Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.9    
    

 
 

PINNACLE GAS RESOURCES, INC.
  AMENDED AND RESTATED STOCK INCENTIVE PLAN    
    

        This Amended and Restated Stock Incentive Plan hereby amends and restates the Company's Stock Incentive Plan (the "Original
Plan"). In addition, this Amended and Restated Stock Incentive Plan hereby evidences the merger of the Company's 2003 Stock Option Plan (the
"SOP") with and into this Amended and Restated Stock Incentive Plan (the "Plan Merger") so that this
Amended and Restated Stock Incentive Plan replaces the SOP with respect to Options granted on or after the Effective Date (as defined below). 

        1.    Purpose; Plan Merger.    

        (a)    Purpose.    The purpose of the Pinnacle Gas Resources, Inc. Amended and Restated Stock Incentive Plan
(the "Plan") is to enhance the ability of Pinnacle Gas Resources, Inc. (the  "Company") and its Subsidiaries to attract and retain officers, employees and directors of outstanding
ability and to provide such Participants with an interest in the Company parallel to that of the Company's stockholders. 

        (b)    Plan Merger.    The SOP is hereby merged with and into the Plan, effective as of February 16, 2006 (the
"Plan Merger Effective Date"), and as a result of this amendment and restatement and the Plan Merger: (i) any new Options (as defined under the
SOP) that otherwise may have been granted under the SOP on or after the Plan Merger Effective Date shall instead be granted under and subject to the terms of the Plan, (ii) all outstanding
Options granted under the SOP prior to the Plan Merger Effective Date are hereby assumed and continued under the Plan, but nevertheless shall remain subject to their individual Option Agreements (as
defined under the SOP) and the terms of the SOP as in effect immediately prior to the Plan Merger Effective Date, and (iii) all outstanding Options and Awards granted under the Original Plan
prior to the Effective Date are hereby assumed and continued under the Plan, but nevertheless shall remain subject to their individual Options or Awards and the terms of the Original Plan as in effect
immediately prior to the Effective Date. 

        2.    Definitions.    

        (a)   "Award" shall mean an award determined in accordance with the terms of the Plan. 

        (b)   "Board" shall mean the Board of Directors of the Company. 

        (c)   "Cause" means (a) with respect to any person party to a written employment agreement in which such term is
defined, as so defined and (b) with respect to all other persons, as such term is defined in the Securityholders Agreement. 

        (d)   "Change of Control" shall have the meaning set forth in the Securityholders Agreement; provided,
that, to the extent that any Award granted under the Plan or the Prior Plans is subject to the provisions of Section 409A of the Code, the definition of Change of
Control shall mean a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company within the meaning of Section 409A of
the Code. 

        (e)   "Code" shall mean the Internal Revenue Code of 1986, as amended. 

        (f)    "Committee" shall mean the Board, unless and until a committee of one or more members of the Board is appointed by the
Board in accordance with Section 4(c). 

        (g)   "Common Stock" shall mean the common stock of the Company. 

        (h)   "Continuous Service" means that the Participant's service as an employee, director or officer with the Company or a
Subsidiary is not interrupted or terminated. The Participant's Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders
service to the Company or a Subsidiary as an employee, director or officer or a change in the entity for which the Participant renders such service; provided,
that, there is no 

 

interruption
or termination of the Participant's Continuous Service other than an approved leave of absence. The Committee, in its sole discretion, may determine whether Continuous Service shall be
considered interrupted. 

        (i)    "Covered Employee" shall have the meaning set forth in Section 162(m)(3) of the Code. 

        (j)    "Disability" shall have the same meaning as provided in any long-term disability plan maintained by the
Company or any Subsidiary in which a Participant then participates (the "LTD Plans"); provided, that, if
no such plan exists, or, to the extent that any Award granted under the Plan or the Prior Plans is subject to the provisions of Section 409A of the Code and any payment due thereunder is made
on account of Disability, it shall have the meaning set forth in Section 22(e)(3) of the Code. 

        (k)   "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 

        (l)    "Fair Market Value" shall mean, as of any date, the value of the Common Stock as determined as following: 

          (i)  If
the Common Stock is listed on any established stock exchange or a national market system, including, without limitation, the NASDAQ National Market or the NASDAQ
Capital Market of The NASDAQ Stock Market, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the date of determination, as reported in The Wall Street Journal or such other source as the Committee deems
reliable; 

         (ii)  If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value will be the mean of the closing bid
and asked prices for the Common Stock on the date prior to the date of determination as reported in The Wall Street Journal or such other source as the
Committee deems reliable; 

        (iii)  If
the Common Stock is not listed on any established stock exchange or a national market system, the average of the high and low bid quotations for the Common Stock on
that date prior to the date of determination as reported by the National Quotation Bureau Incorporated; or 

        (iv)  In
the absence of an established market for the Common Stock, the Fair Market Value thereof will be determined in good faith by the Committee considering all factors it
reasonably deems relevant for
such determination, including, without limitation, discounts for minority positions and the absence of an established market for the Common Stock. 

        (m)  "Good Reason" means (a) with respect to any person party to a written employment agreement in which such term is
defined, as so defined and (b) with respect to all other persons, as such term is defined in the Securityholders Agreement. 

        (n)   "Immediate Family Member" shall mean, except as otherwise determined by the Committee, a Participant's spouse, ancestors
and descendants. 

        (o)   "Incentive Stock Option" shall mean a stock option that is intended to meet the requirements of Section 422 of the
Code. 

        (p)   "Non-Employee Director" shall mean a member of the Board who is a "non-employee director" within
the meaning of Rule 16b-3 and who is also an "outside director" within the meaning of Section 162(m) of the Code. 

        (q)   "Nonqualified Stock Option" shall mean a stock option that is not intended to be an Incentive Stock Option. 

        (r)   "Option" shall mean an Incentive Stock Option or a Nonqualified Stock Option. 

2

 

        (s)   "Participant" shall mean an officer, employee, director or consultant of the Company or its Subsidiaries who is or has
been selected to participate in the Plan in accordance with Section 5. 

