EXHIBIT 10.1
 
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is
entered into effective the 28th day of February 2015 (the “Effective Date”) by
and between Gabriel G. Claypool, a resident of the State of Minnesota
(“Employee”), and Dakota Plains Holdings, Inc., a Nevada corporation (the
“Company”).
 
WHEREAS, the Company’s primary business is developing, owning and operating rail
facilities and other means to support the loading, marketing and transporting of
crude oil and related products from, into and within the North Dakota Bakken oil
fields;
 
WHEREAS, the Company and Employee entered into an Amended and Restated
Employment Agreement effective as of March 12, 2014 (the “Prior Agreement”) and
Employee has been employed by the Company pursuant to the terms and conditions
of the Prior Agreement.
 
WHEREAS, during his employment with the Company, Employee has had and will
continue to have access to the Company’s confidential, proprietary and trade
secret information.  Employee and the Company agree that it is in the best
interests of the Company to protect its confidential, proprietary and trade
secret information, to prevent unfair competition by former executives following
separation of their employment and to secure cooperation from former executives
with respect to matters related to their employment with the Company; and
 
WHEREAS, Employee acknowledges that his receipt of benefits under this Agreement
depends on, among other things, his agreement to abide by the confidentiality,
non-competition, non-solicitation and other covenants contained in this
Agreement, including those in Sections 5 and 6 below.
 
WHEREAS, the Company and Employee now desire to amend and fully restate the
Prior Agreement.
 
NOW, THEREFORE, in consideration of the foregoing recitals and the respective
agreements of the Company and Employee as set forth below, the Company and
Employee, intending to be legally bound, agree as follows:
 
1.             Employment.
 
1.1           Term. As of the Effective Date, the Company hereby agrees to
continue to employ Employee, and Employee hereby accepts such continued
employment on the terms and conditions set forth herein, for the period
commencing on the Effective Date and ending on the three year anniversary of the
Effective Date (the “Initial Term”), subject to earlier termination pursuant to
the terms of this Agreement.  This Agreement will be automatically extended
after the end of the Initial Term for successive one year terms (each a “Renewal
Term”), subject to earlier termination pursuant to the terms of this Agreement,
unless either party delivers to the other party written notice of non-renewal no
fewer than ninety (90) days prior to the expiration of the Initial Term or any
Renewal Term then in effect stating that such party does not wish to extend the
Term beyond the end of the Initial Term or the Renewal Term then in effect;
provided, further, that if a “Change in Control” (as defined in the Company’s
2011 Equity Incentive Plan) occurs prior to the expiration of the Initial Term
or the then-current Renewal Term, then the Initial Term or then-current Renewal
Term (as applicable) shall be extended through the two-year anniversary of the
Change in Control without any option for the Company to not renew this Agreement
prior to the end of such two-year period.  The Initial Term together with any
Renewal Term(s) is herein referred to as the “Term.”  If Employee remains
employed by the Company after the Term, then
 
 

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such employment shall be according to such terms and conditions as the Company
may establish from time to time.
 
1.2           Services. The Company hereby agrees to continue to employ Employee
in the role of the Company’s President and Chief Operating Officer, and Employee
hereby accepts such continued employment with the Company on the terms and
conditions set forth herein. Employee shall perform all activities and services
as the Company’s President and Chief Operating Officer, which shall include such
duties and responsibilities as the Company’s Board of Directors (the “Board”)
and Chief Executive Officer may from time-to-time reasonably prescribe
consistent with the duties and responsibilities of a President and Chief
Operating Officer of the Company (the “Services”). Employee shall use his best
efforts to make himself available to render such Services to the best of his
abilities. The Services shall be performed in a good professional and
workmanlike manner by Employee, to the Company’s reasonable satisfaction, which
shall include duties and responsibilities as the Company’s President and Chief
Operating Officer. Employee shall be considered an executive officer for
purposes of Section 16 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).  The Company and Employee acknowledge that Employee has been
appointed to serve as a member of the Board.  During the Term, the Board may
nominate Employee for reelection to the Board at the expiration of each term of
office, and Employee agrees to serve as a member of the Board for each period
for which Employee is so elected.
 
