Document:

EXHIBIT 10.1

FORM OF INDEPENDENT DIRECTOR

RESTRICTED STOCK AGREEMENT

FOUNDATION COAL HOLDINGS, INC.

2004 STOCK INCENTIVE PLAN

RESTRICTED STOCK
AGREEMENT

THIS AGREEMENT, is made
effective as of                           
(the “Date of Grant”),
between Foundation Coal Holdings, Inc. (the “Company”) and                               .
(the “Participant”).

R  E
C  I  T  A  L  S:

WHEREAS, the Company has adopted the Foundation Coal
Holdings, Inc. 2004 Stock Incentive Plan, as from time to time amended
(the “Plan”), the terms
of which are hereby incorporated by reference and made a part of this
Agreement; and

WHEREAS, the Committee has determined that it would be
in the best interests of the Company and its stockholders to grant the
restricted Shares provided for herein to Participant pursuant to the Plan and
the terms set forth herein;

NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth, the parties agree
as follows:

1.      Definitions.   Whenever
the following terms are used in this Agreement, they shall have the meanings
set forth below. Capitalized terms not otherwise defined herein shall have the
same meanings as in the Plan.

(a)    Cause:   “Cause” shall
mean (i) Participant’s continued failure substantially to perform
Participant’s duties (other than as a result of total or partial incapacity due
to physical or mental illness) for a period of ten (10) days following
written notice by the Company to Participant of such failure, (ii) dishonesty
in the performance of Participant’s duties, (iii) Participant’s conviction
of, or plea of nolo  contendere
to, a crime constituting (x) a felony under the laws of the United States
or any state thereof or (y) a misdemeanor involving moral turpitude or (iv) Participant’s
willful malfeasance or willful misconduct in connection with Participant’s
duties or any act or omission which is injurious to the financial condition or
business reputation of the Company or any of its Affiliates.

(b)   Disability:   “Disability”
shall mean Participant becomes physically or mentally incapacitated and is
therefore unable for a period of six (6) consecutive months or for an
aggregate of nine (9) months in any twenty-four (24) consecutive month
period to perform Participant’s duties.

2.      Grant of Shares.   The
Company hereby grants to Participant                 
Shares, subject to adjustment as set forth in the Plan. The Participant agrees to be bound by all
terms and conditions of this Agreement and the Plan, as amended from time to
time.

3.      Restrictions on Transfer of Shares.   Except
as otherwise determined by the Committee, the Shares cannot be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of during the
Restriction Period, and any such purported assignment, transfer, pledge or encumbrance
shall be void and unenforceable against the Company; provided
that the designation of a beneficiary shall not constitute an assignment,
transfer, pledge or encumbrance. For purposes of this Agreement, the
Restriction Period shall mean the period from the Date of Grant until the fifth
(5th) anniversary of the 

 1
 

Date of Grant; provided, however, that ,
subject to the Participant’s continued service as a director of the Company,
the Restriction Period shall lapse with respect to twenty percent (20%) of the
Shares on December 31, 2005 and with respect to an additional twenty
percent (20%) on each anniversary thereof, until the Shares are 100% vested. Notwithstanding
the foregoing, upon a Change in Control, the Restriction Period shall lapse
with respect to the Restricted Stock, and the Restricted Stock shall thereby be
free of such restrictions.

4.      Forfeiture of Shares.   If Participant’s
Employment shall terminate prior to the expiration of the Restriction Period
for any reason, any Shares with respect to which the Restriction Period has not
yet lapsed (the “Restricted
Stock”) shall, upon such termination of service, be forfeited by
Participant to the Company, without the payment of any consideration or further
consideration by the Company, and neither Participant nor any successors,
heirs, assigns, or personal representatives of Participant shall thereafter
have any further rights or interest in the Restricted Stock or under this
Agreement, and Participant’s name shall thereupon be deleted from the list of
the Company’s stockholders with respect to the Restricted Stock.

5.      Dividends; Voting.   If Participant is
a shareholder of record on any applicable record date, Participant shall
receive any dividends on the Shares granted hereunder when paid regardless of
whether the restrictions imposed by Paragraph 3 hereof have lapsed. If
Participant is a shareholder of record on any applicable record date,
Participant shall have the right to vote the Shares granted hereunder
regardless of whether the restrictions imposed by Paragraph 3 hereof have
lapsed.

