Document:

Filed by Bowne Pure Compliance

Exhibit 10.47

OPTION AGREEMENT

1997 Incentive Plan of Brigham Exploration Company

(Incentive Option)

This Option Agreement (“Agreement”), made and entered into as of                                         , 20
 _____, is by
and between Brigham Exploration Company, a Delaware corporation (the “Company”), and
                                         (the “Optionee”).

WITNESSETH:

WHEREAS, the 1997 Incentive Plan of Brigham Exploration Company (“Plan”) was adopted by the
Company, effective as of February 26, 1997 (“Plan Date”), for certain employees of the Company and
its Subsidiaries;

WHEREAS, the Optionee is eligible to participate in the Plan and the Committee has approved
the grant to Optionee of an option to purchase shares of Common Stock, par value $.01 per share, of
the Company (“Shares”) pursuant to the Plan and upon the terms set forth herein;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
hereinafter set forth, the Company and Optionee hereby agree as follows:

1. Certain Definitions. Terms used in this Agreement and not otherwise defined shall
have the respective meanings assigned to such terms in the Plan; and the following terms shall have
the following meanings:

“Companies” means the Company and any of its Subsidiaries.

“Expiration Date” means 6:00 P.M., Austin, Texas time, on                                         ,
20
 _____.

2. Grant of Option. Subject to the terms, conditions and provisions of the Plan and
those hereinafter set forth, the Company hereby irrevocably grants to the Optionee an Incentive
Option (the “Option”) to purchase                      Shares, subject to adjustment in accordance with the
provisions of Section 7 of this Agreement. This Option is intended to qualify as an incentive
stock option pursuant to Section 422 of the Code.

3. Option Price. The price to be paid by Optionee to the Company for each Share
purchased pursuant to the exercise of this Option (“Option Price”) shall be $                     per share,
such Option Price being not less than 100% of the Fair Market Value of a share of Common Stock as
of the date of grant (or not less than 110% of the Fair Market Value of a share of Common Stock on
the date of grant if the Optionee is a 10% shareholder within the meaning of Code Section
422(c)(5)); provided, however, that the Option Price shall be subject to adjustment in accordance
with the provisions of Section 7 of this Agreement.

 

 

4. Vesting of Right to Exercise Option.

(a) Except as otherwise provided in this Agreement, the right to exercise this Option shall
vest as to 20% of the total Shares which may be purchased hereunder (rounded to the nearest whole
share) on                     , 20
 _____, shall vest with respect to an additional 20% of the total Shares
which may be purchased hereunder (rounded to the nearest whole share) on                                         , 20
 _____,
shall vest with respect to an additional 20% of the total Shares which may be purchased hereunder
(rounded to the nearest whole share) on                                         , 20
 _____, shall vest with respect to an
additional 20% of the total Shares which may be purchased hereunder (rounded to the nearest whole
share) on                                         , 20
 _____, and shall be fully vested on                                         , 20
 _____. From and
after each date of vesting, Optionee may exercise this Option, subject to the terms and conditions
set forth herein, to purchase all or any portion of the Shares for which Optionee’s rights have
vested.

(b) To the extent Optionee does not purchase all or any part of the Shares at the times this
Option becomes exercisable, the Optionee has the right cumulatively thereafter to purchase any
Shares not so purchased and such right shall continue until this Option terminates or expires.

(c) If Optionee’s employment by the Companies is terminated on account of fraud or dishonesty
or other acts which the Board has determined are materially detrimental to the interests of the
Company, the Option shall automatically terminate as of the date of such termination and this
Option, including any portion which has vested, shall be forfeited.

(d) If Optionee’s employment by the Companies terminates voluntarily by Optionee or by action
of the Companies for reasons other than as specified in subsection (c), this Option may be
exercised, but only (i) within the three-month period following such termination (but not after the
date of expiration of this Option), and (ii) to purchase the number of Shares, if any, that could
be purchased upon exercise of this Option at the date of termination of Optionee’s employment.

(e) In the event of Optionee’s death or disability prior to termination of employment, this
Option shall remain outstanding and may be exercised by the person who acquires this Option by will
or the laws of descent and distribution, or by Optionee, as the case may be, but only (i) within
the one-year period following the date of death or disability (but not after the date of expiration
of this Option), and (ii) to purchase the number of Shares that could be purchased upon exercise of
this Option at the time of such death or disability.

