Letter Agreement



 Exhibit 10.1 
 December 27, 2006 
 Mr. Don L. Blankenship 
 24406 U.S. Route 119 
 Belfry, KY 41514 
 Dear Don: 
 This letter will summarize our agreement regarding your continued employment as Chairman, Chief Executive Officer and President of
Massey Energy Company, through December 31, 2007. Your current employment agreement will expire December 31, 2006. I am very pleased that you will continue your leadership of Massey and look forward to the productive year ahead.

 The specifics of your compensation package are included on Appendix A to this letter. In addition, you generally will continue to participate in the
employee benefit plans and arrangements (e.g., the Massey Energy Retirement Plan, the Coal Company Salary Deferral and Profit Sharing Plan, the welfare benefit programs and the nonqualified or supplemental benefit programs) and be entitled to
receive the perquisites provided to you in keeping with past practice, including, but not limited to, use of the Company’s airplanes. 
 If you have any
questions regarding the terms and conditions of your employment or the proposed compensation package included on Appendix A, please do not hesitate to call me. If the offer details are acceptable, please acknowledge by signing and dating one
copy of this letter and return it to me. 
 Sincerely, 
  

	
	 /s/ Bobby R. Inman

	Admiral Bobby R. Inman
	Chairman, Compensation Committee
	Massey Energy Company

 Acknowledged and agreed: 
  

							
	 /s/ Don L. Blankenship
	  		  	 12/27/06
	  	
	Don L. Blankenship	  		  	Date	  	

  







 APPENDIX A TO LETTER AGREEMENT 
 THIS APPENDIX A is part of a letter agreement dated December 27, 2006 by and between MASSEY ENERGY COMPANY, a Delaware corporation
(“Massey”), and DON L. BLANKENSHIP (the “Executive”), and relates to the Executive’s employment by Massey for calendar year 2007 subject to extension as set forth in Section 7 below. 
 SECTION 1. Compensation. 
 1.1.
Base Monthly Salary – $83,333. 
 1.2. Cash Incentive Bonus Award – A target cash incentive bonus award of $900,000
(the “Cash Incentive Bonus Award”) granted pursuant to the Massey Energy Company 2006 Stock and Incentive Compensation Plan, as such plan may be amended from time to time (the “2006 Plan”) based on the achievement of certain
performance objectives for fiscal year 2007 using qualifying performance criteria contained in the 2006 Plan. The target Cash Incentive Bonus Award shall be granted and the performance objectives set by the Compensation Committee of the Board of
Directors of Massey prior to the commencement of fiscal year 2007. There shall be a threshold level of performance for each performance objective below which no payment shall occur, a target level of performance, and a maximum level of performance,
the value of which can be up to two and a half times the target amount, above which no additional payment will occur. The achievement of the Cash Incentive Bonus Award for purposes of this Section 1.2 shall be confirmed by the Chief Financial
Officer and the Compensation Committee and may be adjusted at the sole discretion of the Compensation Committee in a manner consistent with the performance-based compensation rules of Section 162(m) of the Internal Revenue Code, as amended (the
“IRC”), and as permitted by the 2006 Plan. The Cash Incentive Bonus Award, if payable, shall be paid on or about February 29, 2008. 
 1.3. Long Term Incentive Awards – A $300,000 target cash incentive award granted pursuant to the 2006 Plan based on the achievement of a certain performance objective using qualifying performance criteria contained in the 2006
Plan (with a threshold level of performance below which no payment shall occur, a target level of performance, and a maximum level of performance, the value of which can be up to two times the target amount, above which no additional payment will
occur); 50,000 non-qualified stock options granted under the 2006 Plan with service-based vesting; 12,700 shares of restricted stock granted pursuant to the 2006 Plan with service-based vesting; and 7,300 restricted units granted pursuant to the
2006 Plan with service-based vesting. The Long Term Incentive Awards will be subject to all the terms, conditions, and performance and service-based vesting requirements of the November 12, 2006 grants made to participants in Massey’s 2007
Long Term Incentive Program with the following exception regarding the non-qualified stock options, such options must be exercised by the Executive in the first twenty days exercise is permissible for the Executive pursuant to Massey’s trading
window policy and applicable securities laws following their vesting, otherwise they will be automatically forfeited. 
  

