Contents:

Employment Agreement / DON L. BLANKENSHIP

Amendment No. 1 to Employment Agreement

 

 

 

                              AMENDED AND RESTATED

                              EMPLOYMENT AGREEMENT

 

     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"), entered

into as of November 1, 2001, by and between MASSEY ENERGY COMPANY ("Parent"),

A.T. MASSEY COAL COMPANY, INC., ("Massey"), and DON L. BLANKENSHIP (the

"Executive").

 

                                   WITNESSETH:

 

     WHEREAS, Parent and Massey desire to retain the experience, abilities and

service of the Executive upon the terms and conditions specified herein; and

 

     WHEREAS, the Executive is willing to provide such services upon the terms

and conditions specified herein; and

 

     WHEREAS, the parties previously entered into an Employment Agreement, as

previously amended and restated (the "Prior Agreement"), effective as of

November 1, 2001; and

 

     WHEREAS, the parties desire to amend and restate the Prior Agreement as set

forth in this Agreement;

 

     NOW, THEREFORE, in consideration of the premises, the terms and provisions

set forth herein, the mutual benefits to be gained by the performance thereof

and other good and valuable consideration, the receipt and sufficiency of which

are hereby acknowledged, the parties hereto agree as follows:

 

     SECTION 1.  Employment.  Parent and Massey hereby offer employment to the

Executive and the Executive hereby accepts such offers, all upon the terms and

conditions set forth herein.

 

     SECTION 2.  Term.  Subject to the terms and conditions of this Agreement,

the Executive shall be employed by Parent and Massey commencing on November 1,

2001, (the "Effective Date") and terminating on April 30, 2005, (the "Primary

Term") unless sooner terminated pursuant to Section 5 of this Agreement.

 

     SECTION 3.  Duties and Responsibilities.

 

     A.    Capacity.  The Executive shall serve as Chairman and Chief Executive

Officer of Parent and Massey. The Executive shall perform the duties ordinarily

expected of a Chairman and Chief Executive Officer and shall also perform such

other duties consistent therewith as the Organization and Compensation Committee

of Parent's Board of Directors (the "Committee") from time to time, reasonably

determines.

 

     B.    Full-Time Duties.  The Executive shall devote his full business time,

attention and energies to the business of Parent and Massey. Notwithstanding

anything herein to the contrary, the Executive shall be allowed to (a) manage

the Executive's personal investments and affairs, and (b)(i) serve on boards or

committees of civic or charitable organizations or trade

 

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associations, and (ii) with the permission of the Committee, serve on the board

of directors of any corporation or as an advisory director of any corporation;

provided that such activities do not interfere with the proper performance of

his duties and responsibilities specified in Section 3(A).

 

     SECTION 4.  Compensation.

 

     A.    Base Salary.  During the term of this Agreement, the Executive shall

receive a salary (the "Base Salary") of $1,000,000 per annum. The Base Salary

shall be payable by Massey in accordance with the general payroll practices of

Massey in effect from time to time.

 

     B.    Annual Incentive Bonus.  The Executive shall be eligible for an

annual bonus pursuant to the Massey Energy Company 1999 Executive Performance

Incentive Plan ("PIP") with a target amount of at least $700,000, $800,000,

$900,000 and $450,000, based upon company performance for fiscal years ending in

2002, 2003, 2004 and 2005, respectively. The bonus amounts will be paid in

installments on August 15 and February 15 between Massey and the Executive. The

following table shows the target payment amounts and payment dates for each

fiscal year's performance:

 

     ---------------------------------------------------------------------------

               FYE           August 15           February 15          TOTAL

     ---------------------------------------------------------------------------

     2002                     $350,000            $350,000           $700,000

     ---------------------------------------------------------------------------

     2003                     $400,000            $400,000           $800,000

     ---------------------------------------------------------------------------

     2004                     $450,000            $450,000           $900,000

     ---------------------------------------------------------------------------

     2005                     $450,000               N/A             $450,000

     ---------------------------------------------------------------------------

 

     The bonus payments will be based on the financial performance of Parent,

Massey or both for each of the stated fiscal years. There will be predetermined

performance goals and objectives established and mutually agreed to by the

Committee and the Executive. The award payments will be made in accordance with

standard Massey practices.

 

     C.    Long Term Incentive Award.  The Executive shall participate in

Parent's Long Term Incentive Program. The Executive will participate in the

fiscal year 2002, 2003, 2004 and 2005 performance cycles.