(f) For purposes of subsection (d) and (e), if this Option shall not have fully vested as of
the date of termination of Optionee’s employment by the Company (but not in the case of a voluntary
termination by Optionee) or as of the date of the Optionee’s death or disability, then a ratable
portion of the number of Shares which would have become purchasable upon the next vesting date
shall be deemed to have vested as of the date of such termination (or death or disability),
determined by multiplying the number of Shares that vest on the next vesting date by a fraction
with a numerator equal to the number of full months which have then elapsed since the last vesting
date (or grant date in the event that no shares had previously vested) and a denominator equal to
the total number of months between the last vesting date (or grant date in the event that no shares
had previously vested) and the next scheduled vesting date, and rounding to the closest whole
number.

 

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5. Restrictions on Exercise. The right to exercise the Option shall be subject to the
following restrictions:

(a) Vesting. Optionee shall have no right to exercise this Option to purchase any
Shares for which Optionee’s rights have not yet vested in accordance with Section 4.

(b) No Fractional Shares. The Option may be exercised only with respect to full
Shares.

(c) Compliance with Law. The Option may not be exercised in whole or in part, and no
Shares shall be issued nor certificates representing such Shares (if any) delivered pursuant to any
exercise of the Option, if any requisite approval or consent of any governmental authority of any
kind having jurisdiction over the exercise of options or the issuance and sale of Shares shall not
have been obtained or if such exercise or issuance would violate any applicable law.

(d) Exercise by Optionee. The Option shall only be exercisable by the Optionee and by
any transferee who has received such Option pursuant to Section 4(e).

6. Exercise of Option.

(a) Subject to the other terms and provisions of this Agreement, the Option shall be
exercisable by written notice timely given to the Company by the Optionee (the “Exercise Notice”),
which notice (i) shall state the number of Shares that the Optionee then desires to purchase, and
(ii) shall be accompanied by payment in full of the Option Price for each of such Shares. Unless
the Company and Optionee shall have made mutually acceptable alternative arrangements, payment of
the Option Price shall be made in cash or by surrender of Shares owned by the Optionee (the
“Payment Shares”), the aggregate Fair Market Value of which shall be credited against the Option
Price.

(b) The Company’s obligation to issue and transfer Shares upon the exercise of this Option
shall be conditioned on Optionee’s payment to the Company of an amount in cash equal to applicable
withholding taxes, if any, due in connection with the exercise of this Option; provided, however,
that with the consent of the Company, Optionee may satisfy any tax withholding obligation in
connection with the exercise of this Option by (i) surrendering Shares owned by the Optionee to the
Company or (ii) having the Company withhold from Shares otherwise deliverable to Optionee upon
exercise of this Option. Any Shares surrendered or withheld to satisfy Optionee’s tax withholding
obligation shall be valued at Fair Market Value as of the date of surrender or withholding of such
Shares.

7. Recapitalization or Reorganization; Adjustments.

(a) The existence of this Option shall not affect in any way the right or power of the Company
to make or authorize any adjustment, recapitalization, reorganization or other change in the
Company’s capital structure or its business, any merger or consolidation of the Company, any
issuance of additional securities by the Company with priority over Shares or otherwise affecting
Shares or the rights thereof, the dissolution or liquidation of the Company or any sale, lease,
exchange or other disposition of all or any part of its assets or business or any other
corporate act or proceeding.

 

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(b) If as a result of any merger or acquisition transaction involving the Company or any
transaction involving the issuance or redemption of equity interests in the Company, more than
fifty percent (50%) of such equity interests is owned by a party other than those listed on Exhibit
A attached hereto (such event is referred to herein as a “Fundamental Change”), then immediately
before the consummation of the Fundamental Change, any portion of the Option which has not then
vested shall become vested, so that the Optionee shall have an opportunity to exercise the Option
prior to the consummation of the Fundamental Change. The Company shall provide to Optionee at
least 30 days’ notice of any pending Fundamental Change during which period Optionee may elect to
exercise the Option effective immediately before consummation of such Fundamental Change.

