Gulf Keystone Petroleum : Long Term Incentive Plan Rules 2024

GULF KEYSTONE PETROLEUM LIMITED

RULES

of the

GULF KEYSTONE PETROLEUM 2024

LONG TERM INCENTIVE PLAN

Approved by the Board on ●

pursuant to shareholders' approval on ●

Herbert Smith Freehills LLP

HSF Ref: 5153/14460/31056839

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Gulf Keystone Petroleum 2024 Long Term Incentive Plan

	CONTENTS
Clause	Heading	Page
1.	INTERPRETATION AND CONSTRUCTION	2
2.	PLAN LIMITS	4
3.	AWARDS	4
4.	PERFORMANCE CONDITION	6
5.	AWARDS ARE NON-TRANSFERABLE	7
6.	VESTING	7
7.	CESSATION OF OFFICE OR EMPLOYMENT	9
8.	CORPORATE ACTIONS	10
9.	OPTIONS	13
10.	DIVIDEND EQUIVALENT	13
11.	CASH ALTERNATIVE	14
12.	TAX LIABILITY	14
13.	CUSTODY ARRANGEMENTS	15
14.	MALUS AND CLAW-BACK	15
15.	VARIATION OF CAPITAL	17
16.	ADMINISTRATION	17
17.	AMENDMENTS	17
18.	DATA PROTECTION	18
19.	GENERAL	18
APPENDIX 1 : OPERATION OF MALUS AND CLAW-BACK	20
APPENDIX 2 : US PARTICIPANTS	22
APPENDIX 3 : SECTION 431 ITEPA 2003 ELECTION	23

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RULES OF THE GULF KEYSTONE PETROLEUM 2024 LONG TERM INCENTIVE PLAN

1. INTERPRETATION AND CONSTRUCTION1

1.1 For the purposes of the Plan, the following terms shall have the meaning indicated below unless the context clearly indicates otherwise:

"Award" means either a Conditional Award or an Option;

"Board" means the board of directors of the Company or a committee duly authorised by the board of directors (which, in respect of Awards granted to the Executive Directors and Senior Management of the Company, shall be the remuneration committee of the Board) or, following any Corporate Action, the Board or duly authorised committee as constituted immediately prior to the Corporate Action;

"Claw-back" means a recovery of value by the Company from a Participant in accordance with the provisions of Rule 14 (Malus and Claw-back) and Appendix 1 (Operation of Malus and Claw- back);

"Company" means Gulf Keystone Petroleum Limited (registered in Bermuda under No. 31165);

"Conditional Award" means a right to receive a transfer of Shares following vesting of the Award;

"Control" has the meaning given by Section 995 of the Income Tax Act 2007; "Corporate Action" means any of the events referred to in:

1. Rules 8.1 to 8.4 (but excluding a Reorganisation as defined in Rule 8.8); or
2. if the Board determines that Awards will vest pursuant to such Rule, any of the events referred to in Rules 8.5 or 8.6;

"Dealing Day" means any day on which the London Stock Exchange is open for trading;

"Dealing Restriction" means any restriction on the dealing in Shares, whether direct or indirect, pursuant to any law, regulation, code or enactment in England and Wales and/or the jurisdiction in which the Participant is resident, or any share dealing code of the Company (but shall not include any restriction imposed by Rule 6.12 (Holding Period));

"Eligible Employee" means an employee (including an Executive Director) of any Group Company;

"Employees' Share Scheme" has the meaning given by Section 1166 of the Companies Act 2006;

"Executive Director" means an Eligible Employee who is a member of the board of directors of the Company;

"Financial Year" means the financial year of the Company within the meaning of Section 390 of the Companies Act 2006;

"Grant Date" means (subject to Rule 3.2 (Timing of grants)) the date on which an Award is granted;

"Group" means the Company and any company which from time to time is a subsidiary of the Company, within the meaning of section 86 of the Bermuda Companies Act 1981 (each a "Group Company");

