Exhibit 10.27

 

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June 24, 2011

 

Mr. James Griffin

71 Woodcliffe Lake Road

Saddle River, NJ 07458

 

Dear Jim,

 

We are pleased that you have accepted the position of Global Head — Business
Development of Walter Energy, Inc. (“Walter” or the “Company”) effective as of
April 1, 2011. The attached schedules outline the remuneration and benefits and
terms and conditions of your employment.

 

As the Global Head — Business Development of Walter, you will have such duties,
responsibilities and authorities as the Chief Executive Officer of Walter (the
“CEO”) determines are appropriate for your position. You will report to the CEO
or to his designee.

 

It is agreed and understood that this letter agreement (including the schedules
and exhibits attached hereto) (collectively, the “Agreement”) and the other
agreements referred to in this Agreement shall constitute our entire agreement
with respect to the subject matter hereof and shall supersede all prior
agreements, discussions, understandings and proposals (written or oral) relating
to your employment with the Company and its affiliates, including, for the
avoidance of doubt, Western Coal Corp. (“Western”). This Agreement may only be
amended or modified by a written agreement executed by you and Walter (or any of
its respective successors) and will be interpreted under and in accordance with
the laws of the State of Delaware without regard to conflicts of laws.

 

This Agreement may be executed by fax or pdf and in any number of counterparts,
all of which, when taken together, will constitute one and the same instrument.

 

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Jim, we are delighted that you are joining Walter and we look forward to working
with you. If the terms contained within this Agreement are acceptable, please
sign one of the enclosed copies and return it to me in the envelope provided.

 

Best regards,

 

 

 

/s/ Keith Calder

 

July 7/2011

Keith Calder

Date

Chief Executive Officer

 

Walter Energy, Inc.

 

 

ACCEPTANCE

 

I have read the Agreement, have been advised to consult with counsel of my
choice concerning the same, and I fully understand the same. I approve and
accept the terms set forth in the Agreement as governing my employment
relationship with Walter.

 

/s/ James Griffin

 

July 7, 2011

James Griffin

Date

 

 

 

 

Enclosures:

 

 

 

Schedule A       Remuneration & Benefits

 

Schedule B       Terms and Conditions

 

 

 

 

 

 

Initials

 

/s/

 

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SCHEDULE A

 

REMUNERATION & BENEFITS

 

Name:

 

James Griffin

 

 

 

Role Title:

 

Global Head — Business Development

 

 

 

Role Band:

 

n/a

 

 

 

Department:

 

Corporate

 

 

 

Employer:

 

Walter

 

 

 

Date of Appointment:

 

April 1,2011

 

 

 

Continuous Employment Date:

 

September 13, 2010

 

This schedule should be read in conjunction with the remainder of the Agreement.
The policies covering these benefits and their terms and conditions may be
varied from time to time.

 

Base Salary and Remuneration:

 

The remuneration for this position is a base salary of USD$400,000 per annum
which will be subject to review and adjustment by the Compensation and Human
Resources Committee of the Board of Directors (the “Compensation Committee”) and
paid in accordance with Walter’s payroll practices, as they may change from time
to time. Your annual base salary, as in effect from time to time, is hereinafter
referred to as the “Base Salary.”

 

 

 

 

 

The remuneration structure is designed to provide competitive levels of total
remuneration for strong individual and corporate performance and achieve a close
alignment between personal and business performance and remuneration.

 

 

 

Annual Bonus (EIP):

 

You will participate in Walter’s Executive Incentive Plan, as it may be amended
from time to time (the “EIP”) and will be eligible to earn an annual target
bonus of 70% of your Base Salary (the “Target Bonus”), with an upside potential
of 2 times your Target Bonus for top performance. The actual

 