(c) If the Company subdivides its outstanding Shares into a greater number of Shares, the
Option Price in effect immediately prior to such subdivision shall be proportionately reduced, and
the number of Shares then subject to the Option shall be proportionately increased. Conversely, if
the outstanding number of Shares of the Company are combined into a smaller number of Shares, the
Option Price in effect immediately prior to such combination shall be proportionately increased,
and the number of Shares then subject to the Option shall be proportionately reduced.

8. Termination of Option. Unless terminated earlier pursuant to Section 4 hereof,
this Option shall terminate upon the first to occur of the (i) the Expiration Date, or (ii) the
date on which Optionee purchases, or in writing surrenders his right to purchase, all Shares or
other securities then subject to the Option.

9. Restriction on Transfer of Option. The Option may not be sold, assigned,
hypothecated or transferred, except by will or by the laws of descent and distribution. Any
attempted transfer of the Option in violation of this provision shall be void and of no effect
whatsoever.

10. Rights as a Shareholder. Optionee shall have no rights as a shareholder of the
Company with respect to any Shares covered by the Option until the exercise of the Option.

11. Additional Documents. The Company and the Optionee will, upon request of the
other party, promptly execute and deliver all additional documents, and take all such further
action, reasonably deemed by such party to be necessary, appropriate or desirable to complete and
evidence the sale, assignment and transfer of the Shares pursuant to this Agreement.

12. Representations, Warranties and Covenants of Optionee.

(a) The Optionee acknowledges that the Option has not been registered under the Securities Act
of 1933 or applicable state securities laws on the grounds that the issuance of the Option is
exempt from registration under one or more provisions of each of such acts. The Optionee further
understands that in determining the availability and applicability of such exemptions and in
executing and delivering this Agreement and issuing and delivering any Shares upon exercise of the
Option, the Company has relied and will rely upon the representations, warranties and covenants
made by the Optionee herein and in any other documents which he may hereafter deliver to the
Company. Accordingly, the Optionee represents and warrants to and covenants and agrees with
the Company that the Optionee is acquiring and will hold the Option for his own account for
investment and not with a view to any sale or distribution of all or any part thereof.

 

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(b) The Optionee agrees (i) that the certificates representing the Shares or other securities
purchased under this Option may bear such legend or legends as the Company deems appropriate in
order to assure compliance with applicable securities laws, (ii) that the Company may refuse to
register the transfer of the Shares or other securities purchased under this Option on the transfer
records of the Company unless the Company is provided with an opinion of counsel in form and
substance satisfactory to the Company confirming that such proposed transfer would not constitute a
violation of any applicable securities laws, and (iii) that the Company may give related
instructions to its transfer agent, if any, to stop registration of the transfer of the Shares or
other securities purchased under this Option.

(c) Optionee acknowledges that the value of the Option over its life will be speculative and
uncertain, that there is no market for the Option and it is unlikely that any market will develop,
and consequently, the Optionee may ultimately realize no value from the Option.

13. Notices. All notices required or permitted to be given hereunder shall be in
writing and shall be deemed to have been given on the earlier of the date of receipt by the party
to whom the notice is given or five (5) days after being mailed by certified or registered United
States mail, postage prepaid, addressed to the appropriate party at the address shown beside such
party’s signature below or at such other address as such party shall have theretofore designated by
written notice given to the other party.

14. Entirety and Modification. This Agreement contains the entire agreement between
the parties hereto with respect to the subject matter hereof and supersedes any and all prior
agreements, whether written or oral, between such parties relating to such subject matter. No
modification, alteration, amendment or supplement to this Agreement shall be valid or effective
unless the same is in writing and signed by the party against whom it is sought to be enforced.

15. Severability. If any provision of this Agreement is held to be unenforceable,
this Agreement shall be considered divisible, and such provision shall be deemed inoperative to the
extent it is unenforceable, and in all other respects this Agreement shall remain in full force and
effect; provided, however, that if any such provision may be made enforceable by limitation
thereof, then such provision shall be deemed to be so limited and shall be enforceable to the
maximum extent permitted by applicable law.

