Document:

Exhibit 10.12

 

Form of

Rhino Long-Term Incentive Plan

 

Grant of Phantom Units

with DERs

 

Grantee:

 

Grant
Date:                                                                                 , 2010

 

1.                                       Grant
of Phantom Units with DERs.  Rhino GP LLC (the “Company”) hereby grants to
you under the Rhino Long-Term Incentive Plan (the “Plan”)
            
Phantom Units on the terms and conditions set forth herein and in the Plan.
This grant of Phantom Units includes a tandem grant of DERs with respect to
each Phantom Unit.  In the event of any
conflict between the terms of this Agreement and the Plan, which is
incorporated herein by reference as a part of this Agreement, the terms of the
Plan shall control.  Capitalized terms
used in this Agreement but not defined herein shall have the meanings ascribed
to such terms in the Plan, unless the context requires otherwise.

 

2.                                       Vesting.  Subject to  Paragraph 3 below, 1/6th of the
Phantom Units granted hereunder shall vest (rounded up to the nearest whole
Phantom Unit) on each 6th month anniversary of the Grant Date.

 

The
Company shall establish, with respect to each Phantom Unit, a separate
bookkeeping account (a “DER Account”) to which it shall credit (without
interest) an amount equal to any cash distributions made by the Partnership
with respect to a Common Unit during the period such Phantom Unit remains
credited to you.  Upon the vesting of a
Phantom Unit, the tandem DER Account with respect to such vested Phantom Unit
shall also become vested.  Similarly,
upon the forfeiture of a Phantom Unit, the tandem DER Account with respect to
such forfeited Phantom Unit shall also be forfeited.

 

3.                                       Events
Occurring Prior to Full Vesting.

 

(a)                                  Death
or Disability.  If, prior
to a vesting date, your employment with the Company terminates as a result of
your death or a disability that entitled you to benefits under the Company’s
long-term disability plan, all Phantom Units then credited to you and all DER
Accounts automatically will become fully vested upon such termination.

 

(b)                                 Termination
Without Cause; Termination for Good Reason.  If, prior to a vesting date, your employment
with the Company is terminated either by the Company without “Cause” or by you
for a “Good Reason,” as those terms are defined in Paragraph 8 below, all
Phantom Units scheduled to vest during the 12-

 

 

month period following such
termination (and all DER Accounts in tandem with those Phantom Units)
automatically shall be fully vested on such termination and all remaining
Phantom Units (and DER Accounts in tandem with such remaining Phantom Units),
if any, automatically shall be forfeited without payment upon such termination.

 

(c)                                  Other
Terminations.  If, prior
to a vesting date, your employment with the Company terminates for any reason
other than as provided in Paragraphs 3(a) or 3(b) above, all Phantom
Units then credited to you and all DER Accounts automatically shall be
forfeited without payment upon such termination.

 

(d)                                 Change of Control.  Upon a Change of Control, all outstanding
Phantom Units then credited to you and all DER Accounts automatically shall
become fully vested.

 

For
purposes of this Agreement, (i) “employment with the Company and its
Affiliates” means being an Employee, Consultant or a Director of any of them
and a change of status between being an Employee, Consultant or Director of the
Company and/or any Affiliate(s) shall not constitute a “termination of
employment with the Company” and (ii) a “termination of employment” must
also be a “separation from service,” within the meaning of Section 409A of
the Internal Revenue Code.

 

4.                                       Payments.

 

(a)                                  Phantom
Units.  Subject to
Paragraph 5, as soon as reasonably practical and not later than 7 days
following the applicable vesting date, the Company shall pay you, with respect
to each vested Phantom Unit, one Unit, unless the Committee, in its discretion,
elects to pay you an amount of cash equal to the Fair Market Value of a Unit
determined on such vesting date.  If more
than one Phantom Unit vests at the same time, the Company may pay such vested
Phantom Units in any combination of Units and cash as the Company, in its discretion,
elects.

