EXHBIT
10.33
RETENTION AND EMPLOYMENT
AGREEMENT
THIS
RETENTION AND EMPLOYMENT AGREEMENT (this “Agreement”), is made on November 13, 2007 (the “Effective Date”) between MASSEY ENERGY
COMPANY, a Delaware corporation (the “Company”), and John Christopher Adkins
(the “Executive”).
WITNESSETH:
WHEREAS,
Executive is employed by Massey Coal Services, Inc. and is a senior executive of
the Company or one of its Subsidiaries (as defined in Section 18) and has made
and is expected to continue to make major contributions to the short-term and
long-term profitability, growth and financial strength of the Company;
and
WHEREAS,
the Board has determined that appropriate steps should be taken to reinforce and
encourage the continued retention, attention and dedication of, and to contract
for the continued rendering of services by Executive, in connection with his
assigned duties; and
WHEREAS,
in consideration of Executive’s continued employment with the Company or any
Subsidiary of the Company, the Company desires to
provide Executive with certain compensation and benefits set forth in this
Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements hereinafter set forth (including definitions of capitalized terms
which are set forth in Section 18 and throughout this Agreement) and intending
to be legally bound hereby, the Company and Executive agree as
follows:
1. Employment.
1.1
Subject to the terms and conditions of this Agreement, the Company agrees to
employ Executive with the Company or any Subsidiary of the Company during the
term hereof in the executive position of Senior Vice President and Chief
Operating Officer. In such capacity, Executive shall report to the Chief
Executive Officer and President of the Company, and shall have the customary
powers, responsibilities and authorities of executives holding such positions in
corporations of the size, type and nature of the Company, as it exists from time
to time, and as are assigned by the Chief Executive Officer and
President.
1.2
Subject to the terms and conditions of this Agreement, Executive hereby accepts
such employment commencing as of the Effective Date and agrees, subject to any
period of vacation and sick leave, to devote his full business time and efforts
to the performance of services, duties and responsibilities in connection
therewith.
2. Term of Employment.
Executive’s term of employment under this Agreement shall commence on the
Effective Date and, subject to termination by the terms hereunder, shall have an
initial term of three years, ending on November __, 2010 (the “Term of
Employment”); provided, however, that this Agreement shall continue in effect
for a period of twenty-four (24) months beyond the term provided herein if a
Change of Control occurs during the period that this Agreement is in
effect.
3. Compensation.
3.1 Salary. Effective January 1,
2008, the Executive’s base salary (“Base Salary”) shall be increased
from an annual rate of $360,000 to $378,000. Base Salary
shall be payable in accordance with the ordinary payroll practices of the
Company (but no less frequently than
monthly). During the Term of Employment, the Board shall, in good faith,
review, at least annually, Executive’s Base Salary in accordance with the
Company’s customary procedures and practices regarding the salaries of senior
executives and may, if determined by the Board to be appropriate, increase
Executive’s Base Salary following such review. “Base Salary” for all purposes
herein shall be deemed to be a reference to any such increased
amount.
3.2 Annual Bonus. In addition to
his Base Salary, during the Term of Employment, Executive shall be eligible to
receive an annual cash bonus award (the “Annual Cash Bonus”) with a target
amount equal to $325,000 (the “Target Bonus”) for the Company’s 2008 fiscal
year, $350,000 for the Company’s 2009 fiscal year, and $375,000 for
the
Company’s
2010 fiscal year or any subsequent fiscal year, subject to the terms and
conditions set forth by the Compensation Committee of the Board for such fiscal
year. The Annual Cash Bonus awards shall be payable to Executive at the time
bonuses are paid to its executive officers in accordance with the Company’s
policies and practices as set by the Board.
3.3 Discretionary
Bonus. In addition to the Annual Cash Bonus described above in
subsection 3.2, the Executive shall also be eligible during the term of this
Agreement to receive an annual discretionary bonus (“Discretionary Bonus”) in an
amount not to exceed $22,000 to be paid to the Executive at the discretion of
the Chief Executive Officer and President. If the Chief Executive
Officer and President determines in his discretion to pay the Discretionary
Bonus for a year to the Executive, payment of such Discretionary Bonus for a
year shall be made in a lump sum to the Executive on the November 1 on or
immediately following the determination to award and pay the same, but in no
event later than 2-1/2 months after the end of the Executive’s taxable year in
which the determination is made.