"Holding Period" means the period specified in Rule 6.12 (Holding Period) during which the transfer of Shares received on vesting of a Conditional Award or on exercise of an Option is restricted;

"ITEPA" means the Income Tax (Earnings and Pensions) Act 2003;

"Malus Adjustment" means a reduction in the number of Shares subject to an Award in accordance with the provisions of Rule 14 (Malus and Claw-back) and Appendix 1 (Operation of Malus and Claw-back);

1 HSF Note: Bermudan counsel to confirm references to the Bermudan Companies Act.

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"Market Value" means, in relation to a Share on any day:

1. if and so long as the Shares are admitted to listing by the Financial Conduct Authority and traded on the London Stock Exchange, the mid-closing price of a Share on the immediately preceding Dealing Day; or
2. subject to (A) above, its market value, determined in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992;

"Normal Vesting Date" means the date or dates on which an Award shall vest as determined in accordance with Rule 6.2 (Normal vesting);

"Option" means a right to acquire Shares, which may be exercised by the Participant following the vesting of the Award during any period permitted for exercise;

"Option Price" shall be nil, or such other amount as the Board may determine (provided that the Board may reduce or waive such amount at any time);

"Participant" means an Eligible Employee who has received an Award to the extent it has not been released and has not lapsed (or, following the Participant's death, the Participant's Personal Representatives);

"Performance Condition" means the performance condition to which an Award may be subject as provided for in Rule 4 (Performance Condition), which may consist of one or more performance elements, and, if applicable, shall be set out in the Participant's award notification pursuant to Rule 3.11.6;

"Personal Representatives" means, following the Participant's death, the Participant's personal representatives, or a person fulfilling a similar function in any jurisdiction;

"Plan" means this Gulf Keystone Petroleum 2024 Long Term Incentive Plan, as amended from time to time;

"Rule" means a rule of this Plan;

"Senior Management" shall have the meaning ascribed by the UK Corporate Governance Code issued by the Financial Reporting Council;

"Share" means a fully paid ordinary share in the capital of the Company;

"Shareholding Requirements" means any provisions to which the Participant is subject (whether under any contractual arrangement or, in respect of Executive Directors, as a result of the terms of the Company's shareholder-approved remuneration policy) which require the Participant to hold a minimum number of Shares from time to time (including provisions which continue to apply after the Participant has ceased to hold office or employment with the Group);

"Treasury Shares" means Shares to which Sections 724 to 732 of the Companies Act 2006 apply;

"Trust" means any employee benefit trust from time to time established by the Company; "US Participant" has the meaning given in Rule 3.10 (US Participants); and "vesting" means:

1. Shares subject to a Conditional Award becoming due to be transferred to the Participant; or
2. an Option becoming exercisable,

(and "vest" shall be construed accordingly).

1.2 In this Plan unless the context requires otherwise:

1. the headings are inserted for convenience only and do not affect the interpretation of any Rule;
2. a reference to a statute or statutory provision includes a reference:
3. 1. to that statute or statutory provision as from time to time consolidated, modified, re-enacted or replaced by any statute or statutory provision;
   2. to any repealed statute or statutory provision which it re-enacts (with or without modification); and

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1. 1. to any subordinate legislation made under it;
2. words in the singular include the plural, and vice versa;
3. a reference to any one gender shall be treated as a reference to any other gender;
4. a reference to a person shall include a reference to a body corporate;
5. a reference to writing or written form shall include any legible format capable of being reproduced on paper, irrespective of the medium used;
6. the term "including" shall mean "including, without limitation and without prejudice to the generality of the foregoing"; and
7. a reference to any period of time "from" a date or "to" a date (or similar) shall be inclusive of such dates.

1.3 In this Plan:

1. a reference to the "transfer of Shares" (or similar) shall include both the issuance and allotment of Shares and the transfer of Treasury Shares; and
2. a provision obliging, or permitting, any company to do any thing shall be read as obliging, or permitting, such company to do that thing, or procure that thing to be done.

