EXHIBIT 10.1
VERASUN ENERGY CORPORATION
RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement ("Agreement"), dated as of _____________,
is between VeraSun Energy Corporation, a South Dakota corporation (the
"Company"), and _____________ ("Shareholder") and is made pursuant to the
Company's Stock Incentive Plan.
1. Award of Restricted Stock. Pursuant to Section 8 of the Incentive Plan
and in recognition of Shareholder's past services to the Company, the Company
awards to Shareholder ________ shares of the Company's fully paid and
nonassessable Common Shares as a restricted stock grant (the "Shares"). All of
the Shares are subject to forfeiture as set forth in Section 2.
2. Length of Service Restrictions.
2.1 Shares Subject to Forfeiture.
2.1.1 All of the Shares shall initially be subject to forfeiture
to the Company. All or a portion of the Shares shall be automatically forfeited
to the Company if Shareholder's employment by the Company terminates for any
reason, including termination with or without Cause or retirement, as follows:
Portion of Restricted
Employment Termination Prior To Stock Subject to Forfeiture
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First Anniversary of Grant Date ______%
Second Anniversary of Grant Date ______%
Third Anniversary of Grant Date ______%
Fourth Anniversary of Grant Date ______%
Fifth Anniversary of Grant Date ______%
For purposes of this Agreement, a person is considered to be
employed by the Company if the person is employed by any entity that is either
the Company or a parent or subsidiary of the Company.
2.1.2 Notwithstanding Section 2.1.1, the possibility of
forfeiture of the Shares established above shall lapse in its entirety if,
during the period beginning two months before a Change of Control and ending 12
months after a Change in Control, Shareholder's employment by the Company shall
be terminated (A) by the Company other than for Cause, Total Disability or death
or (B) by Shareholder for Good Reason based on an event occurring during such
period.
2.2 Definitions. For purposes of this Agreement, the following terms
shall have the meanings specified.
(A) "Cause" shall mean (1) the willful and continued failure
by Shareholder substantially to perform Shareholder's reasonably assigned duties
with the
Company, other than a failure resulting from Shareholder's incapacity due to
physical or mental illness or impairment, after a written demand for performance
has been delivered to Shareholder by the Chief Executive Officer or the
President which specifically identifies the manner in which the CEO or the
President believes that Shareholder has not substantially performed
Shareholder's duties, or (2) the willful engagement by Shareholder in illegal
conduct, or the conviction of guilty or entering of a nolo contendere plea to a
felony, which is materially and demonstrably injurious to the Company, (3) the
willful failure by Shareholder to follow material written Company policies or
(4) the commission of an act by Shareholder, or the failure by Shareholder to
act, which constitutes gross negligence or gross misconduct. For purposes of
this definition, no act, or failure to act, on Shareholder's part shall be
considered "willful" unless done, or omitted to be done, by Shareholder in bad
faith.
(B) "Change in Control" shall mean the occurrence of any of
the following events:
(1) The approval by the shareholders of the Company of:
(a) any consolidation, merger or plan of share
exchange involving the Company (a "Merger") as a result of which the holders of
outstanding securities of the Company ordinarily having the right to vote for
the election of directors ("Voting Securities") immediately prior to the Merger
do not continue to hold at least 50% of the combined voting power of the
outstanding Voting Securities of the surviving or continuing entity immediately
after the Merger, disregarding any Voting Securities issued or retained by such
holders in respect of securities of any other party to the Merger;
(b) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, the assets of the Company; or
(c) the adoption of any plan or proposal for the
liquidation or dissolution of the Company;
(2) At any time during a period of two consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors of the Company ("Incumbent Directors") shall cease for any reason to
constitute at least a majority thereof; provided, however, that the term
"Incumbent Director" shall also include each new director elected during such
two-year period whose nomination or election was approved by two-thirds of the
Incumbent Directors then in office; or
(3) Any "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Act")) shall, as a result of a tender or exchange offer, open market
purchases or privately negotiated purchases from anyone other than the Company,
have become the beneficial owner (within the meaning of Rule 13d-3 under the
Act), directly or indirectly, of Voting Securities representing twenty percent
(20%) or more of the combined voting power of the then outstanding Voting
Securities.
