Exhibit 10.2
 
INDEX OIL AND GAS INC.
2008 STOCK INCENTIVE PLAN
 
ARTICLE I.  ESTABLISHMENT AND PURPOSE
 
1.1           Establishment.  Index Oil and Gas Inc. (“Index”) hereby
establishes the Index Oil and Gas Inc. 2008 Stock Incentive Plan for the benefit
of certain key employees, officers, directors and others performing services for
Index and its Affiliates, as set forth in this document, as an amendment and
restatement of and successor to the Index Oil and Gas Inc. 2006 Incentive Stock
Option Plan (the “Prior Plan”).  Grants made pursuant to the Prior Plan shall
continue to be governed by the terms of such plan as in effect at the time of
the award and the terms of the related grant agreement.
 
1.2           Purpose.  The purposes of this Plan are to attract and retain
highly qualified individuals to perform services for the Company, to further
align the interests of those individuals with those of the stockholders of
Index, and to more closely link compensation with Company performance.  Index is
committed to creating long-term stockholder value.  Index’s compensation
philosophy is based on the belief that Index can best create stockholder value
if key employees, officers, directors and others performing services for Index
and its Affiliates act and are rewarded as business owners.  Index believes that
an equity stake through equity compensation programs effectively aligns service
provider and stockholder interests by motivating and rewarding performance that
will enhance stockholder value.
 
1.3           Effectiveness and Term.  This Plan shall become effective on the
date of its adoption by the Board (the “Effective Date”), provided that the Plan
is approved within 12 months following such date by the holders of at least a
majority of the shares of Common Stock either (a) present or represented and
entitled to vote at an annual or special meeting of the stockholders of Index
duly held in accordance with applicable law or (b) by written action in lieu of
a meeting in accordance with applicable law.  If the Plan is not so approved by
Index’s stockholders, the Plan will terminate and any Awards granted hereunder
will be null and void.  Unless terminated earlier by the Board pursuant to
Section 14.1, this Plan shall terminate on the day prior to the tenth
anniversary of the Effective Date.
 
ARTICLE II.  DEFINITIONS
 
2.1 “Affiliate” means any corporation, partnership, limited liability Company,
association, trust or other organization which, directly or indirectly,
controls, is controlled by, or is under common control with, Index.  For
purposes of the preceding sentence, “control” (including, with correlative
meanings, the terms “controlled by” and “under common control with”), as used
with respect to any entity or organization, shall mean the possession, directly
or indirectly, of the power (a) to vote more than 50% of the securities having
ordinary voting power for the election of directors of the controlled entity or
organization, or (b) to direct or cause the direction of the management and
policies of the controlled entity or organization, whether through the ownership
of voting securities or by contract or otherwise.
 
2.2 “Award” means an award granted to a Participant in the form of Options,
SARs, Restricted Stock, Restricted Stock Units, Performance Awards, Stock Awards
or Other Incentive Awards, whether granted singly or in combination.
 
2.3 “Award Agreement” means a written agreement between Index and a Participant
that sets forth the terms, conditions, restrictions and limitations applicable
to an Award.
 
2.4 “Board” means the Board of Directors of Index.
 
2.5 “Cash Dividend Right” means a contingent right, granted in tandem with a
specific Restricted Stock Unit Award, to receive an amount in cash equal to the
cash distributions made by Index with respect to a share of Common Stock during
the period such Award is outstanding.
 
2.6 “Cause” means, unless otherwise defined in an Employee Agreement entered
into by the Participant, any of the following: (a) a Participant’s conviction
of, or plea of nolo contendere to, any felony or to any crime or offense causing
substantial harm to the Company or involving acts of theft, fraud, embezzlement,
moral turpitude or similar conduct; (b) a Participant’s repeated intoxication by
alcohol or drugs during the performance of his duties in a manner that
materially and adversely affects the Participant’s performance of such duties;
(c) malfeasance in the conduct of the Participant’s duties, including, but not
limited to (i) willful and intentional misuse or diversion of funds of the
Company, (ii) embezzlement or (iii) fraudulent or willful and material
misrepresentations or concealments on any written reports submitted to the
Company; (d) a Participant’s material violation of any provision of any
employment, nonsolicitation, noncompetition or other agreement with the Company;
or (e) a Participant’s material failure to perform the duties of the
Participant’s employment or material failure to follow or comply with the
reasonable and lawful written directives of the Board or senior officers of
Index, in any case under clause (d) or (e) only after the Participant shall have
been informed in writing of such material failure and given a period of not more
than 30 days to remedy same.
 
 
 
1

--------------------------------------------------------------------------------

 
 
2.7 “Change in Control” means the occurrence of a “change in the ownership,” a
“change in the effective control” or a “change in the ownership of a substantial
portion of the assets” of Index, as determined in accordance with this
definition.  For an event to constitute a  Change in Control that is a “change
in the ownership,” a “change in the effective control” or a “change in the
ownership of a substantial portion of the assets” of Index with respect to a
Participant, except as otherwise provided in subparagraph (ii)(B) of this
definition, Index must be (a) the entity for whom the Participant is providing
services at the time of the Change in Control; (b) the entity that is liable for
payment in respect of an Award but only if either the payment is attributable to
the performance of service by the Participant for the entity or there is a bona
fide business purpose for the entity to be liable for the payment and, in either
case, no significant purpose of making the entity liable for the payment is the
avoidance of Federal income tax; or (c) an entity that is a majority equity
holder, meaning an equity holder owning more than 50% of the total fair market
value and total voting power, of an entity identified in (a) or (b) or any
entity in a chain of entities in which each entity is a majority equity holder
of another entity in the chain, ending in an entity identified in (a) or (b). 
In determining whether an event is a “change in the ownership,” a “change in the
effective control” or a “change in the ownership of a substantial portion of the
assets” of Index, the following provisions apply:
 
(i)           A “change in the ownership” of Index will occur on the date on
which any one person, or more than one person acting as a group, acquires
ownership of stock of Index that, together with stock held by such person or
group, constitutes more than 50% of the total fair market value or total voting
power of the stock of Index, as determined in accordance with Treasury
Regulation § 1.409A-3(i)(5)(v).  If a person or group is considered either to
own more than 50% of the total fair market value or total voting power of the
stock of Index, or to have effective control of Index within the meaning of
subparagraph (ii) of this definition, and such person or group acquires
additional stock of Index, the acquisition of additional stock by such person or
group shall not be considered to cause a “change in the ownership” of Index.
 
(ii)           A “change in the effective control” of Index shall occur on
either of the following dates:
 
(A)           The date on which any one person, or more than one person acting
as a group, acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such person or persons) ownership of
stock of Index possessing 50% or more of the total voting power of the stock of
Index, as determined in accordance with Treasury Regulation §
1.409A-3(i)(5)(vi).  If a person or group is considered to possess 50% or more
of the total voting power of the stock of Index, and such person or group
acquires additional stock of Index, the acquisition of additional stock by such
person or group shall not be considered to cause a “change in the effective
control” of Index; or
 
(B)           The date on which a majority of the members of the Board is
replaced during any 12-month period by directors whose appointment or election
is not endorsed by a majority of the members of the Board before the date of the
appointment or election, as determined in accordance with Treasury Regulation §
1.409A-3(i)(5)(vi).  The event described in the preceding sentence will not
constitute a “change in effective control” unless no other corporation is a
majority shareholder of Index within the meaning of Code Section 409A.
 
(iii)           A “change in the ownership of a substantial portion of the
assets” of Index shall occur on the date on which any one person, or more than
one person acting as a group, acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such person or
persons) assets from Index that have a total gross fair market value equal to or
more than 50% of the total gross fair market value of all of the assets of Index
immediately before such acquisition or acquisitions, as determined in accordance
with Treasury Regulation § 1.409A-3(i)(5)(vii).  A transfer of assets shall not
be treated as a “change in the ownership of a substantial portion of the assets”
when the transfer is made to an entity that is controlled by the shareholders of
Index, as determined in accordance with Treasury Regulation §
1.409A-3(i)(5)(vii)(B).
 
 
2

--------------------------------------------------------------------------------

 
 
2.8 “Code” means the Internal Revenue Code of 1986, as amended from time to
time, including regulations thereunder and successor provisions and regulations.
 
2.9 “Committee” means the Remuneration Committee of the Board or such other
committee of the Board as may be designated by the Board to administer the Plan,
which committee shall consist of two or more members of the Board.  To the
extent that no Committee exists that has the authority to administer the Plan,
the functions of the Committee shall be exercised by the Board.  If possible
based on the composition of the Board, during such time as the Common Stock is
registered under Section 12 of the Exchange Act, each member of the Committee
shall be an Outside Director; provided, however, that with respect to the
application of the Plan to Awards made to Outside Directors, the “Committee”
shall be the Board.  If for any reason the appointed Committee does not meet the
requirements of Rule 16b-3 or Section 162(m) of the Code (to the extent
applicable), such noncompliance with such requirements shall not affect the
validity of Awards, grants, interpretations or other actions of the Committee.
 
2.10 “Common Stock” means the common stock of Index, $.001 par value per share,
or any stock or other securities hereafter issued or issuable in substitution or
exchange for the Common Stock.
 
