Exhibit 10.1
NATURAL RESOURCE PARTNERS
SECOND AMENDED AND RESTATED
LONG-TERM INCENTIVE PLAN
SECTION 1. Purpose of the Plan.
     The Natural Resource Partners Long-Term Incentive Plan (the “Plan”) is
intended to promote the interests of Natural Resource Partners L.P., a Delaware
limited partnership (the “Partnership”), by providing to employees and directors
of GP Natural Resource Partners LLC (the “Company”) and its Affiliates who
perform services for the Partnership incentive compensation cash awards for
superior performance that are based on Units. The Plan is also contemplated to
enhance the ability of the Company and its Affiliates to attract and retain the
services of individuals who are essential for the growth and profitability of
the Partnership and to encourage them to devote their best efforts to the
business of the Partnership, thereby advancing the interests of the Partnership
and its partners.
SECTION 2. Definitions.
     As used in the Plan, the following terms shall have the meanings set forth
below:
     “Affiliate” means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used
herein, the term “control” means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.
     “Award” means a Phantom Unit granted under the Plan, and shall include any
tandem DERs granted with respect to a Phantom Unit.
     “Board” means the Board of Directors of the Company.
     “Change in Control” shall be deemed to have occurred upon the occurrence of
one or more of the following events: (i) any sale, lease, exchange or other
transfer (in one or a series of related transactions) of all or substantially
all of the assets of the Partnership, NRP (GP) LP or the Company to any Person,
other than the Partnership, NRP (GP) LP, the Company or any of their Affiliates,
or (ii) any merger, reorganization, consolidation or other transaction pursuant
to which more than 50% of the combined voting power of the outstanding equity
interests in either NRP (GP) LP or the Company ceases to be owned by the Persons
who own such interests, respectively, as of the effective date of the initial
public offering of Units.
     “Committee” means the Compensation Committee of the Board or such other
committee of the Board appointed by the Board to administer the Plan.
     “DER” means a contingent right, granted in tandem with a specific Phantom
Unit, to receive an amount in cash equal to the cash distributions made by the
Partnership with respect to a Unit during the period such Phantom Unit is
outstanding.

 

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     “Director” means a member of the Board or the Board of Directors or Board
of Managers of an Affiliate who is not an Employee.
     “Employee” means any employee of the Company or an Affiliate, as determined
by the Committee.
     “Fair Market Value” means the average of the last reported sales prices for
the 20 consecutive Trading Days before the date in question. The last reported
sales price for each day shall be the last reported sale price regular way on
the New York Stock Exchange or any other national securities exchange on which
the Units are listed. In the event there is no sale of Units on the New York
Stock Exchange or any other national securities exchange on which the Units are
listed for the 20 consecutive Trading Days preceding such date, the
determination of fair market value shall be made in good faith by the
Committee.  As used herein, the term “Trading Days” with respect to Units means
if the Units are listed or admitted for trading on the New  York Stock Exchange
or any national securities exchange, days on which the New York Stock Exchange
or such national securities exchange is open for business.
     “Participant” means any Employee or Director granted an Award under the
Plan.
     “Partnership Agreement” means the Third Amended and Restated Agreement of
Limited Partnership of Natural Resource Partners L.P., as amended from time to
time.
     “Person” means an individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association,
government agency or political subdivision thereof or other entity.
     “Phantom Unit” means a phantom (notional) Unit granted under the Plan which
upon vesting entitles the Participant to receive an amount of cash equal to the
Fair Market Value of a Unit.
     “Restricted Period” means the period established by the Committee with
respect to an Award during which the Award remains subject to forfeiture (is not
vested) and is not payable to the Participant.
     “Unit” means a Common Unit of the Partnership.
SECTION 3. Administration.
     The Committee shall administer the Plan. A majority of the Committee shall
constitute a quorum, and the acts of the members of the Committee who are
present at any meeting thereof at which a quorum is present, or acts unanimously
approved by the members of the Committee in writing, shall be the acts of the
Committee. Subject to the following and any applicable law, the Committee, in
its sole discretion, may delegate any or all of its powers and duties under the
Plan (provided the Chief Executive Officer is a member of the Board), including
the power to grant Awards under the Plan, to the Chief Executive Officer of the
Company, subject to such limitations on such delegated powers and duties as the
Committee may impose, if any. Upon any such delegation all references in the
Plan to the “Committee”, other than in Section 6, shall be deemed to include the
Chief Executive Officer; provided, however, that such delegation shall not limit
the