3.4 Long Term Incentive
Plan. The Executive shall be eligible for an on-going annual
award in the Company’s Long-Term Incentive Plan (the “Plan”) consistent with
other executives at the Executive’s current level with a target award value of
not less than $500,000. The award opportunity will be reviewed on an
annual basis and adjustments to the award structure may be made as deemed
appropriate by the Compensation Committee. Each such award shall be
subject to all the terms, conditions and performance requirements established by
the Compensation Committee at each of the annual meetings where it grants awards
to all other participants in the Plan, and each of the awards shall be governed
by and subject to the terms of the award agreements and the Massey Energy 2006
Stock and Incentive Plan (or any successor plan).
3.5 Retention
Award. The Executive shall receive an annual retention cash
award of $150,000 to be paid in a lump sum on each of January 1, 2008, January
1, 2009, and January 1, 2010 (the “Retention Awards”) provided the Executive
remains continuously employed by the Company through each of the respective
payment dates.
4. Employee
Benefits.
4.1 Equity- and Cash-Based
Compensation. Any outstanding agreement made with Executive under the
Company’s long-term cash and equity incentive program, including stock option,
restricted stock, restricted unit, other equity or cash-based incentive awards
or other equity or cash-based incentive agreements as of the Effective Date (the “Ancillary Documents”) shall
remain in full force and effect and shall not be affected by this Agreement but
shall remain subject to the applicable terms of Executive’s Change in Control
Agreement.
4.2 Employee Benefit Programs, Plans and
Practices; Perquisites. The Company shall provide Executive while
employed hereunder with coverage under such employee benefit plans (commensurate
with his position in the Company and to the extent permitted under any employee
benefit plan) in accordance with the terms thereof, Directors and Officers
insurance policy, which covers claims arising out of actions or inactions
occurring during the Term of Employment, in accordance with the Directors and
Officers insurance policy, and other employee benefits which the Company may
make available to its senior executives from time to time in its discretion. The
Company also shall provide Executive while
employed hereunder with
perquisites which the Company may make available to its senior executives from
time to time in its discretion.
4.3 Home Loan. The
outstanding agreement made with Executive concerning the purchase of Executive’s
residence is modified as of the Effective Date so that the entire outstanding
principal balance, together with all accrued interest, on the Effective Date
shall be forgiven at such time. In addition, the Company shall reimburse
the Executive for taxes incurred by the Executive in connection with such
principal and interest forgiveness as of the Effective Date; and such
reimbursement shall occur, and/or in its discretion the Company may pay directly
to the applicable taxing authority in lieu of such tax reimbursement to the
Executive, no later than ten (10) days after the Executive presents satisfactory
documentation of the taxes incurred and a determination by the Company of the
taxes incurred, provided that, except as provided in the next sentence, all
payments to be made under this Section 4.3 must be made by the end of the
Executive’s taxable year next following the Executive's s taxable year in which
the income recognition event occurs for tax purposes. Any right to
reimbursement arising due to a tax audit or litigation addressing the existence
or amount of a tax liability must be made by the end of the Executive’s taxable
year following the Executive’s taxable year in which the taxes that are the
subject of the audit or litigation are remitted to the taxing authorities or,
where no such taxes are remitted, the end of the Executive’s taxable year
following the year in which the audit is completed or there is a final and
non-appealable settlement or the resolution of the litigation.
5.
Termination of Employment; Severance Benefit.
5.1 Employment Rights. Executive
and the Company acknowledge that the employment of Executive by the Company is
“at will.” Nothing expressed or implied in this Agreement will create
any right or duty on the part of the Company or Executive to have Executive
remain in the employment of the Company or any Subsidiary.
5.2 Severance
Benefit. The Executive previously entered into a Change in
Control Agreement which shall govern the Executive’s rights, duties and
obligations in the event of the Executive’s cessation of employment with the
Company (or any successor) covered by the Change in Control
Agreement. In the event of the Executive’s cessation of employment
with the Company during the period of this Agreement for any reason other than
for “Cause” (as defined, and determined pursuant to the procedure in the Change
in Control Agreement) under circumstances where such cessation of employment is
not covered by the Change in Control Agreement, then Massey shall pay to the
Executive or if the Executive is deceased to the Executive’s estate, a lump sum
payment equal to 2.5 times the sum of the Executive’s Base Salary of $378,000,
plus the Annual Cash Bonus target amount in effect for the fiscal years
remaining under this Agreement in which the Executive’s Termination Date
occurs (the “Severance Benefit”), unless the Executive elects to
terminate his employment voluntarily during the term of this Agreement other
than for any reason which would constitute “a Constructive Termination
Associated with a Change in Control” (as defined, and determined pursuant to the
procedure, in the Change in Control Agreement, under circumstances where such
Constructive Termination is not covered by the Change in Control
Agreement).