16. Gender. Words used in this Agreement which refer to Optionee and denote the male
gender shall also be deemed to include the female gender or the neuter gender when appropriate.

17. Headings. The headings of the various sections and subsections of this Agreement
have been inserted for convenient reference only and shall not be construed to enlarge, diminish or
otherwise change the express provisions hereof.

18. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware (regardless of the laws that might otherwise govern under
applicable Delaware principles of conflicts of law).

 

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19. Counterparts. This Agreement may be signed in counterparts, each of which shall
be deemed an original and all of which shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set
forth above.

	 	 	 	 	 	 	 
	 	 	BRIGHAM EXPLORATION COMPANY	 	 
	 
	 	 	 	 	 	 
	6300 Bridge Point Pkwy.
	 	 	 	 	 	 
	Building Two, Suite 500
	 	 	 	 	 	 
	Austin, Texas 78730

	 	By:	 	 	 	 
	 

	 	 	 	 

Ben M. Brigham, President / CEO
	 	 
	 
	 	 	 	 	 	 
	 	 	OPTIONEE	 	 
	 
	 	 	 	 	 	 
	[INSERT OPTIONEE’S
	 	 	 	 	 	 
	ADDRESS]
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 

 

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EXHIBIT A

BRIGHAM EXPLORATION COMPANY, A Delaware corporation

BRIGHAM OIL & GAS, L.P., A Delaware limited partnership

BRIGHAM, INC. (f/k/a Brigham Exploration Company), a Nevada corporation

BEN M. BRIGHAM

ANNE L. BRIGHAM

HAROLD D. CARTER

CREDIT SUISSE FIRST BOSTON (USA), INC.

 

7Filed by Bowne Pure Compliance

Exhibit 10.48

BRIGHAM EXPLORATION COMPANY

1997 DIRECTOR STOCK OPTION PLAN

(as amended effective January 1, 2009)

I. PURPOSE

It is the purpose of the Plan to promote the interests of the Company and its stockholders by
attracting and retaining qualified directors by giving them the opportunity to acquire a
proprietary interest in the Company and an increased personal interest in its continued success and
progress. The Options granted hereunder shall not be qualified as “incentive stock options” within
the meaning of Section 422(b) of the Code.

II. DEFINITIONS

As used herein the following terms have the following meanings:

(a) “Board” means the Board of Directors of the Company.

(b) “Chairman of the Board” means the director elected to the position of Chairman of
the Board by the Board.

(c) “Code” means the Internal Revenue Code of 1986, as amended.

(d) “Common Stock” means the $.01 par value Common Stock of the Company.

(e) “Company” means Brigham Exploration Company, a Delaware corporation.

(f) “Effective Date” means March 4, 1997, which shall be the date on which the Plan
shall be effective.

(g) “Eligible Director” means an individual who (i) is on the Effective Date, or
thereafter becomes, a member of the Board, (ii) is neither an employee nor an officer of the
Company or any direct or indirect majority-owned subsidiary of the Company and (C) has not
elected to decline to participate in the Plan pursuant to the following sentence. A director
otherwise eligible to participate in the Plan may make an irrevocable, one-time election, by
written notice to the Company within ten days after his or her initial election to the
Board, or, in the case of the directors in office on the Effective Date, within ten days
prior to the Effective Date, to decline to participate in the Plan. For purposes of the
Plan, “employee” shall mean an individual whose wages are subject to the withholding of
federal income tax under Section 3402 of the Code, and “officer” shall mean an individual
elected or appointed by the Board or the board of directors of the subsidiary, as the case
may be, or chosen in such other manner as may be prescribed in the bylaws of the Company or
the subsidiary, to serve as such.

 

 

 

(h) “Fair Market Value” of a share of Common Stock means, as of a particular date, (i)
if shares of Common Stock are listed on a national securities exchange, the mean
between the highest and lowest sales price per share of Common Stock on the
consolidated transaction reporting system for the principal national securities exchange on
which shares of Common Stock are listed on that date, or, if there shall have been no such
sale so reported on that date, on the last preceding date on which such a sale was so
reported, (ii) if the Common Stock is not so listed, the mean between the closing bid and
asked price on that date, or, if there are no quotations available for such date, on the
last preceding date on which such quotations shall be available, as reported by the Nasdaq
Stock Market, or, if not reported by the Nasdaq Stock Market, by Pink OTC Markets Inc. (or
its successor, or if Pink OTC Markets Inc. or its successor does not then exist, such
over-the-counter quotation service as the Board shall determine), or (iii) if shares of
Common Stock are not publicly traded, the most recent value determined in good faith by the
Board using a “reasonable application of a reasonable valuation method” within the meaning
of Treasury Regulation Section 1.409A-1(b)(5)(iv)(B).