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Chief Executive Officer’s right to receive Awards under the Plan.
Notwithstanding the foregoing, the Chief Executive Officer may not grant Awards
to, or take any action with respect to any Award previously granted to, a person
who is an executive officer or a member of the Board. Subject to the terms of
the Plan and applicable law, and in addition to other express powers and
authorizations conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) designate Participants; (ii) determine the
number of Units to be covered by Awards; (iii) determine the terms and
conditions of any Award; (iv) determine whether, to what extent, and under what
circumstances Awards may be settled, exercised, canceled, or forfeited; (v)
interpret and administer the Plan and any instrument or agreement relating to an
Award made under the Plan; (vi) establish, amend, suspend, or waive such rules
and regulations and appoint such agents as it shall deem appropriate for the
proper administration of the Plan; and (vii) make any other determination and
take any other action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with
respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive, and binding
upon all Persons, including the Company, the Partnership, any Affiliate, any
Participant, and any beneficiary of any Award.
SECTION 4. Eligibility.
     Any Employee or Director who performs services for the Partnership shall be
eligible to be designated a Participant and receive an Award under the Plan.
SECTION 5. Awards.
     (a) Phantom Units. The Committee shall have the authority to determine the
Employees and Directors to whom Phantom Units shall be granted, the number of
Phantom Units to be granted to each such Participant, the Restricted Period, the
conditions under which the Phantom Units may become vested or forfeited, which
may include, without limitation, the accelerated vesting upon the achievement of
specified performance goals, and such other terms and conditions as the
Committee may establish with respect to such Awards, including whether DERs are
granted with respect to such Phantom Units.
     (i) DERs. To the extent provided by the Committee, in its discretion, a
grant of Phantom Units may include a tandem DER grant, which may provide that
such DERs shall be paid directly to the Participant, be credited to a
bookkeeping account (with or without interest at the discretion of the
Committee) subject to the same vesting restrictions as the tandem Award, or be
subject to such other provisions or restrictions as determined by the Committee
in its discretion.
     (ii) Forfeiture. Except as otherwise provided in the terms of the Phantom
Units grant, upon termination of a Participant’s employment with the Company and
its Affiliates or membership on the Board, whichever is applicable, for any
reason during the applicable Restricted Period, all unvested Phantom Units and
any tandem DERs shall be forfeited by the Participant unless otherwise provided
in a written employment agreement between the Participant and the Company or its
Affiliates. The Committee may, in its discretion, waive

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in whole or in part such forfeiture with respect to a Participant’s Phantom
Units and tandem DERs.
     (iii) Lapse of Restrictions. Upon or as soon as reasonably practical
following the vesting of each Phantom Unit, the Participant shall be entitled to
receive from the Company an amount of cash equal to the Fair Market Value of a
Unit.
     (b) General.
     (i) Awards May Be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with, or in substitution for any other Award granted under the Plan or
any award granted under any other plan of the Company or any Affiliate. Awards
granted in addition to or in tandem with other Awards or awards granted under
any other plan of the Company or any Affiliate may be granted either at the same
time as or at a different time from the grant of such other Awards or awards.
     (ii) Limits on Transfer of Awards.
     (A) Except as provided in (B) below, no Award and no right under any such
Award may be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by a Participant and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate.
     (B) Participants may transfer Awards by will and the laws of descent and
distribution.
     (iii) Term of Awards. The term of each Award shall be for such period as
may be determined by the Committee.
     (iv) Consideration for Grants. Awards may be granted for such
consideration, including services or such minimal consideration as may be
required by law, as the Committee determines.
     (v) Change in Control. Upon a Change in Control or such period prior
thereto as may be established by the Committee, all Awards shall automatically
vest and become payable in full. In this regard, all Restricted Periods shall
terminate and all performance criteria, if any, shall be deemed to have been
achieved at the maximum level.
     (c) Adjustments. In the event that the Committee determines that any
distribution (whether in the form of cash, Units, other securities, or other
property), recapitalization, split, reverse split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of Units
or other securities of the Partnership, issuance of warrants or other rights to
purchase Units or other securities of the Partnership, or other similar
transaction or event affects the Units such that an adjustment is determined by
the Committee to be appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the