5.3 Cessation of Employment on Account
of Disability, Cause or Death. Notwithstanding anything in this Agreement
to the contrary, if Executive’s employment terminates on account of Disability,
Executive shall be entitled to receive disability benefits under any disability
program maintained by the Company that covers Executive, and Executive shall not
be considered to have terminated employment under Section 5.2 and shall not
receive the Severance Benefit provided for in Section 5.2. If Executive’s
employment terminates on account of Cause or because of his death, Executive
shall not be considered to have terminated employment under Section 5.2 and
shall not receive the Severance Benefit provided for in Section
5.2.
6. Expenses. Subject to
prevailing Company policy or such guidelines as may be established by the Board,
the Company will reimburse Executive for all reasonable expenses incurred by
Executive in carrying out his duties no later than
the last day of the year following the year in which the Executive incurs the
reimbursable expense.
7. Nonqualified Deferred
Compensation Plan Omnibus Provisions. Notwithstanding any other provision
of this Agreement, it is intended that any payment or benefit which is provided
pursuant to or in connection with this Agreement which is considered to be
nonqualified deferred compensation subject to Section 409A of the Code shall be
provided and paid in a manner, and at such time and in such form, as complies
with the applicable requirements of Section 409A of the Code to avoid the
unfavorable tax consequences provided therein for non-compliance.
Notwithstanding any other provision of this Agreement, the Board is authorized
to amend this Agreement, to amend any election made by Executive under this
Agreement and/or to delay the payment of any monies and/or provision of any
benefits in such manner as may be determined by it to be necessary or
appropriate to comply, or to evidence or further evidence required compliance,
with Section 409A of the Code (including any transition or grandfather rules
thereunder). For purposes of this Agreement, all
rights to payments and benefits hereunder shall be treated as rights to receive
a series of separate payments and benefits to the fullest extent allowed
by Section 409A of the Code. Payments or provision of benefits in
connection with a separation from service payment event will be delayed, to the extent applicable, until
six months after the separation from service or, if earlier, the Executive’s death, if the Executive
is a key employee of a publicly traded corporation under Section 409A(a)(2)(B)(i) of the Code (the
“409A Deferral Period”). In the event such payments are otherwise due
to be made in installments or periodically during the 409A Deferral Period, the
payments which would otherwise have been made in the 409A Deferral Period shall
be accumulated and paid in a lump sum as soon as the 409A Deferral Period ends,
and the balance of the payments shall be made as otherwise
scheduled. In the event benefits are required to be deferred, any
such benefit may be provided during the 409A Deferral Period at Executive’s
expense, with Executive having a right to reimbursement from the Company once
the 409A Deferral Period ends, and the balance of the benefits shall be provided
as otherwise scheduled. For purposes of
this Agreement, termination of employment will be read to mean a “separation
from service” within the meaning of Section 409A of the Code where it is
reasonably anticipated that no further services would be performed after that
date or that the level of services Executive would perform after that
date
(whether as an employee or independent contractor) would
permanently decrease to no more than 20 percent of the average level of bona
fide services performed over the immediately preceding thirty-six (36)-month
period.
8. Enforcement. Without
limiting the rights of Executive at law or in equity, except as provided in
Section 9, if the Company fails to make any payment or provide any benefit
required to be made or provided hereunder on a timely basis, the Company will
pay interest on the amount or value thereof at an annualized rate of interest
equal to the so-called composite “prime rate” as quoted from time to time during
the relevant period in the Eastern Edition of The Wall Street
Journal. Such interest will be payable as it accrues consistent with the timing of the related payments or
benefits to be provided. Any change in such prime rate will be effective
on and as of the date of such change.
9. Tax Limitation on Payments
by the Company. The provisions of this Section 9 shall apply
notwithstanding anything in this Agreement to the contrary.
