Exhibit 10.4
WESTMORELAND COAL COMPANY
Restricted Stock Agreement
Granted under the 2007 Equity Incentive Plan for Employees and Non-Employee
Directors

         
Name of Recipient:
 
 
   
Number of shares of restricted common stock awarded:
 
 
   
Grant Date:
 
 
   
 
 
 
   

     Westmoreland Coal Company (the “Company”) has selected you to receive the
restricted stock award described above, which is subject to the provisions of
the Company’s 2007 Equity Incentive Plan for Employees and Non-Employee
Directors (the “Plan”) and the terms and conditions contained in this Restricted
Stock Agreement. Please confirm your acceptance of this restricted stock award
and of the terms and conditions of this Agreement by signing a copy of this
Agreement where indicated below.

            WESTMORELAND COAL COMPANY
      By:           Name:           Title:        

Accepted and Agreed:
   
                                                                             
Name:

 

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WESTMORELAND COAL COMPANY
Restricted Stock Agreement
Granted under the 2007 Equity Incentive Plan for Employees and Non-Employee
Directors
     The terms and conditions of the award of shares of restricted common stock
of the Company (the “Restricted Shares”) made to the Recipient, as set forth on
the cover page of this Agreement, are as follows:
     1. Issuance of Restricted Shares.
          (a) The Restricted Shares are issued to the Recipient, effective as of
the Grant Date (as set forth on the cover page of this Agreement), in
consideration of [Recipient’s acceptance of employment with the Company and of
services to be rendered][employment services rendered and to be rendered] by the
Recipient to the Company.
          (b) As promptly as practicable following the Grant Date, the Company
shall issue one or more certificates in the name of the Recipient for the
Restricted Shares. Such certificate(s) shall initially be held on behalf of the
Recipient by the Secretary of the Company. Following the vesting of any
Restricted Shares pursuant to Section 2 below, the Secretary shall, if requested
by the Recipient, deliver to the Recipient a certificate representing the vested
Restricted Shares. The Recipient agrees that the Restricted Shares shall be
subject to the forfeiture provisions set forth in Section 3 of this Agreement
and the restrictions on transfer set forth in Section 4 of this Agreement.
     2. Vesting.
          (a) Vesting Schedule. Unless otherwise provided in this Agreement or
the Plan, the Restricted Shares shall vest in accordance with the following
vesting schedule: ___% of the total number of Restricted Shares shall vest on
the [first anniversary] of the Grant Date and ___% of the total number of
Restricted Shares shall vest at the end of each successive ___ period following
the [first anniversary] of the Grant Date, through and including the ___
anniversary of the Grant Date. Any fractional number of Restricted Shares
resulting from the application of the foregoing percentages shall be rounded
down to the nearest whole number of Restricted Shares.
          (b) Acceleration of Vesting. Notwithstanding the foregoing vesting
schedule, all unvested Restricted Shares shall vest effective immediately prior
to (i) a Change in Control Event (as defined in the Plan) or (ii) the death,
Disability (as defined below) or Qualifying Retirement (as defined below) of the
Recipient.
          (c) Definitions. For purposes of this Agreement:
               (i) “Disability” means: (A) if the Recipient’s employment with
the Company is subject to the terms of an employment agreement between the
Recipient and the Company, which employment agreement includes a definition of
“Disability”, the term

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“Disability” as used in this Agreement shall have the meaning set forth in such
employment agreement during the period that such employment agreement remains in
effect; (B) in the absence of such an agreement, the term “Disability” as used
in the Company’s long-term disability plan, if any; or (C) if neither clause
(A) nor clause (B) is applicable, 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.
               (ii) A “Qualifying Retirement” means retirement by the Recipient
after satisfaction of the conditions in either clause (A) or clause (B): (A) the
Recipient has both (1) attained the age of 55 and (2) completed at least ten
years of employment with the Company; or (B) the sum of the Recipient’s age plus
the number of years he or she has been employed by the Company equals or exceeds
75 years.
     3. Forfeiture of Unvested Restricted Shares 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 (except as provided in
Section 2(b) above), all of the Restricted Shares that are unvested as of the
time of such employment termination shall be forfeited immediately and
automatically to the Company, without the payment of any consideration to the
Recipient, effective as of such termination of employment. The Recipient hereby
authorizes the Company to take any actions necessary or appropriate to cancel
any certificate(s) representing forfeited Restricted Shares and transfer
ownership of such forfeited Restricted Shares to the Company; and if the Company
or its transfer agent requires an executed stock power or similar confirmatory
instrument in connection with such cancellation and transfer, the Recipient
shall promptly execute and deliver the same to the Company. The Recipient shall
have no further rights with respect to any Restricted Shares that are so
forfeited. 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.
     4. 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 Restricted Shares, or any interest therein, until such Restricted Shares
have vested, except that the Recipient may transfer such Restricted Shares: to
or for the benefit of any spouse, parents, children, step-children,
grandchildren, legal dependents and any other relatives approved by the
Compensation and Benefits Committee (collectively, “Approved Relatives”) or to a
trust established solely for the benefit of the Recipient and/or Approved
Relatives, provided that such Restricted Shares shall remain subject to this
Agreement (including without limitation the forfeiture provisions set forth in
Section 3 and the restrictions on transfer set forth in this Section 4) and such
permitted transferee shall, as a condition to such transfer, deliver to the
Company a written instrument confirming that such transferee shall be bound by
all of the terms and conditions of this Agreement. The Company shall not be
required (i) to transfer on its books any of the Restricted Shares which have
been transferred in violation of any of the provisions of this Agreement or
(ii) to treat as owner of such Restricted Shares or to pay dividends to any
transferee to whom such Restricted Shares have been transferred in violation of
any of the provisions of this Agreement.

