Exhibit 10.4

 

XX, 20XX

 

Name

Street Address

City, State, Zip

 

Dear Name:

 

In order to encourage you to remain in the employ of the Company, this Agreement
sets forth those benefits which the Company will provide to you in the event
your employment with the Company (1) is Terminated without Cause during the term
of this Agreement, or (2) you resign for Good Reason following a Change in
Control under the circumstances described below.

 

SECTION A.                DEFINITIONS

 

1.             “Agreement” shall mean this letter agreement.

 

2.             “Average Annual Bonus” shall be the highest of (i) the most
recent annual bonus paid to you, (ii) if your Date of Termination occurs after
the end of the calendar year but prior to the payment of annual bonuses with
respect to the prior year, the amount calculated as payable as your annual bonus
pursuant to the bonus targets approved by the Board of Directors of the Company
for such year compared to the actual performance of the Company for such year;
or (iii) the average annual bonus paid to you in the three full calendar years
preceding the Date of Termination.  If you have not been employed by the Company
for three full calendar years prior to the Date of Termination, the average
annual bonus for purposes of clause (iii) of this definition shall be a
percentage of your highest annual salary in effect at any time during the term
of this Agreement equal to the average percentage of annual base pay paid as an
annual bonus to all executives of the Company at your Incentive Compensation
level in the three calendar years preceding the Date of Termination.

 

3.             “Board” shall mean the Company’s Board of Directors.

 

4.             “Cause” shall occur hereunder only upon (A) the willful and/or
continued failure by you substantially to perform your duties with the Company
(other than any such failure resulting from your incapacity due to physical or
mental illness) after a written demand for substantial performance is delivered
to you by the Chief Executive Officer of the Company (“CEO”) which specifically
identifies the manner in which the CEO believes that you have not substantially
performed your duties, (B) the willful engaging by you in gross misconduct
materially and demonstrably injurious to the Company including, without
limitation, a violation of the Company’s Code of Business Conduct in effect from
time to time, or (C) your conviction of or the entering of a plea of nolo
contendere to the commission of a felony.  For purposes of this paragraph, no
act, or failure to act, on your part shall be considered “willful” unless done,
or omitted to be done, by you not in good faith and without reasonable belief
that your action or omission was in the best interest of the Company.

 

5.             “Change in Control” shall be deemed to have occurred if (i) there
shall be consummated (A) any consolidation, merger, or share exchange of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of the

 

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Company’s Common Stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of the
Company’s Common Stock immediately prior to the merger have substantially the
same proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (B) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all or substantially
all of the assets of the Company, or (ii) the stockholders of the Company shall
approve any plan or proposal for the liquidation or dissolution of the Company,
or (iii) at any time during a period of two (2) consecutive years, “Continuing
Directors” shall cease for any reason to constitute at least a majority of the
Board.  For such purpose, “Continuing Directors” shall be directors who were in
office at the beginning of such two year period and new directors whose election
or nomination for election by the Company’s stockholders was approved by a vote
of at least two-thirds of the Continuing Directors then in office.

 

6.             “COBRA” shall mean the Consolidated Omnibus Budget Reconciliation
Act, as amended.

 

7.             “Common Stock” shall mean the common stock, par value $0.01 per
share, of the Company.

 

8.             “Company” shall mean Arch Coal, Inc. and any successor to its
business and/or assets which executes and delivers the agreement provided for in
Section F, paragraph 1 hereof or which otherwise becomes bound by all the terms
and provisions of this Agreement by operation of law.

 

9.             “Competitive Activity” shall have the meaning as set forth in
Section D, paragraph 7.

 

10.           “Competitive Operation” shall have the meaning as set forth in
Section D, paragraph 7.

 

11.          “Confidential Information” shall mean information relating to the
Company’s, its divisions’ and Subsidiaries’ and their successors’ business
practices and business interests, including, but not limited to, customer and
supplier lists, business forecasts, business and strategic plans, financial and
sales information, information relating to products, process, equipment,
operations, marketing programs, research, or product development, engineering
records, computer systems and software, personnel records or legal records.

