exhibit5.htm


    


      
        

        

      

       

      EXHIBIT
        10.5

       

      MASSEY
        ENERGY COMPANY

       

      Incentive
        Award Agreement

      (Based
        on Cumulative Earnings Before Taxes)

       

      THIS
        AGREEMENT dated as of November 12, 2007, between MASSEY ENERGY COMPANY, a
        Delaware Corporation (the “Company”) and [________] (“Participant”) is made
        pursuant and subject to the provisions of the Massey Energy Company 2006
        Stock
        and Incentive Compensation Plan, as amended from time to time (the “Plan”), a
        copy of which is attached.  All terms used herein that are defined in
        the Plan have the same meaning given them in the Plan.

       

      1.  Incentive
        Award.  Pursuant to the Plan, the
        Company, on November 12, 2007 (the “Grant Date”), awarded to Participant,
        subject to the terms and conditions of the Plan and subject further to the
        terms
        and conditions herein set forth, the opportunity to earn a cash payment based
        on
        the satisfaction of the performance criteria set forth in Paragraph 3 below
        (the “Incentive Award”).

       

      2.  Definitions.

       

      (a)           Earnout
        Period means the three year period from January 1, 2008 through
        December 31, 2010 (“Earnout Period”).

       

      (b)           Performance
        Period EBT means the Company’s cumulative earnings before taxes,
        for the three fiscal years of the Company ending December 31, 2008, December
        31,
        2009, and December 31, 2010 (the “Performance Period EBT”), all as confirmed by
        the Company’s Chief Financial Officer and the Chairman of the Compensation
        Committee (“Committee”); provided, however, that extraordinary, unusual or
        infrequently occurring events and transactions, may, in the sole discretion
        of
        the Committee, be excluded pursuant to the Plan in such
        determination.

       

      3.  Amount
        of Award.  Subject to Paragraph 5
        and except as provided in Paragraphs 4 and 6 below, Participant’s Incentive
        Award will be calculated under the amount and formula shown in column (b)
        below,
        based on satisfaction of the criteria set forth in column (a)
        below:

       

      
        	 	
                (a)

                Performance
                  Period EBT

              	
                (b)

                Participant’s
                  Incentive Award

              
	
                High
                  Target

              	
                $[________]

              	
                $[________]

              
	
                Middle
                  Target

              	
                $[________]

              	
                $[________]

              
	
                Low
                  Target

              	
                $[________]

              	
                $[________]

              


      

      


      If
        the
        Performance Period EBT falls between any target amounts, the amount of
        Participant’s Incentive Award is calculated proportionately between the two
        nearest target levels.  No Incentive Award will be paid if the
        Performance Period EBT is less than the low target of $[________] and no
        increase to the Incentive Award will be made for cumulative earnings before
        taxes above the high target of $[________].

       

      Participant’s
        Incentive Award for the Earnout Period, to the extent earned, will be paid
        in
        cash on or about March 31, 2011.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      


       

      4.  Death
        or Disability.  If Participant dies or
        becomes permanently and totally disabled within the meaning of Section 22(e)(3)
        of the Internal Revenue Code of 1986, as amended (the “Code”) (“Permanently and
        Totally Disabled”) while in the employ or service of the Company or a Subsidiary
        within the Earnout Period, Participant or Participant’s estate will be entitled
        to receive a pro rata portion of Participant’s Incentive Award as calculated
        pursuant to Section 3, based on the portion of the Earnout Period elapsed
        prior
        to Participant’s death or becoming Permanently and Totally
        Disabled.

       

      5.  Forfeiture.  Participant’s
        right to receive an Incentive Award is forfeited if Participant’s employment or
        service with the Company and its Subsidiaries terminates during the Earnout
        Period for any reason other than on account of Participant’s death or becoming
        Permanently and Totally Disabled or as set forth in Paragraph 6
        below.

       

      6.  Change
        in Control.  Notwithstanding any other
        provision of this Agreement, Participant's right to receive the Incentive
        Award
        shall be vested if Participant's employment is terminated during the Earnout
        Period by the Company or an Affiliate without Cause within two years following
        a
        Change in Control that occurs on or after the date of this Agreement through
        the
        Earnout Period.  For purposes of this Agreement, Cause shall occur
        upon:

       

             
        (i)     the willful and continued failure by Participant
        substantially to perform Participant's duties with the Company or an Affiliate
        (other than any such failure resulting from Participant's incapacity due
        to
        physical or mental illness) after written demand for substantial performance
        is
        delivered to Participant by the Company or an Affiliate which specifically
        identifies the manner in which the Company or Affiliate believes that
        Participant has not substantially performed Participant's duties,

       

             
        (ii)     Participant’s willful breach of fiduciary
        duty, willful violation of any law, rule, or regulation (other than traffic
        violations or similar offenses), willful violation of a final cease and desist
        order or willfully engaging in any other gross misconduct which is materially
        and demonstrably injurious to the Company or any Affiliate, or

       

             
        (iii)    Participant’s conviction of, or pleading guilty
        or nolo condentere to, the commission of a felony involving fraud,
        embezzlement, theft or moral turpitude. 