2. PLAN LIMITS

1. Subject to Rule 2.2, the Board may not grant an Award if the number of Shares subject to such proposed Award (the "Relevant Shares") would cause the limit in Rule 2.3 to be breached.
2. Rule 2.1 shall not apply in respect of an Award granted on terms that it shall not be capable of being satisfied by the issue of Shares.
   10 per cent limit: Employees' Share Scheme
3. The number of Relevant Shares, when added to the aggregate of:
4. 1. the number of Shares subject to outstanding options or awards granted within the previous 10 years under the Plan or any other Employees' Share Scheme adopted by the Company which may be satisfied by the issue of Shares; and
   2. the number of Shares actually issued within the previous 10 years under the Plan, under any other Employees' Share Scheme or to a Trust (but excluding any of those Shares that were used to satisfy an option or award granted more than 10 years previously, and without double counting any Shares which the Board has determined are to be used to satisfy options or awards counted under Rule 2.3.1 above),

may not exceed such number as represents 10 per cent of the Company's issued share capital immediately prior to such proposed grant or issue.

Treasury Shares

2.4 References in this Rule 2 to the issue of Shares shall include the transfer of Treasury Shares, but only until such time as the guidelines issued by institutional investor bodies cease to provide that they should be so included.

3. AWARDS Eligibility

1. Awards may be granted to Eligible Employees selected by the Board.
   Timing of grants
2. An Award may only be granted:
3. 1. during the period of 42 days commencing on the date of adoption of the Plan;
   2. during the period of 42 days commencing on the Dealing Day immediately following the day on which the Company announces its results for the preceding Financial Year, half-year or other period;

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1. in respect of an Award to be granted in respect of the recruitment or promotion of an Eligible Employee, as soon as reasonably practicable after the Eligible Employee commences office or employment with any Group Company; and/or
2. at such time at which the Board determines that exceptional circumstances exist which justify the grant of the Award,

or, in any such case, if the grant of an Award during such period or at such time would be contrary to any Dealing Restriction, as soon as reasonably practicable after such restriction ceases to apply (and in which case the Board may determine that the Grant Date of the Award shall be the date on which the Award would have been granted but for such restriction having arisen).

Individual limit

3.3 An Award may not be granted to an Eligible Employee where it would cause the aggregate Relevant Value of the Shares subject to such Award and any Award(s) granted to the Eligible Employee in the same Financial Year to exceed an amount equal to:

1. 200% of the gross annual basic salary of that Eligible Employee at the relevant Grant Date; or
2. if the Board so determines in circumstances which it determines to be exceptional, 300% of the gross annual basic salary of that Eligible Employee at the relevant Grant Date,

or, in each case, in respect of any Award granted to an Executive Director, such lower amount as may be specified in any Company directors' remuneration policy in place from time to time.

An Award granted in breach of this limit shall immediately lapse in respect of the number of Shares which cause this limit to be breached. Awards which have been released or have lapsed, or which are granted in connection with the recruitment of an Eligible Employee in lieu of incentive awards awarded, or which would otherwise have been awarded, by the individual's former employer which are forfeited (or not awarded), and any right to receive Shares as a dividend equivalent, shall be ignored for this purpose.

In this Rule 3.3, the "Relevant Value" of a Share subject to an Award means either (as determined by the Board): (i) the Market Value of a Share on the Dealing Day immediately prior to the Grant Date; or (ii) the average of the Market Value of a Share over the period of up to the five consecutive Dealing Days ending on the Dealing Day immediately prior to the Grant Date (each being, where the Award is granted within the period in Rule 3.2.1 or 3.2.2, a Dealing Day within such 42 day period).

