Document:

Exhibit 10.2

 

Notice Of Bonus Award

Under The

Southwest Royalties Reward Plan

 

This Notice of
Bonus Award evidences that                       
(“Participant”) has been selected to
participate in the Southwest Royalties Reward Plan (the “Plan”),
effective as of October 25, 2006.

The Plan was established
by Clayton Williams Energy, Inc. (the “Company”) for
the purpose of rewarding eligible employees and service providers for continued
quality service to the Company and its affiliates by providing them the opportunity
to receive bonus payments that are based on certain profits derived from a
portion of the Company’s working interest in the RS Windham C3 well in Upton
County Texas (Amacker Tippet Field).

Participant hereby
acknowledges and agrees as follows:

1.             Bonus
Percentage.  The Bonus
Percentage applicable to Participant’s Bonus Award is         %.

2.             Full
Vesting Date.  The Full
Vesting Date for Participant’s Bonus Award is October 25, 2011.  Article V of the Plan describes how payments
are made prior to the Full Vesting Date, and Article VI of the Plan describes
how payments are made after the Full Vesting Date.  In addition, the Plan sets forth special
payment provisions in the event of a Sale Transaction (as defined in the Plan).  A Sale Transaction generally includes a sale
of the Well Interest to a third party, as well as a Change of Control (as
defined in the Plan).

3.             Permitted
Transfer at Death. 
Article VIII of the Plan describes how the Bonus Award may be transferred
to a Permitted Assignee (as defined in the Plan) upon Participant’s death.

4.             Terms of
the Plan Govern. 
Participant acknowledges receipt of a copy of the Plan and agrees that
this Bonus Award shall be subject to all of the terms and provisions set forth
in the Plan, as may be amended from time to time, including, without
limitation, the provisions relating to the forfeiture of the Bonus Award.

	
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  Signature of
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  DateExhibit 4.1

This
Warrant and the Securities issuable upon exercise of this Warrant have not been
registered under the Securities Act of 1933 (the “Securities Act”) or under any
state securities or “Blue Sky” laws (“Blue Sky Laws”). No transfer, sale, assign­ment,
pledge, hypothecation or other disposition of this Warrant or the Securities
issuable upon exercise of this Warrant or any interest therein may be made
except (a) pursuant to an effective registration statement under the
Securities Act and any applicable Blue Sky Laws or (b) if the Company has been
furnished with an opinion of counsel for the holder, which opinion and counsel
shall be reasonably satisfactory to the Company, to the effect that no
registration is required because of the availability of an exemption from
registration under the Securities Act and applicable Blue Sky laws.

WARRANT
NO.           

To Purchase
            Shares of
Common Stock

of

BALLISTIC
RECOVERY SYSTEMS, INC.

EXERCISABLE ON OR
BEFORE, AND VOID AFTER

5:00 P.M. MINNEAPOLIS TIME ON JANUARY 10, 2010

THIS
CERTIFIES THAT, for good and valuable consideration,            
(the “Holder”), or registered assigns,  is entitled to subscribe for and purchase from
Ballistic Recovery Systems, Inc., a Minnesota corporation (the “Company”), at
any time after January 10, 2007, to and including January 10, 2010,                     
(           )
fully paid and non-assessable shares of the Common Stock of the Company at the
price of $2.00 per share (the “Warrant Exercise Price”), subject to the
anti-dilution provisions of this Warrant.

The
shares that may be acquired upon exercise of this Warrant are referred to herein
as the “Warrant Shares.”  The term “Common
Stock” means the common stock, par value $.01 per share, of the Company, and
shall also include any capital stock of any class of the Company hereafter
authorized which shall not be limited to a fixed sum or percentage in respect
of the rights of the holders thereof to participate in dividends or in the
distribution of assets upon the voluntary or involuntary liquidation, dissolu­tion,
or winding up of the Company. The term “Convertible Securities” means any stock
or other securities convertible into, or exchangeable for, Common Stock.