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amount of your bonus, if any, will fluctuate based upon actual performance under
the performance metrics associated with the EIP. Participation in the bonus pool
is dependent upon the achievement of Walter’s annual performance goals, as well
as the accomplishment of (x) individual objectives and/or (y) departmental
goals, in each case, as determined and recommended by the management of Walter
and subsequently approved by the Compensation Committee. In order to receive a
bonus under the EIP, you must be employed at the time the bonus is paid.
Notwithstanding anything in this Agreement to the contrary, your bonus, if any,
under the EIP, earned in respect of the 2011 fiscal year, will be pro-rated
based upon the percentage of such fiscal year that will have elapsed from your
commencement date through the last day of such fiscal year and based solely on
the Base Salary actually earned in such fiscal year from your commencement date
through the last day of such fiscal year. Notwithstanding anything in this
Agreement to the contrary, with respect to any bonus to be paid hereunder, such
bonus will be paid in accordance with the EIP and, to the extent possible, will
be structured to comply with Section 162(m) of the Internal Revenue Code of
1986, as amended (the “Code”) as performance based compensation thereunder;
provided however, to the extent not deductible by Walter, such payment will be
deferred until it can be paid by Walter on a tax deductible basis.

 

 

 

 

 

Please note that participation in Walter’s Employee Stock Purchase Plan is a
condition to participation in the bonus pool under the EIP.

 

 

 

Long Term Incentive:

 

Subject to your continued employment with Walter, you will be eligible to
participate in Walter’s Amended and Restated 2002 Long-Term Incentive Award
Plan, as it may be amended and restated from time to time (and any successor
long term incentive award plan) (collectively, the “LTIP”), and will be eligible
to receive annual equity grants from Walter.

 

 

 

 

 

Your annual equity grant in respect of the 2011 fiscal year will be valued at
90% of Base Salary, based on the Black-Scholes value at the date of grant, fifty
percent (50%) of which will be in the form of non-qualified stock options and
fifty percent (50%) of which will be In the form of restricted stock units. Such
equity grants will be awarded under and subject to the terms and conditions of
the LTIP and the

 

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terms and conditions applicable to other awards granted by Walter under the LTIP
to employees of Walter.

 

 

 

Expenses:

 

Reimbursement for all reasonable and customary out-of-pocket business expenses
incurred by you in the performance of your duties hereunder, in accordance with
the policies, practices and procedures of Walter relating to reimbursement of
business expenses incurred by Walter employees in effect at any time during the
12 month period preceding the date you incur the expenses; provided, however,
that any such expense reimbursement will be made no later than the last day of
the calendar year following the calendar year in which you incur the expense,
will not affect the expenses eligible for reimbursement in any other calendar
year, and cannot be liquidated or exchanged for any other benefit.

 

 

 

Health Care:

 

Participation in Walter’s life and health insurance benefit programs beginning
the first day of the month following your commencement date and in accordance
with their terms, as they may change from time to time. Additional benefit plan
information will be available for your review upon request. After you are
enrolled in the U.S. benefit plans, you and all eligible family members will be
covered.

 

 

 

Retirement Plan:

 

Participation in Walter’s retirement plan according to its terms as they may
change from time to time. Information on the retirement plan will be available
for your review upon request. Your eligibility to participate will be consistent
with the requirements of the Employee Retirement Income Security Act of 1974, as
amended.

 

 

 

Leave:

 

Eligibility for 20 business days of vacation and 10 company paid holidays to be
used each year in accordance with Walter’s policy, as it may change from time to
time.

 

 

 

Change in Control:

 

An Executive Change-in-Control Severance Agreement in a form substantially
similar to the form attached hereto as Exhibit A (the “CIC Agreement”).

 

 

 

Severance:

 

Subject to (a) your compliance with the restrictive covenants set forth in
Sections 5 through 7 of Schedule B and (b) your execution, delivery and
non-revocation of a waiver and release of claims in a form substantially similar
to the form attached hereto as Exhibit B (the “Release”) on

 

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or prior to the 21st day following the date on which your employment with Walter
terminates due to (x) the termination of your employment by Walter, other than
for “Cause” (as defined below) or (y) the termination of your employment by you
for “Good Reason” (as defined below), but in each case, excluding any separation
from service by reason of your death or Disability (as defined below) (such
date, the “Severance Date”), you will be entitled to receive the following
severance payments and benefits:

 

 

 

 

 

· For the period commencing on the day immediately following the Severance Date
and ending on the first anniversary of the Severance Date, monthly pay
continuation with each monthly payment equal to one-twelfth (1/12) times the sum
of your Base Salary and Target Bonus, in each case, as in effect on the
Severance Date. Monthly payments will occur in accordance with the payroll dates
in effect on the Severance Date, and such payment dates will not be affected by
any subsequent change in payroll practices.

