Exhibit 10.3


Dakota Plains Holdings, Inc.


2011 EQUITY INCENTIVE PLAN
 
Non-Statutory Stock Option Agreement

  


	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Name
 of Optionee:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 No.
 of Shares Covered:

 	
  

 	
 Date
 of Grant:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Exercise
 Price Per Share:

 	
  

 	
 Expiration
 Date:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Exercise
 Schedule: 

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Date(s)
 of

 Exercisability

 	
  

 	
 No.
 of Shares as to Which

 Option Becomes Exercisable

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 



          This
is a Non-Statutory Stock Option Agreement (“Agreement”) between Dakota Plains Holdings, Inc.
(the “Company”),
and the optionee identified above (the “Optionee”) effective as of
the date of grant specified above.


Background


	
  

 	
  

 	
  

 
	
  

 	
 A.

 	
 The
 Company maintains the Dakota Plains Holdings, Inc. 2011 Equity Incentive Plan
 (the “Plan”).

 
	
  

 	
  

 	
  

 
	
  

 	
 B.

 	
 Under
 the Plan, the Board of Directors of the Company (the “Board”) or a committee of
 two or more directors of the Company (the “Committee”) appointed by
 the Board administers the Plan and has the authority to determine the awards
 to be granted under the Plan (if the Board has not appointed a committee to
 administer the Plan, then the Board shall constitute the Committee).

 
	
  

 	
  

 	
  

 
	
  

 	
 C.

 	
 The
 Committee has determined that the Optionee is eligible to receive an award
 under the Plan in the form of a non-statutory stock option (the “Option”).

 
	
  

 	
  

 	
  

 
	
  

 	
 D.

 	
 The
 Company hereby grants the Option to the Optionee under the terms and
 conditions as follows:

 









Terms and Conditions*


	
  

 	
  

 
	
 1.

 	
 Grant. The Optionee is granted the Option to
 purchase the number of Shares specified at the beginning of this Agreement.

 
	
  

 	
  

 
	
 2.

 	
 Exercise
 Price. The price to
 the Optionee of each Share subject to the Option will be the exercise price
 specified at the beginning of this Agreement.

 
	
  

 	
  

 
	
 3.

 	
 Non-Statutory
 Stock Option. The
 Option is not intended to be an “incentive stock option” within the
 meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
 “Code”).

 
	
  

 	
  

 
	
 4.

 	
 Exercise
 Schedule. The
 Option will vest and become exercisable as to the number of Shares and on the
 dates specified in the exercise schedule at the beginning of this Agreement.
 The exercise schedule will be cumulative; thus, to the extent the Option has
 not already been exercised and has not expired, terminated or been cancelled,
 the Optionee or the person otherwise entitled to exercise the Option as
 provided herein may at any time, and from time to time, purchase all or any
 portion of the Shares then purchasable under the exercise schedule. 

 
	
  

 	
  

 
	
  

 	
 The
 Option may also be exercised in full (notwithstanding the exercise schedule)
 under the circumstances described in Section 8 of this Agreement if it has
 not expired prior thereto.

 
	
  

 	
  

 
	
 5.

 	
 Expiration. 

 


          (a)          Timing.
The Option will expire at 5:00 p.m. Central Time on the earliest of:


                    (1)          The
expiration date specified at the beginning of this Agreement;


                    (2)          The
expiration of the period after the termination of employment of the Optionee
within which the Option can be exercised (as specified in Section 7 of this
Agreement);


                    (3)          Upon
termination of the Optionee’s employment for cause or if it is determined by
the Company within ten days after termination of the Optionee’s employment by
the Optionee that cause existed for termination by the Company, the date of
such determination; or


                    (4)          The
date (if any) fixed for cancellation pursuant to section 12(b) of the Plan.


          (b)          Expiration
Final. In no event may anyone exercise the Option, in whole or in
part, after it has expired, notwithstanding any other provision of this Agreement.


          (c)          Rescission.
In addition, if the Option is exercised, and prior to the delivery of the
certificate representing the Shares so purchased, it is determined that cause
for termination existed, then the Company, in its sole discretion, may rescind
the Option exercise by the Optionee and terminate the Option.


	
  

 	
  

 
	
 6.

 	
 Procedure
 to Exercise Option.

 


          (a)          Notice of
Exercise. The Option may be exercised by delivering written notice
of exercise to the Company at the principal executive office of the Company, to
the attention of the Company’s 


	
  

 	
  

 
	
  

 	
  

 
	
  

 	
  

 
	
 *          Unless
 the context indicates otherwise, terms that are not defined in this Agreement
 shall have the meaning set forth in the Plan as it currently exists or as it
 is amended in the future.