This
Warrant is subject to the following provisions, terms and conditions:

1.             Exercise;
Transferability.

(a)           The rights represented
by this Warrant may be exercised by the Holder hereof, in whole or in part (but
not as to a fractional share of Common Stock), by written notice of exercise
(in the form attached hereto) delivered to the Company at the principal office
of the Company prior to the expiration of this Warrant and accompanied or
preceded by the surrender of this Warrant along with a check in payment of the
Warrant Exercise Price for such shares.

(b)           This Warrant may not be
sold, assigned, hypothecated, or otherwise transferred, other than by will or
pursuant to the operation of law, except in a transaction in compliance with
the provisions of Section 7 hereof.

2.             Exchange and
Replacement. Subject to Sections 1 and 7 hereof, this Warrant is
exchangeable upon the surrender hereof by the Holder to the Company at its
office for new Warrants of 

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like tenor and
date representing in the aggregate the right to purchase the number of Warrant
Shares purchasable hereunder, each of such new Warrants to represent the right
to purchase such number of Warrant Shares (not to exceed the aggregate total
number purchasable hereunder) as shall be designated by the Holder at the time
of such surrender. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction, or mutilation of this
Warrant, and, in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will make and deliver a new Warrant of like
tenor, in lieu of this Warrant.  This
Warrant shall be promptly canceled by the Company upon the surrender hereof in
connection with any exchange or replacement. The Company shall pay all
expenses, taxes (other than stock transfer taxes), and other charges payable in
connection with the preparation, execution, and delivery of Warrants pursuant
to this Section 2.

3.             Issuance
of the Warrant Shares.

(a)           The Company agrees that
the shares of Common Stock purchased upon exercise of this Warrant shall be and
are deemed to be issued to the Holder as of the close of business on the date
on which this Warrant shall have been surrendered and the payment made for such
Warrant Shares as aforesaid. Subject to the provisions of paragraph (b) of this
Section 3, certificates for the Warrant Shares so purchased shall be
delivered to the Holder within a reasonable time, not exceeding fifteen (15)
days after the rights represented by this Warrant shall have been so exercised,
and, unless this Warrant has expired, a new Warrant representing the right to
purchase the number of Warrant Shares, if any, with respect to which this
Warrant shall not then have been exercised shall also be delivered to the Holder
within such time.

(b)           Notwithstanding the
foregoing, however, the Company shall not be required to deliver any
certificate for Warrant Shares upon exercise of this Warrant except in
accordance with exemptions from the applicable securities registration
requirements or registrations under applicable securities laws. Nothing herein,
however, shall obligate the Company to effect registrations under federal or
state securities laws, except as provided in Section 9. If registrations
are not in effect and if exemptions are not available when the Holder seeks to
exercise the Warrant, the Warrant exercise period will be extended, if need be,
to prevent the Warrant from expiring, until such time as either registrations
become effective or exemptions are availa­ble, and the Warrant shall then
remain exercisable for a period of at least 30 calendar days from the date the
Company delivers to the Holder written notice of the availability of such
registrations or exemptions. The Holder agrees to execute such documents and
make such representations, warranties, and agreements as may be required solely
to comply with the exemptions relied upon by the Company, or the registrations
made, for the issuance of the Warrant Shares.

4.             Covenants of the
Company. The Company covenants and agrees that all Warrant Shares will,
upon issuance, be duly authorized and issued, fully paid, non-assessable and
free from all taxes, liens and charges with respect to the issue thereof. The
Company further covenants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized and reserved for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant a sufficient number
of shares of Common Stock to provide for the exercise of the rights represented
by this Warrant.

5.             Anti-Dilution
Adjustments. The provisions of this Warrant are subject to adjustment as
provided in this Section 5.

