exv10w3



 





Exhibit 10.3

2007 Patriot Award




RESTRICTED STOCK AGREEMENT




     THIS AGREEMENT, dated                      ___, 2007 (the “Grant Date”), is made by and between
PATRIOT COAL CORPORATION, a Delaware corporation (the “Company”), and the undersigned
employee or other service provider of the Company or a Subsidiary (as defined below) or an
Affiliate (as defined below) of the Company (the “Grantee”).



     WHEREAS, the Company wishes to afford the Grantee the opportunity to own shares of its $.01
par value common stock (the “Common Stock”);



     WHEREAS, the Company wishes to carry out the Plan (as hereinafter defined), the terms of which
are hereby incorporated by reference and made a part of this Agreement; and



     WHEREAS, the Administrator appointed to administer the Plan has determined that it would be to
the advantage and best interest of the Company and its stockholders to grant the shares of Common
Stock provided for herein to the Grantee, on a restricted basis, as an incentive for increased
efforts during his or her term of office with the Company or its Subsidiaries or Affiliates, and
has advised the Company thereof and instructed the undersigned officer to grant the award;



     NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as
follows:



ARTICLE 1

DEFINITIONS




     Whenever the following terms are used in this Agreement, they shall have the meanings
specified below. Capitalized terms that are not defined in this Agreement shall have the meanings
specified in the Plan.



     Section 1.1 — “Affiliate” means any Person that (i) is directly or indirectly
controlling, controlled by, or under common control with the Company and (ii) would, together with
the Company, be classified as the “service recipient” (as defined in the regulations under Code
Section 409A) with respect to the Grantee. For purposes of this definition, the term “control”
(including, with correlative meanings, the terms “controlling,” “controlled by” and “under common
control with”), as applied to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that Person, whether
through the ownership of voting securities, by contract or otherwise.



     Section 1.2 — “Code” means the Internal Revenue Code of 1986, as amended.



     Section 1.3 — “Person” means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture, governmental authority or
other entity of whatever nature.



 









 





     Section 1.4 — “Plan” means the Patriot Coal Corporation 2007 Long-Term Equity
Incentive Plan, as it may be amended from time to time.



     Section 1.5 — “Subsidiary” means any corporation that (i) is in an unbroken chain of
corporations beginning with the Company if each of the corporations, or group of commonly
controlled corporations, other than the last corporation in the unbroken chain, then owns stock
possessing 50% or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain and (ii) would, together with the Company, be classified as a
“service recipient” (as defined in the regulations under Code Section 409A) with respect to the
Grantee.



ARTICLE 2

GRANT OF RESTRICTED STOCK




     Section 2.1 — Grant of Restricted Stock. For good and valuable consideration, the
Company hereby grants to the Grantee the number of restricted shares of its Common Stock (the
“Restricted Stock”) set forth on the signature page hereof upon the terms and subject to
the conditions set forth in this Agreement.



     Section 2.2 — Transfer Restrictions. At any time prior to vesting in accordance with
Article 3, the shares of Restricted Stock or any interest therein cannot be directly or indirectly
transferred, sold, assigned, pledged, hypothecated or otherwise disposed of. Upon vesting in
accordance with Article 3, the shares of Restricted Stock shall cease to be restricted and shall
become non-forfeitable, and the Grantee shall own such shares free of all restrictions otherwise
imposed by this Agreement.



     Section 2.3 — No Obligation of Employment or Service. Nothing in this Agreement or in
the Plan shall confer upon the Grantee any right to continue in the service of the Company or any
Subsidiary or Affiliate or interfere with or restrict in any way the rights of the Company and its
Subsidiaries or Affiliates, which are hereby expressly reserved, to terminate the service of the
Grantee at any time for any reason whatsoever.



ARTICLE 3

VESTING OF RESTRICTED STOCK




     Section 3.1 — Restricted Stock Vesting. Unless otherwise provided in this Agreement,
the shares of Restricted Stock shall become vested and non-forfeitable on the third anniversary of
the Grant Date.



     Section 3.2 — Acceleration Events. Notwithstanding anything in this Article 3 to the
contrary, the shares of Restricted Stock shall become fully vested and non-forfeitable (but only to
the extent the Award has not otherwise terminated) upon (i) the Grantee’s Termination of Employment
due to death or Disability or (ii) a Change of Control.



     Section 3.3 — Effect of Termination of Employment. Except as otherwise provided in
Section 3.2, no share of Restricted Stock shall become vested and non-forfeitable following the
Grantee’s Termination of Employment, and any unvested and forfeitable share of Restricted Stock
shall be immediately and automatically forfeited upon Termination of Employment.