        (t)    "Performance Goals" shall mean or may be expressed in terms of any of any business criteria selected by the Committee
including, without limitation, revenue, proved oil and gas reserves, oil and gas production, earnings before interest, taxes, depreciation and amortization, funds from operations, funds from
operations per share, operating income, pre or after tax income, cash available for distribution, cash available for distribution per share, net earnings, earnings per share, return on equity, return
on assets, share price performance, improvements in the Company's attainment of expense levels, and implementing or completion of critical projects, or improvement in cash-flow (before or
after tax). A Performance Goal may be measured over a Performance Period on a periodic, annual, cumulative or average basis and may be established on a corporate-wide basis or established
with respect to one or more operating units, divisions, subsidiaries, acquired businesses, minority investments, partnerships or joint ventures. Unless otherwise determined by the Committee by no
later than the earlier of the date that is ninety days after the commencement of the Performance Period or the day prior to the date on which twenty-five percent (25%) of the Performance
Period has elapsed, the Performance Goals will be determined by not accounting for a change in GAAP during a Performance Period. 

        (u)   "Performance Objective" shall mean the level or levels of performance required to be attained with respect to specified
Performance Goals in order for a Participant to become entitled to specified rights in connection with an Award of performance shares. 

        (v)   "Performance Period" shall mean the calendar year, or such other shorter or longer period designated by the Committee,
during which performance will be measured in order to determine a Participant's entitlement to receive payment of an Award. 

        (w)  "Prior Plans" shall mean the SOP and the Original Plan. 

        (x)   "Rule 16b-3" shall mean Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time. 

        (y)   "Securityholders Agreement" shall mean that certain Securityholders Agreement dated as of June 23, 2003, among the
Company and certain shareholders thereof, as may be amended and/or restated from time to time. 

        (z)   "Subsidiary" shall mean any entity that controls, is controlled by or is under common control with the Company as may be
determined by the Board; provided, that, with respect to Incentive Stock Options, it shall mean any subsidiary of the Company that is a corporation and
which at the time qualifies as a "subsidiary corporation" within the meaning of Section 424(f) of the Code. 

        3.    Shares Subject to the Plan.    Subject to adjustment in accordance with  Section 18, the total of the number of shares
of Common Stock which shall be available for the grant of Awards under the Plan shall not exceed
110,000 shares of Common Stock, all of which may be issued pursuant to the exercise of Options; provided, that, for purposes of this limitation, any
Common Stock subject to an Option which is canceled or expires without exercise shall again become available for subsequent Awards under the Plan. Upon forfeiture of Awards in accordance with the
provisions of the Plan and the terms and conditions of the Award, such shares shall again be available for subsequent Awards under the Plan. Subject to adjustment in accordance with  Section 18, no
employee shall be granted, during any calendar year, Options to purchase more than 25,000 shares of Common Stock, and the number
of shares of Common Stock subject to any Awards other than Options granted to any employee during any calendar year shall not exceed 25,000 shares. Common Stock available for issue or distribution
under the Plan shall be authorized and unissued shares or shares reacquired by the Company in any manner. 

3

 

        4.    Administration.    

        (a)    Administration.    The Plan shall be administered by the Committee. 

        (b)    Powers of the Committee.    The Committee shall (i) determine which of the persons eligible under the
Plan shall be granted Awards, (ii) determine the type of Awards to be made to Participants, (iii) determine the number of shares of Common Stock subject to Awards, (iv) determine
the terms and conditions of any Award granted hereunder, which need not be identical (including, but not limited to, any restriction and forfeiture conditions on such Award), and (v) have the
authority to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any agreements entered into hereunder, and to
make all other determinations necessary or advisable for the administration of the Plan. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any
Award in the manner and to the extent it shall deem desirable to carry it into effect. 

        (c)    Delegation to Committee.    

        (i)    General.    The entire Board may comprise the Committee or the Board may delegate administration of the Plan to
a Committee or Committees of one or more members of the Board, and the term "Committee" shall apply to any person or persons to whom such authority has
been delegated. Furthermore, unless one or more Committees has been appointed by the Board, any reference to the Committee in the Plan shall mean the Board. If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the
administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions,
not
inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. 

        (ii)    Committee Composition when Common Stock is Publicly Traded.    At such time as the Common Stock is publicly
traded, in the discretion of the Board, a Committee may consist solely of two or more Non-Employee Directors. Committee members shall also meet the requirements of the rules of any
exchange or national market system upon which the Common Stock is publicly traded. Within the scope of such authority, the Board or the Committee may (1) delegate to a committee of one or more
members of the Board who are not "outside directors" within the meaning of Section 162(m) of the Code the authority to grant Awards to eligible persons who are either (a) not then
Covered Employees and are not expected to be Covered Employees at the time of recognition of income resulting from such Award or (b) not persons with respect to whom the Company wishes to
comply with Section 162(m) of the Code or (2) delegate to a committee of one or more members of the Board who are not "non-employee directors" within the meaning of
Rule 16b-3 the authority to grant Awards to eligible persons who are not then subject to Section 16 of the Exchange Act. 

        (d)    Effect of Committee's Decision.    Any action of the Committee shall be final, conclusive and binding on all
persons, including the Company and its Subsidiaries and stockholders, Participants and persons claiming rights from or through a Participant. Members of the Committee and any officer or employee of
the Company or any Subsidiary acting at the direction of, or on behalf of, the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the
Plan, and shall, to the extent permitted by law, be fully indemnified by the Company with respect to any such action or determination. 

        5.    Eligibility.    Individuals eligible to receive Awards under the Plan shall be the officers, employees,
directors and consultants of the Company and its Subsidiaries selected by the Committee; 

4

 

 provided, that, only employees of the Company and its Subsidiaries may be granted Incentive Stock Options. 

        6.    Awards.    Awards under the Plan may consist of Options, restricted Common Stock, restricted Common Stock units,
performance shares, performance share units, purchases, share awards or other awards based on the value of the Common Stock. Awards shall be subject to the terms and conditions of the Plan and shall
be evidenced by an agreement containing such additional terns and conditions, not inconsistent with the provisions of the Plan, as the Committee shall deem desirable. 

