Exhibit 10.4

Dakota Plains Holdings, Inc.

2011 EQUITY INCENTIVE PLAN
Restricted Stock Agreement

 

 

 

 

 

 

 

Full Name of Employee:

 

 

 

 

 

No. of Shares of Common Stock Covered:

 

Date of Issuance:

 

 

 

Vesting Schedule:

 

 

 

 

 

Vesting Date*

No. of Shares Which
Become Vested (Cumulative)

 

 

 

 

 

 

 

 

 

 

 

 

  *  Provided, however, that all Shares subject to this Agreement will vest
immediately in full upon the terms described in Section 3 of this Agreement.

          This Restricted Stock Agreement is made between Dakota Plains
Holdings, Inc. (the “Company”), and the employee identified above
(the “Employee”) effective as of the date of issuance specified above (the
“Effective Date”).

 

 

 

 

A.

The Company desires to give the Employee an inducement to acquire a proprietary
interest in the Company and an added incentive to advance the interests of the
Company by granting the Employee restricted shares of Common Stock of the
Company (the “Shares”), on the terms and conditions and subject to the
restrictions set forth herein; and

 

 

 

 

B.

The Company and the Employee desire to enter into this Agreement to set forth
the terms and conditions of such grant.

 

 

 

Now, therefore, the Company and the Employee mutually agree as follows:

 

 

1.

Grant of Restricted Stock.

          (a)          Subject to the terms and conditions of this Agreement,
the Company has granted to the Employee the number of Shares specified at the
beginning of this Agreement. Such Shares are subject to the restrictions
provided for in this Agreement and are referred to collectively as the
“Restricted Shares” and each as a “Restricted Share.”

          (b)          Each Restricted Share will be evidenced by a duly issued
stock certificate (which may represent more than one Restricted Share)
registered in the name of the Employee. The Employee will have all rights of a
shareholder of the Company with respect to each Restricted Share (including the
right to

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receive dividends and other distributions, if any). However, all restrictions
provided for in this Agreement will apply to each Restricted Share and to any
other securities distributed with respect to such Restricted Share. No
Restricted Share may be sold, transferred, pledged, hypothecated or otherwise
encumbered or disposed of until such Restricted Share has vested in the Employee
in accordance with all terms and conditions of this Agreement. Each Restricted
Share will remain restricted and subject to forfeiture to the Company unless and
until such Restricted Share has vested in the Employee in accordance with all of
the terms and conditions of this Agreement. Each stock certificate evidencing
any Restricted Share may contain such legends and stock transfer instructions or
limitations as may be determined or authorized by the Company in its sole
discretion. The Company may, in its sole discretion, retain custody of any such
certificate throughout the period during which any restrictions are in effect
and require, as a condition to issuing any such certificate, that the Employee
tender to the Company a stock power duly executed in blank relating to such
custody.

 

 

2.

Normal Vesting. If the Employee remains continuously employed by the Company or
a parent or subsidiary thereof, then the Restricted Shares will vest in the
numbers and on the dates specified in the Vesting Schedule at the beginning of
this Agreement.

 

 

3.

Accelerated Vesting. Notwithstanding Section 2 of this Agreement, the Restricted
Shares will vest immediately upon a Change in Control as defined in Section 5 of
this Agreement if the Employee has been continuously employed by the Company or
a parent or subsidiary thereof through the date immediately prior to the
occurrence of a Change in Control.

 

 

4.

Issuance of Unrestricted Shares. Upon the vesting of any Restricted Shares, such
vested Restricted Shares will no longer be subject to forfeiture as provided in
Section 6 of this Agreement, but will continue to be subject to the provisions
of Section 8 of this Agreement.

 

 

5.