1. Where an Eligible Employee's gross annual basic salary is denominated in a currency other than pounds sterling, for the purposes of Rule 3.3 above such gross annual basic salary shall be converted into pounds sterling on such basis as the Board may determine.
   Method of grant
2. An Award shall be granted by the Board.
3. An Award shall be granted by deed.
4. No payment for the grant of an Award shall be made by the Participant.
5. A Participant may within 30 days of the Grant Date release an Award (in full but not in part) by written notice to the Company. Where a Participant does not release an Award within such period, the Participant shall be deemed to have accepted the Award on the terms set out in the Rules. Alternatively, it may be a term of the grant of an Award that the Participant shall be required to accept the terms of the Award within such period following grant as may be determined by the Board and, where the Board specifies such period, the Award shall lapse at the end of such period if the terms of the Award have not been accepted by the Participant.
   Holding Period
6. A Holding Period shall apply to an Award:

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1. that is granted to an eligible employee who, on the Grant Date, is an Executive Director of the Company; or
2. otherwise if the Board so determines prior to the Grant Date.

US Participants

1. The provisions of Appendix 2 (US Participants) shall apply to an Award granted to or held by a Participant who is or becomes, at any time during the period from the Grant Date to the date on which the Award vests or lapses, subject to taxation under the US Internal Revenue Code of 1986, as amended (a "US Participant"). References to Code §409A are to §409A of the US Internal Revenue Code of 1986, as amended2.
   Award notification
2. As soon as practicable following the Grant Date an award notification in such form as the Board may determine (including electronic) shall be issued in respect of an Award to the Participant, which shall specify:
3. 1. whether the Award takes the form of a Conditional Award or an Option;
   2. the Grant Date;
   3. the Normal Vesting Date;
   4. the number of Shares in respect of which the Award is granted;
   5. in relation to an Option, the Option Price (if any);
   6. if applicable, the full terms of any Performance Condition;
   7. if applicable, that the Award is subject to a Holding Period;
   8. if the Board has so determined prior to the Grant Date, that the dividend equivalent provisions of Rule 10 (Dividend Equivalent) shall apply; and
   9. that the Award is subject to the malus and claw-back provisions of Rule 14 (Malus and Claw-back) and Appendix 1 (Operation of Malus and Claw-back).

4. PERFORMANCE CONDITION

1. An Award may be granted subject to a Performance Condition.
2. In respect of an Award granted to an Executive Director:
3. 1. unless otherwise approved by the Company's shareholders (whether pursuant to the Company's prevailing directors' remuneration policy or otherwise), such Award will be granted subject to a Performance Condition; and
   2. each element of such Performance Condition shall normally be assessed over a period of not less than three years, ending no later than the Normal Vesting Date,

provided that, where an Award is granted to an Eligible Employee in connection with their recruitment or promotion to Executive Director and/or in circumstances which the Board determines to be exceptional, such Award may be granted on terms that the Performance Condition shall be assessed over such shorter period as the Board may prior to the grant of the Award determine.

1. If events happen following the Grant Date which cause the Board to determine that any element of a Performance Condition is no longer a fair measure of the Company's performance, the Board may alter the terms of such element as it determines to be appropriate but not so that the revised Performance Condition is, in the opinion of the Board, materially more or less challenging in the circumstances (taking account of the intervening event) than was intended in setting the original Performance Condition.
2. A Performance Condition may not be retested.

2 HSF Note: GKP to confirm whether US Counsel will be asked to review the appendix. HSF is unable to provide US law advice on this point.

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5. AWARDS ARE NON-TRANSFERABLE

1. A Participant may not transfer, assign, pledge, charge or otherwise dispose of, or grant any form of security or other interest over, any part of the Participant's interest in an Award. An Award shall (unless the Board determines otherwise) lapse: (i) upon the Participant doing so (whether voluntarily or involuntarily); (ii) upon the Participant being deprived of the beneficial ownership of an Award by operation of law; or (iii) upon the Participant becoming bankrupt.
2. Rule 5.1 does not restrict the transmission of an Award to the Participant's Personal Representatives following the Participant's death.

