exv10w4






Exhibit 10.4




PARALLEL PETROLEUM CORPORATION

2008 LONG-TERM INCENTIVE PLAN

OUTSIDE DIRECTOR RESTRICTED STOCK AGREEMENT




Pursuant to the Parallel Petroleum Corporation 2008 Long-Term Incentive Plan (the “Plan”) as
adopted by Parallel Petroleum Corporation, a Delaware corporation (the “Company”), and its
Subsidiaries,



 





(the “Participant”)



is granted a Restricted Stock Award in accordance with Section 6.4 of the Plan.




     1. Terms of Award. The number of shares of Common Stock awarded under this Award
Agreement (this “Agreement”) is
___ shares (the “Awarded Shares”). The Date of Grant of this
Award is ___.



     2. Subject to Plan. This Agreement is subject to the terms and conditions of the
Plan, and the terms of the Plan shall control to the extent not otherwise inconsistent with the
provisions of this Agreement. The capitalized terms used herein that are defined in the Plan shall
have the same meanings assigned to them in the Plan. This Agreement is subject to any rules
promulgated pursuant to the Plan by the Board or the Committee and communicated to the Participant
in writing.



     3. Vesting. Except as specifically provided in this Agreement and subject to certain
restrictions and conditions set forth in the Plan, the Awarded Shares shall be vested as follows:




(a) Twenty-five percent (25.0%) of the total Awarded Shares shall vest on the Date
of Grant, provided the Participant is providing services to the Company or a
Subsidiary on that date.




(b) Twenty-five percent (25.0%) of the total Awarded Shares shall vest on the first
anniversary of the Date of Grant, provided the Participant is providing services to
the Company or a Subsidiary on that date.




(c) Twenty-five percent (25.0%) of the total Awarded Shares shall vest on the second
anniversary of the Date of Grant, provided the Participant is providing services to
the Company or a Subsidiary on that date.




(d) The remaining twenty-five percent (25.0%) of the total Awarded Shares shall vest
on the third anniversary of the Date of Grant, provided the Participant is providing
services to the Company or a Subsidiary on that date.


Notwithstanding the foregoing, in the event of: (i) a Change of Control, (ii) the Participant’s
death, or (iii) the Participant’s Termination of Service by reason of Total and Permanent
Disability, the total Awarded Shares not previously vested shall thereupon immediately become
vested in full, without regard to the vesting limitations set forth above.




 









 





     4. Forfeiture of Awarded Shares. Awarded Shares that are not vested in accordance with
Section 3 shall be forfeited on the date of the Participant’s Termination of Service. Upon
forfeiture, all of the Participant’s rights with respect to the forfeited Awarded Shares shall
cease and terminate, without any further obligations on the part of the Company.



     5. Restrictions on Awarded Shares. Awarded Shares that are not vested in accordance
with Section 3 and which are subject to forfeiture in accordance with Section 4
shall be subject to the terms, conditions, provisions, and limitations of this Section 5.




     (a) Subject to the provisions of the Plan and the other terms of this
Agreement, from the Date of Grant until the date the Awarded Shares are vested in
accordance with Section 3 and no longer subject to forfeiture in accordance
with Section 4 (the “Restriction Period”), the Participant shall not be
permitted to sell, transfer, pledge or assign shares any of the Awarded Shares.




     (b) Except as provided in paragraph (a) above, the Participant shall have, with
respect to his or her Awarded Shares, all of the rights of a stockholder of the
Company, including the right to vote the shares, and the right to receive any
dividends thereon.



     6. Legend. A legend in substantially the following form shall be placed on all
certificates representing Awarded Shares:




On the face of the certificate:




“Transfer of this stock is restricted in accordance with
conditions printed on the reverse of this certificate.”




On the reverse:




“The shares of stock evidenced by this certificate are
subject to and transferable only in accordance with that
certain Parallel Petroleum Corporation 2008 Long-Term
Incentive Plan, a copy of which is on file at the principal
office of the Company in Midland, Texas. No transfer or
pledge of the shares evidenced hereby may be made except in
accordance with and subject to the provisions of said Plan.
By acceptance of this certificate, any holder, transferee or
pledgee hereof agrees to be bound by all of the provisions
of said Plan.”