2.             At-Will Relationship. Employee’s employment with the Company
shall be entirely “at-will,” meaning that either Employee or the Company may
terminate such employment relationship at any time for any reason or for no
reason at all, subject to the provisions of this Agreement.  The date upon which
Employee’s termination of employment with the Company occurs is the “Termination
Date.”  For purposes of Sections 8.2(iv), 8.2(v) and 8.2(vi) of this Agreement
only, with respect to the timing of any payments thereunder, the “Termination
Date” shall mean the date on which a “separation from service” has occurred for
purposes of Section 409A of the Internal Revenue Code of 1986, as amended from
time to time (the “Code”) and the regulations and guidance thereunder.
 
3.             Compensation and Incentive Awards. In consideration for Employee
entering into this Agreement with the Company and performing the Services
required hereunder during the Term, the Company shall provide Employee with the
following compensation while Employee is employed by the Company during the
Term:
 
3.1           Annual Salary. The Company shall pay Employee an annualized base
salary according to this Section 3.1 (the “Salary”), which Salary shall be paid
monthly on the 15th day of each calendar month, or the last business day
immediately preceding the 15th day of each calendar month, in the event the 15th
falls on a weekend or a holiday.  Employee’s annualized Salary as of the
Effective Date shall be $350,000.
 
3.2           Short Term Incentive.  For each calendar year during the Term,
Employee shall be eligible to receive an annual incentive bonus in the
discretion of the Company’s Compensation Committee or Board based upon Employee
meeting or exceeding mutually agreed upon performance goals, with a target
annual incentive bonus equal to 80% of Employee’s annualized Salary and to be
paid in cash, subject to all applicable corporate approvals, to be issued no
later than March 15 of the calendar year immediately following the calendar year
for which such bonus is earned; provided, however, that nothing herein shall
obligate the Company to pay any Short Term Incentive bonus under this Section
3.2 to Employee at any time.
 

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3.3           Long Term Incentive.  For each calendar year during the Term,
Employee shall be eligible to receive an annual incentive bonus in the
discretion of the Company’s Compensation Committee or Board based upon Employee
meeting or exceeding mutually agreed upon performance goals, with a target
annual incentive bonus equal to 160% of Employee’s annualized Salary and to be
paid in restricted stock, subject to all applicable corporate approvals, to be
issued no later than March 15 of the calendar year immediately following the
calendar year for which such bonus is earned; provided, however, that nothing
herein shall obligate the Company to pay any Long Term Incentive bonus under
this Section 3.3 to Employee at any time. The Company agrees that upon the
vesting of restricted stock issued pursuant to this Section 3.3, Employee will
have the option of paying the required withholding tax due upon such vesting or
receiving a certain number of net shares of common stock, in either case in
accordance with the terms of the applicable grant agreements and plan
document(s) governing such restricted stock.
 
3.4           Retention Award. Employee received a restricted stock award of
125,000 shares of the Company’s common stock with vesting in accordance with the
terms and conditions of the Company’s 2011 Equity Incentive Plan and a
Restricted Stock Agreement between the Company and Employee dated the same date
as the Prior Agreement. The Company agrees that upon the vesting of restricted
stock issued pursuant to this Section 3.4, Employee will have the option of
paying the required withholding tax due upon such vesting or receiving a certain
number of net shares of common stock, in either case in accordance with the
terms of the applicable grant agreements and plan document(s) governing such
restricted stock.
 
4.             Benefits. In consideration for Employee entering into this
Agreement with the Company and performing the Services required hereunder during
the Term, the Company shall provide Employee with the following employee
benefits while Employee is employed by the Company during the Term:
 
4.1           Retirement Plans. Employee shall be entitled to participate in the
Company’s 401(k), profit sharing and other retirement plans (the “Plan”)
presently in effect or hereafter adopted by the Company, to the extent that such
Plan relates generally to all employees of the Company. Employee shall be able
to contribute up to the legal limit, as a percentage of his annualized Salary,
into any such Plan, of which the Company shall match Employee’s contribution up
to a maximum of eight percent (8.0%) of Employee’s qualified annualized Salary.
 
