STOCKHOLDERS PROPOSALS FOR 2019
Under the SEC’s
proxy rules, shareholder proposals that meet specified conditions must be included in our proxy statement and proxy for the 2019
annual meeting. Under Exchange Act Rules 14a-5(e) and 14a-8(e), shareholders that intend to present a proposal at our 2019 annual
meeting must give us written notice of the proposal not later than January 15, 2019 for the proposal to be considered for inclusion
in our proxy materials for that meeting. Our timely receipt of a proposal by a qualified shareholder will not guarantee
the proposal’s inclusion in our proxy materials or presentation at the 2018 annual meeting, because there are other requirements
in the proxy rules. We reserve the right to reject, rule out of order, or take other appropriate action with respect to any proposal
that does not comply with all applicable requirements of the SEC’s proxy rules, state law, and our Amended and Restated Bylaws.
OTHER MATTERS
The Board knows of
no other business that will be presented for consideration at the Annual Meeting
Delivery of Documents to Stockholders Sharing an Address
Some banks, brokers
and other nominee record holders may be participating in the practice of “householding” proxy statements, information
statements and annual reports. This means that only one copy of this proxy statement may have been sent to multiple shareholders
in your household. We will promptly deliver a separate copy of this document to you if you call or write us at the following address
or phone number: 2500 City West, Suite 760, Houston, Texas 77042, (281) 918-4100. If you want to receive separate copies
of our proxy statements, information statements and annual reports in the future, or if you are receiving multiple copies and would
like to receive only one copy for your household, you should contact your bank, broker, or other nominee record holder, or you
may contact us at the above address and phone number.
Where you can Find Additional Information
.
The Company is subject
to the informational filing requirements of the Exchange Act and, in accordance therewith, is required to file periodic reports,
proxy statements and other information with the SEC relating to its business, financial condition and other matters. Such reports,
proxy statements and other information can be inspected and copied at the public reference facility maintained by the SEC at 100
F Street, N.E., Washington, D.C. 20549-0213. Information regarding the public reference facilities may be obtained from the SEC
by telephoning 1-800-SEC-0330. The Company’s filings are also available to the public on the SEC’s website (www.sec.gov).
Copies of such materials may also be obtained by mail from the Office of Investor Education and Advocacy of the SEC at 100 F Street,
N.E., Washington, D.C. 20549 at prescribed rates. We maintain a website at https://www.gulfslope.com. You may access
our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed
or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC free of charge at our website as soon as reasonably
practicable after such material is electronically filed with, or furnished to the SEC.
By Order of the Board of Directors,
/S/ John N. Seitz
John N. Seitz, Chief Executive Officer
April 27, 2018
APPENDIX A
GulfSlope Energy, Inc.
2018 Omnibus Incentive Plan
Effective __________, 2018
Contents
Article 1. Establishment, Purpose and Duration
|
1
|
Article 2. Definitions
|
1
|
Article 3. Administration
|
6
|
Article 4. Shares Subject to This Plan and Maximum Awards
|
7
|
Article 5. Eligibility and Participation
|
9
|
Article 6. Stock Options
|
9
|
Article 7. Stock Appreciation Rights
|
11
|
Article 8. Restricted Stock
|
12
|
Article 9. Restricted Stock Units
|
13
|
Article 10. Performance Shares
|
13
|
Article 11. Performance Units
|
14
|
Article 12. Other Stock-Based Awards and Cash-Based Awards
|
14
|
Article 13. Restrictions on Transferability of Awards of Shares
|
15
|
Article 14. Performance-Based Compensation and Compliance with Code Section 162(m)
|
15
|
Article 15. Nonemployee Director Awards
|
17
|
Article 16. Effect of a Change in Control
|
17
|
Article 17. Dividend Equivalents
|
18
|
Article 18. Beneficiary Designation
|
18
|
Article 19. Rights of Participants
|
18
|
Article 20. Amendment and Termination
|
19
|
Article 21. Tax Withholding
|
20
|
Article 22. General Provisions
|
20
|
GulfSlope Energy, Inc.
2018 Omnibus Incentive Plan
Article 1. Establishment, Purpose and
Duration
1.1
Establishment
.
GulfSlope Energy, Inc., a Delaware corporation, establishes an incentive compensation plan to be known as GulfSlope Energy, Inc.
2018
Omnibus Incentive Plan, as set forth in this document. This Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units,
Cash-Based Awards and Other Stock-Based Awards. This Plan shall become effective upon shareholder approval (the “Effective
Date”) and shall remain in effect as provided in Section 1.3.
1.2
Purpose
of this Plan
. The purpose of the Plan is to foster and promote the long-term financial success of the Company and materially
increase shareholder value by (a) motivating superior performance by means of performance-related incentives, (b) encouraging and
providing for the acquisition of an ownership interest in the Company by Employees as well as Non-Employee Directors, and (c) enabling
the Company to attract and retain qualified and competent persons to serve as members of an outstanding management team and the
Board of Directors of the Company upon whose judgment, interest, and performance are required for the successful and sustained
operations of the Company.
1.3
Duration
of this Plan
. Unless sooner terminated as provided herein, this Plan shall terminate ten (10) years from the Effective Date.
After this Plan is terminated, no Awards may be granted but Awards previously granted shall remain outstanding in accordance with
their applicable terms and conditions and this Plan’s terms and conditions.
Article 2. Definitions
Whenever used in this
Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, the initial letter of the
word shall be capitalized.
2.1
“Annual
Award Limit”
or
“Annual Award Limits”
have the meaning set forth in Section 4.3.
2.2
“Award”
means, individually or collectively, a grant under this Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based Awards or Other Stock-Based
Awards, in each case subject to the terms of this Plan.
2.3
“Award
Agreement”
means either (i) a written or electronic agreement entered into by the Company and a Participant setting forth
the terms and provisions applicable to an Award granted under this Plan, including any amendment or modification thereof, or (ii)
a written or electronic statement issued by the Company to a Participant describing the terms and provisions of such Award, including
any amendment or modification thereof. The Committee may provide for the use of electronic, Internet or other non-paper Award Agreements,
and the use of electronic, Internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant.
The Committee shall have the exclusive authority to determine the terms of an Award Agreement evidencing an Award granted under
this Plan, subject to the provisions herein. The terms of an Award Agreement need not be uniform among all Participants or among
similar types of Awards.
2.4
“Beneficial
Owner”
or
“Beneficial Ownership”
shall have the meaning ascribed to such term in Rule 13d-3 of the
General Rules and Regulations under the Exchange Act.
2.5
“Board”
or
“Board of Directors”
means the Board of Directors of the Company.
2.6
“Cash-Based
Award”
means an Award, denominated in cash, granted to a Participant as described in Article 12.
2.7
“Cause”
means, unless otherwise specified in an Award Agreement or in an applicable employment agreement between the Company and a Participant,
any one of the following:
(a) willful
and material misconduct of the Participant;
(b) willful
and continued failure of the Participant to substantially perform his job duties;
(c) the
conviction of the Participant by a court of competent jurisdiction of a felony or entering the plea of
nolo contendere
to
a felony by the Participant;
(d) the
commission by the Participant of an act of theft, fraud, or dishonesty against the Company or any Subsidiary; or
(e) a
material breach by the Participant of any material written policy of the Company.
The existence of Cause under this Section
2.7 shall be determined in good faith by the Committee.
2.8
A
“Change in Control”
means the occurrence of one or more of the following events:
(a) The
acquisition by any Person of Beneficial Ownership of more than 50% of either (A) the then-outstanding Shares (“Outstanding
Company Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled
to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that,
for purposes of this Section 2.8(a) the following acquisitions shall not constitute a Change in Control:
(i) any
acquisition by the Company,
(ii) any
acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company,
(iii) any
entity controlled by the Company, or
(iv) any
acquisition by any entity pursuant to a transaction that complies with Sections 2.8(c)(i), (ii) and (iii).
(b) If
during any period of two consecutive calendar years, the “Incumbent Board” (as defined below), shall cease for any
reason to constitute a majority of the Board. The “Incumbent Board” for purposes of this section, shall
mean the Directors holding office at the beginning of the calendar year two years prior to the event in question; provided, however,
that any individual becoming a Director subsequent to the Effective Date whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the Directors then comprising the Incumbent Board shall be considered
as though such individual was a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of
Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.
(c) Consummation
of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company and/or
any entity controlled by the Company, or a sale or other disposition of all or substantially all of the assets of the Company,
or the acquisition of assets or stock of another entity by the Company or any entity controlled by the Company (each, a “Business
Combination”), in each case, provided, however, that, for purposes of this Section 2.8(c) a Business Combination shall not
constitute a Change in Control if following such Business Combination:
(i) all
or substantially all of the individuals and entities that were the Beneficial Owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of the then-outstanding shares of common stock and more than 50% of the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or
all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be; and
(ii) no
Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company
or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively,
the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting
power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to
the Business Combination; and
(iii) at
least a majority of the members of the board of directors of the entity resulting from such Business Combination were members of
the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business
Combination
.
(d) The
complete liquidation or dissolution of the Company.