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ARTICLE 4

RECEIPT OF STOCK




     Section 4.1 — Conditions to Issuance of Stock Certificates. The shares of Common
Stock deliverable hereunder may be either previously authorized but unissued shares or issued
shares that have been reacquired by the Company. Such shares shall be fully paid and
nonassessable. The Company shall not be required to issue or deliver any certificate or
certificates for shares of Common Stock granted hereunder prior to fulfillment of both of the
following conditions:




     (a) The obtaining of approval or other clearance from any state or federal governmental
agency that the Administrator, in its absolute discretion, determines to be necessary or
advisable; and




     (b) The lapse of such reasonable period of time following the grant as the
Administrator may establish from time to time for administrative convenience.



     Section 4.2 — Escrow. Upon issuance, the certificates for the shares of Restricted
Stock shall be held in escrow by the Company until, and to the extent, the shares of Restricted
Stock cease to be restricted and become non-forfeitable and the Grantee owns such shares free of
all restrictions otherwise imposed by this Agreement. Any new, substituted or additional
securities or other property described in and issued under Section 6.1 of the Plan shall
immediately be delivered to the Company to be held in such escrow. Shares of Restricted Stock,
together with any other assets or securities held in escrow hereunder, shall be (i) surrendered to
the Company for cancellation upon forfeiture, if any, of such shares of Restricted Stock by the
Grantee hereunder or (ii) subject to the provisions of Section 5.1, released to the Grantee to the
extent the shares of Restricted Stock are no longer subject to any of the restrictions otherwise
imposed by this Agreement or the Plan.



     Section 4.3 — Rights as Stockholder. The Grantee shall not be, and shall not have any
of the rights or privileges of, a stockholder of the Company in respect of any shares of Common
Stock granted hereunder unless and until the date (the “Issuance Date”) on which
certificates representing such shares have been issued by the Company to or in the name of such
Grantee (including certificates held in escrow by the Company in accordance with Section 4.2). The
Grantee shall be entitled to receive any dividends paid with respect to the shares of Restricted
Stock that become payable on or after the Issuance Date; provided, however, that no dividends shall
be payable to or for the benefit of the Grantee for shares of Restricted Stock with respect to
record dates occurring prior to the Issuance Date, or with respect to record dates occurring on or
after the date, if any, on which the Grantee has forfeited those shares of Restricted Stock. Any
dividends payable in accordance with this Section 4.3 shall be paid as soon as practicable after
the date on which such dividends are declared and in no event later than the later of (i) the end
of the calendar year in which such dividends are paid to shareholders of the same class of stock,
or (ii) the fifteenth day of the third month following the date on which such dividends are paid to
shareholders of the same class of stock.



     The Grantee shall be entitled to vote the shares of Restricted Stock on or after the Issuance
Date to the same extent as would have been applicable to the Grantee if the shares of



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Restricted Stock had then been fully vested and non-forfeitable; provided, however, that the
Grantee shall not be entitled to vote the shares of Restricted Stock with respect to record dates
for such voting rights occurring prior to the Issuance Date, or with respect to record dates
occurring on or after the date, if any, on which the Grantee forfeited those shares of Restricted
Stock.



ARTICLE 5

MISCELLANEOUS




     Section 5.1 — Tax Consequences. Unless otherwise specifically provided in another
agreement between the Company and the Grantee, the Company shall not be liable or responsible in
any way for any tax (including any withholding tax) consequences relating to the shares of
Restricted Stock, and the Grantee agrees to undertake to determine, and be responsible for, any and
all tax (including any withholding tax) consequences to himself or herself with respect to the
shares of Restricted Stock. Notwithstanding any other provision of this Agreement, the shares of
Restricted Stock, together with any other assets or securities held in escrow hereunder, shall not
be released to the Grantee unless the Grantee has paid to the Company, or made arrangements
satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of
any kind required by law to be withheld with respect to the grant of the shares of Restricted Stock
or the lapse of restrictions imposed by this Agreement.



     Section 5.2 — Section 83(b) Election. The Grantee understands that Code Section 83
may tax as compensation income the difference between the amount paid for the shares of Restricted
Stock, if any, and the fair market value of the shares of Restricted Stock as of the date any
restrictions on the shares of Restricted Stock lapse in the absence of an election under Code
Section 83(b). In this context, “restriction” means the forfeitability of the shares of Restricted
Stock pursuant to the terms of this Agreement.



