EXHBIT
10.33
RETENTION
AND EMPLOYMENT AGREEMENT
THIS
RETENTION AND EMPLOYMENT AGREEMENT (this
“Agreement”), is made on November 13, 2007 (the “Effective Date”)
between MASSEY ENERGY COMPANY, a Delaware corporation (the
“Company”), and John Christopher Adkins (the
“Executive”).
WITNESSETH:
WHEREAS,
Executive is employed by Massey Coal Services, Inc. and is a
senior executive of the Company or one of its Subsidiaries (as
defined in Section 18) and has made and is expected to
continue to make major contributions to the short-term and
long-term profitability, growth and financial strength of the
Company; and
WHEREAS,
the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued retention,
attention and dedication of, and to contract for the continued
rendering of services by Executive, in connection with his
assigned duties; and
WHEREAS,
in consideration of Executive’s continued employment
with the Company or any Subsidiary of the Company, the Company
desire s to provide Executive with certain
compensation and benefits set forth in this
Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth (including
definitions of capitalized terms which are set forth in
Section 18 and throughout this Agreement) and intending to be
legally bound hereby, the Company and Executive agree as
follows:
1.
Employment
.
1.1
Subject to the terms and conditions of this Agreement, the
Company agrees to employ Executive with the Company or any
Subsidiary of the Company during the term hereof in the
executive position of Senior Vice President and Chief
Operating Officer. In such capacity, Executive shall report to
the Chief Executive Officer and President of the Company, and
shall have the customary powers, responsibilities and
authorities of executives holding such positions in
corporations of the size, type and nature of the Company, as
it exists from time to time, and as are assigned by the Chief
Executive Officer and President.
1.2
Subject to the terms and conditions of this Agreement,
Executive hereby accepts such employment commencing as of the
Effective Date and agrees, subject to any period of vacation
and sick leave, to devote his full business time and efforts
to the performance of services, duties and responsibilities in
connection therewith.
2.
Term
of Employment . Executive’s term of employment
under this Agreement shall commence on the Effective Date and,
subject to termination by the terms hereunder, shall have an
initial term of three years, ending on November __, 2010 (the
“Term of Employment”); provided, however, that
this Agreement shall continue in effect for a period of
twenty-four (24) months beyond the term provided herein if a
Change of Control occurs during the period that this Agreement
is in effect.
3.
Compensation
.
3.1
Salary .
Effective January 1, 2008, the Executive’s base salary
(“Base Salary”) shall be increased
from an annual rate of $360,000 to
$378,000. Base Salary shall be payable in
accordance with the ordinary payroll practices of the
Company (but no less
frequently than monthly) . During the Term of
Employment, the Board shall, in good faith, review, at least
annually, Executive’s Base Salary in accordance with the
Company’s customary procedures and practices regarding
the salaries of senior executives and may, if determined by
the Board to be appropriate, increase Executive’s Base
Salary following such review. “Base Salary” for
all purposes herein shall be deemed to be a reference to any
such increased amount.
3.2
Annual
Bonus . In addition to his Base Salary, during the Term
of Employment, Executive shall be eligible to receive an
annual cash bonus award (the “Annual Cash Bonus”)
with a target amount equal to $325,000 (the “Target
Bonus”) for the Company’s 2008 fiscal year,
$350,000 for the Company’s 2009 fiscal year, and
$375,000 for the
Company’s
2010 fiscal year or any subsequent fiscal year, subject to the
terms and conditions set forth by the Compensation Committee
of the Board for such fiscal year. The Annual Cash Bonus
awards shall be payable to Executive at the time bonuses are
paid to its executive officers in accordance with the
Company’s policies and practices as set by the
Board.
3.3
Discretionary
Bonus. In addition to the Annual Cash Bonus
described above in subsection 3.2, the Executive shall also be
eligible during the term of this Agreement to receive an
annual discretionary bonus (“Discretionary Bonus”)
in an amount not to exceed $22,000 to be paid to the Executive
at the discretion of the Chief Executive Officer and
President. If the Chief Executive Officer and
President determines in his discretion to pay the
Discretionary Bonus for a year to the Executive, payment of
such Discretionary Bonus for a year shall be made in a lump
sum to the Executive on the November 1 on or immediately
following the determination to award and pay the same, but in
no event later than 2-1/2 months after the end of the
Executive’s taxable year in which the determination is
made.
3.4
Long Term
Incentive Plan . The Executive shall be
eligible for an on-going annual award in the Company’s
Long-Term Incentive Plan (the “Plan”) consistent
with other executives at the Executive’s current level
with a target award value of not less than
$500,000. The award opportunity will be reviewed on
an annual basis and adjustments to the award structure may be
made as deemed appropriate by the Compensation
Committee. Each such award shall be subject to all
the terms, conditions and performance requirements established
by the Compensation Committee at each of the annual meetings
where it grants awards to all other participants in the Plan,
and each of the awards shall be governed by and subject to the
terms of the award agreements and the Massey Energy 2006 Stock
and Incentive Plan (or any successor plan).