        7.    Options.    Options may be granted under the Plan in such form as the Committee may from time to time approve
pursuant to terns set forth in an Option agreement. 

        (a)    Types of Options.    Each Option agreement shall state whether or not the Option will be treated as an
Incentive Stock Option or Nonqualified Stock Option. The aggregate Fair Market Value of the Common Stock for which Incentive Stock Options granted to any one employee under this Plan or any other
incentive stock option plan of the Company or of any of its Subsidiaries may by their terms first become exercisable during any calendar year shall not exceed $100,000, determining Fair Market Value
as of the date each respective Option is granted. In the event such threshold is exceeded in any calendar year, such excess Options shall be automatically deemed to be Nonqualified Stock Options. To
the extent that any Option granted under this Plan which is intended to be an Incentive Stock Option fails for any reason to qualify as such at any time, such Option shall be a Nonqualified Stock
Option. 

        (b)    Option Price.    The purchase price per share of the Common Stock purchasable under an Option shall be
determined by the Committee; provided, however, the exercise price for each share of the Common Stock subject to Options will be not less than 100% of
the Fair Market Value per share of the Common Stock on the date of the grant and in the case of Incentive Stock Options granted to an employee owning stock possessing more than 10% of the total
combined voting power of all classes of shares of the Company and its Subsidiaries (a "10% Stockholder") the price per share specified in the agreement
relating to such Option shall not be less than 110% of the Fair Market Value per share of the Common Stock on the date of grant. With stockholder approval, the Company specifically reserves the right
under this Plan to directly or indirectly reprice Options granted hereunder by reducing the exercise price of any such Option or awarding substitute Options with a lower exercise price under such
terms as it may determine to be appropriate. 

        (c)    Option Period.    The term of each Option shall be fixed by the Committee, but no Option shall be exercisable
after the expiration of seven years from the date the Option is granted; provided, that, in the case of Incentive Stock Options granted to 10%
Stockholders, the term of such Option shall not exceed five years from the date of grant. 

        (d)    Exercisability.    Each Option shall vest and become exercisable at a rate determined by the Committee on the
date of grant. 

        (e)    Method of Exercise.    Options may be exercised, in whole or in part, by giving written notice of exercise to
the Company in a form approved by the Company specifying the number shares of Common Stock to be purchased. Such notice shall be accompanied by the payment in full (i) of the Option exercise
price and (ii) unless other arrangements have been made with the Committee, any required withholding taxes. The exercise price of the Option may be paid by (i) cash or certified or bank
check, (ii) surrender of Common Stock held by the Optionee for at least six (6) months prior to exercise (or such longer or shorter period as may be required to avoid a charge to
earnings for financial accounting purposes) or the attestation of ownership of such shares, in either case, if so permitted by the Company, where such Common Stock has a Fair Market Value equal to the
aggregate exercise price of the Option at the time of exercise, (iii) if established by the Company, through a "same day sale" commitment from optionee and a broker-dealer that is acceptable to
the Company 

5

 

that
is a member of the National Association of Securities Dealers (an "NASD Dealer") whereby the optionee irrevocably elects to exercise the Option and
to sell a portion of the shares so purchased sufficient to pay for the total exercise price and whereby the NASD Dealer irrevocably commits upon receipt of such shares to forward the total exercise
price plus all required withholding taxes directly to the Company, (iv) retention of Shares which would otherwise be delivered upon exercise of this Option, (v) non-cash
consideration having a fair market value equal to the exercise price of the Option at the time of exercise, (vi) through additional methods prescribed by the Committee, all under such terms and
conditions as deemed appropriate by the Committee in its discretion, or (vii) by any combination of the foregoing, and, in all instances, to the extent permitted by applicable law. A
Participant's subsequent transfer or disposition of any Common Stock acquired upon exercise of an Option shall be subject to any Federal and state laws then applicable, specifically securities law,
and the terms and conditions of this Plan. 

        8.    Restricted Common Stock.    The Committee may from time to time award restricted Common Stock under the Plan to
eligible Participants. Shares of restricted Common Stock may not be sold, assigned, transferred or otherwise disposed of, or pledged or hypothecated as collateral for a loan or as security for the
performance of any obligation or for any other purpose, for such period (the "Restricted Period") as the Committee shall determine. The Committee may
define the Restricted Period in terms of the passage of time or in any other manner it deems appropriate. The Committee may alter or waive at any time any term or condition of restricted Common Stock
that is not mandatory under the Plan. Unless otherwise determined by the Committee, upon termination of a Participant's Continuous Service with the Company for any reason prior to the end of the
Restricted Period, the restricted Common Stock shall be forfeited and the Participant shall have no right with respect to the Award. Except as restricted under the terms of the Plan and any Award
agreement, any Participant awarded restricted Common Stock shall have all the rights of a stockholder including, without limitation, the right to vote restricted Common Stock and the right to receive
dividends or other distributions paid or made with respect to such shares; provided, however, the Committee may in the Award restrict the Participant's right to dividends until the Restricted Period
lapses. If a share certificate is issued in respect of restricted Common Stock, the certificate shall be registered in the name of the Participant, but shall be held by the Company for the account of
the Participant along with a stock power endorsed in blank until the end of the Restricted Period. The Committee may also award restricted Common Stock in the form of restricted Common Stock units
having a value equal to an identical number of shares of Common Stock. Payment of restricted Common Stock units shall be made in Common Stock or in cash or in a combination thereof (based upon the
Fair Market Value of the Common Stock on the day the Restricted Period expires), all as determined by the Committee in its sole discretion. 

        9.    Performance Shares.    

        (a)    Type of Awards.    Performance shares may be granted in the form of actual shares of Common Stock or Common
Stock units having a value equal to an identical number of shares of Common Stock. In the event that a share certificate is issued in respect of performance shares, such certificate shall be
registered in the name of the Participant, but shall be held by the Company along with a stock power endorsed in blank until the time the performance shares are earned. The Performance Objectives and
the length of the Performance Period shall be determined by the Committee. The Committee shall determine in its sole discretion whether performance shares granted in the form of Common Stock units
shall be paid in cash, Common Stock or a combination of cash and Common Stock. 