 

     The Long Term Incentive Award for each cycle shall consist of a target cash

award of $300,000 (except for the four month fiscal 2005 performance cycle for

which the target cash award shall be $150,000). The amount payable under each

Long Term Incentive Award may range up to 2 times the target level as determined

by the Committee in a manner consistent with Massey's established Long Term

Incentive Program based on predetermined performance of Parent, Massey or both

over the performance cycle. Each of the cash awards will be evidenced by an

Award Agreement between Parent and the Executive pursuant to the PIP.

 

     The Long Term Incentive Program will also consist of annual grants of

50,000 non-qualified stock options, 12,700 shares of restricted stock, and a

cash bonus equal to the fair market value of 7,300 shares of Parent stock

(except for the four month fiscal 2005 performance cycle the Long Term Incentive

Program will consist of 25,000 non-qualified stock options, 6,350

 

 

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shares of restricted stock and a cash bonus equal to the fair market value of

3,650 shares of Parent stock). Each of the stock options will be evidenced by an

Award Agreement between Parent and the Executive pursuant to the Massey Energy

Company 1996 Executive Stock Plan (the "ESP") or the PIP and each of the

restricted stock grants and the cash bonuses will be evidenced by an Award

Agreement between Parent and the Executive pursuant to the PIP.

 

     D. Shadow Stock. Subject to the following terms and conditions, the

Executive shall be granted units of shadow stock ("Units") pursuant to the

Massey Energy Company 1982 Shadow Stock Plan (the "Shadow Plan"), and such Units

shall vest, at the time and in the amounts set forth in the following table:

 

      Date of Grant                   Vesting Date              Number of Units

 

     November 1, 2001               October 31, 2002             300,000 Units

 

     November 1, 2002               October 31, 2003             300,000 Units

 

     November 1, 2003               October 31, 2004             300,000 Units

 

     November 1, 2004                April 30, 2005              150,000 Units

 

     Notwithstanding the foregoing, these grants will become effective only if

the Committee affirmatively authorizes such grant at a meeting prior to November

1 of each year and the Committee may in its sole discretion, at any time prior

to the granting of Units pursuant to this Section 4(D) alter the number of such

Units to be granted and/or condition the vesting of such Units on the

performance of such criteria as the Committee shall elect.

 

     In the event the Executive remains continuously employed by Parent or

Massey until the applicable vesting date, then all restrictions on the Units

shall expire and the Units shall vest. On each date that Units vest in

accordance with the foregoing table, the then value of the Units will thereupon

be credited to the Executive's account in the Massey Executive Deferred

Compensation Program. In the event the Executive's employment with Parent and

Massey terminates prior to the expiration of the Primary Term and following a

"Change of Control" (as such term is hereinafter defined) or if the Executive's

employment is terminated by Parent or Massey for reasons which do not constitute

"Cause" as defined herein, then any Units which have not vested in accordance

with the foregoing table shall be vested as of such termination date and all

restrictions on the Units will expire and the then value of the Units will

thereupon be credited to the Executive's account in the Massey Executive

Deferred Compensation Program. Subject to the provisions of Section 7 below, in

the event the Executive's employment with Parent and Massey terminates prior to

the expiration of the Primary Term for any reason other than those set forth in

the preceding sentence, then all of the Executive's rights in the Units which

have not previously vested in accordance with the foregoing table shall

terminate as of the date of termination, and all rights thereunder shall cease.

The Units will be evidenced by a Shadow Stock Agreement between Parent and the

Executive.

 

     E.    Stock Appreciation Rights (SARs).  As of the Effective Date, the

Executive shall be granted units of Stock Appreciation Rights (SARs) pursuant to

the Massey Energy Company 1997 Stock Appreciation Rights Plan (the "SAR Plan").

The number of shares awarded shall be

 

 

                                       3

 

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787,500. All restrictions on the SARs will expire and the then value of the SARs

will thereupon be credited to Executive's account in the Massey Executive

Deferred Compensation Program in the event that the Executive remains

continuously employed by Parent or Massey from the Effective Date until the

applicable vesting date in accordance with the following table:

 

          Vesting Date                                     Number of SARs

 

        October 31, 2002                                    225,000 SARs

 

        October 31, 2003                                    225,000 SARs

 

        October 31, 2004                                    225,000 SARs

 

         April 30, 2005                                     112,500 SARs

 

     In addition, all restrictions on the SARs will expire and the then value of

the SARs will thereupon be credited to the Executive's account in the Massey

Executive Deferred Compensation Plan in the event that the Executive's

employment with Parent and Massey terminates prior to the expiration of the

Primary Term following a "Change of Control" (as such term is hereinafter

defined) or the Executive's employment is terminated by Parent or Massey for

reasons which do not constitute "Cause" as defined herein.

