CLOUD PEAK ENERGY INC. (Form: 8-K, Received: 03/16/2012 16:17:34)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 15, 2012

Cloud Peak Energy Inc.

Cloud Peak Energy Resources LLC

(Exact name of registrant as specified in its charter)

Delaware Delaware		001-34547 333-168639		26-3088162 26-4073917
(State or other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

505 S. Gillette Ave., Gillette, Wyoming		82716
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (307) 687-6000

Not Applicable

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02(e)

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 15, 2012, the Compensation Committee of the Board of Directors of Cloud Peak Energy Inc. (“Cloud Peak Energy”) approved various forms of equity award agreements (the “2012 Award Agreements”) pursuant to Cloud Peak Energy’s 2009 Long Term Incentive Plan (“LTIP”) and in connection with the 2012 annual LTIP grants to employees. The 2012 Award Agreements are substantially similar to the previously disclosed 2011 Award Agreements for Cloud Peak Energy’s 2011 LTIP awards. The primary modifications to the 2012 Award Agreements were: (1) provide additional detail regarding the payment of dividends, if any, that may accrue for restricted stock awards; (2) specify for all three forms of equity that early retirement includes retirement at the age of 55 with 10 years of service with Cloud Peak Energy; and (3) adjust the performance goals for performance share units to reflect recent mergers of certain of the peer companies, modify the limitation on any vesting in the case of a negative Cloud Peak Energy Total Shareholder Return, and increase the number of days used to determine the beginning and ending share prices for the Total Shareholder Return calculation.

The 2012 Award Agreements are filed as Exhibits 10.1, 10.2 and10.3 to this Form 8-K and are incorporated by reference in this Item 5.02(e). The foregoing summary is qualified in its entirety by the complete terms and conditions of the LTIP and the 2011 and 2012 Award Agreements.

Item 9.01

Financial Statements and Exhibits

(d) Exhibits. The following exhibits are being filed herewith.

10.1		Form of 2012 Performance Share Unit Award Agreement under the 2009 Cloud Peak Energy Inc. Long Term Incentive Plan

10.2		Form of 2012 Nonqualified Stock Option Agreement under the 2009 Cloud Peak Energy Inc. Long Term Incentive Plan

10.3		Form of 2012 Restricted Stock Agreement under the 2009 Cloud Peak Energy Inc. Long Term Incentive Plan

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CLOUD PEAK ENERGY INC.

Date: March 16, 2012	By:	/s/ Amy J. Stefonick
	Name:	Amy J. Stefonick
	Title:	Corporate Secretary


	CLOUD PEAK ENERGY RESOURCES LLC

Date: March 16, 2012	By:	/s/ Amy J. Stefonick
	Name:	Amy J. Stefonick
	Title:	Corporate Secretary

EXHIBIT INDEX

Exhibit No.		Description

10.1		Form of 2012 Performance Share Unit Award Agreement under the 2009 Cloud Peak Energy Inc. Long Term Incentive Plan

10.2		Form of 2012 Nonqualified Stock Option Agreement under the 2009 Cloud Peak Energy Inc. Long Term Incentive Plan

10.3		Form of 2102 Restricted Stock Agreement under the 2009 Cloud Peak Energy Inc. Long Term Incentive Plan

Exhibit 10.1

FORM OF
CLOUD PEAK ENERGY INC.
2009 LONG TERM INCENTIVE PLAN
PERFORMANCE SHARE UNIT AWARD AGREEMENT

THIS AGREEMENT, made as of the day of , 2012 (the “Grant Date”), between Cloud Peak Energy Inc., a Delaware corporation (the “Company”), and (the “Grantee”).

WHEREAS, the Company has adopted the Cloud Peak Energy Inc. 2009 Long Term Incentive Plan (the “Plan”) in order to provide an additional incentive to certain employees and directors of the Company and its Subsidiaries; and

WHEREAS, the Committee responsible for administration of the Plan has determined to grant Performance Share Units to the Grantee as provided herein.

NOW, THEREFORE, the parties hereto agree as follows:

1. Grant of Performance Share Units .

The Company hereby grants to the Grantee an award of Performance Share Units (the “Award”). Upon fulfillment of the requirements set forth below, the Grantee shall have the right to receive one share of common stock of the Company (“Share”) for each vested Performance Share Unit. This grant is in all respects limited and conditioned as hereinafter provided, and is subject in all respects to the terms and conditions of the Plan now in effect and as it may be amended from time to time (but only to the extent that such amendments apply to outstanding grants of Performance Share Units). Except as otherwise expressly set forth herein, such terms and conditions are incorporated herein by reference, made a part hereof, and shall control in the event of any conflict with any other terms of this Agreement, and the capitalized terms used in this Agreement shall have the same definitions set forth in the Plan.