 

(b)                                 DER Accounts.  Subject to Paragraph 5, upon the vesting of a
Phantom Unit, the Company shall pay you an amount of cash equal to the amount
then credited to the tandem DER Account maintained with respect to such Phantom
Unit.

 

5.                                       Withholding
of Taxes.  To the
extent that the vesting or payment of a Phantom Unit or a DER Account results
in the receipt of compensation by you with respect to which the Company or an
Affiliate has a tax withholding obligation pursuant to applicable law, the
Company or Affiliate shall withhold from the amounts of cash and Units,
respectively, otherwise payable to you, that amount of cash and Units, as
applicable, equal to the Company’s or Affiliate’s tax withholding obligations
with respect to such cash and Unit payments. 
No payment of a vested Phantom Unit or DER Account shall be made
pursuant to this Agreement until the applicable tax withholding requirements
with respect to such event have been satisfied in full.

 

6.                                       Limitations
on Transfers.  All rights
under this Agreement shall belong to you alone and may not be transferred,
assigned, pledged, or hypothecated by you in any way 

 

2

 

(whether by operation of law or otherwise), other
than by will or the laws of descent and distribution or a qualified domestic
relations order and shall not be subject to execution, attachment, or similar
process.  Upon any attempt by you to
transfer, assign, pledge, hypothecate, or otherwise dispose of such rights
contrary to the provisions in this Agreement or the Plan, or upon the levy of
any attachment or similar process upon such rights, such rights shall
immediately become null and void.

 

7.                                       Binding
Effect.  This
Agreement shall be binding upon and inure to the benefit of any successor or
successors of the Company and upon any person lawfully claiming under you.

 

8.                                       Entire
Agreement.  Except as provided below, this Agreement
constitutes the entire agreement of the parties with regard to the subject
matter hereof, and contains all the covenants, promises, representations,
warranties and agreements between the parties with respect to the Phantom Units
granted hereby.  Without limiting the
scope of the preceding sentence, all prior understandings and agreements, if
any, among the parties hereto relating to the subject matter hereof are hereby
null and void and of no further force and effect.

 

As
used in Paragraph 3, the terms “Cause” and “Good Reason” shall have the
following meanings:

 

(a)                                  if you have a written
employment agreement with the Company that defines both of those terms, they
shall have their respective meanings set forth in your employment agreement;

 

(b)                                 if you have a written
employment agreement with the Company that does not define both of such terms,
the undefined term shall have the meaning set forth below, as applicable:

 

(i)                                     “Cause” means (A) the
failure to perform substantially your duties (other than a failure due to your “disability”)
within 10 days after written notice of such failure from the Company, (B) your
conviction of, or plea of guilty or no contest to, either a misdemeanor
involving moral turpitude or a felony, (C) your engaging in any illegal
conduct, gross misconduct, or other material breach of the employment agreement
that is materially and demonstratively injurious to the Company or an Affiliate
of the Company, or (D) your engaging in any act of dishonesty or fraud
involving the Company or an Affiliate of the Company; and

 

(ii)                                  “Good Reason”
means, without your express written consent, (A) the assignment to you of
duties inconsistent in any material respect with those of your position, or any
other diminution in any material respect in your position, authority, duties or
responsibilities, (B) a reduction in your base salary, (C) a
reduction in your welfare, qualified retirement plan or paid time off benefits,
other than a reduction as a result of a general change in any such plan, (D) any
purported termination of your employment under the employment agreement by the
Company other than for “Cause” or “disability,” or (E) a sale of
substantially 

 

3

 

all
of the assets of the Company to an entity other than an Affiliate, Wexford
Capital or any investment fund managed thereby. 
You must give written notice to the Committee of the event alleged to
constitute Good Reason within six months of its occurrence and the Company
shall have 30 days upon receipt of the notice to cure the alleged “Good Reason”
event.  If it is timely cured, such event
shall not constitute a Good Reason and your employment shall not
terminate.  If it is not timely cured,
your employment will terminate on the 31st day after the
receipt of your notice; and

 

(c)                                  if you do not have a written
employment agreement with the Company,

 

(i)                                     “Cause” shall have the
meaning as used in the Company’s employee handbook and in its standard
employment practices and policies (as determined by the Committee); and

 

(ii)                                  “Good Reason” shall mean a
material reduction in your annual rate of base salary or in your duties and
authorities,  as determined immediately prior
to the reduction, neither of which is the result of any job performance
deficiency (as determined by the Compensation Committee of the Board in its
sole discretion), or a relocation of your principle place of work by more than
50 miles.