“The shares of stock of this Corporation represented by this
certificate have not been registered under the Securities
Act of 1933, as amended (the “Act”), and may not be offered
for sale, sold or otherwise transferred except pursuant to
an effective registration statement under the Act or an
opinion of counsel satisfactory to the Corporation to the
effect that registration under the Act is not required.”



     All Awarded Shares owned by the Participant shall be subject to the terms of this Agreement
and shall be represented by a certificate or certificates bearing the foregoing legend.



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     7. Delivery of Certificates. Certificates for Awarded Shares free of restriction
under this Agreement shall be delivered to the Participant promptly after, and only after, the
Restriction Period shall expire without forfeiture in respect of such shares of Common Stock.
Certificates for shares of Common Stock forfeited pursuant to Section 4 shall be promptly
returned to the Company by the Participant. In connection with the issuance of a certificate for
Restricted Stock, the Participant shall endorse such certificate in blank or execute a stock power
in a form satisfactory to the Company in blank and deliver such certificate and executed stock
power to the Company. The parties acknowledge that remedies at law will be inadequate remedies for
breach of this Section 7 and consequently agree that this Section 7 shall be
enforceable by specific performance. The remedy of specific performance shall be cumulative of all
of the rights and remedies at law or in equity of the parties under this Section 7.



     8. Non-Assignability. Except as otherwise provided herein, the Awarded Shares are not
assignable or transferable by the Participant in any form or fashion except by will or by the laws
of descent and distribution.



     9. Voting. The Participant, as record holder of the Awarded Shares, has the exclusive
right to vote, or consent with respect to, such Awarded Shares until such time as the Awarded
Shares are transferred in accordance with this Agreement; provided, however, that
this Section 9 shall not create any voting right where the holders of such Awarded Shares
otherwise have no such right.



     10. Adjustment of Number of Shares and Related Matters. The number of shares of
Common Stock covered by the Awarded Shares shall be subject to adjustment in accordance with
Articles 11 – 13 of the Plan.



     11. Participant’s Representations. Notwithstanding any of the provisions hereof to
the contrary, the Participant hereby agrees that he will not acquire any Awarded Shares, and that
the Company will not be obligated to issue any Awarded Shares to the Participant hereunder, if the
issuance of such shares shall constitute a violation by the Participant or the Company of any
provision of any law or regulation of any governmental authority. Any determination in this
connection by the Company shall be final, binding, and conclusive. The obligations of the Company
and the rights of the Participant are subject to all applicable laws, rules, and regulations.



     12. Investment Representation. Unless the Awarded Shares are issued to the
Participant in a transaction registered under applicable federal and state securities laws, by his
execution hereof, the Participant represents and warrants to the Company that all Awarded Shares
are being acquired by the Participant for investment purposes only for his own account and not with
any intent for resale or distribution in violation of federal or state securities laws. Unless the
Awarded Shares are issued to him in a transaction registered under the applicable federal and state
securities laws, all certificates issued with respect to the Awarded Shares shall bear an
appropriate restrictive investment legend and shall be held indefinitely, unless they are
subsequently registered under the applicable federal and state securities laws or the Participant
obtains an opinion of counsel, in form and substance satisfactory to the Company and its counsel,
that such registration is not required.



     13. Participant’s Acknowledgments. The Participant acknowledges receipt of a copy of
the Plan, which is annexed hereto, and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts this Award subject to all the terms and provisions thereof.
The Participant hereby agrees to accept as binding, conclusive, and final all decisions or
interpretations of the Board or the Committee upon any questions arising under the Plan or this
Agreement.



     14. Law Governing. This Agreement shall be governed by, construed, and enforced in
accordance with the laws of the State of Texas (excluding any conflict of laws rule or principle of
Texas



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law that might refer the governance, construction, or interpretation of this Agreement to the
laws of another state).




     15. No Right to Continue Service. Nothing herein shall be construed to confer upon
the Participant the right to continue in the service of the Company or interfere with or restrict
in any way the right of the Company to discharge the Participant at any time (subject to any
contract rights of the Participant).