(i) “Holder” means an Eligible Director to whom an Option has been granted under the
Plan.

(j) “Initial Options” means those options granted to each Eligible Director who becomes
a member of the Board automatically on the date of his or her initial election as a director
of the Company.

(k) “Option” means any option to purchase shares of Common Stock granted pursuant to
the provisions of the Plan, including Initial Options and Subsequent Options.

(l) “Plan” means this Brigham Exploration Company 1997 Director Stock Option Plan, as
amended.

(m) “Subsequent Options” means those options granted automatically as of December 31 of
each year to each Eligible Director who is serving the Company as a director on such date
beginning December 31, 1997.

III. ADMINISTRATION

The Plan shall be administered by the Board. The Board shall have no authority, discretion or
power to select the participants who will receive Options, to set the number of shares to be
covered by any Option, to set the exercise price of any Option or to set the period within which
Options may be exercised, or to alter any other terms or conditions specified herein, except in the
sense of administering the Plan subject to the express provisions of the Plan and except in
accordance with Section 6.02 hereof. Subject to the foregoing limitations, the Board shall have
authority and power to adopt such rules and regulations and to take such action as it shall
consider necessary or advisable for the administration of the Plan, and to construe, interpret and
administer the Plan. The decisions of the Board relating to the Plan shall be final and binding
upon the Company, the Holders and all other persons. No member of the Board shall incur any
liability by reason of any action or determination made in good faith with respect to the Plan or
any stock option agreement entered into pursuant to the Plan.

 

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IV. OPTIONS

4.01 Participation. Each Eligible Director who does not elect to decline to participate in the
Plan pursuant to paragraph (g) of Article II hereof shall be granted an Option to purchase Common
Stock under the Plan on the terms and conditions herein described.

4.02 Terms and Conditions of Options; Stock Option Agreements. Each Option granted under the
Plan shall be evidenced by a written stock option agreement entered into by the Company and the
Holder to whom the Option is granted, which agreement shall include, incorporate or conform to the
following terms and conditions, and such other terms and conditions not inconsistent therewith or
with the terms and conditions of the Plan as the Board considers appropriate in each case:

(a) Option Grant Dates. An Option shall be granted (i) to each Eligible Director who
becomes a member of the Board after the Effective Date automatically on the date of his or
her initial election as a director of the Company (an “Initial Option”), provided that such
person does not elect to decline to participate in the Plan pursuant to paragraph (g) of
Article II hereof, and (ii) automatically as of December 31 of each year to each Eligible
Director who is serving the Company as a director on such date, beginning December 31, 1997
(a “Subsequent Option”). The date of grant of an Option pursuant to the Plan shall be
referred to hereinafter as the “Grant Date” of such Option.

(b) Number of Shares. Each Initial Option shall entitle the Holder to purchase, in
accordance with the terms of such Option and the Plan, 20,000 shares of Common Stock,
subject to adjustment in accordance with Section 5.02 hereof. Each Subsequent Option shall
entitle the Holder to purchase, in accordance with the terms of such Option and the Plan,
10,000 shares of Common Stock, subject to adjustment in accordance with Section 5.02 hereof.
If, on the Grant Date of any Option, fewer shares of Common Stock remain available for grant
than are necessary to permit the grant of Options to each person entitled to receive an
Option on such date in accordance with the provisions of this Section 4.02, then (i) first,
an Option covering an equal number of whole shares of Common Stock, up to 20,000 shares,
shall be granted on such date to each Eligible Director who is to receive an Initial Option
and (ii) thereafter, Options shall be granted to the remaining Eligible Directors then
serving covering an equal number of whole shares of Common Stock and all such Options shall
cover, in the aggregate, all remaining shares of Common Stock then available for grant under
the Plan (or such smaller number as may be necessary to permit each such Option to cover an
equal number of whole shares of Common Stock).