        (b)    Performance Objectives.    The Committee shall establish the Performance Objectives for each Award of
performance shares, consisting of one or more business criteria permitted as Performance Goals hereunder, one or more levels of performance with respect to each such criteria, and the amount or
amounts payable or other rights that the Participant will be entitled to upon achievement of such levels of performance. The Performance Objectives shall be established by the Committee prior to, or 

6

 

reasonably
promptly following the inception of, a Performance Period but, to the extent required by Section 162(m) of the Code, by no later than the earlier of the date that is ninety days
after the commencement of the Performance Period or the day prior to the date on which twenty-five percent of the Performance Period has elapsed. More than one Performance Goal may be
incorporated in a Performance Objective, in which case achievement with respect to each Performance Goal may be assessed individually or in combination with each other. The Committee may, in
connection with the establishment of Performance Objectives for a Performance Period, establish a matrix setting forth the relationship between performance on two or more Performance Goals and the
amount of the Award of performance shares payable for that Performance Period. The level or levels of performance specified with respect to a Performance Goal may be established in absolute terms, as
objectives relative to performance in prior periods, as an objective compared to the performance of one or more comparable companies or an index covering multiple companies, or otherwise as the
Committee may determine. Performance Objectives shall be objective and shall otherwise meet the requirements of Section 162(m) of the Code. Performance Objectives may differ for performance
shares granted to any one Participant or to different Participants. An Award of performance shares to a Participant who is a Covered Employee shall (unless the Committee determines otherwise) provide
that in the event of the Participant's termination of Continuous Service prior to the end of the Performance Period for any reason, such Award will be payable only (1) if the applicable
Performance Objectives are achieved and (ii) to the extent, if any, as the Committee shall determine. 

        (c)    Certification.    Following the completion of each Performance Period, the Committee shall certify in writing,
in accordance with the requirements of Section 162(m) of the Code, whether the Performance Objectives and other material terms of an Award of performance shares have been achieved or met.
Unless the Committee determines otherwise, performance shares shall not be settled until the Committee has made the certification specified under this  Section 9(c). 

        (d)    Adjustment.    The Committee may, in its discretion, reduce or eliminate the amount of payment with respect to
an Award of performance shares to a Covered Employee, notwithstanding the achievement of a specified Performance Objective; provided, that, no such
adjustment shall be made if such adjustment would adversely impact a Participant following a Change of Control. 

        (e)    Maximum Amount Payable.    Subject to Section 18, the
maximum number of performance shares subject to any Award to a Covered Employee is 25,000 for each 12 months during the Performance Period (or, to the extent the Award is paid in cash, the
maximum dollar amount of any such Award is the equivalent cash value, based on the Fair Market Value of the Common Stock, of such number of shares of Common Stock on the last day of the Performance
Period). 

        10.    Share Purchases.    The Committee may authorize eligible individuals to purchase Common Stock in the Company at
a price equal to, below or above the Fair Market Value of the Common Stock at the time of grant. Any such offer may be subject to the conditions and terms the Committee may impose. 

        11.    Share Awards.    Subject to such performance and employment conditions as the Committee may determine, awards
of Common Stock or awards based on the value of the Common Stock may be granted either alone or in addition to other Awards granted under the Plan. Any Awards under this  Section 11 and any Common
Stock covered by any such Award may be forfeited to the extent so provided in the Award agreement, as determined by the
Committee. Payment of Common Stock awards made under this Section 11 which are based on the value of Common Stock may be made in Common Stock or
in cash or in a combination thereof (based upon the Fair Market Value of the Common Stock on the date of payment), all as determined by the Committee in its sole discretion. 

7

 

        12.    Termination.    

        (a)   In
any Option agreement, the Committee may provide that in the event of a termination of Participant's Continuous Service for any reason, the unvested Option granted to
such Participant or former Participant shall be immediately and automatically terminated. 

        (b)   In
any Option agreement, the Committee may provide that in the event (i) of a termination of Participant's Continuous Service for Cause or (ii) of a
termination of Participant's Continuous Service for any reason other than Good Reason, and within 90 days after such termination, Participant accepts employment with an entity the Board
reasonably considers a significant competitor of the Company or any Subsidiary, the Option granted to such Participant or former Participant shall be immediately and automatically terminated. 

        (c)   In
any Option agreement, the Committee may provide that in the event of a termination of Participant's Continuous Service for any reason other than Cause, Disability or
death, then Participant may exercise the Option (to the extent entitled to do as of the date of termination) but only within such period of time ending on the date that is 90 days following a
termination. 

        (d)   In
any Option agreement, the Committee may provide that in the event of a termination of Participant's Continuous Service as a result of Participant's Disability, then
Participant may exercise the Option (to the extent entitled to do as of the date of termination), but only within such period of time ending on the earlier of (i) the date that is
12 months following the termination or (ii) the expiration of the term of the Option as set forth in the Option agreement. 

        (e)   In
any Option agreement, the Committee may provide that in the event of a termination of Participant's Continuous Service as a result of Participant's death, the Option
may be exercised (to the extent entitled to do so as of the date of death) by Participant's estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person
designated to exercise the Option upon Participant's death, but only within the period ending on the earlier of (i) the date that is 12 months following the date of death or
(ii) the expiration of the term of the Option as set forth in the Option agreement. 

        13.    Forfeiture.    Notwithstanding anything in the Plan to the contrary and unless otherwise specifically provided
in an Award agreement, in the event of (a) a serious breach of conduct by a Participant or former Participant (including, without limitation, any conduct prejudicial to or in conflict with the
Company or any Subsidiary) or (b) a termination of Participant's Continuous Service for Cause, the Committee may, if such conduct or activity or termination occurs within one year following the
exercise or payment of an Award, require such Participant or former Participant to repay to the Company any gain realized or payment received upon the exercise or payment of such Award (with such gain
or payment valued as of the date of exercise or payment). Such cancellation or repayment obligation shall be effective as of the date specified by the Committee. Any repayment obligation shall be
satisfied in cash or, if permitted in the sole discretion of the Committee, it may be satisfied in shares of Common Stock (based upon the Fair Market Value of the share of Common Stock on the date of
payment), and the Committee may provide for an offset to any future payments owed by the Company or any Subsidiary to the Participant or former Participant if necessary to satisfy the repayment
obligation. The determination of whether a Participant or former Participant has engaged in a serious breach of conduct or any activity in competition with any of the businesses of the Company or any
Subsidiary shall be determined by the Committee in good faith and in its sole discretion. 

