Exhibit 10.4
Natural Resource Partners
Long-Term Incentive Plan
Phantom Unit with DERs Agreement
     AGREEMENT made as of February [     ], 200[   ] between GP Natural Resource
Partners LLC, a Delaware limited liability company (the “Company”), and
                                                             (“Employee”).
     To carry out the purposes of the Natural Resource Partners Long-Term
Incentive Plan (the “Plan”), by affording Employee the opportunity to receive
cash payments based on the Fair Market Value of the Common Units (“Units”) of
Natural Resource Partners L.P. (the “Partnership”), the Company and Employee
hereby agree as follows:

1.   Grant of Phantom Units with DERs.

  (a)   General. The Company hereby grants to Employee ___ Phantom Units
pursuant to the Plan. This grant of Phantom Units also includes a grant of
tandem DERs with respect to each Phantom Unit. The Company shall establish a DER
bookkeeping account with respect to each Phantom Unit (“DER Account”) that shall
be credited with an amount equal to any cash distributions made by the
Partnership on a Unit during the period such tandem Phantom Unit is outstanding.
This grant is subject to the terms and conditions of the Plan, which is
incorporated herein by reference as a part of this Agreement. A copy of the Plan
is attached hereto. In the event of any conflict between the terms of this
Agreement and the Plan, the Plan shall control. Capitalized terms used in this
Agreement but not defined herein shall have the meanings ascribed to such terms
in the Plan, unless the context requires otherwise.     (b)   Vesting. Except as
otherwise provided in Paragraph 2 hereof, all Phantom Units and DERs granted
hereunder shall vest in accordance with Schedule A hereto.

2.   Events Occurring Prior to Vesting.

  (a)   Death or Disability. If, prior to vesting, Employee ceases to be an
employee of the Company and its Affiliates as a result of death or disability
(within the Company’s policy or determination thereof), all unvested Phantom
Units and DERs granted hereunder then held by Employee will automatically become
fully vested upon such termination.     (b)   Other Terminations. If Employee
terminates from the Company and its Affiliates for any reason other than death
or disability as provided in (a) above, all unvested Phantom Units and DERs
granted hereunder then held by Employee shall be automatically forfeited upon
such termination.

 

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  (c)   Change in Control. Notwithstanding any other provision hereof,
immediately prior to the occurrence of a Change in Control all Phantom Units and
DERs granted hereunder then held by Employee shall become fully vested.

3.   Payment. As soon as administratively practicable and not later than 30 days
after the vesting of a Phantom Unit and its tandem DER, Employee shall receive
from the Company, in cancellation of such Phantom Unit and DER, a cash payment
equal to the sum of (i) the Fair Market Value of a Unit on the payment date and
(ii) the amount of cash then credited to the DER Account with respect to such
Phantom Unit.

4.   Limitations Upon Transfer. All rights under this Agreement shall belong to
Employee and may not be transferred, assigned, pledged, or hypothecated in any
way (whether by operation of law or otherwise), other than by will or the laws
of descent and distribution or pursuant to a “qualified domestic relations
order” (as defined by the Internal Revenue Code of 1986, as amended), and shall
not be subject to execution, attachment, or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate, or otherwise dispose of such rights
contrary to the provisions in this Agreement, or the Plan, or upon the levy of
any attachment or similar process upon such rights, such rights shall
immediately become null and void.

5.   Withholding of Tax. To the extent that the grant, vesting or payment of a
vested Phantom Unit or DER results in the receipt of compensation by Employee
with respect to which the Company or Affiliate has a withholding obligation, the
Company or Affiliate shall withhold such amount from any payment otherwise due
under this Agreement.

6.   Binding Effect. This Agreement shall be binding upon and inure to the
benefit of any successor or successors of the Company or upon any person
lawfully claiming under Employee.

7.   Modification. Except to the extent permitted by the Plan, any modification
of this Agreement will be effective only if it is in writing and signed by each
party whose rights hereunder are affected thereby.

8.   Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to conflicts
of laws principles thereof.

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer, and Employee has executed this Agreement, all
effective as of the day and year first above written.

                  GP NATURAL RESOURCE PARTNERS LLC    
 
           
 
  By:        
 
     
 
Name: Corbin J. Robertson, Jr.    
 
      Title: Chairman and Chief Executive Officer    
 
                EMPLOYEE    
 
                     

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Schedule A

      Units Granted   Vesting Date
 
   

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