Notwithstanding anything in this Plan or
any Agreement to the contrary, to the extent any provision of this Plan or an Agreement would cause a payment of an Award that
is not exempt from the requirements of Code Section 409A to be made because of the occurrence of a Change in Control, then such
payment shall not be made unless such Change in Control also constitutes a “change in ownership”, “change in
effective control” or “change in ownership of a substantial portion of the Company’s assets” within the
meaning of Code section 409A. Any payment that would have been made except for the application of the preceding sentence
shall be made in accordance with the payment schedule that would have applied in the absence of a Change in Control (and other
Participant rights that are tied to a Change in Control, such as vesting, shall not be affected by this paragraph).
2.9
“Code”
means the U.S. Internal Revenue Code of 1986, as amended from time to time. For purposes of this Plan, references to sections of
the Code shall be deemed to include references to any applicable regulations thereunder and any successor or similar provision.
2.10
“Commission”
means the Securities and Exchange Commission.
2.11
“Committee”
means the Compensation Committee of the Board or a subcommittee thereof or any other committee designated by the Board to administer
this Plan. The members of the Committee shall be appointed from time to time by and shall serve at the discretion of the Board.
If the Committee does not exist or cannot function for any reason, the Board may take any action under the Plan that would otherwise
be the responsibility of the Committee. The Committee shall be constituted to comply with the requirements of Rule 16b-3 promulgated
by the Commission under the Securities Exchange Act of 1934, or such rule or any successor rule thereto which is in effect from
time to time, Section 162(m) of the Code and any applicable listing or governance requirements of any securities exchange on which
the Company’s common shares are listed.
2.12
“Company”
means GulfSlope Energy, Inc., and any successor thereto as provided in Section 22.21.
2.13
“Covered
Employee”
means any Employee who is or may become a “Covered Employee,” as defined in Code Section 162(m),
and who is designated, either as an individual Employee or class of Employees, by the Committee within the shorter of (i) 90
days after the beginning of the Performance Period, or (ii) 25% of the Performance Period has elapsed, as a “Covered Employee”
under this Plan for such applicable Performance Period.
2.14
“Director”
means any individual who is a member of the Board of Directors of the Company.
2.15
“Disability”
means a Participant’s eligibility to receive group long-term disability benefits under a plan sponsored by the Company or
a Subsidiary, or if no such plan is applicable, a Participant’s inability to perform the essential functions of his or her
duties due to a medically determinable physical or mental impairment, illness or injury, which can be expected to result in death
or to be of long-continued and indefinite duration as determined in the sole discretion of the Committee, except in the case of
any Option that is an Incentive Stock Option, if and to the extent required in order for the Option to satisfy the requirements
of Section 422 of the Code, the term “Disability” means disabled within the meaning of Section 22(e)(3) of the Code.
Notwithstanding the preceding provisions of this Section 2.15 or anything in any Award Agreement to the contrary, to the extent
any provision of this Plan or an Award Agreement would cause a payment not to be exempt from Code Section 409A to be made because
of the Participant’s Disability, then there shall not be a Disability that triggers payment until the date (if any) that
the Participant is disabled within the meaning of Code section 409A(a)(2)(C). Any payment that would have been made
except for the application of the preceding sentence shall be made in accordance with the payment schedule that would have applied
in the absence of a Disability (and other Participant rights that are tied to a Disability, such as vesting, shall not be affected
by the prior sentence).
2.16
“Dividend
Equivalent”
has the meaning set forth in Section 18.
2.17
“Effective
Date”
has the meaning set forth in Section 1.1.
2.18
“Employee”
means any individual performing services for the Company or a Subsidiary and designated as an employee of the Company or the Subsidiary
on its payroll records. An Employee shall not include any individual during any period he or she is classified or treated by the
Company or Subsidiary as an independent contractor, a consultant or an employee of an employment, consulting or temporary agency
or any other entity other than the Company or Subsidiary, without regard to whether such individual is subsequently determined
to have been, or is subsequently retroactively reclassified, as a common-law employee of the Company or Subsidiary during such
period. An individual shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or
(ii) transfers between locations of the Company or between the Company and any Subsidiaries. For purposes of Incentive Stock
Options, no such leave may exceed 90 days, unless reemployment upon expiration of such leave is guaranteed by statute or contract.
If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three months following
the 91st day of such leave, any Incentive Stock Option held by a Participant shall cease to be treated as an Incentive Stock Option
and shall be treated for tax purposes as a Nonqualified Stock Option. Neither service as a Director nor payment of a director’s
fee by the Company shall be sufficient to constitute “employment” by the Company.
2.19
“Exchange
Act”
means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.
2.20
“Fair
Market Value”
means, on any given date (i) if the Shares are listed on a national or regional securities exchange on
the given date or traded on an over-the-counter exchange, Fair Market Value on such date shall be the closing price for a Share
on such securities exchange on the immediately preceding day on which sales were made on such exchange; or (ii) if Shares are not
listed on such an exchange, the fair market value of a Share on that date shall be determined in good faith by the Committee; provided,
however, the Committee, in its discretion, may use an alternative definition of Fair Market Value including, but not limited to,
a price that is based on the opening, actual, high, low, or average selling prices of a Share on the securities exchange on which
Shares are listed or traded on the given date, the trading date preceding the given date, the trading date next succeeding the
given date, or an average of trading days. Notwithstanding the foregoing, (i) in the case of an Option or SAR, Fair Market Value
shall be determined in accordance with a definition of fair market value that permits the Award to be exempt from Code section
409A; and (ii) in the case of an Option that is intended to qualify as an ISO under Code section 422 or an Award that is intended
to qualify as performance-based compensation under Code section 162(m), Fair Market Value shall be determined by the Committee
in accordance with the requirements of Code section 422 or Code section 162(m), as applicable.
2.21
“Grant
Date”
means
the date an Award is granted to a Participant pursuant to the Plan.
2.22
“Grant
Price”
means the price established at the time of grant of an SAR pursuant to Article 7.
2.23
“Incentive
Stock Option”
or “
ISO
” means an Award granted pursuant Article 6 that is designated as an Incentive Stock
Option and that is intended to meet the requirements of Code Section 422 or any successor provision.
2.24
“Insider”
shall mean an individual who is, on the relevant date, an officer (as defined in Rule 16a-1(f) (or any successor provision) promulgated
by the Commission under the Exchange Act) or Director of the Company, or a more than 10% Beneficial Owner of any class of the Company’s
equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Board in accordance
with Section 16 of the Exchange Act.
2.25
“Nonemployee
Director”
means a Director who is not an Employee.
2.26 “Nonqualified
Stock Option”
or “
NQSO
” means an Award granted pursuant to Article 6 that is not intended to meet
the requirements of Code Section 422, or that otherwise does not meet such requirements.
2.27
“Option”
means an Award granted to a Participant pursuant to Article 6, which Award may be an Incentive Stock Option or a Nonqualified
Stock Option.
2.28
“Option
Price”
means the price at which a Share may be purchased by a Participant pursuant to an Option.
2.29
“Other
Stock-Based Award”
means an equity-based or equity-related Award not otherwise described by the terms of this Plan that
is granted pursuant to Article 12.
2.30
“Participant”
means any eligible individual as set forth in Article 5 to whom an Award is granted.
2.31
“Performance-Based
Compensation”
means compensation under an Award that is intended to satisfy the requirements of Code Section 162(m) for
certain performance-based compensation paid to Covered Employees. Notwithstanding the foregoing, nothing in this Plan shall be
construed to mean that an Award that does not satisfy the requirements for performance-based compensation under Code Section 162(m)
does not constitute performance-based compensation for other purposes, including Code Section 409A.
2.32
“Performance
Measures”
means measures, as described in Article 14, upon which performance goals are based and that are approved by
the Company’s shareholders pursuant to this Plan to qualify Awards as Performance-Based Compensation.
2.33
“Performance
Period”
means the period of time during which pre-established performance goals must be met to determine the degree of
payout and/or vesting with respect to an Award.
2.34
“Performance
Share”
means an Award granted pursuant to Article 10.
2.35
“Performance
Unit”
means an Award granted pursuant to Article 11.
2.36
“Period
of Restriction”
means the period when Restricted Stock or Restricted Stock Units are subject to a substantial risk of
forfeiture (based on the passage of time, the achievement of performance goals or upon the occurrence of other events as determined
by the Committee, in its discretion) as provided in Articles 8 and 9.
2.37
“Person”
shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a “group” as defined in Section 13(d) thereof.
2.38
“Plan”
means GulfSlope Energy, Inc. 2018 Omnibus Incentive Plan, as the same may be amended from time to time.
2.39
“Restricted
Stock”
means an Award granted pursuant to Article 8.
2.40
“Restricted
Stock Unit”
means an Award granted pursuant to Article 9.
2.41
“Share”
means a share of common stock of the Company.
2.42
“Stock
Appreciation Right”
or “
SAR
” means an Award granted pursuant to Article 7.
2.43
“Subsidiary”
means any corporation or other entity, whether domestic or foreign, in which the Company has or obtains, directly or indirectly,
an interest of more than 50% by reason of stock ownership or otherwise.