(a) In
the event that it shall be determined that any Payment would constitute an
“excess parachute payment” within the meaning of Section 280G of the Code, then
the Company shall pay Executive an additional amount (the “Gross-Up Payment”)
such that the net amount retained by the Executive after deduction of any excise
tax imposed under Section 4999 of the Code, and any federal, state and local
income tax, employment tax, excise tax and other tax imposed upon the Gross-Up
Payment, shall be equal to the Payment. Notwithstanding the
foregoing, if the Net After-tax Benefit to the Executive of receiving the
Gross-Up Payment does not exceed the Reduced Amount (as defined below) by more
than the lesser of $50,000 or 10% (as compared to the Net After-tax Benefit to
Executive resulting from elimination of the Gross-Up Payment, then the Company
shall not pay Executive the Gross-Up Payment and the Payments shall be reduced
(but not below zero) so that the Present Value of the aggregate of all Payments
does not exceed the Reduced Amount; provided, however, that no such reduction
shall be effected, but no Gross-up Payment shall be made, if the Net After-tax
Benefit to Executive of receiving all of the Payments exceeds by more than the
lesser of $50,000 or 10% of the Net After-tax Benefit to Executive resulting
from having such Payments so reduced. In the event a reduction is
required pursuant hereto, the order of reduction shall be first all cash
payments on a pro rata basis, then any equity compensation on a pro rata basis,
and lastly medical and dental coverage. For purposes of this Section 9, the
following terms have the following meanings:
(i) “Net
After-tax Benefit” shall mean the Present Value of a Payment net of all federal
state and local income, employment and excise taxes imposed on Executive with
respect thereto, determined by applying the highest marginal rate(s) applicable
to an individual for Executive’s taxable year in which the Executive’s
employment terminates.
(ii)
“Payment” means any payment or distribution or provision of benefits by the
Company to or for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any reductions required by this
Section 9.
(iii)
“Present Value” shall mean such value determined in accordance with Section
280G(d)(4) of the Code.
(iv)
“Reduced Amount” shall be an amount expressed in Present Value which maximizes
the aggregate Present Value of Payments without causing any Payment to be
subject to excise tax under Section 4999 of the Code or the deduction limitation
of Section 280G of the Code.
(b)
Except as set forth in the next sentence, all determinations to be made under
this Section 9 shall be made by the nationally recognized independent public
accounting firm used by the Company prior to the Termination Date (“Accounting
Firm”), which Accounting Firm shall provide its determinations and any
supporting calculations to the Company and Executive within ten days of
Executive’s Termination Date. If determined by the Accounting Firm to be
excludible from parachute payments under Section 280G of the Code, the value of
Executive’s non-competition covenant under Section 13(a) of this Agreement shall
be determined by independent appraisal by a nationally-recognized business
valuation firm acceptable to both Executive and the Company, and a portion of
the Payments shall, to the extent of that appraised value, be specifically
allocated as reasonable compensation for such non-competition covenant and shall
not be treated as a parachute payment. Any such determination by the Accounting
Firm shall be binding upon the Company and Executive.
(c) If
the Accounting Firm determines that Payments should be reduced, the Company
shall promptly give Executive notice to that effect and a copy of the detailed
calculation thereof. All determinations made by the Accounting Firm
under this Section 9 shall be binding upon the Company and Executive and shall
be made within twenty (20) business days of Executive’s Termination
Date.
(d) While
it is the intention of the Company and Executive to reduce the amounts payable
or distributable to Executive hereunder only if the aggregate Net After-tax
Benefit to Executive would thereby be increased in the manner provided for
herein, as a result of the uncertainty in the application of Section 4999 of the
Code at the time of the initial determination by the Accounting Firm hereunder,
it is possible that amounts will have been paid or distributed by the Company to
or for the benefit of Executive pursuant to this Agreement which should not have
been so paid or distributed (“Overpayment”) or that additional amounts which
will have not been paid or distributed by the Company to or for the benefit of
Executive pursuant to this Agreement could have been so paid or distributed
(“Underpayment”), in each case, consistent with the calculation of the Reduced
Amount hereunder. In the event that the Accounting Firm, based either
upon the assertion of a deficiency by the Internal Revenue Service against the
Company or Executive which the Accounting Firm believes has a high probability
of success determines that an Overpayment has been made, any such Overpayment
paid or distributed by the Company to or for the benefit of Executive shall be
treated for all purposes as a loan to Executive which Executive shall repay to
the Company together with interest at the applicable federal rate provided for
in Section 7872(f)(2) of the Code; provided, however, that no such loan shall be
deemed to have been made and no amount shall be payable by Executive to the
Company if and to the extent such deemed loan and payment would not either
reduce the amount on which Executive is subject to tax under Sections 1 and 4999
of the Code or generate a refund of such taxes. In the event that the Accounting
Firm, based upon controlling precedent or substantial authority, determines that
an Underpayment has occurred, any such Underpayment shall be promptly paid by
the Company to or for the benefit of Executive together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the
Code.
