Agreement.
 
(b)           Outstanding Awards, other than Options and SARs, Subject Solely to
a Service Condition. Upon a Change in Control, a Participant’s then-outstanding
Awards, other than Options and SARs, that are not vested and as to which vesting
depends solely on the satisfaction of a service obligation by the Participant to
the Company or any Subsidiary shall become fully vested and shall be settled in
cash, Shares or a combination thereof as provided for under the applicable Award
Agreement as soon as practicable following such Change in Control.
 
(c)           Outstanding Awards, other than Options and SARs, Subject to a
Performance Condition. Upon a Change in Control, a Participant’s
then-outstanding Awards, other than Options and SARs, that are not vested and as
to which vesting depends upon the satisfaction of one or more performance
conditions shall immediately vest and all performance conditions shall be deemed
satisfied as if target performance was achieved and shall be settled in cash,
Shares or a combination thereof as provided for under the applicable Award
Agreement as soon as practicable following such Change in Control;
notwithstanding that the applicable performance period, retention period or
other restrictions and conditions have not been completed or satisfied.
 
(d)           Other Awards. Upon a Change in Control, the treatment of a
Participant’s then-outstanding Awards that are not vested and that are not
subject to paragraphs (a), (b) or (c) above shall be determined in accordance
with the applicable Award Agreements or, if not specified in the Award
Agreements, shall be determined by the Committee.
 
Article 17. Dividend Equivalents

The Committee may grant Dividend Equivalents to a Participant based on the
dividends declared on Shares that are subject to any Award granted to the
Participant, except for Options, SARs and Restricted Stock, with such Dividend
Equivalents credited to the Participant as of the applicable dividend payment
dates that occur during a period determined by the Committee. Such Dividend
Equivalents shall be converted to and paid in cash or additional Shares or
Awards by such formula and at such time and subject to such limitations as may
be determined by the Committee; provided that in the case of an Award as to
which vesting depends upon the satisfaction of one or more performance
conditions, the right to Dividend Equivalents shall be subject to the same
restrictions on vesting and payout as the underlying Award.
 
Article 18. Beneficiary Designation

Each Participant under this Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under this Plan is to be paid in case of his death before he receives
any or all of such benefit. Each such designation shall revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime. In the absence of any such
beneficiary designation, benefits remaining unpaid or rights remaining
unexercised at the Participant’s death shall be paid to or exercised by the
Participant’s executor, administrator or legal representative.
 
 
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Article 19. Rights of Participants

19.1           Employment. Nothing in this Plan or an Award Agreement shall (a)
interfere with or limit in any way the right of the Company or any Subsidiary to
terminate any Participant’s employment with the Company or any Subsidiary at any
time or for any reason not prohibited by law or (b) confer upon any Participant
any right to continue his employment or service as a Director or Third-Party
Service Provider for any specified period of time. Neither an Award nor any
benefits arising under this Plan shall constitute an employment contract with
the Company or any Subsidiary and, accordingly, subject to Articles 3 and 20,
this Plan and the benefits hereunder may be amended or terminated at any time in
the sole and exclusive discretion of the Board without giving rise to any
liability on the part of the Company, any Subsidiary, the Committee or the
Board.

19.2           Participation. No individual shall have the right to be selected
to receive an Award under this Plan, or, having been so selected, to be selected
to receive a future Award.
 
19.3           Rights as a Shareholder. Except as otherwise provided herein, a
Participant shall have none of the rights of a shareholder with respect to
Shares covered by any Award until the Participant becomes the record holder of
such Shares.
 
Article 20. Amendment and Termination

20.1           Amendment and Termination of the Plan and Awards.
 
(a)           Subject to subparagraphs (b) and (c) of this Section 20.1 and
Section 20.3 of the Plan, the Board may at any time amend or terminate the Plan
or amend or terminate any outstanding Award.
 
(b)           Except as provided for in Section 4.4, the terms of an outstanding
Award may not be amended, without prior shareholder approval, to:
 
(i)           reduce the Option Price of an outstanding Option or to reduce the
Grant Price of an outstanding SAR,
 
(ii)           cancel an outstanding Option or SAR in exchange for other Options
or SARs with an Option Price or Grant Price, as applicable, that is less than
the Option Price of the cancelled Option or the Grant Price of the cancelled
SAR, as applicable, or
 
(iii)           cancel an outstanding Option with an Option Price that is less
than the Fair Market Value of a Share on the date of cancellation or cancel an
outstanding SAR with a Grant Price that is less than the Fair Market Value of a
Share on the date of cancellation in exchange for cash or another Award.
 