2. Performance Share Unit Vesting .

The performance period for this Award shall commence on January 1, 2012 and shall end on December 31, 2014 (the “Performance Period”). The Award shall be subject to performance vesting requirements based upon the achievement of Performance Goals as set forth in Appendix A to this Agreement.

3. Dividends .

The Grantee shall be entitled to receive dividend equivalents, which represent the right to receive Shares measured by the dividend payable with respect to Performance Share Units (“Dividend Equivalent Rights”). Dividend Equivalents Rights on Performance Share Units will accrue and be reinvested into additional Performance Share Units through the Performance

Period. The additional Shares will be subject to the vesting conditions and other terms and restrictions that apply to the Performance Share Units granted in Section 1 and will be paid as set forth in Section 4 of this Agreement.

4. Payment of Vested Performance Share Units .

For each vested Performance Share Unit, one Share shall be delivered to the Grantee as soon as administratively practicable following vesting at the completion of the Performance Period, but no later than the fifteenth day of the third month following the end of the calendar year in which such vesting date occurs.

5. Termination of Employment .

5.1 Termination—Generally . Subject to Sections 5.2 and 7 hereof, if the Grantee’s employment with the Company or any of its Subsidiaries is terminated on or before the last day of the Performance Period, the Performance Share Units granted hereunder shall immediately be forfeited to the Company in their entirety without payment of consideration therefor to the Grantee and the Grantee shall not be entitled to any Shares under this Agreement.

5.2 Qualifying Terminations . If the Grantee’s employment with the Company or any of its Subsidiaries is terminated for any of the reasons set forth below (and subject to Section 7 hereof), in each case if such termination occurs on or before the last day of the Performance Period, the Grantee, or the Grantee’s legatee or legatees under his or her will, or his or her distributees, as applicable, shall be entitled to a Pro Rata Portion (as defined below) of the Award. The “Pro Rata Portion” shall mean the total number of Shares which otherwise would have vested and become payable pursuant to Section 4 hereof had the Grantee remained employed to the end of the Performance Period, multiplied by a fraction, the numerator of which is the number of days between (A) the Grant Date and (B) the date of the Grantee’s termination of employment, and the denominator of which is 1,095. The Grantee’s Pro Rata Portion of the Award shall be paid following the completion of the Performance Period, based on actual performance achieved, in accordance with Section 4 of this Agreement.

5.2.1 death

5.2.2 Disability (as defined in the Plan)

5.2.3 Redundancy (as defined below)

5.2.4 Retirement (as defined below)

5.2.5 If the Grantee is not subject to an Employment Agreement, termination for any other reason, other than a termination by the Company for Cause (as defined in the Plan), if there are exceptional circumstances and the Committee so decides prior to the date of the termination of the Grantee’s employment.

5.2.6 If the Grantee is subject to an Employment Agreement, termination by the Company for any reason other than for Cause as defined therein.

5.2.7 If the Grantee is subject to an Employment Agreement, termination by the Grantee for Good Reason as defined therein.

5.3 Definitions . For purposes of this Agreement:

(a) “ Employment Agreement ” means an effective, written employment agreement between the Grantee and the Company. Notwithstanding any provision herein to the contrary, in the event of any inconsistency between this Section 5 or Section 7 and any Employment Agreement, the terms of the Employment Agreement shall control.

(b) “ Redundancy ” means the Company or any of its Subsidiaries, as applicable, has ceased, or intends to cease, to carry on the business or particular business function for the purposes of which the Grantee is or was employed by it, or has ceased, or intends to cease, to carry on that business or particular business function in the place where the Grantee is or was employed.

(c) “ Retirement ” means retirement at or after age 65, or early retirement at or after age 55 with 10 years of service with the Company.

6. Adjustments . In the event of a Change in Capitalization, the Committee shall make equitable adjustments to the number and class of Shares subject to this Agreement as provided under the terms of the Plan. The Committee’s adjustment shall be made in accordance with the provisions of Article 12 of the Plan and shall be final, binding and conclusive for all purposes of the Plan and this Agreement. Unless the Committee determines otherwise, the number of Performance Share Units subject to this Award shall always be a whole number.

7. Effect of a Change in Control .

7.1 Change in Control—Generally . In the event a Change in Control (as defined in the Plan) occurs, the surviving or successor entity is expected to assume this Agreement. If, however, the surviving or successor entity does not assume this Agreement, the Committee may, in its sole discretion, exercise its authority under the Plan to modify the Award under this Agreement, including, but not limited to, by providing for the end of the Performance Period in connection with the occurrence of such Change in Control and the deemed achievement of Performance Goals at target, with payment of shares with respect to vested Performance Share Units occurring in connection with the occurrence of such Change in Control, which payment shall be made in accordance with the schedule described in Section 4 of this Agreement.

