Alpha Natural Resources

 

 

 

 

 

 

                              Corporate Governance Practices and Policies

                              The following corporate governance practices and

                              policies (the "Practices and Policies") have been

                              approved by the Board of Directors (the "Board")

                              of Alpha Natural Resources, Inc. (the "Company")

                              at the recommendation of the Board's Nominating

                              and Corporate Governance Committee. Along with the

                              charters of the Board committees applicable

                              provisions of the Company's governing instruments,

                              and the Delaware General Corporation Law, these

                              Practices and Policies provide the foundation for

                              the governance of the Company. The Board may

                              review and amend these Practices and Policies from

                              time to time as it deems necessary.

                              I. ROLE OF BOARD AND MANAGEMENT.

                              The Board directs the management of the business

                              and affairs of the Company and provides strategic

                              guidance and oversight to the Company's

                              management. The Board is elected by the Company's

                              stockholders. The Company's day-to-day business

                              operations are conducted and supervised by its

                              management and employees, under the supervision of

                              the Chief Executive Officer ("CEO"). The CEO

                              speaks for the Company and reports to the Board.

                              The directors exercise their business judgment and

                              act in what they reasonably believe is the best

                              interests of the Company and its stockholders.

                              II. FUNCTIONS OF BOARD.

                              The Board generally has at least four scheduled

                              meetings a year at which it reviews and discusses

                              the Company's plans and prospects, current issues

                              facing the Company and management's reports on the

                              Company's performance. The Board has a variety of

                              specific powers and duties, some of which may be

                              delegated to committees of the Board, including:

                              (i) Providing general strategic guidance and

                              oversight to the Company's management;

                              (ii) Reviewing, approving and monitoring major

                              corporate actions and strategies;

                              (iii) Evaluating major risks facing the Company;

                              (iv) Selecting and evaluating the CEO and Chairman

                              of the Board and providing oversight to management

                              succession planning;

                              (v) Providing counsel and oversight on the

                              selection and evaluation of senior management; and

                              (vi) Striving to ensure legal and ethical conduct.

                              Directors are expected to attend Board meetings

                              and meetings of committees on which they serve in

                              person or by conference telephone. Directors are

                              also expected to review all materials distributed

                              prior to a meeting and to spend sufficient time

                              preparing for each meeting in order to properly

                              discharge their responsibilities.

 

                              III. SIZE OF BOARD AND SELECTION PROCESS.

                              The number of directors serving on the Board is

                              set by a resolution of the Board and generally

                              will be small enough to encourage personal

                              interaction and discussion but large enough to

                              address the significant challenges and issues

                              facing the Company. All of our directors serve

                              one-year terms, and all directors are elected each

                              year by the stockholders at the annual meeting.

                              The Board proposes a slate of nominees to the

                              stockholders for election to the Board (using

                              information provided by the Nominating and

                              Corporate Governance Committee). The Board may

                              fill vacancies or newly created directorships.

                              Stockholders may propose nominees for election as

                              directors by complying with the director

                              nomination provisions of the Company's Bylaws.

                              IV. BOARD MEMBERSHIP CRITERIA.

                              The Nominating and Corporate Governance Committee

                              reviews the qualifications of proposed nominees

                              for director to serve on the Board and recommends

                              nominees to the Board.

                              The CEO, members of the Nominating and Corporate

                              Governance Committee, and other members of the

                              Board are the primary sources for the

                              identification of prospective nominees. The

                              Nominating and Corporate Governance Committee is

                              also authorized to retain search firms or other

                              consultants for this purpose. The Nominating and

                              Corporate Governance Committee may consider

                              proposed nominees that are identified by

                              stockholders as described under Section III above.

