Filed by Bowne Pure Compliance





Exhibit 10.46




OPTION AGREEMENT




1997 Incentive Plan of Brigham Exploration Company

(Non-Qualified Stock 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 a Nonqualified
Stock Option (the “Option”) to purchase                      Shares, subject to adjustment in accordance with
the provisions of Section 7 of this Agreement. This Option is a nonqualified stock option and
shall not be treated as an incentive stock option under 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; 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 90 days after 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 (or
within the additional 90-day period provided by Section 4(d) hereof), 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.



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.


 


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(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; provided,
however, that the period during which the Option may be exercised shall not be extended more than
30 days after the exercise of the Option first would no longer violate 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 9.




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 parties 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 pursuant to the laws of descent and distribution or
in accordance with the provisions of the Plan. 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).



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.


 


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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.







 


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