7.2 Termination Following a Change in Control . If there is a Change in Control and the surviving or successor entity has assumed this Agreement, and within two (2) years after such Change in Control the Grantee’s employment with the Company or any of its Subsidiaries is terminated (i) by the Company or any of its Subsidiaries without Cause (as defined in the Plan or, if applicable, an Employment Agreement) or (ii) if the Grantee is subject to an Employment Agreement, by the Grantee for Good Reason as defined therein, the Grantee shall be entitled, following the completion of the Performance Period, to the total number of Shares which otherwise would have vested and become payable had he or she remained employed to the end of the Performance Period, based on actual performance achieved, in accordance with Section 4 of this Agreement.

8. Restrictions on Transfer . Performance Share Units may not be sold, assigned, hypothecated, pledged or otherwise transferred or encumbered in any manner except by will or the laws of descent and distribution.

9. Withholding of Taxes . The Grantee shall pay to the Company, or the Company and the Grantee shall agree on such other arrangements necessary for the Grantee to pay, the applicable federal, state and local income taxes required by law to be withheld (the “Withholding Taxes”), if any, upon the vesting of Performance Share Units and delivery of the Shares. The Company shall have the right to deduct from any distribution of cash to any Grantee, an amount equal to the Withholding Taxes with respect to the Shares delivered pursuant to the terms of this Agreement. In satisfaction of the obligation to pay Withholding Taxes to the Company upon the delivery of any Shares following the vesting of Performance Share Units, the Grantee may make a written election which may be accepted or rejected in the discretion of the Company, to have withheld a portion of such Shares then deliverable to the Grantee having an aggregate Fair Market Value as of the date such Restrictions lapse equal to the Withholding Taxes.

10. No Rights as a Shareholder . Until Shares are issued, if at all, in satisfaction of the Company’s obligations under this Award, in the time and manner specified above, the Grantee shall have no rights as a shareholder.

11. Dodd-Frank Clawback Policies . This Agreement is subject to any clawback policies the Company may adopt in order to conform to the Dodd-Frank Act and resulting rules issued by the Securities and Exchange Commission and that the Company determines should apply to this Agreement. These clawback policies may subject the Grantee’s rights and benefits under this Agreement to reduction, cancellation, forfeiture or recoupment if certain specified events occur, including, but not limited to, an accounting restatement due to the Company’s material noncompliance with financial reporting regulations.

12. No Right to Continued Employment . Nothing in this Agreement or the Plan shall be interpreted or construed to confer upon the Grantee any right with respect to continuance of employment by the Company, any Subsidiary or any Division, nor shall this Agreement or the Plan interfere in any way with the right of the Company, any Subsidiary or any Division to terminate the Grantee’s employment therewith at any time.

13. Grantee Bound by the Plan . The Grantee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.

14. Severability . Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

15. Governing Law . Except as to matters of federal law, the validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware without giving effect to the conflicts of laws principles thereof.

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

17. Successors in Interest . This Agreement shall inure to the benefit of and be binding upon any successor to the Company. This Agreement shall inure to the benefit of the Grantee’s legal representatives. All obligations imposed upon the Grantee and all rights granted to the Company under this Agreement shall be final, binding and conclusive upon the Grantee’s beneficiaries, heirs, executors, administrators and successors.

18. Modification of Agreement . This Agreement may be modified, amended, suspended or terminated, and any terms or conditions may be waived, but only by a written instrument executed by the parties hereto. No waiver by either party hereto of any breach by the other party hereto of any provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions at the time or at any prior or subsequent time.

19. Resolution of Disputes . Any dispute or disagreement which may arise under, or as a result of, or in any way relate to, the interpretation, construction or application of this Agreement shall be determined by the Committee. Any determination made hereunder shall be final, binding and conclusive on the Grantee and the Company for all purposes; provided however, that this dispute resolution provision shall not interfere with Grantees rights to pursue and protect his legal rights in a court of competent jurisdiction.

20. Sections and Other Headings . The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.

CLOUD PEAK ENERGY INC.		GRANTEE



By:		Print Name:
Title:

Appendix A

Cloud Peak Energy Inc.
Performance Share Plan
FY2012 through FY2014

The Committee has established the following Performance Share Plan terms for Performance Share Unit grants. All Performance Share Award grants are made pursuant to the Cloud Peak Energy Inc. 2009 Long Term Incentive Plan.

Performance Metric: Relative Total Shareholder Return

Performance for the purposes of determining the vesting of the Performance Share Unit Awards will be based on relative Total Shareholder Return (TSR). Relative TSR measures the Cloud Peak Energy share price movement over a performance period relative to the share price movement of peer companies.