(e) All
of the fees and expenses of the Accounting Firm in performing the determinations
referred to in this Section 9 shall be borne solely by the Company.
(f) All payments to be made under this Section 9 (other
than the Underpayment described in Section 9(d)) must be made by the end of the
Executive’s taxable year next following the Company’s taxable year in which the
Company remits the related taxes. Any right to reimbursement incurred
due to a tax audit or litigation addressing the existence or amount of a tax
liability must be made by the end of the Executive’s taxable year following the
Executive’s taxable year in which the taxes that are the subject of the audit or
litigation are remitted to the taxing authorities or, where no such taxes are
remitted, the end of the Executive’s taxable year following the year in which
the audit is completed or there is a final and non-appealable settlement or the
resolution of the litigation.
10. Duties upon Termination;
Mitigation Obligation. Upon termination of employment for any reason,
Executive or his estate shall surrender to the Company all correspondence,
letters, files, contracts, mailing lists, customer lists, advertising materials,
ledgers, supplies, equipment, checks, and all other materials and records of any
kind that are the property of the Company or any of its subsidiaries or
affiliates, that may be in Executive’s possession or under his control,
including all copies of any of the foregoing. The Company hereby acknowledges
that it will be difficult and may be impossible for Executive to find reasonably
comparable employment following the Termination Date. Accordingly, the payment
and provision of the severance compensation by the Company to Executive in
accordance with the terms of this Agreement is hereby acknowledged by the
Company to be reasonable, and Executive will not be required to mitigate the
amount of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise, nor will any profits, income, earnings or other
benefits from any source whatsoever create any mitigation, offset, reduction or
any other obligation on the part of Executive hereunder or
otherwise.
11. Legal Fees and
Expenses. If litigation or arbitration is commenced by either party to
enforce or interpret any provision contained in this Agreement, the Company will
undertake to indemnify Executive for his reasonable attorneys' fees and expenses
associated with such litigation or arbitration if Executive substantially
prevails in such litigation or arbitration or any settlement
thereof. Notwithstanding the foregoing, if it should appear to
Executive that the Company has failed to comply with any of its obligations
under this Agreement or in the event that the Company or any other person takes
or threatens to take any action to declare this Agreement void or unenforceable,
or institutes any litigation or other action or proceeding designed to deny, or
to recover from, Executive the benefits provided or intended to be provided to
Executive under this Agreement, the Company will in any event reimburse
Executive for his reasonable attorneys' fees and expenses incurred in connection
therewith up to $10,000 without regard to the commencement or
outcome
of any litigation or arbitration in order for Executive to retain counsel to
advise and represent Executive in connection with any such interpretation,
enforcement or defense, including without limitation the initiation or defense
of any litigation or other legal action, whether by or against the Company or
any director, officer or employee of the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship between the
Company and such counsel, the Company irrevocably consents to Executive’s
entering into an attorney-client relationship with such counsel, and in that
connection, the Company and Executive agree that a confidential relationship
will exist between Executive and such counsel. The first $10,000 of such
expenses will be paid by the Company as they are incurred by Executive, and any
balance thereof due to Executive shall be paid within thirty (30) days after any
final judgment or decision or settlement in which Executive substantially
prevails. Any reimbursements to be paid by the
Company to the Executive under this Section 11 for the first $10,000 of such
expenses must be paid as soon as administratively feasible after the Executive
incurs the expense and the Executive will
be entitled to receive any balance thereof as soon as administratively feasible
after the termination of such litigation or arbitration or any settlement
thereof under terms on which the Executive substantially
prevails.