2.44
“Third-Party
Service Provider”
means any consultant, agent, advisor or independent contractor who renders bona fide services to the
Company or a Subsidiary that (a) are not in connection with the offer and sale of the Company’s securities in a capital raising
transaction, (b) do not directly or indirectly promote or maintain a market for the Company’s securities, and (c) are provided
by a natural person who has contracted directly with the Company or Subsidiary to render such services.
Article 3. Administration
3.1
General
.
The Committee shall be responsible for administering this Plan, subject to this Article 3 and the other provisions of this Plan.
The Committee may employ attorneys, consultants, accountants, agents and other individuals, any of whom may be an Employee, and
the Committee, the Company, and its officers and Directors shall be entitled to rely upon the advice, opinions or valuations of
any such individuals. All actions taken and all interpretations and determinations made by the Committee shall be final and binding
upon the Participants, the Company or Subsidiary, and all other interested individuals.
3.2
Authority
of the Committee
. Subject to any express limitations set forth in the Plan, the Committee shall have full and exclusive discretionary
power and authority to take such actions as it deems necessary and advisable with respect to the administration of the Plan including,
but not limited to, the following:
(a) To
determine from time to time which of the persons eligible under the Plan shall be granted Awards, when and how each Award shall
be granted, what type or combination of types of Awards shall be granted, the provisions of each Award granted (which need not
be identical), including the time or times when a person shall be permitted to receive Shares pursuant to an Award and the number
of Shares subject to an Award;
(b) To
construe and interpret the Plan and Awards granted under it, and to establish, amend, and revoke rules and regulations for its
administration. The Committee, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or
in an Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective;
(c) To
approve forms of Award Agreements for use under the Plan;
(d) To
determine Fair Market Value of a Share in accordance with Section 2.20 of the Plan;
(e) To
amend the Plan or any Award Agreement as provided in the Plan;
(f) To
adopt sub-plans and/or special provisions applicable to stock awards regulated by the laws of a jurisdiction other than and outside
of the United States. Such sub-plans and/or special provisions may take precedence over other provisions of the Plan, but unless
otherwise superseded by the terms of such sub-plans and/or special provisions, the provisions of the Plan shall govern;
(g) To
authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted
by the Board;
(h) To
determine whether Awards will be settled in shares of common stock, cash or in any combination thereof;
(i) To
determine whether Awards will provide for Dividend Equivalents;
(j) To
establish a program whereby Participants designated by the Committee may reduce compensation otherwise payable in cash in exchange
for Awards under the Plan;
(k) To
authorize a program permitting eligible Participants to surrender outstanding Awards in exchange for newly granted Awards subject
to any applicable shareholder approval requirements set forth in Section 21.1 of the Plan;
(l) To
impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by
a Participant or other subsequent transfers by a Participant of any Shares, including, without limitation, restrictions under an
insider trading policy and restrictions as to the use of a specified brokerage firm for such resales or other transfers; and
(m) To
provide, either at the time an Award is granted or by subsequent action, that an Award shall contain as a term thereof, a right,
either in tandem with the other rights under the Award or as an alternative thereto, of the Participant to receive, without payment
to the Company, a number of Shares, cash or a combination thereof, the amount of which is determined by reference to the value
of Shares.
3.3
Delegation.
The Committee may delegate to one or more of its members or to one or more officers of the Company or any Subsidiary or to one
or more agents or advisors such administrative duties or powers as it may deem advisable, and the Committee or any individuals
to whom it has delegated duties or powers as aforesaid may employ one or more individuals to render advice with respect to any
responsibility the Committee or such individuals may have under this Plan. To the extent permitted by applicable law, the Committee
may, by resolution, authorize one or more officers of the Company to do one or both of the following on the same basis as can the
Committee: (a) designate Employees to be recipients of Awards; and (b)
determine the size of any such Awards; provided
, however , (i) the Committee shall not delegate such responsibilities to any such officer for Awards granted to an
Employee who is considered an Insider; (ii) the resolution providing such authorization sets forth the total number of Awards such
officer(s) may grant; and (iii) the officer(s) shall report periodically to the Committee regarding the nature and scope of the
Awards granted pursuant to the authority delegated.
Article 4. Shares Subject to This Plan
and Maximum Awards
4.1
Number
of Shares Authorized and Available for Awards
. Subject to adjustment as provided under the Plan, the total number of Shares
that are available for Awards under the Plan shall be 110,000,000 Shares. Such Shares may be authorized and unissued Shares, treasury
Shares, Shares purchased in the open market or in private transactions, or any combination of the foregoing, as may be determined
from time to time by the Board or by the Committee. Any of the authorized Shares may be used for any type of Award under the Plan,
and any or all of the Shares may be allocated to Incentive Stock Options.
4.2
Share
Usage
. The Committee shall determine the appropriate method for determining the number of Shares available for grant under
the Plan, subject to the following:
(a) Any
Shares related to an Award granted under this Plan that terminates by expiration, forfeiture, cancellation or otherwise without
the issuance of the Shares, are settled in cash in lieu of Shares, or are exchanged with the Committee’s permission, prior
to the issuance of Shares, for Awards not involving Shares shall be available again for grant under this Plan.
(b) Any
Shares tendered (by either actual delivery or attestation) (i) to pay the Option Price of an Option granted under this Plan or
Prior Plan or (ii) to satisfy tax withholding obligations associated with an Award granted under this Plan, shall become available
again for grant under this Plan.
(c) Any
Shares that were subject to an SAR granted under this Plan that were not issued upon the exercise of such SAR shall become available
again for grant under this Plan.
4.3
Adjustments
in Authorized Shares
. Adjustment in authorized Shares available for issuance under the Plan or under an outstanding Award and
adjustments in Annual Award Limits shall be subject to the following provisions:
(a) In
the event of any corporate event or transaction such as a merger, consolidation, reorganization, recapitalization, separation,
partial or complete liquidation, stock dividend, stock split, reverse stock split, split up, spin-off, distribution of stock or
property of the Company, combination of Shares, exchange of Shares, dividend in kind, extraordinary cash dividend or any other
similar corporate event or transaction (“Corporate Transactions”), the Committee, in order to prevent dilution or enlargement
of Participants’ rights under this Plan, shall substitute or adjust, as applicable, (1) the number and kind of Shares that
may be issued under this Plan or under particular forms of Awards, (2) the number and kind of Shares subject to outstanding Awards,
(3) the Option Price or Grant Price applicable to outstanding Awards, and (4) the Annual Award Limits and other value determinations
applicable to outstanding Awards. The Committee, in its discretion, shall determine the methodology or manner of making such substitution
or adjustment.
(b) In
addition to the adjustments permitted under paragraph (a) above, the Committee, in its sole discretion, may make such other adjustments
or modifications in the terms of any Awards that it deems appropriate to reflect any Corporate Transaction, including, but not
limited to, modifications of performance goals and changes in the length of Performance Periods, subject to the limitations set
forth in Section 14.4.
(c) The
determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on Participants under this
Plan.
Article 5. Eligibility and Participation
5.1
Eligibility
to Receive Awards
. Individuals eligible to participate in this Plan include all Employees, Directors and Third-Party Service
Providers.
5.2
Participation
in the Plan
. Subject to the provisions of this Plan, the Committee may, from time to time, select from all individuals eligible
to participate in the Plan, those individuals to whom Awards shall be granted and shall determine, in its sole discretion, the
nature of any and all terms permissible by law and the amount of each Award.
Article 6. Stock Options
6.1
Grant
of Options
. Options may be granted to Participants in such number, and upon such terms, and at any time and from time
to time as shall be determined by the Committee, in its sole discretion. Each grant of an Option shall be evidenced by an Award
Agreement which shall specify whether the Option is in the form of a Nonqualified Stock Option or an Incentive Stock Option.
6.2
Option
Price
. The Option Price for each grant of an Option shall be determined by the Committee in its sole discretion and shall be
specified in the Award Agreement evidencing such Option; provided , however , the Option Price must be at
least equal to 100% of the Fair Market Value of a Share as of the Option’s Grant Date, subject to adjustment as provided
for under Section 4.4.
6.3
Term
of Option
. The term of an Option granted to a Participant shall be determined by the Committee, in its sole discretion; provided,
however, no Option shall be exercisable later than the tenth anniversary date of its grant. Notwithstanding the foregoing,
for Nonqualified Stock Options granted to Participants outside the United States, the Committee has the authority to grant Nonqualified
Stock Options that have a term greater than ten years.
6.4
Exercise
of Option
. An Option shall be exercisable at such times and be subject to such restrictions and conditions as the Committee
shall in each instance approve, which terms and restrictions need not be the same for each grant or for each Participant.
6.5
Payment
of Option Price
. An Option shall be exercised by the delivery of a notice of exercise to the Company or an agent designated
by the Company in a form specified or accepted by the Committee, or by complying with any alternative procedures that may be authorized
by the Committee, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment
for the Shares. A condition of the issuance of the Shares as to which an Option shall be exercised shall be the payment of the
Option Price. The Option Price of any exercised Option shall be payable to the Company in accordance with one of the following
methods:
(a) In
cash or its equivalent;
(b) By
tendering (either by actual delivery or attestation) previously acquired Shares having an aggregate Fair Market Value at the time
of exercise equal to the Option Price;
(c) By
a cashless (broker-assisted) exercise;
(d) By
“net settlement” (i.e., the Company withholds Shares with a Fair Market Value equal to the aggregate Option Price in
respect of the portion of the Option to be exercised from any Shares that would have otherwise been received by the Participant).