(c)           Notwithstanding the foregoing, no amendment of this Plan shall be
made without shareholder approval if shareholder approval is required pursuant
to rules promulgated by any stock exchange or quotation system on which Shares
are listed or quoted or by applicable U.S. state corporate laws or regulations,
applicable U.S. federal laws or regulations and the applicable laws of any
foreign country or jurisdiction where Awards are, or will be, granted under the
Plan.
 
20.2           Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. Subject to Section 14.4, the Committee may make adjustments
in the terms and conditions of, and the criteria included in, Awards in
recognition of unusual or nonrecurring events (including, without limitation,
the events described in Section 4.4) affecting the Company or the financial
statements of the Company or of changes in applicable laws, regulations, or
accounting principles, whenever the Committee determines that such adjustments
are appropriate in order to prevent unintended dilution or enlargement of the
benefits or potential benefits intended to be made available under this Plan.
The determination of the Committee as to the foregoing adjustments, if any,
shall be conclusive and binding on Participants under this Plan. By accepting an
Award under this Plan, a Participant agrees to any adjustment to the Award made
pursuant to this Section 20.2 without further consideration or action.
 
 
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20.3           Awards Previously Granted. Notwithstanding any other provision of
this Plan to the contrary, other than Sections 20.2, 20.4 and 22.14, no
termination or amendment of this Plan or an Award Agreement shall adversely
affect in any material way any Award previously granted under this Plan, without
the written consent of the Participant holding such Award.

20.4           Amendment to Conform to Law. Notwithstanding any other provision
of this Plan to the contrary, the Committee may amend the Plan or an Award
Agreement, to take effect retroactively or otherwise, as deemed necessary or
advisable for the purpose of conforming the Plan or an Award Agreement to any
law relating to plans of this or similar nature, and to the administrative
regulations and rulings promulgated thereunder. By accepting an Award under this
Plan, a Participant agrees to any amendment made pursuant to this Section 20.4
to the Plan and any Award without further consideration or action.
 
Article 21. Tax Withholding

21.1           Minimum Tax Withholding. The Company shall have the power and the
right to deduct or withhold, or require a Participant to remit to the Company,
the minimum statutory amount to satisfy applicable federal, state and local tax
withholding requirements, domestic or foreign, with respect to any taxable event
arising as a result of this Plan but in no event shall such deduction or
withholding or remittance exceed the minimum statutory withholding requirements.
 
21.2           Share Withholding. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock,
upon the settlement of Restricted Stock Units, or upon the achievement of
performance goals related to Performance Shares, or any other taxable event
arising as a result of an Award granted hereunder (collectively and individually
referred to as a “Share Payment”), a Participant may elect, subject to the
approval of the Committee, to satisfy the withholding requirement, in whole or
in part, by having the Company withhold from a Share Payment the number of
Shares having a Fair Market Value on the date the withholding is to be
determined equal to the minimum statutory withholding requirement but in no
event shall such withholding exceed the minimum statutory withholding
requirement. All such elections shall be irrevocable, made in writing, and
signed by the Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.
 
Article 22. General Provisions

22.1           Forfeiture Events.
 
(a)           In addition to the forfeiture events specified in Section 22.1(b),
the Committee may specify in an Award Agreement that the Participant’s rights,
payments and benefits with respect to an Award shall be subject to reduction,
cancellation, forfeiture or recoupment upon the occurrence of certain specified
events, in addition to any otherwise applicable vesting of an Award.
 
(b)           A Participant’s termination of employment for Cause shall result
in the forfeiture of the Participant’s outstanding Awards in accordance with the
following:
 
(i)           Any outstanding and nonvested Options, SARs, Restricted Stock,
RSUs, Performance Shares, Performance Units, Cash-Based Awards and Other
Stock-Based Awards granted to the Participant shall be forfeited as of the date
immediately preceding the Participant’s Termination of Employment; and
 
(ii)           Any vested and unexercised Options and SARs, vested but not
settled RSUs, earned but not settled Performance Shares or Performance Units,
and earned and/or vested Cash-Based Awards and Other Stock-Based Awards granted
to the Participant shall be forfeited as of the date immediately preceding the
Participant’s Termination of Employment.
 
