Document:

exv10w21

 

Exhibit 10.21

Nonstatutory Stock Option

Granted Under RXi Pharmaceuticals Corporation 2007 Incentive Plan

			
	1.	 	Grant of Option.

     This certificate evidences a nonstatutory stock option (this “Stock Option”) granted by RXi
Pharmaceuticals Corporation, a Delaware corporation (the “Company”), on [___] to
[___] (the “Participant”) pursuant to the Company’s 2007 Incentive Plan (as from time to
time in effect, the “Plan”). Under this Stock Option, the Participant may purchase, in whole or in
part, on the terms herein provided, a total of [___] shares of common stock of the Company (the
“Shares”) at $[___] per Share. The latest date on which this Stock Option, or any part thereof,
may be exercised is [___] (the “Final Exercise Date”). The Stock Option evidenced by this
certificate is intended to be, and is hereby designated, a nonstatutory option, that is, an option
that does not qualify as an incentive stock option as defined in section 422 of the Internal
Revenue Code of 1986, as amended from time to time (the “Code”).

     This Stock Option is exercisable in the following installments prior to the Final Exercise
Date:

 

 

Notwithstanding the foregoing, upon termination of the Participant’s Employment, any portion of
this Stock Option that is not then exercisable will promptly expire and the remainder of this Stock
Option will remain exercisable for three months (unless termination of the Participant’s Employment
resulted from reasons that in the determination of the Administrator cast such discredit on the
Participant as to justify immediate forfeiture of this Stock Option, in which case this entire
Option shall immediately expire and no portion thereof shall remain exercisable); provided, that
any portion of this Stock Option held by the Participant immediately prior to the Participant’s
death, to the extent then exercisable, will remain exercisable for one year following the
Participant’s death; and further provided, that in no event shall any portion of this Stock Option
be exercisable after the Final Exercise Date. 

			
	2.	 	Exercise of Stock Option.

     Each election to exercise this Stock Option shall be in writing, signed by the Participant or
the Participant’s executor, administrator, or legally appointed representative (in the event of the
Participant’s incapacity) or the person or persons to whom this Stock Option is transferred by will
or the applicable laws of descent and distribution (collectively, the “Option Holder”), and
received by the Company at its principal office, accompanied by this certificate and payment in
full as provided in the Plan. Subject to the further terms and conditions provided in the Plan,
the purchase price may be paid as follows: (i) by delivery of cash or check acceptable to the
Administrator; (ii) upon and following an initial public offering of the Company and to the

 

 

extent permitted by applicable law (as determined by the Administrator), through a
broker-assisted exercise program acceptable to the Administrator; or (iii) through any combination
of the foregoing. In the event that this Stock Option is exercised by an Option Holder other than
the Participant, the Company will be under no obligation to deliver Shares hereunder unless and
until it is satisfied as to the authority of the Option Holder to exercise this Stock Option.

			
	3.	 	Restrictions on Transfer of Shares.

     If at the time this Stock Option is exercised the Company or any of its shareholders is a
party to any agreement restricting the transfer of any outstanding shares of the Company’s common
stock, the Administrator may provide that this Stock Option may be exercised only if the Shares so
acquired are made subject to the transfer restrictions set forth in that agreement (or if more than
one such agreement is then in effect, the agreement or agreements specified by the Administrator).

     If requested by the Corporation and the managing underwriter of an offering by the Corporation
of Common Stock pursuant to a registration statement under the Securities Act of 1933, as amended,
each stockholder who acquires shares by exercise of this Option shall agree, by executing and
delivering such form of agreement as the Company and such underwriter shall reasonably request, not
to sell publicly or otherwise transfer or dispose of any shares held by such stockholder or other
securities of the Corporation held by such stockholder for a specified period of time (not to
exceed 180 days) immediately following the effective date of such registration statement; provided,
that such agreement shall apply only to the initial public offering of the Corporation’s
securities.

			
	4.	 	Withholding; Agreement to Provide Security.

     If at the time this Stock Option is exercised the Company determines that under applicable law
and regulations it could be liable for the withholding of any federal or state tax upon exercise or
with respect to a disposition of any Shares acquired upon exercise of this Stock Option, this Stock
Option may not be exercised unless the person exercising this Stock Option remits to the Company
any amounts determined by the Company to be required to be withheld upon exercise (or makes other
arrangements satisfactory to the Company for the payment of such taxes) and gives such security as
the Company deems adequate to meet its potential liability for the withholding of tax upon a
disposition of the Shares and agrees to augment such security from time to time in any amount
reasonably determined by the Company to be necessary to preserve the adequacy of such security.