 

12.          “Date Of Termination” shall mean: (A) if this Agreement is
terminated for Disability, 30 days after the Notice of Termination is given by
the Company to you (provided that you shall not have returned to the performance
of your duties on a full-time basis during such 30 day period), (B) if your
employment is terminated for Good Reason by you, the date specified in the
Notice of Termination, and (C) if your employment is Terminated for any other
reason, the date on which a Notice of Termination is received by you unless a
later date is specified.

 

13.          “Disability” shall occur if, as a result of your incapacity due to
physical or mental illness, you shall have been absent from your duties with the
Company for six consecutive months and shall not have returned to full-time
performance of your duties within 30 days after written notice is given to you
by the Company.

 

14.          “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

 

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15.          “Good Reason” shall mean:

 

(a)           without your express written consent, the assignment to you after
a Change in Control, of any duties materially inconsistent with, or a
significant, material diminution of, your position, duties, responsibilities or
status with the Company immediately prior to a Change in Control;

 

(b)           a material reduction by the Company in your base salary in effect
immediately prior to a Change in Control;

 

(c)           a relocation of your primary work location without written consent
more than 50 miles from the work location in effect immediately prior to the
Change in Control, except for required travel on the Company’s business to an
extent substantially consistent with your business travel obligations prior to
the Change in Control; or

 

(d)           any breach by the Company of any material provision of this
Agreement.

 

Notwithstanding the foregoing, your termination of employment shall not be a
termination of employment Good Reason unless (i) such termination occurs within
two years of the initial existence of the condition giving rise to such
termination, (ii) you give notice to the Company of the condition giving rise to
such termination within 90 days of its initial existence, and (iii) the Company
does not cure the condition giving rise to such termination within the 30 day
period beginning on the date it receives notice from you of such condition.

 

16.          “Notice of Termination” shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of your employment under the provision so indicated.

 

17.          “Person” shall have the meaning as set forth in Sections 13(d) and
14(d)(2) of the Exchange Act.

 

18.          “Qualifying Termination” shall mean the termination of your
employment after a Change in Control while this Agreement is in effect, unless
such termination is (a) by reason of your death or Disability, (b) by the
Company for Cause, or (c) by you other than for Good Reason.

 

19.          “Significant Stockholder” shall mean any stockholder of the Company
who, immediately prior to the Effective Date, owned more than 5% of the common
stock of the Company.

 

20.          “Solicitation Activity” shall have the meaning as set forth in
Section D, paragraph 7.

 

21.          “Specified Employee” shall mean a key employee (as defined in Code
Section 416(i)(5)) determined in accordance with the meaning of such term under
Code Section 409A and the regulations promulgated thereunder and the resolutions
of the Board governing such determination.

 

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22.          “Subsidiary” shall mean any corporation of which more than 20% of
the outstanding capital stock having ordinary voting power to elect a majority
of the board of directors of such corporation (irrespective of whether or not at
the time capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency) is at the
time directly or indirectly owned by the Company, by the Company and one or more
other Subsidiaries, or by one or more other Subsidiaries.

 

23.          “Termination” or “Terminated” shall mean a “separation from
service” within the meaning of Code Section 409A.

 

SECTION B.                TERM AND BENEFITS

 

This Agreement shall be in effect for a period of one year from the date you
accept this Agreement and shall automatically renew for successive one year
periods unless terminated by either party by at least one year advance written
notice prior to the commencement of the next succeeding one year period at which
time the Agreement shall terminate at the end of the next succeeding one year
period.  During the term of employment hereunder, you agree to devote your full
business time and attention to the business and affairs of the Company and to
use your best efforts, skills and abilities to promote its interests.

 

In the event of your retirement, at your election or in accordance with the
Company’s generally applicable retirement policies, as in effect from time to
time, this Agreement shall automatically terminate, without additional notice to
you, as of the effective date of your retirement.  Notwithstanding the first
sentence of this paragraph and the first sentence of this Section B, if a Change
in Control should occur while you are still an employee of the Company and while
this Agreement is in effect, then this Agreement shall continue in effect from
the date of such Change in Control for a period of two years.  Prior to a Change
in Control, your employment may be terminated by the Company for Cause at any
time pursuant to a Notice of Termination.  In such event, you shall not be
entitled to the benefits provided hereunder.  No benefits shall be payable
hereunder unless your employment is terminated without Cause or there shall have
been a Change in Control and your employment by the Company shall thereafter
terminate in accordance with Section D hereof.