6.      No Right to Continued Employment.   Neither the Plan nor this Agreement shall be
construed as giving Participant the right to be retained as a non-employee
director of the Company or any Affiliate.

7.      Legend on Certificates.   The
certificates representing the Shares shall be subject to such stop transfer
orders and other restrictions as the Committee may determine is required by the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Shares are listed, any
applicable federal or state laws and the Company’s Certificate of Incorporation
and Bylaws, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions. In
addition, the certificates representing the Shares shall be issued bearing a
restrictive legend that sets forth the restrictions on transfer, forfeiture
provisions and other terms and conditions to which the Shares are subject
pursuant to this Agreement.

8.      Securities Laws.   Upon
the acquisition of any Shares hereunder, Participant will make or enter into
such written representations, warranties and agreements as the Committee may
reasonably request in order to comply with applicable securities laws or with
this Agreement. The granting of Shares hereunder shall be subject to all
applicable laws, rules and regulations and to such approvals of any
governmental agencies as may be required.

9.      Notices.   Any
notice under this Agreement shall be addressed to the Company in care of its
General Counsel, addressed to the principal executive office of the Company and
to Participant at the address last appearing in the personnel records of the
Company for Participant or to either party at such other address as either
party hereto may hereafter designate in writing to the other. Any such notice
shall be deemed effective upon receipt thereof by the addressee.

10.   Entire Agreement.   This
Agreement, together with the Stockholders Agreement and the Plan, embodies the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof.

 2
 

11.   Governing Law.   This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware without regard to conflicts of laws.

12.   Signature in Counterparts.   This Agreement may be signed in counterparts, each
of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

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

	
   

  	
  FOUNDATION COAL HOLDINGS, INC.

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
     Its:
  Sr. VP Safety and Human Resources

  
	
   

  	
   

  	
   

  
	
   

  	
  Participant’s Name

  

 

 3EXHIBIT 10.1

 

FORM OF INDEPENDENT DIRECTOR

 

RESTRICTED STOCK AGREEMENT

 

FOUNDATION COAL HOLDINGS, INC.

2004 STOCK INCENTIVE PLAN

 

RESTRICTED STOCK AGREEMENT

 

THIS AGREEMENT, is made effective as of                    
(the “Date of Grant”),
between Foundation Coal Holdings, Inc. (the “Company”) and                               .
(the “Participant”).

 

R E  C  I  T  A
L  S:

 

WHEREAS, the Company has adopted the Foundation Coal
Holdings, Inc. 2004 Stock Incentive Plan, as from time to time amended
(the “Plan”), the terms of
which are hereby incorporated by reference and made a part of this Agreement;
and

 

WHEREAS, the Committee has determined that it would
be in the best interests of the Company and its stockholders to grant the
restricted Shares provided for herein to Participant pursuant to the Plan and
the terms set forth herein;

 

NOW, THEREFORE, in consideration of the mutual
covenants hereinafter set forth, the parties agree as follows:

 

1.             Definitions. 
Whenever the following terms are used in this Agreement, they shall have
the meanings set forth below. 
Capitalized terms not otherwise defined herein shall have the same
meanings as in the Plan.

 

(a)           Cause:  “Cause”
shall mean (i) Participant’s continued failure substantially to perform
Participant’s duties (other than as a result of total or partial incapacity due
to physical or mental illness) for a period of ten (10) days following
written notice by the Company to Participant of such failure, (ii) dishonesty
in the performance of Participant’s duties, (iii) Participant’s conviction
of, or plea of nolo  contendere to, a crime constituting (x) a
felony under the laws of the United States or any state thereof or (y) a
misdemeanor involving moral turpitude or (iv) Participant’s willful
malfeasance or willful misconduct in connection with Participant’s duties or
any act or omission which is injurious to the financial condition or business
reputation of the Company or any of its Affiliates.

 

(b)           Disability:  “Disability”
shall mean Participant becomes physically or mentally incapacitated and is
therefore unable for a period of six (6) consecutive months or for an
aggregate of nine (9) months in any twenty-four (24) consecutive month
period to perform Participant’s duties.

