Exhibit 10.2

 

INTREPID POTASH, INC.
2008 EQUITY INCENTIVE PLAN

 

PERFORMANCE UNIT AGREEMENT (PRODUCTION)

 

The Board of Directors of Intrepid Potash, Inc., a Delaware corporation (the
“Company”), has granted an award of performance units (the “Performance Units”)
under the Intrepid Potash, Inc. 2008 Equity Incentive Plan (the “Plan”) to the
Grantee named below.  This Performance Unit Agreement (this “Agreement”)
evidences the terms of that award of Performance Units.

 

I.  NOTICE OF GRANT

 

Grantee:

 

 

 

 

 

Number of Performance Units Granted:

 

 

 

 

 

Grant Date:

 

 

 

 

 

Vesting Schedule

 

The Performance Units will vest                                 , provided that
Grantee remains employed by the Company on that date (each date, a “Vesting
Date”)

 

 

 

Performance Period

 

 

 

 

 

Performance Measures and Targets:

 

See Exhibit A

 

II.  PERFORMANCE UNIT AGREEMENT

 

1.                                      Grant of Performance Units.  Subject to
the terms and conditions of this Agreement and the Plan, the Company granted to
Grantee the Performance Units set forth in the Notice of Grant, effective on the
Grant Date set forth in the Notice of Grant.  The Plan is incorporated herein by
reference.  In the event of a conflict between the terms and conditions of the
Plan and this Agreement, the terms and conditions of the Plan shall govern.  All
capitalized terms in this Agreement shall have the meaning assigned to them in
this Agreement or in the Plan.

 

2.                                      Vesting and Payout of Performance
Units.  Except as otherwise set forth in this Agreement, the Performance Units
will vest in accordance with the Vesting Schedule set forth in the Notice of
Grant.  Each Performance Unit is a bookkeeping entry that initially represents
the equivalent of one share of the Company’s Common Stock.  After the end of the
Performance Period and before the first Vesting Date, the Committee will certify
the number of shares of the Company’s Common Stock, if any, to be issued to
Grantee on each Vesting Date in settlement of the Performance Units in
accordance with the performance measures and targets set forth on Exhibit A and
the other terms and conditions of this Agreement.  On each Vesting Date, the
Company will issue to Grantee in full settlement of the vesting Performance
Units the number of shares, if any, certified by the Committee.

 

3.                                      Transfer Restrictions.  The Performance
Units may not be sold, assigned, hypothecated, pledged, or otherwise transferred
or encumbered in any manner except (a) by will or the laws of descent and
distribution or (b) as otherwise permitted pursuant to the Plan.

 

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4.                                      Separation From Service.

 

(a)                                 General.  Except as provided otherwise in
this Agreement or the Plan, in the event Grantee has a “Separation from Service”
(as determined consistent with Section 409A of the Code), all outstanding
Performance Units will be forfeited and cancelled immediately upon such
Separation from Service, and Grantee will have no further rights under this
Agreement.

 

(b)                                 Separation from Service by Reason of Death
or Disability.  In the event Grantee has a Separation from Service due to death
or Disability, the portion of the Performance Units that would have vested had
Grantee remained in Service through the next Vesting Date will vest immediately
upon such Separation from Service.  Not later than 30 days after such Separation
from Service, the Company will issue to Grantee (or Grantee’s estate or heirs)
one share of the Company’s Common Stock in full settlement of each such vested
Performance Unit.  In other words, the vested Performance Units will be settled
in shares of the Company’s Common Stock at the target level of 100%.  The
remaining unvested Performance Units, if any, will be forfeited immediately upon
such Separation from Service.

 

5.                                      Change of Control.  In the event of the
occurrence of a Change of Control, immediately prior to such occurrence of a
Change of Control, (a) all outstanding Performance Units will vest in full and
(b) the Company will issue to Grantee one share of the Company’s Common Stock in
full settlement of each such vested Performance Unit.