6. VESTING Normal vesting

1. An Award shall vest on the Normal Vesting Date, provided that, where an Award is granted subject to a Performance Condition, the Normal Vesting Date shall be deferred until such date as is reasonably required in order for the Board to assess the Performance Condition pursuant to Rule 6.6.
2. The Normal Vesting Date(s) of an Award shall be:
3. 1. for any Award granted to an Executive Director, subject to Rule 6.3, the third anniversary of the Grant Date or such later date as the Board may determine; and
   2. for other Eligible Employees the third anniversary of the Grant Date or such other date or dates as the Board may, prior to the grant of an Award, determine;
4. The Board may determine that where an Award is granted to an Eligible Employee in connection with their recruitment or promotion to Executive Director, and/or in circumstances which the Board determine to be exceptional, the Normal Vesting Date for an Award granted to an Executive Director shall be such earlier date or dates as the Board may, prior to the grant of an Award, determine.
5. Where the Board determines that an Award shall vest on multiple Normal Vesting Dates, the Board shall determine the proportion of the Award that shall vest on each such Normal Vesting Date and these Rules shall, other than in respect of the application of time pro-rating pursuant to Rules 6.15.1, 7.5 and 8.7, apply separately to each part of the Award (and references to the "Award" shall be read accordingly).
   Vesting subject to Dealing Restrictions
6. A Conditional Award shall not vest unless, and vesting shall be delayed until, the Board is satisfied that at that time:
7. 1. such vesting;
   2. the transfer of Shares to the Participant; and
   3. any action needed to be taken by the Company to give effect to such vesting,

is not contrary to any Dealing Restriction.

Extent of vesting determined by the Performance Condition

1. Where an Award is granted subject to a Performance Condition, the extent to which that Award shall vest (if at all) shall, subject to Rule 6.8, be determined by reference to the Performance Condition. At the end of the period over which the Performance Condition is assessed, the Award shall lapse to the extent that the Performance Condition is not met or the Board applies a reduction to the Award.
2. In the event that any element of a Performance Condition is required to be assessed prior to the end of the period over which it was originally intended to be assessed, the Board may make its assessment on the basis of such information (not limited to published accounts) as it determines to be appropriate.
3. The Board may increase or reduce (including to nil) the extent to which any Award shall vest (including, for the avoidance of doubt, an Award which is not subject to a Performance

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Condition) if it determines that it is appropriate to do so to reflect: (i) the broader performance of the Group; (ii) the Participant's individual performance; and/or (iii) the broader experience of shareholders and/or employees.

Effect of vesting

6.9 The effect of the vesting of an Award is that:

1. the Shares in respect of which a Conditional Award vests shall be transferred to the Participant as soon as is reasonably practicable (which may include transferring the Shares on more than one consecutive Dealing Day on such basis as the Board may determine); and
2. an Option shall, to the extent that it vests, become exercisable in accordance with Rule 9 (Options).

Disciplinary proceedings

1. Unless the Board determines otherwise, an Award shall not vest while a Participant is subject to a regulatory investigation process and/or formal disciplinary process (or similar), or where a Participant has been served with notice that such a process may be instigated without such notice having been rescinded, and vesting shall (subject to the Award lapsing to any extent prior to or as a result of the conclusion of such process pursuant to Rule 7 (Cessation of office or employment) or 14 (Malus and Claw-back)) be delayed until the conclusion of such process. For the avoidance of doubt, the Board shall act reasonably and in good faith in determining whether to instigate a formal disciplinary process (or similar).
   Lapse of Awards to give effect to claw-back of other awards
2. By participating in the Plan, the Participant acknowledges that the Board may lapse any Award to such extent as it determines to be necessary (including in full) in order to give effect to a claw-back under the terms of the Plan or any other Employees' Share Scheme or bonus scheme operated from time to time by any Group Company.
   Holding Period
3. If an Award is subject to a Holding Period as specified pursuant to Rule 3.9 (Holding Period) above, then subject to Rules 6.13 and 6.14, a Participant shall not transfer, assign, pledge, charge or otherwise dispose of, or grant any form of security or other interest over, any of the Shares in respect of which an Award vests, within the period of five years from the Grant Date. For the avoidance of doubt, where an Option subject to a Holding Period is exercised during that Holding Period, the duration of the Holding Period shall continue to be five years from the Grant Date.
4. Rule 6.12 shall not restrict a sale or transfer of Shares pursuant to Rule 12 (Tax Liability) and/or pursuant to a Corporate Action.
5. Rule 6.12 shall (subject to Rule 7.8 (Meaning of cessation of office or employment)), unless the Board determines otherwise, continue to apply notwithstanding the Participant ceasing to hold office or employment with any Group Company for any reason.
   International transfers
6. Where a Participant, whilst continuing to hold an office or employment with a Group Company, is to be transferred to work in another country, and as a result the Board considers that following such transfer either: (i) the Participant or a Group Company is likely to suffer a tax disadvantage in respect of an Award; or (ii) due to securities or exchange control laws, there are likely to be restrictions on the Participant's ability to receive Shares pursuant to an Award, to exercise an Option and/or to hold or deal in Shares, the Board may decide that an Award shall vest (subject to the extent to which any Performance Condition has been met in accordance with Rules 6.6 and 6.7 and the application of Rule 6.8) on such date as it may determine, in which case:
   6.15.1 the proportion of the Award which may vest shall be limited (unless the Board determines otherwise) to a pro rata proportion on the basis of the number of whole months which have elapsed from the Grant Date to such vesting date, as compared