 

                              While the Nominating and Corporate Governance

                              Committee has no formal process for identifying

                              and evaluating proposed nominees, the members of

                              the Nominating and Corporate Governance Committee

                              generally will review the resume of a proposed

                              nominee and consult the proposed nominee's

                              personal references. The Nominating and Corporate

                              Governance Committee may also personally interview

                              (and suggest that other members of the Board

                              interview) the proposed nominee, if the Committee

                              considers the proposed nominee sufficiently

                              suitable.

                              In identifying candidates for membership on the

                              Board, the Nominating and Corporate Governance

                              Committee and the Board shall take into account

                              all factors it considers appropriate, which may

                              include (a) Board qualifications of diversity,

                              individuals with various and relevant career

                              experience, creating a Board respected within the

                              industry and the Company's markets, proven leaders

                              in the communities in which the Company does

                              business, experienced managers, visionaries for

                              the future of the Company's business, ability to

                              effectively handle crises and minimize risk,

                              dedicated to sound corporate governance, and

                              collegial, and (b) individual qualifications of

                              strength of character, maturity of judgment,

                              independence of thought, accounting and finance

                              knowledge (including expertise that could qualify

                              at least one director as an "audit committee

                              financial expert," as that term is defined by the

                              rules of the Securities and Exchange Commission

                              (the "SEC")), technical expertise, familiarity

                              with the Company's business industry and

                              competition, general business acumen, critical

                              thinking, local or community ties, consideration

                              of any actual or potential conflicts of interest

                              posed by the proposed nominee's election as a

                              director, and the proposed nominee's time

                              available to devote to Board and committee

                              activities and to enhance his or her knowledge of

                              the Company's business. The Nominating and

                              Corporate Governance Committee and Board also may

                              consider the extent to which the candidate would

                              fill a present need on the Board.

 

                              Each director will disclose any potential or

                              perceived conflict of interest they may have to

                              the Chair of the Nominating and Corporate

                              Governance Committee as well as on any issue

                              considered by the Board or the committee on which

                              they serve. If a director has a conflict of

                              interest, he or she will not vote on the related

                              matter and will not attempt to influence other

                              directors on their votes on the matter.

 

                              V. INDEPENDENCE OF DIRECTORS.

                              The Company's Board and committee composition is

                              subject to the rules of the New York Stock

                              Exchange (the "NYSE"), which require a majority of

                              the directors serving on the Board to

                              beindependent and require that the Company's Audit

                              Committee, Compensation Committee and Nominating

                              and Corporate Governance Committee be comprised

                              entirely of independent directors.

                              Each director will promptly inform the Chair of

                              the Nominating and Corporate Governance Committee

                              or the Chairman of the Board of any change in his

                              or her circumstances which might compromise such

                              director's independence or impact his or her

                              ability to perform Board and committee duties

                              effectively. The Board encourages each director to

                              frequently assess when such changed circumstances

                              might compromise independence.

                              VI. RESIGNATION.

                              Management directors will offer to resign from the

                              Board upon their resignation, removal or

                              retirement as an officer of the Company. The Board

                              will, in its sole discretion, determine whether to

                              accept such resignation.

                              Non-management directors must inform the Chair of

                              the Nominating and Corporate Governance Committee,

                              the Lead Director (if any), and the CEO of any

                              principal occupation or business association

                              change, including retirement, and offer their

                              resignation to the Chair of the Nominating and

                              Corporate Governance Committee and the CEO. The

                              Chair of the Nominating and Corporate Governance

                              Committee and/or the CEO, in turn, will advise the

                              Nominating and Corporate Governance Committee of

                              the change of status so that the committee, with

                              the aid of such person(s) and the Lead Director

                              (if any), may make a recommendation to the Board

                              of whether to accept or reject the offer of

                              resignation. The Board shall review the

                              recommendation of the Nominating and Corporate

                              Governance Committee and shall determine whether

                              to accept or reject the offer of resignation.