 

SECTION C.                TERMINATION PRIOR TO CHANGE IN CONTROL

 

1.             Compensation Prior to a Change in Control.  If you are Terminated
by the Company without Cause during the term of this Agreement and prior to a
Change in Control, you shall be entitled to the following:

 

(a)           A single lump sum payment equal to the higher of:  (1) your annual
salary immediately prior to your Date of Termination, or (2) your highest annual
salary during the three fiscal years preceding the fiscal year in which your
Date of Termination occurs.

 

(b)           To the extent you are covered thereunder on the Date of
Termination, a single lump sum payment equal to the product of (i) 12 and
(ii) the monthly COBRA rate in effect from time to time for your and your
eligible dependents’ coverage under the Company’s health plans.  Upon your
Termination, you and any covered dependents shall be entitled to elect to
continue participation in the Company’s health plans in accordance with COBRA
and the otherwise applicable terms of such plans, including terms relating to
payment of COBRA premiums or retiree medical contributions, if eligible and
timely elected.

 

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(c)           A single lump sum payment equal to the product of (i) 12 and
(ii) the monthly premium rate applicable upon conversion of your non-optional
Company-group life insurance to individual coverage at the rate applicable to
the converted policy assuming timely application to the insurance company for
conversion and, if you have not timely applied for conversion, then at the group
rate on the Date of Termination.

 

(d)           If and when payments are made, payment in cash of any pro-rata
portion (up through your Date of Termination) of any amounts you would have
received under the Company’s performance unit/share plans, Annual Incentive
Compensation Plan, and any other similar executive compensation plan in which
you were a participant immediately prior to your Date of Termination.

 

(e)           A single lump sum payment in cash equal to your Average Annual
Bonus.

 

(f)            To the extent you are participating thereunder on the Date of
Termination, a single lump sum payment equal to the sum of (A) the Company
matching contribution you would have received under the Company’s thrift plan
and nonqualified deferred compensation plan as if you had been contributing the
same percentage of your eligible compensation under such plans as in effect on
your Date of Termination during the 12-month period following your Date of
Termination and (B) the annual cash balance credit amount you would have
received under the Company’s cash balance plan and nonqualified supplemental
retirement plan during the 12-month period following your Date of Termination. 
For purposes of this calculation, payments made pursuant to paragraph 1(a) and
1(e) hereof shall be deemed includable compensation under these plans to the
same extent as if you had remained an active employee of the Company and the
payments were made for base salary and annual bonus, respectively, during the
period following your Date of Termination.

 

(g)           To the extent you had elected to receive such services prior to
the Date of Termination, financial counseling services shall be provided to you
in accordance with the Company’s financial counseling services plan during the
12-month period following your Date of Termination; provided that, the maximum
amount payable to the provider of such services shall not exceed $5,000.

 

(h)           Reasonable outplacement services, for a period not to exceed the
12-month period following your Date of Termination.

 

(i)            A single lump sum payment equal to the value of all unused,
earned and accrued vacation as of your Date of Termination.

 

(j)            All unexpired, non-restricted stock options held by you under any
Company stock option plan shall immediately vest as of your Date of Termination,
and shall be exercisable, if at all, in accordance with the option agreements
and plans granting such options to you.

 

However, in the event that your employment with the Company is Terminated during
the term of this Agreement and prior to a Change in Control and such Termination
is not a Termination without Cause (including, without limitation, termination
by reason of your voluntary termination, retirement, death, or Disability), or
if your employment is terminated for Cause during the term of this Agreement,
you shall not be entitled to receive any benefits under this Agreement.

 

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2.             Release.  In exchange for the benefits herein and as a condition
to receiving any benefits under this Agreement, you agree to execute a release
in substantially the form used by the Company on the Date of Termination, which
completely releases the Company to the fullest extent permitted by law from all
claims you may have against the Company on your Date of Termination except
claims related to (a) claims for benefits to which you are entitled under this
Agreement and (b) any applicable worker’s compensation or unemployment
compensation, and return such executed release to the Company no later than 30
days after your Date of Termination.