(c) Price. The price at which each share of Common Stock covered by an Option may be
purchased pursuant to the Plan shall be the Fair Market Value of a share of Common Stock on
the Grant Date of the Option.

(d) Option Period. Each option shall become exercisable in five equal annual
installments on each of the first five anniversaries of such option’s “Grant Date.” The
period within which each Option may be exercised shall expire on the seventh
anniversary of such Grant Date (the “Option Period”), unless terminated sooner pursuant
to Section 4.02(e) hereof.

 

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(e) Termination of Service, Death, Etc. The following provisions shall apply with
respect to the exercise of an Option granted hereunder in the event that the Holder thereof
ceases to be a director of the Company for the reasons described in this Section 4.02(e):

(i) If the directorship of the Holder is terminated within the Option Period on
account of any act of (a) fraud or intentional misrepresentation or (b)
embezzlement, misappropriation or conversion of assets or opportunities of the
Company or any direct or indirect majority-owned subsidiary of the Company, the
Option shall automatically terminate as of the date of such termination;

(ii) If the Holder dies during the Option Period while such Holder is a
director of the Company (or during the additional three-month period provided by
paragraph (iii) of this Section 4.02(e)), the Option may be exercised, to the extent
that the Holder was entitled to exercise it at the date of the Holder’s death,
within one year after such death (if within the Option Period), but not thereafter,
by the executor or administrator of the estate of the Holder, or by the person or
persons who shall have acquired the Option directly from the Holder by bequest or
inheritance; or

(iii) If the directorship of the Holder is terminated for any reason (other
than the circumstances specified in paragraphs (i) and (ii) of this Section 4.02(e))
within the Option Period, including a failure by the stockholders of the Company to
reelect the Holder as a director, the Option may be exercised, to the extent the
Holder was entitled to do so at the date of termination of the directorship, within
three months after such termination (if within the Option Period), but not
thereafter.

(f) Transferability. An Option granted under the Plan shall not be transferable by the
Holder, otherwise than by will or pursuant to the laws of descent and distribution or with
the consent of the Board, and during the lifetime of the Holder the Option shall be
exercisable only by the Holder or his or her guardian or legal representative or by
transferees of the Holders in such circumstances as the Board may approve.

(g) Requirement of Directorship. Except as provided in Section 4.02(e) hereof, an
Option may not be exercised unless the Holder is at the time of exercise serving as a
director of the Company, and, except as provided in Section 4.02(e) hereof, such Option
shall terminate upon termination of the Holder’s service as a director of the Company.

 

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(h) Exercise, Payments, Etc. Each Option granted hereunder may be exercised, in whole
or in part, by the Holder thereof at any time or (with respect to partial exercises) from
time to time during the Option Period, subject to the provisions of the Plan and the stock
option agreement evidencing such Option, and the method for
exercising an Option shall be by the personal delivery to the Secretary of the Company
of, or by the sending by United States registered or certified mail, postage prepaid,
addressed to the Company (to the attention of its Secretary), of, written notice signed by
the Holder specifying the number of shares of Common Stock with respect to which such Option
is being exercised. Such notice shall be accompanied by the full amount of the purchase
price of such shares, in cash and/or by delivery of shares of Common Stock already owned by
the Holder having an aggregate Fair Market Value (determined as of the date of exercise)
equal to the purchase price, including an actual or deemed multiple series of exchanges of
such shares. Any such notice shall be deemed to have been given on the date of receipt
thereof (in the case of personal delivery as above-stated) or on the date on which the same
was deposited in a regularly maintained receptacle for the deposit of United States mail,
addressed and sent as above-stated. In addition to the foregoing, promptly after demand by
the Company, the exercising Holder shall pay to the Company an amount equal to applicable
withholding taxes, if any, due in connection with such exercise. No shares of Common Stock
shall be issued upon exercise of an Option until full payment therefor and for all
applicable withholding taxes has been made, and a Holder shall have none of the rights of a
shareholder until shares of Common Stock are issued to such Holder.