 



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Secretary,
in the form attached to this Agreement. The notice shall state the number of
Shares to be purchased, and shall be signed by the person exercising the
Option. If the person exercising the Option is not the Optionee, he/she also
must submit appropriate proof of his/her right to exercise the Option.


          (b)          Tender of
Payment. Upon giving notice of any exercise hereunder, the Optionee
shall provide for payment of the purchase price of the Shares being purchased
through one or a combination of the following methods:


                    (1)          Cash
(including check, bank draft or money order);


                    (2)          To
the extent permitted by law, through a broker assisted cashless exercise in
which the Optionee simultaneously exercises the Option and sells all or a
portion of the Shares thereby acquired pursuant to a brokerage or similar
relationship and uses the proceeds from such sale to pay the purchase price of
such Shares; or


                    (3)          By
delivery to the Company of unencumbered Shares having an aggregate Fair Market
Value on the date of exercise equal to the purchase price of such Shares. 


                    (4)          To
the extent permitted by law, through a broker assisted cashless exercise in
which the Optionee simultaneously exercises the Option and sells all or a
portion of the Shares thereby acquired pursuant to a brokerage or similar
relationship and uses the proceeds from such sale to pay the purchase price of
such Shares;


          (c)          Limitation
on Payment by Shares. Notwithstanding Section 6(b), the Option may
not be exercised through payment of any portion of the purchase price with
Shares if, in the opinion of the Committee, payment in such manner could have
adverse financial accounting consequences for the Company that were not
applicable at the time of the grant.


          (d)          Delivery of
Certificates. As soon as practicable after the Company receives the
notice and purchase price provided for above, it shall deliver to the person
exercising the Option, in the name of such person, a certificate or
certificates representing the Shares being purchased. The Company shall pay any
original issue or transfer taxes with respect to the issue or transfer of the
Shares and all fees and expenses incurred by it in connection therewith. All
Shares so issued shall be fully paid and nonassessable. Notwithstanding
anything to the contrary in this Agreement, no certificate for Shares
distributable under the Plan shall be issued and delivered unless the issuance
of such certificate complies with all applicable legal requirements including,
without limitation, compliance with the provisions of applicable state
securities laws, the Securities Act and the Exchange Act.


	
  

 	
  

 
	
 7.

 	
 Employment Requirement. The Option may be exercised only while
 the Optionee remains employed with the Company or a parent or subsidiary
 thereof, and only if the Optionee has been continuously so employed since the
 date the Option was granted; provided that:

 



          (a)          Post-Employment.
The Option may be exercised for three months after termination of
the Optionee’s employment if such cessation of employment is for a reason other
than death or disability, but only to the extent that it was exercisable
immediately prior to termination of employment, provided that if termination of
the Optionee’s employment shall have been for cause, the Option shall expire,
and all rights to purchase Shares hereunder shall terminate, immediately upon
such termination.


          (b)          Death or
Disability. The Option may be exercised for one year after
termination of the Optionee’s employment if such termination of employment is
because of death or disability of the Optionee.


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          (c)          Change in
Control. If the Optionee’s employment terminates after a declaration
made pursuant to section 12(b) of the Plan in connection with an event, the
Option may be exercised at any time permitted by such declaration.


	
  

 	
  

 
	
 8.

 	
 Acceleration of Vesting.

 



          (a)          Death or
Disability. In the event of the death or disability of the Optionee,
any portion of the Option that was not previously exercisable shall become
immediately exercisable in full if the Optionee shall have been continuously
employed by the Company or a parent or subsidiary thereof between the date the
Option was granted and the date of such death or disability.


          (b)          Change in
Control. If a Change in Control of the Company shall or is to occur,
then the Option, if not already exercised in full or otherwise terminated,
expired or cancelled, shall become immediately exercisable in full and shall
remain exercisable during the remaining term of the Option.


          (c)          Discretionary
Acceleration. Notwithstanding any other provisions of this Agreement
to the contrary, the Committee may, in its sole discretion, declare at any time
that the Option shall be immediately exercisable.


	
  

 	
  

 
	
 9.

 	
 Limitation on Transfer. During the lifetime of the Optionee, only
 the Optionee or his/her guardian or legal representative may exercise the
 Option. The Option may not be assigned or transferred by the Optionee
 otherwise than by will or the laws of descent and distribution or pursuant to
 a qualified domestic relations order as defined by the Code or Title I of the
 Employee Retirement Income Security Act, or the rules thereunder.