       

      For
        purposes hereof, no act, or failure to act, on Participant’s part described in
        clause (i) or (ii) above shall be considered “willful” unless done, or omitted
        to be done, by Participant not in good faith and without reasonable belief
        that
        Participant's action or omission was in the best interest of the Company
        and its
        Affiliates.  The fact that Participant is or shortly may be “retirement
        eligible” and thus eligible for or entitled to post-retirement benefits from any
        plan, arrangement or program sponsored, participated in or contributed to
        by the
        Company or an Affiliate shall not prevent Participant’s termination from being
        considered for Cause.

      


      7.  Notice.  Any
        notice or other communications given pursuant to this Agreement shall be
        in
        writing and shall be personally delivered or mailed by United States registered
        or certified mail, postage prepaid, return receipt requested, to the following
        addresses:

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        
          
            	
                    If
                      to the Company:

                  	 
	 	 
	
                    By
                      hand-delivery:

                  	
                    By
                      mail:

                  
	
                    Massey
                      Energy Company

                  	
                    Massey
                      Energy Company

                  
	
                    Attention:
                      Corporate Secretary

                  	
                    Attention:
                      Corporate Secretary

                  
	
                    4
                      North Fourth Street

                  	
                    P.O.
                      Box 26765

                  
	
                    Richmond,
                      Virginia 23219

                  	
                    Richmond,
                      Virginia 23261

                  
	 	 
	
                    If
                      to Participant:

                  	 
	 	 
	
                    [Name]

                  	 
	
                    [Address]

                  	 
	
                    [Address]

                  	 


          

        

      

       

      8.  Confidentiality.  Participant
        agrees that this Agreement and the receipt of this Incentive Award are
        conditioned upon Participant not disclosing the terms of this Agreement or
        the
        receipt of the Incentive Award to anyone other than Participant’s spouse,
        confidential financial advisor, or senior management of the Company prior
        to end
        of the Earnout Period. If Participant discloses such information to any person
        other than those named in the prior sentence, except as may be required by
        law,
        Participant agrees that this Incentive Award will be forfeited.

       

      9.  No
        Right to Continued Employment or
        Service.  This Agreement does not confer
        upon Participant any right to continue in the employ or service of the Company
        or a Subsidiary, nor shall it interfere in any way with the right of the
        Company
        or a Subsidiary to terminate such employment or service at any
        time.

       

      10.  Governing
        Law.  This Agreement shall be governed
        by the laws of the State of Delaware.

       

      11.  Conflicts.  In
        the event of any conflict between the provisions of the Plan as in effect
        on the
        date hereof and the provisions of this Agreement, the provisions of the Plan
        shall govern. All references herein to the Plan shall mean the Plan as in
        effect
        on the date hereof or as duly amended.

       

      12.  Participant
        Bound by Plan.  Participant hereby
        acknowledges receipt of a copy of the Plan and agrees to be bound by all
        the
        terms and provisions thereof.

       

      13.  Binding
        Effect.  Subject to the limitations
        stated above and in the Plan, this Agreement shall be binding upon and inure
        to
        the benefit of the legatees, distributees, and personal representatives of
        Participant and the successors of the Company.

       

      14.  Taxes.  Participant
        shall make arrangements acceptable to the Company for the satisfaction of
        income
        and employment tax withholding requirements attributable to the vesting or
        payment of this Award.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      15.  Employment
        and Service.  In determining cessation
        of employment or service, transfers between the Company and/or any Subsidiary
        shall be disregarded, and changes in status between that of a Member, a
        Non-Employee Service Provider and a Non-Employee Director shall be
        disregarded.

       

      IN
        WITNESS WHEREOF, the Company has caused this Agreement to be signed by a
        duly
        authorized officer, and Participant has affixed his signature
        hereto.

       

                           MASSEY
        ENERGY COMPANY

      


      


                            By:
        __________________________

                            Name:
        Baxter F. Phillips, Jr.

                            Its:
        Executive Vice President and Chief Administrative Officer

      


                           _____________________________

                          [Participant]