			
	5.	 	Nontransferability of Stock Option.

     This Stock Option is not transferable by the Participant otherwise than by will or the laws of
descent and distribution, and is exercisable during the Participant’s lifetime only by the
Participant (or in the event of the Participant’s incapacity, the person or persons legally
appointed to act on the Participant’s behalf).

 

 

			
	6.	 	Provisions of the Plan.

     This Stock Option is subject to the provisions of the Plan, which are incorporated herein by
reference. A copy of the Plan as in effect on the date of the grant of this Stock Option has been
furnished to the Participant. By exercising all or any part of this Stock Option, the Participant
agrees to be bound by the terms of the Plan and this certificate. All initially capitalized terms
used herein will have the meaning specified in the Plan, unless another meaning is specified
herein.

     IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly
authorized officer.

	 	 	 	 	 
	 	RXi Pharmaceuticals Corporation

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 

Dated: [_________________]

	 	 	 	 	 
	 	Acknowledged

 	 
	 	  	 	 
	 	 	[Name of Participant] 	 
	 	 	 	 
	 

Dated: [_________________]exv10w1

 

EXHIBIT 10.1

2007 Award

EXTENDED LONG-TERM INCENTIVE AWARD

RESTRICTED STOCK UNITS 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 restricted stock
units provided for herein to the Grantee 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 — “Restricted Stock Units” means hypothetical shares of Common Stock
granted to the Grantee as set forth on the signature page hereof upon the terms and subject to the
conditions set forth in this Agreement.

     Section 1.6 — “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.

     Section 1.7 — “Super-Performance Restricted Stock Units” means the Restricted Stock
Units granted to the Grantee which shall vest, if at all, in accordance with Section 3.1(b).

     Section 1.8 — “Time-Based Restricted Stock Units” means the Restricted Stock Units
granted to the Grantee which shall vest, if at all, in accordance with Section 3.1(a).

     Section 1.9 — Vesting Date” means the December 31st on or next following each of the
Fifth, Sixth and Seventh anniversaries of the Grant Date.

ARTICLE 2

GRANT OF RESTRICTED STOCK UNITS

     Section 2.1 — Grant of Restricted Stock Units. For good and valuable consideration,
the Company hereby grants to the Grantee the number Restricted Stock Units set forth on the
signature page hereof upon the terms and subject to the conditions set forth in this Agreement.
Each Restricted Stock Unit covered by this Agreement represents an unfunded and unsecured promise
of the Company to issue to the Grantee, on or after the date the Restricted Stock Unit becomes
fully vested, the Fair Market Value of one share of Common Stock.

     Section 2.2 — Transfer Restrictions. At any time prior to vesting in accordance with
Article 3, the Restricted Stock Units 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 Restricted Stock Units shall cease to be restricted and the Grantee
shall have a non-forfeitable right to the number of shares of Common Stock that corresponds to the
number of vested Restricted Stock Units.

     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.

2

 

ARTICLE 3

VESTING OF RESTRICTED STOCK UNITS

     Section 3.1 — Restricted Stock Unit Vesting. The Grantee shall have a non-forfeitable
right to a number of shares of Common Stock of a Fair Market Value equal to the value of his or her
Restricted Stock Units upon the vesting of such Restricted Stock Units in accordance with this
Section 3.

     (a) Time Vesting. Unless otherwise provided in this Agreement, the Time-Based
Restricted Stock Units shall become vested as follows:

	 	 	 	 	 
	Date Time-Based Restricted	 	Percentage of Time-Based Restricted
	Stock Units Become Vested	 	Stock Units That Become Vested
	Fifth Anniversary of Grant Date
	 	 	50	%
	Sixth Anniversary of Grant Date
	 	 	25	%
	Seventh Anniversary of Grant Date
	 	 	25	%

     (b) Super-Performance Vesting. Unless otherwise provided in this Agreement, as
of any Vesting Date, the number of Super-Performance Restricted Stock Units that become vested
shall equal the sum of (X) plus (Y) where:

     (X) equals the product of:

     (i) The number of Time-Based Restricted Stock Units that vest on the
anniversary of the Grant Date on or immediately preceding such Vesting Date, as
specified in Section 3.1(a); multiplied by

     (ii) The percentage, expressed as a decimal, of the performance grid achieved
by the Grantee with respect to such Vesting Date, as determined by the Administrator
pursuant to Exhibit A hereto; multiplied by

     (iii) The Multiplier applicable to the Grantee, determined in accordance with
Section 3.1(c) below; and

     (Y) equals, in the case of the Vesting Dates on or next following the sixth and seventh
anniversaries of the Grant Date, the number of additional Restricted Stock Units, if any, that
would have vested on a prior Vesting Date had the Percentage of the Performance Grid achieved with
respect to the current Vesting Date been achieved with respect to such prior Vesting Date.

