anrexhibit1035.htm


    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.


       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      ·           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 1⁄2 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