BRIGHAM EXPLORATION COMPANY
1997 DIRECTOR STOCK OPTION PLAN
(as amended effective January 1, 2009)
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.
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.
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.
2
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
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