Change in Control. A “Change in Control” of the Company means the following:

          (a)          The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) of beneficial ownership (within
the meaning of Exchange Act Rule 13d-3) of 30% or more of either (i) the then
outstanding Shares (the “Outstanding Company Common Stock”) or (ii) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of the Board of Directors of the Company (the
“Outstanding Company Voting Securities”); provided, however, that the following
acquisitions will not constitute a Change in Control:

                    (1)          any acquisition of Shares or voting securities
of the Company directly from the Company (excluding any acquisition resulting
from the exercise of a conversion or exchange privilege with respect to
outstanding convertible or exchangeable securities unless such outstanding
convertible or exchangeable securities were acquired directly from the Company);

                    (2)          any acquisition of Shares or voting securities
of the Company by the Company, any of its wholly owned subsidiaries, or any
shareholder of the Company as of the Effective Date;

                    (3)          any acquisition of Shares or voting securities
of the Company by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries, or

                    (4)          any acquisition by any corporation with respect
to which, immediately following such acquisition, more than 70% of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by

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all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such acquisition in substantially
the same proportions as was their ownership, immediately prior to such
acquisition, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be;

          (b)          The individuals who constitute the Incumbent Directors
cease for any reason to constitute at least a majority of the Board of Directors
of the Company (the “Board”), with the term “Incumbent Directors” meaning
(1) the members of the Board as of the Effective Date, and (2) any individual
who becomes a member of the Board after such date whose election, or nomination
for election by the shareholders of the Company, was approved by the vote of at
least a majority of the then Incumbent Directors, but excluding any individual
whose initial assumption of office as a director of the Company occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board;

          (c)          Approval by the shareholders of the Company of a
reorganization, merger, consolidation or statutory exchange of Outstanding
Company Voting Securities, unless, immediately following such reorganization,
merger, consolidation or exchange, all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such reorganization, merger, consolidation or exchange beneficially own,
directly or indirectly, more than 70% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such reorganization, merger,
consolidation or exchange in substantially the same proportions as was their
ownership, immediately prior to such reorganization, merger, consolidation or
exchange, of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be; or

          (d)          Approval by the shareholders of the Company of (1) a
complete liquidation or dissolution of the Company or (2) the sale or other
disposition of all or substantially all of the assets of the Company, other than
to a corporation with respect to which, immediately following such sale or other
disposition, more than 70% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as was their ownership, immediately prior to
such sale or other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be.

Notwithstanding the above, a Change in Control shall not be deemed to occur with
respect to the Employee if the acquisition of the 30% or greater interest
referred to in paragraph (1) is by a group, acting in concert, that includes the
Employee or if at least 30% of the then outstanding common stock or combined
voting power of the then outstanding voting securities (or voting equity
interests) of the surviving corporation or of any corporation (or other entity)
acquiring all or substantially all of the assets of the Company shall be
beneficially owned, directly or indirectly, immediately after a reorganization,
merger, consolidation, statutory share exchange or disposition of assets
referred to in paragraphs (3) or (4) by a group, acting in concert, that
includes the Employee.

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6.

Forfeiture. If (a) the Employee’s employment with the Company, or a parent or
subsidiary thereof, is terminated for any reason, whether by the Company with or
without cause, voluntarily or involuntarily by the Employee or otherwise, or
(b) the Employee attempts to transfer or otherwise dispose of any of the
Restricted Shares or the Restricted Shares become subject to attachment or any
similar involuntary process, in violation of this Agreement, then any Restricted
Shares that have not previously vested (including pursuant to Section 3 of this
Agreement) will be forfeited by the Employee to the Company, the Employee will
thereafter have no right, title or interest whatever in such Restricted Shares,
and, if the Company does not have custody of any and all certificates
representing Restricted Shares so forfeited, the Employee must immediately
return to the Company any and all certificates representing Restricted Shares so
forfeited. Additionally, the Employee must deliver to Company a stock power duly
executed in blank relating to any and all certificates representing Restricted
Shares forfeited to the Company in accordance with the previous sentence or, if
such stock power has previously been tendered to the Company, the Company will
be authorized to deem such previously tendered stock power delivered, and the
Company will be authorized to cancel any and all certificates representing
Restricted Shares so forfeited and issue and deliver to the Employee a new
certificate for any Shares which vested prior to forfeiture.

 

 

7.

Lock-Up. If requested by the Company in connection with any registration of the
offering of any securities of the Company under the Securities Act of 1933, as
amended (the “Securities Act”), the Employee will not sell or otherwise transfer
any securities of the Company during the 180-day period (or such other period as
may be requested in writing by the managing underwriter of such offering and
agreed to in writing by the Company) (the “Market Standoff”) following the
effective date of a registration statement of the Company filed under the
Securities Act. Such restrictions will apply only to the first registration
statement of the Company to become effective under the Securities Act that
includes securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Securities Act. The Company may impose
stop transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff.