 

     Subject to the provisions of Section 7 below, in the event that the

Executive's employment with Parent and Massey terminates prior to the expiration

of the Primary Term for any reason other than those set forth in the preceding

sentence, then all of the Executive's rights in the SARs which have not

previously vested in accordance with the foregoing table shall terminate as of

the date of termination, and all rights thereunder shall cease. The SARs shall

have a ten-year term from the Effective Date, subject to earlier expiration in

accordance with the plan documents. The SARs will be evidenced by an SAR

Agreement between Parent and the Executive.

 

     F.    Retention Stock Award.  A subaccount, denominated as the "Retention

Stock Account" will be established for the Executive under the Massey Executive

Deferred Compensation Plan. As of the Effective Date, the Retention Stock

Account will be credited with the then value of 350,000 shares of Parent stock.

The Executive's interest in the Retention Stock Account will vest on April 30,

2005 if the Executive remains in the continuous employ of Parent or Massey from

the Effective Date until April 30, 2005. In addition Executive's interest in the

Retention Stock Account will vest on the date of the Executive's termination of

employment if the Executive's employment with Parent and Massey terminates prior

to April 30, 2005 and following a "Change in Control" (as such term is

hereinafter defined) or if the Executive's employment is terminated by Parent or

Massey for reasons which do not constitute "Cause" as defined herein. In the

event that the Executive's employment with Parent and Massey terminates prior to

April 30, 2005 due to death or permanent and total disability as defined by

Massey personnel policy, then the Executive will vest in a pro rata interest in

the Retention Stock Account in accordance with the following table and the

portion of the Retention Stock Account which does not vest shall terminate and

be forfeited:

 

 

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        ------------------------------------------------------------------------

               Date of Death                          Pro rata Portion

               or Disability                            to be Vested

 

        ------------------------------------------------------------------------

         November 1, 2001 through                           2/7

         October 31, 2002

 

        ------------------------------------------------------------------------

         November 1, 2002 through                           4/7

         October 31, 2003

 

        ------------------------------------------------------------------------

         November 1, 2003 through                           6/7

         October 31, 2004

 

        ------------------------------------------------------------------------

         On or after November 1, 2004                       7/7

        ------------------------------------------------------------------------

 

     Except as provided in the three preceding sentences, the Executive's

interest in the Retention Stock Account shall terminate and be forfeited if the

Executive's employment with Parent and Massey terminates prior to April 30,

2005.

 

     The value of the Retention Stock Account shall be determined based on the

value of the Parent stock as if the amount credited thereto was invested in

Parent stock and received dividends and other distributions thereon to the same

extent as if it was invested in Parent stock.

 

     G.    Retention Cash Award.  The Executive's account in the Massey

Executive Deferred Compensation Plan will be credited with $400,000 on each of

October 31, 2002, October 31, 2003 and October 31, 2004 and an additional

$200,000 on April 30, 2005. All restrictions on such amounts and the bookkeeping

earnings thereon shall lapse on April 30, 2005 if the Executive remains in the

continuous employ of Parent or Massey from the Effective Date until April 30,

2005. In the event the Executive's employment with Parent and Massey terminates

prior to April 30, 2005 and following a "Change in Control" (as such term is

hereinafter defined) or if the Executive's employment is terminated by Parent or

Massey for reasons which do not constitute "Cause" as defined herein, then the

date for the addition any credits to the Massey Executive Deferred Compensation

Plan referred to in the first sentence of this paragraph shall be accelerated to

such termination date and all restrictions on all such amounts (including

amounts credited before the termination date) and the bookkeeping earnings

thereon shall lapse as of such termination date. In the event that the

Executive's employment with Parent and Massey terminates prior to April 30, 2005

due to death or permanent and total disability as defined by Massey personnel

policy, all restrictions shall lapse on amounts scheduled to be credited to the

Executive's account in the Massey Executive Deferred Compensation Plan on or

before the Executive's termination date and the bookkeeping earnings thereon. In

the event that the Executive's employment with Parent and Massey terminates

prior to April 30, 2005 for any reason other than those set forth in the two

preceding sentences, then all of the Executive's rights with respect to amounts

credited or to be credited to the Executive's account in the Massey Executive

Deferred Compensation Plan pursuant to the first sentence of this paragraph

shall terminate as of the date of such termination of employment.