(e) By
any combination of (a), (b), (c) and (d); or
(f) Any
other method approved or accepted by the Committee in its sole discretion.
Unless otherwise determined by the Committee,
all payments under all of the methods indicated above shall be paid in United States dollars or Shares, as applicable.
6.6
Special
Rules Regarding ISOs
. Notwithstanding any provision of the Plan to the contrary, an Option granted in the form of an ISO to
a Participant shall be subject to the following rules:
(a)
Special
ISO definitions:
(i) “Parent
Corporation” shall mean as of any applicable date a corporation in respect of the Company that is a parent corporation within
the meaning of Code Section 424(e).
(ii) “ISO
Subsidiary” shall mean as of any applicable date any corporation in respect of the Company that is a subsidiary corporation
within the meaning of Code Section 424(f).
(iii) A
“10% Owner” is an individual who owns stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or its Parent Corporation or any ISO Subsidiary.
(b)
Eligible
employees
. An ISO may be granted solely to eligible Employees of the Company, Parent Corporation, or ISO Subsidiary.
(c)
Specified
as an ISO
. An Award Agreement evidencing the grant of an ISO shall specify that such grant is intended to be an ISO.
(d)
Option
price
. The Option Price for each grant of an ISO shall be determined by the Committee in its sole discretion and shall be specified
in the Award Agreement; provided, however, the Option Price must be at least equal 100% of the Fair Market Value of a Share as
of the ISO’s Grant Date (in the case of 10% owners, the Option Price may not be not less than 110% of such Fair Market Value),
subject to adjustment provided for under Section 4.4.
(e)
Right
to exercise
. Any ISO granted to a Participant shall be exercisable during his or her lifetime solely by such Participant.
(f)
Exercise
period
. The period during which a Participant may exercise an ISO shall not exceed ten years (five years in the case of a Participant
who is a 10% owner) from the date on which the ISO was granted.
(g)
Termination
of employment
. In the event a Participant terminates employment due to death or Disability, the Participant (or, in the case
of death, the person(s) to whom the Option is transferred by will or the laws of descent and distribution) shall have the right
to exercise the Participant’s ISO award during the period specified in the applicable Award Agreement solely to the extent
the Participant had the right to exercise the ISO on the date of his death or Disability; as applicable, provided, however, that
such period may not exceed one year from the date of such termination of employment or if shorter, the remaining term of the ISO.
In the event a Participant terminates employment for reasons other than death or disability, the Participant shall have the right
to exercise the Participant’s ISO during the period specified in the applicable Award Agreement solely to the extent the
Participant had the right to exercise the ISO on the date of such termination of employment; provided, however, that such period
may not exceed three months from the date of such termination of employment or if shorter, the remaining term of the ISO.
(h)
Dollar
limitation
. To the extent that the aggregate Fair Market Value of (a) the Shares with respect to which Options designated as
Incentive Stock Options plus (b) the shares of stock of the Company, Parent Corporation and any ISO Subsidiary with respect to
which other Incentive Stock Options are exercisable for the first time by a holder of such Incentive Stock Options during any calendar
year under all plans of the Company and ISO Subsidiary exceeds $100,000, such Options shall be treated as Nonqualified Stock Options.
For purposes of the preceding sentence, (a) Options shall be taken into account in the order in which they were granted, and (b)
the Fair Market Value of the Shares shall be determined as of the time the Option or other incentive stock option is granted.
(i)
Duration
of plan
. No ISO may be granted more than ten years after the earlier of (a) adoption of this Plan by the Board and (b) the
Effective Date.
(j)
Notification
of disqualifying disposition
. If any Participant shall make any disposition of Shares issued pursuant to the exercise of an
ISO, such Participant shall notify the Company of such disposition within 30 days thereof. The Company shall use such information
to determine whether a disqualifying disposition as described in Code section 421(b) has occurred.
(k)
Transferability
.
No ISO may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution; provided , however , that at the discretion of the Committee, an ISO may be transferred
to a grantor trust under which Participant making the transfer is the sole beneficiary.
Article 7. Stock Appreciation Rights
7.1
Grant
of SARs
. SARs may be granted to Participants in such number, and upon such terms, and at any time and from time to time as
shall be determined by the Committee, in its sole discretion. Each grant of SARs shall be evidenced by an Award Agreement.
7.2
Grant
Price
. The Grant Price for each grant of an SAR shall be determined by the Committee and shall be specified in the Award Agreement
evidencing the SAR; provided , however , the Grant Price must be at least equal to 100% of the FAIR MARKET
VALUE of a Share as of the Grant Date, subject to adjustment as provided for under Section 4.4.
7.3
Term
of SAR
. The term of an SAR granted to a Participant shall be determined by the Committee, in its sole discretion; provided,
however, no SAR shall be exercisable later than the tenth anniversary date of its grant. Notwithstanding the foregoing, for SARs
granted to Participants outside the United States, the Committee has the authority to grant SARs that have a term greater than
ten years.
7.4
Exercise
of SAR
. An SAR shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall
in each instance approve, which terms and restrictions need not be the same for each grant or for each Participant.
7.5
Notice
of Exercise
. An SAR shall be exercised by the delivery of a notice of exercise to the Company or an agent designated by the
Company in a form specified or accepted by the Committee, or by complying with any alternative procedures that may be authorized
by the Committee, setting forth the number of Shares with respect to which the SAR is to be exercised.
7.6
Settlement
of SARs
. Upon the exercise of an SAR, pursuant to a notice of exercise properly completed and submitted to the Company in accordance
with Section 7.5, a Participant shall be entitled to receive payment from the Company in an amount equal to the product of (a)
and (b) below:
(a) The
excess of the Fair Market Value of a Share on the date of exercise over the Grant Price.
(b) The
number of Shares with respect to which the SAR is exercised.
Payment shall be made in cash, Shares or
a combination thereof as provided for under the applicable Award Agreement.
Article 8. Restricted Stock
8.1
Grant
of Restricted Stock
. Restricted Stock may be granted to Participants in such number, and upon such terms, and at any time and
from time to time as shall be determined by the Committee, in its sole discretion. Each grant of Restricted Stock shall be evidenced
by an Award Agreement.
8.2
Nature
of Restrictions
. Each grant of Restricted Stock shall be subject to a Restriction Period that shall lapse upon the satisfaction
of such conditions and restrictions as are determined by the Committee in its sole discretion and set forth in an applicable Award
Agreement. Such conditions or restrictions may include, without limitation, one or more of the following:
(a) Restrictions
based upon the achievement of specific performance goals;
(b) Time-based
restrictions on vesting following the attainment of the performance goals;
(c) Time-based
restrictions;
(d) Restrictions
under applicable laws and restrictions under the requirements of any stock exchange or market on which such Shares are listed or
traded; and
(e) A
requirement that a Participant pay a stipulated purchase price for each Share of Restricted Stock.
8.3
Issuance
of Shares
. To the extent deemed appropriate by the Committee, the Company may retain the certificates representing Shares of
Restricted Stock in the Company’s possession until such time as all conditions or restrictions applicable to such Shares
have been satisfied or lapse. Shares of Restricted Stock covered by each Restricted Stock grant shall become freely transferable
by the Participant after all conditions and restrictions applicable to such Shares have been satisfied or lapsed (including satisfaction
of any applicable tax withholding obligations).
8.4
Certificate
Legend
. In addition to any legends placed on certificates pursuant to Section 8.2, each certificate representing Shares
of Restricted Stock granted pursuant to this Plan may bear a legend such as the following or as otherwise determined by the Committee
in its sole discretion:
The sale or transfer of Shares of stock represented by this certificate, whether voluntary,
involuntary or by operation of law, is subject to certain restrictions on transfer as set forth in the GulfSlope Energy, Inc. 2018
Omnibus Incentive Plan, and in the associated Award Agreement. A copy of this Plan and such Award Agreement may be obtained from
GulfSlope Energy, Inc.
8.5
Voting
and Dividend Rights
. Unless otherwise determined by the Committee and set forth in a Participant’s applicable Award Agreement,
to the extent permitted or required by law, as determined by the Committee, a Participant holding Shares of Restricted Stock granted
hereunder shall be granted the right to exercise full voting rights with respect to those Shares and the right to receive dividends
declared on those Shares during the Period of Restriction. Notwithstanding the foregoing, the Committee may require that any dividends
on such Shares of Restricted Stock shall be automatically deferred and reinvested in additional Restricted Stock subject to the
same restrictions on vesting as the underlying Award, or may require that dividends and other distributions on Restricted Stock
shall be paid to the Company for the account of the Participant and held pending and subject to the same restrictions on vesting
as the underlying Award; provided, however, that to the extent that any dividends are deferred, reinvested or otherwise not paid
when such dividends would otherwise normally be paid, (i) all terms and conditions for such delayed payment shall be included in
the Agreement, and (ii) such deferral, reinvestment or delay in payment of the dividends shall only be allowed to the extent it
complies with, or is exempt from, the requirements of Code section 409A.
Article 9. Restricted Stock Units
9.1
Grant
of Restricted Stock Units
. Restricted Stock Units may be granted to Participants in such number, and upon such terms, and at
any time and from time to time as shall be determined by the Committee, in its sole discretion. A grant of a Restricted Stock Unit
or Restricted Stock Units shall not represent the grant of Shares but shall represent a promise to deliver a corresponding number
of Shares or the value of each Share based upon the completion of service, performance conditions, or such other terms and conditions
as specified in the applicable Award Agreement over the Restriction Period. Each grant of Restricted Stock Units shall be evidenced
by an Award Agreement.
9.2
Nature
of Restrictions
. Each grant of Restricted Stock Units shall be subject to a Restriction Period that shall lapse upon the satisfaction
of such conditions and restrictions as are determined by the Committee in its sole discretion and set forth in an applicable Award
Agreement. Such conditions or restrictions may include, without limitation, one or more of the following:
(a) Restrictions
based upon the achievement of specific performance goals;
(b) Time-based
restrictions on vesting following the attainment of the performance goals;
(c) Time-based
restrictions;
(d) Restrictions
under applicable laws and restrictions under the requirements of any stock exchange or market on which such Shares underlying the
Restricted Stock Unit are listed or traded; and
(e) A
requirement that a Participant pay a stipulated purchase price for each Restricted Stock Unit.
9.3
Voting
Rights
. A Participant shall have no voting rights with respect to any Restricted Stock Units granted hereunder or the Shares
corresponding to any Restricted Stock Units granted hereunder.
9.4
Settlement
and Payment Restricted Stock Units
. Unless otherwise elected by the Participant or otherwise provided for in the Award Agreement,
Restricted Stock Units shall be settled upon the date such Restricted Stock Units vest. Such settlement may be made in Shares,
cash or a combination thereof, as specified in the Award Agreement.
Article 10. Performance Shares
10.1
Grant
of Performance Shares
. Performance Shares may be granted to Participants in such number, and upon such terms and at any time
and from time to time as shall be determined by the Committee, in its sole discretion. Each grant of Performance Shares shall be
evidenced by an Award Agreement.
10.2
Value
of Performance Shares
. Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the
Grant Date. The Committee shall set performance goals in its discretion that, depending on the extent to which they are met over
the specified Performance Period, shall determine the number of Performance Shares that shall be paid to a Participant.
10.3
Earning
of Performance Shares
. After the applicable Performance Period has ended, the number of Performance Shares earned by the Participant
over the Performance Period shall be determined as a function of the extent to which the applicable corresponding performance
goals have been achieved. This determination shall be made solely by the Committee.
10.4
Form
and Timing of Payment of Performance Shares
. The Committee shall pay at the close of the applicable Performance Period, or
as soon as practicable thereafter, any earned Performance Shares in the form of cash or in Shares or in a combination thereof,
as specified in a Participant’s applicable Award Agreement. Any Shares paid to a Participant under this Section 10.4 may
be subject to any restrictions deemed appropriate by the Committee.
Article 11. Performance Units
11.1
Grant
of Performance Units
. Subject to the terms and provisions of this Plan, Performance Units may be granted to a Participant in
such number, and upon such terms and at any time and from time to time as shall be determined by the Committee, in its sole discretion.
Each grant of Performance Units shall be evidenced by an Award Agreement.
11.2
Value
of Performance Units
. Each Performance Unit shall have an initial notional value equal to a dollar amount determined by the
Committee, in its sole discretion. The Committee shall set performance goals in its discretion that, depending on the extent to
which they are met over the specified Performance Period, will determine the number of Performance Units that shall be settled
and paid to the Participant.
11.3
Earning
of Performance Units
. After the applicable Performance Period has ended, the number of Performance Units earned by the Participant
over the Performance Period shall be determined as a function of the extent to which the applicable corresponding performance
goals have been achieved. This determination shall be made solely by the Committee.
11.4
Form
and Timing of Payment of Performance Units
. The Committee shall pay at the close of the applicable Performance Period, or as
soon as practicable thereafter, any earned Performance Units in the form of cash or in Shares or in a combination thereof, as specified
in a Participant’s applicable Award Agreement. Any Shares paid to a Participant under this Section 11.4 may be subject to
any restrictions deemed appropriate by the Committee.
Article 12. Other Stock-Based Awards
and Cash-Based Awards
12.1
Grant
of Other Stock-Based Awards and Cash-Based Awards
.
(a) The
Committee may grant Other Stock-Based Awards not otherwise described by the terms of this Plan, including, but not limited to,
the grant or offer for sale of unrestricted Shares and the grant of deferred Shares or deferred Share units, in such amounts and
subject to such terms and conditions, as the Committee shall determine, in its sole discretion. Such Awards may involve the transfer
of actual Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares.
(b) The
Committee, at any time and from time to time, may grant Cash-Based Awards to a Participant in such amounts and upon such terms
as the Committee shall determine, in its sole discretion.
(c) Each
grant of Other Stock-Based Awards and Cash-Based Awards shall be evidenced by an Award Agreement.
12.2
Value
of Other Stock-Based Awards and Cash-Based Awards
.
(a) Each
Other Stock-Based Award shall be expressed in terms of Shares or units based on Shares, as determined by the Committee, in its
sole discretion.
(b) Each
Cash-Based Award shall specify a payment amount or payment range as determined by the Committee, in its sole discretion. If the
Committee exercises its discretion to establish performance goals, the value of Cash-Based Awards that shall be paid to the Participant
will depend on the extent to which such performance goals are met.
12.3
Payment
of Other Stock-Based Awards and Cash-Based Awards
. Payment, if any, with respect to Cash-Based Awards and Other Stock-Based
Award shall be made in accordance with the terms of the applicable Award Agreement, in cash, Shares or a combination of both as
determined by the Committee in its sole discretion.
Article 13. Restrictions on Transferability
of Awards and Shares
13.1
Transferability
of Awards
. Except as provided in Section 13.2, during a Participant’s lifetime, Options and SARs shall be exercisable
only by the Participant. Awards shall not be transferable other than by will or the laws of descent and distribution or, subject
to the consent of the Committee, pursuant to a domestic relations order entered into by a court of competent jurisdiction; no Awards
shall be subject, in whole or in part, to attachment, execution or levy of any kind; and any purported transfer in violation of
this Section 13.1 shall be null and void. The Committee may establish such procedures as it deems appropriate for a Participant
to designate a beneficiary to whom any amounts payable or Shares deliverable in the event of, or following, the Participant’s
death may be provided.
13.2
Committee
Action
. Except as provided in Section 6.6(k), the Committee may, in its discretion, determine that notwithstanding Section
13.1, any or all Awards shall be transferable, without compensation to the transferor, to and exercisable by such transferees,
and subject to such terms and conditions, as the Committee may deem appropriate; provided , however , no
Award may be transferred for value without shareholder approval.
13.3
Restrictions
on Share Transferability
. The Committee may impose such restrictions on any Shares acquired by a Participant under the Plan
as it may deem advisable, including, without limitation, minimum holding period requirements, restrictions under applicable federal
securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed or traded or
under any blue sky or state securities laws applicable to such Shares.
Article 14. Performance-Based Compensation
and Compliance with Code Section 162(m)
14.1
Compliance
with Section 162(m)
. The provisions of the Plan are intended to ensure that all Options and SARs granted hereunder to any Participant
who is or may be a Covered Employee at the time of exercise of such Option or SAR qualify for exemption from the limitation on
deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(c) of the Code and that such Options
and SARs shall therefore be considered Performance-Based Compensation and this Plan shall be interpreted and operated consistent
with that intention. The Committee may designate any Award (other than an Option or SAR) as Performance-Based Compensation upon
grant, in each case based upon a determination that (i) the Participant is or may be a Covered Employee with respect to such Award,
and (ii) the Committee wishes such award to qualify for exemption from the limitation on deductibility imposed by Section 162(m)
of the Code that is set forth in Section 162(m)(4)(c). The Committee shall have the sole authority to specify which Awards are
to be granted in compliance with Section 162(m) and treated as Performance-Based Compensation.
14.2
Performance
Measures
. The performance goals upon which the payment or vesting of an Award to a Covered Employee that is intended to qualify
as Performance-Based Compensation shall be limited to one or a combination of two or more of the following:
(a) Book
value;
(b) Cash
flow (including funds from operations and cash available for distribution);
(c) Debt;
(d) Earnings
(either in aggregate or on a per-share basis);
(e) Earnings
before or after either, or any combination of, interest, taxes, depreciation, or amortization (“EBITDA”);
(f) Economic
value added;
(g) Expenses/costs
(including any combination of: finding costs, development costs, acquisition costs, production costs, operating costs, transportation
costs, selling expenses, general and administrative expenses);
(h) Gross
or net income;
(i) Gross
or net operating margins;
(j) Gross
or net profits;
(k) Gross
or net revenues;
(l) Market
share;
(m) Net
asset value (NAV);
(n) Net
income;
(o) Operating
income;
(p) Operational
performance measures;
(q) Pre-tax
Income;
(r) Production
levels;
(s) Profitability
ratios;
(t) Reserves
(including the volumes of, or the discounted present value of, proved, probable and/or possible reserve levels and/or additions
to reserves);
(u) Return
measures (including return on assets, return on equity, return on investment, return on capital, return on capital employed, return
on invested capital, gross profit return on investment, gross margin return on investment);
(v) Revenue;
(w) Share
price (including growth in share price and total shareholder return);
(x) Strategic
business objectives (including, but not limited to, objective project milestones, development and refinement of exploration prospect
portfolio, and partnering success);
(y) Transactions
relating to acquisitions or divestitures; or
(z) Working
capital.
Any Performance Measure(s) may, as the
Committee, in its sole discretion deems appropriate, (i) be expressed in absolute amounts or on a per unit basis (e.g., per share,
per barrel, per MCF), (ii) relate to the performance of the Company or any Subsidiary as a whole or any business unit or division
of the Company or any Subsidiary or any combination thereof, (iii) be compared to the performance of a group of comparator companies,
or published or special index, (iv) be based on change in the Performance Measure over a specified period of time and such change
may be measured based on an arithmetic change over the specified period (e.g., cumulative change or average change), or percentage
change over the specified period (e.g., cumulative percentage change, average percentage change or compounded percentage change),
(v) relate to or be compared to one or more other Performance Measures, or (vi) any combination of the foregoing. The Committee
also has the authority to provide for accelerated vesting of any Award based on the achievement of performance goals pursuant to
the Performance Measures specified in this Article 14.
14.3
Evaluation
of Performance
. The Committee may provide in any Award intended to qualify as Performance-Based Compensation that any evaluation
of performance may include or exclude the impact, if any, on reported financial results of any of the following events that occurs
during a Performance Period: (a) asset write-downs, (b) litigation or claim judgments or settlements, (c) changes in tax laws,
accounting principles or other laws or provisions, (d) reorganization or restructuring programs, (e) acquisitions or divestitures,
(f) foreign exchange gains and losses, and (g) gains and losses that are treated as extraordinary items under Financial Accounting
Standard No. 145 (Accounting Standards Codification Topic 225-20). To the extent such inclusions or exclusions affect Awards to
Covered Employees; they shall be prescribed in a form that meets the requirements of Code Section 162(m) for deductibility.
14.4
Adjustment
of Performance-Based Compensation
. Awards that are intended to qualify as Performance-Based Compensation may not be adjusted
upward. The Committee shall retain the discretion to adjust such Awards downward, either on a formula or discretionary basis or
any combination, as the Committee determines, in its sole discretion.
14.5
Committee
Discretion
. In the event that applicable tax or securities laws change to permit Committee discretion to alter the governing
Performance Measures or permit flexibility with respect to the terms of any Award or Awards to be treated as Performance-Based
Compensation without obtaining shareholder approval of such changes, the Committee shall have sole discretion to make such changes
without obtaining shareholder approval. In addition, in the event that the Committee determines that it is advisable to grant Awards
that shall not qualify as Performance-Based Compensation, the Committee may make such grants without satisfying the requirements
of Code Section 162(m) and base vesting on Performance Measures other than those set forth in Section 14.2.
Article 15. Nonemployee Director Awards
15.1
Awards
to Nonemployee Directors
.
The Board or Committee shall determine and approve all Awards to Nonemployee Directors.
The terms and conditions of any grant of any Award to a Nonemployee Director shall be set forth in an Award Agreement.
15.2
Awards
in Lieu of Fees.
The Board or Committee may permit a Nonemployee Director the opportunity to receive an Award in lieu of payment
of all or a portion of future director fees (including but not limited to cash retainer fees and meeting fees) or other type of
Awards pursuant to such terms and conditions as the Board or Committee may prescribe and set forth in an applicable sub-plan or
Award Agreement.
Article 16. Effect of a Change in Control
16.1
Notwithstanding
any other provision of this Plan to the contrary, the provisions of this Article 16 shall apply in the event of a Change in Control,
and set forth in the applicable Award Agreement:
(a)
Outstanding
Options and SARs
. Upon a Change in Control, a Participant’s then-outstanding Options and SARs that are not vested shall
immediately become fully vested (and, to the extent applicable, all performance conditions shall be deemed satisfied) and exercisable
over the exercise period set forth in the applicable Award Agreement.
(b)
Outstanding
Awards, other than Options and SARs, Subject Solely to a Service Condition
. Upon a Change in Control, a Participant’s
then-outstanding Awards, other than Options and SARs, that are not vested and as to which vesting depends solely on the satisfaction
of a service obligation by the Participant to the Company or any Subsidiary shall become fully vested and shall be settled in cash,
Shares or a combination thereof as provided for under the applicable Award Agreement as soon as practicable following such Change
in Control.
(c)
Outstanding
Awards, other than Options and SARs, Subject to a Performance Condition
. Upon a Change in Control, a Participant’s then-outstanding
Awards, other than Options and SARs, that are not vested and as to which vesting depends upon the satisfaction of one or more performance
conditions shall immediately vest and all performance conditions shall be deemed satisfied as if target performance was achieved
and shall be settled in cash, Shares or a combination thereof as provided for under the applicable Award Agreement as soon as practicable
following such Change in Control; notwithstanding that the applicable performance period, retention period or other restrictions
and conditions have not been completed or satisfied.
(d)
Other
Awards
. Upon a Change in Control, the treatment of a Participant’s then-outstanding Awards that are not vested and that
are not subject to paragraphs (a), (b) or (c) above shall be determined in accordance with the applicable Award Agreements or,
if not specified in the Award Agreements, shall be determined by the Committee.
Article 17. Dividend Equivalents
The Committee may grant
Dividend Equivalents to a Participant based on the dividends declared on Shares that are subject to any Award granted to the Participant,
except for Options, SARs and Restricted Stock, with such Dividend Equivalents credited to the Participant as of the applicable
dividend payment dates that occur during a period determined by the Committee. Such Dividend Equivalents shall be converted to
and paid in cash or additional Shares or Awards by such formula and at such time and subject to such limitations as may be determined
by the Committee; provided that in the case of an Award as to which vesting depends upon the satisfaction of one or more performance
conditions, the right to Dividend Equivalents shall be subject to the same restrictions on vesting and payout as the underlying
Award.
Article 18. Beneficiary Designation
Each Participant under
this Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom
any benefit under this Plan is to be paid in case of his death before he receives any or all of such benefit. Each such designation
shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective
only when filed by the Participant in writing with the Company during the Participant’s lifetime. In the absence of any such
beneficiary designation, benefits remaining unpaid or rights remaining unexercised at the Participant’s death shall be paid
to or exercised by the Participant’s executor, administrator or legal representative.
Article 19. Rights of Participants
19.1
Employment
.
Nothing in this Plan or an Award Agreement shall (a) interfere with or limit in any way the right of the Company or any Subsidiary
to terminate any Participant’s employment with the Company or any Subsidiary at any time or for any reason not prohibited
by law or (b) confer upon any Participant any right to continue his employment or service as a Director or Third-Party Service
Provider for any specified period of time. Neither an Award nor any benefits arising under this Plan shall constitute an employment
contract with the Company or any Subsidiary and, accordingly, subject to Articles 3 and 20, this Plan and the benefits hereunder
may be amended or terminated at any time in the sole and exclusive discretion of the Board without giving rise to any liability
on the part of the Company, any Subsidiary, the Committee or the Board.
19.2
Participation
.
No individual shall have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected
to receive a future Award.
19.3
Rights
as a Shareholder
. Except as otherwise provided herein, a Participant shall have none of the rights of a shareholder with respect
to Shares covered by any Award until the Participant becomes the record holder of such Shares.
Article 20. Amendment and Termination
20.1
Amendment
and Termination of the Plan and Awards
.
(a) Subject
to subparagraphs (b) and (c) of this Section 20.1 and Section 20.3 of the Plan, the Board may at any time amend or terminate the
Plan or amend or terminate any outstanding Award.
(b) Except
as provided for in Section 4.4, the terms of an outstanding Award may not be amended, without prior shareholder approval, to:
(i) reduce
the Option Price of an outstanding Option or to reduce the Grant Price of an outstanding SAR,
(ii) cancel
an outstanding Option or SAR in exchange for other Options or SARs with an Option Price or Grant Price, as applicable, that is
less than the Option Price of the cancelled Option or the Grant Price of the cancelled SAR, as applicable, or
(iii) cancel
an outstanding Option with an Option Price that is less than the Fair Market Value of a Share on the date of cancellation or cancel
an outstanding SAR with a Grant Price that is less than the Fair Market Value of a Share on the date of cancellation in exchange
for cash or another Award.
(c) Notwithstanding
the foregoing, no amendment of this Plan shall be made without shareholder approval if shareholder approval is required pursuant
to rules promulgated by any stock exchange or quotation system on which Shares are listed or quoted or by applicable U.S. state
corporate laws or regulations, applicable U.S. federal laws or regulations and the applicable laws of any foreign country or jurisdiction
where Awards are, or will be, granted under the Plan.
20.2
Adjustment
of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events
. Subject to Section 14.4, the Committee may make adjustments
in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including,
without limitation, the events described in Section 4.4) affecting the Company or the financial statements of the Company or of
changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available
under this Plan. The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on
Participants under this Plan. By accepting an Award under this Plan, a Participant agrees to any adjustment to the Award made pursuant
to this Section 20.2 without further consideration or action.
20.3
Awards
Previously Granted
. Notwithstanding any other provision of this Plan to the contrary, other than Sections 20.2, 20.4 and 22.14,
no termination or amendment of this Plan or an Award Agreement shall adversely affect in any material way any Award previously
granted under this Plan, without the written consent of the Participant holding such Award.
20.4
Amendment
to Conform to Law.
Notwithstanding any other provision of this Plan to the contrary, the Committee may amend the Plan or an
Award Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the
Plan or an Award Agreement to any law relating to plans of this or similar nature, and to the administrative regulations and rulings
promulgated thereunder. By accepting an Award under this Plan, a Participant agrees to any amendment made pursuant to this Section
20.4 to the Plan and any Award without further consideration or action.
Article 21. Tax Withholding
21.1
Minimum
Tax Withholding
. The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to
the Company, the minimum statutory amount to satisfy applicable federal, state and local tax withholding requirements, domestic
or foreign, with respect to any taxable event arising as a result of this Plan but in no event shall such deduction or withholding
or remittance exceed the minimum statutory withholding requirements.
21.2
Share
Withholding
. With respect to withholding required upon the exercise of Options or SARs, upon the lapse of restrictions on Restricted
Stock, upon the settlement of Restricted Stock Units, or upon the achievement of performance goals related to Performance Shares,
or any other taxable event arising as a result of an Award granted hereunder (collectively and individually referred to as a “Share
Payment”), a Participant may elect, subject to the approval of the Committee, to satisfy the withholding requirement, in
whole or in part, by having the Company withhold from a Share Payment the number of Shares having a Fair Market Value on the date
the withholding is to be determined equal to the minimum statutory withholding requirement but in no event shall such withholding
exceed the minimum statutory withholding requirement. All such elections shall be irrevocable, made in writing, and signed by the
Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.
Article 22. General Provisions
22.1
Forfeiture
Events
.
(a) In
addition to the forfeiture events specified in Section 22.1(b), the Committee may specify in an Award Agreement that the Participant’s
rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon
the occurrence of certain specified events, in addition to any otherwise applicable vesting of an Award.
(b) A
Participant’s termination of employment for Cause shall result in the forfeiture of the Participant’s outstanding Awards
in accordance with the following:
(i) Any
outstanding and nonvested Options, SARs, Restricted Stock, RSUs, Performance Shares, Performance Units, Cash-Based Awards and Other
Stock-Based Awards granted to the Participant shall be forfeited as of the date immediately preceding the Participant’s Termination
of Employment; and
22.2
Legend
.
The certificates for Shares may include any legend that the Committee deems appropriate to reflect any restrictions on transfer
of such Shares.
22.3
Gender
and Number
. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine,
the plural shall include the singular, and the singular shall include the plural.
22.4
Severability
.
In
the event any provision of this Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of this Plan, and this Plan shall be construed and enforced as if the illegal or invalid provision had not
been included.
22.5
Requirements
of Law
.
The granting of Awards and the issuance of Shares under this Plan shall be subject to all applicable laws,
rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
22.6
Delivery
of Title
.
The Company shall have no obligation to issue or deliver evidence of title for Shares issued under this
Plan prior to:
(a) Obtaining
any approvals from governmental agencies that the Company determines are necessary or advisable; and
(b) Completion
of any registration or other qualification of the Shares under any applicable national or foreign law or ruling of any governmental
body that the Company determines to be necessary or advisable.
22.7
Inability
to Obtain Authority
.
The inability of the Company to obtain authority from any regulatory body having jurisdiction,
which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
22.8
Investment
Representations
.
The Committee may require any individual receiving Shares pursuant to an Award under this Plan
to represent and warrant in writing that the individual is acquiring the Shares for investment and without any present intention
to sell or distribute such Shares.
22.9
Employees
Based Outside of the United States
. Notwithstanding any provision of this Plan to the contrary, in order to comply with the
laws in other countries in which the Company or any Subsidiaries operate or have Employees, Directors or Third-Party Service Providers,
the Committee, in its sole discretion, shall have the power and authority to:
(a) Determine
which Subsidiaries shall be covered by this Plan;
(b) Determine
which Employees, Directors or Third-Party Service Providers outside the United States are eligible to participate in this Plan;
(c) Modify
the terms and conditions of any Award granted to Employees, Directors or Third-Party Service Providers outside the United States
to comply with applicable foreign laws;
(d) Establish
sub-plans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable.
Any sub-plans and modifications to Plan terms and procedures established under this Section 22.9 by the Committee shall be attached
to this Plan document as appendices; and
(e) Take
any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local government
regulatory exemptions or approvals.
Notwithstanding the above, the Committee
may not take any actions hereunder, and no Awards shall be granted, that would violate applicable law.
22.10
Uncertificated
Shares
. To the extent that this Plan provides for issuance of certificates to reflect the transfer of Shares, the transfer
of such Shares may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock
exchange.
22.11
Unfunded
Plan
.
Participants shall have no right, title or interest whatsoever in or to any investments that the Company
or any Subsidiaries may make to aid it in meeting its obligations under this Plan. Nothing contained in this Plan, and no action
taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between
the Company and any Participant, beneficiary, legal representative or any other individual. To the extent that any individual acquires
a right to receive payments from the Company or any Subsidiary under this Plan, such right shall be no greater than the right of
an unsecured general creditor of the Company or the Subsidiary, as the case may be. All payments to be made hereunder shall be
paid from the general funds of the Company, or the Subsidiary, as the case may be, and no special or separate fund shall be established,
and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in this Plan.
22.12
No
Fractional Shares
. No fractional Shares shall be issued or delivered pursuant to this Plan or any Award. The Committee shall
determine whether cash, Awards or other property shall be issued or paid in lieu of fractional Shares or whether such fractional
Shares or any rights thereto shall be forfeited or otherwise eliminated.
22.13
Retirement
and Welfare Plans
. Neither Awards made under this Plan nor Shares or cash paid pursuant to such Awards may be included as “compensation”
for purposes of computing the benefits payable to any Participant under the Company’s or any Subsidiary’s retirement
plans (both qualified and nonqualified) or welfare benefit plans unless such other plan expressly provides that such compensation
shall be taken into account in computing a Participant’s benefit.
22.14
Deferred
Compensation.
To the extent applicable, this Plan and all Awards granted hereunder are intended to comply with or be exempt
from Code section 409A and will be interpreted in a manner intended to comply with Code section 409A. To the extent there is a
conflict between the provisions of the Plan relating to compliance with Code section 409A and the provisions of any Agreement issued
under the Plan, the provisions of the Plan control. Moreover, any discretionary authority that the Committee may have
pursuant to the Plan shall not be applicable to an Award not exempt from Code Section 409A to the extent such discretionary authority
would conflict with Code section 409A. In addition, to the extent required to avoid a violation of the applicable rules
under Code section 409A by reason of Code section 409A(a)(2)(B)(i), any payment under an Award shall be delayed until the earliest
date of payment that will result in compliance with the rules of Code section 409A(a)(2)(B)(i) (regarding the required six-month
delay for distributions to specified employees that are related to a separation from service). To the extent that an
Award not exempt from Code Section 409A provides for payment upon the recipient’s termination of employment as an employee
or cessation of service as a Non-Employee Director or Third-Party Service Provider, such Award shall be deemed to require payment
upon the individual’s “separation from service” within the meaning of Code section 409A. In the event
that an Award shall be deemed not to comply with Code section 409A, then neither the Company, the Board of Directors, the Committee
nor its or their designees or agents, nor any of their affiliates, assigns or successors (each a “protected party”)
shall be liable to any Award recipient or other person for actions, inactions, decisions, indecisions or any other role in relation
to the Plan by a protected party if made or undertaken in good faith or in reliance on the advice of counsel (who may be counsel
for the Company), or made or undertaken by someone other than a protected party.
22.15
Nonexclusivity
of this Plan
. The adoption of this Plan shall not be construed as creating any limitations on the power of the Board or Committee
to adopt such other compensation arrangements as it may deem desirable for any Participant.
22.16
No
Constraint on Corporate Action
. Nothing in this Plan shall be construed to: (i) limit, impair, or otherwise affect the Company’s
or a Subsidiary’s right or power to make adjustments, reclassifications, reorganizations or changes of its capital or business
structure, or to merge or consolidate, or dissolve, liquidate, sell or transfer all or any part of its business or assets; or,
(ii) limit the right or power of the Company or a Subsidiary to take any action that such entity deems to be necessary or appropriate.
22.17
Governing
Law
. The Plan and each Award Agreement shall be governed by the laws of the state of Delaware excluding any conflicts or choice
of law rule or principle that might otherwise refer construction or interpretation of this Plan to the substantive law of another
jurisdiction.