V. AUTHORIZED COMMON STOCK

5.01 Common Stock. The total number of shares as to which Options may be granted pursuant to
the Plan shall be 1,000,000 shares of Common Stock, in the aggregate, except as such number of
shares shall be adjusted from and after the Effective Date in accordance with the provisions of
Section 5.02 hereof. If any outstanding Option under the Plan shall expire or be terminated for any
reason, the shares of Common Stock allocable to the unexercised portion of such Option shall again
be available for grant under the Plan.

5.02 Adjustments Upon Changes in Common Stock. In the event the Company shall effect a
split of the Common Stock or a dividend payable in Common Stock, or in the event the outstanding
Common Stock shall be combined into a smaller number of shares, the maximum number of shares as to
which Options may be granted under the Plan shall be increased or decreased proportionately. In the
event that before delivery by the Company of all the shares of Common Stock in respect of which any
Option has been granted under the Plan, the Company shall have effected such a split, dividend or
combination, the shares still subject to the Option shall be increased or decreased proportionately
and the purchase price per share shall be increased or decreased proportionately so that the
aggregate purchase price for all the then optioned shares shall remain the same as immediately
prior to such split, dividend or combination.

In the event of a reclassification of the Common Stock not covered by the foregoing, or in the
event of a liquidation or reorganization, including a merger, consolidation or sale of assets, the
Board shall make such adjustments, if any, as it may deem equitable in the number, purchase price
and kind of shares covered by the unexercised portions of Options theretofore granted under the
Plan; provided, however, that any such adjustment shall be made in accordance with Section 409A of
the Code and the regulations thereunder. The provisions of this Section 5.02
shall only be applicable if, and only to the extent that, the application thereof does not
conflict with any valid governmental statute, regulation or rule.

 

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VI. GENERAL PROVISIONS

6.01 Termination of Plan. The Plan shall terminate whenever (whether before or after the
Effective Date) the Board adopts a resolution to that effect. If not sooner terminated in
accordance with the preceding sentence, the Plan shall wholly cease and expire on March 4, 2017.
After termination of the Plan, no Options shall be granted under the Plan, but the Company shall
continue to recognize, and perform its obligations with respect to, any Options previously granted.

6.02 Amendment of Plan. The Board may from time to time (whether before, on or after the
Effective Date) amend, modify or suspend the Plan. Nevertheless, (a) no such amendment,
modification or suspension shall impair any Options theretofore granted under the Plan or deprive
any Holder of any shares of Common Stock which such Holder might have acquired through or as a
result of the Plan, and (b) after the stockholders of the Company have approved and adopted the
Plan in accordance with Section 6.04 hereof, no such amendment or modification shall be made
without the approval of the holders of the outstanding shares of capital stock of the Company
entitled to vote in the election of directors generally where such amendment or modification would
(i) increase the total number of shares of Common Stock as to which Options may be granted under
the Plan or decrease the exercise price at which Options may be granted under the Plan (other than
as provided in Section 5.02 hereof), (ii) materially alter the class of persons eligible to be
granted Options under the Plan, (iii) materially increase the benefits accruing to Holders under
the Plan or (iv) extend the term of the Plan or the Option Period specified in Section 4.02(d)
hereof.

Notwithstanding the foregoing, the provisions of the Plan relating to (a) the number of shares
of Common Stock covered by, and the exercise price of, Options granted under the Plan, (b) the
timing of grants of Options under the Plan and (c) the class of persons eligible to be granted
Options under the Plan shall not be amended more than once every six months, other than to comport
with changes in the Code, the Employee Retirement Income Security Act of 1974, as amended, or the
rules thereunder.

6.03 Treatment of Proceeds. Proceeds from the sale of Common Stock pursuant to Options granted
under the Plan shall constitute general funds of the Company.

6.04 Effectiveness. The Plan shall become effective as of the Effective Date, subject to and
upon the receipt of shareholder approval by the affirmative votes of the holders of a majority of
the shares of Common Stock present, or represented, and entitled to vote at a meeting of
stockholders duly held in accordance with the applicable laws of the State of Delaware.

6.05 Section Headings. The section headings included herein are only for convenience, and they
shall have no effect on the interpretation of the Plan.

 

6

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