Exhibit 10.1
WESTMORELAND COAL COMPANY
Performance-Based Restricted Stock Unit Agreement
Amended and Restated 2007 Equity Incentive Plan for Employees and Non-Employee
Directors

     
Name of Recipient:
   
 
   
 
   
Performance-Based RSUs at Grant Date:
   
 
   
 
   
Performance Criterion:
  3-year Cumulative Free Cash Flow
 
   
Grant Date:
  April 1, 2011

Westmoreland Coal Company (the “Company”) has selected you (the “Recipient”) to
receive the restricted stock unit award described above, which is subject to the
provisions of the Company’s Amended and Restated 2007 Equity Incentive Plan for
Employees and Non-Employee Directors (the “Plan”) and the terms and conditions
contained in this Restricted Stock Unit Agreement (this “Agreement”). The terms
and conditions of the award of restricted stock units (the “RSUs”) made to the
Recipient are as follows:

1.  
Issuance of Restricted Stock Units. The performance-contingent RSUs are issued
to the Recipient on the Grant Date set forth above, in consideration of
employment services rendered and to be rendered by the Recipient to the Company.
Each RSU represents one share of the Company’s common stock, $2.50 par value per
share (the “Common Stock”) upon vesting in accordance with Section 3. Unless and
until performance is completed and the RSUs vest, Recipient will have no right
to receive the shares of Common Stock.

2.  
Issuance of RSUs.

  a.  
Performance Period. The Performance Period consists of a cumulative three-year
measurement period.

  b.  
Award. Subject to the terms of this Agreement and the Plan, the Recipient is
hereby granted the opportunity to earn the RSUs as shown above in accordance
with the terms of the remainder of this Agreement.

  c.  
Settlement of Awards.

  i.  
Form of Settlement. RSUs will be settled in shares of Common Stock on the date
that the RSUs vest if the performance criterion has been met. The Committee, at
its sole discretion, can elect to pay any or all RSUs in the form cash,
equivalent to the closing stock price of shares of Common Stock on the date that
the RSUs vest.

 

 

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  ii.  
Distribution of RSUs. The shares of Common Stock payable upon vesting of the
RSUs shall be distributed to you as soon as practical following the vesting
date. Notwithstanding any other provisions of this Agreement, the Company shall
not be obligated to deliver the RSUs if the delivery thereof shall constitute a
violation of any provision of any law or of any regulation of any governmental
authority, and delivery of the RSUs may be postponed for such period as may be
required to comply with any requirements under any law or regulation applicable
to the issuance or delivery of such shares. The Recipient agrees that his or her
right to receive the RSUs shall be subject to the vesting schedule set forth in
Section 3 of this Agreement, the termination provisions set forth in Section 4
of this Agreement, and the restrictions on transfer set forth in Section 5 of
this Agreement.

3.  
Vesting.

  a.  
Vesting Schedule. Unless otherwise provided in this Agreement or the Plan, the
RSUs shall 100% vest on the third anniversary of the Grant Date upon the
successful achievement of the performance criterion. Should the Company fail to
achieve the performance criterion, all RSUs shall be forfeited.

  b.  
Vesting upon Death or Disability. RSUs will be earned on a pro-rata basis based
on the date of death or Disability and will be paid out at the end of the
three-year period, with the payout determined based on the final performance
determination. For purposes of this Agreement, “Disability” is as used in the
Company’s long-term disability plan, if any; if not defined in the long-term
disability plan, is a physical or mental infirmity which impairs the Recipient’s
ability to substantially perform his or her duties for a period of 180
consecutive days.

  c.  
Reorganization Event. If the Company undergoes a Reorganization Event (as
defined in the Plan) other than a liquidation or dissolution, the RSUs will
represent a right to receive the cash, securities, or other property into which
the Common Stock of the Company was converted or for which it was exchanged
pursuant to the Reorganization Event. Upon a liquidation or dissolution of the
Company, all restrictions and conditions on all RSUs are automatically deemed
terminated.

4.  
Termination of RSUs Upon Employment Termination. In the event that the Recipient
ceases to be employed by the Company for any reason or no reason, with or
without cause, all of the RSUs that are unvested as of the time of such
employment termination shall be terminated immediately and automatically,
without the payment of any consideration to the Recipient, effective as of such
termination of employment. The Recipient shall have no further rights with
respect to any RSUs that are so terminated, and shall have no further right to
receive a distribution. If the Recipient is employed by a subsidiary of the
Company, any references in this Agreement to employment with the Company shall
instead be deemed to refer to employment with such subsidiary.

 

 

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5.  
Restrictions on Transfer. The Recipient shall not sell, assign, transfer,
pledge, hypothecate, or otherwise dispose of, by operation of law or otherwise
(collectively “transfer”) any RSUs, or any interest therein, until such RSUs
have vested. The Company shall not be required to treat as owner of such RSUs
any transferee to whom such RSUs have been transferred in violation of any of
the provisions of this Agreement.

6.  
Rights as a Shareholder. The Recipient shall have no right to vote the shares of
Common Stock or to act in respect of the Common Stock at any meeting of
shareholders and is not entitled to any dividends paid with respect to the
Common Stock until issuance upon vesting.

7.  
Provisions of the Plan. This Agreement is subject to the provisions of the Plan,
a copy of which will be furnished to you upon your request.