(a)           The Warrant Exercise
Price shall be adjusted from time to time such that in case the Company shall
hereafter:

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(i)            pay any dividends on
any class of stock of the Company payable in Common Stock or securities
convertible into Common Stock;

(ii)           subdivide its then
outstanding shares of Common Stock into a greater number of shares; or

(iii)          combine outstanding
shares of Common Stock, by reclassification or otherwise;

then, in any such
event, the Warrant Exercise Price in effect immediately prior to such event
shall (until adjusted again pursuant hereto) be adjusted immediately after such
event to a price (calculated to the nearest full cent) determined by dividing
(A) the number of shares of Common Stock outstanding immediately prior to
such event, multiplied by the then existing Warrant Exercise Price, by
(B) the total number of shares of Common Stock outstanding immediately
after such event (including in each case the maximum number of shares of Common
Stock issuable in respect of any securities convertible into Common Stock), and
the resulting quotient shall be the adjusted Warrant Exercise Price per share.
An adjustment made pursuant to this Subsection shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision, combina­tion or reclassification. If, as a result of an adjustment
made pursuant to this Subsection, the Holder of any Warrant thereafter
surrendered for exercise shall become entitled to receive shares of two or more
classes of capital stock or shares of Common Stock and other capital stock of
the Company, the Board of Directors (whose determination shall be conclusive)
shall determine the allocation of the adjusted Warrant Exercise Price between
or among shares of such classes of capital stock or shares of Common Stock and
other capital stock. All calculations under this Subsection shall be made to
the nearest cent or to the nearest 1/100 of a share, as the case may be. In the
event that at any time as a result of an adjustment made pursuant to this Sub­section,
the holder of any Warrant thereafter surrendered for exercise shall become
entitled to receive any shares of the Company other than shares of Common
Stock, thereafter the Warrant Exercise Price of such other shares so receivable
upon exercise of any Warrant shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the provisions
with respect to Common Stock contained in this Section.

(b)           Upon each adjustment of
the Warrant Exercise Price pursuant to Section 5(a) above, the Holder of
each Warrant shall thereafter (until another such adjustment) be entitled to
purchase at the adjusted Warrant Exercise Price the number of shares,
calculated to the nearest full share, obtained by multiplying the number of
shares specified in such Warrant (as adjusted as a result of all adjustments in
the Warrant Exercise Price in effect prior to such adjustment) by the Warrant
Exercise Price in effect prior to such adjustment and dividing the product so
obtained by the adjusted Warrant Exercise Price.

(c)           In case of any
consolidation or merger to which the Company is a party other than a merger or
consolidation in which the Company is the continuing corporation, or in case of
any sale or conveyance to another corporation of the property of the Company as
an entirety or substantially as an entirety, or in the case of any statutory
exchange of securities with another corporation (including any exchange
effected in connection with a merger of a third corporation into the Company),
there shall be no adjustment under Section 5(a) above but the Holder of
each Warrant then outstanding shall have the right thereafter to convert such
Warrant into the kind and amount of shares of stock and other securities and
property which he would have owned or have been entitled to receive immediately
after such consolidation, merger, statutory exchange, sale, or conveyance had
such Warrant been converted immediately prior to the effective date of such
consolidation, merger, statutory exchange, sale, or conveyance and in any such
case, if necessary, appropriate adjustment shall be made in the application of
the provisions set forth in this Section with respect to the rights and
interests thereafter of any Holders of the Warrant, to the end that the
provisions set forth in this Section shall thereafter correspondingly be 

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made applicable,
as nearly as may reasonably be, in relation to any shares of stock and other
securities and property thereafter deliverable on the exercise of the Warrant.
The provisions of this Subsection shall similarly apply to successive
consolidations, mergers, statutory exchanges, sales or conveyances.

(d)           Upon any adjustment of
the Warrant Exercise Price, then and in each such case, the Company shall give
written notice thereof, by First-class mail, postage prepaid, addressed to the
Holder as shown on the books of the Company, which notice shall state the
Warrant Exercise Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares of Common Stock purchasable at such
price upon the exercise of this Warrant, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based.

6.             No Voting Rights.
This Warrant shall not entitle the Holder to any voting rights or other rights
as a shareholder of the Company.