 

 

 

 

 

· Except as provided below, continuation of group medical, dental, vision, group
basic term life insurance, accidental death and dismemberment insurance,
voluntary term life insurance, voluntary accidental death and dismemberment
insurance, dependent life Insurance and employee assistance program benefits,
provided, to the extent applicable, regular contributions are made, at the level
in effect on the Severance Date, in each case, for a period (such period, the
“Continuation Coverage Period”) beginning immediately upon the Severance Date
and continuing until the earliest to occur of (A) the first anniversary of the
Severance Date, (B) the last date you are eligible to participate in the benefit
under applicable law, or (C) the date you are eligible to receive comparable
benefits from a subsequent employer, as determined solely by Walter in good
faith; provided, however, that if you fall to execute and deliver the Release or
revoke the Release, in either case, the Continuation Coverage Period shall cease
immediately upon such date. Such benefits shall be provided to you at the same
coverage and cost to you as in effect on the Severance Date. To the extent
permitted by law, you shall be eligible to qualify for COBRA health care
continuation coverage under Section 4980B of the Code, or any replacement or
successor

 

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provision of United States tax law, beginning following the expiration of the
period described above. Notwithstanding the foregoing, your participation in the
Employee Stock Purchase Plan and long-term disability insurance plan, and your
ability to make deferrals under the 401(k) plan, will cease effective on the
Severance Date. For purposes of this subsection, you shall send written notice
of the terms and conditions of any subsequent employment and the corresponding
benefits earned from such employment and shall provide, or cause to be provided,
to Walter, In writing, correct, complete and timely information concerning the
same to the extent requested by Walter;

 

 

 

 

 

provided, however, that Walter shall have the right to cease making such
payments and you shall be obligated to repay any such amounts to Walter already
paid if you fall to execute and deliver the Release within the time period
provided for above or, after timely delivery, revoke it within the time period
specified in such Release.

 

 

 

 

 

If your employment with Walter is terminated by you without Good Reason upon 60
days’ prior written notice to the CEO and such termination occurs on or before
December 31, 2011, subject to your execution, delivery and non-revocation of the
Release on or prior to the 21st day following the date on which your employment
with Walter terminates, you will be entitled to receive a lump sum cash payment
in an amount equal to $680,000, payable as soon as administratively feasible
following the termination date, but in no event later than December 31, 2011;
provided, however, that you shall be obligated to repay any such amounts to
Walter already paid if you fall to execute and deliver the Release within the
time period provided for above or, after timely delivery, revoke it within the
time period specified in such Release.

 

 

 

 

 

Notwithstanding anything in this Agreement to the contrary and for the avoidance
of doubt, you shall not be entitled to severance payments or benefits under this
Agreement in the event you experience a separation from service within
twenty-four (24) months following a Change in Control of the Company (as defined
in the CIC Agreement). Severance payments and benefits payable upon a separation
from service in connection with such a

 

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termination of employment, if any, shall be determined and paid under the CIC
Agreement.

 

 

 

 

 

For purposes of this Agreement, the term “Cause” shall mean: (i) your willful
and continued refusal to perform the duties of your position (other than any
such failure resulting from your incapacity due to physical or mental illness);
(ii) your conviction or guilty plea of a felony involving fraud or dishonesty;
(iii) theft or embezzlement by you of property from Walter or any subsidiary or
affiliate; or (iv) fraudulent preparation by you of financial information of
Walter or any subsidiary or affiliate.

 

 

 

 

 

For purposes of this Agreement, the term “Good Reason” shall mean the occurrence
of any of the following conditions [in each case arising without your consent):
(A) a material breach of this Agreement by Walter or (B) a material diminution
in your authority, duties or responsibilities. Notwithstanding the foregoing,
your voluntary separation from service shall be for “Good Reason” only if
(x) you provide written notice of the facts or circumstances constituting a
“Good Reason” condition to Walter within 30 days after the initial existence of
the Good Reason condition, (y) the Company does not remedy the Good Reason
condition within 30 days after it receives such notice and (z) the voluntary
separation from service occurs within 90 days after the initial existence of the
Good Reason condition. For purposes of this Agreement, the parties agree that
“Good Reason” will not exist solely because the amount of your bonus fluctuates
due to performance considerations under the EIP or other Walter incentive plan
applicable to you and in effect from time to time.