TSR = End of Period Share Price — Beginning of Period Share Price + Dividend(1)
Beginning of Period Share Price

The Beginning of Period Share Price and the End of Period Share Price for Cloud Peak Energy and the peer companies will be calculated by using the first and last, respectively, twenty (20) trading days of the performance period.

(1) For purposes of calculating the dividend element of TSR, the Committee will assume the reinvestment of dividends paid in the applicable shares during the performance period as of the last trading day of each applicable fiscal quarter in which dividends are paid.

Grant Date		As defined above in the first paragraph of the Award Agreement
Performance Period		As defined above in Section 2 of the Award Agreement
Vesting		3-year cliff vest from Grant Date
Peer Companies		As set forth below
Target Performance		Median of the Peer Companies
Payout Range		0% to 200% of Target Performance, provided in no event can the payout exceed 15 times the “Target Opportunity” (which is defined as the Cloud Peak Energy closing share price on the Grant Date multiplied by the target number of Performance Share Units awarded). In the event the payout would otherwise exceed 15 times the Target Opportunity, the number of shares delivered will be reduced to the number of whole shares such that the total payout is equal to 15 times the Target Opportunity.

Peer Companies:

1. Alliance Resource Partners

2. Alpha Natural Resources

3. Arch Coal

4. Berry Petroleum

5. Cabot Oil & Gas

6. Consol Energy

7. EQT Corp.

8. Forest Oil Corp.

9. James River Coal

10. Newfield Exploration Co.

11. Noble Energy

12. Patriot Coal

13. Peabody Energy

14. Penn Virginia Corporation

15. Sandridge Energy

16. SM Energy

17. Walter Energy

18. Whiting Petroleum Corp.

The Committee, in its sole discretion, will make such changes to the list of Peer Companies as may be required to appropriately and equitably reflect the merger, consolidation, acquisition or other similar event involving a Peer Company. For the 2012-2014 performance cycle, International Coal and Massey Energy have been removed from the peer group.

Target Performance

TSR for each of the Peer Companies is calculated and ranked highest to lowest. The Median TSR performance of the Peer Companies is the TSR at which half the Peer Companies’ TSR results are below and half the Peer Companies’ TSR results are above.

Payout Range

Grants of Performance Share Awards will be made at the Target Performance amount defined as the Median performance of the Peer Companies. The amount vested at Vesting will range from 0% to 200% of the Target Performance amount depending upon the final positioning of CPE’s TSR to the median of the Peer Companies at the end of the Performance Period (but in no event will the payout exceed 15 times the Target Opportunity, as described above).

The extent to which Performance Share Units will vest will be determined as follows:

Outcome Relative to Peer Group TSR

	CPE Three-Year Percentile Ranking in TSR	Percentage of Performance Share Units Vesting
	Below 25 th Percentile	0	%
Threshold	25 th Percentile	50	%
Target	50 th Percentile	100	%
Maximum	90 th Percentile	200	%

· If the Company’s Total Shareholder Return (TSR) is below the 25 th percentile of the Company’s Performance Peer Group, then the payout is 0%.

· The payout is linear between the 25 th percentile and the 50 th percentile.

· The payout is linear between the 50 th percentile and the 90 th percentile

· Irrespective of where the Company’s TSR is in relation to its Performance Peer Group, if the Company’s TSR is negative during the Performance Period, then the payout shall be reduced by 50% compared to what it otherwise would have been pursuant to this Appendix A.

The Committee, in its sole discretion, will determine the number of Performance Share Units that have vested at the end of the Performance Period based on the performance of the Company, calculated using the performance grid and guidelines set forth above.

Exhibit 10.2

FORM OF

CLOUD PEAK ENERGY INC.

2009 LONG TERM INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

THIS AGREEMENT, made as of the day of , 2012 (the “Grant Date”), between Cloud Peak Energy Inc., a Delaware corporation (the “Company”), and (the “Grantee”).

WHEREAS, the Committee responsible for administration of the Plan has determined to grant an option to the Grantee as provided herein.

NOW, THEREFORE, the parties hereto agree as follows:

1. Grant of Option .

1.1. The Company hereby grants to the Grantee the right and option (the “Option”) to purchase all or any part of an aggregate of whole Shares subject to, and in accordance with, the terms and conditions set forth in this Agreement.

1.2. The Option is not intended to qualify as an Incentive Stock Option.

1.3. This Agreement shall be construed in accordance and consistent with, and subject to, the provisions of the Plan (the provisions of which are incorporated herein by reference); and, except as otherwise expressly set forth herein, the capitalized terms used in this Agreement shall have the same definitions as set forth in the Plan.

2. Purchase Price .

The price at which the Grantee shall be entitled to purchase Shares upon the exercise of the Option shall be $ per Share.