12. Confidentiality.
Executive hereby covenants and agrees that, except as specifically requested or
directed by the Company, he will not disclose to any person not employed by the
Company, or use in connection with engaging in competition with the Company, any
confidential or proprietary information (as provided below) of the Company. For
purposes of this Agreement, the term “confidential or proprietary information”
will include all information of any nature and in any form that is owned by the
Company and that is not publicly available (other than by Executive’s breach of
this Section 12) or generally known to persons engaged in businesses similar or
related to those of the Company. Confidential or proprietary information will
include, without limitation, the Company’s financial matters, customers,
employees, industry contracts, strategic business plans, product development (or
other proprietary product data), marketing plans, consulting solutions and
processes, and all other secrets and all other information of a confidential or
proprietary nature which is protected by the Uniform Trade Secrets Act. For
purposes of the preceding two sentences, the term “Company” will also include
any Subsidiary (collectively, the “Restricted Group”). The foregoing obligations
imposed by this Section 12 will not apply (i) in the course of the business of
and for the benefit of the Company, (ii) if such confidential or proprietary
information has become, through no fault of Executive, generally known to the
public, or (iii) if Executive is required by law to make disclosure (after
giving the Company notice and an opportunity to contest such
requirement).
13. Covenants Not to Compete and
Not to Solicit; Breach of Agreement Obligations by
Executive.
(a) Covenant Not to Compete. In
the event Executive’s employment ceases, then, for a period of one (1) year
following Executive’s Termination Date, Executive shall not directly or
indirectly engage in (whether as an employee, consultant, proprietor, partner,
director or otherwise), or have any ownership interest in, or participate in a
financing, operation, management or control of, any person, firm, corporation or
business that is a Restricted Business (as defined below) in a Restricted
Territory (as defined below) without the prior written consent of the Board. For
this purpose, ownership, whether direct or beneficial, of no more than 5% of the
outstanding securities entitled to vote generally in the election of directors
of a publicly traded corporation shall not constitute a violation of this
provision.
(b) Covenant Not to Solicit. In
the event Executive’s employment with the Company ceases, then, for a period of
one (1) year following Executive’s Termination Date, Executive shall not: (i)
solicit, encourage or take any other action which is intended to induce any
other employee, any supplier or any customer, of the Company or any Subsidiary
to terminate his employment or relationship with the Company or any Subsidiary;
or (ii) interfere in any manner with the contractual or employment relationship
between the Company and any such employee, supplier or customer of the Company
or any Subsidiary. The foregoing shall not prohibit Executive or any entity with
which Executive may be affiliated from hiring a former employee of the Company
or any Subsidiary; provided that such hiring results exclusively from such
former employee’s affirmative response to a general recruitment
effort.
(c) Interpretation. The covenants
contained herein are intended to be construed as a series of separate covenants,
one for each of the counties, parishes, towns, cities or states or similar local
governmental or political subdivisions of the Restricted Territory. Except for
geographic coverage, each such separate covenant shall be deemed identical in
terms to the covenant contained in the preceding subsections. If, in any
judicial proceeding, the court shall refuse to enforce any of the separate
covenants (or any part thereof) deemed included in such subsections, then such
unenforceable covenant (or such part) shall be deemed to be eliminated from this
Agreement for the purpose of those proceedings to the extent necessary to permit
the remaining separate covenants (or portions thereof) to be
enforced.
(d) Remedies for
Breach. In the event Executive’s employment ceases and
Executive is entitled to receive or has received after the Effective Date one or
more Annual Cash Bonus Awards under Section 3.2 for the last twelve months of
his employment and/or the Severance Benefit under Section
5.2 (collectively the “Non-Competition Compensation”), pursuant to
Section 5.2, the Company’s obligations to provide the Non-Competition
Compensation shall be and is expressly conditioned upon Executive’s
covenants not to compete and not to solicit as provided herein. In the event
Executive breaches his obligations to the Company as provided herein, the
Company’s obligations to provide the Non-Competition Compensation shall cease,
and Executive shall be obligated to return to the Company any all such
Non-Competition Compensation previously received by him. In addition, it is
recognized that damages in the event of breach of this Section 13 by Executive
would be difficult, if not impossible, to ascertain, and it is therefore
specifically agreed that the Company, in addition to and without limiting any
other remedy or right it may have, shall have the right to an injunction or
other equitable relief in any court of competent jurisdiction, enjoining any
such breach. The existence of the express rights to cease or recover
payment and the value of the Non-Competition Compensation otherwise provided for
and to obtain an injunction or other equitable relief shall not preclude the
Company from pursuing any other rights and remedies at law or in equity which it
may have.
