jrcc_ex0401.htm


    Exhibit 4.1

     

    AMENDMENT
NO. 3

    
      to

      RIGHTS
AGREEMENT

      


      THIS AMENDMENT NO. 3 (“Amendment No. 3”) to the
Rights Agreement (the “Rights
Agreement”) dated as of May 25, 2004 and amended as of November 3,
2006 and August 2, 2007, between JAMES RIVER COAL COMPANY, a
Virginia corporation (the “Company”), and COMPUTERSHARE TRUST COMPANY, N.A.
(successor rights agent to SUNTRUST BANK), as rights
agent (the “Rights
Agent”), is made by and between the Company and the Rights Agent
effective this 3rd day of November, 2009.  All capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the Rights
Agreement.

      


      W I T N E S S E T H:

      


      WHEREAS, the Company has
generated net operating losses for United States federal income tax purposes
(“NOLs”) and certain
other tax benefits, which may potentially provide valuable tax benefits to the
Company, and the Company desires to avoid an “ownership change” within the
meaning of Section 382 (as defined below) and thereby maximize its ability
to utilize such NOLs and other tax benefits and, in furtherance of such
objective, the Company desires to enter into this Amendment No. 3;
and

       

      WHEREAS, the Company has
determined to amend the Rights Agreement in accordance with Section 27 of the
Rights Agreement and the Rights Agent is directed to join in this Amendment No.
1 to the Rights Agreement as set forth herein.

       

      AGREEMENT

       

      NOW, THEREFORE, for and in
consideration of the premises and the mutual agreements contained herein, the
parties hereto agree that the Rights Agreement shall be amended as
follows:

       

      1. New
Section 1 Definitions.  Section 1 of the Rights Agreement shall
be deleted in its entirety and replaced by the following new Section
1:

       

      


       

      Section 1.    
Definitions.  The
following terms, as used herein, have the following meanings:

       

      (a)    
“Acquiring
Person” means any
Person who or which, together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner (A) until the NOL Protections Termination Date, of
4.9% or more of the shares of Common Stock then outstanding, and (B) after the
NOL Protections Termination Date, of 20% or more of the shares of Common Stock
then outstanding (such percentage of the shares of Common Stock outstanding
being referred to herein as the “Trigger
Percentage”);

       


      
        
           


        

        
          
          

          
            

          

        

        
           


        

      


      


       

      provided, however, that, an
“Acquiring Person” shall
not include the following Persons:

       

      (i)          
  any Excluded Person,

       

      (ii)       
   any Person who is the Beneficial Owner of 20% or more of the
shares of Common Stock outstanding as of the Effective Date, provided, further, that in the
event that a Person does not become an Acquiring Person by reason of
this clause (ii) such Person nonetheless shall become an Acquiring Person if such
Person thereafter becomes the Beneficial Owner of an additional 2% or more of
the Common Stock then outstanding over and above the shares beneficially owned
by such Person as of the Effective Date, unless the acquisition of such Common
Stock is an Approved Acquisition,

       

      (iii)           any
Person, who alone or together with its Affiliates or Associates becomes the
Beneficial Owner of 20% or more of the shares of Common Stock then outstanding
as a result of an Approved Acquisition; or

       

      (iv)           a
Grandfathered Person (until the NOL Protections Termination Date, after which
this subsection (iv) shall be of no further force nor effect).

       

      Notwithstanding
the foregoing, if the Board of Directors of the Company determines in good faith
that a Person who would otherwise be an “Acquiring Person” as defined
pursuant to the foregoing provisions of this Section 1(a) has become such
inadvertently, and such Person divests as promptly as practicable a sufficient
number of shares of Common Stock so that such Person would no longer be an
“Acquiring Person” as
defined pursuant to the foregoing provisions of this Section 1(a), then such Person
shall not be deemed an Acquiring Person for any purposes of this
Agreement.  Such sales of shares should be effected in a manner
satisfactory to the Board of Directors of the Company with due regard for the
potential adverse impact on the trading markets for the Company’s Common
Stock.

       

      (b)    
“Affiliate” and “Associate” have the respective meanings
ascribed to such terms in Rule 12b-2 under the Exchange Act as in effect on the
date hereof.