 

3.             Payment of Benefits.  Unless otherwise provided in this Agreement
or in the applicable compensation or stock option plan or program, all payments
shall be made to you in a single lump sum within 60 days after your Date of
Termination.  These benefits are in addition to all accrued and vested benefits
to which you are entitled to under any of the Company’s plans and arrangements,
including but not limited to, the accrued vested benefits to which you are
eligible for and entitled to receive under any of the Company’s qualified and
non-qualified benefit or retirement plans, or any successor plans in effect on
your Date of Termination hereunder, except that if you are disabled on the Date
of Termination so as to make you eligible to receive long-term disability
benefits under a Company plan on or after that date, you will not receive the
portion of the single lump sum payment described in Section C, paragraph
1(f)(i)(B).

 

4.             No Duty to Mitigate.  You shall not be required to mitigate the
amount of any payment provided for in this Section by seeking other employment
or otherwise, nor shall the amount of any payment provided for in this
Section be reduced by any compensation earned by you as the result of employment
by another employer after your Date of Termination, or otherwise.  Except as
provided herein, the Company shall have no right to set off against any amount
owing hereunder any claim which it may have against you.

 

SECTION D.                TERMINATION FOLLOWING CHANGE IN CONTROL

 

1.             Qualifying Termination.  If your termination is a Qualifying
Termination, you shall be entitled to receive the payments and benefits provided
in this Section.

 

2.             Notice of Termination.  Except as provided in Section F,
paragraph 1, any termination of your employment following a Change in Control
shall be communicated by written Notice of Termination to the other party
hereto.  No termination shall be effective without such Notice of Termination.

 

3.             Compensation Upon Termination After a Change in Control.

 

(a)           If your termination is a Qualifying Termination, then the Company
shall pay to you as severance pay (and without regard to the provisions of any
benefit or incentive plan), in a lump sum cash payment, an amount equal to two
times the higher of; (1) your annual salary immediately prior to your Date of
Termination, or (2) your highest annual salary during the three fiscal years
preceding the fiscal year in which your Date of Termination occurs or, if
greater, the prior three fiscal years preceding the fiscal year in which the
Change in Control occurs.

 

(b)           If your termination is a Qualifying Termination, in addition to
the payments required by the preceding paragraph, you shall be entitled to the
following:

 

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(i)            To the extent you are covered thereunder on the Date of
Termination, a single lump sum payment equal to the product of (i) 18 and
(ii) the monthly COBRA rate in effect from time to time for your and any covered
dependents’ coverage under the Company’s health plans.  Upon your Termination,
you and any covered dependents shall be entitled to elect to continue
participation in the Company’s health plans in accordance with COBRA and the
otherwise applicable terms of such plans, including terms related to payment of
COBRA premiums or retiree medical contributions, if eligible and timely elected.

 

(ii)           A single lump sum payment equal to the product of (A) 24 and
(B) the monthly premium rate applicable upon conversion of your non-optional
Company-group life insurance to individual coverage at the rate applicable to
the converted policy assuming timely application to the insurance company for
conversion and, if you have not timely applied for conversion, then at the group
rate on the Date of Termination.

 

(iii)          Full payment in cash of any performance unit/share awards in
existence on your Date of Termination less any amounts paid to you under the
applicable performance unit/share plan upon a Change in Control pursuant to the
provisions of such plan; plus any pro rata portion (up through your Date of
Termination) of any amounts you would have received under the Company’s
Incentive Compensation Plan and any other similar executive compensation plan in
which you were a participant immediately prior to your Date of Termination.

 

(iv)          A single lump sum payment in cash of an amount equal to two times
your Average Annual Bonus.

 

(v)           Reasonable outplacement services, for a period not to exceed two
(2) years after your Date of Termination.

 

(vi)          To the extent you had elected to receive such services prior to
the Date of Termination, financial counseling services shall be provided to you
by a firm reasonably acceptable to you during the 24-month period following your
Date of Termination; provided that, the maximum amount payable to the provider
of such services shall not exceed $5,000.