 

     H.    Life Insurance Policy.  The Executive's rights under the $4,000,000

split dollar life insurance policies or program owned by Parent and in force on

the Effective Date shall be vested if the Executive remains in the continuous

employ of the Parent or Massey from the Effective

 

 

                                       5

 

<PAGE>

 

Date until April 30, 2005 or, if earlier, the termination of the Executive's

employment (x) following a "Change in Control" (as such term is hereinafter

defined), (y) by Parent or Massey for reasons which do not constitute "Cause" as

defined herein or (z) due to death or permanent and total disability as defined

by Massey's personnel policy. The Executive's rights under the $4,000,000 split

dollar life insurance policies or program owned by Parent and in force on the

Effective Date shall be determined without regard to this paragraph if the

Executive's employment with Parent and Massey terminates before April 30, 2005

for a reason other than those set forth in items (z), (y) or (z) of the

preceding sentence.

 

     SECTION 5.  Termination of Employment.

 

     Notwithstanding the provisions of Section 2, the Executive's employment

hereunder may terminate under any of the following conditions:

 

     A.    Death.  The Executive's employment under this Agreement shall

terminate automatically upon his death.

 

     B.    Disability.  The Executive's employment under this Agreement may be

terminated due to his Disability. "Disability" shall mean permanent and total

disability as defined by Massey personnel policy.

 

     C.    Termination by Company for Cause.  The Executive's employment

hereunder may be terminated for Cause by Parent or Massey. For purposes of this

Agreement, "Cause" means:

 

           (1)   willful and persistent failure by the Executive to reasonably

perform his duties:

 

           (2)   conviction of a misdemeanor involving moral turpitude which

materially affects the Executive's ability to perform his duties hereunder or

materially adversely affects the Executive's, the Parent's or Massey's

reputation or conviction of a felony;

 

           (3)   material dishonesty, defalcation, or embezzlement or

misappropriation of corporate assets or opportunities; or

 

           (4)   any material default by the Executive in the performance of any

covenants or agreements of the Executive set forth in this Agreement.

 

     Any termination of the Executive's employment for Cause under this Section

5(C) shall be authorized by the Parent's Board of Directors (the "Board"). The

Executive shall be given notice by the Board specifying in detail the particular

act or failure to act on which the Board is relying in proposing to terminate

him for Cause and offering the Executive an opportunity, on a date at least 1

day after the receipt of such notice, to have a hearing, with counsel, before

the Board.

 

 

                                       6

 

<PAGE>

 

     SECTION 6. Change of Control.

 

     A. Upon the Executive's termination of employment for any reason

(including, by way of example and not of limitation, the Executive's death or

permanent and total disability as defined by Massey personnel policy),within two

years following a Change of Control, as defined below, any restrictions on any

stock option, restricted stock, stock appreciation right, Unit or other

equity-based incentive provided under the PIP, ESP, the SAR Plan, the Shadow

Plan or any other plan of Parent (a "Stock Plan") shall lapse immediately.

 

     B. Upon the Executive's termination of employment for any reason

(including, by way of example and not of limitation, the Executive's death or

disability as defined by Massey personnel policy), within two years following a

Change of Control, as defined below, the Executive's account in the Massey

Executive Deferred Compensation Plan shall be credited with any credits

accelerated in accordance with Section 4(G) and the Executive shall be vested in

his rights under the split dollar life insurance policies or program in

accordance with Section 4(H).

 

     C. A Change of Control shall have the meaning set forth in the PIP as of

the Effective Date, or any definition that is more favorable to the Executive

that is set forth in any subsequent Stock Plan or that is approved by the Board

for the benefit of Massey's senior executives.

 

     SECTION 7. Voluntary Termination

 

     A. Notwithstanding any other provisions of this Agreement, if Executive

voluntarily terminates his employment with Massey at any time after October 31,

2002 and prior to October 31, 2004, Executive's rights with respect to the

compensation described in paragraphs A, B, C, D, E and H of Section 4 of this

Agreement shall be determined, and Executive shall receive such compensation, as

if Executive terminated his employment as of the next succeeding October 31

after the actual date of his termination of employment (the "Deemed Termination

Date").

