(9) Stockholders' Equity

9 Months Ended

Sep. 30, 2013

Notes

(9) Stockholders' Equity

 (9) Stockholders’ Equity

Common Stock

On September 13, 2013, we entered into the Common Stock Purchase Agreement pursuant to which we agreed to sell, contemporaneously with the consummation of the acquisition of HIE, shares of our common stock at a price of $1.39 per share (the “Shares”) in a private transaction (the “Stock Sale”). Certain purchasers, namely, ZCOF Par Petroleum Holdings, L.L.C., an affiliate of Zell Credit Opportunities Master Fund, L.P. (“ZCOF”), and affiliates of Whitebox Advisors, LLC (“Whitebox”), each owned 10% or more of the our common stock directly or through affiliates prior to the execution of the Common Stock Purchase Agreement and are deemed to be our affiliates as a result of such ownership. ZCOF and Whitebox have representatives on our board of directors.

On September 25, 2013, we completed the Stock Sale and issued 143,884,892 Shares. The Stock Sale resulted in aggregate gross proceeds to us of approximately $200.0 million. We did not engage any investment advisors with respect to the Stock Sale, and no finders’ fees or commissions will be paid to any party in connection therewith. The Shares have been issued and sold by us in a private placement transaction in reliance upon an exemption from registration pursuant to Regulation D under the Securities Act of 1933, as amended.

During the nine months ended September 30, 2013, we issued approximately 2,014,000 shares of our common stock for settlement of bankruptcy claims and approximately 3,129,000 shares of restricted and unrestricted common stock to certain key employees and directors.

Registration Rights Agreement

In connection with the closing of the sale of the Shares, we entered into a registration rights agreement (the “Registration Rights Agreement”), with the purchasers of the Shares. Under the Registration Rights Agreement, we agreed to file a registration statement relating to the Shares with the U.S. Securities and Exchange Commission within 60 days after the closing date of the sale which would be declared effective within 180 days of the closing date of the sale. We also agreed to use commercially reasonable efforts to keep the registration statement effective until the earliest to occur of (i) the disposition of all registrable securities, (ii) the availability under Rule 144 of the Securities Act of 1933, as amended, for each holder of registrable securities to immediately freely resell such registrable securities without volume restrictions or (iii) the third anniversary of the effective date of the registration statement.

The Registration Rights Agreement also provides the right for a holder or group of holders of more than $50 million of registrable securities to demand that we conduct an underwritten public offering of the registrable securities. However, the demanding holders are limited to a total of three such underwritten offerings, with no more than one demand request for an underwritten offering made in any 365 day period. Additionally, the Registration Rights Agreement contains customary indemnification rights and obligations for both us and the holders of registrable securities.

If the registration statement (i) is not filed with the SEC on or prior to the applicable deadline (ii) is not declared effective by the SEC prior to the applicable deadline, or (iii) does not remain effective for the applicable effectiveness period described above then from the that date until cured, we must pay, as liquidated damages and not as a penalty, an amount in cash equal to 0.25% of the purchaser’s allocated purchase price per calendar month, not to exceed 0.75% of the allocated purchase price. We will accrue an obligation for the Registration Rights Agreement when it is probable that an obligation has been incurred and the amount can be reasonably determined.

Incentive Plan

On December 20, 2012, our Board of Directors (the “Board”) approved the Par Petroleum Corporation 2012 Long Term Incentive Plan (the “Incentive Plan”). Under the Incentive Plan, the Board, or a committee of the Board, may issue up to 16 million shares of our common stock, or incentive stock options, nonstatutory stock options or restricted stock to our employee or directors, or other individuals providing services to us. In general, the terms of any award issue will be determined by the committee upon grant.

On December 31, 2012, a total of 2,191,834 shares of our restricted common stock were granted to members of the Board of Directors and certain key employees. During the nine months ended September 30, 2013, an additional 3,094,168 shares of our restricted stock were granted to certain key employees. Restricted stock granted to members of the Board vests in full after one year from the date of grant, while most restricted stock granted to employees vests on a pro-rata basis over five years. For the nine months ended September 30, 2013, the following activity occurred under our Incentive Plan:

	Shares		Weighted- Average Grant Date Fair Value
Stock Awards:
Non vested balance, beginning of period		2,191,834	$	1.09
Granted		3,094,168		1.77
Vested		—		—
Forfeited		—		—
Non vested balance, end of period		5,286,002	$	1.49

For the three and nine months ended September 30, 2013, we recognized compensation costs of approximately $210,000 and $491,000, respectively, related to the restricted stock awards. As of September 30, 2013, there are approximately $6.3 million of total unrecognized compensation costs related to restricted stock awards, which are expected to be recognized on a straight-line basis over a weighted average period of 4.6 years. The grant date fair value was estimated using the previous 20 days average trading price of our common stock.