 

 

8.

Transfer Restrictions.

          (a)          The Employee understands that, notwithstanding the
vesting of the Restricted Shares under Sections 2 and 3 of this Agreement, none
of the Shares issued to the Employee pursuant to this Agreement have been (nor
are anticipated to be) registered under the Securities Act, or any state
securities laws, in reliance upon exemptions from registration. The Shares,
therefore, cannot be sold unless they are subsequently registered under the
Securities Act or the Employee obtains an opinion of counsel satisfactory to the
Company that such sale may be effected without violation of applicable federal
or state securities laws.

          (b)          The Company is not required (1) to transfer on its books
any Shares that have been sold or otherwise transferred in violation of any of
the provisions of this Agreement or (2) to treat as owner of such Shares or to
accord the right to vote or pay dividends to any transferee to whom such Shares
have been so transferred.

 

 

9.

Limitation on Change in Control Payments. Notwithstanding anything in this
Agreement to the contrary, if, with respect to the Employee, the acceleration of
the vesting of Restricted Shares as provided in Section 3 of this Agreement
(which acceleration could be deemed a “payment” within the meaning of
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the
“Code”)), together with any other payments which the Employee has the right to
receive from the Company or any corporation which is a member of an “affiliated
group” (as defined in Section 1504(a) of the Code without regard to
Section 1504(b) of the Code) of which the Company is a member, would constitute
a “parachute payment” (as defined in

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Section 280G(b)(2) of the Code), then the “payments” to the Employee will be
reduced to the largest amount as will result in no portion of such “payments”
being subject to the excise tax imposed by Section 4999 of the Code. Without
limiting the prior sentence, the Employee will have the discretion to determine
which “payments” will be reduced so that no portion of such “payments” are
subject to the excise tax imposed by Section 4999 of the Code. Notwithstanding
anything to the contrary in this Section 9, if the Employee is subject to a
separate agreement with the Company that expressly addresses the potential
application of Section 280G or 4999 of the Code (including, without limitation,
that “payments” under such agreement or otherwise will be reduced, that such
“payments” will not be reduced or that such “payments” will be “grossed up” for
tax purposes), then this Section 9 will not apply, and any “payments” to the
Employee pursuant to Section 3 of this Agreement will be treated as “payments”
arising under such separate agreement.

 

 

10.

Employment. This Agreement does not give the Employee any right to continued
employment with the Company or any parent or subsidiary thereof, and the Company
or any parent or subsidiary thereof employing the Employee may terminate such
employment or otherwise treat the Employee without regard to the effect it may
have upon the Employee or any Restricted Shares under this Agreement.

 

 

11.

Tax Withholding. The parties to this Agreement recognize that the Company or a
parent or subsidiary of the Company may be obligated to withhold federal and
state income taxes or other taxes upon the vesting of the Restricted Shares, or,
in the event that the Employee elects under Section 83(b) of the Code to report
the receipt of the Restricted Shares as income in the year of receipt, upon the
Employee’s receipt of the Restricted Shares. The Employee agrees that, at such
time, if the Company or a parent or subsidiary is required to withhold such
taxes, the Employee will promptly pay in cash upon demand to the Company, or the
parent or subsidiary having such obligation, such amounts as shall be necessary
to satisfy such obligation.

 

 

12.

Miscellaneous. This Agreement is binding in all respects on the Employee’s
heirs, representatives, successors and assigns. This Agreement will be governed
by and construed in accordance with the laws of the State of Minnesota. This
Agreement contains all terms and conditions with respect to the subject matter
hereof and no amendment, modification or other change hereto will be of any
force or effect unless and until set forth in a writing executed by the Employee
and the Company.

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          The Employee and the Company have executed this Agreement as of the
Effective Date.

 

 

 

 

 

 

 

    ____________________, Employee

 

 

 

DAKOTA PLAINS HOLDINGS, INC.

 

 

 

By:

 

 

     Its

 

[Signature Page to Restricted Stock Agreement]

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