 

     B. In consideration of the foregoing and without any further compensation,

Executive shall, for a period of six months after the actual date of his

termination of employment, provide to Parent and Massey such advice and other

consulting services as Parent or Massey shall request. During such six month

period, Executive shall make himself available to Parent and Massey on a

full-time basis and shall not enter into any employment, consulting or other

business arrangement with any competitor or potential competitor of Parent or

Massey.

 

     SECTION 8. Payments Upon Termination.

 

     A. Upon termination of the Executive's employment for any reason prior to

the expiration of the Primary Term, Parent and/or Massey shall be obligated to

pay, and the Executive shall be entitled to receive:

 

        (1)  all accrued and unpaid Base Salary under Section 4(A) to the date

of termination;

 

        (2)  any unpaid bonus under Section 4(B) or long-term incentive award

under Section 4(C) for the fiscal year or performance cycle ending prior to the

date of termination;

 

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<PAGE>

 

provided that if such termination occurs after October 31 of a calendar year,

such unpaid bonus or long-term incentive award shall accrue as of October 31;

 

        (3) any benefits to which he is entitled under the terms of the Massey

Executive Deferred Compensation Program, the Long Term Incentive Program, and

any other applicable employee pension or benefit plan or program, or applicable

law.

 

     B. Upon termination of the Executive's employment by Parent or Massey

without Cause pursuant to Section 5(C), Parent and/or Massey shall be obligated

to pay and the Executive shall be entitled to receive:

 

        (1)  all of the amounts and benefits described in Section 8(A);

 

        (2)  Base Salary under Section 4(A) for the remainder of the Primary

Term, as if there had been no termination;

 

        (3) annual bonuses under Section 4(B)for the remainder of the Primary

Term equal to the target bonus for each such fiscal year, such bonuses to be

paid at the same time annual bonuses are regularly paid by Massey to him;

 

        (4) accelerated vesting of Units of shadow stock and corresponding

credits to the Executive's account under the Massey Executive Deferred

Compensation Plan in accordance with Section 4(D);

 

        (5) accelerated vesting of SARs and corresponding credits to the

Executive's account under the Massey Executive Deferred Compensation Plan in

accordance with Section 4(E);

 

        (6) accelerated vesting of the Executive's interest in the Retention

Stock Account in accordance with Section 4(F);

 

        (7) accelerated credits to the Executive's account under the Massey

Executive Deferred Compensation Plan in accordance with Section 4(G) and

accelerated vesting of such amounts;

 

        (8) accelerated vesting of the Executive's rights under the split

dollar life insurance policy in accordance with Section 4(H).

 

     C. Upon termination of the Executive's employment on account of the

Executive's death or permanent and total disability as defined by Massey

personnel policy, Parent and/or Massey shall be obligated to pay, and the

Executive shall be entitled to receive:

 

        (1) all of the amounts and benefits described in Section 8(A);

 

        (2) accelerated vesting of a pro rata interest in the Retention Stock

Account in accordance with Section 4(F);

 

                                       8

 

<PAGE>

 

        (3) accelerated credits to the Executive's account in the Massey

Executive Deferred Compensation Plan in accordance with Section 4(G) and

accelerated vesting of such amounts;

 

        (4) accelerated vesting of the Executive's rights under the split

dollar life insurance policy in accordance with Section 4(H).

 

     D. Upon voluntary termination of employment by Executive as set forth in

Section 7, Parent and/or Massey shall be obligated to pay and the Executive

shall be entitled to receive:

 

        (1) all of the amounts and benefits described in Section 8(A);

 

        (2) base salary under Section 4(A) for the remaining period through

the Deemed Termination Date;

 

        (3) annual bonuses under Section 4(B), if any, for the remaining

period through the Deemed Termination Date;

 

        (4) vesting of any long-term incentive awards under Section 4(C) that

would have vested had Executive's employment with Parent or Massey continued

through the Deemed Termination Date;

 

        (5) vesting of any Units of shadow stock and corresponding credits to

the Executive's account under the Massey Executive Deferred Compensation Plan in

accordance with Section 4(D) that would have vested had Executive's employment

with Parent or Massey continued through the Deemed Termination Date, except

that, in lieu of credits to the Massey Executive Deferred Compensation Plan, the

value of such Units will be paid within 15 days of such vesting;

 

        (6) vesting of SARs and corresponding credits to the Executive's

account under the Massey Executive Deferred Compensation Plan in accordance with

Section 4(E) that would have vested had Executive's employment with Parent or

Massey continued though the Deemed Termination Date, except that, in lieu of

credits to the Massey Executive Deferred Compensation Plan, the value of such

SARs will be paid within 15 days of such vesting; and

 

        (7) a determination of the Executive's rights under the split dollar

life insurance policy as described in Section 4(H) as though Executive's

employment with Parent or Massey had terminated on the Deemed Termination Date.

 

     E. In the event of any termination of employment under this Section 8, the

Executive shall be under no obligation to seek other employment, and there shall

be no offset against amounts due the Executive under this Agreement on account

of any remuneration attributable to any subsequent employment that he may

obtain.

 

     SECTION 9. Amendment; Waiver. The terms and provisions of this

Agreement may be modified or amended only by a written instrument executed by .

each of the parties hereto, and compliance with the terms and provisions hereof

may be waived only by a written instrument executed by each Party entitled to

the benefits thereof. No failure or delay on the part of any

 

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<PAGE>

 

party in exercising any right, power or privilege granted hereunder shall

constitute a waiver thereof, nor shall any single or partial exercise of any

such right, power or privilege preclude any other or further exercise thereof or

the exercise of any other right, power or privilege granted hereunder.

 

     SECTION 10. Entire Agreement. Except as contemplated herein, this

Agreement constitutes the entire agreement between the parties with respect to

the subject matter hereof and supersedes any and all prior written or oral

agreements, arrangements of understandings between Parent, Massey and the

Executive with respect thereto; provided, however, that this Agreement shall not

affect or impair in any way the rights and obligations of Parent and Executive

under the Special Successor Development and Retention Program established in

August, 1998.

 

     SECTION 11. Notices. All notices or communications hereunder shall be in

writing, addressed as follows or to any ddress subsequently provided to the

other party:

 

     To Parent:

     Massey Energy Company

     Attention:  Chief Legal Officer

     4 North 4/th/ Street

     Richmond, VA 23219

 

     To Massey:

 

     A. T. Massey Coal Company, Inc.

     Attention:  Chief Legal Officer

     4 North 4/th/ Street

     Richmond, VA  23219

 

     To the Executive:

 

     Don Blankenship

     P.O. Box 895

     Matewan, WV  25678

 

     All such notices shall be conclusively deemed to be received and shall be

effective, (i) if sent by hand delivery or overnight courier, upon receipt, (ii)

if sent by telecopy or facsimile transmission, upon confirmation of receipt by

the sender of such transmission or (iii) if sent by registered or certified

mail, on the fifth day after the day on which such notice is mailed.

 

     SECTION 12. Severability. In the event that any term or provision of

this Agreement is found to be invalid, illegal or unenforceable, the validity,

legality and enforceability of the remaining terms and provisions hereof shall

not be in any way affected or impaired thereby, and this Agreement shall be

construed as if such invalid, illegal or unenforceable provision had never been

contained therein.

 

     SECTION 13. Binding Effect; Assignment. This Agreement shall be binding

upon and inure to the benefit of the parties and their respective successors and

assigns (it being understood and agreed that, except as expressly provided

herein, nothing contained in this Agreement is

 

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<PAGE>

 

intended to confer upon any other person or entity any rights, benefits or

remedies of any kind or character whatsoever). No rights or obligations of

Parent or Massey under this Agreement may be assigned or transferred by Parent

or Massey except that such rights or obligations may be assigned or transferred

pursuant to a merger or consolidation in which Parent or Massey is not the

continuing entity, or the sale or liquidation as described of all or

substantially all of the assets of Parent or Massey, provided that the assignee

or transferee is the successor to all or substantially all of the assets of

Parent or Massey and such assignee or transferee assumes the liabilities,

obligations and duties of Parent or Massey, as contained in this Agreement,

either contractually or as a matter of law. Parent and Massey further agree

that, in the event of a sale of assets or liquidation as described in the

preceding sentence, each shall take whatever action it legally can in order to

cause such assignee or transferee to expressly assume the liabilities,

obligations and duties of Parent or Massey hereunder. In the event of the sale,

liquidation, consolidation, or merger of Massey or substantially all the assets

of Massey in which Parent does not retain an ownership interest of more than

50%, Parent agrees to guarantee payment to Executive of all amounts due under

this or related agreements referenced herein.

 

     SECTION 14. Governing Law; Dispute Resolution. This Agreement shall be

governed by and construed in accordance with the laws of the Commonwealth of

Virginia (except that no effect shall be given to any conflicts of law

principles thereof that would require the application of the laws of another

jurisdiction). Any dispute or misunderstanding arising out of or in connection

with this Agreement shall first be settled, if possible, by the parties

themselves through negotiation and, failing success at negotiation through

mediation, and failing success at mediation, shall be arbitrated at Richmond,

Virginia. Unless otherwise agreed upon by Massey and the Executive, the

arbitration shall be had before three arbitrators, each party designating an

arbitrator and the two designees naming a third arbitrator experienced in

employment related controversies. The procedure shall be in accordance with the

rules and regulations of the American Arbitration Association.

 

     SECTION 15. Headings. The headings of the sections contained in this

Agreement are for convenience only and shall not be deemed to control or affect

the meaning or construction of any provision of this Agreement.

 

     SECTION 16. Counterparts. This Agreement may be executed in one or more

counterparts, each of which shall be deemed an original, but all of which

together shall constitute one and the same instrument.

 

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<PAGE>

 

     IN WITNESS WHEREOF, the undersigned have executed this Agreement effective

as of the date set forth above.

 

                               MASSEY ENERGY COMPANY

 

                               By: __________________________________

 

 

 

                               A.T. MASSEY COAL COMPANY, INC.

 

 

                               By: ___________________________________

 

 

                               Executive:

 

 

                               _______________________________________

                               Donald L. Blankenship

 

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AMENDMENT NO. 1

TO

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDMENT NO. 1 to that certain AMENDED AND RESTATED EMPLOYMENT AGREEMENT dated November 1, 2001, by and among MASSEY ENERGY COMPANY, a Delaware corporation (“Parent”), A.T. MASSEY COAL COMPANY, INC., a Virginia corporation and the sole direct, wholly-owned subsidiary of Parent (“Massey”), and DON L. BLANKENSHIP (the “Executive”), as amended and restated on July 16, 2002 (the “Current Agreement”), is entered into as of February 22, 2005, by and among Parent, Massey and the Executive (the “Amendment”).

 

WITNESSETH:

 

WHEREAS, the Current Agreement expires April 30, 2005, Parent’s fiscal year has been changed to the calendar year since the Current Agreement was entered into; and the parties desire to extend the terms of the Current Agreement so it will coincide with Parent’s fiscal year, in accordance with the terms specified in this Amendment;

 

WHEREAS, Parent and Massey desire to retain the experience, abilities and services of the Executive beyond the Primary Term of the Current Agreement; and

 

WHEREAS, the Executive is willing to provide such services beyond the Primary Term of the Current Agreement upon the terms and provisions specified in this Amendment;

 

NOW, THEREFORE, in consideration of the premises, the terms and provisions set forth herein, the mutual benefits to be gained by the performance thereof, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1. Definitions. Capitalized terms not defined herein shall have the meanings ascribed to them in the Current Agreement.

 

SECTION 2. Extension Period. The parties agree to extend the terms and provisions set forth in the Current Agreement for an additional eight months (the “Extension Period”), which period shall begin on May 1, 2005 and extend through December 31, 2005.

 

SECTION 3. Compensation. The Executive shall receive the compensation outlined on Exhibit A attached hereto and incorporated herein by this reference during the Extension Period, in accordance with the provisions of the Current Agreement, subject to any appropriate adjustments for dates, etc. (the “Extension Period Compensation”). No vesting, payment, conversion and other provisions regarding any compensation items relating to the Primary Term of the Current Agreement shall be affected by this Amendment, except as otherwise provided herein. On April 30, 2005, the then value of the Retention Stock Award for the Primary Term under the Current Agreement, determined by the average of the high and low trading prices of Parent’s stock on the New York Stock Exchange on such date, shall be converted to a cash amount and credited to the Executive’s account in the Massey Executive Deferred Compensation Program.