                              VII. SERVICE ON BOARDS AND OTHER COMMITMENTS

                              The Nominating and Corporate Governance Committee

                              will carefully review the prior commitments of

                              each director candidate before recommending

                              his/her appointment or nomination to join the

                              Board. Directors should advise the Chair of the

                              Nominating and Corporate Governance Committee, the

                              Lead Director (if any), and the CEO prior to

                              accepting an invitation to serve on any corporate

                              board od directors, or with any government group

                              and should keep them fully apprised of the

                              committees of other public company boards on which

                              they serve.

                              It is the Board's policy that any individual

                              director should not serve on more than three

                              public company boards (inclusive of the Company's

                              Board), if the director is employed, or five

                              public company boards (inclusive ot the Company's

                              Board), if the director is retired and no longer

                              employed, unless otherwise expressly approved by

                              the Board. Except in special circumstances and

                              only after the Board has determined that such

                              simulataneous service would not impair the ability

                              to serve effectively on the Company's Audit

                              Committee, no member of the Audit Committee shall

                              serve on the audit committees of more than three

                              public companies (inclusive of the Company's Audit

                              Committee). For purposes of this policy and as

                              provided under the NYSE rules, (i) service on the

                              boards of multiple funds within a single family of

                              funds shall be deemed service on one public

                              company board, and (ii) service on multiple audit

                              committees within a single family of funds shall

                              be deemed as service on one public company audit

                              committee.

                              VIII. LEAD DIRECTOR

                              In the event that the director serving as Chairman

                              of the Board is not independent, the Board shall

                              designate one of its independent members who has

                              served as a director of the Company for at least

                              one year to serve as Lead Director of the Board,

                              with the following specific duties and

                              responsibilities:

 

                              (i) Serving as the principal liaison between the

                              Board and the Chairman of the Board and between

                              the Board and the Company's stockholders;

 

                              (ii) Presiding over all Board meetings at which

                              the Chairman is not present, including executive

                              sessions and meetings of non-management and/or

                              independent directors;

                              (iii) Approving with the Chairman of the Board the

                              schedule and agenda for Board meetings;

                              (iv) Authority to direct the Chief Executive

                              Officer or Secretary to call a special meeting of

                              the Board;

                              (v) Authority to consult directly with major

                              stockholders, when requested and appropriate to do

                              so; and

                              (vi) Performing such other duties as may from time

                              to time be delegated to the Lead Director by the

                              Board.

                              IX. CODE OF BUSINESS CONDUCT AND ETHICS.

                              The Company is committed to conducting business in

                              accordance with the highest standards of ethics,

                              integrity, and quality and has adopted a Code of

                              Business Conduct and Ethics (the "Code") to

                              promote ethical standards and deter wrongdoing.

                              The Code addresses matters including: (i)

                              conflicts of interest, (ii) corporate

                              opportunities, (iii) confidentiality, (iv) fair

                              dealing, (v) protection and proper use of Company

                              assets, (vi) compliance with laws, rules, and

                              regulations, and (vii) such other matters as the

                              Board deems appropriate. The Code applies to all

                              directors, officers and employees of the Company.

                              The Code requires all covered persons to avoid

                              conflicts of interest that may be to the detriment

                              of the Company. No waiver of the Code will be

                              granted except by a vote of the Board or the Audit

                              Committee, which will determine whether a waiver

                              is appropriate and ensure that the waiver is

                              accompanied by appropriate controls designed to

                              protect the Company.

                              X. COMMUNICATION WITH DIRECTORS.

                              Interested parties may contact an individual

                              director, the Board or a Board committee, by

                              sending an email to vgroves@alphanr.com or write

                              to the following address:

                              Board of Directors

                              Alpha Natural Resources, Inc.

                              One Alpha Place, P.O. Box 2345

                              Abingdon, VA 24212

                              Attention: Vaughn R. Groves, General Counsel

                              Communications should specify the addressee(s) and

                              the general topic of the communication. The

                              Company will review and sort communications before

                              forwarding them.

                              Any concerns about accounting or auditing matters

                              or possible violations of the Code should be

                              reported pursuant to the procedures outlined in

                              the Code, which are available on the Company's

                              website www.alphanr.com.