        14.    Withholding.    Upon (a) disposition of shares of Common Stock acquired pursuant to the exercise of an
Incentive Stock Option granted pursuant to the Plan within two years of the grant of the Incentive Stock Option or within one year after exercise of the Incentive Stock Option, or (b) exercise
of a Nonqualified Stock Option (or an Incentive Stock Option treated as a Nonqualified Stock Option), exercise of a stock appreciation right or the vesting or payment of any other Award under the
Plan, or 

8

 

(c) under
any other circumstances determined by the Committee in its sole discretion, the Company shall have the right to require any Participant, and such Participant by accepting the Awards
granted under the Plan agrees, to pay to the Company the amount of any taxes which the Company shall be required to withhold at the minimum statutory rate with respect thereto. In the event of  clauses (a), (b) or (c), with the consent of the
Committee, at its sole discretion, such Participant may elect to pay to the Company an amount equal to the amount of the taxes which the Company shall be required to withhold by delivering to the
Company shares of Common Stock having a Fair Market Value equal to the amount of the withholding tax obligation as determined by the Company; provided,
however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law. Such shares so delivered to satisfy the
minimum withholding obligation may be either shares withheld by the Company upon the exercise of the Option or other shares. At the Committee's sole discretion, a Participant may elect to have
additional taxes withheld and satisfy such withholding with cash or shares of Common Stock held for at least six (6) months prior to exercise, if, in the opinion of the Company's outside
accountants, doing so, would not result in a charge against earnings. 

        15.    Nontransferability, Beneficiaries.    Unless otherwise determined by the Committee with respect to the
transferability of Nonqualified Stock Options by a Participant to his Immediate Family Members (or to trusts or partnerships or limited liability companies established for such family members), no
Award shall be assignable or transferable by the Participant, otherwise than by will or the laws of descent and distribution or pursuant to a beneficiary designation, and Options shall be exercisable,
during the Participant's lifetime, only by the Participant (or by the Participant's legal representatives in the event of the Participant's incapacity). Each Participant may designate a beneficiary to
exercise any Option held by the Participant at the time of the Participant's death or to be assigned any other Award outstanding at the time of the Participant's death. If no beneficiary has been
named by a deceased Participant, any Award held by the Participant at the time of death shall be transferred as provided in his will or by the laws of descent and distribution. Except in the case of
the holder's incapacity, an Option may only be exercised by the holder thereof. 

        16.    No Right to Continuous Service.    Nothing contained in the Plan or in any Award under the Plan shall confer
upon any Participant any right with respect to the continuation of service with the Company or any of its Subsidiaries, or interfere in any way with the right of the Company or its Subsidiaries to
terminate his or her Continuous Service at any time. Nothing contained in the Plan shall confer upon any Participant or other person any claim or right to any Award under the Plan. 

        17.    Governmental Compliance.    Each Award under the Plan shall be subject to the requirement that if at any time
the Committee shall determine that the listing, registration or qualification of any shares
issuable or deliverable thereunder upon any securities exchange or under any Federal or state law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a
condition thereof, or in connection therewith, no such grant or award may be exercised or shares issued or delivered unless such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Committee. 

        18.    Corporate Events.    

        (a)   In
the event of any recapitalization, reclassification, stock split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or exchange of
Common Stock or other securities of the Company, or other similar corporate transaction or event (an "Event"), and in the Committee's opinion, such
event affects the Common Stock such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan or Prior Plans or with respect to an Award, then the Committee shall, in such manner 

9

 

as
it may deem equitable, including, without limitation, adjust any or all of the following: (1) the number and kind of shares of Common Stock (or other securities or property) with respect to
which Awards may be granted or awarded; (ii) the number and kind of shares of Common Stock (or other securities or property) subject to outstanding Awards; and (iii) the grant or
exercise price with respect to any Award. Any such adjustment made to an Incentive Stock Option shall be made in accordance with Section 424(a) of the Code unless otherwise determined by the
Committee in its sole discretion. The Committee's determination under this Section 18(a) shall be final, binding and conclusive. 

        (b)   Upon
the occurrence of an Event in which outstanding Awards are not to be assumed or otherwise continued following such an Event, the Committee may, in its discretion,
terminate any outstanding Award without a Participant's consent and (i) provide for either (1) the purchase of any such Award for an amount of cash equal to the amount that could have
been attained upon the exercise of such Award or realization of the Participant's rights had such Award been currently exercisable or payable or fully vested or (2) the replacement of such
Award with other rights or property selected by the Committee in its sole discretion and/or (ii) provide that such Award shall be exercisable (whether or not vested) as to all shares covered
thereby for at least 30 days prior to such Event. 

        (c)   The
existence of the Plan, the Award agreement and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or the
stockholders 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 issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or
the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar character or otherwise. 

        19.    Award Agreement.    Each Award under the Plan shall be evidenced by an agreement setting forth the terms and
conditions, as determined by the Committee, which shall apply to such Award, in addition to the terms and conditions specified in the Plan. 

        20.    Amendment.    The Board may amend, suspend or terminate the Plan or any portion thereof at any time,  provided, that,
(a) no amendment shall be made without stockholder approval if such approval is necessary to comply with any applicable law,
regulation or stock exchange or market rule and (b) except as provided in Section 18, no amendment shall be made that would adversely
affect the rights of a Participant under an Award theretofore granted, without such Participant's written consent. 