 

(vii)         A single lump sum payment equal to the value of all unused, earned
and accrued vacation as of your Date of Termination pursuant to the Company’s
policies in effect immediately prior to the Change in Control.

 

(viii)        All unexpired stock options held by you under any Company stock
option plan shall immediately vest as of your Date of Termination, and shall be
exercisable, if at all, in accordance with the option agreements and plans
granting such options to you.

 

(ix)          To the extent you are participating thereunder on the Date of
Termination, a single lump sum payment equal to the sum of (A) the Company
matching contribution you would have received under the Company’s thrift plan
and nonqualified deferred compensation plan as if you had been contributing the
same percentage of your eligible compensation under such plans as in effect on

 

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your Date of Termination during the 24-month period following your Date of
Termination and (B) the annual cash balance credit amount you would have
received under the Company’s cash balance plan and nonqualified supplemental
retirement plan during the 24-month period following your Date of Termination. 
For purposes of this calculation, payments made pursuant to paragraph 3(a) and
3(b)(iv) hereof shall be deemed includable compensation under these plans to the
same extent as if you had remained an active employee of the Company and the
payments were made for base salary and annual bonus, respectively, during the
period following your Date of Termination.

 

4.             Release.  In exchange for the benefits herein and as a condition
to receiving any benefits under this Agreement, you agree to execute a release
in substantially the form used by the Company on the Date of Termination, which
completely releases the Company to the fullest extent permitted by law from all
claims you may have against the Company on your Date of Termination except
claims related to (a) claims for benefits to which you are entitled under this
Agreement and (b) any applicable worker’s compensation or unemployment
compensation, and return such executed release to the Company no later than 30
days after your Date of Termination.

 

5.             Payment of Benefits.  Unless otherwise provided in this Agreement
or in the applicable compensation or stock option plan or program, all payments
shall be made to you within 30 days after your Date of Termination.  However, if
such 30-day period begins in one calendar year and ends in another calendar
year, you will receive the payments in the later calendar year to the extent
such payments (or portion thereof) are nonqualified deferred compensation under
Code Section 409A for which an exemption is not available. These benefits are in
addition to all accrued and vested benefits to which you are entitled to under
any of the Company’s plans and arrangements, including but not limited to, the
accrued vested benefits to which you are eligible for and entitled to receive
under any of the Company’s qualified and non-qualified benefit or retirement
plans, or any successor plans in effect on your Date of Termination hereunder,
except that if you are disabled on the Date of Termination so as to make you
eligible for long-term disability benefits on or after that date, you will not
be eligible for pension credits for two years from the Date of Termination and
provided that, the payment described in paragraph 3(a) shall be made on the
fifth day following your Date of Termination.  Notwithstanding the preceding
sentence, the payment of the amounts described in paragraphs 3(a) and 3(b)(i),
(ii), (iii), (iv), (vi) and (ix) (and any other payments or benefits under this
Agreement which are nonqualified deferred compensation under Code Section 409A
for which an exemption is not available) shall not be made until the day after
the last day of the six-month period beginning on your Date of Termination if
you are a Specified Employee, to the extent required to prevent the imposition
of a tax under Code Section 409A.

 

6.             No Duty to Mitigate.  You shall not be required to mitigate the
amount of any payment provided for in this Section by seeking other employment
or otherwise, nor shall the amount of any payment provided for in this Section
be reduced by any compensation earned by you as the result of employment by
another employer after your Date of Termination, or otherwise.  Except as
provided herein, the Company shall have no right to set off against any amount
owing hereunder any claim which it may have against you.