7.             Notice
of Transfer of Warrant or Resale of the Warrant Shares.

(a)           Subject to the sale,
assignment, hypothecation, or other transfer restrictions set forth in
Section 1 hereof, the Holder, by acceptance hereof, agrees to give written
notice to the Company before transferring this Warrant or transferring any
Warrant Shares of such Holder’s intention to do so, describing briefly the
manner of any proposed transfer. Promptly upon receiving such written notice,
the Company shall present copies thereof to the Company’s counsel and to
counsel to the original purchaser of this Warrant. If in the opinion of each
such counsel the proposed transfer may be effected without registra­tion or
qualification (under any federal or state securities laws), the Company, as
promptly as practicable, shall notify the Holder of such opinion, whereupon the
Holder shall be entitled to transfer this Warrant or to dispose of Warrant
Shares received upon the previous exercise of this Warrant, all in accordance
with the terms of the notice delivered by the Holder to the Company; provided
that an appropriate legend may be endorsed on this Warrant or the certificates
for such Warrant Shares respecting restrictions upon transfer thereof necessary
or advisable in the opinion of counsel and satisfactory to the Company to
prevent further transfers which would be in violation of Section 5 of the
Securities Act of 1933, as amended (the “1933 Act”) and applicable state
securities laws; and provided further that the prospective transferee or
purchaser shall execute such documents and make such representations,
warranties, and agree­ments as may be required solely to comply with the exemptions
relied upon by the Company for the transfer or disposition of the Warrant or
Warrant Shares.

(b)           If in the opinion of
either of the counsel referred to in this Section 7, the proposed transfer
or disposition of this Warrant or such Warrant Shares described in the written
notice given pursuant to this Section 7 may not be effected without
registration or qualification of this Warrant or such Warrant Shares the
Company shall promptly give written notice thereof to the Holder, and the
Holder will limit its activities in respect to such transfer or disposition as,
in the opinion of both such counsel, are permitted by law.

8.             Fractional
Shares.

(a)           Fractional shares shall
not be issued upon the exercise of this Warrant, but in any case where the
holder would, except for the provisions of this Section, be entitled under the
terms hereof to receive a fractional share, the Company shall, upon the
exercise of this Warrant for the largest number of whole shares then called
for, pay a sum in cash equal to the sum of (a) the excess, if any, of the
Fair Market Value of such fractional share over the proportional part of the
Warrant Exercise Price represented by such fractional share, plus (b) the
proportional part of the Warrant Exercise Price represented by such fractional
share.

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(b)           For purposes of this
Section, the term “Fair Market Value” with respect to shares of Common Stock as
of a particular date (the “Determination Date”) shall mean:

(i)            If the Company’s
Common Stock is traded on an exchange or is quoted on The Nasdaq National
Market, then the average closing or last sale prices, respectively, reported
for the ten (10) business days immediately preceding the Determination Date;

(ii)           If the Company’s Common
Stock is not traded on an exchange or on The Nasdaq National Market but is
traded on The Nasdaq Small-Cap Market or the local over-the-counter market,
then the average closing bid and asked prices reported for the ten (10)
business days immediately preceding the Determination Date; and

(iii)          If the Company’s Common
Stock is not traded on an exchange, on The Nasdaq National Market, The Nasdaq
Small-Cap Market or on the local over-the-counter market, then the fair market
value of Common Stock as determined in good faith by the Board of Directors of
the Company.

9.             Registration
Rights.

(a)           Required Registration.  Pursuant to a Registration Rights Agreement
of even date herewith, the Company shall include the Warrant Shares in the
Registration Statement that it is required to file within forty-five (45) days
of the final closing of the private offering, pursuant to which this Warrant
was issued.   