2.11 “Company” means Index and any Affiliate.
 
2.12 “Disability” means (a) the Participant is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months or (b) if the Company
has an accident or health plan covering its employees, the Participant is, by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than three months under an accident or health plan covering
employees of the Company; provided, however, that with respect to Options and
SARs that are not subject to Code Section 409A, “Disability” shall mean disabled
within the meaning of Code Section 22(e)(3).
 
2.13 “Dividend Unit Right” means a contingent right, granted in tandem with a
specific Restricted Stock Unit Award, to have an additional number of Restricted
Stock Units credited to a Participant in respect of the Award equal to the
number of shares of Common Stock that could be purchased at Fair Market Value
with the amount of each cash distribution made by Index with respect to a share
of Common Stock during the period such Award is outstanding.
 
2.14 “Effective Date” means the date this Plan becomes effective as provided in
Section 1.3.
 
2.15 “Employee” means an employee of the Company; provided, however, that the
term “Employee” does not include an Outside Director or an individual performing
services for the Company who is treated for tax purposes as an independent
contractor at the time of performance of services.
 
2.16 “Employee Agreement” means any agreement between the Company and an
Employee containing one or more of the following agreements or covenants by the
Employee:  (i) an employment agreement, (ii) an agreement by the Employee to
keep confidential certain information, (iii) an agreement or covenant to refrain
from competing with the Company, (iv) an agreement or covenant to refrain from
soliciting employees or customers of the Company, or (v) an agreement to
disclose and assign to the Company certain intellectual property, including
without limitation, ideas, inventions, discoveries, processes, designs, methods,
substances, articles, computer programs, and improvements.
 
2.17 “Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
2.18 “Fair Market Value” means (a) if the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation Nasdaq Global Select Market, Nasdaq Global Market, Nasdaq Capital
Market, the American Stock Exchange and the New York Stock Exchange, the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or system for the date of the determination (or if there
was no quoted price for such date, then for the last preceding business day on
which there was a quoted price), as reported in The Wall Street Journal or such
other source as the Committee deems reliable; (b) if the Common Stock is
regularly quoted by a recognized securities dealer but selling prices are not
reported, the mean between the high bid and low asked prices for the Common
Stock for the date of the determination, as reported in The Wall Street Journal
or such other source as the Committee deems reliable; or (c) if the Common Stock
is not reported or quoted by any such organization, (i) with respect to
Incentive Stock Options, the fair market value of the Common Stock as determined
in good faith by the Committee within the meaning of Section 422 of the Code or
(ii) with respect to other Awards, fair market value of the Common Stock as
determined in good faith by the Committee using a “reasonable application of a
reasonable valuation method” within the meaning of Treasury Regulation §
1.409A-1(b)(5)(iv)(B).
 
 
 
3

--------------------------------------------------------------------------------

 
2.19  “Grant Date” means the date an Award is determined to be effective by the
Committee upon the grant of such Award.
 
2.20 “Incentive Stock Option” means an Option that is intended to meet the
requirements of Section 422(b) of the Code.
 
2.21 “Index” means Index Oil and Gas Inc., a Nevada corporation, or any
successor thereto.
 
2.22 “Nonqualified Stock Option” means an Option that is not an Incentive Stock
Option.
 
2.23 “Option” means an option to purchase shares of Common Stock granted to a
Participant pursuant to Article VII.  An Option may be either an Incentive Stock
Option or a Nonqualified Stock Option, as determined by the Committee.
 
2.24 “Other Incentive Award” means an incentive award granted to a Participant
pursuant to Article XII.
 
2.25 “Outside Director” means a member of the Board who (a) meets the
independence requirements of the principal exchange or quotation system upon
which the shares of Common Stock are listed or quoted, (b) qualifies as an
“outside director” under Section 162(m) of the Code, (c) qualifies as a
“non-employee director” of Index under Rule 16b-3, and (d) satisfies
independence criteria under any other applicable laws or regulations relating to
the issuance of shares of Common Stock to Employees.
 
2.26 “Participant” means an Employee, Outside Director or other individual
performing services for the Company that has been granted an Award; provided,
however, that no Award that may be settled in Common Stock may be issued to a
Participant that is not a natural person.
 
2.27 “Performance Award” means an Award granted to a Participant pursuant to
Article XI to receive cash or Common Stock conditioned in whole or in part upon
the satisfaction of specified performance criteria.
 
2.28 “Permitted Transferee” shall have the meaning given such term in Section
15.4.
 
2.29 “Plan” means the Index Oil and Gas Inc. 2008 Stock Incentive Plan, as in
effect from time to time.
 
2.30 “Prior Plan” means the Index Oil and Gas Inc. 2006 Incentive Stock Option
Plan.
 
2.31 “Restricted Period” means the period established by the Committee with
respect to an Award of Restricted Stock or Restricted Stock Units during which
the Award remains subject to forfeiture.
 
2.32 “Restricted Stock” means a share of Common Stock granted to a Participant
pursuant to Article IX that is subject to such terms, conditions and
restrictions as may be determined by the Committee.
 
2.33 “Restricted Stock Unit” means a fictional share of Common Stock granted to
a Participant pursuant to Article X that is subject to such terms, conditions
and restrictions as may be determined by the Committee.
 
 
 
4

--------------------------------------------------------------------------------

 
2.34 “Rule 16b-3” means Rule 16b-3 promulgated by the SEC under the Exchange
Act, or any successor rule or regulation that may be in effect from time to
time.
 
2.35 “SEC” means the United States Securities and Exchange Commission, or any
successor agency or organization.
 
2.36 “Securities Act” means the Securities Act of 1933, as amended.
 
2.37 “Stock Appreciation Right” or “SAR” means a right granted to a Participant
pursuant to Article VIII with respect to a share of Common Stock to receive upon
exercise cash, Common Stock or a combination of cash and Common Stock, equal to
the appreciation in value of a share of Common Stock.
 
2.38 “Stock Award”  means an award of common stock pursuant to section 12.1.
 
ARTICLE III.  PLAN ADMINISTRATION
 
3.1 Plan Administrator and Discretionary Authority.  The Plan shall be
administered by the Committee.  The Committee shall have total and exclusive
responsibility to control, operate, manage and administer the Plan in accordance
with its terms.  The Committee shall have all the authority that may be
necessary or helpful to enable it to discharge its responsibilities with respect
to the Plan.  Without limiting the generality of the preceding sentence, the
Committee shall have the exclusive right to (a) interpret the Plan and the Award
Agreements executed hereunder, (b) decide all questions concerning eligibility
for, and the amount of, Awards granted under the Plan, (c) construe any
ambiguous provision of the Plan or any Award Agreement, (d) prescribe the form
of Award Agreements, (e) correct any defect, supply any omission or reconcile
any inconsistency in the Plan or any Award Agreement, (f) issue administrative
guidelines as an aid to administering the Plan and make changes in such
guidelines as the Committee from time to time deems proper, (g) make regulations
for carrying out the Plan and make changes in such regulations as the Committee
from time to time deems proper, (h) determine whether Awards should be granted
singly or in combination, (i) to the extent permitted under the Plan, grant
waivers of Plan terms, conditions, restrictions and limitations, (j) accelerate
the exercise, vesting or payment of an Award when such action or actions would
be in the best interests of the Company, (k) provide for the extension of the
exercisability of an Option to the extent such extension does not result in a
modification of the Option for purposes of Code Section 409A, (l) require
Participants to hold a stated number or percentage of shares of Common Stock
acquired pursuant to an Award for a stated period, and (m) take any and all
other actions the Committee deems necessary or advisable for the proper
operation or administration of the Plan.  The Committee shall have authority in
its sole discretion with respect to all matters related to the discharge of its
responsibilities and the exercise of its authority under the Plan, including
without limitation its construction of the terms of the Plan and its
determination of eligibility for participation in, and the terms of Awards
granted under, the Plan.  The decisions of the Committee and its actions with
respect to the Plan shall be final, conclusive and binding on all persons having
or claiming to have any right or interest in or under the Plan, including
without limitation Participants and their respective Permitted Transferees,
estates, beneficiaries and legal representatives.  In the case of an Award
intended to be eligible for the performance-based compensation exemption under
section 162(m) of the Code, the Committee shall exercise its discretion
consistent with qualifying the Award for such exemption.
 
3.2 Liability; Indemnification.  No member of the Committee, nor any person to
whom it has delegated authority, shall be personally liable for any action,
interpretation or determination made in good faith with respect to the Plan or
Awards granted hereunder, and each member of the Committee (or delegatee of the
Committee) shall be fully indemnified and protected by Index with respect to any
liability he may incur with respect to any such action, interpretation or
determination, to the maximum extent permitted by applicable law.
 