 

7.             Competitive Activity and Solicitation Activity.  In consideration
of the foregoing, you agree that if your employment is terminated during the
term of this Agreement, then (i) during a period ending six months following
your Date of Termination you shall not engage in any Competitive Activity and
(ii) during a period ending one year following your Date of

 

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Termination you shall not engage in any Solicitation Activity; provided, you
shall not be subject to the foregoing obligation if the Company breaches a
material provision of this Agreement.  If you choose to engage in any
Competitive Activity or Solicitation Activity during that period, the Company
shall be entitled to recover any benefits paid to you under this Agreement.  For
purposes of this Agreement, “Competitive Activity” shall mean your
participation, without the written consent of the General Counsel of the
Company, in the management of any business operation of any enterprise if such
operation (a “Competitive Operation”) engages in substantial and direct
competition with any business operation actively conducted by the Company or its
divisions and Subsidiaries on your Date of Termination.  For purposes of this
paragraph, a business operation shall be considered a Competitive Operation if
such business sells a competitive product or service which constitutes (i) 15%
of that business’s total sales or (ii) 15% of the total sales of any individual
subsidiary or division of that business and, in either event, the Company’s
sales of a similar product or service constitutes (i) 15% of the total sales of
the Company or (ii) 15% of the total sales of any individual Subsidiary or
division of the Company.  Competitive Activity shall not include (i) the mere
ownership of securities in any enterprise, or (ii) participation in the
management of any enterprise or any business operation thereof, other than in
connection with a Competitive Operation of such enterprise.  For purposes of
this Agreement, “Solicitation Activity” shall mean your solicitation for
employment or retention, hiring or retention, without the written consent of the
General Counsel of the Company, of any person employed or retained by the
Company on your Date of Termination or during the six months preceding your Date
of Termination.

 

SECTION E.                PARACHUTE PAYMENT CUTBACK

 

Notwithstanding any other provision of this Agreement, if any payments or
benefits in the nature of compensation pursuant to this Agreement or otherwise
would in the aggregate result in you receiving a “parachute payment” within the
meaning of Section 280G of the Internal Revenue Code, then such payment or
benefits shall be cut back to the minimum extent necessary to avoid an excise
tax under Section 4999 of the Internal Revenue Code, but if and only if applying
such cutback would result in you retaining a larger after-tax amount.  In
determining the extent to which such payments or benefits would result in a
parachute payment or such cutback is necessary, an appropriate portion of the
cash payments under Section D shall be treated as reasonable compensation for
Executive’s obligations pursuant to Section D.7.  The determination of such
portion shall be by mutual agreement of you and the Company, or if requested by
you, the determination will be made by a valuator mutually acceptable to you and
the Company whose fees and expenses shall be paid by the Company.  If any
payments or benefits are to be cut back, the payments and benefits to be paid
latest in time shall be cut back first, and in the event that payments and
benefits to be cut back are to be paid at the same time, non-cash payments and
benefits shall be cut back [before] [after] cash payments.

 

SECTION F.                MISCELLANEOUS

 

1.             Assumption of Agreement.  The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, share exchange
or otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to you, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.  Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of a material provision
of this Agreement and shall entitle you to terminate your employment for Good
Reason and receive the compensation in the same amount and on the same terms as
you would be entitled pursuant to

 

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Section D, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed your Date of
Termination without a Notice of Termination being given.

 

2.             Confidentiality.  All Confidential Information which you acquire
or have acquired in connection with or as a result of the performance of
services for the Company, whether under this Agreement or prior to the effective
date of this Agreement, shall be kept secret and confidential by you unless
(a) the Company otherwise consents or (b) you are legally required to disclose
such Confidential Information by a court of competent jurisdiction.  This
covenant of confidentiality shall extend beyond the term of this Agreement and
shall survive the termination of this Agreement for any reason.  If you breach
this covenant of confidentiality, the Company shall be entitled to recover from
any benefits paid to you under this Agreement its damages resulting from such
breach.

 

3.             Employment.  You agree to be bound by the terms and conditions of
this Agreement and to remain in the employ of the Company during any period
following any public announcement by any Person of any proposed transaction or
transactions which, if effected, would result in a Change in Control until a
Change in Control has taken place.  However, nothing contained in this Agreement
shall impair or interfere in any way with the right of the Company to terminate
your employment for Cause prior to a Change in Control.

