We maintain the LTIP for certain employees and officers of MGP and its affiliates who perform services for us. As part of our LTIP, unit awards of non-vested "phantom" or notional units, also referred to as "restricted units", may be granted which upon satisfaction of time and performance-based vesting requirements, entitle the LTIP participant to receive ARLP common units. Certain awards may also contain a minimum-value guarantee payable in ARLP common units or cash that would be paid regardless of whether or not the awards vest, as long as service requirements are met.

Annual grant levels, vesting provisions and minimum-value guarantees of restricted units for designated participants are recommended by Mr. Craft, subject to review and approval of the Compensation Committee. Vesting of all restricted units outstanding is subject to the satisfaction of certain financial tests. If it is not probable the financial tests for a particular grant of restricted units will be met, any previously expensed amounts for that grant are reversed and no future expense will be recognized for that grant. Assuming the financial tests are met, grants of restricted units issued to LTIP participants are generally expected to cliff vest on January 1st of the third year following issuance of the grants. We expect to settle restricted unit grants by delivery of newly-issued ARLP common units, except for the portion of the grants that will satisfy employee tax withholding obligations of LTIP participants. We account for forfeitures of non-vested LTIP restricted unit grants as they occur. As provided under the DERs provisions of the LTIP and the terms of the LTIP restricted unit awards, all non-vested restricted units include contingent rights to receive quarterly distributions in cash or, at the discretion of the Compensation Committee, phantom units in lieu of cash credited to a bookkeeping account with value equal to the cash distributions we make to unitholders during the vesting period. If it is not probable the financial tests for a particular grant of restricted units will be met, any previously paid DER amounts for that grant are reversed from Partners’ Capital and recorded as compensation expense and any future DERs, for that grant, if any, will be recognized as compensation expense when paid.

(1)	During the year ended December 31, 2019, we issued 596,650 unrestricted common units to LTIP participants. The remaining vested units were settled in cash to satisfy tax withholding obligations of the LTIP participants.

(2)

In December 2020, we modified the vesting requirements for certain restricted units that we granted in February 2020 which were determined to be improbable of vesting under the original vesting requirements (the "2020 Grants"). The new vesting requirements make it probable the modified restricted units will vest. Also in December 2020, an additional 578,114 restricted units under these modified vesting requirements were granted. The grant date fair value reflects the modification date fair value for those awards that were modified.

(3)

In February 2020, we issued 279,622 unrestricted common units to LTIP participants as a result of satisfying the vesting requirements for 424,486 restricted units that were granted in 2017. The remaining vested units were settled in cash to satisfy tax withholding obligations of the LTIP participants. In December 2020, we accelerated the vesting requirements for 495,038 restricted units that were granted in 2018 (the "2018 Grants") and settled these restricted units in cash.

(4)	In December 2020, 675,302 restricted units that were granted in 2019 (the "2019 Grants") were canceled since it was determined that the vesting requirements for these restricted units were not probable of being satisfied.

(5)	In April 2021, we granted 921,430 restricted units and 896,760 restricted units that have minimum-value guarantees of $2.53 per unit and $3.79 per unit, respectively, regardless of whether or not the awards vest.

For the years ended December 31, 2021, 2020 and 2019, our LTIP expense for grants of restricted units was $5.4 million, $8.1 million and $10.4 million, respectively. LTIP expense for grants of restricted units for the year ended December 31, 2020 includes the impact of the reversal of the 2019 Grants, the modification of the 2020 Grants and

incremental compensation cost associated with the cash settlement of the 2018 Grants. The cash settlement of the 2018 Grants was the first time we have settled restricted units in cash and we currently do not expect to do so again in the future. The cash settlement of the 2018 Grants resulted in $5.4 million in incremental compensation cost. The 2019 Grants were determined to be not probable of vesting therefore $4.8 million of cumulative previously recognized expense was reversed in 2020, offset in part by related DERs for the 2019 Grants previously recorded to equity and then expensed in 2020. The 2020 Grants were determined to be improbable of vesting therefore the Compensation Committee modified the awards to change the vesting requirement, which made the grants probable of vesting, and granted additional restricted units under these modified vesting requirements as previously discussed. As a result, the grant date fair value of the modified awards was changed to reflect the modification date fair value of the awards resulting in a net reduction in LTIP expense of $1.0 million for the year ended December 31, 2020.

The total obligation associated with LTIP grants of restricted units as of December 31, 2021 and 2020 was $6.7 million and $1.3 million, respectively, and is included in the partners' capital Limited partners-common unitholders line item in our consolidated balance sheets. As of December 31, 2021, there was $10.8 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 1.6 years.

On January 26, 2022, the Compensation Committee authorized additional grants of 694,919 restricted units, of which 687,719 units were granted. These restricted units have minimum-value guarantees of either $9.62 or $6.41 per unit, regardless of whether or not the awards vest.

Supplemental Executive Retirement Plan and Directors' Deferred Compensation Plan

We utilize the SERP to provide deferred compensation benefits for certain officers and key employees. All allocations made to participants under the SERP are made in the form of "phantom" ARLP units and SERP distributions will be settled in the form of ARLP common units. The SERP is administered by the Compensation Committee.

Our directors participate in the Directors' Deferred Compensation Plan. Pursuant to the Directors' Deferred Compensation Plan, for amounts deferred either automatically or at the election of the director, a notional account is established and credited with notional common units of ARLP, described in the Directors' Deferred Compensation Plan as "phantom" units. Distributions from the Directors' Deferred Compensation Plan will be settled in the form of ARLP common units.

For both the SERP and Directors' Deferred Compensation Plan, when quarterly cash distributions are made with respect to ARLP common units, an amount equal to such quarterly distribution is credited to each participant's notional account as additional phantom units. All grants of phantom units under the SERP and Directors' Deferred Compensation Plan vest immediately.

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, 2019	635,837	$	27.34	$	11,025
Granted	111,012		14.50
Issued (1)	(115,484)		25.20
Phantom units outstanding as of December 31, 2019	631,365		25.48		6,831
Granted	129,265		5.25
Phantom units outstanding as of December 31, 2020	760,630		22.04		3,408
Granted	46,638		9.45
Issued (1)	(138,570)		25.86
Phantom units outstanding as of December 31, 2021	668,698		20.13		8,452

(1)

During the years ended December 31, 2021 and 2019, we issued ARLP common units that we purchased on the open market of 102,962 and 115,484, respectively, to participants under the SERP and Directors' Deferred Compensation Plan. Units issued in 2021 were net of units settled in cash to satisfy tax withholding obligations.

Total SERP and Directors' Deferred Compensation Plan expense was $0.4 million, $0.7 million and $1.6 million for the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021 and 2020, the total obligation associated with the SERP and Directors' Deferred Compensation Plan was $13.5 million and $16.8 million, respectively, and is included in the partners' capital Limited partners-common unitholders line item in our consolidated balance sheets.

See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for unit-based compensation.