4.2           Vacation. Employee shall be entitled to four weeks paid vacation
annually pursuant to such general policies and procedures of the Company
consistent with past practices as are from time to time adopted by the Company.
 
4.3           Expense Reimbursement. Employee shall be reimbursed by the Company
for all ordinary and customary business expenses, including travel. Employee
shall provide such appropriate documentation regarding such expenses and
disbursements as Company may reasonably require. Reimbursement shall occur once
per month and must be paid within thirty (30) days after the Company receives
appropriate documentation from Employee related to such expenses but in no event
later than the end of the Company’s taxable year following the taxable year in
which such expenses are incurred.
 
4.4           Health Insurance. Employee, Employee’s spouse and any children of
Employee (the “Employee’s Family”) shall be entitled to participate in health,
hospitalization, disability, dental and other such health-related benefits
and/or insurance plans that the Company may have in effect from time-to-time and
provided Employee and Employee’s Family meets the eligibility requirements for
each such individual plan or program, all of which insurance premiums shall be
paid by the Company on behalf of Employee and Employee’s Family. The Company
provides no
 

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assurance as to the adoption or continuance of any particular health,
hospitalization, disability, dental and other such health-related benefits
and/or insurance plans or programs and Employee and Employee’s Family’s
participation in any such plan or program shall be subject to the provisions,
rules and regulations applicable thereto.
 
4.5           Other Benefits. Employee shall also be entitled to such other
benefits as the Company may from time-to-time generally provide to its
personnel, at the discretion of and as permitted by the Company’s management.
 
5.             Confidential Information.
 
5.1           Employee shall maintain the confidentiality of all trade secrets,
(whether owned or licensed by the Company) and related or other interpretative
materials and analyses of the Company’s projects, or knowledge of the existence
of any material, information, analyses, projects, proposed joint ventures,
mergers, acquisitions, divestitures and other such anticipated or contemplated
business ventures of the Company, and other confidential or proprietary
information of the Company (“Confidential Information and Materials”) obtained
by Employee as result of Employee’s employment with the Company (including
Employee’s employment with the Company before the Effective Date) and for two
(2) years following termination of Employee’s employment with the Company for
any reason, whether such termination is at the initiative of Employee or the
Company or before or after expiration of the Term.
 
5.2           In the event that such Confidential Information and Materials are
memorialized on any computer hardware, software, CD-ROM, disk, tape, or other
media, Company shall have the right, subject to the rights of third parties
under contract, copyright, or other law, to view, use, and copy for safekeeping
or backup purposes such Confidential Information and Materials. During the
period of confidentiality, Employee shall make no use of such Confidential
Information and Materials for his own financial or other benefit, and shall not
retain any originals or copies, or reveal or disclose any Confidential
Information and Materials to any third parties, except as otherwise expressly
agreed by the Company. Except in the performance of the Services, Employee shall
have no right to use the Company’s corporate logos, trademarks, service marks,
or other intellectual property without prior written permission of the Company
and subject to any limitations or restrictions upon such use as the Company may
require.
 
5.3           Upon expiration or termination of this Agreement, Employee shall
turn over to a designated representative of the Company all property in
Employee’s possession and custody and belonging to the Company. Employee shall
not retain any copies or reproductions of correspondence, memoranda, reports,
notebooks, drawings, photographs or other documents relating in any way to the
affairs of the Company and containing Confidential Information and Materials
which came into Employee’s possession at any time during the term of Employee’s
employment with the Company.
 