 

6.                                      Leave of Absence.  For purposes of this
Agreement, Service does not terminate when Grantee goes on a bona fide employee
leave of absence that was approved by the Company or an Affiliate in writing, if
the terms of the leave provide for continued Service crediting, or when
continued Service crediting is required by applicable law.  However, Service
will be treated as terminating 90 days after Grantee went on the approved leave,
unless Grantee’s right to return to active work is guaranteed by law or by a
contract.  Service terminates in any event when the approved leave ends unless
Grantee immediately returns to active Service.  The Committee determines, in its
sole discretion, which leaves of absence count for this purpose, and when
Service terminates for all purposes under the Plan.

 

7.                                      Tax Withholding.  Grantee shall make
appropriate arrangements with the Company to provide for payment of all federal,
state, local, or foreign taxes of any kind required by law to be withheld upon
the issuance, vesting, or payment of any Award or amount payable or paid under
this Agreement.  Such arrangements may include, but are not limited to, the
payment of cash directly to the Company, withholding by the Company from other
cash payments of any kind otherwise due to Grantee, or share withholding as
described below.  Subject to the prior approval of the Committee, which may be
withheld by the Committee, in its sole discretion, Grantee may elect to satisfy
the minimum statutory withholding obligations, in whole or in part, (a) by
having the Company withhold shares of Stock otherwise issuable to Grantee or
(b) by delivering to the Company shares of Stock already owned by Grantee.  The
shares delivered or withheld shall have an aggregate Fair Market Value not in
excess of the minimum statutory total tax withholding obligations.  The Fair
Market Value of the shares used to satisfy the withholding obligation shall be
determined by the Company as of the date that the amount of tax to be withheld
is to be determined.  Shares used to satisfy any tax withholding obligation must
be vested and cannot be subject to any repurchase, forfeiture, or other similar
requirements.  Any election to withhold shares shall be irrevocable, made in
writing, signed by Grantee, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.

 

8.                                      Investment Representations.  The
Committee may require Grantee (or Grantee’s estate or heirs) to represent and
warrant in writing that the individual is acquiring the shares of Stock for
investment and without any present intention to sell or distribute such shares
and to make such other representations as are deemed necessary or appropriate by
the Company and its counsel.

 

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9.                                      No Right to Continued Service.  Neither
the grant of Performance Units nor this Agreement gives Grantee the right to
continue Service with the Company or its Affiliates in any capacity.  The
Company and its Affiliates reserve the right to terminate Grantee’s Service at
any time and for any reason not prohibited by law.

 

10.                               Covenants.  Grantee expressly covenants and
agrees (a) not to divulge to others or use for Grantee’s own benefit any
confidential information obtained during Grantee’s Service relating to the
business and operations of the Company or any of its Affiliates; and (b) during
and for twelve (12) months after Grantee’s Service, not to solicit or otherwise
induce, directly or indirectly, any current employee of the Company or any of
its Affiliates to leave employment in order to work for any other person or
entity.

 

11.                               Governing Law.  The validity and construction
of this Agreement and the Plan shall be construed in accordance with and
governed by the laws of the State of Delaware other than any conflicts or choice
of law rule or principle that might otherwise refer construction or
interpretation of the Plan and this Agreement to the substantive laws of any
other jurisdiction.

 

12.                               Binding Effect.  This Agreement shall be
binding upon and inure to the benefit of the Company and Grantee and their
respective heirs, executors, administrators, legal representatives, successors
and assigns.

 

13.                               Tax Treatment; Section 409A.  Grantee may
incur tax liability as a result of issuance, vesting, or payment of any Award or
amount payable or paid under this Agreement or the disposition of any resulting
shares of Stock.  Grantee should consult his or her own tax adviser for tax
advice.

 

Notwithstanding any other provision of this Agreement, any issuance of shares or
payment of amounts payable under this Agreement that occurs in connection with
Grantee’s Separation from Service and that is subject to Section 409A of the
Code and does not satisfy any applicable exception will be delayed for six
months from the date of Grantee’s Separation from Service if Grantee is a
“specified employee” (as defined in Section 409A(a)(2)(B)(i) of the Code)
determined in accordance with the methodology established by the Company as in
effect on the date of such Separation from Service.