        21.    Change of Control.    The Committee may, in its discretion, provide in any Award agreement or amendment
thereto, whether, upon the occurrence of a Change in Control, all Options represented by such Award agreement may automatically become vested and exercisable in full, and all restrictions or
performance conditions, if any, on any Restricted Stock Award or Performance Share Award granted hereunder will automatically lapse. The Committee may, in its discretion, include such further
provisions and limitations in any agreement documenting such Awards as it may deem equitable and in the best interests of the Company. 

        22.    General Provisions.    

        (a)   The
Committee may require each Participant purchasing or acquiring shares pursuant to an Award under the Plan to (i) agree in writing to be bound by all of the
conditions and provisions of the Securityholders Agreement as a stockholder and (ii) represent to and agree with the Company in writing that such Participant is acquiring the shares for
investment and without a view to distribution thereof. 

10

 

        (b)   All
certificates for Common Stock delivered under the Plan pursuant to any Award shall be subject to such stock-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed, and any applicable
Federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. If the Committee determines that
the issuance of Common Stock hereunder is not in compliance with, or subject to an exemption from, any applicable Federal or state securities laws, such shares shall not be issued until such time as
the Committee determines that the issuance is permissible. 

        (c)   It
is the intent of the Company that the Plan satisfy, and be interpreted in a manner that satisfies, the applicable requirements of Rule 16b-3 as
promulgated under Section 16 of the Exchange Act so that Participants will be entitled to the benefit of Rule 16b-3, or any other rule promulgated under Section 16 of
the Exchange Act, and will not be subject to short-swing liability under Section 16 of the Exchange Act. Accordingly, if the operation of any provision of the Plan would conflict with the
intent expressed in this Section 22(c), such provision to the extent possible shall be interpreted and/or deemed amended so as to avoid such
conflict. 

        (d)   Except
as otherwise provided by the Committee in the applicable grant or Award agreement, a Participant shall have no rights as a stockholder with respect to any shares
of Common Stocks subject to an Award until a certificate or certificates evidencing shares of Common Stock shall have been issued to the Participant and, subject to  Section 18, no adjustment shall
be made for dividends or distributions or other rights in respect of any share for which the record date is prior
to the date on which Participant shall become the holder of record thereof. 

        (e)   The
law of the State of Delaware shall apply to all Awards and interpretations under the Plan regardless of the effect of such state's conflict of laws principles. 

        (f)    Where
the context requires, words in any gender shall include any other gender. 

        (g)   Headings
of Sections are inserted for convenience and reference; they do not constitute any part of this Plan. 

        (h)   The
Committee shall have the power to accelerate the time at which an Award shall be exercisable or vest notwithstanding the terms of any Award agreement. 

        (i)    No
payment pursuant to the Plan shall be taken into account in determining any benefits pursuant to any pension, retirement, savings, profit sharing, group insurance,
welfare or other benefit plan of the Company or any Subsidiary except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder. 

        (j)    The
expenses of administering the Plan shall be borne by the Company and its Subsidiaries. 

        (k)   No
fractional shares of Common Stock shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional shares or
whether such fractional shares shall be eliminated by rounding up or down as appropriate. 

        (l)    The
Plan is intended to constitute an "unfunded" plan for incentive compensation. With respect to any payments not yet made to a Participant pursuant to an Award,
nothing contained in the Plan or any Award agreement shall give the Participant any rights that are greater than those of a general unsecured creditor of the Company or any Subsidiary. To the extent
applicable, the Plan is intended to comply with Section 409A of the Code and the Committee shall interpret the Plan in accordance therewith. 

11

 

        23.    Expiration of the Plan.    Subject to earlier termination pursuant to  Section 20, no Award may be granted following the
seven year anniversary of the Effective Date and except with respect to outstanding Awards,
this Plan shall terminate. 

        24.    Effective Date; Approval of Stockholders.    The effective date of the Plan shall be the date it was adopted by
the Board (the "Effective Date"); provided, however, that any Options or Awards granted under this Plan
prior to the date that the Company's stockholders approve the Plan shall be contingent on such approval, and no Incentive Stock Options may be granted hereunder unless approval by the Company's
stockholders occurs within twelve (12) months of adoption of the Plan by the Board. Unless the Company determines to submit Section 9 of
the Plan and the definition of Performance Goal to the Company's stockholders at the first stockholder meeting that occurs in the fifth year following the year in which the Plan was last approved by
stockholders (or any earlier meeting designated by the Board), in accordance with the requirements of Section 162(m) of the Code, and such stockholder approval is obtained, then no further
performance shares shall be made to Covered Employees under Section 9 after the date of such annual meeting, but the remainder of the Plan shall
continue in effect. 

        25.    Code Section 409A Standards.    The Plan, and all Awards and Award Agreements pursuant to the Plan,
shall be effected, interpreted, and applied in a manner consistent with the standards for nonqualified deferred compensation plans established by Code Section 409A and its interpretive
regulations (the "Section 409A Standards"). To the extent that any terms of the Plan, an Award Agreement, or an Award would subject any
Participant to gross income inclusion, interest, or additional tax pursuant to, or would be prohibited by, Code Section 409A, those terms are to that extent superseded by the applicable
Section 409A Standards. 

Adopted
by the Board of Directors as of February 16, 2006. 

12

QuickLinks

Exhibit 10.9

PINNACLE GAS RESOURCES, INC. AMENDED AND RESTATED STOCK INCENTIVE PLANQuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.10  

  

 
 

PINNACLE GAS RESOURCES, INC.
  STOCK INCENTIVE PLAN    
    
    STOCK OPTION AGREEMENT    
    

        This Stock Option Agreement (this "Agreement") is made and entered into effective as of the date of grant set
forth below (the "Date of Grant") by and between Pinnacle Gas Resources, Inc., a Delaware corporation (together with its Subsidiary or
Subsidiaries, if any, the "Company"), and                        , an
individual resident of the State of Wyoming
("Optionee"). 