 

9.                                       Modifications.  Any modification of this Agreement shall be
effective only if it is in writing and signed by both you and an authorized
individual on behalf of the Company.

 

10.                                 Governing
Law.  This grant shall be governed by, and construed in accordance with, the
laws of the State of Delaware, without regard to conflicts of laws principles
thereof.

 

 

	
   

  	
  Rhino
  GP LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Dated:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Grantee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [name]

  
	
   

  	
  Dated:

  	
   

  

 

4Exhibit 10.22

 

Form of

Rhino Long-Term Incentive Plan

 

Grant of Unit Awards and Restricted Units

 

Grantee:

 

Grant
Date:

 

1.                                       Grant
of Unit Awards and Restricted Units.  Rhino GP LLC (the “General Partner”) hereby
grants to you under the Rhino Long-Term Incentive Plan (the “Plan”) (i)               
Unit Awards, which are 100% vested on the Grant Date, and (ii)             
Restricted Units, which are subject to the terms and conditions set forth
herein and in the Plan, which is incorporated herein by reference as a part of
this Agreement. In the event of any conflict between the terms of this
Agreement and the Plan, the Plan shall control. 
Capitalized terms used in this Agreement but not defined herein shall
have the meanings ascribed to such terms in the Plan, unless the context
requires otherwise.

 

2.                                       Vesting
of Restricted Units and Distributions.

 

(a)                                  Restricted
Units.

 

Subject
to Paragraph 3 below, the Restricted Units granted hereunder shall vest ratably
on the first day of each of the three calendar quarters next beginning
following the Grant Date, as follows:

 

	
  Vesting
  Date

  	
   

  	
  Vested Percentage

  
	
   

  	
   

  	
   

  
	
  On the 1st day of the 1st calendar quarter beginning after the Grant
  Date

  	
   

  	
  331/3%

  
	
   

  	
   

  	
   

  
	
  On the 1st day of the 2nd calendar quarter beginning after the Grant
  Date

  	
   

  	
  662/3%

  
	
   

  	
   

  	
   

  
	
  On the 1st day of the 3rd calendar quarter beginning after the Grant
  Date

  	
   

  	
  100%

  

 

If
on an applicable vesting date the application of above vesting schedule results
in a fractional Restricted Unit being vested, the number of Restricted Units
vesting on such date shall be rounded up to the next whole number of Restricted
Units.

 

 

(b)                                 Distributions
on Restricted Units.

 

Any
distributions made by Rhino Resource Partners LP (the “Partnership”) with
respect to a Restricted Unit shall be held by the General Partner (without
interest) and shall be paid to you when the Restricted Unit with respect to
which such distribution was made vests or shall be forfeited when such
Restricted Unit is forfeited, as the case may be.

 

3.                                       Events
Occurring Prior to Full Vesting.

 

(a)                                  Death
or Disability.  If your
membership on the Board terminates as a result of your death or a disability
that prevents you from performing your duties as a member of the Board (as
determined by the Committee), the Restricted Units then remaining automatically
will become fully vested upon such termination.

 

(b)                                 Other
Terminations.  If your
membership on the Board terminates for any reason other than as provided in
Paragraph 3(a), the Restricted Units then remaining automatically shall be
forfeited without payment upon such termination.

 

(c)                                  Change of
Control.  Upon a
Change of Control, the Restricted Units then remaining automatically shall
become fully vested.

