PARALLEL PETROLEUM CORP
FORM OF STOCK AWARD AGREEMENT
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<TYPE>EX-10.3
<SEQUENCE>3
<FILENAME>d57750exv10w3.htm
<DESCRIPTION>FORM OF STOCK AWARD AGREEMENT
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.3
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PARALLEL PETROLEUM CORPORATION<BR>
2008 LONG-TERM INCENTIVE PLAN</B><BR>
<U><B>OUTSIDE DIRECTOR STOCK AWARD AGREEMENT</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the Parallel Petroleum Corporation 2008 Long-Term Incentive Plan (the &#147;<B><I>Plan</I></B>&#148;) as
adopted by Parallel Petroleum Corporation, a Delaware corporation (the &#147;<B><I>Company</I></B>&#148;), and its
Subsidiaries,
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="center" style="font-size: 10pt">(the &#147;<B><I>Participant</I></B>&#148;)</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">is granted an Other Award in accordance with Section&nbsp;6.6 of the Plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;<U>Terms of Award</U>. The number of shares of Common Stock awarded under this Stock
Award Agreement (this &#147;<B><I>Agreement</I></B>&#148;) is
<B>&#95;&#95;&#95;</B> shares (the &#147;<B><I>Awarded Shares</I></B>&#148;). The Date of Grant of
this Award is <B>&#95;&#95;&#95;</B>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;<U>Subject to Plan</U>. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;<U>Vesting</U>. All of the Awarded Shares shall vest on the Date of Grant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;<U>Legend</U>. A legend in substantially the following form shall be placed on all
certificates representing Awarded Shares:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">On the face of the certificate:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%">&#147;Transfer of this stock is restricted in accordance with
conditions printed on the reverse of this certificate.&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">On the reverse:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%">&#147;The shares of stock of this Corporation represented by this
certificate have not been registered under the Securities
Act of 1933, as amended (the &#147;Act&#148;), 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.&#148;
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 legends.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;<U>Delivery of Certificates</U>. Certificates for Awarded Shares shall be delivered to
the Participant promptly after the Participant&#146;s and the Company&#146;s execution and delivery of this
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;<U>Adjustment of Number of Shares and Related Matters</U>. The number of shares of Common
Stock covered by the Awarded Shares shall be subject to adjustment in accordance with <U>Articles
11 &#150; 13</U> of the Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;<U>Participant&#146;s Representations</U>. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;<U>Investment Representation</U>. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;<U>Participant&#146;s Acknowledgments</U>. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;<U>Law Governing</U>. 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 law that might refer the governance, construction, or interpretation of this Agreement to the
laws of another state).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;<U>No Right to Continue Service</U>. 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).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;<U>Legal Construction.</U> 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.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;<U>Covenants and Agreements as Independent Agreements</U>. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;<U>Entire Agreement</U>. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;<U>Parties Bound</U>. 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 <U>Section&nbsp;5</U> hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;<U>Modification</U>. 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;
<U>provided</U>, <U>however</U>, that the Company may change or modify this Agreement without the
Participant&#146;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&nbsp;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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;<U>Headings</U>. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.&nbsp;<U>Gender and Number</U>. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.&nbsp;<U>Notice</U>. 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:
</DIV>

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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notice to the Company shall be addressed and delivered as follows:</TD>
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<DIV align="left" style="font-size: 10pt; margin-left: 10%; margin-top: 6pt">Parallel Petroleum Corporation<BR>
1004 North Big Spring, Suite&nbsp;400<BR>
Midland, Texas 79701<BR>
Attn: Chief Executive Officer<BR>
Facsimile:&nbsp;&nbsp;432-684-8057
</DIV>


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    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notice to the Participant shall be addressed and delivered as set forth on the
signature page.</TD>
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;<I>Signature Page Follows</I>&#093;
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer, and the Participant, to evidence Participant&#146;s consent and approval of all the
terms hereof, has duly executed this Agreement, as of the date specified in <U>Section&nbsp;1</U>
hereof.
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    <TD colspan="3" valign="top" align="left"><B>COMPANY:</B></TD>
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    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>PARALLEL PETROLEUM CORPORATION</B></TD>
    <TD>&nbsp;</TD>
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    <TD align="left" valign="top">By:</TD>
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Name:
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    <TD colspan="3" valign="top" align="left"><B>PARTICIPANT:</B></TD>
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    <TD align="left" valign="top">Signature</TD>
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    <TD align="left" valign="top">Name:</TD>
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