(C) "Good Reason" shall mean:
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(1) a diminution of Shareholder's status, title,
position(s) or responsibilities from Shareholder's status, title, position(s)
and responsibilities as in effect immediately prior to the Change of Control (or
two months before the Change in Control) or the assignment to Shareholder of any
duties or responsibilities which are inconsistent with such status, title,
position(s) or responsibilities, or any removal of Shareholder from such
position(s), except in connection with the termination of Shareholder's
employment for Cause, Total Disability or as a result of Shareholder's death or
voluntarily by Shareholder other than for Good Reason and provided that Good
Reason shall not exist if Shareholder has the same status, title, position(s)
and responsibilities after the Change in Control but the Company is no longer a
publicly held company or is a wholly owned subsidiary of another company;
(2) a reduction by the Company in Shareholder's rate of
base salary, bonus or incentive opportunity (other than as part of any general
salary reduction that may be implemented for all of the Company's employees) or
a substantial reduction in benefits other than a reduction in benefits
applicable to substantially all employees; or
(3) the Company's requiring Shareholder to be based
anywhere other than the _____________ area except for reasonably required travel
on the Company's business.
(D) "Total Disability" shall mean a medically determinable
mental or physical impairment that is expected to result in death or has lasted
or is expected to last for a continuous period of 12 months or more and that, in
the opinion of the Company and two independent physicians, causes the
Shareholder to be unable to perform duties as an employee, director, officer or
consultant of the Employer and unable to be engaged in any substantial gainful
activity. Total Disability shall be deemed to have occurred on the first day
after the two independent physicians have furnished their written opinion of
Total Disability to the Company and the Company has reached an opinion of Total
Disability.
3. Withholding. Upon notification of the amount due, if any, and prior to
or concurrently with delivery of the certificates representing the Shares,
Shareholder shall pay to the Company amounts necessary to satisfy any applicable
federal, state, and local withholding tax requirements. If additional
withholding becomes required beyond any amount deposited before delivery of the
certificates, Shareholder shall pay such amount to the Company on demand. If
Shareholder fails to pay any amount demanded, the Company shall have the right
to withhold such amount from other amounts payable by the Company to
Shareholder, including salary, subject to applicable law.
4. Limitations on Transfer.
4.1 While Subject to Forfeiture. Without the written consent of the
Company, Shareholder shall not sell, assign, encumber, dispose of or transfer
(including transfer by operation of law) any interest in any Shares that are
subject to forfeiture pursuant to Section 2.
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5. Legend. All certificates representing the Shares shall be endorsed with
legends substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE SUBJECT TO
FORFEITURE AND CERTAIN RESTRICTIONS UPON TRANSFER AS SET FORTH IN A
RESTRICTED STOCK AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED
HOLDER, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE
CORPORATION."
6. Specific Performance. Shareholder acknowledges and agrees that the
Company will suffer irreparable harm if Shareholder fails to comply with the
terms of this Agreement, and that monetary damages will be inadequate to
compensate the Company for such failure. Accordingly, Shareholder agrees that
this Agreement may be enforced by specific performance or other injunctive
relief, in addition to any other remedies available at law or in equity.
7. Section 83(b) Election. Shareholder is advised that any income
recognized as a result of receiving the Shares will be treated as ordinary
compensation income subject to federal, state and local income, employment and
other tax withholding. Shareholder is advised that if he or she makes an
election under Section 83(b) of the Internal Revenue Code of 1986 with respect
to some or all of the Shares, Shareholder will recognize ordinary compensation
income at the time of the award of Shares in an amount equal to the fair market
value of the Shares on that date. If Shareholder does not make a Section 83(b)
election, Shareholder will recognize ordinary compensation income (i) at the
time or times any portion of the Shares vests in accordance with Section 2 of
this Agreement, in an amount equal to the fair market value of that Shares on
the vesting date, and (ii) in connection with the payment of any cash dividends
on the Shares while the Shares are unvested. Prior to or concurrently with the
acceptance by the Company of a Section 83(b) election for the Shares or delivery
to Shareholder of the certificates representing the Shares, Shareholder shall
pay to Company the amount necessary to satisfy all applicable federal, state and
local tax withholding requirements arising in connection with Shareholder's
receipt of the Shares, including any amounts required to be withheld at the time
any portion of the Shares vest in accordance with Section 2 of this Agreement.