RECITALS:  

        WHEREAS, Optionee is employed with the Company, pursuant to which, among other things, the Company is granting to Optionee the option to purchase the Company's
common stock, subject to the Company's Stock Incentive Plan (the "Plan"); and 

        WHEREAS,
the Company now desires to grant to Optionee the option described in the Letter effective as of the Date of Grant; and 

        WHEREAS,
Optionee and the Company now desire to set forth their mutual understanding and agreement with respect to the matters set forth herein; 

        NOW,
THEREFORE, in consideration of the premises and mutual covenants and agreements set forth in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows: 

Optionee:

Social Security Number:

Address:

Total Option Shares:

Exercise Price Per Share:

Expiration Date:

        1.    Grant of Option.    The Company hereby grants to Optionee an option (the
"Option") to purchase the total number of shares of Common Stock of the Company set forth above as "Total Option Shares" (the
"Shares") at the "Exercise Price Per Share" set forth above (the "Exercise Price"), subject to all of
the terms and conditions of this Agreement and the Plan. The Option is intended to qualify as an "incentive stock option" ("ISO") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), although the Company makes no representation or guarantee that the
Option will qualify as an ISO. Any portion of the Option which cannot qualify an ISO shall be a Nonqualified Stock Option. 

        2.    Exercise Period.    

        2.1   Provided
Optionee continues to provide Continuous Service to the Company, and subject to the Plan, the Option may be exercised by Optionee during a period commencing on
December 9, 2006 and terminating at the close of business on December 9, 2012 (the "Expiration Date") as follows: 

        (a)   On
or after December 9, 2006, Optionee may exercise the Option for the purchase of up to 20% of the Shares (60 Shares); 

        (b)   On
or after December 9, 2007, Optionee may exercise the Option for the purchase of up to an additional 30% of the Shares (90 Shares); and 

 

        (c)   On
or after December 9, 2008, Optionee may exercise the Option for the purchase of up to an additional 50% of the Shares (150 Shares). 

        2.2   The
Option shall expire on the Expiration Date set forth above or earlier as provided in Section 2.1 or 3 of this Agreement or, if applicable, pursuant to
Section 21 of the Plan. 

        3.    Termination.    

        3.1   Upon
termination of Continuous Service for any reason, the unvested portion of the Option shall immediately terminate. 

        3.2   Except
as provided in Section 3.4, upon termination of Continuous Service for any reason other than Cause, Optionee may continue to exercise the Option (to the
extent that Optionee is entitled to exercise the Option as of the date of termination) but only within such period of time ending on the date that is 90 days following the termination of
Optionee's Continuous Service. 

        3.3   The
Option (whether or not vested) shall immediately terminate and cease to be exercisable: 

        (a)   Upon
termination by the Company of Optionee's Continuous Service for Cause; or 

        (b)   In
the event Optionee accepts employment with an entity the Board reasonably considers a significant competitor of the Company within 90 days after termination by
Optionee of his Continuous Service for other than Good Reason. 

        3.4   Upon
termination of Optionee's Continuous Service as a result of Optionee's Disability, Optionee may continue to exercise the Option (to the extent that Optionee is
entitled to exercise the Option as of the date of termination), but only within such period of time ending on the earlier of (i) the date that is 12 months following such termination or
(ii) the expiration of the term of the Option as set forth above. 

        3.5   Upon
termination of Optionee's Continuous Service as a result of Optionee's death, the Option may be exercised (to the extent Optionee is entitled to exercise the Option
as of the date of death) by Optionee's estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon Optionee's
death, but only within the period ending on the earlier of (i) the date that is 12 months following the date of death or (ii) the expiration of the term of the Option as set forth
above. 

        4.    Forfeiture.    Notwithstanding anything in the Plan or in this Agreement to the
contrary, in the event of (a) a serious breach of conduct by Optionee (including, without limitation, any conduct prejudicial to or in conflict with the Company) or any activity in competition
with any of the businesses of the Company or (b) a termination of Optionee's Continuous Service for Cause, the Committee may, if such conduct or activity or termination occurs within one year
following the exercise of the Option, require Optionee to repay to the Company any gain realized or payment received upon the exercise of the Option (with such gain or payment valued as of the date of
exercise or payment). Such cancellation or repayment obligation shall be effective as of the date specified by the Committee. Any repayment obligation shall be satisfied in cash or, if permitted in
the sole discretion of the Committee, it may be satisfied in shares of Common Stock (based upon the Fair Market Value of the share of Common Stock on the date of payment), and the Committee may
provide for an offset to any future payments owed by the Company to Optionee if necessary to satisfy the repayment obligation. The determination of whether Optionee has engaged in a serious breach of
conduct or any activity in competition with any of the businesses of the Company shall be determined by the Committee in good faith and in its sole discretion. 

        5.    Exercise of Option.    

        5.1   The
Option may be exercised, in whole or in part, by giving written notice of exercise to the Company in a form approved by the Company specifying the number Shares to
be purchased. Such 

2

 

notice
shall be accompanied by the payment in full for the number of Shares purchased. The purchase price of the Shares purchased pursuant to the exercise of the Option shall be the Exercise Price,
which has been determined to be not less than the Fair Market Value of the Shares at the date of grant of the Option. Payment for the Shares shall be made in cash or certified or bank check. 

        5.2   At
the time of exercise, Optionee shall pay to the Company such amount as the Company deems necessary to satisfy its obligation to withhold Federal, state or local
income or other taxes incurred by reason of the exercise of the Option granted hereunder. Such payment shall be made in cash or by certified or bank check. 

        6.    Issuance of Shares.    Except as otherwise provided in the Plan or this Agreement, as
promptly as practicable after receipt of such written notification of exercise and full payment of the Exercise Price and any required income tax withholding, the Company shall issue or Transfer to
Optionee the number of Shares with respect to which the Option has been so exercised. 

        7.    Securityholder Agreement; Transfer Restrictions.    

        7.1   By
Optionee's execution of this Agreement, Optionee hereby agrees that (i) the Option and any Shares that may be issued upon the exercise thereof are "Shares" as
defined in and governed by that certain Securityholder Agreement, dated June 23, 2003, by and between the Company and the shareholders party thereto (the "Securityholder
Agreement") and (ii) that Optionee is subject to all the provisions of, is bound by, and is a party to, such Securityholder Agreement as a "Shareholder" (as defined
therein). 

