Exhibit 10.35

 
July 24, 2009

A. Scott Pack, Jr.

Re:  Your Eligibility for Alpha's Key Employee Retention Program

Dear Scott:

Welcome to Alpha's Key Employee Retention Program ("Retention Program"). You are
being offered this opportunity to demonstrate the value we place on you as an
individual and your career, and your key role in the merger transition following
the merger (the "Merger") between Alpha Natural Resources, Inc. and Foundation
Coal Holdings, Inc. ("Foundation") with Foundation as the surviving company
which will be renamed "Alpha Natural Resources, inc." ("Alpha" or the
"Company"). The Retention Program is designed to provide you with an opportunity
to earn significant compensation over and above your base salary through the
payment of an additional retention incentive payment, contingent upon your
continued employment and satisfactory performance in support of the Merger
[which is described in more detail below].

The objectives of the Retention Program are to (i) provide additional incentives
in order to retain key talent, and (ii) promote stabilization within the
combined organization.

We look forward to the future success of our new company and are pleased to ask
you to help achieve that success by providing you this retention opportunity.
The balance of this letter outlines the terms of your specific retention
opportunity.

Key Terms of Your Retention Opportunity

 
1.
Your base salary on August 1, 2009 will be: $331,000.

 
2.
Your potential retention incentive amount is 50% of your base salary on August
3, 2009.

 
3.
Your total potential retention incentive amount is: $165,500.

 
4.
Your retention period is twenty-four (24) months from the date of the closing of
the Merger (i.e., July 31, 2009).

When You Will Be Eligible To Receive Payments Under the Retention Program

Subject to the terms of this letter, 50% of your retention amount will be paid
to you in cash on the one year anniversary date of the closing of the Merger and
the remaining 50% of your retention amount will be paid to you on the second
anniversary date of the closing of the Merger (each such date hereinafter
referred to as a "Payment Date").

·           Your eligibility to receive the retention incentive payments under
the Retention on Program is conditioned upon, and subject to, your: (1)
continued full-time employment with the Company and its subsidiaries through the
applicable Payment Date; and (2) maintaining satisfactory performance through
the applicable Payment Date.

 
 
 

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·           If your employment with the Company and its subsidiaries is
involuntarily terminated by the Company and its subsidiaries before the end of
your retention period for reasons other than "cause" (as defined below) or due
to your "total and permanent disability" (as defined below) or death, you (or
your beneficiary) shall be paid the prorated portion of the remaining unpaid
portion of your total retention incentive amount and the "Payment Date" for any
such payment shall be the date your employment is terminated, For purposes of
the Retention Program, (i) "cause" means as defined by the Company's plans
applicable to you or employment policies in effect at the time of your
employment termination or you engaged in willful conduct involving
misappropriation, dishonesty or serious moral turpitude, each as determined by
the Company, in is sole discretion. and (ii) "total and permanent disability"
means you are, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than three months under an accident and health
plan covering employees of your employer.

To the extent you become entitled to a retention incentive payment pursuant to
the terms of this letter, any such payment shall be made on the Payment Date or
as soon as administratively practicable thereafter (but in all cases within
thirty (30) days of the Payment Date). Please note that your retention payments
will be subject to withholding of applicable income and employment taxes.

The provisions of this letter agreement will be administered, interpreted and
construed in a manner intended to comply with Section 409A of the Internal
Revenue Code ("'Section 409A"), the regulations issued thereunder or any
exception thereto (or disregarded to the extent such provision cannot be so
administered, interpreted, or construed). For purposes of Section 409A, each
payment shall be treated as a separate payment. Each payment under this letter
agreement is intended to be excepted from Section 409A to the maximum extent
provided under Section 409A as follows: (i) each payment that is scheduled to be
made within the applicable 2 ½ month period specified in Treas. Reg. Sec.
1.409A-1(b)(4) is intended to be excepted under the short-term deferral
exception as specified in Treas. Reg. Sec. 1.409A-1(b)(4); and (il) each payment
that is not otherwise excepted under the short-term deferral exception is
intended to be excepted under the involuntary pay exception as specified in
Treas. Reg. Sec. 1.409A-1(b)(9)(iii). You shall have no right to designate the
date of any payment under this Agreement.

For purposes of this letter agreement, you shall be considered to have
experienced a termination of employment only if you have separated from service
with the Company and all of its controlled group members within the meaning of
Section 409A of the Internal Revenue Code. Whether you have separated from
service will be determined based on all of the facts and circumstances and in
accordance with the guidance issued under Section 409A of the Code.

The law of the State of Virginia shall govern the Company's obligations under
this letter.

Please sign below indicating your agreement with these terms. Make and keep one
copy of this letter for your records, and then return the original to the
undersigned.

Sincerely,

/s/  Jack Porco                                                                
Jack Porco
EVP & Chief Commercial Officer
And President, Alpha Coal Sales

/s/ A. Scott Pack,
Jr.                                                                  7/30/09                                           
Signature:  A. Scott Pack,
Jr.                                                                                                Date

 
 

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