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     5. Restrictive Legends.
     All certificates representing Restricted Shares shall have affixed thereto
a legend in substantially the following form, in addition to any other legends
that may be required under applicable law:
“These shares of stock are subject to forfeiture provisions and restrictions on
transfer set forth in a certain Restricted Stock Agreement between the
corporation and the registered owner of these shares (or his or her predecessor
in interest), and such Agreement is available for inspection without charge at
the office of the Secretary of the corporation.”
     6. Rights as a Shareholder. Except as otherwise provided in this Agreement,
for so long as the Recipient is the registered owner of the Restricted Shares,
the Recipient shall (i) have the right to vote the Restricted Shares and act in
respect of the Restricted Shares at any meeting of shareholders and (ii) be
entitled to all ordinary cash dividends paid with respect to the Restricted
Shares. If any dividends or distributions are paid in shares, or consist of a
dividend or distribution to holders of Common Stock other than an ordinary cash
dividend, the shares, cash or other property will be subject to the same
restrictions on transferability and forfeitability as the shares of Restricted
Stock with respect to which they were paid.
     7. Provisions of the Plan.
     This Agreement is subject to the provisions of the Plan, a copy of which is
furnished to the Recipient with this Agreement.
     8. Tax Matters.
          (a) Acknowledgments; Section 83(b) Election. The Recipient
acknowledges that he or she is responsible obtaining the advice of the
Recipient’s own tax advisors with respect to the acquisition of the Restricted
Shares and the Recipient is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents with respect
to the tax consequences relating to the Restricted Shares. The Recipient
understands that the Recipient (and not the Company) shall be responsible for
the Recipient’s tax liability that may arise in connection with the acquisition,
vesting and/or disposition of the Restricted Shares. The Recipient acknowledges
that he or she has been informed of the availability of making an election under
Section 83(b) of the Internal Revenue Code, as amended, with respect to the
issuance of the Restricted Shares and that the Recipient has decided not to file
a Section 83(b) election.
          (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 vesting of the Restricted Shares. On each
date on which Restricted Shares vest, the Company shall deliver written notice
to the Recipient of the amount of withholding taxes due with respect to the
vesting of the Restricted Shares that vest on such date; provided, however, that
the total tax withholding cannot exceed the Company’s minimum statutory
withholding obligations (based on

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minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to such supplemental taxable
income). The Recipient shall satisfy such tax withholding obligations by making
a cash payment to the Company on the date of vesting of the Restricted Shares,
in the amount of the Company’s withholding obligation in connection with the
vesting of such Restricted Shares. The Recipient may, if the Compensation and
Benefits Committee so approves in writing in advance of the applicable vesting
date, satisfy such tax withholding obligations by transferring to the Company,
on each date on which Restricted Shares vest under this Agreement, such number
of Restricted Shares that vest on such date as have a fair market value
(calculated using the last reported sale price of the common stock of the
Company on the American Stock Exchange on the trading date immediately prior to
such vesting date) equal to the amount of the Company’s tax withholding
obligation in connection with the vesting of such Restricted Shares. To effect
such delivery of Restricted Shares, the Recipient hereby authorizes the Company
to take any actions necessary or appropriate to cancel any certificate(s)
representing such Restricted Shares and transfer ownership of such Restricted
Shares to the Company; and if the Company or its transfer agent requires an
executed stock power or similar confirmatory instrument in connection with such
cancellation and transfer, the Recipient shall promptly execute and deliver the
same to the Company.
     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 Restricted Shares
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 conflicts of laws provisions.
          (d) Recipient’s Acknowledgments. The Recipient acknowledges that he or
she has read this Agreement, has received and read the Plan, and understands the
terms and conditions of this Agreement and the Plan.

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