 
	
  

 	
  

 
	
 10.

 	
 No Shareholder Rights
 Before Exercise. No
 person shall have any of the rights of a shareholder of the Company with
 respect to any Share subject to the Option until the Share actually is issued
 to him/her upon exercise of the Option.

 
	
  

 	
  

 
	
 11.

 	
 Discretionary Adjustment. In the event of any reorganization,
 merger, consolidation, recapitalization, liquidation, reclassification, stock
 dividend, stock split, combination of shares, rights offering, or
 extraordinary dividend or divestiture (including a spin off), or any other
 change in the corporate structure or Shares of the Company, the Committee (or
 if the Company does not survive any such transaction, a comparable committee
 of the Board of Directors of the surviving corporation) may, without the
 consent of the Optionee, make such adjustment as it determines in its
 discretion to be appropriate as to the number and kind of securities subject
 to and reserved under the Plan and, in order to prevent dilution or
 enlargement of rights of the Optionee, the number and kind of securities
 issuable upon exercise of the Option and the exercise price hereof.

 
	
  

 	
  

 
	
 12.

 	
 Tax Withholding. Delivery of Shares upon exercise of the
 Option shall be subject to any required withholding taxes. As a condition
 precedent to receiving Shares upon exercise of the Option, the Optionee shall
 be required to pay to the Company, in accordance with the provisions of
 paragraph 14 of the Plan, an amount equal to the amount of any required
 withholdings. In lieu of all or any part of such a cash payment, a person
 exercising the Option may cover all or any part of the minimum required tax
 withholdings through a reduction in the number of Shares delivered to the
 person exercising the Option or through a subsequent return to the Company of
 Shares delivered to the person exercising the Option (in each case, such
 Shares having an aggregate Fair Market Value on the date of exercise equal to
 the amount of the withholding taxes being paid through such delivery,
 reduction or subsequent return of Shares). Notwithstanding the foregoing, no
 person shall be permitted to pay any such withholdings with Shares, or
 through a reduction in the number of 

 


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 Shares to be delivered
 upon exercise of the Option, if the Committee, in its sole discretion,
 determines that payment in such manner is undesirable.

 
	
  

 	
  

 
	
 13.

 	
 Interpretation of This
 Agreement. All
 decisions and interpretations made by the Committee with regard to any
 question arising hereunder or under the Plan shall be binding and conclusive
 upon the Company and the Optionee. If there is any inconsistency between the
 provisions of this Agreement and the Plan, the provisions of the Plan shall
 govern.

 
	
  

 	
  

 
	
 14.

 	
 Discontinuance of
 Employment. This
 Agreement shall not give the Optionee a right to continued employment with
 the Company or any parent or subsidiary of the Company, and the Company or
 any such parent or subsidiary employing the Optionee may terminate his/her
 employment at any time and otherwise deal with the Optionee without regard to
 the effect it may have upon him/her under this Agreement.

 
	
  

 	
  

 
	
 15.

 	
 Option Subject to Plan,
 Articles of Incorporation and By Laws. The Optionee acknowledges that the Option
 and the exercise thereof is subject to the Plan, the Articles of
 Incorporation, as amended from time to time, and the By Laws, as amended from
 time to time, of the Company, and any applicable federal or state laws, rules
 or regulations.

 
	
  

 	
  

 
	
 16.

 	
 Obligation to Reserve
 Sufficient Shares.
 The Company shall at all times during the term of the Option reserve and keep
 available a sufficient number of Shares to satisfy this Agreement.

 
	
  

 	
  

 
	
 17.

 	
 Binding Effect. This Agreement shall be binding in all
 respects on the heirs, representatives, successors and assigns of the
 Optionee.

 
	
  

 	
  

 
	
 18.

 	
 Choice of Law. This Agreement is entered into under the
 laws of the State of Minnesota and shall be construed and interpreted
 thereunder without regard to its conflict of law principles.

 
	
  

 	
  

 
	
 19.

 	
 Acknowledgement of Receipt
 of Copy. By
 execution of this Agreement, the Optionee acknowledges having received a copy
 of the Plan.

 



          The
Optionee and the Company have executed this Agreement as of the ____ day of
________, 20__.


	
  

 	
  

 	
  

 	
  

 
	
  

 	
 OPTIONEE

 
	
  

 	
  

 
	
  

 	
  

 
	
  

 	
 DAKOTA PLAINS HOLDINGS, INC.

 
	
  

 	
  

 
	
  

 	
 By 

 	
  

 
	
  

 	
    Its 

 	
  

 


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