(b)           Piggyback
Registration. If the Company at any time within two (2) years after
complete exercise of this Warrant, but no more than seven (7) years from the
date of this Warrant, proposes to register under the 1933 Act (except by a
Form S-4 or Form S-8 Registration Statement or any successor forms
thereto) or qualify for a public distribution under Section 3(b) of the
1933 Act, any of its securities, it will give written notice to all Holders of
this Warrant, any Warrants issued pursuant to Section 2 and/or
Section 3(a) hereof, and any Warrant Shares of its intention to do so and,
on the written request of any such Holder given within twenty (20) days after
receipt of any such notice (which request shall specify the Warrant Shares
intended to be sold or disposed of by such Holder and describe the nature of
any proposed sale or other disposition thereof), the Company will use its best
efforts to cause all such Warrant Shares, the Holders of which shall have
requested the registration or qualification thereof, to be included in such
registration statement proposed to be filed by the Company; provided, however,
that if a greater number of Warrant Shares is offered for participation in the
proposed offering than in the reasonable opinion of the managing underwriter of
the proposed offering (which opinion shall be in writing and delivered to the
Holders) can be accommodated without adversely affecting the proposed offering,
then the amount of Warrant Shares proposed to be offered by such Holders for
registration, as well as the number of securities of any other selling
shareholders participating in the registration, shall not be included or shall
be proportionately reduced to a number deemed satisfactory by the managing
underwriter. With respect to each inclusion of securities in a registration
statement pursuant to this Section 9(a), the selling Holders shall pay the
fees and disbursements of special counsel and accountants for the selling
Holders, and underwriting discounts or commissions and transfer taxes
applicable to the selling Holders’ shares, and the Company shall pay all other
costs and expenses of the registration, including but not limited to all
registration, filing and NASD fees, printing expenses, fees and disbursements
of counsel and accountants for the Company, all internal expenses, and legal
fees and disbursements and other expenses of complying with state securities
laws of any jurisdictions in which the securities to be offered are to be
registered or qualified. The Company need not maintain the effectiveness of any
such registration, qualification, notification or approval, whether or not at
the request of the Holders, more than six (6) months following the effective
date thereof.

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(c)           Indemnification.
The Company hereby indemnifies each of the Holders of this Warrant and of any
Warrant Shares, and the officers and directors, if any, who control such
Holders, within the meaning of Section 15 of the 1933 Act, against all
losses, claims, damages, and liabilities caused by (1) any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (and as amended or supplemented if the
Company shall have furnished any amendments thereof or supplements thereto),
any Preliminary Prospectus (not corrected in the final, amended or supplemented
prospectus furnished to such Holders for distribution) or any state securities
law filings; (2) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading except insofar as such losses, claims, damages, or
liabilities are caused by any untrue statement or omission contained in
information furnished in writing to the Company by such Holder expressly for
use therein; and each such Holder by its acceptance hereof severally agrees
that it will indemnify and hold harmless the Company, each of its officers who
signs such Registration Statement, and each person, if any, who controls the
Company, within the meaning of Section 15 of the 1933 Act, with respect to
losses, claims, damages, or liabilities which are caused by any untrue
statement or omission contained in information furnished in writing to the
Company by such Holder expressly for use therein.

(d)           Cooperation.
Upon the exercise of registration rights pursuant hereto, each holder agrees to
supply the Company with such information as may be required by the Company to
register or qualify the shares to be registered.

IN WITNESS WHEREOF, Ballistic Recovery Systems, Inc.
has caused this Warrant to be signed by its duly authorized officer and this
Warrant to be dated January 10, 2007.

	
   

  	
  BALLISTIC RECOVERY SYSTEMS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  	
  Don Hedquist

  
	
   

  	
   

  	
  Its Chief
  Financial Officer

  

Signature Page

Ballistic Recovery Systems, Inc.

Warrant No.            

 

 6

Warrant No.
           

SUBSCRIPTION FORM

(To be
signed upon exercise of Warrant)

The
undersigned, the holder of the within Warrant, hereby irrevocably elects to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder,                                    
of the shares of Common Stock of BALLISTIC RECOVERY SYSTEMS, INC to which such
Warrant relates and herewith makes payment of $                        
therefor in cash or by certified check and requests that the certificate for
such shares be issued in the name of, and be delivered to,                                         ,
the address for which is set forth below the signature of the undersigned.

	
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  Social Security or Tax Ident. No.

  

ASSIGNMENT FORM

(To be
signed upon authorized transfer of Warrant)

FOR
VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto
                                                 
the right to purchase                   
shares of Common Stock of Ballistic Recovery Systems, Inc. to which the within
Warrant relates and appoints                             
attorney, to transfer said right on the books of                             
with full power of substitution in the premises.

	
  Dated: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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  Social Security or Tax Ident. No.

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