Employee Incentive Plan

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OIL & GAS EMPLOYEE INCENTIVE PLAN

The oil and gas industry is highly dependent upon the individuals who undertake the work, such that it is extremely important that the contractual arrangements between those individuals and the company need to be clearly defined and established. Such a contract needs to be appropriately negotiated and drafted such that each side is properly protected and capable of realize the most from this particular contract, as exemplified in an employee incentive plan (while having the capacity to resolve problems and settle disputes).

What should be noted is that employee incentive plans need to be particularized to the particular company's culture and related corporate objectives. Particular aspects seen in such incentive plans have included:

"Grant of Target Performance-Based Restricted Share Units. In accordance with these Terms and Conditions and xxx's Long-Term Incentive Plan, as the same may be amended from time to time (the 'Incentive Plan'), Company grants to Grantee as of the Date of Grant the right to receive in Class A Common Shares up to xxx Percent of the number of Target Performance-Based Restricted Share Units. For the purposes of these Terms and Conditions, 'Target Performance-Based Restricted Share Units' means a bookkeeping entry that records the equivalent of Class A Common Shares awarded pursuant to Section xxx of the Incentive Plan that is payable upon the achievement of the Performance Goals. Target Performance-Based Restricted Share Units are not Common Shares and have no voting rights or, except as stated in Section xxx, dividend rights."

"Performance Goals. The Performance Goal for the Performance Period is based on the attainment of at least a minimum Return on Equity, as set forth on Exhibit xxx. Return on Equity for the purposes of Exhibit xxx shall be calculated (i) for each quarter in the three year period ended xxx by dividing Company’s Net Income (as defined in the Incentive Plan) for each such quarterly period by the shareholder equity as of the end of such quarter, in each case as reported in the financial statements of Company and (ii) adding together the calculated result for each of the twelve quarters."

"Payment of Awards; Elective Deferral. Up to and including xxx Percent of the Target Performance-Based Restricted Share Units as adjusted pursuant to Sections xxx and xxx of these Terms and Conditions will be settled in Class A Common Shares. The Class A Common Shares covered by these Terms and Conditions or any prorated portion thereof shall be issued to Grantee as promptly as practicable after the Administrator’s certification of the attainment of the Performance Goal or the Change in Control Event, as the case may be. Notwithstanding the foregoing, Grantee may elect pursuant to xxx's Deferred Stock Program to defer receipt of any Class A Common Shares to which Grantee may be entitled following certification of the attainment of the Performance Goal. This deferral election shall be separate from any deferral election that Grantee may make regarding Dividend Equivalents."

For more information on the legal services of Neufeld Legal P.C. with respect to employment-related contracts or to schedule an appointment, contact us at Christopher@OilGasLawyer.ca or 403-400-4092.

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Employment-related agreements pertaining to oil and gas sector:

Executive Employment Agreement

Standard Employment Agreement

Independent Contractor Agreement

Consulting Services Agreement

Employee Incentive Plan

Employee Stock Option Plan

Employment Termination / Severance Agreement