       

      (c)    
 “Approved
Acquisition”
means any acquisition of Common Stock that (i) causes a Person to become the
Beneficial Owner of (A) shares of Common Stock then outstanding equal to or
greater than the Trigger Percentage, or (B) if already a Beneficial Owner of
shares of Common Stock then outstanding equal to or greater than the Trigger
Percentage, any additional shares of Common Stock then outstanding, and (ii) is
approved in advance by a
majority of the Board of Directors.

       

      (d)     
A Person shall be deemed the “Beneficial
Owner” of, and
shall be deemed to “beneficially
own,” any securities:

       


      
        
           


        

        
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      (i)           
 which such Person or any of its Affiliates or Associates beneficially owns
(as determined pursuant to Rule 13d-3 under the Exchange Act as in effect on the
date hereof), directly or indirectly;

       

      (ii)      
    which such Person or any of its Affiliates or
Associates, directly or indirectly, has

       

      (A)           the
right to acquire (whether such right is exercisable immediately or only upon the
occurrence of certain events or the passage of time or both) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights (other than pursuant to
the Rights), warrants, options or otherwise; provided, however, that a
Person shall not be deemed the “Beneficial Owner” of, or to
“beneficially own,” any
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of its Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or

       

      (B)           the
right to vote or dispose of (whether such right is exercisable immediately or
only upon the occurrence of certain events or the passage of time or both)
pursuant to any agreement, arrangement or understanding (whether or not in
writing) or otherwise; provided, however, that a
Person shall not be deemed the “Beneficial Owner” of, or to
“beneficially own,” any
security under this clause (B) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding (1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations promulgated under
the Exchange Act, and (2) is not also then reportable by such Person on Schedule
13D under the Exchange Act (or any comparable or successor report);
or

       

      (iii)           which
are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any of its Affiliates
or Associates) has any agreement, arrangement or understanding (whether or not
in writing) for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in Subsection (ii)(B) above) or
disposing of any such securities;

       

      (iv)           of
which any other Person is the “Beneficial Owner”, if such
Person or any of such Person’s Affiliates or Associates has any formal or
informal understanding (whether or not in writing) with such other Person (or
any of such other Person’s Affiliates or Associates) to make a “coordinated
acquisition” of shares within the meaning of Treasury Regulation § 1.382-3(a)(1)
or is otherwise treated as included in the same “entity” within the meaning of
Treasury Regulation 1.382-3(a)(1) in which such other Person is also
included; or

       


      
        
           


        

        
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      (v)         
 which are the subject of a derivative action entered into by such Person,
or derivative security acquired by such Person, which gives such Person the
economic equivalent of ownership of an amount of such securities due to the fact
that the value of the derivative is explicitly determined by reference to the
price or value of such securities, without regard to whether (A) such
derivative conveys any voting rights in such securities to such Person,
(B) the derivative is required to be, or capable of being, settled through
delivery of such securities, or (C) such Person may have entered into other
transactions that hedge the economic effect of such derivative.  In
determining the number of securities deemed beneficially owned by virtue of this
Section 1(d)(v), the
subject Person shall be deemed to “beneficially own” (without
duplication) the number of securities that are synthetically owned pursuant to
such derivative securities.

       

      Provided, however, that nothing
in this Section 1(d)
shall cause any Person engaged in business as an underwriter of securities who
acquires any securities of the Company through such Person’s participation in
good faith in a firm commitment underwriting to be deemed the “Beneficial Owner” of, or to
“beneficially own,” such
securities until the expiration of 40 days after the date of such
acquisition.

       

      Notwithstanding
anything herein to the contrary, to the extent not within the foregoing
provisions of this Section 1(d), a Person
shall be deemed the “Beneficial
Owner” of and to “beneficially own” stock or
securities which such Person would be deemed to constructively own or which
otherwise would be aggregated with stock or securities owned by such Person
pursuant to Section 382 and the Treasury Regulations
thereunder.

       

      (e)    
“Business
Day” means any
day other than a Saturday, Sunday or a day on which banking institutions in the
Commonwealth of Virginia and State of New York are authorized or obligated by
law or executive order to close.

       

      (f)   
  “Close of
Business” on any
given date means 5:00 P.M., Richmond, Virginia time, on such date; provided, however, that if such
date is not a Business Day, then it shall mean 5:00 P.M., Richmond, Virginia
time, on the next succeeding Business Day.

       

      (g)    
“Code” means the Internal Revenue
Code of 1986, as amended, or any successor statute.