5.4           Employee acknowledges that the Company is a public company subject
to the reporting requirements of the Exchange Act and that this Agreement may be
subject to the filing requirements of the Exchange Act. Employee acknowledges
and agrees that the applicable insider trading rules and limitations on
disclosure of non-public information set forth in the Exchange Act and rules and
regulations promulgated by the SEC shall apply to this Agreement and Employee’s
employment with the Company. Employee (on behalf of himself as well as his
executors, heirs, administrators and assigns) absolutely and unconditionally
agrees to indemnify and hold harmless the Company and all of its past, present
and future affiliates, executors, heirs, administrators, shareholders,
employees, officers, directors, attorneys, accountants, agents,
 

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representatives, predecessors, successors and assigns from any and all claims,
debts, demands, accounts, judgments, causes of action, equitable relief,
damages, costs, charges, complaints, obligations, controversies, actions, suits,
proceedings, expenses, responsibilities and liabilities of every kind and
character whatsoever (including, but not limited to, reasonable attorneys’ fees
and costs) in the event of Employee’s breach or alleged breach of any obligation
under the Exchange Act, any rules promulgated by the SEC and any other
applicable Federal or state laws, rules, regulations or orders.
 
5.5           The foregoing obligations of confidentiality shall not apply to
any Confidential Information and Materials that: (i) are now or subsequently
become generally publicly known, other than as a direct or indirect result of
the breach by Employee of this Agreement, (ii) are independently made available
to Employee in good faith by a third party who has not violated a confidential
relationship with the Company, or (iii) are required to be disclosed by law or
legal process.  Employee understands and agrees that Employee’s obligations
under this Agreement to maintain the confidentiality of the Company’s
Confidential Information are in addition to any obligations of Employee under
applicable statutory or common law.  The parties agree that the provisions of
this Section 5 shall survive any termination of Employee’s employment with the
Company and this Agreement.
 
6.             Non-Competition and Non-Solicitation.
 
6.1           Employee agrees that he will not:
 
(i)            anywhere the Company does business, including but not limited to
Williston Basin and the Rocky Mountain Region, engage, directly or indirectly,
alone or as a shareholder (other than as a holder of less than ten percent (10%)
of the common stock of any publicly traded corporation), partner, officer,
director, employee, consultant or advisor, or otherwise in any way participate
in or become associated with, any other business organization that is engaged or
becomes engaged in any business that is the same or substantially identical
business of the Company, or is directly competitive with, any business activity
that the Company is conducting at the time of Employee’s termination or has
notified Employee that it proposes to conduct and for which the Company has,
prior to the time of such termination, expended substantial resources (the
“Designated Industry”),
 
(ii)           divert to any competitor of the Company any customer of the
Company, or
 
(iii)          solicit any employee, consultant or independent contractor of the
Company to change its relationship with the Company, or hire or offer employment
to, or a consulting or independent contractor relationship with, any person to
whom Employee actually knows the Company has offered employment; provided,
however, that this provision does not apply to any employee, consultant or
independent contractor of the Company who responds to a general solicitation for
an advertised position provided Employee has not otherwise engaged in conduct
prohibited by this Section 6.
 
6.2           Employee agrees to be bound by the provisions of this Section 6 in
consideration for the Company’s employment of Employee, payment of the
compensation and benefits provided under Section 3 and Section 4 above and the
covenants and agreements set forth herein. The provisions of this Section 6
shall apply during the term of Employee’s employment with the Company and for a
period of two (2) years following termination of Employee’s employment
 

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with the Company for any reason, whether such termination is at the initiative
of Employee or the Company or before or after expiration of the Term.  The
parties agree that the provisions of this Section 6 shall survive any
termination of this Agreement, Employee will continue to be bound by the
provisions of this Section 6 until their expiration and Employee shall not be
entitled to any compensation from the Company with respect thereto except as
provided under this Agreement.
 
6.3           Employee acknowledges that the provisions of this Section 6 are
essential to protect the business and goodwill of the Company. If at any time
the provisions of this Section 6 shall be determined to be invalid or
unenforceable by reason of being vague or unreasonable as to area, duration or
scope of activity, this Section 6 shall be considered divisible and shall become
and be immediately amended to only such area, duration and scope of activity as
shall be determined to be reasonable and enforceable by the court or other body
having jurisdiction over the matter; and Employee agrees that this Section 6 as
so amended shall be valid and binding as though any invalid or unenforceable
provision had not been included herein.
 