 

4.             Arbitration.  Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled exclusively by
arbitration in accordance with the Center for Public Resources’ Model ADR
Procedures and Practices, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. 
Notwithstanding the foregoing, the Company shall not be restricted from seeking
equitable relief, including injunctive relief as set forth in paragraph 5 of
this Section, in the appropriate forum. Any cost of arbitration will be paid by
the Company.  In the event of a dispute over the existence of Good Reason or
Cause after a Change in Control, the Company shall continue to pay your salary,
bonuses and plan benefits pending resolution of the dispute.  If you prevail in
the arbitration, the remaining amounts due to you under this Agreement are to be
immediately paid to you.

 

5.             Injunctive Relief.  You acknowledge and agree that the remedy of
the Company at law for any breach of the covenants and agreements contained in
paragraph 2 of this Section and in Section D, paragraph 7 will be inadequate,
and that the Company will be entitled to injunctive relief against any such
breach or any threatened, imminent, probable or possible breach.  You represent
and agree that such injunctive relief shall not prohibit you from earning a
livelihood acceptable to you.

 

6.             Notice.  For the purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth on the first page of this Agreement, provided
that all notices to the Company shall be directed to the attention of the
General Counsel of the Company, or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.

 

7.             Indemnification.  The Company will indemnify you to the fullest
extent permitted by the laws of the State of Missouri and the existing bylaws of
the Company, in respect of all

 

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your services rendered to the Company and its divisions and Subsidiaries prior
to your Date of Termination.  You shall be entitled to the protection of any
insurance policies the Company now or hereafter maintains generally for the
benefit of its directors, officers and employees (but only to the extent of the
coverage afforded by the existing provisions of such policies) to protect
against all costs, charges and expenses whatsoever incurred or sustained by you
in connection with any action, suit or proceeding to which you may be made a
party by reason of your being or having been a director, officer or employee of
the Company or any of its divisions or Subsidiaries during your employment
therewith.

 

8.             Further Assurances.  Each party hereto agrees to furnish and
execute such additional forms and documents, and to take such further action, as
shall be reasonably and customarily required in connection with the performance
of this Agreement or the payment of benefits hereunder.

 

9.             Miscellaneous.  No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by you and such officer(s) as may be specifically designated
by the Board.  No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.  Any payments or
benefits provided to you under this Agreement or paid or provided to you during
your employment with the Company shall be subject to the clawback policy (if
any) adopted by the Board from time to time to comply with Section 954 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

10.          Termination of other Agreements.  Upon execution by both parties,
this Agreement shall terminate and shall replace all prior employment and
severance agreements between you and the Company and its divisions or
Subsidiaries and the terms hereof shall govern as if executed on the initial
date of such prior employment and severance agreements.

 

11.          Severability.  The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

 

12.          Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

 

13.          Legal Fees And Expenses.  Any other provision of this Agreement
notwithstanding, the Company shall pay all legal fees and expenses which you may
incur as a result of the Company’s contesting of the validity, enforceability or
your interpretation of, or determinations under, any part of this Agreement. 
The Company shall make payment of such reimbursement from time to time, but in
no event later than the last day of the calendar year following the calendar
year in which such expenses are incurred, provided you timely submit reasonable
documentation of such expenses.  In the event you are not the prevailing party
in any such contest, you must pay back any reimbursements made by the Company
under this Section 13 within 30 days of final disposition of the contest.

 

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14.          Governing Law.  This Agreement shall be governed in all respects by
the laws of the State of Missouri, without reference to its conflicts of law
provisions.

 

15.          Agreement Binding on Successors.  This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.  This Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.  If you
should die while any amounts would still be payable to you hereunder if you had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to your devisee, legatee, or
other designee or, if there be no such designee, to your estate.

 

16.          Headings.  All Headings are inserted for convenience only and shall
not affect any construction or interpretation of this Agreement.

 

If this Agreement correctly sets forth our agreement on the subject matter
hereof, please sign and return to the Company the enclosed copy of this
Agreement which will then constitute our agreement on this matter.

 

 

Sincerely,

 

 

 

ARCH COAL, INC.

 

 

 

 

 

By:

 

 

 

Steven F. Leer

 

 

Chairman and Chief Executive Officer

 

 

 

 

ACKNOWLEDGED AND ACCEPTED as

 

of this             day of             , 20          .

 

 

 

 

 

Employee

 

 

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