ARCH COAL, INC.
OUTSIDE DIRECTORS’
DEFERRED COMPENSATION PLAN
WHEREAS, Arch
Coal, Inc. (“Company”) previously adopted the Arch
Coal, Inc. Outside Directors’ Deferred Compensation Plan
(“Plan”); and
WHEREAS, effective
January 1, 2005, the Company began administering the Plan with
respect to amounts deferred on and after January 1, 2005, in
accordance with a good faith interpretation of Section 409A of
the Internal Revenue Code of 1986, as amended (“Code”);
and
WHEREAS, effective
January 1, 2009, the Company desires to amend the Plan to
incorporate provisions consistent with the final regulations
promulgated under Code Section 409A; and
WHEREAS, with
respect to deferrals (and earnings thereon) credited and vested
prior to January 1, 2005, the terms of the Plan in effect as of
December 31, 2004, shall continue to govern such benefits, and
the provisions of that “grandfathered” portion of the
Plan are set forth in a separate document;
NOW, THEREFORE,
effective January 1, 2009, the portion of the Plan which is
subject to Code Section 409A is restated as
follows:
ARCH COAL, INC.
OUTSIDE DIRECTORS’
DEFERRED COMPENSATION PLAN
409A Document
The purpose of
this Arch Coal, Inc. Outside Directors’ Deferred Compensation
Plan (the “Plan”) is to provide members of the Board
who are not officers or employees of the Company with an
opportunity to defer fees earned by them from the Company as a
means of saving for retirement or other future purposes.
Effective
January 1, 2005, the Company administered the Plan in
accordance with a good faith interpretation of Section 409A of
the Internal Revenue Code of 1986, as amended (“Code”).
However, deferrals (and earnings thereon) made and vested prior to
December 31, 2004, shall be “grandfathered” and
governed by the document in effect as of December 31, 2004.
Amounts (and earnings thereon) deferred or vested on or after
January 1, 2005, by or on behalf of a Participant shall be
governed by this 409A Document.
The following
definitions shall be applicable throughout the Plan:
(a) “Accounting
Date” means each Business Day on which a calculation
concerning a Participant’s Retirement Account is performed,
or as otherwise defined by the Board.
(b) “Beneficiary”
means the person(s) designated by the Participant in accordance
with Section 11, or if no person(s) is/are so designated, the
estate of a deceased Participant.
(c) “Board”
means the Board of Directors of Arch Coal, Inc. or its
designee.
(d) “Business
Day” means a day on which the New York Stock Exchange is open
for trading activity.
(e) “Common
Stock” means the common stock, $.01 par value, of Arch Coal,
Inc.
(f) “Common
Stock Fund” means that investment option, approved by the
Board, in which a Participant’s Retirement Account may be
deemed to be invested and may earn income based on a hypothetical
investment in Common Stock.
(g) “Company”
means Arch Coal, Inc., its divisions, subsidiaries and
affiliates.
(h) “Corporate
Human Resources” means the Corporate Human Resources
Department of the Company.
(i) “Credit
Date” means the date on which Fees would otherwise have been
paid to the Participant or, in the case of the Participant’s
designation of investment option changes, any date
within three
Business Days after the Participant’s designation is received
in accordance with the procedures established by the
Board.
(j) “Deferred
Fees” means the Fees elected by the Participant to be
deferred pursuant to the Plan.
(k) “Election”
means a Participant’s delivery of a written notice of
election to Corporate Human Resources electing to defer payment of
all or a portion of his or her Fees (in accordance with rules
prescribed by the Board) either until Termination, death or such
other time as further provided by the Board or the
Company.
(l) “Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
(m) “Fair
Market Value” means the price of a share of Common Stock, as
reported on the Composite Tape for New York Stock Exchange issues
on the date and at the time designated by the Company.
(n) “Fees”
means any fees earned by a director of the Company.
(o) “Fiscal
Year” means the fiscal year of the Company, which is
currently the annual period commencing January 1 and ending the
following December 31.
(p) “Outside
Director” means a member of the Board who is neither an
officer nor an employee of the Company.
(q) “Participant”
means an Outside Director who has elected to defer payment of all
or a portion of his or her Fees under the Plan.
(r) “Plan”
means this Arch Coal, Inc. Outside Directors’ Deferred
Compensation Plan as it now exists or as it may hereafter be
amended.
(s) “Retirement
Account” means the account to which the Participant’s
Deferred Fees are credited and from which, pursuant to
Section 9(a), distributions are made.
(t) “Service
Year” means the calendar year or portion thereof during which
the services have been rendered for which Fees are
payable.
(u) “Stock
Unit(s)” means the share equivalents credited to the Common
Stock Fund of a Participant’s Retirement Account pursuant to
Section 6.
(v) “Termination”
means termination of services as an Outside Director for any
reason, as defined under Code Section 409A.
3.
SHARES; ADJUSTMENTS IN EVENT OF CHANGES IN
CAPITALIZATION
In the event of
any change in the outstanding Common Stock of the Company by reason
of any stock split, share dividend, recapitalization, merger,
consolidation, reorganization, combination,
2
or exchange or
reclassification of shares, split-up, split-off, spin-off,
liquidation or other similar change in capitalization, or any
distribution to common shareholders other than cash dividends, the
number or kind of shares or Stock Units that may be credited under
the Plan shall be automatically adjusted so that the proportionate
interest of the Participants shall be maintained as before the
occurrence of such event. Such adjustment shall be conclusive and
binding for all purposes of the Plan. !
All Outside
Directors are eligible to participate in the Plan.
Full power and
authority to construe, interpret and administer the Plan shall be
vested in the Company and the Board. This power and authority
includes, but is not limited to, selecting investment indices,
establishing deferral cycles for purposes of Section 9(b),
establishing deferral terms and conditions, and adopting
modifications, amendments and procedures as may be deemed
necessary, appropriate or convenient by the Board. Decisions of the
Company and the Board shall be final, conclusive and binding upon
all parties. Day-to-day administration of the Plan shall be the
responsibility of Corporate Human Resources.
Upon election to
participate in the Plan, there shall be established a Retirement
Account to which there shall be credited any Deferred
Fees
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