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Plan, then the Committee shall, in such manner as it may deem equitable, adjust
any or all of (i) the number and type of Units (or other securities or property)
with respect to which Awards may be granted, (ii) the number and type of Units
(or other securities or property) subject to outstanding Awards, and (iii) if
deemed appropriate, make provision for a cash payment to the holder of an
outstanding Award; provided, that the number of Units subject to any Award shall
always be a whole number.
SECTION 6. Amendment and Termination.
     Except to the extent prohibited by applicable law:
     (a) Amendments to the Plan. Except as required by the rules of the
principal securities exchange on which the Units are traded and subject to
Section 6(b) below, the Board or the Committee may amend, alter, suspend,
discontinue, or terminate the Plan in any manner, including increasing the
number of Units available for Awards under the Plan, without the consent of any
partner, Participant, other holder or beneficiary of an Award, or other Person.
     (b) Amendments to Awards. Subject to Section 6(a), the Committee may waive
any conditions or rights under, amend any terms of, or alter any Award
theretofore granted, provided no change, other than pursuant to Section 6(c), in
any Award shall materially reduce the benefit to a Participant without the
consent of such Participant.
     (c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee is hereby authorized to make adjustments in
the terms and conditions of, and the criteria included in, Awards in recognition
of unusual or nonrecurring events (including, without limitation, the events
described in Section 5(c) of the Plan) affecting the Partnership or the
financial statements of the Partnership, or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan.
SECTION 7. General Provisions.
     (a) No Rights to Award. No Person shall have any claim to be granted any
Award under the Plan, and there is no obligation for uniformity of treatment of
Participants. The terms and conditions of Awards need not be the same with
respect to each recipient.
     (b) Withholding. The Company or any Affiliate is authorized to withhold
from any Award, from any payment due under any Award or from any compensation or
other amount owing to a Participant the amount of any applicable taxes payable
in respect of the grant of an Award, the lapse of restrictions thereon, or any
payment under an Award or under the Plan and to take such other action as may be
necessary in the opinion of the Company to satisfy its withholding obligations
for the payment of such taxes.
     (c) No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate or to remain on the Board, as applicable. Further, the Company or
an Affiliate may at any time dismiss a Participant

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from employment, free from any liability or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award agreement.
     (d) Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Delaware law without regard to its conflict of
laws principles.
     (e) Severability. If any provision of the Plan or any award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, person or award and the remainder of the Plan and any
such Award shall remain in full force and effect.
     (f) Other Laws. The Committee may refuse to pay any cash under an Award if,
in its sole discretion, it determines that the payment might violate any
applicable law or regulation or the rules of the principal securities exchange
on which the Units are then traded.
     (g) No Trust or Fund Created. Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any participating Affiliate and a
Participant or any other Person. To the extent that any Person acquires a right
to receive payments from the Company or any participating Affiliate pursuant to
an award, such right shall be no greater than the right of any general unsecured
creditor of the Company or any participating Affiliate.
     (h) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
     (i) Facility Payment. Any amounts payable hereunder to any person under
legal disability or who, in the judgment of the Committee, is unable to properly
manage his financial affairs, may be paid to the legal representative of such
person, or may be applied for the benefit of such person in any manner which the
Committee may select, and the Company shall be relieved of any further liability
for payment of such amounts.
     (j) Gender and Number. Words in the masculine gender shall include the
feminine gender, the plural shall include the singular and the singular shall
include the plural.
     (k) Participation by Affiliates. With respect to the Awards made to the
employees of an Affiliate, the Company shall act as an agent of such
participating Affiliate. In this regard, the Company shall make payment with
respect to such Awards directly to the participating Affiliate, which, in turn,
shall be responsible for making the payments with respect to such Awards to its
eligible employees.
SECTION 8. Term of the Plan.
     This Plan amendment and restatement shall be effective on the date of its
approval by the Board and shall continue until the date terminated by the Board.
However, unless otherwise

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expressly provided in the Plan or in an applicable Award Agreement, any Award
granted prior to such termination, and the authority of the Board or the
Committee to amend, alter, adjust, suspend, discontinue, or terminate any such
Award or to waive any conditions or rights under such Award, shall extend beyond
such termination date.

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