7.             Non-Disparagement. Both the Company and Employee agree that
neither they nor any of their respective affiliates, predecessors, subsidiaries,
partners, principals, officers, directors, authorized representatives, agents,
employees, successors, assigns, heirs or family members shall disparage or
defame any other party hereto relating in any respect to this Agreement, their
relationship or the Company’s employment of Employee.
 
8.             Rights Upon Termination of Employment.
 
8.1           If Employee’s employment with the Company is terminated by the
Company or Employee for any reason upon or following the expiration of the Term,
or if Employee’s employment with the Company is terminated during the Term by
the Company for Cause (as defined below) or by Employee for any reason other
than Good Reason (as defined below), or if Employee’s employment with the
Company is terminated during the Term by reason of Employee’s death or
Disability (as defined below), then: (i) the Company shall pay to Employee or
his beneficiary or his estate, as the case may be, Employee’s Salary through the
Termination Date, (ii) the Company shall pay any unpaid expense reimbursement
that might have accrued prior to the Termination Date; and (iii) any securities
held in the name of Employee, or any portion thereof, may be exercised to the
extent Employee was entitled to do so as of the Termination Date in accordance
with the terms of the applicable grant agreements and plan document(s) governing
such securities.
 
8.2           If Employee’s employment with the Company is terminated during the
Term by the Company for any reason other than for Cause or by the Employee for
Good Reason, then: (i) the Company shall pay Employee’s Salary through the
Termination Date, (ii) the Company shall pay any unpaid expense reimbursement
that might have accrued prior to the Termination Date, (iii) subject to Section
8.7, any securities held in the name of Employee, or any portion thereof, shall
vest or may be exercised by Employee during  the six-month period immediately
following the Termination Date as though Employee was entitled to do so as of
the Termination Date in accordance with the terms of the applicable grant
agreements and plan document(s) governing such securities, (iv) subject to
Section 8.7 and only if the Termination Date occurs before a Change in Control
(as defined in the Company’s 2011 Equity Incentive Plan) or if the Termination
Date occurs after the one (1) year anniversary of such Change in Control, the
Company shall pay Employee an amount equal to two times Employee’s annualized
Salary as of the Termination Date, payable in 24 substantially equal monthly
installments on or about the 15th day of each of the 24 months immediately
following the Termination Date; provided, however, that any installments that
otherwise would be payable between the Termination Date and the 60th
 

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day after the Termination Date shall be delayed until the 15th day of the
calendar month that is more than 60 days after the Termination Date and included
with the installment payable on such date, (v) subject to Section 8.7, the
Company shall pay Employee an amount equal to two times Employee’s target Short
Term Incentive award made pursuant to Section 3.2, less applicable withholdings,
payable in 24 substantially equal monthly installments on or about the 15th day
of each of the 24 months immediately following the Termination Date; provided,
however, that any installments that otherwise would be payable between the
Termination Date and the 60th day after the Termination Date shall be delayed
until the 15th day of the calendar month that is more than 60 days after the
Termination Date and included with the installment payable on such date, and
(vi) subject to Section 8.7, if Employee is eligible for and takes all steps
necessary to continue Employee’s and Employee’s Family’s group health and dental
insurance coverage with the Company following the Termination Date (including
completing and returning the forms necessary to elect COBRA coverage), the
Company will (a) pay for the portion of the premium costs for such coverage that
the Company would pay if Employee had remained employed by the Company, at the
same level of coverage that was in effect as of the Termination Date, through
the earliest of: (1) the 18-month month anniversary of the Termination Date, (2)
the date Employee becomes eligible for group health and dental insurance
coverage from any other employer, or (3) the date Employee is no longer eligible
to continue Employee’s and Employee’s Family’s group health and dental insurance
coverage with the Company under applicable law, and (b) pay Employee an amount
equal to the Company’s portion of the first month COBRA premium costs for such
coverage identified in Section 8.2(vi)(a) multiplied by six (6), payable in a
lump sum on the Company’s first payroll that is more than 60 days after the
Termination Date.
 
