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EXHIBIT 10.12
ALLIANCE RESOURCE MANAGEMENT GP, LLC
SHORT-TERM INCENTIVE PLAN
1. INTENT.
The purpose of the Short-Term Incentive Plan (the "Plan") is to
motivate the employees of Alliance Resource Management GP, LLC (the "Company")
and its affiliates who perform services for Alliance Resource Partners, L.P., a
Delaware limited partnership, and its subsidiaries (the "Partnership") to
collectively produce outstanding results, encourage superior performance,
increase productivity, and aid in the retention of key employees.
2. PLAN GUIDELINES.
The administration of the Plan and any potential financial renumeration
to come as a result of its implementation is subject to the determination by the
Company's Board of Directors and/or its Compensation Committee (collectively,
the "Compensation Committee") that the performance goals for the applicable
period have been achieved. The Plan is an additional compensation program
designated to encourage Plan Participants (designated by the Company's
Compensation Committee) to exceed specified projected performance levels for
designated periods. The Plan's pay-out pool will be approved by the Company's
Compensation Committee after reviewing the Partnership's performance results for
the designated period.
3. PERFORMANCE TARGETS.
3.1 Designation of Performance Targets. The Compensation Committee
shall determine the "performance measure" and "standard performance target" to
be used for each calendar/fiscal year (a "Plan Year") for determining the pool
of dollars to be distributed as a result of this Plan. Satisfactory results as
determined by the Compensation Committee in its sole discretion must be achieved
in order for a performance pay-out distribution to occur under the Plan.
3.2 Equitable Adjustment to Performance Targets. The performance
criteria for a Plan Year shall be subject to equitable adjustment at the sole
discretion of the Compensation Committee to reflect the occurrence of any
significant events during the Plan Year.
4. PARTICIPANTS.
Designated employees of the Company and its affiliates are eligible to
participate in the Plan to share in the rewards of outstanding performance as it
is linked to individual performance, as
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determined by the Compensation Committee, in consultation with the Company's
President and Chief Executive officer ("CEO").
5. PERFORMANCE PAY.
The size of any performance pay-out distribution pool and a
Participant's designated level of participation in such pool will be determined
under criteria established or approved by the Compensation Committee for that
Plan Year.
6. PROCESS FOR PERFORMANCE PAY-OUT.
6.1 Procedure. After the aggregate performance pay-out distribution
pool for the Plan Year has been determined, the Company's CEO may allocate a
portion of the aggregate performance pay-out pool to each of the Company's
and/or participating affiliates' senior vice presidents, vice presidents and/or
department heads. Such individual's responsibility will be to further allocate,
subject to the CEO's review and approval, the apportioned performance pay-out
distribution pool to Participants assigned within such individual's area of
responsibility based upon the Participant's individual performance during the
Plan Year.
6.2 Communication to Participants. Care will be used in communicating
to any Participant his individual level assignment and potential performance
pay-out distribution amount. Each Participant may or may not receive the
allocated performance pay-out distribution amount depending upon the Company's
performance, department or regional performance, and discretionary allocations
from the Company's Compensation Committee, or its designee(s).
7. DISCRETIONARY PAYMENTS OUTSIDE THE PLAN.
In the event that any Participant's exceptional individual performance
is demonstrated to substantially exceed standard expectations and
responsibilities, the Company's CEO (or his designee(s)) may award and
distribute a discretionary bonus to a Participant. The Company's CEO shall have
the authority to make such discretionary bonus pay-outs; provided, however, if a
discretionary bonus is to be paid to a Participant who also participates in the
Company's Long-Term Incentive Plan such pay-out must be approved in advance by
the Compensation Committee unless and to the extent such advance approval
requirement has been waived by the Compensation Committee.
8. TERMINATION OF EMPLOYMENT.
Termination of employment of a Participant for any reason prior to a
performance pay-out distribution will result in the Participant's forfeiture of
any right, title or interest in a performance pay-out distribution under the
Plan, unless and to the extent waived by the Compensation Committee in its
discretion.
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9. AMENDMENT AND TERMINATION.
The Company's Compensation Committee, at its sole discretion, reserves
the right to amend the Plan and to terminate the Plan at any time.
10. ADMINISTRATION OF PLAN.
10.1 Administration. The Compensation Committee may delegate the
responsibility for the day-to-day administration and operation of the Plan to
the CEO (or his designee(s)) of the Company or any participating affiliate. The
Compensation Committee (or the entity or individual to which administrative
authority has been delegated) shall have the authority to interpret and construe
any and all provisions of the Plan. Any determination made by the Compensation
Committee (or the entity or individual to which administrative authority has
been delegated) shall be final and conclusive.
10.2 Indemnification. Neither the Company, any participating affiliate,
nor the Board of Directors, or any member or any committee thereof, of the
Company or any participating affiliate, nor any employee of the Company or any
participating affiliate shall be liable for any act, omission, interpretation,
construction or determination made in connection with the Plan in good faith;
and the members of the Company's Board of Directors, the Compensation Committee
and/or the employees of the Company or any participating affiliate shall be
entitled to indemnification and reimbursement by the Company to the maximum
extent permitted by law in respect of any claim, loss, damage or expense
(including counsel's fees) arising from their acts, omission and conduct in
their official capacity with respect to the Plan.
11. GENERAL PROVISIONS.
11.1 Non-Guarantee of Employment. Nothing contained in this Plan shall
be construed as a contract of employment between the Company and/or a
participating affiliate and a Participant, and nothing in this Plan shall confer
upon any Participant any right to continued employment with the Company or a
participating affiliate, or to interfere with the right of the Company or a
participating affiliate to discharge a Participant, with or without cause.
11.2 Interests Not Transferable. Except as to withholding of any tax
under the laws of the United States or any state or locality, no benefits under
the Plan shall be subject in any manner to alienation, sale, transfer,
assignment, pledge, attachment or other legal process, or encumbrance of any
kind, and any attempt to do so shall be void.
11.3 Facility Payment. Any amounts payable hereunder to any person
under legal disability or who, in the judgment of the Company's Board of
Directors and/or the Compensation 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 Company's
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Board of Directors and/or the Compensation Committee may select, and each
participating affiliate shall be relieved of any further liability for payment
of such amounts.
11.4 Tax Withholding. The Company and/or any participating affiliate
may deduct from any payments otherwise due under this Plan to a Participant (or
beneficiary) amounts required by law to be withheld for purposes of federal,
state or local taxes.
11.5 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.
11.6 Controlling Law. To the extent not superseded by federal law, the
law of the State of Delaware shall be controlling in all matters relating to the
Plan.
11.7 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.
11.8 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 the law deemed applicable by the Compensation 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 Compensation 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.
11.9 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.
11.10 Headings. Headings are given to the Sections 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.
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