8.  
Tax Matters.

  a.  
Acknowledgments. The Recipient acknowledges that he or she is responsible for
obtaining the advice of the Recipient’s own tax and financial advisors with
respect to the federal and state tax considerations resulting from Recipient’s
receipt of the RSUs. The Recipient understands that the Company will report to
appropriate taxing authorities the payment to the Recipient of compensation
income upon the vesting of the RSUs. The Recipient understands that the
Recipient (and not the Company) shall be responsible for the Recipient’s federal
and state tax liability that may arise in connection with the acquisition,
vesting, and/or disposition of the RSUs.

  b.  
Withholding. The Recipient acknowledges and agrees that the Company has the
right to deduct from payments of any kind otherwise due to the Recipient any
federal, state, local or other taxes of any kind required by law to be withheld
with respect to the RSUs. On each date on which RSUs vest, the Company shall
deliver written notice to the Recipient of the amount of withholding taxes due
with respect to the vesting of the RSUs that vest on such date; provided,
however, that the total tax withholding cannot exceed the Company’s minimum
statutory withholding obligations (based on minimum statutory withholding rates
for federal and state tax purposes, including payroll taxes, that are applicable
to such supplemental taxable income). In satisfaction of its withholding
obligations, the Company shall reduce the cash distribution by the applicable
withholding amount. Should the RSUs be distributed in the form of shares of
Company Stock, then the Company shall reduce the number of RSUs deliverable to
Recipient in respect of such vesting by the number of RSUs that have a fair
market value on such vesting date (calculated using the last reported sale price
of the common stock of the Company on the principal stock exchange on which the
Common Stock is traded on such vesting date) equal to the amount of the
Company’s tax withholding obligation in connection with the vesting of such
RSUs. Any fractional number of RSUs resulting from tax withholding shall be
rounded up to the nearest whole number of RSUs. With respect to tax withholding
amounts, the Company has all of the rights specified in Section 9 of this
Agreement and has no obligations to the Recipient except as expressly stated in
Section 9 of this Agreement.

 

 

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9.  
Miscellaneous.

  a.  
Authority of Compensation and Benefits Committee. In making any decisions or
taking any actions with respect to the matters covered by this Agreement, the
Compensation and Benefits Committee shall have all of the authority and
discretion, and shall be subject to all of the protections, provided for in the
Plan. All decisions and actions by the Compensation and Benefits Committee with
respect to this Agreement shall be made in the Compensation and Benefits
Committee’s discretion and shall be final and binding on the Recipient.

  b.  
No Right to Continued Employment. The Recipient acknowledges and agrees that,
notwithstanding the fact that the vesting of the RSUs is contingent upon his or
her continued employment by the Company, this Agreement does not constitute an
express or implied promise of continued employment or confer upon the Recipient
any rights with respect to continued employment by the Company.

  c.  
Governing Law. This Agreement shall be construed, interpreted, and enforced in
accordance with the internal laws of the State of Delaware without regard to any
applicable conflict of law provisions.

  d.  
Conflicts and Interpretation. In the event of any conflict between this
Agreement and the Plan, this Agreement shall control. In the event of any
ambiguity in this Agreement, or any matters as to which this Agreement is
silent, the Plan shall govern, including, without limitation, the provisions
thereof pursuant to which the Compensation and Benefits Committee has the power,
among others, to (i) interpret the Plan, (ii) amend and repeal administrative
rules, guidelines, and practices relating to the Plan and (iii) make all other
determinations deemed necessary or advisable for the administration of the Plan.

  e.  
Compliance with Internal Revenue Service Tax Code.

  i.  
IRC Section 83. The RSUs granted under this Agreement are governed by Section 83
of the Internal Revenue Code.

  ii.  
IRC Section 409A. Section 409A of the Code imposes a number of requirements on
“non-qualified deferred compensation plans and arrangements.” This Agreement and
the Plan shall be operated in compliance with Section 409A of the Code and each
provision Plan shall be interpreted, to the extent possible, to comply with
Section 409A of the Code. Notwithstanding any provision of the Plan to the
contrary, in the event that the Employer determines that any provision of the
Plan is not in compliance with Section 409A of the Code, the Employer may
(i) adopt such amendments to the Plan and appropriate policies and procedures,
including amendments and policies with retroactive effect, that the Employer
determines necessary or appropriate to preserve the intended tax treatment of
the Plan benefits provided by the Plan and/or (ii) take such other actions as
the Employer determines necessary or appropriate to comply with the requirements
of Section 409A of the Code.

 

 

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  f.  
Binding Agreement. Subject to the limitation on the transferability of this
grant contained herein, this Agreement will be binding upon and inure to the
benefit of the heirs, legatees, legal representatives, successors, and assigns
of the parties hereto.

  g.  
Captions. Captions provided herein are for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.

  h.  
Agreement Severable. In the event that any provision in this Agreement will be
held invalid or unenforceable, such provision will be severable from, and such
invalidity or unenforceability will not be construed to have any effect on, the
remaining provisions of this Agreement.

  i.  
Modifications to the Agreement. This Agreement constitutes the entire
understanding of the parties on the subjects covered. The Employee expressly
warrants that he is not accepting this Agreement in reliance on any promises,
representations, or inducements other than those contained herein. Modifications
to this Agreement can be made only in an express written contract executed by a
duly authorized officer of the Company.

  j.  
Recipient’s Acknowledgments. The Recipient acknowledges that he or she has read
this Agreement, has read the Plan and the Information About Restricted Stock
Units (“Information”), and understands the terms and conditions of this
Agreement, the Plan and the Information.

            WESTMORELAND COAL COMPANY
      By:   /s/ Jennifer S. Grafton         Name:   Jennifer S. Grafton       
Title:   General Counsel and Secretary   

Accepted and Agreed:

     
 
Name: