For the year ended 31 December 2014 (to be paid in 2015), the following metrics were adopted as targets:  (1) Increase in PV10 of proved reserves divided by the capital spent to generate that growth during the period excluding  acquisitions and dispositions  The amount of any STI and LTI bonuses relative to the year ended 31 December 2014 will be determined subsequent to the filing  of this report and included in reported remuneration in next year’s Directors’ Report. Long-Term Incentives  We have two active equity incentive plans under the LTI component of the incentive remuneration program. These are the  Sundance Employee Option Plan ("ESOP") and the Sundance Energy Australia Limited Restricted Share Units available only to our  U.S. employees under the Incentive Remuneration Plan (the "RSU Plan"). Any grants made to employees that also serve as a  director are subject to shareholder approval prior to issuance. ESOP Plan The ESOP provides for the issuance of stock options at an exercise price determined at the time of the issue by a committee  designated by the board (the "Plan Committee"). Options under the ESOP may be granted to eligible employees, as determined  by the Plan Committee, and typically include our executive officers, directors and key employees. Historically, the Plan Committee has granted options in connection with attracting new employees, which grant is made once  employment has commenced. It is within the discretion of the Plan Committee, however, to authorize additional option grants  during the tenure of employment. Generally, an option vests 20 percent on the 90th day following the grant date, with an  additional 20 percent vesting on the first, second, third and fourth anniversaries thereof. Options are valued using the Black- Scholes methodology and recognized as remuneration in accordance with their vesting conditions. In the event of a voluntary  winding up of the Company, unvested stock options vest immediately. We may amend the ESOP or any portion thereof, or waive  or modify the application of the ESOP rules in relation to a participant, at any time. Certain amendments to the ESOP may require  the approval of the option holders. No stock options were granted to any officers or directors during fiscal years 2013 or 2014.  RSU Plan  The RSU Plan provides for the issuance of restricted share units ("RSUs") to our U.S. employees. The purpose of issuing RSUs is to  reward senior executives and employees for achievement of financial and operational performance targets established by our  board. The RSU Plan is administered by our board. RSUs may be granted to eligible employees from a bonus pool established at  the sole discretion of our board. The bonus pool is subject to board and management review of performance metrics with respect  to both our and the individual employee's performance over a measured period determined by the Remuneration and  Nominations Committee and the board. The RSUs may be settled in cash or shares at the discretion of our board. Under the RSU Plan, which applies to 2014 payments earned in 2013, 25% of the RSUs vest upon satisfaction of the performance  criteria and share award determination, and 25% vest on each of next three anniversaries. The RSUs are based on performance  targets established and approved by our board. The number of RSUs awarded is calculated by dividing the value of the LTI award  by the closing price of the Company’s shares at the end of the fiscal year for which the award is granted. - 36 -  Financial Performance Metric  Performance  Target  Target  Weight  Production of oil and natural gas per 1,000 debt adjusted share  4.06 Boe  17.5%  Cash margin  72.6%  17.5%  Net asset value per debt-adjusted share  1.02  PV/I (1)  1.25  17.5%  Health, safety and environmental  Qualitative  10.0%  Assessment of the performance of senior executives and managers  20.0% 