 

 

 

 

 

For purposes of this Agreement, the term “Disability” shall mean any medical
condition whatsoever which leads to your absence from your job function for a
continuous period of six months without you being able to resume such functions
on a full time basis at the expiration of such period, it being understood that
unsuccessful attempts to return to work for periods under thirty days shall not
be deemed to have interrupted said continuity.

 

 

 

Location:

 

The location of the Walter Corporate Office will be Chicago, Illinois. You will
be provided with relocation

 

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assistance in accordance with the Walter Energy Relocation policy, a copy of
which will be provided under separate cover.

 

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SCHEDULE B

 

TERMS AND CONDITIONS

 

1.                          It is agreed and understood that your employment
with Walter is to be at will, and either you or Walter may terminate the
employment relationship at any time for any reason, with or without cause, and
with or without notice to the other; nothing in this Agreement or elsewhere
constitutes or shall be construed as a commitment to employ you or pay you
severance, other than as stated in Schedule A or in the CSC Agreement, for any
period of time.

 

2.                          Outside interest. While employed by Walter, you
agree to devote your full business time and best efforts to the performance of
your duties hereunder and will not engage in any other business, profession or
occupation for compensation or otherwise which would conflict or interfere with
the rendition of such services either directly or indirectly without the prior
written consent of the CEO or his designee.

 

3.                          You agree that all inventions, improvements, trade
secrets, reports, manuals, computer programs, systems, tapes and other ideas and
materials developed or invented by you during the period of your employment with
Walter, either solely or in collaboration with others, which relate to the
actual or anticipated business or research of Walter or any of its subsidiaries
or affiliates, which result from or are suggested by any work you may do for
Walter or any of its subsidiaries or affiliates, or which result from use of
Walter’s or any of its subsidiaries’ or affiliates’ premises or Walter’s, its
subsidiaries’, its affiliates’, or its customers’ property (collectively, the
“Developments”) shall be the sole and exclusive property of Walter. You hereby
assign to Walter your entire right and interest in any such Developments, and
will hereafter execute any documents in connection therewith that Walter may
reasonably request. This section does not apply to any inventions that you made
prior to your employment by Walter or Western, or to any inventions that you
develop entirely on your own time without using any of Walter’s or Western’s
equipment, supplies or facilities, or Walter’s or Western’s or their respective
subsidiaries’, affiliates’, or customers’ confidential information which do not
relate to Walter’s, Western’s, their respective subsidiaries’ or its affiliates’
business, anticipated research and development, or the work you have performed
for Walter, Western and their respective subsidiaries and affiliates.

 

4.                          As an inducement of Walter to make this offer to
you, you represent and warrant that there exists no impediment or restraint,
contractual or otherwise on your power, right or ability to accept this offer
and to perform the duties and obligations specified in this Agreement.

 

5.                          Non-Compete/Non-Solicit. It is understood and agreed
that you will have substantial relationships with specific businesses and
personnel, prospective and existing, vendors, contractors, customers, and
employees of Walter and its subsidiaries that result in the creation of customer
goodwill. Therefore, while you are employed by Walter and following

 

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the termination of your employment for any reason and continuing for a period of
12 months from the date of your termination, so long as Walter or any affiliate,
successor or assigns thereof is in the coal mining business or like business
within the Restricted Area (defined as mining industries in the geographical
areas in which Walter or any of its subsidiaries competes at the time of your
termination), unless the Board of Directors approves an exception, you shall
not, directly or indirectly, for yourself or on behalf of, or in conjunction
with, any other person, persons, company, partnership, corporation, business
entity or otherwise;

 

(a)  Call upon, solicit, write, direct, divert, influence, or accept business
(either directly or indirectly) with respect to any account or customer or
prospective customer of the Company or any corporation controlling, controlled
by, under common control with, or otherwise related to Walter, including but not
limited to Western or any other affiliated companies; or

 

(b)  Hire away any independent contractors or personnel of Walter and/or entice
any such persons to leave the employ of Walter or its affiliated entities
without the prior written consent of Walter.