        7.2   Optionee
may not sell, assign, transfer, pledge, hypothecate or dispose of (by gift or otherwise) or in any way encumber (each, a
"Transfer") the Option other than to a designated beneficiary upon death or by will or the laws of descent and distribution. The Option is exercisable
during Optionee's lifetime only by Optionee. No Transfer of the Option, or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except to a designated
beneficiary, upon death, by will or the laws of descent and distribution), shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such Transfer the
Option shall terminate and become of no further effect. 

        7.3   Optionee
shall not Transfer, all or any part of the Shares issued pursuant to or as a result of this Agreement, except in compliance with the terms of the Plan and the
Securityholder Agreement or as otherwise required by law. 

        7.4   Optionee
should be aware that he may be required to bear the financial risks of this investment for an indefinite period of time. 

        8.    Rights as Stockholder.    Optionee or a transferee of the Option shall have no rights as
a stockholder with respect to any Shares until he or she shall have become the holder of record of such Shares, and no adjustment shall be made for dividends or distributions or other rights in
respect of such Shares for which the record date is prior to the date upon which Optionee or such transferee shall become the holder of record thereof. 

        9.    Adjustments.    The Option may be adjusted or terminated in any manner as contemplated
by the Plan. 

        10.    Compliance with Law.    Notwithstanding any of the provisions hereof, Optionee hereby
agrees that he will not exercise the Option, and that the Company will not be obligated to issue or Transfer any Shares to Optionee hereunder, if the exercise hereof or the issuance or Transfer of
such Shares shall constitute a violation by Optionee or the Company of any provisions of any law or regulation of any governmental authority. Any determination in this connection by the Committee
shall be final, binding and conclusive. The Company shall in no event be obliged to register any securities pursuant to the Securities Act (as now in effect or as hereafter amended) or to take any
other affirmative action in 

3

 

order
to cause the exercise of the Option or the issuance or Transfer of Shares pursuant thereto to comply with any law or regulation of any governmental authority. 

        11.    Notice.    Every notice or other communication relating to this Agreement shall be in
writing, and shall be mailed to or delivered to the party for whom it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as
herein provided; provided, that, unless and until some other address be so designated, all notices or communications by Optionee to the Company shall be
mailed or delivered to the Company at its principal executive office, and all notices or communications by the Company to Optionee may be given to Optionee personally or may be mailed to Optionee at
his address as recorded in the records of the Company. 

        12.    Governing Law.    The law of the State of Delaware shall govern all questions
concerning the construction, validity and interpretation of the Plan and this Agreement, without regard to such state's conflicts of law rules. 

        13.    Plan.    The terms and provisions of the Plan are incorporated herein by reference, and
Optionee hereby acknowledges receiving a copy of the Plan. In the event of a conflict or inconsistency between the terms and provisions of the Plan (other than such terms and provisions that are
discretionary) and the provisions of this Agreement, the Plan shall govern and control. Capitalized terms used herein but not otherwise defined shall have the meanings given to them in the Plan. 

        14.    Notice of Disqualifying Disposition.    If Optionee sells or otherwise disposes of any
of the Shares acquired pursuant to an ISO on or before the later of (i) the date that is two years after the Date of Grant, and (ii) the date that is one year after transfer of such
Shares to Optionee upon exercise of the Option, Optionee shall immediately notify the Company in writing of such disposition. Optionee agrees that he may be subject to income tax withholding by the
Company on the compensation income recognized by Optionee from the early disposition by payment in cash or out of the current wages or other compensation payable to Optionee. 

        15.    Tax Consequences.    Set forth below is a brief summary as of the effective date of the
Plan of some of the federal tax consequences of exercise of the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS
ARE SUBJECT TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. 

        15.1 There
will be no regular federal income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price will be treated as a tax preference item for federal alternative minimum tax purposes and may subject Optionee to the alternative minimum tax in the year of
exercise. 

        15.2 If
the Shares are held for more than 12 months after the date of the transfer of the Shares pursuant to the exercise of an ISO and are disposed of more than two
years after the Date of Grant, any gain realized on disposition of the Share will be treated as long term capital gain for federal income tax purposes. If Shares purchased under an ISO are disposed of
within the applicable one-year or two-year period, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to extent of
the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. 

        15.3 The
Company may be required to withhold from Optionee's compensation or collect from him and pay to the applicable taxing authorities an amount equal to a percentage of
this compensation income. 

        16.    Binding Effect; Successors and Assigns.    The Company may assign any of its rights
under this Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this
Agreement shall be 

4

 

binding
upon Optionee and his heirs, executors, administrators, legal representatives, successors and assigns or any other assignee or transferee of the Option or Shares Transferred in accordance with
this Agreement. 

        17.    Market Standoff Agreement.    If, prior to an initial public offering of the equity
securities of the Company, the underwriters require that any officers and directors of the Company agree not to effect any disposition of any equity security of the Company or of any security
convertible into or exchangeable or exercisable for any equity security of the Company (in each case, other than as part of such underwritten public offering), Optionee agrees to the same during the
180-day period (or such longer period as may be reasonably requested by the underwriter of such offering) beginning on, the effective date of such registration statement (except as a part
of such registration). 

        18.    No Right to Continuous Service.    Nothing contained in this Agreement or under the
Plan shall confer upon any Participant any right with respect to the continuation of service with the Company, or
interfere in any way with the right of the Company to terminate his or her Continuous Service at any time. Nothing contained in the Plan shall confer upon any Participant or other person any claim or
right to any Award under the Plan. 

[Signature Page Follows]

5

        IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized representative and Optionee has executed this Agreement effective as of the Date of Grant. 

	PINNACLE GAS RESOURCES, INC.	 	OPTIONEE
	

By:	
 	

 
	
 	

 
 (Signature)
	

Ron Barnes
 (Please print name)	
 	

 
 (Please print name)
	

Chief Financial Officer
 (Please print title)	
 	

 	
 	

 

QuickLinks

PINNACLE GAS RESOURCES, INC. STOCK INCENTIVE PLAN STOCK OPTION AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}]]