8.3           Termination of Employee for “Cause” shall mean any of the
following acts by Employee:
 
(i)            an intentional act of fraud, embezzlement, theft or any other
material violation of law:
 
(ii)           intentional damage to the Company’s assets;
 
(iii)          the willful and continued failure to substantially perform
required duties for the Company (other than as a result of incapacity due to
physical or mental illness); or
 
(iv)          willful conduct that is demonstrably and materially injurious to
the Company, monetarily or otherwise.
 
8.4           “Disability” hereunder shall mean the inability of Employee to
perform on a full-time basis the duties and responsibilities of his employment
with the Company by reason of his illness or other physical or mental impairment
or condition, if such inability continues for an uninterrupted period of 180
days or more during any 360-day period.  A period of inability shall be
“uninterrupted” unless and until Employee returns to full-time work, with or
without an accommodation, for a continuous period of at least thirty (30) days.
 
8.5           “Good Reason” hereunder shall mean the occurrence of any of the
following during the Term without Employee’s consent: (i) a material reduction
in Employee’s duties that is inconsistent with Employee’s position as President
and Chief Operating Officer of Company; (ii) Employee is no longer the President
and Chief Operating Officer of Company; (iii) any material reduction in
Employee’s annual base salary or bonus compensation (other than in connection
with a general decrease in the salary or bonuses for other employees of
Company); (iv) material breach by Company of any of its obligations hereunder;
or (v) a requirement by Company that Employee
 

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relocate Company’s principal office to a facility more than fifty (50) miles
from Company’s principal office as of the Effective Date; provided, however that
Employee must provide written notice to the Company that Good Reason exists
within fifteen (15) days of the occurrence of the circumstances giving rise to
Good Reason, the Company must fail to cure such circumstances within thirty (30)
days after its receipt of such notice from Employee and the Company engaging in
good faith negotiations with Employee to resolve the alleged Good Reason
circumstances or to confirm with Employee that the facts Employee has identified
support a Good Reason resignation, and Employee must resign no later than ninety
(90) days after expiration of the Company’s 30-day cure period in order for
Employee’s resignation to be for Good Reason.
 
8.6           In the event of termination of Employee’s employment, the sole
obligation of the Company shall be its obligation to make the payments called
for by Section 8.1 or Section 8.2 hereof, as the case may be, and the Company
shall have no other obligation to Employee or to his beneficiary or his estate,
except for compensation earned for services performed through the Termination
Date or as otherwise provided by law, under the terms of any other applicable
agreement between Employee and the Company or under the terms of any employee
benefit plans or programs then maintained by the Company in which Employee
participates.
 
8.7           Notwithstanding the foregoing provisions of this Section 8, the
Company shall not be obligated to provide the consideration under Section
8.2(iii), 8.2(iv), 8.2(v) or 8.2(vi) hereof unless Employee shall have signed a
release of claims in favor of the Company in a form to be prescribed by the
Company, all applicable consideration periods and rescission periods provided by
law shall have expired and Employee is in strict compliance with the terms of
this Agreement as of the dates of the payments.
 
9.             Rights Upon a Change in Control.  If a Change in Control (as
defined in the Company’s 2011 Equity Incentive Plan) occurs during the Term,
then, subject to Employee signing and not rescinding a release of claims in
favor of the Company in a form to be prescribed by the Company, the Company
shall pay Employee an amount equal to two times Employee’s annualized Salary as
of the Change in Control, less applicable withholdings, payable in a lump sum no
later than 75 days after the Change in Control occurs.  For avoidance of doubt,
if a Change in Control (as defined in the Company’s 2011 Equity Incentive Plan)
occurs during the Term, then Employee will not be eligible to receive the
severance pay described in Section 8.2(iv) unless the Termination Date occurs
during the Term and after the one (1) year anniversary of such Change in
Control.
 