 

2.             Grant
of Shares.  The Company hereby grants to Participant                 
Shares, subject to adjustment as set forth in the Plan.  The Participant agrees to be bound by all
terms and conditions of this Agreement and the Plan, as amended from time to
time.

 

3.             Restrictions
on Transfer of Shares.  Except as otherwise determined by the
Committee, the Shares cannot be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of during the Restriction Period, and any
such purported assignment, transfer, pledge or encumbrance shall be void and
unenforceable against the Company; provided that the designation of a
beneficiary shall not constitute an assignment, transfer, pledge or
encumbrance.  For purposes of this
Agreement, the Restriction Period shall mean the period from the Date of Grant
until the fifth (5th) anniversary of the Date of Grant; provided,
however, that, subject to the Participant’s continued service as a
director of the Company, the Restriction Period shall lapse with respect to
twenty percent (20%) of the Shares on December 31, 2005 and with respect
to an additional twenty percent (20%) on each anniversary thereof, until the
Shares are 100% vested.  Notwithstanding
the foregoing, upon a Change in Control, the Restriction Period shall lapse
with respect to the Restricted Stock, and the Restricted Stock shall thereby be
free of such restrictions.

 

1

 

4.             Forfeiture
of Shares.  If Participant’s Employment shall terminate
prior to the expiration of the Restriction Period for any reason, any Shares
with respect to which the Restriction Period has not yet lapsed (the “Restricted Stock”) shall, upon such termination of service,
be forfeited by Participant to the Company, without the payment of any
consideration or further consideration by the Company, and neither Participant
nor any successors, heirs, assigns, or personal representatives of Participant
shall thereafter have any further rights or interest in the Restricted Stock or
under this Agreement, and Participant’s name shall thereupon be deleted from
the list of the Company’s stockholders with respect to the Restricted Stock.

 

5.             Dividends;
Voting.  If Participant is a shareholder of record on
any applicable record date, Participant shall receive any dividends on the
Shares granted hereunder when paid regardless of whether the restrictions
imposed by Paragraph Error!
Reference source not found.
hereof have lapsed.  If Participant is a
shareholder of record on any applicable record date, Participant shall have the
right to vote the Shares granted hereunder regardless of whether the
restrictions imposed by Paragraph Error!
Reference source not found.
hereof have lapsed.

 

6.             No
Right to Continued Employment.  Neither the Plan nor this Agreement shall be
construed as giving Participant the right to be retained as a non-employee
director of the Company or any Affiliate.

 

7.             Legend
on Certificates.  The certificates representing the Shares
shall be subject to such stop transfer orders and other restrictions as the
Committee may determine is required by the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which such Shares are listed, any applicable federal or state laws and the
Company’s Certificate of Incorporation and Bylaws, and the Committee may cause
a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.  In
addition, the certificates representing the Shares shall be issued bearing a
restrictive legend that sets forth the restrictions on transfer, forfeiture
provisions and other terms and conditions to which the Shares are subject
pursuant to this Agreement.

 

8.             Securities
Laws.  Upon the acquisition of any Shares hereunder,
Participant will make or enter into such written representations, warranties
and agreements as the Committee may reasonably request in order to comply with
applicable securities laws or with this Agreement.  The granting of Shares hereunder shall be
subject to all applicable laws, rules and regulations and to such
approvals of any governmental agencies as may be required.

 

9.             Notices.  Any
notice under this Agreement shall be addressed to the Company in care of its
General Counsel, addressed to the principal executive office of the Company and
to Participant at the address last appearing in the personnel records of the
Company for Participant or to either party at such other address as either
party hereto may hereafter designate in writing to the other.  Any such notice shall be deemed effective
upon receipt thereof by the addressee.

 

10.           Entire
Agreement.  This Agreement, together with the
Stockholders Agreement and the Plan, embodies the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior oral or written agreements and understandings relating to the subject
matter hereof.

 

11.           Governing
Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard
to conflicts of laws.

 

12.           Signature
in Counterparts.  This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

 

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

 

	
   

  	
  FOUNDATION COAL HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
     Its: Sr. VP Safety and Human Resources

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Participant’s
  Name

  
					

 

2

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