       

      (h)    
“Common
Stock” means the
Common Stock, par value $0.01 per share, of the Company, except that, when used
with respect to any Person other than the Company, “Common Stock” means the
capital stock (or other equity interests) of such Person with the greatest
voting power, or the equity securities or other equity interests having the
power to control or direct the management of such Person.

       


      
        
           


        

        
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      (i)     
“Distribution
Date” means the
earlier of (i) the Close of Business on the tenth day (or such later day as may
be designated by action of a majority of the Board of Directors) after the Share
Acquisition Date, and (ii) the Close of Business on the tenth Business Day (or
such later day as may be designated by action of a majority of the Board of
Directors) after the date of the commencement by any Person (other than an
Excluded Person) of, or of the first public announcement of the intention by any
Person (other than an Excluded Person) to commence, a tender or exchange offer
if, upon consummation thereof, such Person, together with all Affiliates and
Associates of such Person, would be the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding.

       

      (j)     
“Employee
Benefit Plan”
means any employee benefit plan of the Company or any of its Subsidiaries or any
Person organized, appointed or established by the Company or any of its
Subsidiaries for or pursuant to the terms of any such plan.

       

      (k)     
“Exchange
Act” means the
Securities Exchange Act of 1934, as amended.

       

      (l)      
“Excluded
Person”
means:

       

      (i)         
   the Company, any of its Subsidiaries or any Employee Benefit
Plan, and

       

      (ii)       
    until the NOL Protections Termination Date, any Person
who or which would otherwise be an Acquiring Person but whose Beneficial
Ownership (together with all Affiliates and Associates of such Person) of 4.9%
or more of the Common Stock then outstanding would not, as determined by the
Board of Directors of the Company in its sole discretion, jeopardize, endanger
or limit (in timing or amount) the availability to the Company of its Tax
Benefits, at any time prior to the time at which the Company’s right of
redemption expires pursuant to Section 23(a) of this Agreement; provided, however, that such a
Person (together with all Affiliates and Associates of such Person) will cease
to be an “Excluded Person” if (i) such Person (together with all Affiliates
and Associates of such Person) ceases to beneficially own 4.9% or more of the
Common Stock then outstanding or (ii) the Board of Directors of the Company
subsequently makes a contrary determination in which case such Person (together
with all Affiliates and Associates of such Person) will become an “Acquiring
Person”. A purchaser, assignee or transferee of Common Stock from an Excluded
Person shall not thereby become an Excluded Person, except that a transferee
from the estate of an Excluded Person who receives Common Stock as a bequest or
inheritance from an Excluded Person shall be an Excluded Person so long as such
Person continues to be the Beneficial Owner of 4.9% or more of the Common Stock
then outstanding.

       

      (m)    
“Expiration
Date” means the
earlier of (i) the Final Expiration Date, and (ii) the time at which all Rights
are redeemed as provided in Section 23 or exchanged as
provided in Section
24.

       

      (n)    
“Final
Expiration Date”
means the Close of Business on May 25, 2014.

       

      (o)    
“Flip-in
Event” means any
event described in Section 11(a)(ii)(A), (B) or (C), but excluding any event
described in Section 11(a)(ii)(D).

       

      (p)    
“Flip-over
Event” means any
event described in Section 13(a)(x), (y), or (z).

       


      
        
           


        

        
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      (q)    
“Grandfathered
Person” means any
Person (together with all Affiliates and Associates of such Person) who would
otherwise be an Acquiring Person as of the date of this Amendment No. 3 as a
result of being the “Beneficial
Owner” of 4.9% or more, but less than 20% or more, of the shares of
Common Stock then outstanding; provided, however, that such
Person (together with all Affiliates and Associates of such Person) shall cease
to be a “Grandfathered Person” at such time as either:

       

      (i)            
the Beneficial Ownership of Common Stock of such Person (or any Affiliates or
Associates of such Person) increases by more than one-half of one percent (.5%)
of the shares of Common Stock then outstanding without the prior written
approval of the Company, other than any increase pursuant to or as a result of
(A) a reduction in the amount of Common Stock outstanding, (B) the
exercise of any options, warrants, rights or similar interests (including shares
of restricted stock) granted by the Company to its directors, officers and
employees, (C) any unilateral grant of any Common Stock by the Company,
(D) any issuance of Common Stock by the Company or any stock dividend,
stock split or similar transaction effected by the Company in which all holders
of Common Stock are treated equally or (E) any Approved Acquisition,
or

       

      (ii)           
the Beneficial Ownership of Common Stock of such Person (together with all
Affiliates and Associates of such Person) decreases to an amount less than 4.9%
of the Common Stock then outstanding.

