Exhibit 10.4

ROYAL GOLD, INC.
2004 OMNIBUS LONG-TERM INCENTIVE PLAN

PERFORMANCE SHARE AGREEMENT

     Royal Gold, Inc., a Delaware corporation (the “Company”), hereby grants
performance shares relating to shares of its common stock, $.01 par value (the
“Stock”), to the individual named below as the Holder, subject to the vesting
conditions set forth in the attachment. Additional terms and conditions of the
grant are set forth in this cover sheet, in the attachment and in the Royal
Gold, Inc. 2004 Omnibus Long-Term Incentive Plan (the “Plan”).

Grant Date:                               , 200___

Name of Holder:
                                                                                                              

Holder’s Social Security Number:           -          -          

Number of Performance Shares Covered by Grant:
                                        

     This Performance Share grant is subject to all of the terms and conditions
described in this Agreement and in the Plan, a copy of which is available for
your review upon request to the Corporate Secretary. You should carefully review
the Plan, and the Plan will control in the event any provision of this Agreement
should appear to be inconsistent with the terms of the Plan.

          Company:  

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(Signature)

 
       

  Title:    

     

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Attachment

This is not a stock certificate or a negotiable instrument.

 

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ROYAL GOLD, INC.
2004 OMNIBUS LONG-TERM INCENTIVE PLAN

PERFORMANCE SHARE AGREEMENT

     
Performance Shares Transferability
  This grant is an award of performance shares in the number of shares set forth
on the cover sheet, subject to the vesting conditions described below (the
“Performance Shares”). Your Performance Shares may not be transferred, assigned,
pledged or hypothecated, whether by operation of law or otherwise, nor may the
Performance Shares be made subject to execution, attachment or similar process.
 
   
Vesting
  The Performance Shares shall vest as follows: (i) ___percent (___%) of the
total number of Performance Shares granted hereunder shall vest for each
___percent (___%) increase in free cash flow per share (“FCFPS”) (as defined in
the Company’s most recent annual report and on a trailing twelve month basis,
calculated quarterly) over FCFPS in the trailing twelve month period ended
September 30, 2004 of $0.82 per share (you will be ___ (___%) vested in the
Performance Shares if there has been a ___ percent increase in FCFPS over FCFPS
in the trailing twelve month period ended September 30, 2004); (ii) ___ percent
(___%) of the total number of Performance Shares granted hereunder shall vest
for each ___% increase of the total royalty ounces in reserve (as determined
below) on a per share of Stock basis for any annual reporting period over total
royalty ounces in reserve on a per share of Stock basis of 0.0234 ounces per
share at the Grant Date; and (iii) one hundred percent (100%) of all unvested
Performance Shares granted hereunder shall vest when and if the market
capitalization of the Company (calculated by multiplying (A) the number of
outstanding shares of Stock by (B) the fair market value of a share of Stock on
such date, such fair market value to be equal to the closing price of Stock on
such date as quoted on the Nasdaq Stock Market and listed by the Nasdaq
Corporate Services Network on its webpage (www.nasdaq.net)) is equal to or
greater than $___for five (5) consecutive days that the Nasdaq Stock Market is
open for the transaction of business. The vesting thresholds set forth in
subsections (i) — (iii) above are separate and independent thresholds that will
each result in vesting; all three (3) thresholds need not be met for vesting to
occur. For purposes of the forgoing vesting rules, total royalty ounces in
reserve shall equal the sum of the royalty ounces in reserve for each royalty
owned by the Company, each calculated by multiplying (C) times (D) where
(C) equals the total ounces of gold (attributable to the

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  Royal Gold royalty) in reserve as reported by the operator (if a royalty is
for a metal other than gold, for purposes of this calculation, the total reserve
of such metal shall be adjusted to a proportionate number of ounces of gold,
based on the price of such metal to the price of gold at the time of such
determination) and (D) equals the applicable royalty rate at the time of such
calculation. Notwithstanding the foregoing vesting rules, if you incur an
Involuntary Termination in connection with a Corporate Transaction, you shall be
one hundred percent (100%) vested in the Performance Shares as of the date of
such Involuntary Termination.
 
   

  For this purpose, Involuntary Termination in connection with a Corporate
Transaction means a termination of your Service during the one year period
commencing with a Corporate Transaction by reason of:
 
   

            (a)      your involuntary discharge by the Company for reasons other
than Cause; or
 
   

            (b)      your voluntary resignation from the Company following (i) a
material adverse change in your title or responsibilities with the Company,
(ii) a material reduction in your base salary or (iii) receipt of notice that
your principal workplace will be relocated by more than 50 miles.
 