     The Grantee understands that he or she may elect to be taxed at the time he or she receives
the shares of Restricted Stock and while the shares of Restricted Stock are subject to restrictions
rather than waiting to be taxed on the shares of Restricted Stock when and as the restrictions
lapse. The Grantee realizes that he or she may choose this tax treatment by filing an election
under Code Section 83(b) with the Internal Revenue Service within thirty (30) days after the Grant
Date and by filing a copy of such election with his or her tax return for the tax year in which the
Restricted Shares were subjected to the restrictions. THE GRANTEE UNDERSTANDS THAT FAILURE TO MAKE
THIS FILING IN A TIMELY MANNER MAY RESULT IN THE RECOGNITION OF COMPENSATION INCOME BY THE GRANTEE,
AS THE RESTRICTIONS LAPSE, ON ANY DIFFERENCE BETWEEN THE PURCHASE PRICE, IF ANY, AND THE FAIR
MARKET VALUE OF THE SHARES OF RESTRICTED STOCK AT THE TIME SUCH RESTRICTIONS LAPSE. THE GRANTEE
ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO TIMELY FILE THE
ELECTION UNDER CODE SECTION 83(b). THE GRANTEE ACKNOWLEDGES THAT HE OR SHE SHALL CONSULT HIS OR
HER OWN TAX ADVISERS REGARDING THE ADVISABILITY OR NON-ADVISABILITY OF MAKING THE ELECTION UNDER
CODE SECTION 83(b) AND ACKNOWLEDGES THAT HE OR SHE SHALL NOT RELY ON THE COMPANY OR ITS ADVISERS
FOR SUCH ADVICE.



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     Section 5.3 — Administration. The Administrator has the power to interpret the Plan
and this Agreement and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions
taken and all interpretations and determinations made by the Administrator in good faith shall be
final and binding upon the Grantee, the Company and all other interested persons. No member of the
Administrator shall be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan or the shares of Restricted Stock. In its absolute discretion,
the Board of Directors may at any time and from time to time exercise any and all rights and duties
of the Administrator under the Plan and this Agreement.



     Section 5.4 — Notices. Any notice to be given under the terms of this Agreement to
the Company shall be addressed to the Company in care of its Secretary, and any notice to be given
to the Grantee shall be addressed to him or her at the address given beneath his or her signature
hereto. By a notice given pursuant to this Section 5.4, either party may hereafter designate a
different address for notices to be given to him, her or it. Any notice that is required to be
given to the Grantee shall, if the Grantee is then deceased, be given to the Grantee’s personal
representative if such representative has previously informed the Company of his, her or its status
and address by written notice under this Section 5.4. Any notice shall be deemed duly given when
enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage
prepaid) in a post office or branch post office regularly maintained by the United States Postal
Service.



     Section 5.5 — Titles. Titles and headings are provided herein for convenience only
and are not to serve as a basis for interpretation or construction of this Agreement.



     Section 5.6 — Pronouns. The masculine pronoun shall include the feminine and neuter,
and the singular the plural, where the context so indicates.



     Section 5.7 — Applicability of Plan. The shares of Common Stock issued to the Grantee
hereunder shall be subject to all of the terms and provisions of the Plan, to the extent applicable
to such shares. In the event of any conflict between this Agreement and the Plan, the terms of the
Plan shall control.



     Section 5.8 — Amendment. This Agreement may be amended only by a writing executed by
the parties hereto that specifically states that it is amending this Agreement.



     Section 5.9 — Dispute Resolution. Any dispute or controversy arising under or in
connection with this Agreement shall be resolved by arbitration. Arbitrators shall be selected,
and arbitration shall be conducted, in accordance with the rules of the American Arbitration
Association. The Company shall pay any legal fees in connection with such arbitration in the event
that the Grantee prevails on a material element of his or her claim or defense. Notwithstanding
anything in this Section 5.9 to the contrary, payments made under this Section 5.9 that are
provided during one calendar year shall not affect the amount of such payments provided during a
subsequent calendar year, payments under this Section 5.9 may not be exchanged or substituted for
other forms of compensation to the Grantee, and any such reimbursement or payment will be paid
within sixty (60) days after the Grantee prevails, but in no later than the last day of Grantee’s
taxable year following the taxable year in which he



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incurred the expense giving rise to such reimbursement or payment. This Section 5.9 shall
remain in effect throughout the Grantee’s employment and for a period of five (5) years following
the Grantee’s Termination of Employment.



     Section 5.10 — Governing Law. The laws of the State of Delaware shall govern the
interpretation, validity and performance of the terms of this Agreement regardless of the law that
might be applied under principles of conflicts of laws.



[SIGNATURE PAGE FOLLOWS]




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     IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto,
effective on the Grant Date.



	 	 	 	 	 	 	 
	GRANTEE	 	PATRIOT COAL CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

[Grantee]

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Its	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

Address

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Grantee’s Taxpayer Identification Number:

                    -          -                     	 	Aggregate number of shares of
Common Stock granted hereunder:
                    	 	 







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