ARTICLE IV.  SHARES SUBJECT TO THE PLAN
 
4.1 Available Shares.
 
(a)           Subject to adjustment as provided in Sections 4.2, the maximum
number of shares of Common Stock that shall be available for grant of Awards
under the Plan shall be (i) 5,500,000 shares, plus (ii) shares of Common Stock,
if any, that, as of the Effective Date, remain available for grants under the
Prior Plan, plus (iii) shares of Common Stock subject to outstanding grants
under the Prior Plan on the Effective Date, that later expire, are forfeited or
otherwise cease to be subject to such grants for any reason other than such
grants having been exercised or paid.  If an Award granted under this Plan
expires, is forfeited or otherwise ceases to be subject to such Award for any
reason other than such Awards having been exercised or paid, the undelivered
shares of Common Stock which were subject to the Award shall, unless the Plan
shall have been terminated, become available for future Awards under the Plan.
 
 
 
5

--------------------------------------------------------------------------------

 
(b)           The maximum aggregate number of shares of Common Stock that may be
issued pursuant to Incentive Stock Options is 5,500,0001. The maximum number of
shares of Common Stock that may be subject to all Awards granted under the Plan
to any one Participant each fiscal year is 500,000 shares.  The maximum number
of shares of Common Stock that may be subject to Nonqualified Stock Options and
SARs granted under the Plan to any one Participant during a fiscal year is
500,000 shares.  The limitations provided in this Section 4.1(b) shall be
subject to adjustment as provided in Section 4.2.
 
(c)           Shares of Common Stock issued pursuant to the Plan may be original
issue or treasury shares or a combination of the foregoing, as the Committee, in
its sole discretion, shall from time to time determine.  During the term of this
Plan, Index will at all times reserve and keep available such number of shares
of Common Stock as shall be sufficient to satisfy the requirements of the
Plan.  If, after reasonable efforts, which efforts shall not include
registration of the Plan or Awards under the Securities Act, Index is unable to
obtain authority from any applicable regulatory body, which authorization is
deemed necessary by legal counsel for Index for the lawful issuance of shares
under the Plan, Index shall be relieved of any liability with respect to its
failure to issue and sell the shares for which such requisite authority was so
deemed necessary unless and until such authority is obtained.
 
(d)           Notwithstanding any provision of this Plan to the contrary, the
Board or the Committee shall have the right to substitute or assume awards in
connection with mergers, reorganizations, separations or other transactions to
which Section 424(a) of the Code applies, provided such substitutions or
assumptions are permitted by Section 424 of the Code (or, if applicable, Section
409A of the Code) and the regulations promulgated thereunder.
 
4.2 Adjustments for Recapitalizations and Reorganizations.  Subject to Article
XIII, if there is any change in the number or kind of shares of Common Stock
outstanding (a) by reason of a stock dividend, spin-off, recapitalization, stock
split or combination or exchange of shares, (b) by reason of a merger,
reorganization or consolidation, (c) by reason of a reclassification or change
in par value or (d) by reason of any other extraordinary or unusual event
affecting the outstanding Common Stock as a class without Index’s receipt of
consideration, or if the value of outstanding shares of Common Stock is reduced
as a result of a spin-off or Index’s payment of an extraordinary cash dividend,
or distribution, or dividend or distribution consisting of any assets of Index
other than cash, the maximum number and kind of shares of Common Stock available
for issuance under the Plan, the maximum number and kind of shares of Common
Stock for which any individual may receive Awards in any fiscal year or under
the Plan, the number and kind of shares of Common Stock covered by outstanding
Awards, and the price per share or the applicable market value or performance
target of such Awards will be appropriately adjusted by the Committee to reflect
any increase or decrease in the number of, or change in the kind or value of,
issued shares of Common Stock to preclude, to the extent practicable, the
enlargement or dilution of rights under such Awards; provided, however, that any
fractional shares resulting from such adjustment shall be
eliminated.  Notwithstanding the provisions of this Section 4.2, (i) the number
and kind of shares of Common Stock available for issuance as Incentive Stock
Options under the Plan shall be adjusted only in accordance with Sections 422
and 424 of the Code and the regulations thereunder and (ii) outstanding Awards
and Award Agreements shall be adjusted in accordance with (A) Sections 422 and
424 of the Code and the regulations thereunder with respect to Incentive Stock
Options and (B) Section 409A of the Code and the regulations thereunder with
respect to Nonqualified Stock Options and, to the extent applicable, other
Awards.
 
4.3 Adjustments for Awards.  The Committee shall have sole discretion to
determine the manner in which shares of Common Stock available for grant of
Awards under the Plan are counted.  Without limiting the discretion of the
Committee under this Section 4.3, unless otherwise determined by the Committee,
the following rules shall apply for the purpose of determining the number of
shares of Common Stock available for grant of Awards under the Plan:
 
 
 
6

--------------------------------------------------------------------------------

 
(a)           Options, Restricted Stock and Stock Awards.  The grant of Options,
Restricted Stock or Stock Awards shall reduce the number of shares of Common
Stock available for grant of Awards under the Plan by the number of shares of
Common Stock subject to such an Award.
 
(b)           SARs.  The grant of SARs that may be paid or settled (i) only in
Common Stock or (ii) in either cash or Common Stock shall reduce the number of
shares available for grant of Awards under the Plan by the number of shares
subject to such an Award; provided, however, that upon the exercise of SARs, the
excess of the number of shares of Common Stock with respect to which the Award
is exercised over the number of shares of Common Stock issued upon exercise of
the Award shall again be available for grant of Awards under the Plan.  The
grant of SARs that may be paid or settled only for cash shall not affect the
number of shares available for grant of Awards under the Plan.
 
(c)           Restricted Stock Units.  The grant of Restricted Stock Units
(including those credited to a Participant in respect of a Dividend Unit Right)
that may be paid or settled (i) only in Common Stock or (ii) in either cash or
Common Stock shall reduce the number of shares available for grant of Awards
under the Plan by the number of shares subject to such an Award; provided,
however, that upon settlement of the Award, the excess, if any, of the number of
shares of Common Stock that had been subject to such Award over the number of
shares of Common Stock issued upon its settlement shall again be available for
grant of Awards under the Plan.  The grant of Restricted Stock Units that may be
paid or settled only for cash shall not affect the number of shares available
for grant of Awards under the Plan.
 
(d)           Performance Awards and Other Incentive Awards.  The grant of a
Performance Award or Other Incentive Award in the form of Common Stock or that
may be paid or settled (i) only in Common Stock or (ii) in either Common Stock
or cash shall reduce the number of shares available for grant of Awards under
the Plan by the number of shares subject to such an Award; provided, however,
that upon settlement of the Award, the excess, if any, of the number of shares
of Common Stock that had been subject to such Award over the number of shares of
Common Stock issued upon its settlement shall again be available for grant of
Awards under the Plan.  The grant of a Performance Award or Other Incentive
Award that may be paid or settled only for cash shall not affect the number of
shares available for grant of Awards under the Plan.
 
(e)           Cancellation, Forfeiture and Termination.  If any Award referred
to in Sections 4.3(a), (b), (c) or (d) (other than an Award that may be paid or
settled only for cash) is canceled or forfeited, or terminates, expires or
lapses, for any reason, the shares then subject to such Award shall again be
available for grant of any Awards under the Plan.
 
(f)           Payment of Exercise Price and Withholding Taxes.  If shares of
Common Stock are used to pay the exercise price of an Award, the number of
shares available for grant of Awards under the Plan shall be increased by the
number of shares delivered as payment of such exercise price.  If shares of
Common Stock are used to pay withholding taxes payable upon exercise, vesting or
payment of an Award, or shares of Common Stock that would be acquired upon
exercise, vesting or payment of an Award are withheld to pay withholding taxes
payable upon exercise, vesting or payment of such Award, the number of shares
available for grant of Awards under the Plan shall be increased by the number of
shares delivered or withheld as payment of such withholding taxes.

ARTICLE V.  ELIGIBILITY
 
The Committee shall select Participants from those Employees, Outside Directors
and other individuals or entities providing services to the Company that, in the
opinion of the Committee, are in a position to make a significant contribution
to the success of the Company.  Once a Participant has been selected for an
Award by the Committee, the Committee shall determine the type and size of Award
to be granted to the Participant and shall establish in the related Award
Agreement the terms, conditions, restrictions and limitations applicable to the
Award, in addition to those set forth in the Plan and the administrative
guidelines and regulations, if any, established by the
Committee.  Notwithstanding the foregoing, Employees, Outside Directors and
other individuals or entities that provide services to Affiliates that are not
considered a single employer with Index under Code Section 414(b) or Code
Section 414(c) shall not be eligible to receive Awards which are subject to Code
Section 409A until the Affiliate adopts this Plan as a participating employer in
accordance with Section 15.19.
 