Shareholder shall pay these amounts in cash or, at the election of the
Shareholder, by surrendering to Company for cancellation (i) Shares (except in
the case of withholding due in connection with a Section 83(b) election) or (ii)
other shares of Company Common Stock held for at least six months, in each case
valued at the closing market price for the Company Common Stock on the last
trading day preceding the date of Shareholder's election to surrender such
shares. If additional withholding becomes required beyond any amount paid before
delivery of the certificates representing the Shares, Shareholder shall pay such
amount to Company upon demand. If Shareholder fails to pay any amount demanded,
Company shall have the right to withhold such amount from other amounts payable
by Company to the Shareholder, including salary, subject to applicable law.
SHAREHOLDER IS ADVISED THAT TO BE VALID A SECTION 83(B) ELECTION MUST BE FILED
WITH THE INTERNAL REVENUE SERVICE WITHIN 30 DAYS OF THE DATE OF THE AWARD OF
SHARES, A COPY OF THE ELECTION MUST BE PROVIDED TO THE COMPANY, AND A COPY OF
THE ELECTION MUST BE ATTACHED TO THE SHAREHOLDER'S FEDERAL (AND
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POSSIBLY STATE) INCOME TAX RETURN FOR THE YEAR OF THE ELECTION. SHAREHOLDER
ACKNOWLEDGES THAT IF HE OR SHE CHOOSES TO MAKE A SECTION 83(B) ELECTION, IT IS
SHAREHOLDER'S SOLE RESPONSIBILITY, AND NOT COMPANY'S, TO MAKE A VALID AND TIMELY
ELECTION. SHAREHOLDER IS ENCOURAGED TO REVIEW THE FEDERAL INCOME TAX
CONSEQUENCES PORTION OF THE COMPANY'S STOCK INCENTIVE PLAN PROSPECTUS AND TO
CONSULT SHAREHOLDER'S PERSONAL TAX ADVISOR REGARDING THE ADVISABILITY OF MAKING
A SECTION 83(B) ELECTION WITH RESPECT TO THE SHARES.
IRS CIRCULAR 230 NOTICE: ANY TAX ADVICE CONTAINED HEREIN WAS NOT INTENDED
OR WRITTEN TO BE USED, AND CANNOT BE USED, BY SHAREHOLDER OR ANY OTHER PERSON
(I) IN PROMOTING, MARKETING OR RECOMMENDING ANY TRANSACTION, PLAN OR ARRANGEMENT
OR (II) FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL
TAX LAW.
8. Notices. Any required or permitted notice shall be given in writing and
shall be deemed given upon personal delivery or upon deposit in the United
States mail by registered or certified mail, postage prepaid. Any notice to
Shareholder shall be addressed to Shareholder at Shareholder's address shown on
the corporate records of the Company, and any notice to the Company shall be
addressed to the Company at its registered office.
9. No Right to Employment. Nothing in the Company's Stock Incentive Plan or
this Agreement shall confer upon Shareholder any right to be continued in the
employment of the Company or to interfere in any way with the right of the
Company to terminate Shareholder's employment at any time for any reason.
10. Entire Agreement; Amendment. This Agreement constitutes the entire
agreement of the parties with regard to the subject matter hereof and may be
amended only by written agreement between the Company and Shareholder.
11. Successors of Company. This Agreement shall be binding upon and shall
inure to the benefit of any successor or successors of the Company and, subject
to the restrictions on transfer of this Agreement, shall be binding upon and
shall inure to the benefit of Shareholder's heirs, executors, administrators,
successors and assigns.
12. Governing Law, Severability. This Agreement shall be governed by and
construed in accordance with the laws of South Dakota, without regard to the
conflict of laws rules applied in the courts of such state. If any provision or
provisions of this Agreement are found to be unenforceable, the remaining
provisions shall nevertheless be enforceable and shall be construed as if the
unenforceable provisions were deleted.
13. Further Action. The parties agree to execute such further instruments
and to take such further actions as may reasonably be necessary to carry out the
intent of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Restricted Stock
Agreement as of the date written above.
VERASUN ENERGY CORPORATION SHAREHOLDER
By: Name:
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Name: Address:
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Title:
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