 

4.                                       Unit
Certificates.  A
certificate evidencing the Restricted Units may be issued in your name,
pursuant to which you shall have all voting rights, if any.  The certificate shall bear the following
legend:

 

The
Units evidenced by this certificate have been issued pursuant to an agreement
made as of [            ], a copy of
which is attached hereto and incorporated herein, between the General Partner
and the registered holder of the Units, and are subject to forfeiture to the
General Partner under certain circumstances described in such agreement.  The sale, assignment, pledge or other
transfer of the Units evidenced by this certificate is prohibited under the
terms and conditions of such agreement, and such Units may not be sold,
assigned, pledged or otherwise transferred except as provided in such
agreement.

 

The
General Partner may cause the certificate to be delivered upon issuance to the
Secretary of the General Partner as a depository for safekeeping until the
forfeiture occurs or the restrictions lapse pursuant to the terms of this
Agreement.  Upon request of the General
Partner, you shall deliver to the General Partner a unit power, endorsed in
blank, relating to the Restricted Units then subject to the restrictions.  Upon the lapse of the restrictions without
forfeiture, the General Partner shall cause a certificate or certificates to be
issued without legend in your name in exchange for the certificate evidencing
the Restricted Units.

 

In
lieu of issuing a certificate in your name, the Restricted Units may be
evidenced, in the discretion of the Committee, in book-entry form.

 

2

 

5.                                       Limitations
Upon Transfer.  All rights
under this Agreement shall belong to you alone and may not be transferred,
assigned, pledged, or hypothecated by you in any way (whether by operation of
law or otherwise), other than by will or the laws of descent and distribution
and shall not be subject to execution, attachment, or similar process.  Upon any attempt by you to transfer, assign,
pledge, hypothecate, or otherwise dispose of such rights contrary to the
provisions in this Agreement or the Plan, or upon the levy of any attachment or
similar process upon such rights, such rights shall immediately become null and
void.

 

6.                                       Restrictions. By accepting
this grant, you agree that any Units that you may acquire upon vesting of this
award will not be sold or otherwise disposed of in any manner that would
constitute a violation of any applicable federal or state securities laws.  You also agree that (i) the certificates
representing the Units acquired under this award may bear such legend or
legends as the Committee deems appropriate in order to assure compliance with
applicable securities laws, (ii) the Partnership may refuse to register
the transfer of the Units acquired under this award on the transfer records of
the Partnership if such proposed transfer would in the opinion of counsel
satisfactory to the General Partner constitute a violation of any applicable
securities law, and (iii) the Partnership may give related instructions to
its transfer agent, if any, to stop registration of the transfer of the Units
to be acquired under this award.

 

7.                                       Withholding
of Taxes.  If the
grant or vesting of a Restricted Unit or the payment to you of distributions
thereon results in the receipt of compensation by you with respect to which the
General Partner has a tax withholding obligation pursuant to applicable law,
the General Partner shall withhold (or net) such cash and number of
unrestricted Units otherwise payable to you as the General Partner requires to
meet its tax withholding obligations under such applicable laws.  No issuance of an unrestricted Unit shall be
made pursuant to this Agreement until the applicable tax withholding
requirements of the General Partner with respect to such event have been
satisfied in full.

 

8.                                       Binding
Effect.  This
Agreement shall be binding upon and inure to the benefit of any successor or
successors of the Partnership and upon any person lawfully claiming under you.

 

9.                                       Modifications.  Except as provided below, any modification of
this Agreement shall be effective only if it is in writing and signed by both
you and an authorized officer of the General Partner.

 

10.                                 Entire
Agreement.  This Agreement constitutes the entire
agreement of the parties with regard to the subject matter hereof, and contains
all the covenants, promises, representations, warranties and agreements between
the parties with respect to the Restricted Units granted hereby.  Without limiting the scope of the preceding
sentence, all prior understandings and agreements, if any, among the parties
hereto relating to the subject matter hereof are hereby null and void and of no
further force and effect.

 

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

 

3

 

	
   

  	
  Rhino
  GP LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Dated:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Grantee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [name]

  
	
   

  	
  Dated:

  	
   

  

 

4

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