3.5
Retention
Award. The Executive shall receive an
annual retention cash award of $150,000 to be paid in a lump
sum on each of January 1, 2008, January 1, 2009, and January
1, 2010 (the “Retention Awards”) provided the
Executive remains continuously employed by the Company through
each of the respective payment dates.
4.
Employee
Benefits .
4.1
Equity- and
Cash-Based Compensation . Any outstanding agreement
made with Executive under the Company’s long-term cash
and equity incentive program, including stock option,
restricted stock, restricted unit, other equity or cash-based
incentive awards or other equity or cash-based incentive
agreements as of the Effective
Date (the “Ancillary Documents”) shall
remain in full force and effect and shall not be affected by
this Agreement but shall remain subject to the applicable
terms of Executive’s Change in Control
Agreement.
4.2
Employee
Benefit Programs, Plans and Practices; Perquisites .
The Company shall provide Executive while employed hereunder
with coverage under such employee benefit plans (commensurate
with his position in the Company and to the extent permitted
under any employee benefit plan) in accordance with the terms
thereof, Directors and Officers insurance policy, which covers
claims arising out of actions or inactions occurring during
the Term of Employment, in accordance with the Directors and
Officers insurance policy, and other employee benefits which
the Company may make available to its senior executives from
time to time in its discretion. The Company also shall provide
Executive while employed
hereunder
with perquisites which the Company may make available to its
senior executives from time to time in its
discretion.
4.3
Home
Loan. The outstanding agreement made with
Executive concerning the purchase of Executive’s
residence is modified as of the Effective Date so that the
entire outstanding principal balance, together with all
accrued interest, on the Effective Date shall be forgiven at
such time. In addition, the Company shall reimburse the
Executive for taxes incurred by the Executive in connection
with such principal and interest forgiveness as of the
Effective Date; and such reimbursement shall occur, and/or in
its discretion the Company may pay directly to the applicable
taxing authority in lieu of such tax reimbursement to the
Executive, no later than ten (10) days after the Executive
presents satisfactory documentation of the taxes incurred and
a determination by the Company of the taxes incurred, provided
that, except as provided in the next sentence, all payments to
be made under this Section 4.3 must be made by the end of the
Executive’s taxable year next following the Executive's
s taxable year in which the income recognition event occurs
for tax purposes. Any right to reimbursement arising due
to a tax audit or litigation addressing the existence or
amount of a tax liability must be made by the end of the
Executive’s taxable year following the Executive’s
taxable year in which the taxes that are the subject of the
audit or litigation are remitted to the taxing authorities or,
where no such taxes are remitted, the end of the
Executive’s taxable year following the year in which the
audit is completed or there is a final and non-appealable
settlement or the resolution of the litigation.
5.
Termination of Employment; Severance Benefit.
5.1
Employment
Rights . Executive and the Company acknowledge that the
employment of Executive by the Company is “at
will.” Nothing expressed or implied in this
Agreement will create any right or duty on the part of the
Company or Executive to have Executive remain in the
employment of the Company or any Subsidiary.
5.2
Severance
Benefit . The Executive previously entered
into a Change in Control Agreement which shall govern the
Executive’s rights, duties and obligations in the event
of the Executive’s cessation of employment with the
Company (or any successor) covered by the Change in Control
Agreement. In the event of the Executive’s
cessation of employment with the Company during the period of
this Agreement for any reason other than for
“Cause” (as defined, and determined pursuant to
the procedure in the Change in Control Agreement) under
circumstances where such cessation of employment is not
covered by the Change in Control Agreement, then Massey shall
pay to the Executive or if the Executive is deceased to the
Executive’s estate, a lump sum payment equal to 2.5
times the sum of the Executive’s Base Salary of
$378,000, plus the Annual Cash Bonus target amount in effect
for the fiscal years remaining under this Agreement in which
the Executive’s Termination Date occurs (the
“Severance Benefit”), unless the Executive elects
to terminate his employment voluntarily during the term of
this Agreement other than for any reason which would
constitute “a Constructive Termination Associated with a
Change in Control” (as defined, and determined pursuant
to the procedure, in the Change in Control Agreement, under
circumstances where such Constructive Termination is not
covered by the Change in Control Agreement).
5.3
Cessation of
Employment on Account of Disability, Cause or Death .
Notwithstanding anything in this Agreement to the contrary, if
Executive’s employment terminates on account of
Disability, Executive shall be entitled to receive disability
benefits under any disability program maintained by the
Company that covers Executive, and Executive shall not be
considered to have terminated employment under Section 5.2 and
shall not receive the Severance Benefit provided for in
Section 5.2. If Executive’s employment terminates on
account of Cause or because of his death, Executive shall not
be considered to have terminated employment under Section 5.2
and shall not receive the Severance Benefit provided for in
Section 5.2.