3. Duration of Option .

Except as otherwise provided in Sections 6 and 7 hereof, the Option shall be exercisable to the extent and in the manner provided herein for a period of ten (10) years from the Grant Date.

4. Vesting and Exercisability of Option .

Subject to Sections 6 and 7 hereof, provided that the Grantee continues to serve as an employee of the Company or any of its Subsidiaries, the Option shall vest and become exercisable on the third anniversary of the Grant Date.

5. Manner of Exercise and Payment .

5.1. Subject to the terms and conditions of this Agreement and the Plan, the Option may be exercised by delivery of written notice to the Company, at its principal executive office, to the attention of the General Counsel and Corporate Secretary. Such notice shall state that the Grantee is electing to exercise the Option and the number of Shares in respect of which the Option is being exercised and shall be signed by the person or persons exercising the Option. If requested by the Committee, such person or persons shall (i) deliver this Agreement to the Secretary of the Company who shall endorse on this Agreement a notation of such exercise and (ii) provide satisfactory proof as to the right of such person or persons to exercise the Option.

5.2. The notice of exercise described in Section 5.1 hereof shall be accompanied by the full purchase price for the Shares in respect of which the Option is being exercised, in cash or by check or, if indicated in the notice, such payment shall follow by check from a registered broker acting as agent on behalf of the Grantee. However, at the discretion of the Committee appointed to administer the Plan, the Grantee may pay the exercise price in part or in full by transferring to the Company unrestricted Shares owned by the Grantee having a Fair Market Value on the day preceding the date of exercise equal to the cash amount for which such Shares are substituted. In addition, the Option may be exercised through a broker-dealer pursuant to such cashless exercise procedures that are, from time to time, deemed acceptable by the Committee in its sole discretion.

5.3. Upon receipt of notice of exercise and full payment for the Shares in respect of which the Option is being exercised, the Company shall, subject to this Agreement and the Plan, take such action as may be necessary to effect the transfer to the Grantee of the number of Shares as to which such exercise was effective.

5.4. The Grantee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any Shares subject to the Option until (i) the Option shall have been exercised pursuant to the terms of this Agreement and the Grantee shall have paid the full purchase price for the number of Shares in respect of which the Option was exercised, (ii) the Company shall have issued and delivered the Shares to the Grantee, and (iii) the Grantee’s name shall have been entered as a stockholder of record on the books of the Company, whereupon the Grantee shall have full voting and other ownership rights with respect to such Shares.

5.5. The terms and provisions of any Employment Agreement that relates to or affects the Option are incorporated herein by reference. Notwithstanding the foregoing provisions of this Section 5 or Section 6 or 7, in the event of any conflict or inconsistency between the terms and conditions of this Section 5 or Section 6 or 7 and the terms and conditions of the Employment Agreement, if any, the terms and conditions of the Employment Agreement shall be controlling.

6. Termination of Employment .

6.1. Termination—Generally . Subject to Sections 6.2 and 7 hereof, if the Grantee’s employment with the Company or any of its Subsidiaries is terminated on or after the Grant Date for any reason, the Option shall (a) if not vested and exercisable at the time of such termination, immediately expire without payment of consideration therefor and (b) if vested and exercisable at the time of termination, remain exercisable by the Grantee at any time prior to the earlier to occur of (i) the end of the thirty (30) day period immediately following the date of the Grantee’s termination (and such thirty (30) day period shall be extended during any period in which the Grantee is prohibited by law or Company insider trading policies from exercising such Option, to the extent such extension complies with the requirements of Treasury regulation section 1.409A-1(b)(5)(v)(C)(1)) and (ii) the ten (10) year anniversary of the Grant Date.

6.2. Qualifying Terminations . If the Grantee’s employment with the Company or any of its Subsidiaries is terminated for any of the reasons set forth below (and subject to Section 7 hereof), in each case if such termination occurs on or after the Grant Date and prior to the third anniversary of the Grant Date, a Pro Rata Portion (as defined below) of the Option shall, if not then vested, vest and become exercisable as of the date of such termination, and the remaining portion of the Option that is not vested and exercisable at the time of such termination shall immediately expire without consideration therefor. The Pro Rata Portion of the Option, or the entire Option if such termination occurs on or after the third anniversary of the Grant Date, shall remain exercisable by the Grantee at any time prior to the earlier to occur of (i) the end of the ninety (90) day period immediately following the date of the Grantee’s termination (and such ninety (90) day period shall be extended during any period in which the Grantee is prohibited by law or Company insider trading policies from exercising such Option) and (ii) the ten (10) year anniversary of the Grant Date; provided , however , that in the event of a qualified termination under Section 6.2.1 below the Pro Rata Portion of the Option or the entire Option, as applicable, shall remain exercisable by the Grantee’s legatee or legatees under his or her will, or by his or her personal representatives or distributees, as applicable, for a period ending on the earlier to occur of (a) one (1) year following such qualified termination, or (b) the ten (10) year anniversary of the Grant Date. The “Pro Rata Portion” shall mean the total number of Shares subject to the Option multiplied by a fraction, the numerator of which is the number of days between (A) the Grant Date and (B) the date of the Grantee’s termination of employment, and the denominator of which is 1,095.