(e) For
proposes of this Section 13, the following terms have the following
meanings:
(i)
“Restricted Business” means any business function with a direct competitor of
the Company or any Subsidiary that is substantially similar to the business
function performed by Executive with the Company or any Subsidiary immediately
prior to his Termination Date.
(ii)
“Restricted Territory” means the counties, parishes, towns, cities or states or
similar governmental or political subdivisions of any country in which the
Company or any Subsidiary operates or does business, inclusive of markets in
which the Company competes with the Restricted Business to sell its
products.
(f) Reasonableness. In the event
that the provisions of this Section 13 shall ever be deemed to exceed the time,
scope or geographic limitations permitted by applicable laws, then such
provisions shall be reformed to the maximum time, scope or geographic
limitations, as the case may be, permitted by applicable laws.
14. Notices. For all
purposes of this Agreement, all communications, including without limitation,
notices, consents, requests or approvals, required or permitted to be given
hereunder will be in writing and will be deemed to have been duly given when
hand delivered or dispatched by electronic facsimile transmission (with receipt
thereof confirmed electronically), or five (5) business days after having been
mailed by United States registered or certified mail, return receipt requested,
postage prepaid, or three (3) business days after having been sent by a
nationally recognized courier service for overnight/next-day delivery, such as
FedEx, UPS, or the United States Postal Service, addressed to the Company (to
the attention of the Secretary of the Company) at its principal executive office
and to Executive at his principal residence, or to such other address as any
party may have furnished to the other in writing and in accordance herewith,
except that notices of changes of address will be effective only upon
receipt.
15. Validity. If any
provision of this Agreement or the application of any provision hereof to any
person or circumstances is held invalid, unenforceable or otherwise illegal, the
remainder of this Agreement and the application of such provision to any other
person or circumstances will not be affected, and the provision so held to be
invalid, unenforceable or otherwise illegal will be reformed to the extent (and
only to the extent) necessary to make it enforceable, valid or
legal.
16. Successors and Binding
Agreement. (a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization or otherwise) to
all or substantially all of the business or assets of the Company, by agreement
in form and substance reasonably satisfactory to Executive, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
the Company would be required to perform if no such succession had taken place.
This Agreement will be binding upon and inure to the benefit of the Company and
any successor to the Company, including without limitation any persons acquiring
directly or indirectly all or substantially all of the business or assets of the
Company whether by purchase, merger, consolidation, reorganization or otherwise
(and such successor will thereafter be deemed “Company” for the purposes of this
Agreement), but will not otherwise be assignable, transferable or delegable by
the Company.
(b) This
Agreement will inure to the benefit of and be enforceable by Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees and legatees. This Agreement will supersede the provisions
of
any prior
employment agreement between Executive and the Company that relate to any matter
that is also the subject of this Agreement, other than the Executive’s Change in
Control Agreement, and such provisions in such employment agreements will be
null and void. This foregoing sentence shall have no impact on Section 4.1 of
this Agreement.
(c) This
Agreement is personal in nature and neither of the parties hereto will, without
the consent of the other, assign, transfer or delegate this Agreement or any
rights or obligations hereunder except as expressly provided in Sections 16(a)
and (b). Without limiting the generality or effect of the foregoing, Executive’s
right to receive payments and benefits hereunder will not be assignable,
transferable or delegable, whether by pledge, creation of a security interest,
or otherwise, other than by a transfer by Executive’s will or by the laws of
descent and distribution and, in the event of any attempted assignment or
transfer contrary to this Section 16(c), the Company will have no liability to
pay any amount so attempted to be assigned, transferred or
delegated.
17. Amendment;
Modification. This Agreement may only be amended by written agreement of
the parties hereto. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in a
writing signed by Executive and the Company. No waiver by either party hereto at
any time of any breach by the other party hereto or compliance with any
condition or provision of this Agreement to be performed by such other party
will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations, oral
or otherwise, expressed or implied with respect to the subject matter hereof
have been made by either party that are not set forth expressly in this
Agreement.
18. Certain Defined
Terms. In addition to terms defined elsewhere herein, the following terms
have the following meanings when used in this Agreement with initial capital
letters:
(a)
“Board” means the Board of Directors of the Company. If Executive is also a
member of the Board, then in the case of any provision hereof that requires
action by, or a determination of, the Board in connection with this Agreement,
it is understood that such provision refers to the members of the Board other
than Executive. Unless otherwise provided by the Board and except in determining
Cause, the Compensation Committee of the Board shall have full authority to act
on behalf of the Board in connection with any duty or action expressly assigned
under, or implicitly to be acted on in connection with, this Agreement to or by
the Board.