 

In addition, Grantee acknowledges that the Committee, in the exercise of its
sole discretion and without Grantee’s consent, may amend or modify this
Agreement in any manner and delay the payment of any amounts payable pursuant to
this Agreement to the minimum extent necessary to satisfy the requirements of
Section 409A of the Code.  The Company will provide Grantee with notice of any
such amendment or modification.  This Section does not, and shall not be
construed so as to, create any obligation on the part of the Company to adopt
any such amendments or to take any other actions or to indemnify Grantee for any
failure to do so.  Each amount to be paid under this Agreement will be construed
as a separate identified payment for purposes of Section 409A of the Code.

 

14.                               Amendment.  The terms and conditions set forth
in this Agreement may only be amended by the written consent of the Company and
Grantee, except to the extent set forth in Section 15 of the Plan regarding
Section 409A of the Code and any other provision set forth in the Plan.

 

15.                               2008 Equity Incentive Plan.  The Performance
Units and other rights granted hereunder shall be subject to such additional
terms and conditions as may be imposed under the terms of the Plan, a copy of
which has been provided to Grantee.

 

[Company Signature Page Follows]

 

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This Performance Unit Agreement is executed on behalf of the Company by its
authorized officer on the date set forth below.

 

 

INTREPID POTASH, INC.

 

 

 

 

 

By:

 

 

 

James N. Whyte

 

 

Executive Vice President of Human

 

 

Resources and Risk Management

 

 

 

Date:

 

[Grantee Signature Page Follows]

 

INTREPID POTASH, INC. PERFORMANCE UNIT AGREEMENT COMPANY SIGNATURE PAGE

 

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ACKNOWLEDGMENT AND AGREEMENT

 

Grantee acknowledges receipt of this Agreement and agrees to all of the terms
and conditions described in this Agreement and in the Plan, a copy of which is
attached.  Grantee acknowledges that Grantee has carefully reviewed the Plan,
and agrees that the Plan will control in the event that any provision in this
Agreement is in conflict with the Plan.  To accept this Agreement and the
Performance Units, Grantee must sign and date this signature page and return it
to the Company no later than                         .

 

 

 

GRANTEE

 

 

 

 

 

 

 

Signature

 

 

 

Print Name:

 

 

 

 

Date:

 

 

Attachments:

 

Exhibit A — Performance Measures and Targets
2008 Equity Incentive Plan
Form S-8 Prospectus

 

INTREPID POTASH, INC. PERFORMANCE UNIT AGREEMENT GRANTEE SIGNATURE PAGE

 

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EXHIBIT A

PERFORMANCE MEASURES AND TARGETS (PRODUCTION)

 

The number of shares of the Company’s Common Stock, if any, that will be issued
to Grantee in settlement of vesting Performance Units in accordance with, and
subject to the terms and conditions of, the Agreement will be determined by
measuring the Company’s combined actual production tons of potash and
langbeinite in 2012 as compared to the Company’s pre-established budget for 2012
using the payout grid below.  The combined budgeted production tons of potash
and langbeinite for 2012 is 1,097,658 tons.  The exact number of shares to be
issued for each vesting Performance Unit will be interpolated based on the
actual results for 2012.

 

Percent of Budget
Attained

 

Number of Shares of the
Company’s Common
Stock to be Issued
(Stated as a Percentage
of the Number of Vesting
Performance Units)

 

115% or Higher

 

150

%

112

%

140

%

109

%

130

%

106

%

120

%

103

%

110

%

100

%

100

%

96

%

90

%

92

%

80

%

88

%

70

%

84

%

60

%

80

%

50

%

Lower than 80

%

0

%

 

For avoidance of doubt:

 

·                  If the Percent of Budget Attained is higher than 115%, then
the number of shares to be issued will equal 150% multiplied by the number of
vesting Performance Units.  In other words, the maximum number of shares that
will be issued to Grantee is 150% of the number of vesting Performance Units.

·                  If the Percent of Budget Attained is lower than 80%, then no
shares will be issued.

 

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