6.2.1 death

6.2.2 Disability (as defined in the Plan)

6.2.3 Redundancy (as defined below)

6.2.4 Retirement (as defined below)

6.2.5 If the Grantee is not subject to an Employment Agreement, termination for any other reason, other than a termination by the Company for Cause (as defined in the Plan), if there are exceptional circumstances and the Committee so decides prior to the date of the termination of the Grantee’s employment.

6.2.6 If the Grantee is subject to an Employment Agreement, termination by the Company for any reason other than for Cause as defined therein.

6.2.7 If the Grantee is subject to an Employment Agreement, termination by the Grantee for Good Reason as defined therein.

6.3 Definitions . For purposes of this Agreement:

(a) “ Employment Agreement ” means an effective, written employment agreement between the Grantee and the Company.

(c) “ Retirement ” means retirement at or after age 65, or early retirement on or after age 55 with 10 years of service with the Company.

7. Effect of a Termination Following a Change in Control .

If, within two (2) years after a Change in Control, the Grantee’s employment with the Company or any of its Subsidiaries is terminated (i) by the Company or any of its Subsidiaries without Cause (as defined in the Plan or, if applicable, an Employment Agreement) or (ii) if the Grantee is subject to an Employment Agreement, by the Grantee for Good Reason as defined therein, the Option shall immediately vest and become exercisable in its entirety and the Option shall remain exercisable by the Grantee or by the Grantee’s legatee or legatees under his or her will, or by his or her personal representatives or distributees, as applicable, at any time prior to the earlier to occur of (i) the end of the ninety (90) day period immediately following the date of the Grantee’s termination (and such ninety (90) day period shall be extended during any period in which the Grantee is prohibited by law or Company insider trading policies from exercising such Option) and (ii) the ten (10) year anniversary of the Grant Date.

8. No Right to Continued Employment .

Nothing in this Agreement or the Plan shall be interpreted or construed to confer upon the Grantee any right with respect to continuance of employment by the Company, any Subsidiary or any Division, nor shall this Agreement or the Plan interfere in any way with the right of the Company, any Subsidiary or any Division to terminate the Grantee’s employment therewith at any time.

9. Adjustments .

In the event of a Change in Capitalization, the Committee shall make equitable adjustments to the number and class of Shares or other securities, cash or property subject to the Option and the purchase price for such Shares or other securities. The Committee’s adjustment

shall be made in accordance with the provisions of Article 12 of the Plan and shall be final, binding and conclusive for all purposes of the Plan and this Agreement.

10. Dodd-Frank Clawback Policies .

This Agreement is subject to any clawback policies the Company may adopt in order to conform to the Dodd-Frank Act and resulting rules issued by the Securities and Exchange Commission and that the Company determines should apply to this Agreement. These clawback policies may subject the Grantee’s rights and benefits under this Agreement to reduction, cancellation, forfeiture or recoupment if certain specified events occur, including, but not limited to, an accounting restatement due to the Company’s material noncompliance with financial reporting regulations.

11. Withholding of Taxes .

The Grantee shall be required to pay to the Company, and the Company shall have the right and is hereby authorized to withhold, any applicable withholding taxes in respect of the Option, its exercise or any payment or transfer under, or with respect to, the Option and to take such other action as may be necessary in the reasonable opinion of the Committee to satisfy all obligations for the payment of such withholding taxes. The Grantee shall be solely responsible for the payment of all taxes relating to the payment or provision of any amounts or benefits hereunder.

12. Grantee Bound by the Plan .

The Grantee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.

13. Signature in Counterpart .

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

14. Modification of Agreement .

This Agreement may be modified, amended, suspended or terminated, and any terms or conditions may be waived, but only by a written instrument executed by the parties hereto. No waiver by either party hereto of any breach by the other party hereto of any provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions at the time or at any prior or subsequent time.

15. Severability .

Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

16. Governing Law .

Except as to matters of federal law, the validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware without giving effect to the conflicts of laws principles thereof.

17. Successors in Interest .

This Agreement shall inure to the benefit of and be binding upon any successor to the Company. This Agreement shall inure to the benefit of the Grantee’s legal representatives. All obligations imposed upon the Grantee and all rights granted to the Company under this Agreement shall be final, binding and conclusive upon the Grantee’s beneficiaries, heirs, executors, administrators and successors.

18. Resolution of Disputes .

Any dispute or disagreement which may arise under, or as a result of, or in any way relate to, the interpretation, construction or application of this Agreement shall be determined by the Committee. Any determination made hereunder shall be final, binding and conclusive on the Grantee and the Company for all purposes; provided, however, that this dispute resolution provision shall not interfere with Grantee’s rights to pursue and protect his or her legal rights in a court of competent jurisdiction.

19. Sections and Other Headings .

The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.

CLOUD PEAK ENERGY INC.		GRANTEE



By:		Print Name:
Title:

Exhibit 10.3

FORM OF

CLOUD PEAK ENERGY INC.

2009 LONG TERM INCENTIVE PLAN

RESTRICTED STOCK AGREEMENT

THIS AGREEMENT, made as of the day of , 2012 (the “Grant Date”), between Cloud Peak Energy Inc., a Delaware corporation (the “Company”), and (the “Grantee”).

WHEREAS, the Committee responsible for administration of the Plan has determined to grant Restricted Stock to the Grantee as provided herein.

NOW, THEREFORE, the parties hereto agree as follows:

1. Grant of Restricted Stock .

1.1. The Company hereby grants to the Grantee, and the Grantee hereby accepts from the Company, Shares of Restricted Stock subject to, and in accordance with, the terms and conditions set forth in this Agreement.

1.2. This Agreement shall be construed in accordance with and consistent with, and subject to, the provisions of the Plan (the provisions of which are incorporated herein by reference); and, except as otherwise expressly set forth herein, the capitalized terms used in this Agreement shall have the same definitions as set forth in the Plan.

2. Rights of Grantee .

The Grantee shall be entitled, at all times on and after the Grant Date, to exercise the right to vote the Shares of Restricted Stock but shall not be entitled to receive any dividends or other distributions paid or made with respect thereto until the Restrictions (as defined below) lapse pursuant to Sections 3, 5 or 6 hereof. Upon the Vesting Date (as defined below) or such earlier date upon which the Shares of Restricted Stock become vested pursuant to Sections 5 or 6 hereof or the Plan, the Grantee shall be entitled to any dividends that may have previously accrued to the Grantee’s Shares of Restricted Stock, which dividends shall be paid in additional Shares of Company stock as soon as administratively feasible following such vesting date, but in no event later than the end of the calendar year in which such vesting date occurs or, if later, the 15th day of the third month following such vesting date. Dividends accruing following the lapse of Restrictions on Grantee’s Shares of Restricted Stock shall be paid if, as, and when declared by the Board, with any such dividend payment made on the date on which the dividend for such class of stock is paid to shareholders of such class. Prior to the Vesting Date or such earlier date upon which the Shares of Restricted Stock become vested pursuant to Sections 5 or 6 hereof or

the Plan, the Grantee shall not be entitled to sell, transfer, pledge, hypothecate, assign or otherwise dispose of the Shares of Restricted Stock (collectively, the “Transfer Restrictions”) and the Shares of Restricted Stock shall be subject to forfeiture in accordance with Section 5 hereof (the “Forfeiture Restrictions” and collectively, with the Transfer Restrictions, the “Restrictions”).

3. Vesting and Lapse of Restrictions .

Subject to Sections 5 and 6 hereof, provided that the Grantee continues to serve as an employee of the Company or any of its Subsidiaries, the Restrictions on the Shares of Restricted Stock shall lapse and the Restricted Stock granted hereunder shall fully vest on the third anniversary of the Grant Date (such date, the “Vesting Date”).

4. Escrow and Delivery of Certificates .

4.1. Certificates representing the Shares of Restricted Stock shall be issued and held by the Company in escrow and shall remain in the custody of the Company until their delivery to the Grantee or his or her estate as set forth in Section 4.2 hereof, subject to the Grantee’s delivery of the appropriate blank stock powers and any documents which the Company in its discretion may require as a condition to the issuance of Shares and the delivery of Shares to the Grantee or his or her estate.

4.2. Certificates representing those Shares of Restricted Stock in respect of which the Restrictions have lapsed pursuant to Section 3, 5 or 6 hereof shall be delivered to the Grantee as soon as practicable following the applicable date on which such Restrictions lapse.

4.3. The Grantee may receive, hold, sell or otherwise dispose of those Shares represented by Certificates delivered to him or her pursuant to Section 4.2 hereof free and clear of the Restrictions, but subject to compliance with all federal, state and other similar securities laws and the Company’s insider trading policies.

4.4. Each Certificate will bear a legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF (A “TRANSFER”) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF A RESTRICTED STOCK AGREEMENT DATED AS OF [] , 2012, AS IT MAY BE AMENDED FROM TIME TO TIME. PURSUANT TO SUCH AGREEMENT, THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFER RESTRICTIONS AND FORFEITURE RESTRICTIONS, AND ANY TRANSFEREE OF THESE SECURITIES TAKES SUBJECT TO SUCH TRANSFER RESTRICTIONS AND FORFEITURE RESTRICTIONS. COPIES OF THE RESTRICTED STOCK AGREEMENT ARE ON FILE WITH THE COMPANY.

5. Effect of Certain Terminations of Employment .

5.1. Termination—Generally . Except in the case of a termination described in Sections 5.2 or 6 hereof, in the event the Grantee’s employment with the Company or any of its Subsidiaries is terminated on or after the Grant Date and prior to the third anniversary of the Grant Date those Shares of Restricted Stock on which the Restrictions have not yet lapsed shall immediately be forfeited to the Company in their entirety without payment of consideration therefor to the Grantee.

5.2. Qualifying Terminations . If the Grantee’s employment with the Company or any of its Subsidiaries is terminated for any of the reasons set forth below (and subject to Section 6 hereof), in each case if such termination occurs prior to the Vesting Date, a Pro Rata Portion (as defined below) of the Shares of Restricted Stock shall vest, and the Restrictions on such Restricted Stock shall lapse, as of the date of such termination and the remaining Shares of Restricted Stock on which the Transfer Restrictions have not yet lapsed shall immediately be forfeited to the Company in their entirety without payment of consideration therefor to the Grantee. The “Pro Rata Portion” shall mean the total number of Shares of Restricted Stock granted multiplied by a fraction, the numerator of which is the number of days between (A) the Grant Date and (B) the date of the Grantee’s termination of employment, and the denominator of which is 1,095.

5.2.1 death

5.2.2 Disability (as defined in the Plan)

5.2.2 Redundancy (as defined below)

5.2.3 Retirement (as defined below)

5.2.4 If the Grantee is not subject to an Employment Agreement, termination for any other reason, other than a termination by the Company for Cause (as defined in the Plan), if there are exceptional circumstances and the Committee so decides prior to the date of the termination of the Grantee’s employment.

5.2.5 If the Grantee is subject to an Employment Agreement, termination by the Company for any reason other than for Cause as defined therein.

5.2.6 If the Grantee is subject to an Employment Agreement, termination by the Grantee for Good Reason as defined therein.

5.3 Definitions . For purposes of this Agreement:

(a) “ Employment Agreement ” means an effective, written employment agreement between the Grantee and the Company. Notwithstanding any provision herein to the contrary, in the event of any inconsistency between this Section 5 or Section 6 and any Employment Agreement, the terms of the Employment Agreement shall control.

intends to cease, to carry on that business or particular business function in the place where the Grantee is or was employed.

(c) “ Retirement ” means retirement at or after age 65, or early retirement at or after age 55 with 10 years of service with the Company.

6. Effect of a Termination Following a Change in Control .

If, within two (2) years of a Change in Control, the Grantee’s employment with the Company or any of its Subsidiaries is terminated (i) by the Company or any of its Subsidiaries without Cause (as defined in the Plan or, if applicable, an Employment Agreement) or (ii) if the Grantee is subject to an Employment Agreement, by the Grantee for Good Reason as defined therein, all outstanding Shares of Restricted Stock which have not become vested in accordance with Section 3 hereof shall vest, and the Restrictions on such Shares of Restricted Stock shall lapse in their entirety as of the date of such termination.

7. Grantee Bound by the Plan .

The Grantee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.

8. No Right to Continued Employment .

9. Dodd-Frank Clawback Policies .

10. Withholding of Taxes .

The Grantee shall pay to the Company, or the Company and the Grantee shall agree on such other arrangements necessary for the Grantee to pay, the applicable federal, state and local income taxes required by law to be withheld (the “Withholding Taxes”), if any, upon the vesting and delivery of the Shares. The Company shall have the right to deduct from any distribution of cash to any Grantee, an amount equal to the Withholding Taxes with respect to the Restricted Stock. In satisfaction of the obligation to pay Withholding Taxes to the Company upon the lapse of Restrictions on any Shares of Restricted Stock, the Grantee may make a written election

which may be accepted or rejected in the discretion of the Company, to have withheld a portion of the Shares of Restricted Stock then deliverable to the Grantee having an aggregate Fair Market Value as of the date such Restrictions lapse equal to the Withholding Taxes.

11. Signature in Counterpart .

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

12. Modification of Agreement .

13. Severability .

14. Governing Law .

15. Successors in Interest .

16. Resolution of Disputes .

17. Sections and Other Headings .

The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.

CLOUD PEAK ENERGY INC.		GRANTEE



By:		Print Name:
Title: