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AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT

This AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (“Amendment”) is made and
entered into as of April 19, 2013, by and between Keith G. Larsen, (the
“Executive”)  and U.S. Energy Corp., a Wyoming corporation (the
“Company”),  with respect to the following facts:

A.           Executive and Company are parties to the Executive Employment
Agreement effective April 20, 2012 (the “Agreement”), with respect to employment
by the Executive.

B.           The Executive and Company now wish to amend the Agreement as
follows.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Executive and Company do hereby agree:

1.  
Recitals/Definitions.  Executive and Company acknowledges that the recitals set
forth above are true and correct. Initially capitalized terms used and not
otherwise defined herein shall have the meanings ascribed in the Agreement.

 
2.  
Employment Term.  Executive and Company hereby extends the Employment Term
described in Section 1 of the Agreement to October 20, 2013.

 
3.  
2001 Stock Compensation Plan.  With approval of the 2012 Equity Plan by the
shareholders at the 2012 Annual Meeting, the 2001 Stock Compensation Plan will
be terminated on April 20, 2013 and is deleted from Section 3 part 3 of the
Agreement.

 
4.  
Performance Compensation Plan.  The 2012 Performance Matrix in the Performance
Compensation Plan, which is attached to the Agreement, is hereby modified to be
applicable for 2013 as provided for in Exhibit A.

 
5.  
Affirmation.  The Agreement, as amended by this Amendment, is hereby affirmed
and remains in full force and effect.  In the event of a conflict or discrepancy
between the Agreement and this Amendment, the provisions of this Amendment shall
control.

 
6.  
Counterparts.  This Amendment may be executed in counterparts, each of which
shall be deemed an original, but all of which, together, shall constitute one
and the same Amendment.

 
IN WITNESS WHEREOF, Executive and Company have executed this Amendment as of the
date first written above.
 

EXECUTIVE
 
U.S. ENERGY CORP.
By:
 /s/  Keith G. Larsen  
By:
  /s/  Jerry W. Danni
Name:
Keith G. Larsen
 
Name:
Jerry W. Danni
Its:
CEO
 
Its:
Chairman of Compensation Committee

 
 
 
 

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Exhibit A

2013 Performance Compensation Plan

Financial Factors

Stock Price: The 200 day moving average stock price ending December 31, 2013
must exceed the same 200 day moving average ending December 31, 2012 by 15% or
greater to earn the 20% assigned award.  No award will be earned for less than
the targeted 15% increase in the 200 day moving day average stock price.

Earnings Per Share:  During the year ending December 31, 2013 earnings per share
must increase at least $0.05 per share to attain the 20% assigned award.

Cash Flow:  2012 cash flow from operations must be at least $21 million to
trigger the award.  To qualify for the full 20% award, cash flow must be $30
million or greater.  Cash flow between $21 million and $30 million will be
awarded in 2% increments up to the full 20% allocated award amount.

Operational Factors

Reserves:  Increase oil and gas proved reserves by 30% at December 31, 2013 from
the stated reserves at December 31, 2012.

Production:  Increase average daily oil and gas production for the year ending
2013 by 40%, from the 2012 average daily production. No award will be earned for
less than a 40% increase for the year ending December 31, 2013.

2013 BONUS AWARD MATRIX SUMMARY

Description
 
Tier 1
   
Tier 2
   
Tier 3
   
Tier 4
   
Tier 5
 
Salary Range
    $0-$49,999      
$50,000-
$99,999
      $100,000-$149,999    
$150,000 +
Non-executive
   
Executive Officers
 
Bonus % of Base Salary
    10%       20%       35%       50%       100%  

 
 
 
2013 BONUS AWARD MATRIX CRITERIA
Metric
 
% Allocated
 
Criteria
Stock price
    20%  
15% increase in the 200 MDA
Earnings per share
    20%  
Greater than $0.05/share
Cash flow from operations
    20%  
$21 - $30 million, allocated in 2% increments
Reserves (BOE)
    20%  
Increase by 30%
Production (BOE/day)
    20%  
Increase by 40%

 
 

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