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to the number of whole months in the period from the Grant Date to the Normal Vesting Date, and shall take account of any proportion of the Award which has already vested on an earlier Normal Vesting Date(s) applied pursuant to Rule 6.2.2 or 6.3. Any remainder of the Award shall lapse; and

6.15.2 an Option may, subject to Rule 9.5, be exercised during the period of six months, or such other period as may be determined by the Board, from such vesting date and shall lapse at the expiry of such period.

7. CESSATION OF OFFICE OR EMPLOYMENT Cessation where Awards lapse

7.1 An Award shall lapse:

1. on the Participant ceasing to hold office or employment with any Group Company; or
2. if the Participant gives or receives notice of such cessation, on such earlier date (on or following the date notice is given or received) as may be determined by the Board,

save in each case where Rule 7.2 or Rule 7.6 applies.

Reasons for cessation where Awards remain capable of vesting

7.2 An Award shall not lapse (or, in the case of Rule 7.2.6, shall be deemed not to have lapsed) pursuant to Rule 7.1 where the reason for the cessation or notice is:

1. injury, disability or ill-health (as evidenced to the satisfaction of the Board);
2. redundancy (within the meaning of the Employment Rights Act 1996);
3. retirement (as evidenced to the satisfaction of the Board);
4. the transfer of the Participant's employment in connection with the disposal of a business or undertaking, or a part-business or part-undertaking;
5. the company with which the Participant holds office or employment ceasing to be a Group Company; or
6. any other reason, if the Board so determines.

Where the Board exercises its discretion under Rule 7.2.6 the Board may impose additional conditions on the Award (including as to when the Award may vest).

Timing of vesting in the event of cessation prior to the Normal Vesting Date

7.3 Where prior to the Normal Vesting Date a Participant ceases to hold office or employment with any Group Company for any of the reasons specified in Rule 7.2:

1. an Award shall not vest at the date of such cessation, but shall continue to be capable of vesting in accordance with the remainder of these Rules; or
2. the Board may determine that the Award shall instead vest (subject to the extent to which any Performance Condition has been met in accordance with Rules 6.6 and 6.7 and the application of Rule 6.8) on or at any time following the date of cessation,

and in either case an Option shall, subject to Rule 9.5, cease to be exercisable at the expiry of the period of six months, or such other period as may be determined by the Board, from such date on which the Award vests (under any Rule), and shall lapse at the expiry of such period.

Exercise period in the event of cessation on or after the Normal Vesting Date

7.4 Where on or after the Normal Vesting Date a Participant ceases to hold office or employment with any Group Company for any of the reasons specified in Rule 7.2, an Option shall, subject to Rule 9.5, lapse at the expiry of the period of six months, or such other period as may be determined by the Board, from the date of cessation.

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