22.2           Legend. The certificates for Shares may include any legend that
the Committee deems appropriate to reflect any restrictions on transfer of such
Shares.

 
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22.3           Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine, the
plural shall include the singular, and the singular shall include the plural.
 
22.4           Severability. In the event any provision of this Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of this Plan, and this Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
 
22.5           Requirements of Law. The granting of Awards and the issuance of
Shares under this Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
 
22.6           Delivery of Title. The Company shall have no obligation to issue
or deliver evidence of title for Shares issued under this Plan prior to:
 
(a)           Obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable; and
 
(b)           Completion of any registration or other qualification of the
Shares under any applicable national or foreign law or ruling of any
governmental body that the Company determines to be necessary or advisable.
 
22.7           Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company’s counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
 
22.8           Investment Representations. The Committee may require any
individual receiving Shares pursuant to an Award under this Plan to represent
and warrant in writing that the individual is acquiring the Shares for
investment and without any present intention to sell or distribute such Shares.
 
22.9           Employees Based Outside of the United States. Notwithstanding any
provision of this Plan to the contrary, in order to comply with the laws in
other countries in which the Company or any Subsidiaries operate or have
Employees, Directors or Third-Party Service Providers, the Committee, in its
sole discretion, shall have the power and authority to:
 
(a)           Determine which Subsidiaries shall be covered by this Plan;
 
(b)           Determine which Employees, Directors or Third-Party Service
Providers outside the United States are eligible to participate in this Plan;
 
(c)           Modify the terms and conditions of any Award granted to Employees,
Directors or Third-Party Service Providers outside the United States to comply
with applicable foreign laws;
 
(d)           Establish sub-plans and modify exercise procedures and other terms
and procedures, to the extent such actions may be necessary or advisable. Any
sub-plans and modifications to Plan terms and procedures established under this
Section 22.9 by the Committee shall be attached to this Plan document as
appendices; and
 
(e)           Take any action, before or after an Award is made, that it deems
advisable to obtain approval or comply with any necessary local government
regulatory exemptions or approvals.
 
Notwithstanding the above, the Committee may not take any actions hereunder, and
no Awards shall be granted, that would violate applicable law.

 
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22.10           Uncertificated Shares. To the extent that this Plan provides for
issuance of certificates to reflect the transfer of Shares, the transfer of such
Shares may be effected on a noncertificated basis, to the extent not prohibited
by applicable law or the rules of any stock exchange.
 
22.11           Unfunded Plan. Participants shall have no right, title or
interest whatsoever in or to any investments that the Company or any
Subsidiaries may make to aid it in meeting its obligations under this Plan.
Nothing contained in this 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, legal
representative or any other individual. To the extent that any individual
acquires a right to receive payments from the Company or any Subsidiary under
this Plan, such right shall be no greater than the right of an unsecured general
creditor of the Company or the Subsidiary, as the case may be. All payments to
be made hereunder shall be paid from the general funds of the Company, or the
Subsidiary, as the case may be, 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 this Plan.
 
22.12           No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to this Plan or any Award. The Committee shall determine
whether cash, Awards or other property shall be issued or paid in lieu of
fractional Shares or whether such fractional Shares or any rights thereto shall
be forfeited or otherwise eliminated.
 
22.13           Retirement and Welfare Plans. Neither Awards made under this
Plan nor Shares or cash paid pursuant to such Awards may be included as
“compensation” for purposes of computing the benefits payable to any Participant
under the Company’s or any Subsidiary’s retirement plans (both qualified and
nonqualified) or welfare benefit plans unless such other plan expressly provides
that such compensation shall be taken into account in computing a Participant’s
benefit.
 