       

      (r)     
“NOLs” shall have the meaning set
forth in the recitals to this Amendment No. 3.

       

      (s)    
“NOL
Protections Termination Date” means December 5,
2010.

       

      (t)     
“Person” means an individual,
corporation, partnership, limited liability company, association, trust or any
other entity or organization.

       

      (u)    
“Preferred
Stock” means the
Series A Participating Cumulative Preferred Stock, par value $1.00 per share, of
the Company having the terms set forth in the form of certificate of designation
attached hereto as Exhibit
A.

       

      (v)    
“Purchase
Price” means the
price (subject to adjustment as provided herein) at which a holder of a Right
may purchase one one-hundredth of a share of Preferred Stock (subject to
adjustment as provided herein) upon exercise of a Right, which price shall
initially be $200.00.

       

      (w)    
“Qualifying
Tender Offer” means a tender or exchange offer for all outstanding shares
of Common Stock of the Company approved by a majority of the Board of Directors
then in office, after taking into account the potential long-term value of the
Company and all other factors that they consider relevant.

       

      (x)     
“Section
382” means
Section 382 of the Code or any successor or replacement provision.

       

      (y)    
“Securities
Act” means the
Securities Act of 1933, as amended.

       


      
        
           


        

        
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      (z)    
“Share
Acquisition Date”
means the date of the first public announcement (including the filing of a
report on Schedule 13D under the Exchange Act (or any comparable or successor
report)) by the Company or an Acquiring Person expressly stating that an
Acquiring Person has become such pursuant to the provisions of the Agreement;
provided, that if such Person is determined by the Board of Directors of the
Company not to have become an Acquiring Person pursuant to Section 1(a) of this
Agreement, then no Share Acquisition Date will be deemed to have
occurred.

       

      (aa)  
“Subsidiary” means, with respect to any
Person, any other Person of which securities or other ownership interests having
ordinary voting power, in the absence of contingencies, to elect a majority of
the board of directors or other Persons performing similar functions are at the
time directly or indirectly owned or controlled by such first
Person.

       

      (bb)   “Tax
Benefits” means
NOLs, capital loss carryovers, general business credit carryovers, alternative
minimum tax credit carryovers, foreign tax credit carryovers, any loss or
deduction attributable to a “net unrealized built-in loss” within the meaning of
Section 382, of the Company or any of its Subsidiaries and any other
attribute the benefit of which is subject to possible limitation under
Section 382 or Section 383 of the Code.

       

      (cc)   “Trading
Day” means a day
on which the principal national securities exchange or inter-dealer quotation
system on which the shares of Common Stock are listed, admitted to trading or
quoted is open for the transaction of business or, if the shares of Common Stock
are not listed, admitted to trading or quoted on any national securities
exchange or inter-dealer quotation system, a Business Day.

       

      (dd)   
“Treasury
Regulations”
“Treasury Regulations” shall mean the final, temporary and proposed regulations
promulgated by the United States Department of the Treasury under the Code as
amended or superseded from time to time.

       

      (ee)   
“Triggering
Event” means any
Flip-in Event or any Flip-over Event.

       

      2. No
Further Amendments. Except as amended hereby, the Rights Agreement
remains in full force and effect.

      


      IN
WITNESS WHEREOF, the parties hereto have executed this Amendment No. 3 by their
duly authorized representatives effective the date set forth above.

      


      
        	
                James
      River Coal Company

                 

              	
                Computershare
      Trust Company, N.A.

              
	
                By:  /s/ Samuel M. Hopkins,
      II               
      

              	
                By: 
      /s/ Kellie
      Gwinn                      
      

              
	
                Name: 
      Samuel M. Hopkins II

              	
                Name: 
      Kellie Gwinn

              
	
                Title: 
      Vice President

              	
                Title: 
      Vice President

              
	 
      	 
      
	 
      	
                Address
      for notice:

                 

                350 Indiana Street, Suite 750

                Golden, Colorado  80901

                Attn:  Client Services

              


      

      



      
        
           


        

        
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