 

6.                          Non-Disparagement. Following the termination of your
employment for any reason and continuing for so long as Walter or any affiliate,
successor or assigns thereof carries on the name or like business within the
Restricted Area, you shall not, directly or indirectly, for yourself or on
behalf of, or in conjunction with, any other person, persons, company,
partnership, corporation, business entity or otherwise:

 

(a)  Make any statements or announcements or permit anyone to make any public
statements or announcements concerning the termination of your employment with
Walter, or

 

(b)  Make any statements that are inflammatory, detrimental, slanderous, or
negative in any way to the interests of Walter or its affiliated entities.

 

7.                          You acknowledge and agree that you will respect and
safeguard Walter’s and its subsidiaries’ property, trade secrets and
confidential information. You acknowledge that Walter’s electronic communication
systems (such as email and voicemail) are maintained to assist in the conduct of
Walter’s and its subsidiaries’ business and that such systems and data exchanged
or stored thereon are Walter property. In the event you leave the employ of
Walter, you will not disclose any trade secrets or confidential information you
acquired while an employee of Walter to any other person or entity, including
without limitation, a subsequent employer, or use such information in any
manner.

 

8.                          Compensation Recovery Policy. You understand and
agree that if any of Walter’s financial statements are required to be restated
due to errors, omissions, fraud or misconduct, the Compensation Committee may,
in its sole discretion but acting in good faith, direct that Walter recover all
or a portion of any cash incentive, equity compensation or severance

 

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disbursements paid to you with respect to any fiscal year of Walter for which
the financial results are negatively affected by such restatement. For purposes
of this provision, errors, omissions, fraud or misconduct may include and are
not limited to circumstances where Walter has been required to prepare an
accounting restatement due to material noncompliance with any financial
reporting requirement, as enforced by the Securities and Exchange Commission,
and the Compensation Committee has determined in its sole discretion that you
had knowledge of the material noncompliance or the circumstances that gave rise
to such noncompliance and failed to take reasonable steps to bring it to the
attention of the appropriate individuals within Walter, or you personally and
knowingly engaged in practices which materially contributed to the circumstances
that enabled a material noncompliance to occur.

 

9.                          This Agreement is intended to comply with
Section 409A of the Code and will be interpreted accordingly. References under
this Agreement to the termination of your employment shall be deemed to refer to
the date upon which you have experienced a “separation from service” within the
meaning of Section 409A of the Code. Notwithstanding anything in this Agreement
to the contrary, (i) if at the time of your separation from service with Walter
you are a “specified employee” as defined in Section 409A of the Code (and any
related regulations or other pronouncements thereunder) and the deferral of the
commencement of any payments or benefits otherwise payable hereunder or payable
under any other compensatory arrangement between you and Walter as a result of
such separation from service is necessary in order to prevent any accelerated or
additional tax under Section 409A of the Code, then Walter will defer the
commencement of the payment of any such payments or benefits hereunder (without
any reduction in such payments or benefits ultimately paid or provided to you)
until the first business day after the date that is six months following your
separation from service (or the earliest date as is permitted under Section 409A
of the Code), at which point all payments deferred pursuant to this paragraph
shall be paid to you in a lump sum and (ii) if any other payments of money or
other benefits due to you hereunder could cause the application of an
accelerated or additional tax under Section 409A of the Code, such payments or
other benefits shall be deferred if deferral will make such payment or other
benefits compliant under Section 409A of the Code, or otherwise such payment or
other benefits shall be restructured, to the extent possible, in a manner that
does not cause such an accelerated or additional tax. To the extent any
reimbursements or in-kind benefits due to you under this Agreement constitute
“deferred compensation” under Section 409A of the Code, any such reimbursements
or in-kind benefits shall be paid to you in a manner consistent with Treasury
Regulation Section 1.409A-3(i)(l)(iv). For purposes of Section 409A of the Code,
each payment made under this Agreement shall be designated as a “separate
payment” within the meaning of Section 409A of the Code.

 

10.                   Walter shall withhold from any amounts payable hereunder
all Federal, state, city or other taxes as legally shall be required.

 

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11.                   You acknowledge and agree that you have read this
Agreement carefully, have been advised by the Company to consult with an
attorney regarding its contents, and that you fully understand the same.

 

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