 
 
7

--------------------------------------------------------------------------------

 
ARTICLE VI.  FORM OF AWARDS

6.1           Form of Awards.  Awards may be granted under the Plan, in the
Committee’s sole discretion, in the form of Options pursuant to Article VII,
SARs pursuant to Article VIII, Restricted Stock pursuant to Article IX,
Restricted Stock Units pursuant to Article X, Performance Awards pursuant to
Article XI and Stock Awards and Other Incentive Awards pursuant to Article XII,
or a combination thereof.  All Awards shall be subject to the terms, conditions,
restrictions and limitations of the Plan.  The Committee may, in its sole
discretion, subject any Award to such other terms, conditions, restrictions
and/or limitations (including without limitation the time and conditions of
exercise, vesting or payment of an Award and restrictions on transferability of
any shares of Common Stock issued or delivered pursuant to an Award), provided
they are not inconsistent with the terms of the Plan.  The Committee may, but is
not required to, subject an Award to such conditions as it determines are
necessary or appropriate to ensure that an Award constitutes “qualified
performance based compensation” within the meaning of Section 162(m) of the Code
and the regulations thereunder.  Awards under a particular Article of the Plan
need not be uniform, and Awards under more than one Article of the Plan may be
combined in a single Award Agreement.  Any combination of Awards may be granted
at one time and on more than one occasion to the same Participant.  Subject to
compliance with applicable tax law, an Award Agreement may provide that a
Participant may elect to defer receipt of income attributable to the exercise or
vesting of an Award.
 
6.2           Loans.  The Committee may, in its sole discretion, approve the
extension of a loan by the Company to a Participant who is an Employee to assist
the Participant in paying the exercise price or purchase price of an Award;
provided, however, that no loan shall be made to any officer of the Company or
to any other person if the extension of such loan would violate any provision of
applicable law (including, without limitation, the Sarbanes-Oxley Act of
2002).  Any loan will be made upon such terms and conditions as the Committee
shall determine.
 
ARTICLE VII.  OPTIONS
 
7.1 General.  Awards may be granted in the form of Options that may be Incentive
Stock Options or Nonqualified Stock Options, or a combination of
both.  Incentive Stock Options may be granted only to employees of Index or a
“parent corporation” or a “subsidiary corporation” of Index, as those terms are
defined in Sections 424(e) and (f) of the Code, respectively.  Nonqualified
Stock Options may be granted only to Employees, Outside Directors or other
individuals performing services for Index or a corporation or other type of
entity in a chain of corporations or other entities in which each corporation or
other entity has a “controlling interest” in another corporation or entity in
the chain, starting with Index and ending with the corporation or other entity
for which the Employee performs services.  For purposes of this Section,
“controlling interest” means (a) in the case of a corporation, ownership of
stock possessing at least 50% of total combined voting power of all classes of
stock entitled to vote of such corporation or at least 50% of the total value of
shares of all classes of stock of such corporation; (b) in the case of a
partnership, ownership of at least 50% of the profits interest or capital
interest of such partnership; (c) in the case of a sole proprietorship,
ownership of the sole proprietorship; or (d) in the case of a trust or estate,
ownership of an actuarial interest (as defined in Treasury Regulation §
1.414(c)-2(b)(2)(ii)) of at least 50% of such trust or estate.
 
7.2 Terms and Conditions of Options.  An Option shall be exercisable in whole or
in such installments and at such times as may be determined by the Committee,
provided that an Option granted to an Employee shall become exercisable over a
period of no longer than five years and no less than 20% of the shares covered
by such Option shall become exercisable annually.  To the extent not exercised,
installments (if more than one) shall accumulate, but shall be exercisable, in
whole or in part, only during the period of exercise stated in the Award
Agreement, whether or not other installments are then exercisable.  No portion
of an Option shall be exercisable, in whole or in part, prior to one year from
the Grant Date unless the Award Agreement provides otherwise.  The price at
which a share of Common Stock may be purchased upon exercise of an Option shall
be determined by the Committee, but such exercise price shall not be less than
100% of the Fair Market Value per share of Common Stock on the Grant Date
unless, with respect to a Nonqualified Stock Option, (a) the Option is granted
through the assumption of, or in substitution for, outstanding awards previously
granted to individuals who became Employees (or other service providers) as a
result of a merger, consolidation, acquisition or other corporate transaction
involving the Company which complies with Treasury Regulation §
1.409A-1(b)(5)(v)(D) or (b) the Option is otherwise structured to be exempt from
or comply with Section 409A of the Code.  Except as otherwise provided in
Section 7.3, the term of each Option shall be as specified by the Committee;
provided, however, that no Options shall be exercisable later than 10 years
after the Grant Date.  Options may be granted with respect to Restricted Stock
or shares of Common Stock that are not Restricted Stock, as determined by the
Committee in its sole discretion.
 
 
 
8

--------------------------------------------------------------------------------

 
7.3 Restrictions Relating to Incentive Stock Options.
 
(a)           Options granted in the form of Incentive Stock Options shall, in
addition to being subject to the terms and conditions of Section 7.2, comply
with Section 422(b) of the Code.  To the extent the aggregate Fair Market Value
(determined as of the dates the respective Incentive Stock Options are granted)
of Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by an individual during any calendar year under all incentive
stock option plans of Index and its parent and subsidiary corporations exceeds
$100,000, such excess Incentive Stock Options shall be treated as options that
do not constitute Incentive Stock Options.  The Committee shall determine, in
accordance with the applicable provisions of the Code, which of a Participant’s
Incentive Stock Options will not constitute Incentive Stock Options because of
such limitation and shall notify the Participant of such determination as soon
as practicable after such determination.  The price at which a share of Common
Stock may be purchased upon exercise of an Incentive Stock Option shall be
determined by the Committee, but such exercise price shall not be less than 100%
of the Fair Market Value of a share of Common Stock on the Grant Date.  No
Incentive Stock Option shall be granted to an Employee under the Plan if, at the
time such Option is granted, such Employee owns stock possessing more than 10%
of the total combined voting power of all classes of stock of Index or of its
parent or subsidiary corporations, within the meaning of Section 422(b)(6) of
the Code, unless (i) on the Grant Date of such Option, the exercise price of
such Option is at least 110% of the Fair Market Value of the Common Stock
subject to the Option and (ii) such Option by its terms is not exercisable after
the expiration of five years from the Grant Date of the Option.
 
(b)    Each Participant awarded an Incentive Stock Option shall notify Index in
writing immediately after the date he or she makes a disqualifying disposition
of any shares of Common Stock acquired pursuant to the exercise of such
Incentive Stock Option.  A disqualifying disposition is any disposition
(including any sale) of such Common Stock before the later of (i) two years
after the Grant Date of the Incentive Stock Option or (ii) one year after the
date of exercise of the Incentive Stock Option.
 
7.4 Exercise of Options.
 
(a)           Subject to the terms and conditions of the Plan, Options shall be
exercised by the delivery of a written notice of exercise to Index, setting
forth the number of whole shares of Common Stock with respect to which the
Option is to be exercised, accompanied by full payment for such shares.
 
(b)           Upon exercise of an Option, the exercise price of the Option shall
be payable to Index in full either (i) in cash or an equivalent acceptable to
the Committee, (ii) in the sole discretion of the Committee and in accordance
with any applicable administrative guidelines established by the Committee, (A)
by tendering one or more previously acquired nonforfeitable, unrestricted shares
of Common Stock having an aggregate Fair Market Value at the time of exercise
equal to the total exercise price or (B) by surrendering a sufficient portion of
the shares with respect to which the Option is exercised having an aggregate
Fair Market Value at the time of exercise equal to the total exercise price or
(iii) in a combination of the forms specified in (i) or (ii) of this subsection;
provided, however, that payment of the exercise price by means of tendering or
surrendering shares of Common Stock shall not be permitted when the same may, in
the reasonable opinion of the Committee, cause Index to record a loss or expense
as a result thereof.
 
(c)           During such time as the Common Stock is registered under Section
12 of the Exchange Act, to the extent permissible under applicable law, payment
of the exercise price of an Option may also be made, in the absolute discretion
of the Committee, by delivery to Index or its designated agent of an executed
irrevocable option exercise form together with irrevocable instructions to a
broker-dealer to sell or margin a sufficient portion of the shares with respect
to which the Option is exercised and deliver the sale or margin loan proceeds
directly to Index to pay the exercise price and any required withholding taxes.
 
(d)           As soon as reasonably practicable after receipt of written
notification of exercise of an Option and full payment of the exercise price and
any required withholding taxes, Index shall (i) deliver to the Participant, in
the Participant’s name or the name of the Participant’s designee, a stock
certificate or certificates in an appropriate aggregate amount based upon the
number of shares of Common Stock purchased under the Option or (ii) cause to be
issued in the Participant’s name or the name of the Participant’s designee, in
book-entry form, an appropriate number of shares of Common Stock based upon the
number of shares purchased under the Option.
 
 
 
9

--------------------------------------------------------------------------------

 
7.5           Termination of Employment or Service.  Each Award Agreement
embodying the Award of an Option shall set forth the extent to which the
Participant shall have the right to exercise the Option following termination of
the Participant’s employment or service with the Company.  Such provisions shall
be determined by the Committee in its absolute discretion, need not be uniform
among all Options granted under the Plan and may reflect distinctions based on
the reasons for termination of employment or service.  In the event a
Participant’s Award Agreement embodying the award of an Option does not set
forth such termination provisions, the following termination provisions shall
apply with respect to such Award:
 
(a)           Termination For Cause.  If the employment or service of a
Participant shall terminate for Cause, each outstanding Option held by the
Participant shall automatically terminate as of the date of such termination of
employment or service, and the right to exercise the Option shall immediately
terminate.
 