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     (c) Multiplier Table:

	 	 	 	 	 	 	 	 	 
	 	 	Number of Time-	 	Percentage of the	 	 
	 	 	Based Restricted	 	Performance Grid	 	Multiplier
	Vesting Date	 	Stock Units that	 	Achieved on Such	 	 	 	 
	 	 	Become Vested on	 	Vesting Date	 	 	 	 
	 	 	Such Vesting Date	 	 	 	 	 	 
	December 31st
following fifth anniversary of
Grant Date

	 	Determined under
Section 3.1(a)
	 	0-100% as
determined by the
Administrator
pursuant to Exhibit A
	 	 	0.5	 
	December 31st following
sixth anniversary of Grant Date

	 	Determined under
Section 3.1(a)
	 	0-100% as
determined by the
Administrator
pursuant to Exhibit A
	 	 	2.0	 
	December 31st
following seventh anniversary of
Grant Date

	 	Determined under
Section 3.1(a)
	 	0-100% as
determined by the
Administrator
pursuant to Exhibit A
	 	 	3.0	 

     The Administrator shall determine the percentage of the performance grid achieved with
respect to any Vesting Date and specify such percentage in writing no later than two (2) months
following such Vesting Date. The calculation used to determine the percentage of the performance
grid achieved is set forth in Exhibit A hereto and is based on the percentage of the
attainment of the EBITDA Goal, ROIC Goal and Leverage Goal, as determined by the Administrator.

     (d) For the avoidance of any doubt of the application of the vesting provisions contained in
this Section 3.1, Exhibit B contains an example of a hypothetical calculation of the
vesting provisions.

     Section 3.2 — Acceleration Events. Notwithstanding anything in this Article 3 to the
contrary, the Time-Based Restricted Stock Units shall become fully vested (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; Forfeiture. Except as otherwise
provided in Section 3.2, no unvested Restricted Stock Unit shall become vested following the
Grantee’s Termination of Employment, and any unvested Restricted Stock Units shall be immediately
and automatically forfeited upon the earlier to occur of (a) Termination of Employment, or (b) the
Vesting Date on or next following the seventh anniversary of the Grant Date.

ARTICLE 4

ISSUANCE OF STOCK

     Section 4.1 — Payment upon Vesting of Restricted Stock Units. Subject to the terms of
this Agreement, following the vesting of Restricted Stock Units hereunder the Company shall

4

 

issue to the Grantee (or, in the event of the Grantee’s death, to his or her estate or
beneficiary) the number of shares of Common Stock of a Fair Market Value equal to the value of to
the number of vested Restricted Stock Units (with one Restricted Stock Unit having a value equal to
the Fair Market Value of one share of Common Stock). Such issuance shall be made to the Grantee in
the form of shares of Common Stock (or cash only if required by Section 4.2) as soon as
administratively practicable and, in no event later than two and one-half months following the end
of the calendar year in which the Restricted Stock Units vest pursuant to Section 3 above.

     Section 4.2 — Conditions to Issuance of Stock Certificates. Shares of Common Stock
that may be issued in accordance with Section 4.1 may be either previously authorized but unissued
shares or issued shares that have been reacquired by the Company. In accordance with Treasury
Regulation Section 1.409A-2(b)(7)(ii)), if the Administrator reasonably anticipates that issuing
Common Stock on the Payment Date will violate federal securities laws or other applicable laws, the
Company may delay issuing such Common Stock, provided that the Company issues such Common Stock on
the earliest date at which the Administrator reasonably anticipates that such issuance will not
violate federal securities laws or other applicable laws; provided, however that if such issuance
will not occur within the time required by Section 4.1, the Company will pay such vested amount in
the form of cash rather than shares of Common Stock no later than required by Section 4.1.

     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 corresponding to vested Restricted Stock Units 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. The Grantee shall not be entitled to receive any
dividends paid with respect to the shares of Common Stock with respect to record dates occurring
prior to the Issuance Date, and the Grantee shall not be entitled to vote the shares of Common
Stock with respect to record dates for such voting rights occurring prior to the Issuance Date.