22.18
Delivery
and Execution of Electronic Documents
. To the extent permitted by applicable law, the Company may (i) deliver by email or other
electronic means (including posting on a website maintained by the Company or by a third party under contract with the Company)
all documents relating to the Plan or any Award thereunder (including without limitation, prospectuses required by the Commission)
and all other documents that the Company is required to deliver to its security holders (including without limitation, annual reports
and proxy statements) and (ii) permit Participant’s to electronically execute applicable Plan documents (including, but not
limited to, Award Agreements) in a manner prescribed to the Committee.
22.19
No
Representations or Warranties Regarding Tax Effect
. Notwithstanding any provision of the Plan to the contrary, the Company,
Subsidiaries, the Board and the Committee neither represent nor warrant the tax treatment under any federal, state, local or foreign
laws and regulations thereunder (individually and collectively referred to as the “Tax Laws”) of any Award granted
or any amounts paid to any Participant under the Plan including, but not limited to, when and to what extent such Awards or amounts
may be subject to tax, penalties and interest under the Tax Laws.
22.20
Indemnification
.
Subject
to requirements of the laws of the state of Delaware, each individual who is or shall have been a member of the Board, or a Committee
appointed by the Board, or an officer of the Company to whom authority was delegated in accordance with Article 3, shall be indemnified
and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action, suit or proceeding to which he or she may be a party
or in which he or she may be involved by reason of any action taken or failure to act under this Plan and against and from any
and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction
of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity,
at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his/her own behalf, unless
such loss, cost, liability or expense is a result of his/her own willful misconduct or except as expressly provided by statute.
The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals
may be entitled under the Company’s Articles of Incorporation or Bylaws, as a matter of law or otherwise, or any power that
the Company may have to indemnify them or hold them harmless.
22.21
Successors
.
All obligations of the Company under this Plan with respect to Awards granted hereunder shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise,
of all or substantially all of the business and/or assets of the Company
APPENDIX B
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
GULFSLOPE ENERGY, INC.
ARTICLE 1
The name of the corporation
is
GulfSlope Energy, Inc.
(the “
Corporation
”).
ARTICLE 2
The address of the
registered office of the Corporation in the State of Delaware is 919 North Market St., Suite 950, Wilmington, Delaware 19801. The
name of its registered agent at such address is InCorp Services, Inc.
ARTICLE 3
The purpose of the Corporation is to engage
in any lawful act or activity for which a corporation may now or hereafter be organized under the General Corporation Law of the
State of Delaware (the “
DGCL
”).
ARTICLE 4
The total number of shares of capital stock
that the Corporation shall have authority to issue is 1,550,000,000, consisting of 1,500,000,000 shares of common stock, par value
$0.001 per share (the “
Common Stock
”), and 50,000,000 shares of preferred stock, par value $0.001 per share
(the “
Preferred Stock
”).
[
IF PROPOSAL 3 IS NOT APPROVED THEN
THE FIRST PARAGRAPH OF ARTICLE 4 SHALL READ AS FOLLOWS:
The total number of shares of capital stock that the Corporation
shall have authority to issue is 1,025,000,000, consisting of 975,000,000 shares of common stock, par value $0.001 per share (the
“
Common Stock
”), and 50,000,000 shares of preferred stock, par value $0.001 per share (the “
Preferred
Stock
”).
]
Except as otherwise
required by law or as otherwise provided in this certificate of incorporation or in any designation of any series of Preferred
Stock pursuant to a resolution of the Board of Directors, each share of Common Stock shall be entitled to one vote and the holders
of the Common Stock shall exclusively possess all voting power, shall be entitled to participate equally and on the same basis
as to any dividends if, as and when declared by the Board of Directors and as to the distributions in the event of any dissolution,
liquidation or winding up of the Corporation, whether voluntary or involuntary.
The Board of Directors
is expressly authorized from time to time to designate one or more series of the Preferred Stock, to issue the Preferred Stock
as Preferred Stock of any such series, and in connection with the designation of each such series to fix by resolution or resolutions
providing for the issue of shares thereof the voting and other powers, if any, and the designations, preferences and relative,
participating, optional or other special rights, and the qualifications, limitations or restrictions thereof to the fullest extent
now or hereafter permitted by the DGCL. All series of Preferred Stock shall rank equally and be identical in all respects
except as set forth in the resolutions of the Board of Directors of the Corporation providing for the issue of such stock.
ARTICLE 5
Except as otherwise
provided in this certificate of incorporation, in furtherance and not in limitation of the powers conferred by statute, the Board
of Directors is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws of the Corporation
ARTICLE 6
The affairs of the Corporation shall be
governed by a Board of Directors. The number of directors of the Corporation shall be determined in the manner set forth in the
Bylaws of the Corporation. Commencing with the 2015 annual meeting of stockholders, directors shall be divided into
three classes as determined by action of the Board of Directors, apportioned as nearly as equal as possible. The three classes
shall be designated as Class I, Class II and Class III. The initial term of office of the Class I directors shall expire
on the date of the 2016 annual meeting of stockholders, the initial term of office of the Class II directors shall expire on the
date of the 2017 annual meeting of stockholders, and the initial term of office of the Class III directors shall expire on the
date of the 2018 annual meeting of stockholders. Commencing with the 2016 annual meeting and at each annual meeting
of stockholders thereafter, directors elected to succeed those directors whose terms expire shall be elected for a term of office
to expire at the third succeeding annual meeting of stockholders after their election, so that the term of office of one class
of directors shall expire each year. Each director shall hold office until the expiration of such director’s term of office
and until such director’s successor shall have been elected and qualified, or until such director’s earlier resignation,
removal or death. In case of any increase or decrease, from time to time, in the number of authorized directors constituting the
whole Board of Directors, the number of directors in each class shall be apportioned as nearly as equal as possible as determined
by action of the Board of Directors. A director elected by the remainder of the Board of Directors to fill a vacancy shall hold
office for the remainder of the term of the predecessor director and until such director’s successor has been elected and
qualified, or until such director’s successor has been elected and qualified, or until such director’s earlier resignation,
removal or death.
ARTICLE 7
Elections of directors
need not be by written ballot unless the Bylaws shall so provide.
ARTICLE 8
Meetings of stockholders
of the Corporation may be held within or without the State of Delaware, as the Bylaws may provide. The books of the
Corporation may be kept (subject to any provision of applicable law) outside the State of Delaware at such place or places as may
be designated from time to time by the Board of Directors or in the Bylaws of the Corporation. Subject to the rights
of the holders of any series of Preferred Stock, any action required or permitted to be taken by stockholders of the Corporation
must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent
in writing by such stockholders.
ARTICLE 9
A director of this
Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. If
the DGCL is amended to authorize the further elimination or limitation of the liability of directors, then the liability of a director
of the Corporation, in addition to the limitation on personal liability provided in this Article, shall be eliminated or limited
to the fullest extent permitted by the DGCL as so amended.
Any repeal or modification
of the foregoing provisions of this Article 9 by the stockholders of the Corporation shall not adversely affect any right or protection
of a director of the Corporation existing at the time of, or increase the liability of any director of the Corporation with respect
to any acts or omissions of such director occurring prior to, such repeal or modification.
ARTICLE 10
To the fullest extent
permitted by applicable law, the Corporation is also authorized to provide indemnification of (and advancement of expenses to)
its agents (and any other persons to which the DGCL permits this Corporation to provide indemnification) through Bylaw provisions,
agreements with such agents or other persons, vote of stockholders or disinterested directors, or otherwise, in excess of the indemnification
and advancement otherwise permitted by Section 145 of the DGCL, subject only to limits created by the DGCL (statutory or non-statutory),
with respect to actions for breach of duty to this Corporation, its stockholders, and others.
Any repeal, amendment
or modification of any of the foregoing provisions of this Article 10 shall not adversely affect any right or protection of a director,
officer, agent, or other person existing at the time of, or increase the liability of any director of this Corporation with respect
to any acts or omissions of such director, officer, or agent occurring prior to, such repeal, amendment or modification.
ARTICLE 11
The Corporation reserves
the right to amend, alter, change or repeal in any respect any provision contained in this certificate of incorporation in the
manner now or hereafter prescribed by applicable laws, and all rights conferred upon stockholders in this certificate of incorporation
are granted subject to this reservation.
ARTICLE 12
The Corporation hereby
expressly elects not to be governed by Section 203 of the DGCL.
Appendix B-1
AMENDMENT REGARDING INCREASE IN NUMBER
OF AUTHORIZED SHARES
OF COMMON STOCK (PROPOSAL 4)
If Proposal 4 is approved, but not Proposal
3, the first paragraph of Article 4 of the certificate of incorporation of the Company will be amended in its entirety as follows:
The total number of shares of capital
stock that the Corporation shall have authority to issue is 1,025,000,000, consisting of 975,000,000 shares of common stock, par
value $0.001 per share (the “
Common Stock
”), and 50,000,000 shares of preferred stock, par value $0.001 per
share (the “
Preferred Stock
”).
PROXY
GULFSLOPE
ENERGY, INC.
ANNUAL
MEETING OF STOCKHOLDERS
MAY 18, 2018