(b)           Termination By Reason of Death or Disability.  In the event of a
Participant’s death or Disability while employed by or in the service of Index
or an Affiliate, each outstanding Option shall remain outstanding and may be
exercised by the person who acquires the Option by will or the laws of descent
and distribution, or by the Participant, as the case may be, but only (i) within
18 months following the date of death or 12 months following the date of
Disability, as applicable (in each case, if otherwise prior to the date of
expiration of the Option), and not thereafter, and (ii) to purchase the number
of shares of Common Stock, if any, that could be purchased upon exercise of the
Option at the time of death or Disability.
 
(c)           Termination For Reasons Other Than Cause, Death or Disability.  If
a Participant’s employment or service with the Company is terminated voluntarily
by the Participant or by action of Index or an Affiliate for reasons other than
for Cause, an Option may be exercised, but only (i) within six months after such
termination (if otherwise prior to the date of expiration of the Option), and
not thereafter, and (ii) to purchase the number of shares of Common Stock, if
any, that could be purchased upon exercise of the Option at the date of
termination of the Participant’s employment or service.
 
Notwithstanding the foregoing, except in the case of a Participant’s death, an
Option will not be treated as an Incentive Stock Option unless at all times
beginning on the Grant Date and ending on the day three months (one year in the
case of a Participant who is “disabled” within the meaning of Section 22(e)(3)
of the Code) before the date of exercise of the Option, the Participant is an
employee of Index or a “parent corporation” or a “subsidiary corporation” of
Index, as those terms are defined in Sections 424(e) and (f) of the Code,
respectively (or a corporation or a parent or subsidiary corporation of such
corporation issuing or assuming an option in a transaction to which Section
424(a) of the Code applies).
 
ARTICLE VIII.  STOCK APPRECIATION RIGHTS
 
8.1           General.
 
(a)
The Committee may grant Awards in the form of SARs in such numbers and at such
times as it shall determine.  SARs shall vest and be exercisable in whole or in
such installments and at such times as may be determined by the Committee.  The
price at which SARs may be exercised shall be determined by the Committee but
shall not be less than 100% of the Fair Market Value per share of Common Stock
on the Grant Date unless (i) the SARs are granted through the assumption of, or
in substitution for, outstanding awards previously granted to individuals who
became Employees (or other service providers) as a result of a merger,
consolidation, acquisition or other corporate transaction involving the Company
which complies with Treasury Regulation § 1.409A-1(b)(5)(v)(D) or (ii) the SARs
are otherwise structured to be exempt from or comply with Section 409A of the
Code.  The term of each SAR shall be as specified by the Committee; provided,
however, that no SAR shall be exercisable later than 10 years after the Grant
Date.  At the time of an Award of SARs, the Committee may, in its sole
discretion, prescribe additional terms, conditions, restrictions and limitations
applicable to the SARs, including without limitation rules pertaining to the
termination of employment or service (by reason of death, permanent and total
disability, or otherwise) of a Participant prior to exercise of the SARs, as it
determines are necessary or appropriate, provided they are not inconsistent with
the Plan.

 
 
10

--------------------------------------------------------------------------------

 
(b)
SARs may be granted only to Employees, Outside Directors or other individuals
performing services for Index or a corporation or other type of entity in a
chain of corporations or other entities in which each corporation or other
entity has a “controlling interest” in another corporation or entity in the
chain, starting with Index and ending with the corporation or other entity for
which the Employee performs services.  For purposes of this Section,
“controlling interest” means (a) in the case of a corporation, ownership of
stock possessing at least 50% of total combined voting power of all classes of
stock entitled to vote of such corporation or at least 50% of the total value of
shares of all classes of stock of such corporation; (b) in the case of a
partnership, ownership of at least 50% of the profits interest or capital
interest of such partnership; (c) in the case of a sole proprietorship,
ownership of the sole proprietorship; or (d) in the case of a trust or estate,
ownership of an actuarial interest (as defined in Treasury Regulation §
1.414(c)-2(b)(2)(ii)) of at least 50% of such trust or estate.

 
8.2           Exercise of SARs.  SARs shall be exercised by the delivery of a
written notice of exercise to Index, setting forth the number of whole shares of
Common Stock with respect to which the Award is being exercised.  Upon the
exercise of SARs, the Participant shall be entitled to receive an amount equal
to the excess of the aggregate Fair Market Value of the shares of Common Stock
with respect to which the Award is exercised (determined as of the date of such
exercise) over the aggregate exercise price of such shares.  Such amount shall
be payable to the Participant in cash or in shares of Common Stock, as provided
in the Award Agreement.

 
ARTICLE IX.  RESTRICTED STOCK

 
9.1           General.  Awards may be granted in the form of Restricted Stock in
such numbers and at such times as the Committee shall determine.  The Committee
shall impose such terms, conditions and restrictions on Restricted Stock as it
may deem advisable, including without limitation prescribing the period over
which and the conditions upon which the Restricted Stock may become vested or be
forfeited and/or providing for vesting upon the achievement of specified
performance goals pursuant to a Performance Award.  A Participant shall not be
required to make any payment for Restricted Stock unless required by the
Committee pursuant to Section 9.2.
 
9.2           Purchased Restricted Stock.  The Committee may in its sole
discretion require a Participant to pay a stipulated purchase price for each
share of Restricted Stock.
 
9.3           Restricted Period.  At the time an Award of Restricted Stock is
granted, the Committee shall establish a Restricted Period applicable to such
Restricted Stock.  Each Award of Restricted Stock may have a different
Restricted Period in the sole discretion of the Committee.
 
9.4           Other Terms and Conditions.  Restricted Stock shall constitute
issued and outstanding shares of Common Stock for all corporate
purposes.  Restricted Stock awarded to a Participant under the Plan shall be
registered in the name of the Participant or, at the option of Index, in the
name of a nominee of Index, and shall be issued in book-entry form or
represented by a stock certificate.  Subject to the terms and conditions of the
Award Agreement, a Participant to whom Restricted Stock has been awarded shall
have the right to receive dividends thereon during the Restricted Period, to
vote the Restricted Stock and to enjoy all other stockholder rights with respect
thereto, except that the Participant may not sell, transfer, pledge, exchange,
hypothecate or otherwise dispose of the Restricted Stock during the Restricted
Period.  A breach of the terms and conditions established by the Committee
pursuant to the Award of the Restricted Stock may result in a forfeiture of the
Restricted Stock.  At the time of an Award of Restricted Stock, the Committee
may, in its sole discretion, prescribe additional terms, conditions,
restrictions and limitations applicable to the Restricted Stock, including
without limitation rules pertaining to the termination of employment or service
(by reason of death, permanent and total disability, retirement, cause or
otherwise) of a Participant prior to expiration of the Restricted Period.
 
9.5           Miscellaneous.  Nothing in this Article shall prohibit the
exchange of shares of Restricted Stock pursuant to a plan of merger or
reorganization for stock or other securities of Index or another corporation
that is a party to the reorganization, provided that the stock or securities so
received in exchange for shares of Restricted Stock shall, except as provided in
Article XIII, become subject to the restrictions applicable to such Restricted
Stock.  Any shares of Common Stock received as a result of a stock split or
stock dividend with respect to shares of Restricted Stock shall also become
subject to the restrictions applicable to such Restricted Stock.
 
 
11

--------------------------------------------------------------------------------

 

 
ARTICLE X.  RESTRICTED STOCK UNITS

10.1           General.  Awards may be granted in the form of Restricted Stock
Units in such numbers and at such times as the Committee shall determine.  The
Committee shall impose such terms, conditions and restrictions on Restricted
Stock Units as it may deem advisable, including without limitation prescribing
the period over which and the conditions upon which a Restricted Stock Unit may
become vested or be forfeited and/or providing for vesting upon the achievement
of specified performance goals pursuant to a Performance Award.  Upon the lapse
of restrictions with respect to each Restricted Stock Unit, the Participant
shall be entitled to receive one share of Common Stock or an amount of cash
equal to the Fair Market Value of one share of Common Stock, as provided in the
Award Agreement.  A Participant shall not be required to make any payment for
Restricted Stock Units.
 
10.2           Restricted Period.  At the time an Award of Restricted Stock
Units is granted, the Committee shall establish a Restricted Period applicable
to such Restricted Stock Units.  Each Award of Restricted Stock Units may have a
different Restricted Period in the sole discretion of the Committee.
 
10.3           Cash Dividend Rights and Dividend Unit Rights.  To the extent
provided by the Committee in its sole discretion, a grant of Restricted Stock
Units may include a tandem Cash Dividend Right or Dividend Unit Right grant.  A
grant of Cash Dividend Rights may provide that such Cash Dividend Rights shall
be paid directly to the Participant at the time of payment of related dividend,
be credited to a bookkeeping account subject to the same vesting and payment
provisions as the tandem Award (with or without interest in the sole discretion
of the Committee), or be subject to such other provisions or restrictions as
determined by the Committee in its sole discretion.  A grant of Dividend Unit
Rights may provide that such Dividend Unit Rights shall be subject to the same
vesting and payment provisions as the tandem Award or be subject to such other
provisions and restrictions as determined by the Committee in its sole
discretion.
 