 

                              XI. ACCESS TO EMPLOYEES AND INDEPENDENT ADVISORS.

                              Directors have full access to the Company's

                              management and other employees. Directors may

                              initiate any required meetings or contacts

                              directly or through the Company's CEO or

                              Secretary. At the invitation of the Board or a

                              committee, members of management may attend Board

                              or committee meetings and make presentations. The

                              Board and committees have access to the Company's

                              officers and employees and may retain independent

                              legal, accounting or other consultants for advice

                              without obtaining the approval of the Company in

                              advance. The Company will pay the fees and

                              expenses of such consultants.

                              XII. BOARD COMMITTEES.

                              The Board has established the following four

                              standing committees to assist the Board in

                              discharging its responsibilities: (i) the Audit

                              Committee; (ii) the Compensation Committee; (iii)

                              the Nominating and Corporate Governance Committee;

                              and (iv) the Safety, Health and Environmental

                              Committee. Each committee has a written charter

                              which is approved by the Board and describes the

                              committee's authority and responsibilities,

                              qualifications for membership, procedures for

                              appointment and removal and committee operations

                              and structure. The members of the committees are

                              appointed by the Board and each committee reports

                              to the Board. Subject to applicable law and NYSE

                              rules, the Board may add new committees or

                              eliminate existing committees as it deems

                              advisable. Additionally, each committee may invite

                              to its meetings any director, member of management

                              of the Company and such other persons as it deems

                              appropriate in order to carry out its

                              responsibilities. Each committee may also exclude

                              from its meetings any persons it deems appropriate

                              in order to carry out its responsibilities.

 

                              The NYSE rules require the Company to have an

                              Audit Committee, a Compensation Committee and a

                              Nominating and Corporate Governance Committee. The

                              main function of each committee is as follows:

 

                              Audit Committee. The audit committee monitors the

                              quality, reliability and integrity of the

                              Company's accounting policies and financial

                              statements, oversees the Company's compliance with

                              legal and regulatory requirements and reviews the

                              independence, qualifications and performance of

                              the Company's internal and independent auditors.

 

                              Compensation Committee. The compensation committee

                              is responsible for reviewing and approving the

                              compensation, including salary, bonuses and

                              benefits, of the Company's executive officers

                              (and, in the case of the CEO, reviewing, approving

                              and recommending that the independent members of

                              the Company's Board ratify and approve such

                              compensation) and producing a compensation

                              committee report on executive compensation as

                              required by the SEC to be included in the

                              Company's annual proxy statement or annual report

                              on Form 10-K filed with the SEC.

 

                              Nominating and Corporate Governance Committee. The

                              nominating and corporate governance committee will

                              assist the Board in identifying individuals

                              qualified to become Board members and executive

                              officers and selecting, or recommending that the

                              Board select, director nominees for election to

                              the Board and its committees. The Nominating and

                              Corporate Governance Committee is also responsible

                              for monitoring compliance in areas of corporate

                              governance.

 

                              XIII. MEETINGS OF NON-MANAGEMENT DIRECTORS.

                              The non-management members of the Board will have

                              regularly scheduled executive sessions during the

                              year without management present. At their

                              discretion, the non-management directors can

                              appoint one of their members to act as a

                              chairperson to preside at such meetings. During

                              these sessions, the non-management directors will,

                              among other things, review CEO succession,

                              performance and compensation; compensation of

                              other key executive officers; strategic issues for

                              Board consideration; future Board agendas and the

                              flow of information to directors; management

                              progression and succession; and the Board's

                              corporate governance matters.

                              XIV. BOARD AND COMMITTEE AGENDAS.

                              The Board and each Board committee is responsible

                              for setting the agenda for meetings held during

                              the year. Information relevant to the agenda of

                              each meeting will be distributed to the directors

                              or committee members in writing or electronically

                              in advance of the meeting. The CEO, or, in the

                              case of Board committees, the committee

                              chairperson, will determine the nature and extent

                              of information that will be provided regularly to

                              the directors or the committee members. Directors

                              and committee members are entitled to make

                              suggestions for agenda items, or additional

                              pre-meeting materials, to the CEO or appropriate

                              committee chairperson at any time.

                              XV. BOARD COMPENSATION.

                              The Compensation Committee has responsibility for

                              recommending to the Board compensation and

                              benefits for non-employee directors, if any,

                              including cash, equity-based awards and other

                              compensation. In determining non-employee director

                              compensation and benefits, if any, the

                              Compensation Committee may seek advice from

                              outside consultants and will consider (i) the

                              amount that is adequate to compensate directors

                              for the time and effort attending to their

                              obligations on the Company's Board and committees

                              and (ii) the compensation and benefits offered by

                              comparable public companies to non-employee

                              directors. The Compensation Committee will also

                              consider issues raised with respect to a

                              director's independence if compensation exceeds

                              what is customary.

                              XVI. DIRECTOR ORIENTATION AND CONTINUING

                              EDUCATION.

                              The Company's Chief Financial Officer and the

                              General Counsel will be responsible for providing

                              an orientation for new directors. This orientation

                              will include familiarizing the directors with

                              their responsibilities under applicable law and

                              the rules of the NYSE and briefing the directors

                              on the Company's key policies and practices,

                              strategic plans, financial performance and

                              compliance programs. Members of senior management

                              will also periodically provide directors with

                              materials and update directors on subjects that

                              would assist them in discharging their duties

                              including new legal and regulatory developments

                              relating to directors. Directors are encouraged to

                              visit the Company's principal office in Abingdon,

                              Virginia and one or more of the Company's

                              operations. The Company also encourages directors

                              to participate in continuing director education

                              seminars, and the Company will pay a director's

                              reasonable fees and expenses to participate in one

                              such seminar annually.

                              XVII. ANNUAL MEETING.

                              The Board encourages directors to attend the

                              annual meetings of the Company's stockholders.

                              XVIII. CEO AND SENIOR MANAGEMENT PERFORMANCE

                              REVIEW.

                              The Compensation Committee and its authorized

                              subcommittees will review the performance of the

                              CEO and senior management at least annually. The

                              review will examine each individual's performance

                              in light of the Company's goals and objectives and

                              determine compensation based on such review.

                              XIX. SUCCESSION PLAN.

                              The Board is responsible for assuring that the

                              Company has key management talent to pursue the

                              Company's business plans and strategies. The Board

                              will consider a succession plan for the CEO and

                              other key executives, based upon recommendations

                              from the Nominating and Corporate Governance

                              Committee. The succession plan will include

                              advance planning for emergencies and contingencies

                              such as the departure, death or disability of the

                              CEO and other senior members of management.

                              XX. ANNUAL PERFORMANCE EVALUATION.

                              The Board will conduct an annual self-evaluation

                              to determine whether the Board and its committees

                              are functioning effectively. Directors will

                              provide comments regarding such self-evaluation

                              directly to the Nominating and Corporate

                              Governance Committee and such committee will

                              report annually to the Board with an assessment of

                              the Board's and the committees' performance. The

                              report will assess the Board's and the committees'

                              contributions to the Company and focus on areas in

                              which the Board or management believes that the

                              Board and the committees could improve. The Board,

                              with the assistance of the Nominating and

                              Corporate Governance Committee, will also review

                              these Practices and Policies from time to time as

                              necessary to determine whether any amendments are

                              appropriate.

                              XXI. STOCK OWNERSHIP.

                              The Board believes that directors and executive

                              officers should be stockholders and have a

                              financial stake in the Company. In furtherance of

                              this belief, the Board has established stock

                              ownership guidelines applicable to the Company's

                              directors and executive officers.

 

                              Amended February 11, 2009