Exhibit 10.10
RETENTION AND EMPLOYMENT
AGREEMENT
AS AMENDED AND
RESTATED
THIS RETENTION AND EMPLOYMENT
AGREEMENT (this “Agreement”), originally effective on
November 13, 2007 (the “Effective Date”), is made
on December 23, 2008 between MASSEY ENERGY COMPANY, a Delaware
corporation (the “Company”), and John Christopher
Adkins (the “Executive”). This Agreement amends,
restates and supersedes the Retention and Employment Agreement
between the Company and the Executive effective as of the Effective
Date (the “Original Agreement”).
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 desired to provide Executive
with certain compensation and benefits set forth in this Agreement;
and
WHEREAS, the Company and the
Executive entered into the Original Agreement, effective as the
Effective Date; and
WHEREAS, the Company and the
Executive now desire to amend and restate the Original Agreement to
reflect provisions of Section 409A of the Code and the final
regulations issued thereunder, which amendment is to be effective
as of the original Effective Date.
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 originally 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 commenced
on the Effective Date and, subject to termination by the terms
hereunder, shall have an initial term of three years, ending on
November 12, 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 the 15
th
day of the third
month following immediately after the end of Executive’s
taxable year in which the determination to pay the Discretionary
Bonus 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.
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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 was modified as of the Effective
Date so that the entire outstanding principal balance, together
with all accrued interest, on the Effective Date was 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
the Company shall pay to the Executive or if the Executive is
deceased to the Executive’s estate, within 30 days following
Executive’s cessation of employment with the Company, 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
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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 (or, if lesser, the period
of Executive’s employment or service).
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.
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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