10.4           Other Terms and Conditions.  At the time of an Award of
Restricted Stock Units, the Committee may, in its sole discretion, prescribe
additional terms, conditions, restrictions and limitations applicable to the
Restricted Stock Units, including without limitation rules pertaining to the
termination of employment or service (by reason of death, total and permanent
disability, retirement, Cause or otherwise) of a Participant prior to expiration
of the Restricted Period.
 
ARTICLE XI.  PERFORMANCE AWARDS

 
11.1           General.  Awards may be granted in the form of Performance Awards
that may be payable in the form of cash, shares of Common Stock or a combination
of both, in such amounts and at such times as the Committee shall
determine.  Performance Awards shall be conditioned upon the level of
achievement of one or more stated performance goals over a specified performance
period that shall not be shorter than one year.  Performance Awards may be
combined with other Awards to impose performance criteria as part of the terms
of such other Awards.
 
11.2           Terms and Conditions.  Each Award Agreement embodying a
Performance Award shall set forth (a) the amount, including a target and maximum
amount if applicable, a Participant may earn in the form of cash or shares of
Common Stock or a formula for determining such amount, (b) the performance
criteria and level of achievement versus such criteria that shall determine the
amount payable or number of shares of Common Stock to be granted, issued,
retained and/or vested, (c) the performance period over which performance is to
be measured, (d) the timing of any payments to be made, (e) restrictions on the
transferability of the Award and (f) such other terms and conditions as the
Committee may determine that are not inconsistent with the Plan.
 
11.3           Code Section 162(m) Requirements.  From and after the date on
which remuneration paid (or Awards granted) pursuant to the Plan becomes subject
to the deduction limitation of Section 162(m) of the Code, the Committee shall
determine in its sole discretion whether all or any portion of a Performance
Award shall be intended to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code (the “162(m) Requirements”).  The
performance criteria for any Performance Award that is intended to satisfy the
162(m) Requirements shall be established in writing by the Committee based on
one or more performance goals as set forth in Section 11.4 not later than 90
days after commencement of the performance period with respect to such Award,
provided that the outcome of the performance in respect of the goals remains
substantially uncertain as of such time.  The maximum amount that may be paid in
cash pursuant to Performance Awards granted to a Participant with respect to an
Index’s fiscal year that are intended to satisfy the 162(m) Requirements is
$1,000,000; provided, however, that such maximum amount with respect to a
Performance Award that provides for a performance period longer than one fiscal
year shall be the foregoing limit multiplied by the number of full fiscal years
in the performance period.  At the time of the grant of a Performance Award and
to the extent permitted under Code Section 162(m) and regulations thereunder for
a Performance Award intended to satisfy the 162(m) Requirements, the Committee
may provide for the manner in which the performance goals will be measured in
light of specified corporate transactions, extraordinary events, accounting
changes and other similar occurrences.
 
 
 
12

--------------------------------------------------------------------------------

 
11.4           Performance Goals. The performance measure(s) to be used for
purposes of Performance Awards may be described in terms of objectives that are
related to the individual Participant or objectives that are Company-wide or
related to a subsidiary, division, department, region, function or business unit
of the Company in which the Participant is employed or with respect to which the
Participant performs services, and may consist of one or more or any combination
of the following criteria:  (a) earnings or earnings per share (whether on a
pre-tax, after-tax, operational or other basis), (b) return on equity, (c)
return on assets or net assets, (d) return on capital or invested capital and
other related financial measures, (e) cash flow or EBITDA or EBITDAX, (f)
revenues, (g) income or operating income, (h) expenses or costs or expense
levels or cost levels (absolute or per unit), (i) one or more operating ratios,
(j) stock price, (k) total stockholder return, (l) operating profit, (m) profit
margin, (n) capital expenditures, (o) net borrowing, debt leverage levels,
credit quality or debt ratings, (p) the accomplishment of mergers, acquisitions,
dispositions, public offerings, move to a senior market or similar extraordinary
business transactions, (q) net asset value per share, (r) economic value added,
(s) individual business objectives, (t) growth in production, (u) growth in
reserves, (v) reserve replacement ratio and/or (w) finding and development cost
per unit.  The performance goals based on these performance measures may be made
relative to the performance of other business entities.
 
11.5           Certification and Negative Discretion.  Prior to the payment of
any compensation pursuant to a Performance Award that is intended to satisfy the
162(m) Requirements, the Committee shall certify the extent to which the
performance goals and other material terms of the Award have been achieved or
satisfied.  The Committee in its sole discretion shall have the authority to
reduce, but not to increase, the amount payable and the number of shares to be
granted, issued, retained or vested pursuant to a Performance Award.
 
ARTICLE XII.  STOCK AWARDS AND OTHER INCENTIVE AWARDS
 
12.1           Stock Awards.  Stock Awards may be granted to Participants upon
such terms and conditions as the Committee may determine.  Shares of Common
Stock issued pursuant to Stock Awards may be issued for cash consideration or
for no cash consideration.  The Committee shall determine the number of shares
of Common Stock to be issued pursuant to a Stock Award.  The Committee may in
its sole discretion require a Participant to pay a stipulated purchase price for
each share of Common Stock covered by a Stock Award.
 
12.2           Other Incentive Awards.  Other Incentive Awards may be granted in
such amounts, upon such terms and at such times as the Committee shall
determine.  Other Incentive Awards may be granted based upon, payable in or
otherwise related to, in whole or in part, shares of Common Stock if the
Committee, in its sole discretion, determines that such Other Incentive Awards
are consistent with the purposes of the Plan.  Each grant of an Other Incentive
Award shall be evidenced by an Award Agreement that shall specify the amount of
the Other Incentive Award and the terms, conditions, restrictions and
limitations applicable to such Award.  Payment of Other Incentive Awards shall
be made at such times and in such form, which may be cash, shares of Common
Stock or other property (or a combination thereof), as established by the
Committee, subject to the terms of the Plan.
 
ARTICLE XIII.  CHANGE OF CONTROL
 
13.1           Vesting of Awards.  Except as provided otherwise in an Award
Agreement at the time an Award is granted, notwithstanding any provision of this
Plan to the contrary, in the event of a Change in Control, any time periods,
conditions or contingencies relating to the exercise or realization of, or lapse
of restrictions under, an Award granted hereunder shall be accelerated or waived
(assuming with respect to any Performance Awards, all performance criteria and
other conditions are achieved or fulfilled to the maximum extent possible) so
that:
 
(a)           if no exercise of the Award is required, the Award may be realized
in full at the time of the occurrence of the Change in Control (the “Change
Effective Time”), or
 
(b)           if exercise of the Award is required, the Award may be exercised
in full as of the Change Effective Time.
 
 
 
13

--------------------------------------------------------------------------------

 
13.2           Assumption of Awards.  Upon a Change in Control where Index is
not the surviving entity (or survives only as a subsidiary of another entity),
unless the Committee determines otherwise, all outstanding Options that are not
exercised at or before the Change Effective Time will be assumed by or replaced
with comparable options or rights in the surviving entity (or a parent of the
surviving entity) in accordance with Section 424 or Section 409A of the Code and
the Treasury Regulations and other guidance thereunder, as applicable, and other
outstanding Awards will be converted into similar awards of the surviving entity
(or a parent of the surviving entity).
 
13.3           Cancellation of Awards.  Notwithstanding the foregoing, in the
event of a Change in Control of Index, then the Committee, in its discretion,
may, no later than the Change Effective Time, require any Participant holding an
Award to surrender such Award in exchange for (a) with respect to each share of
Common Stock subject to an Option or SAR (whether or not vested), payment by the
Company (or a successor), in cash, of an amount equivalent to the excess of the
value of the consideration received for each share of Common Stock by holders of
Common Stock in connection with such Change in Control (the “Change in Control
Consideration”) over the exercise price or grant price per share, (b) with
respect to each share of Common Stock subject to an Award of Restricted Stock
Units or Other Incentive Awards, and related Cash Dividend Rights and Dividend
Unit Rights (if applicable), payment by the Company (or a successor), in cash,
of an amount equivalent to the value of any such Cash Dividend Rights and
Dividend Unit Rights plus the value of the Change in Control Consideration for
each share covered by the Award, assuming all restrictions or limitations
(including risks of forfeiture) have lapsed and (c) with respect to a
Performance Award, payment by the Company (or a successor), in cash, of an
amount equivalent to the value of such Award, as determined by the Committee,
taking into account, to the extent applicable, the Change in Control
Consideration, and assuming all performance criteria and other conditions to
payment of such Awards are achieved or fulfilled to the maximum extent
possible.  Payments made upon a Change in Control pursuant to this Section shall
be made no later than the Change Effective Time.
 