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 consequences to the Grantee relating to the Restricted Stock Units, and the
Grantee agrees to be responsible for, any and all taxes with respect to the Restricted Stock Units.
The Company shall be entitled to require payment in cash or deduction from other compensation
payable to Grantee of any sums required by Federal, state or local law to be withheld with respect
to the Restricted Stock Units. The Administrator may, in its discretion and in satisfaction of the
foregoing requirement, allow the Company to withhold shares of Common Stock issued pursuant to
Article 4 (or allow the return of Shares) having a Fair Market Value equal to the sums required to
be so withheld.

     Section 5.2 — 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

5

 

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 5.3 — 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 5.3, 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 5.3. 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 5.4 — 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 5.5 — Pronouns. The masculine pronoun shall include the feminine and neuter,
and the singular the plural, where the context so indicates.

     Section 5.6 — 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 5.7 — 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 5.8 — 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 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.

6

 

     Section 5.9 — 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]

7

 

     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 Time-Based
Restricted Stock Units granted
hereunder:                     
	                    -     -                    	 	Aggregate number of
Super-Performance Restricted
Stock Units granted hereunder:
                     (this number will
always equal 1.5 times the
number of Time-Based Restricted
Stock Units)
	 	 	The Time-Based Restricted Stock
Units and Super-Performance
Restricted Stock Units under
this Agreement shall
collectively be referred to as
the Restricted Stock Units.

8

 

EXHIBIT A

The percentage of the performance grid achieved as of the Vesting Date for each year is determined
as follows:

(A) The percentage of the EBITDA Goal achieved multiplied by 1/3; plus

(B) The percentage of the ROIC Goal achieved multiplied by 1/3; plus

(C) The percentage of the Leverage Goal achieved multiplied by 1/3;

provided that the level achieved for any goal shall equal 0 if the level of achievement is less
than 25%; provided further that 100% is the maximum level of achievement for any goal; provided
further that the level of achievement between 25% and 100% is to be interpolated by the
Administrator. For example, if the ROIC for a given year is 15%, the level of achievement of the
ROIC Goal is 75% per the table below.

Patriot Extended LTIP

Performance Grid

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Achievement	 	Year 5	 	Year 6	 	Year 7
	 	 	%	 	2012	 	2013	 	2014
	 	 	 	 	 
	EBITDA Goal (1/3 weight)
	 	 	25	%	 	$	798.5	 	 	$	1,028.5	 	 	$	1,281.5	 
	(5,6 and 7 year cumulative)
	 	 	50	%	 	$	871.1	 	 	$	1,122.0	 	 	$	1,398.0	 
	(in millions)1
	 	 	100	%	 	$	943.6	 	 	$	1,215.5	 	 	$	1,514.5	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ROIC Goal (1/3 weight)
	 	 	25	%	 	 	12	%	 	 	12	%	 	 	12	%
	(5,6 and
7 Yr. EBITDA ROIC2)
	 	 	50	%	 	 	14	%	 	 	14	%	 	 	14	%
	 
	 	 	100	%	 	 	16	%	 	 	16	%	 	 	16	%

 

			
	1	 	EBITDA (also known as Adjusted
EBITDA) —  Income from continuing operations before deducting depreciation,
depletion and amortization; asset retirement obligation expense; interest
income and expense, income taxes and minority interests. For each of the
years, EBITDA is determined as follows:

	 	•	 	5-Yr Cumulative EBITDA — EBITDA as reported for fiscal/calendar years
2008 — 2012, on a cumulative basis
	 
	 	•	 	6 -Yr Cumulative EBITDA — EBITDA as reported for fiscal/calendar years
2008 — 2013, on a cumulative basis
	 
	 	•	 	7 -Yr Cumulative EBITDA — EBITDA as reported for fiscal/calendar years
2008 — 2014, on a cumulative basis

			
	2	 	EBITDA ROIC is calculated for
2008-2012, 2008-2013 and 2008-2014, as follows:

	 	•	 	2008-2012 — 5-Yr Cumulative EBITDA divided by 5-years (2008 — 2012)
Total Invested Capital
	 
	 	•	 	2008-2013 — 6-Yr Cumulative EBITDA divided by 6-years (2008 — 2013)
Total Invested Capital.
	 
	 	•	 	2008-2014 — 7-Yr Cumulative EBITDA divided by 7-years (2008 — 2014)
Total Invested Capital.

Total Invested Capital includes: Total Debt, Total Stockholder’s Equity,
and Legacy Liabilities.
Legacy Liabilities include the long-term portions of: asset retirement
obligations, workers’ compensation liabilities (including traumatic and black
lung liabilities), post-retirement benefit obligations, pension obligations and
Combined Benefit Fund obligations.