   

  The Compensation, Nominating and Corporate Governance Committee has the sole
authority to determine whether the vesting thresholds set forth above have been
achieved and shall have the authority to make adjustments to such thresholds for
unusual or non-recurring events. Further, the Committee shall determine if you
have incurred an Involuntary Termination and whether or not such Involuntary
Termination was in connection with a Corporate Transaction. Any such
determinations shall be made in the sole discretion of the Committee.
 
   

  The resulting aggregate number of vested Performance Shares will be rounded
down to the nearest whole number of Performance Shares. You may not vest in more
than the number of Performance Shares covered by this grant.
 
   

  Except as may be provided in an applicable employment agreement between you
and the Company or an Affiliate, no additional Performance Shares will vest
after your Service has terminated for any reason.
 
   

  All Performance Shares that have not vested by the fifth anniversary of the
Grant Date will be forfeited.

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Delivery of Stock Pursuant to Vested Performance Shares
  A certificate for all of the shares of Stock represented by the vested
Performance Shares (which shares of Stock will be rounded down to the nearest
number of whole shares) will be delivered to you on or immediately after you
have vested is in such Performance Shares provided, that, if vesting occurs
during a period in which you are (i) subject to a lock-up agreement restricting
your ability to sell shares of Stock in the open market or (ii) restricted from
selling shares of Stock in the open market because you are not then eligible to
sell under the Company’s insider trading or similar plan as then in effect
(whether because a trading window is not open or you are otherwise restricted
from trading), delivery of such shares of Stock will be delayed until the first
date on which you are no longer prohibited from selling shares of Stock due to a
lock-up agreement or insider trading plan restriction.
 
   
Forfeiture of Unvested Performance Shares
  In the event that your Service terminates for any reason, unless otherwise
provided in an applicable employment agreement between you and the Company or an
Affiliate and except as provided above in the case of an Involuntary Termination
in connection with a Corporate Transaction, you will forfeit all of the
Performance Shares that have not yet vested.
 
   
Withholding Taxes
  You agree, as a condition of this grant, that you will make acceptable
arrangements to pay any withholding or other taxes that may be due as a result
of vesting in Performance Shares or your acquisition of Stock under this grant.
In the event that the Company determines that any federal, state, local or
foreign tax or withholding payment is required relating to this grant, the
Company will have the right to: (i) require that you arrange such payments to
the Company; (ii) withhold such amounts from other payments due to you from the
Company or any Affiliate; or (iii) cause an immediate forfeiture of shares of
Stock subject to the Performance Shares granted pursuant to this Agreement in an
amount equal to the withholding or other taxes due.
 
   
Retention Rights
  This Agreement does not give you the right to be retained by the Company (or
any Affiliates) in any capacity. The Company (and any Affiliate) reserve the
right to terminate your Service at any time and for any reason.
 
   
Shareholder Rights
  You do not have any of the rights of a shareholder with respect to the
Performance Shares unless and until the Stock relating to the Performance Shares
has been delivered to you.
 
   
Adjustments
  In the event of a stock split, a stock dividend or a similar change in the
Company stock, the number of Performance Shares covered by this grant will be
adjusted (and rounded down to the

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  nearest whole number) in accordance with the terms of the Plan.
 
   
Applicable Law
  This Agreement will be interpreted and enforced under 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 this Agreement to the
substantive law of another jurisdiction.
 
   
Consent to Electronic Delivery
  The Company may choose to deliver certain statutory materials relating to the
Plan in electronic form. By accepting this grant you agree that the Company may
deliver the Plan prospectus and the Company’s annual report to you in an
electronic format. If at any time you would prefer to receive paper copies of
these documents, as you are entitled to receive, the Company would be pleased to
provide copies. Please contact the Corporate Secretary to request paper copies
of these documents.
 
   
The Plan
  The text of the Plan is incorporated in this Agreement by reference. This
Agreement and the Plan constitute the entire understanding between you and the
Company regarding this grant of Performance Shares. Any prior agreements,
commitments or negotiations concerning this grant are superseded.
 
   
Stock Ownership Requirements
  You are required to continue to hold ___percent (___%) of the shares of Stock
acquired pursuant to this Performance Share grant (such ___% to be determined
after reducing the shares of Stock covered by this grant by the number shares of
Stock equal in value to the amount required to be withheld to pay taxes in
connection with this grant) until the number of shares of Stock owned by you
equals or exceeds ___.

     This Performance Share grant is subject to all of the terms and conditions
described above and in the Plan.

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