ARTICLE XIV.  AMENDMENT AND TERMINATION
 
14.1           Plan Amendment and Termination.  The Board may at any time
suspend, terminate, amend or modify the Plan, in whole or in part; provided,
however, that no amendment or modification of the Plan shall become effective
without the approval of such amendment or modification by the holders of at
least a majority of the shares of Common Stock if (a) such amendment or
modification increases the maximum number of shares subject to the Plan (except
as provided in Article IV) or changes the designation or class of persons
eligible to receive Awards under the Plan or (b) counsel for Index determines
that such approval is otherwise required by or necessary to comply with
applicable law or the listing requirements of an exchange or association on
which the Common Stock is then listed or quoted.  An amendment to the Plan
generally will not require stockholder approval if it curtails rather than
expands the scope of the Plan, nor if it is made to conform the Plan to
statutory or regulatory requirements, such as, without limitation, Code Section
409A, or regulations issued thereunder.  Upon termination of the Plan, the terms
and provisions of the Plan shall, notwithstanding such termination, continue to
apply to Awards granted prior to such termination.  Except as otherwise provided
herein, no suspension, termination, amendment or modification of the Plan shall
adversely affect in any material way any Award previously granted under the
Plan, without the consent of the Participant (or the Permitted Transferee)
holding such Award.  Notwithstanding the foregoing, Index may amend any Award
Agreement to be exempt from Code Section 409A or to comply with the requirements
of Code Section 409A or to modify any provision that causes an Award that is
intended to be classified as an “equity instrument” under FAS 123R to be
classified as a liability on Index’s financial statements.
 
14.2           Award Amendment and Cancellation.  The Committee may amend the
terms of any outstanding Award granted pursuant to the Plan, but except as
otherwise provided herein, no such amendment shall adversely affect in any
material way the Participant’s (or a Permitted Transferee’s) rights under an
outstanding Award without the consent of the Participant (or the Permitted
Transferee) holding such Award.  Unless an Award Agreement specifies otherwise,
the Committee may cancel any unexpired, unpaid or deferred Stock Award or
Restricted Stock Award at any time if the Participant is not in compliance with
all applicable provisions of the Plan, the Award Agreement, any Employee
Agreement, and the following conditions:
 
(a)           The Participant shall not render services for any organization or
engage directly or indirectly in any business which, in the judgment of the
chief executive officer of the Company or other senior officer designated by the
Committee, is or becomes competitive with the Company, or which organization or
business, or the rendering of services to such organization or business, is or
becomes otherwise prejudicial to or in conflict with the interests of the
Company. For Participants whose employment has terminated, the judgment of the
chief executive officer shall be based on the Participant’s position and
responsibilities while employed by the Company, the Participant’s
post-employment responsibilities and position with the other organization or
business, the extent of past, current and potential competition or conflict
between the Company and the other organization or business, the effect on the
Company’s customers, suppliers and competitors and such other considerations as
are deemed relevant given the applicable facts and circumstances.  A Participant
who has retired shall be free, however, to purchase as an investment or
otherwise, stock or other securities of such organization or business so long as
they are listed upon a recognized securities exchange or traded
over-the-counter, and such investment does not represent a substantial
investment to the Participant or a greater than 10% equity interest in the
organization or business.
 
 
14

--------------------------------------------------------------------------------

 
 
(b)           A Participant shall not, without prior written authorization from
the Company, disclose to anyone outside the Company, or use in other than the
Company’s business, any confidential information or material, as defined in the
Company’s Proprietary Information and Invention Agreement or similar agreement
regarding confidential information and intellectual property, relating to the
business of the Company, acquired by the Participant either during or after
employment with the Company.
 
(c)           A Participant, pursuant to the Company’s Proprietary Information
and Invention Agreement or similar Agreement or Policy, shall disclose promptly
and assign to the Company all right, title and interest in any invention or
idea, patentable or not, made or conceived by the Participant during employment
by the Company, relating in any manner to the actual or anticipated business,
research or development work of the Company and shall do anything reasonably
necessary to enable the Company to secure a patent where appropriate in the
United States and in foreign countries.
 
(d)           Upon exercise, payment or delivery pursuant to any Award, the
Participant shall certify on a form acceptable to the Committee that he or she
is in compliance with the terms and conditions of the Plan and any other
Employee Agreement.  Failure to comply with all of the provisions of this
Section 14.2 prior to, or during the six months after, any exercise, payment or
delivery pursuant to an Award shall cause such exercise, payment or delivery to
be rescinded. Index shall notify the Participant in writing of any such
rescission within two years after such exercise, payment or delivery.  Within 10
days after receiving such a notice from Index, the Participant shall pay to
Index the amount of any gain realized or payment received as a result of the
rescinded exercise, payment or delivery pursuant to an Award. Such payment shall
be made either in cash or by returning to Index the number of shares of Common
Stock that the Participant received in connection with the rescinded exercise,
payment or delivery.
 
ARTICLE XV.  MISCELLANEOUS
 
15.1           Award Agreements.  After the Committee grants an Award under the
Plan to a Participant, Index and the Participant shall enter into an Award
Agreement setting forth the terms, conditions, restrictions and limitations
applicable to the Award and such other matters as the Committee may determine to
be appropriate.  The Committee may permit or require a Participant to defer
receipt of the payment of cash or the delivery of shares of Common Stock that
would otherwise be due to the Participant in connection with any Award;
provided, however, that any permitted deferrals shall be structured to meet the
requirements of Section 409A of the Code and regulations thereunder.  Awards
that are not paid currently shall be recorded as payable on Index’s records for
the Plan.  The terms and provisions of the respective Award Agreements need not
be identical.  All Award Agreements shall be subject to the provisions of the
Plan, and in the event of any conflict between an Award Agreement and the Plan,
the terms of the Plan shall govern.  All Awards under the Plan are intended to
be structured in a manner that will either comply with or be exempt from Section
409A of the Code.
 
15.2           Listing; Suspension.
 
(a)           If and as long as the Common Stock is listed on a national
securities exchange or system sponsored by a national securities association,
the issuance of any shares of Common Stock pursuant to an Award shall be
conditioned upon such shares being listed on such exchange or system. Index
shall have no obligation to issue such shares unless and until such shares are
so listed, and the right to exercise any Option or other Award with respect to
such shares shall be suspended until such listing has been effected.
 
 
15

--------------------------------------------------------------------------------

 
(b)           If at any time counsel to Index or its Affiliates shall be of the
opinion that any sale or delivery of shares of Common Stock pursuant to an Award
is or may in the circumstances be unlawful or result in the imposition of excise
taxes on Index or its Affiliates under the laws of any applicable jurisdiction,
Index or its Affiliates shall have no obligation to make such sale or delivery,
or to make any application or to effect or to maintain any qualification or
registration under the Securities Act, or otherwise, with respect to shares of
Common Stock or Awards, and the right to exercise any Option or other Award
shall be suspended until, in the opinion of such counsel, such sale or delivery
shall be lawful or will not result in the imposition of excise taxes on Index or
its Affiliates.

(c)           Upon termination of any period of suspension under this Section,
any Award affected by such suspension that shall not then have expired or
terminated shall be reinstated as to all shares available before such suspension
and as to shares that would otherwise have become available during the period of
such suspension, but no such suspension shall extend the term of any Award
unless otherwise determined by the Committee in its sole discretion.
 
15.3           Additional Conditions.  Notwithstanding anything in the Plan to
the contrary (a) the Committee may, if it shall determine it necessary or
desirable in its sole discretion, at the time of grant of any Award or the
issuance of any shares of Common Stock pursuant to any Award, require the
recipient of the Award or such shares of Common Stock, as a condition to the
receipt thereof, to deliver to Index a written representation of present
intention to acquire the Award or such shares of Common Stock for his own
account for investment and not for distribution, (b) the certificate for shares
of Common Stock issued to a Participant may include any legend that the
Committee deems appropriate to reflect any restrictions on transfer and (c) all
certificates for shares of Common Stock delivered under the Plan shall be
subject to such stop transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations and other requirements of the SEC,
any stock exchange or association upon which the Common Stock is then listed or
quoted, any applicable federal or state securities law, and any applicable
corporate law, and the Committee may cause a legend or legends to be placed on
any such certificates to make appropriate reference to such restrictions.
 
15.4           Transferability.
 
(a)           All Awards granted to a Participant shall be exercisable during
his lifetime only by such Participant, or if applicable, a Permitted Transferee
as provided in subsection (c) of this Section; provided, however, that in the
event of a Participant’s legal incapacity, an Award may be exercised by his
guardian or legal representative.  When a Participant dies, the personal
representative, beneficiary, or other person entitled to succeed to the rights
of the Participant may acquire the rights under an Award.  Any such successor
must furnish proof satisfactory to Index of the successor’s entitlement to
receive the rights under an Award under the Participant’s will or under the
applicable laws of descent and distribution.
 
(b)           Except as otherwise provided in this Section, no Award shall be
subject to execution, attachment or similar process, and no Award may be sold,
transferred, pledged, exchanged, hypothecated or otherwise disposed of, other
than by will or pursuant to the applicable laws of descent and
distribution.  Any attempted sale, transfer, pledge, exchange, hypothecation or
other disposition of an Award not specifically permitted by the Plan or the
Award Agreement shall be null and void and without effect.
 
(c)           If provided in the Award Agreement, Nonqualified Stock Options may
be transferred by a Participant to a Permitted Transferee.  For purposes of the
Plan, “Permitted Transferee” means (i) a member of a Participant’s immediate
family, (ii) trusts in which a person listed in (i) above has more than 50% of
the beneficial interest, (iii) a foundation in which the Participant or a person
listed in (i) above controls the management of assets, (iv) any other entity in
which the Participant or a person listed in (i) above owns more than 50% of the
voting interests, provided that in the case of the preceding clauses (i) through
(iv), no consideration is provided for the transfer and (v) any transferee
permitted under applicable securities and tax laws as determined by counsel to
Index.  In determining whether a person is a “Permitted Transferee,” immediate
family members shall include a Participant’s child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law, including adoptive relationships.
 
 
16

--------------------------------------------------------------------------------

 

 
(d)           Incident to a Participant’s divorce, the Participant may request
that Index agree to observe the terms of a domestic relations order which may or
may not be part of a qualified domestic relations order (as defined in Code
Section 414(p)) with respect to all or a part of one or more Awards made to the
Participant under the Plan.  Index’s decision regarding such a request shall be
made by the Committee, in its sole and absolute discretion, based upon the best
interests of Index.  The Committee’s decision need not be uniform among
Participants.  As a condition of participation, a Participant agrees to hold
Index harmless from any claim that may arise out of Index’s observance of the
terms of any such domestic relations order.
 
15.5           Withholding Taxes.  The Company shall be entitled to deduct from
any payment made under the Plan, regardless of the form of such payment, the
amount of all applicable income and employment taxes required by law to be
withheld with respect to such payment, may require the Participant to pay to the
Company such withholding taxes prior to and as a condition of the making of any
payment or the issuance or delivery of any shares of Common Stock under the
Plan, and shall be entitled to deduct from any other compensation payable to the
Participant any withholding obligations with respect to Awards.  In accordance
with any applicable administrative guidelines it establishes, the Committee may
allow a Participant to pay the amount of taxes required by law to be withheld
from or with respect to an Award by (a) withholding shares of Common Stock from
any payment of Common Stock due as a result of such Award, or (b) permitting the
Participant to deliver to the Company previously acquired shares of Common
Stock, in each case having an aggregate Fair Market Value equal to the amount of
such required withholding taxes.  No payment shall be made and no shares of
Common Stock shall be issued pursuant to any Award unless and until the
applicable tax withholding obligations have been satisfied.
 
15.6           No Fractional Shares.  No fractional shares of Common Stock shall
be issued or delivered pursuant to the Plan or any Award granted hereunder,
provided that the Committee in its sole discretion may round fractional shares
down to the nearest whole share or settle fractional shares in cash.
 
15.7           Notices.  All notices required or permitted to be given or made
under the Plan or pursuant to any Award Agreement (unless provided otherwise in
such Award Agreement) shall be in writing and shall be deemed to have been duly
given or made if (a) delivered personally, (b) transmitted by first class
registered or certified United States mail, postage prepaid, return receipt
requested, (c) sent by prepaid overnight courier service or (d) sent by telecopy
or facsimile transmission, with confirmation receipt, to the person who is to
receive it at the address that such person has theretofore specified by written
notice delivered in accordance herewith.  Such notices shall be effective (a) if
delivered personally or sent by courier service, upon actual receipt by the
intended recipient, (b) if mailed, upon the earlier of five days after deposit
in the mail or the date of delivery as shown by the return receipt therefore or
(c) if sent by telecopy or facsimile transmission, when the answer back is
received.  Index or a Participant may change, at any time and from time to time,
by written notice to the other, the address that it or such Participant had
theretofore specified for receiving notices.  Until such address is changed in
accordance herewith, notices hereunder or under an Award Agreement shall be
delivered or sent (a) to a Participant at his address as set forth in the
records of the Company or (b) to Index at the principal executive offices of
Index clearly marked “Attention:  Chief Executive Officer.”
 
15.8           Compliance with Law and Stock Exchange or Association
Requirements.  It is the intent of Index that Options designated Incentive Stock
Options comply with the applicable provisions of Section 422 of the Code, and
that Awards intended to constitute “qualified performance-based awards” comply
with the applicable provisions of Section 162(m) of the Code and that any
deferral of the receipt of the payment of cash or the delivery of shares of
Common Stock that the Committee may permit or require, and all Awards either be
exempt from Code Section 409A or, if not exempt, comply with the requirements of
Section 409A of the Code. To the extent that any legal requirement of Section 16
of the Exchange Act or Sections 422, 162(m) or 409A of the Code as set forth in
the Plan ceases to be required under Section 16 of the Exchange Act or Sections
422, 162(m) or 409A of the Code, that Plan provision shall cease to apply.  Any
provision of this Plan to the contrary notwithstanding, the Committee may revoke
any Award if it is contrary to law, governmental regulation or stock exchange or
association requirements or modify an Award to bring it into compliance with any
government regulation or stock exchange or association requirements.  The
Committee may agree to limit its authority under this Section.
 
15.9           Binding Effect.  The obligations of Index under the Plan shall be
binding upon any successor corporation or organization resulting from the
merger, consolidation or other reorganization of Index, or upon any successor
corporation or organization succeeding to all or substantially all of the assets
and business of Index.  The terms and conditions of the Plan shall be binding
upon each Participant and his Permitted Transferees, heirs, legatees,
distributees and legal representatives.
 
 
17

--------------------------------------------------------------------------------

 
 
15.10                      Severability.  If any provision of the Plan or any
Award Agreement is held to be illegal or invalid for any reason, the illegality
or invalidity shall not affect the remaining provisions of the Plan or such
agreement, as the case may be, but such provision shall be fully severable and
the Plan or such agreement, as the case may be, shall be construed and enforced
as if the illegal or invalid provision had never been included herein or
therein.
 
15.11                      No Restriction of Corporate Action.  Nothing
contained in the Plan shall be construed to prevent Index or any Affiliate from
taking any corporate action (including any corporate action to suspend,
terminate, amend or modify the Plan) that is deemed by Index or such Affiliate
to be appropriate or in its best interest, whether or not such action would have
an adverse effect on the Plan or any Awards made or to be made under the
Plan.  No Participant or other person shall have any claim against Index or any
Affiliate as a result of such action.
 
15.12                      Governing Law.  The Plan shall be governed by and
construed in accordance with the internal laws (and not the principles relating
to conflicts of laws) of the State of Nevada except as superseded by applicable
federal law.
 
15.13                      No Right, Title or Interest in Company Assets.  No
Participant shall have any rights as a stockholder of Index as a result of
participation in the Plan until the date of issuance of Common Stock in his name
and, in the case of Restricted Stock, unless and until such rights are granted
to the Participant pursuant to the Plan.  To the extent any person acquires a
right to receive payments from the Company under the Plan, such rights shall be
no greater than the rights of an unsecured general creditor of the Company, and
such person shall not have any rights in or against any specific assets of the
Company.  All Awards shall be unfunded.
 
15.14                      Risk of Participation.  Nothing contained in the Plan
shall be construed either as a guarantee by Index or its Affiliates, or their
respective stockholders, directors, officers or employees, of the value of any
assets of the Plan or as an agreement by Index or its Affiliates, or their
respective stockholders, directors, officers or employees, to indemnify anyone
for any losses, damages, costs or expenses resulting from participation in the
Plan.
 
15.15                      No Guarantee of Tax Consequences.  No person
connected with the Plan in any capacity, including without limitation Index and
the Affiliates and their respective directors, officers, agents and employees,
makes any representation, commitment or guarantee that any tax treatment,
including without limitation federal, state and local income, estate and gift
tax treatment, will be applicable with respect to any Awards or payments
thereunder made to or for the benefit of a Participant under the Plan or that
such tax treatment will apply to or be available to a Participant on account of
participation in the Plan.
 
15.16                      Continued Employment or Service.  Nothing contained
in the Plan or in any Award Agreement shall confer upon any Participant the
right to continue in the employ or service of the Company, or interfere in any
way with the rights of the Company to terminate a Participant’s employment or
service at any time, with or without cause.  The loss of existing or potential
profit in Awards will not constitute an element of damages in the event of
termination of employment or service for any reason, even if the termination is
in violation of an obligation of Index or an Affiliate to the Participant.
 
15.17                      Miscellaneous.  Headings are given to the articles
and sections of the Plan solely as a convenience to facilitate reference.  Such
headings shall not be deemed in any way material or relevant to the construction
of the Plan or any provisions hereof.  The use of the masculine gender shall
also include within its meaning the feminine.  Wherever the context of the Plan
dictates, the use of the singular shall also include within its meaning the
plural, and vice versa.
 
15.18                      Participating Affiliates.  With the consent of the
Committee, any Affiliate that is not considered a single employer with Index
under Code Section 414(b) or Code Section 414(c) may adopt the Plan for the
benefit of its Employees by written instrument delivered to the Committee before
the grant to the Affiliate’s Employees under the Plan of any Award subject to
Code Section 409A.

 
18

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, this Plan has been executed as of October 7, 2008.
 

  INDEX OIL AND GAS INC.          
 
By:
/s/ Signed by Lyndon West       Name:  Lyndon West       Title:  President      
   

 
 
 
 
 
 
 
 
 
 
 
19