6.
Expenses
. Subject to prevailing Company policy or such guidelines as
may be established by the Board, the Company will reimburse
Executive for all reasonable expenses incurred by Executive in
carrying out his duties no later
than the last day of the year following the year in which the
Executive incurs the reimbursable expense
.
7.
Nonqualified
Deferred Compensation Plan Omnibus Provisions .
Notwithstanding any other provision of this Agreement, it is
intended that any payment or benefit which is provided
pursuant to or in connection with this Agreement which is
considered to be nonqualified deferred compensation subject to
Section 409A of the Code shall be provided and paid in a
manner, and at such time and in such form, as complies with
the applicable requirements of Section 409A of the Code to
avoid the unfavorable tax consequences provided therein for
non-compliance. Notwithstanding any other provision of this
Agreement, the Board is authorized to amend this Agreement, to
amend any election made by Executive under this Agreement
and/or to delay the payment of any monies and/or provision of
any benefits in such manner as may be determined by it to be
necessary or appropriate to comply, or to evidence or further
evidence required compliance, with Section 409A of the Code
(including any transition or grandfather rules thereunder).
For purposes of this Agreement,
all rights to payments and benefits hereunder shall be treated
as rights to receive a series of separate payments and
benefits to the fullest extent allowed by Section 409A of the Code . Payments or provision of
benefits in connection with a separation from service payment
event will be delayed, to the
extent applicable, until six months after the separation from service or, if earlier, the Executive’s death,
if the Executive is a key employee of a publicly traded
corporation under Section
409A(a)(2)(B)(i) of the Code (the “409A Deferral
Period”). In the event such payments are
otherwise due to be made in installments or periodically
during the 409A Deferral Period, the payments which would
otherwise have been made in the 409A Deferral Period shall be
accumulated and paid in a lump sum as soon as the 409A
Deferral Period ends, and the balance of the payments shall be
made as otherwise scheduled. In the event benefits
are required to be deferred, any such benefit may be provided
during the 409A Deferral Period at Executive’s expense,
with Executive having a right to reimbursement from the
Company once the 409A Deferral Period ends, and the balance of
the benefits shall be provided as otherwise scheduled.
For purposes of this
Agreement, termination of employment will be read to mean a
“separation from service” within the meaning of
Section 409A of the Code where it is reasonably anticipated
that no further services would be performed after that date or
that the level of services Executive would perform after that
date
(whether as an employee or independent contractor) would
permanently decrease to no more than 20 percent of the average
level of bona fide services performed over the immediately
preceding thirty-six (36)-month period.
8.
Enforcement
. Without limiting the rights of Executive at law or in
equity, except as provided in Section 9, if the Company fails
to make any payment or provide any benefit required to be made
or provided hereunder on a timely basis, the Company will pay
interest on the amount or value thereof at an annualized rate
of interest equal to the so-called composite “prime
rate” as quoted from time to time during the relevant
period in the Eastern Edition of The Wall Street
Journal . Such interest will be payable as it accrues
consistent with the timing of
the related payments or benefits to be provided. Any
change in such prime rate will be effective on and as of the
date of such change.
9.
Tax
Limitation on Payments by the Company . The provisions
of this Section 9 shall apply notwithstanding anything in this
Agreement to the contrary.
(a)
In the event that it shall be determined that any Payment
would constitute an “excess parachute payment”
within the meaning of Section 280G of the Code, then the
Company shall pay Executive an additional amount (the
“Gross-Up Payment”) such that the net amount
retained by the Executive after deduction of any excise tax
imposed under Section 4999 of the Code, and any federal, state
and local income tax, employment tax, excise tax and other tax
imposed upon the Gross-Up Payment, shall be equal to the
Payment. Notwithstanding the foregoing, if the Net
After-tax Benefit to the Executive of receiving the Gross-Up
Payment does not exceed the Reduced Amount (as defined below)
by more than the lesser of $50,000 or 10% (as compared to the
Net After-tax Benefit to Executive resulting from elimination
of the Gross-Up Payment, then the Company shall not pay
Executive the Gross-Up Payment and the Payments shall be
reduced (but not below zero) so that the Present Value of the
aggregate of all Payments does not exceed the Reduced Amount;
provided, however, that no such reduction shall be effected,
but no Gross-up Payment shall be made, if the Net After-tax
Benefit to Executive of receiving all of the Payments exceeds
by more than the lesser of $50,000 or 10% of the Net After-tax
Benefit to Executive resulting from having such Payments so
reduced. In the event a reduction is required
pursuant hereto, the order of reduction shall be first all
cash payments on a pro rata basis, then any equity
compensation on a pro rata basis, and lastly medical and
dental coverage. For purposes of this Section 9, the following
terms have the following meanings:
(i)
“Net After-tax Benefit” shall mean the Present
Value of a Payment net of all federal state and local
incom