SECTION 4. Nonqualified Deferred Compensation Plan Omnibus Provision. Any compensation or benefits which are provided or available to the Executive pursuant to or in connection with any plan or program (including without limitation the Current Agreement, as amended by this Amendment) to which Parent, Massey or any of their affiliates is a party and which is considered to be provided under a nonqualified deferred compensation plan subject to Section 409A of the Internal Revenue Code of 1986, as amended (“IRC”) shall be provided and paid in a manner, and at such time and in such form, as complies with the applicable requirements of IRC Section 409A to avoid the unfavorable tax consequences provided therein for non-compliance. The Executive hereby consents to the amendment of any such plan or program as may be determined by Parent or Massey to be necessary or appropriate to evidence or further evidence required compliance with IRC Section 409A. Unless Parent or Massey otherwise determines, all deferrals for the benefit of the Executive under any plan or program subject or potentially subject to the provisions of IRC Section 409A will cease as of December 31, 2004, and Parent or Massey will establish new plans or programs for such deferrals after December 31, 2004 which mirror the provisions thereof but for compliance with IRC Section 409A.

 

SECTION 5. Full Force and Effect. The terms and provisions of the Current Agreement, as amended by this Amendment, shall continue in full force and effect, except to the extent such terms and/or provisions conflict with this Amendment, in which case this Amendment shall control.

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date set forth above.

 

 

 

 

MASSEY ENERGY COMPANY

 

 

 

 

/s/ Baxter F. Phillips, Jr.


 

Name:

 

Baxter F. Phillips, Jr.

Title:

 

Executive Vice President and

 

 

Chief Administrative Officer

 

A.T. MASSEY COAL COMPANY, INC.

 

 

 

 

/s/ Baxter F. Phillips, Jr.


 

Name:

 

Baxter F. Phillips, Jr.

Title:

 

Executive Vice President and

Chief Administrative Officer

 

 

 

 

/s/ Don L. Blankenship


 

 

 

Don L. Blankenship

 

2


Exhibit A to Amendment No. 1 to Amended and Restated Employment Agreement of February 22, 2005 by and among Massey Energy Company, A.T. Massey Coal Company, Inc. and Don L. Blankenship

 

May 1, 2005 – December 31, 2005 Extension Period Compensation

 

1.

Base Monthly Salary – $83,333.

 

2.

Extension Incentive Bonus – $600,000 target amount based on consolidated companies performance for all of 2005, payable February 15, 2006.

 

3.

Long Term Incentive Award – $200,000 target cash award, 33,333 non-qualified stock options, 8,467 shares of restricted stock, and a cash bonus award equal to the fair market value of 4,867 shares of Parent stock.1

 

4.

Deferred Incentive Bonus – Bonus equal to the product obtained by multiplying (i) the average of the high and low trading prices of Parent common stock on the New York Stock Exchange on December 30, 2005, by (ii) 266,667, to be credited to the Executive’s account in the Massey Executive Deferred Compensation Program.

 

5.

Stock Appreciation Rights (SARs) –150,000 SARs to be granted on May 1, 2005, and vesting on December 30, 2005, to be credited to the Executive’s account in the Massey Executive Deferred Compensation Program upon exercise of the SARs by the Executive.

 

6.

Retention Cash Award – $266,667 to be credited to the Executive’s account in the Massey Executive Deferred Compensation Program on December 30, 2005.

 

7.

Life Insurance – Parent or Massey shall pay the premiums on the Executive’s $4,000,000 split dollar life insurance policy.

 

8.

In the event that the Executive’s employment with Parent and/or Massey terminates during and prior to the end of the Extension Period for any reason other than for Cause, then Parent and/or Massey shall pay to the Executive, or if the Executive is deceased to his Estate, 2.5 times the sum of the Executive’s Annual Base Salary of $1,000,000 plus Extension Incentive Bonus of $600,000, unless the Executive elects to terminate his employment voluntarily during and prior to the end of the Extension Period other than for good reason (i.e., relocation, reduction in base salary or other compensation, material reduction in scope of responsibilities, or significant reduction in authority). Any such payment shall be made in six equal monthly payments beginning the month after the Executive’s employment with Parent and/or Massey terminates.

 

9.

In the event that the Executive’s employment with Parent and/or Massey terminates during and prior to the end of the Extension Period for any reason, all of the Executive’s rights with respect to the Deferred Incentive Bonus, Stock Appreciation Rights, and Retention Cash Award, as set forth in items 4, 5, & 6 above, shall terminate and all rights thereunder shall cease, and payment of Life Insurance premiums as set forth in item 7 above shall cease.

 


1

The Long Term Incentive Award in Item 3 above supplements the November 15, 2004 award and is made subject to all the terms, conditions and performance requirements of the original November 15, 2004 grant.

 

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