     16. Legal Construction. In the event that any one or more of the terms, provisions,
or agreements that are contained in this Agreement shall be held by a court of competent
jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid,
illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision,
or agreement that is contained in this Agreement and this Agreement shall be construed in all
respects as if the invalid, illegal, or unenforceable term, provision, or agreement had never been
contained herein.



     17. Covenants and Agreements as Independent Agreements. Each of the covenants and
agreements that is set forth in this Agreement shall be construed as a covenant and agreement
independent of any other provision of this Agreement. The existence of any claim or cause of
action of the Participant against the Company, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Company of the covenants and agreements
that are set forth in this Agreement.



     18. Entire Agreement. This Agreement and the Plan supersede any and all other prior
understandings and agreements, either oral or in writing, between the parties with respect to the
subject matter hereof and constitute the sole and only agreements between the parties with respect
to the said subject matter. All prior negotiations and agreements between the parties with respect
to the subject matter hereof are merged into this Agreement. Each party to this Agreement
acknowledges that no representations, inducements, promises, or agreements, orally or otherwise,
have been made by any party or by anyone acting on behalf of any party, which are not embodied in
this Agreement or the Plan and that any agreement, statement or promise that is not contained in
this Agreement or the Plan shall not be valid or binding or of any force or effect.



     19. Parties Bound. The terms, provisions, and agreements that are contained in this
Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their
respective heirs, executors, administrators, legal representatives, and permitted successors and
assigns, subject to the limitation on assignment expressly set forth herein. No person or entity
shall be permitted to acquire any Awarded Shares without first executing and delivering an
agreement in the form satisfactory to the Company making such person or entity subject to the
restrictions on transfer contained in Section 5 hereof.



     20. Modification. No change or modification of this Agreement shall be valid or
binding upon the parties unless the change or modification is in writing and signed by the parties;
provided, however, that the Company may change or modify this Agreement without the
Participant’s consent or signature if the Company determines, in its sole discretion, that such
change or modification is necessary for purposes of compliance with or exemption from the
requirements of Section 409A of the Code or any regulations or other guidance issued thereunder.
Notwithstanding the preceding sentence, the Company may amend the Plan to the extent permitted by
the Plan.



     21. Headings. The headings that are used in this Agreement are used for reference and
convenience purposes only and do not constitute substantive matters to be considered in construing
the terms and provisions of this Agreement.



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     22. Gender and Number. Words of any gender used in this Agreement shall be held and
construed to include any other gender, and words in the singular number shall be held to include
the plural, and vice versa, unless the context requires otherwise.



     23. Notice. Any notice required or permitted to be delivered hereunder shall be
deemed to be delivered only when actually received by the Company or by the Participant, as the
case may be, at the addresses set forth below, or at such other addresses as they have theretofore
specified by written notice delivered in accordance herewith:




	 	(a)	 	Notice to the Company shall be addressed and delivered as follows:




Parallel Petroleum Corporation

1004 North Big Spring, Suite 400

Midland, Texas 79701

Attn: Chief Executive Officer

Facsimile:  432-684-8057





	 	(b)	 	Notice to the Participant shall be addressed and delivered as set forth on the
signature page.





     24. Tax Requirements. The Participant is hereby advised to consult immediately with
his or her own tax advisor regarding the tax consequences of this Agreement, the method and timing
for filing an election to include this Agreement in income under Section 83(b) of the Code, and the
tax consequences of such election. By execution of this Agreement, the Participant agrees that if
the Participant makes such an election, the Participant shall provide the Company with written
notice of such election in accordance with the regulations promulgated under Code Section 83(b).



[Signature Page Follows]




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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer, and the Participant, to evidence Participant’s consent and approval of all the
terms hereof, has duly executed this Agreement, as of the date specified in Section 1
hereof.



	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	PARALLEL PETROLEUM CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title	 	 
	 
	 	 	 	 	 	 





	 	 	 	 	 	 	 
	 	 	PARTICIPANT:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Signature	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Address:	 	 	 	 







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