10.           Notices. Any notice required or permitted under this Agreement
shall be personally delivered or sent by recognized overnight courier or by
certified mail, return receipt requested, postage prepaid, and shall be
effective when received (if personally delivered or sent by recognized overnight
courier) or on the third day after mailing (if sent by certified mail, return
receipt requested, postage prepaid) to Employee at the address indicated on the
signature page of this Agreement and to the Company at its headquarters or
principal place of business. Either party may designate a different person to
whom notices should be sent at any time by notifying the other party in writing
in accordance with this Agreement.
 
11.           Survival of Certain Provisions. Those provisions of this Agreement
which by their terms extend beyond the termination or non-renewal of this
Agreement (including all representations, warranties, and covenants of the
parties) shall remain in full force and effect and survive such termination or
non-renewal.
 
12.           Severability. Each provision of this Agreement shall be considered
severable such that if any one provision or clause conflicts with existing or
future applicable law, or may not be given full
 

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effect because of such law, this shall not affect any other provision which can
be given effect without the conflicting provision or clause.
 
13.           Entire Agreement. This Agreement contains the entire agreement and
understanding between the parties, and supersede all prior agreements and
understandings relating to the subject matter hereof, including without
limitation the Prior Agreement. There are no understandings, conditions,
representations or warranties of any kind between the parties except as
expressly set forth herein.
 
14.           Assignability. Employee may not assign this Agreement to any third
party for whatever purpose without the express written consent of the Company.
The Company may not assign this Agreement to any third party without the express
written consent of Employee except by operation of law, or through merger,
liquidation, recapitalization or sale of all or substantially all of the assets
of the Company, provided that the Company may assign this Agreement at any time
to an affiliate of the Company. The provisions of this Agreement shall inure to
the benefit of and be binding upon the parties and their respective
representatives, successors, and assigns. Any third party to which the Company
assigns this Agreement by operation of law, or through merger, liquidation,
recapitalization or sale of all or substantially all of the assets of the
Company, or because such third party is an affiliate of the Company, shall
thereafter be deemed the “Company” for the purposes of this Agreement.
 
15.           Headings. The headings of the paragraphs and sections of this
Agreement are inserted solely for the convenience of reference. They shall in no
way define, limit, extend, or aid in the construction of the scope, extent, or
intent of this Agreement.
 
16.           Waiver. The failure of a party to enforce the provisions of this
Agreement shall not be construed as a waiver of any provision or the right of
such party thereafter to enforce each and every provision of this Agreement.
 
17.           Amendments. No amendments of this Agreement shall be binding upon
the Company or Employee unless made in writing, signed by the parties hereto,
and delivered to the parties at the addresses provided herein.
 
18.           Governing Law. This Agreement shall be governed by and construed
under the internal laws of the State of Minnesota, without regard to the
principles of comity and/or the applicable conflicts of laws of any state that
would result in the application of any laws other than the State of Minnesota.
 
19.           Jurisdiction. This Agreement, including the documents, instruments
and agreements to be executed and/or delivered by the parties pursuant hereto,
shall be construed, governed by and enforced in accordance with the internal
laws of the State of Minnesota, without giving effect to the principles of
comity or conflicts of laws thereof.  Employee and the Company agree and consent
that any legal action, suit or proceeding seeking to enforce any provision of
this Agreement shall be instituted and adjudicated solely and exclusively in any
court of general jurisdiction in Minnesota, or in the United States District
Court having jurisdiction in Minnesota and Employee and the Company agree that
venue will be proper in such courts and waive any objection which they may have
now or hereafter to the venue of any such suit, action or proceeding in such
courts, and each hereby irrevocably consents and agrees to the jurisdiction of
said courts in any such suit, action or proceeding. Employee and the Company
further agree to accept and acknowledge service of any and all process which may
be served in any such suit, action or proceeding in said courts, and also agree
that service of process or notice upon them shall be deemed in every respect
effective service of process or notice upon them, in any suit, action,
proceeding, if given or made (i) according to applicable law, (ii) by a person
over the age of eighteen (18) who personally served such notice or service of
process on Employee or the Company, as the case may be, or (iii) by certified
mail,
 

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return receipt requested, mailed to employee or the Company, as the case may be,
at their respective addresses set forth in this Agreement.
 
20.           Counterparts and Electronic Signatures. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same Agreement.
 
21.           Taxes and Section 409A.  Company may withhold from any amounts
payable under this Agreement such federal, state and local income and employment
taxes as Company shall determine are required to be withheld pursuant to any
applicable law or regulation.  Employee shall be solely responsible for the
payment of all taxes due and owing with respect to wages, benefits, and other
compensation provided to him hereunder. This Agreement and the compensation
payable hereunder is intended to satisfy, or be exempt from, the requirements of
Section 409A(a)(2)(3) and (4) of the Code, including current and future guidance
and regulations interpreting such provisions, and should be interpreted
accordingly.  Each payment under this Agreement is intended to be treated as one
of a series of separate payments for purposes of Code Section 409A and Treasury
Regulation §1.409A-2(b)(2)(iii) (or any similar or successor provisions).  To
the extent that any payments under Section 8.2(iv) are subject to Code Section
409A and Employee is a “Specified Employee” (as defined in Section 409A) as of
the Termination Date, such payments to Employee under Section 8.2(iv) may not be
made before the date that is six (6) months after the Termination Date or, if
earlier, the date of Employee’s death.  Payments to which Employee would
otherwise be entitled during the first six (6) months following the Termination
Date will be accumulated and paid on the first day of the seventh month
following the Termination Date (or Employee’s death, if earlier).
 
22.           Excise Tax.  In the event that the benefits provided for in this
Agreement or otherwise payable to Employee (i) constitute “parachute payments”
within the meaning of Section 280G of the Code, and (ii) if the net after-tax
amount of such parachute payment to Employee is less than what the net after-tax
amount to Employee would be if the aggregate payments and benefits otherwise
constituting the parachute payment were limited to three times Employee’s “base
amount” (as defined in Section 280G(b)(3) of the Code) less $1.00, then the
aggregate payments and benefits otherwise constituting the parachute payment
shall be reduced to an amount that shall equal three times Employee’s base
amount, less $1.00.  Should such a reduction in payments and benefits be
required, Employee shall be entitled, subject to the following sentence, to
designate those payments and benefits under this Agreement or the other
arrangements that will be reduced or eliminated so as to achieve the specified
reduction in aggregate payments and benefits to Employee and avoid
characterization of such aggregate payments and benefits as a parachute
payment.  The Company will provide Employee with all information reasonably
requested by Employee to permit Employee to make such designation.  To the
extent that Employee’s ability to make such a designation would cause any of the
payments and benefits to become subject to any additional tax under Code Section
409A, or if Employee fails to make such a designation within ten business days
of receiving the requested information from the Company, then the Company shall
achieve the necessary reduction in such payments and benefits by first reducing
or eliminating the portion of the payments and benefits that are payable in cash
and then by reducing or eliminating the non-cash portion of the payments and
benefits, in each case in reverse order beginning with payments and benefits
which are to be paid or provided the furthest in time from the date of the
Company’s determination.  For purposes of this Section 22, a net after-tax
amount shall be determined by taking into account all applicable income, excise
and employment taxes, whether imposed at the federal, state or local level,
including the excise tax imposed under Section 4999 of the Code.  
 
[Signature Page Follows]
 

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

         
DAKOTA PLAINS HOLDINGS, INC.
            /s/ Timothy R. Brady    
Timothy R. Brady
Chief Financial Officer
         
EMPLOYEE
          /s/ Gabriel G. Claypool     Gabriel G. Claypool  

 
[Signature Page to Employment Agreement]
 

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