9

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Achievement	 	Year 5	 	Year 6	 	Year 7
	 	 	%	 	2012	 	2013	 	2014
	 	 	 
	Leverage Goal (1/3 weight)
	 	 	25	%	 	 	< 2.50	 	 	 	< 2.50	 	 	 	< 2.50	 
	(Debt/EBITDA)3
	 	 	50	%	 	 	< 2.00	 	 	 	< 2.00	 	 	 	< 2.00	 
	 
	 	 	100	%	 	 	< 1.50	 	 	 	< 1.50	 	 	 	< 1.50	 

 

			
	3	 	Leverage Goal is calculated for 2012,
2013 and 2014 as follows:

	 	•	 	Year 5 (2012)- Total debt as of fiscal year/calendar year end 2012
divided by EBITDA as reported for the year ended 2012 as adjusted per
the definition for EBITDA (in footnote 1).
	 
	 	•	 	Year 6 (2013)- Total debt as of fiscal year/calendar year end 2013
divided by EBITDA as reported for the year ended 2013 5 as adjusted per
the definition for EBITDA (in footnote 1).
	 
	 	•	 	Year 7 (2014)- Total debt as of fiscal year/calendar year end 2014
divided by EBITDA as reported for the year ended 2014 as adjusted per
the definition for EBITDA (in footnote 1).

10

 

EXHIBIT B

Vesting Calculation Example

     Joe Smith is granted 1000 Time-Based Restricted Stock Units plus 1500 Super-Performance
Restricted Stock Units for a total of 2500 Restricted Stock Units. Joe Smith works for Patriot for
10 years following the date of such grant so that all of the Time-Based Restricted Stock Units vest
as follows in accordance with Section 3.1(a):

	 	 	 	 	 	 	 	 	 
	Date Time-Based	 	Percentage of Time-Based	 	Number of Time-Based Restricted Stock Units that
	Restricted	 	Restricted	 	become vested on such anniversary of the Grant
	Stock Units become	 	Stock Units that become	 	Date
	vested	 	vested	 	 
	Fifth anniversary of Grant Date
	 	 	50	%	 	 	500	 
	Sixth anniversary of Grant Date
	 	 	25	%	 	 	250	 
	Seventh anniversary of Grant Date
	 	 	25	%	 	 	250	 
	Total
	 	 	 	 	 	1000 Time-Based Restricted Stock Units vest

     For the Super-Performance Restricted Stock Units, the Administrator certifies that 50% of
the performance grid is achieved in accordance with Exhibit A as of the Vesting Date
following the Fifth Anniversary of the Grant Date, 50% of the performance grid is achieved in
accordance with Exhibit A as of the Vesting Date following the Sixth Anniversary of the
Grant Date, and 100% of the performance grid is achieved in accordance with Exhibit A as of
the Vesting Date following the Seventh Anniversary of the Grant Date. Joe Smith’s
Super-Performance Restricted Stock Units shall vest as follows in accordance with Sections 3.1(b):

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Vesting Date	 	Number of Time-	 	Percentage	 	Multiplier for number	 	Number of Super-Performance
	 	 	Based Restricted	 	of the	 	of Restricted	 	Restricted Stock Units that
	 	 	Stock Units that	 	Performance	 	Stock Units that	 	become vested pursuant to
	 	 	become vested on	 	Grid	 	become vested	 	calculation in Section 3.1(b)
	 	 	such anniversary	 	Achieved	 	 	 	 	 	 	 	 
	December 31st

following Fifth anniversary of
Grant Date

	 	 	500	 	 	50% (expressed as
0.5 for
calculation)
	 	 	0.5	 	 	 	125	 
	December 31st
following
Sixth anniversary of Grant Date

	 	 	250	 	 	50% (expressed as
0.5 for
calculation)
	 	 	2.0	 	 	 	250	 
	December 31st

following Seventh anniversary of
Grant Date

	 	 	250	 	 	100% (expressed as
1.0 for
calculation)
	 	 	3.0	 	 	750 for Seventh Year +

additional 250 for Sixth Year*

+

additional 125 for Fifth Year*

	Total

	 	 	 	 	 	 	 	 	 	 	 	1500 Super-Performance
Restricted
Stock Units Vest

 

			
	*	 	The additional vesting in the Seventh Year for the two previous years occurs pursuant to
the Section 3.1(b)(Y), which recalculates previous years vesting for Super-Performance Restricted
Stock Units based on a higher percentage of the performance grid achieved in a subsequent year.

11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}]]