(b)
“Change in Control” means a “Change of Control” as defined in the Change in
Control Agreement.
(c)
“Change in Control Agreement” means that certain agreement first entered into
between the Executive and the Company as of December 21, 2005 and as thereafter
amended or replaced.
(d)
“Code” means the Internal Revenue Code of 1986, as amended.
(e)
“Disability” means Executive becomes permanently disabled within the meaning of,
and begins actually to receive long-term disability benefits pursuant to, the
long-term disability plan of the Company or any Subsidiary in effect for, or
applicable to, Executive, or if none, then Executive is determined by the Social
Security Administration to be totally and permanently disabled for purposes of
entitlement to Social Security disability benefits.
(f)
“Subsidiary” means any Company affiliate, whether or not incorporated, the
majority of the outstanding capital stock or other ownership interests of which
is owned, directly or indirectly, by the Company.
(g)
“Termination Date” means the last day of Executive’s employment with the Company
or any Subsidiary.
19. Beneficiaries.
Executive shall be entitled to select (and change, to the extent permitted under
any applicable law) a beneficiary or beneficiaries to receive any compensation
or benefit payable hereunder following Executive’s death, and may change such
election, in either case by giving the Company written notice thereof. In the
event of Executive’s death or a judicial determination of his incompetence,
reference in this Agreement to Executive shall be deemed, where appropriate, to
refer to his beneficiary, estate or other legal representative. If Executive
dies without having designated a beneficiary, or if the beneficiary so
designated has predeceased Executive or cannot be located by the Company within
one year after the date when the Company commenced making a reasonable effort to
locate such beneficiary, then Executive's surviving spouse, or if none, then
Executive's estate shall be deemed to be his beneficiary.
20. Dispute Resolution.
Any dispute or controversy arising under or in connection with this Agreement
(other than an action to enforce the covenants in Section 13 hereof) or the
Ancillary Documents shall be resolved by arbitration in either Richmond,
Virginia or Charleston, West Virginia as so determined by Executive. Three
arbitrators shall be selected, and arbitration shall be conducted, in accordance
with the rules of the American Arbitration Association. Subject to Section 11
hereof, the arbitrators shall have the discretion to award the cost of
arbitration, arbitrators’ fees and the respective attorneys’ fees of each party
between the parties as they see fit.
21. Governing Law. The
validity, interpretation, construction and performance of this Agreement will be
governed by and construed in accordance with the substantive laws of the State
of Delaware, without giving effect to the principles of conflict of laws of such
State.
22. Entire Agreement.
This Agreement and the Ancillary Documents contain the entire understanding
between the parties hereto and supersedes in all respects any prior or other
agreement or understanding, both written and oral, between the Company, any
affiliate of the Company or any predecessor of the Company or affiliate of the
Company and Executive.
23. Acknowledgement.
Executive acknowledges that he has signed this Agreement voluntarily and
knowingly in exchange for the consideration described herein, which Executive
acknowledges is adequate and satisfactory to him and which Executive
acknowledges is in addition to any other benefits to which Executive is
otherwise entitled and that Executive has been and is hereby advised in writing
to consult with an attorney prior to signing this Agreement.
24. Withholding of Taxes.
The Company may withhold from any amounts payable under this Agreement all
federal, state, city or other taxes as the Company is required to withhold
pursuant to any applicable law, regulation or ruling.
25. Survival.
Notwithstanding the expiration of the term of this Agreement, the provisions of
Sections 3, 5, 6, 7, 8, 9, 10, 11, 12, 13, 16, 19, 20, 21 and 25 hereunder shall
remain in effect as long as is reasonably necessary to give effect thereto in
accordance with the terms hereof.
26. Miscellaneous.
References to Sections are to references to Sections of this Agreement. Any
reference in this Agreement to a provision of a statute, rule or regulation will
also include any successor provision thereto. Whenever used herein, the
masculine includes the feminine.
27. Counterparts. This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original but all of which together will constitute one and the
same agreement.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and
delivered as of November 13, 2007.
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MASSEY
ENERGY COMPANY
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By:
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Name:
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Don
L. Blankenship
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Title:
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Chairman,
Chief Executive Officer
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and
President
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John
Christopher Adkins
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