22.14           Deferred Compensation. To the extent applicable, this Plan and
all Awards granted hereunder are intended to comply with or be exempt from Code
section 409A and will be interpreted in a manner intended to comply with Code
section 409A. To the extent there is a conflict between the provisions of the
Plan relating to compliance with Code section 409A and the provisions of any
Agreement issued under the Plan, the provisions of the Plan control.  Moreover,
any discretionary authority that the Committee may have pursuant to the Plan
shall not be applicable to an Award not exempt from Code Section 409A to the
extent such discretionary authority would conflict with Code section 409A.  In
addition, to the extent required to avoid a violation of the applicable rules
under Code section 409A by reason of Code section 409A(a)(2)(B)(i), any payment
under an Award shall be delayed until the earliest date of payment that will
result in compliance with the rules of Code section 409A(a)(2)(B)(i) (regarding
the required six-month delay for distributions to specified employees that are
related to a separation from service).  To the extent that an Award not exempt
from Code Section 409A provides for payment upon the recipient’s termination of
employment as an employee or cessation of service as a Non-Employee Director or
Third-Party Service Provider, such Award shall be deemed to require payment upon
the individual’s “separation from service” within the meaning of Code section
409A.  In the event that an Award shall be deemed not to comply with Code
section 409A, then neither the Company, the Board of Directors, the Committee
nor its or their designees or agents, nor any of  their affiliates, assigns or
successors (each a “protected party”) shall be liable to any Award recipient or
other person for actions, inactions, decisions, indecisions or any other role in
relation to the Plan by a protected party if made or undertaken in good faith or
in reliance on the advice of counsel (who may be counsel for the Company), or
made or undertaken by someone other than a protected party.

22.15           Nonexclusivity of this Plan. The adoption of this Plan shall not
be construed as creating any limitations on the power of the Board or Committee
to adopt such other compensation arrangements as it may deem desirable for any
Participant.
 
22.16           No Constraint on Corporate Action. Nothing in this Plan shall be
construed to: (i) limit, impair, or otherwise affect the Company’s or a
Subsidiary’s right or power to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, or to merge or
consolidate, or dissolve, liquidate, sell or transfer all or any part of its
business or assets; or, (ii) limit the right or power of the Company or a
Subsidiary to take any action that such entity deems to be necessary or
appropriate.

 
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22.17           Governing Law. The Plan and each Award Agreement shall be
governed by the laws of the state of Delaware excluding any conflicts or choice
of law rule or principle that might otherwise refer construction or
interpretation of this Plan to the substantive law of another jurisdiction.
 
22.18           Delivery and Execution of Electronic Documents. To the extent
permitted by applicable law, the Company may (i) deliver by email or other
electronic means (including posting on a website maintained by the Company or by
a third party under contract with the Company) all documents relating to the
Plan or any Award thereunder (including without limitation, prospectuses
required by the Commission) and all other documents that the Company is required
to deliver to its security holders (including without limitation, annual reports
and proxy statements) and (ii) permit Participant’s to electronically execute
applicable Plan documents (including, but not limited to, Award Agreements) in a
manner prescribed to the Committee.
 
22.19           No Representations or Warranties Regarding Tax Effect.
Notwithstanding any provision of the Plan to the contrary, the Company,
Subsidiaries, the Board and the Committee neither represent nor warrant the tax
treatment under any federal, state, local or foreign laws and regulations
thereunder (individually and collectively referred to as the “Tax Laws”) of any
Award granted or any amounts paid to any Participant under the Plan including,
but not limited to, when and to what extent such Awards or amounts may be
subject to tax, penalties and interest under the Tax Laws.
 
22.20           Indemnification. Subject to requirements of the laws of the
state of Delaware, each individual who is or shall have been a member of the
Board, or a Committee appointed by the Board, or an officer of the Company to
whom authority was delegated in accordance with Article 3, shall be indemnified
and held harmless by the Company against and from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit or proceeding to which
he or she may be a party or in which he or she may be involved by reason of any
action taken or failure to act under this Plan and against and from any and all
amounts paid by him or her in settlement thereof, with the Company’s approval,
or paid by him or her in satisfaction of any judgment in any such action, suit,
or proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his/her own behalf, unless such loss,
cost, liability or expense is a result of his/her own willful misconduct or
except as expressly provided by statute. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such
individuals may be entitled under the Company’s Articles of Incorporation or
Bylaws, as a matter of law or otherwise, or any power that the Company may have
to indemnify them or hold them harmless.
 
22.21           Successors. All obligations of the Company under this Plan with
respect to Awards granted hereunder shall be binding on 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 business and/or assets of the Company
 

 
 
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