ALLIANCE RESOURCE PARTNERS LP
For the period ended Dec 31, 2023. Filed Feb 23, 2024.
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FY2023 · Filed Feb 23, 2024
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16. Common Unit-Based Compensation Plans
Long-Term Incentive Plan
A summary of non-vested LTIP grants of restricted units is as follows:
| | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|
| · Number of units · Weighted average grant date fair value per unit · Intrinsic value | |||||||||
| · · · · · · · (in thousands) · | |||||||||
| | | | | | | | | | |
| Non-vested grants at January 1, 2021 | | 1,430,489 | | $5.02 | | $6,409 | | ||
| Granted (1) | | 1,818,190 | | | 6.03 | | | | |
| Forfeited | | (118,204) | | 5.48 | | | | | |
| Non-vested grants at December 31, 2021 | | 3,130,475 | | | 5.59 | | | 39,569 | |
| Granted (1) | | 769,907 | | | 14.65 | | | | |
| Forfeited | | (203,249) | | 6.93 | | | | | |
| Non-vested grants at December 31, 2022 | | 3,697,133 | | | 7.40 | | | 75,126 | |
| Granted (1) | 450,125 | | | 21.54 | | | | | |
| Vested (2) | (1,291,330) | | 5.02 | | | | | ||
| Forfeited | (145,584) | | 6.86 | | | | | ||
| Non-vested grants at December 31, 2023 | 2,710,344 | | 10.91 | | | 57,405 | | ||
| (1) | Restricted units granted have certain minimum-value guarantees per unit, regardless of whether or not the awards vest. |
| (2) | During the year ended December 31, 2023, we issued 860,060 unrestricted common units to the LTIP participants. The remaining vested units were settled in cash to satisfy our tax withholding obligations. |
For the years ended December 31, 2023, 2022 and 2021, our LTIP expense for grants of restricted units was $10.4 million, $9.4 million and $5.4 million, respectively. The total obligation associated with LTIP grants of restricted units as of December 31, 2023 and 2022 was $19.5 million and $16.0 million, respectively, and is included in the partners' capitalLimited partners-common unitholders line item in our consolidated balance sheets. As of December 31, 2023, there was $10.0 million in total unrecognized compensation expense related to the non-vested LTIP restricted unit grants that are expected to vest. That expense is expected to be recognized over a weighted-average period of 1.4 years.
On January 24, 2024, the Compensation Committee authorized additional grants of 440,470 restricted units, of which 425,470 units were granted. These restricted units have certain minimum-value guarantees, regardless of whether or not the awards vest.
Supplemental Executive Retirement Plan and Directors' Deferred Compensation Plan
A summary of SERP and Directors' Deferred Compensation Plan activity is as follows:
| | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|
| · Number of units · Weighted average grant date fair value per unit · Intrinsic value | |||||||||
| · · · · · · · (in thousands) · | |||||||||
| | | | | | | | | | |
| Phantom units outstanding as of January 1, 2021 | | 760,630 | | $22.04 | | $3,408 | | ||
| Granted | | 46,638 | | | 9.45 | | | | |
| Settled (1) | | (138,570) | | | 25.86 | | | | |
| Phantom units outstanding as of December 31, 2021 | | 668,698 | | | 20.37 | | | 8,452 | |
| Granted | | 73,842 | | | 19.44 | | | | |
| Phantom units outstanding as of December 31, 2022 | | 742,540 | | | 20.28 | | | 15,088 | |
| Granted | | 118,737 | | | 20.46 | | | | |
| Settled (1) | (49,331) | | | 20.27 | | | | | |
| Phantom units outstanding as of December 31, 2023 | 811,946 | | 20.44 | | | 17,197 | | ||
| (1) | During the years ended December 31, 2023 and 2021, we purchased 27,576 ARLP common units and 102,962 ARLP common units on the open market to settle the accounts of participants under the SERP. Units purchased were net of units settled in cash to satisfy tax-withholding obligations. |
Total SERP and Directors' Deferred Compensation Plan expense was $2.4 million, $1.4 million and $0.4 million for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023 and 2022, the total obligation associated with the SERP and Directors' Deferred Compensation Plan was $16.6 million and $15.1 million, respectively, and is included in the partners' capitalLimited partners-common unitholders line item in our consolidated balance sheets.
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