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 1.4. Performance-Based Restricted Unit Awards – Two performance-based restricted unit awards
(each a “Performance Restricted Unit Award”), granted pursuant to the 2006 Plan, which shall vest based on the achievement of certain performance objectives for fiscal year 2007 using qualifying performance criteria contained in the 2006
Plan. The Performance Restricted Unit Awards shall be granted and the performance objectives set by the Compensation Committee prior to the commencement of fiscal year 2007. Each performance objective shall consist of two levels of targeted
performance, a threshold level (“Level 1”) and an enhanced level (“Level 2”), which, for purposes of this Section 1.4, if achieved, shall be confirmed by the Chief Financial Officer and the Compensation Committee and which
may be adjusted at the sole discretion of the Compensation Committee in a manner consistent with the performance-based compensation rules of Section 162(m) of the IRC, and as permitted by the 2006 Plan. The Level 1 Performance Restricted Unit
Award shall be for a total of 120,000 restricted units, comprised of a certain number of restricted units attributed to each performance objective, and the Level 2 Performance Restricted Unit Award shall be for a total of 70,000 restricted units,
comprised of a certain number of restricted units attributed to each performance objective. Both awards shall be granted on or before December 28, 2006. If Level 1 targeted performance for a given performance objective is confirmed as set forth
above, the Executive shall vest in that portion of the Level 1 Performance Restricted Unit Award that has been allocated to the achievement of the targeted performance for such performance objective and that portion of the Level 1 Performance
Restricted Unit Award that has vested shall be paid on or about February 29, 2008 based on the closing market price of Massey common stock on the New York Stock Exchange on the last trading day of 2007. If Level 1 targeted performance for a
given performance objective is not confirmed as set forth above that portion of the Level 1 Performance Restricted Unit Award that has been allocated to the achievement of the targeted performance for such performance objective shall be forfeited.
If Level 2 targeted performance for a given performance objective is confirmed as set forth above, the Executive shall vest in that portion of the Level 2 Performance Restricted Unit Award that has been allocated to the achievement of the targeted
performance for such performance objective and that portion of the Level 2 Performance Restricted Unit Award that has vested shall be paid on or about February 29, 2008 based on the closing market price of Massey common stock on the New York
Stock Exchange on the last trading day of 2007. If the targeted performance for a given performance objective is confirmed, as set forth above, to have fallen between Level 1 and Level 2 targeted performance for such performance objective, the
Executive shall vest in that portion of the Level 2 Performance Restricted Unit Award that is equal to the number of restricted units allocated to Level 2 targeted performance for such performance objective times a fraction, the numerator of which
is that amount of performance achieved over and above Level 1 targeted performance for such performance objective and the denominator of which is the difference between Level 2 targeted performance for such performance objective and Level 1 targeted
performance for such performance objective. For example, if the number of restricted units allocated to Level 2 targeted performance for a certain performance objective was 30,000 and only one-third of Level 2 targeted performance for such
performance objective was achieved, then the Executive would vest in 10,000 restricted units. That portion of the Level 2 Performance Restricted Unit Award that vests shall be paid on or about February 29, 2008 based on the closing market price
of Massey common stock on the New York Stock Exchange on the last trading day of 2007 and that portion of the Level 2 Performance Restricted Unit Award which did not vest shall be forfeited. In the event the Executive ceases to be employed on or
before December 30, 2007 and is entitled 

  

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to payments and benefits under the Change in Control Agreement (as defined in Section 1.10 below), the Level 1 Performance Restricted Unit Award shall
vest and become payable based on the closing market price of Massey common stock on the New York Stock Exchange on the date of termination. 
 1.5. Performance-Based Cash Incentive Awards – Two performance-based cash incentive awards (each a “Performance Cash Award”) granted pursuant to the 2006 Plan based on the achievement of certain performance objectives
for fiscal year 2007 using qualifying performance criteria contained in the 2006 Plan. The Performance Cash Awards shall be granted and the performance objectives set by the Compensation Committee prior to the commencement of fiscal year 2007. Each
performance objective shall consist of two levels of targeted performance, a further enhanced level (“Level 3”) and a superior level (“Level 4”), which, for purposes of this Section 1.5, if achieved, shall be confirmed by
the Chief Financial Officer and the Compensation Committee and which may be adjusted at the sole discretion of the Compensation Committee in a manner consistent with the performance-based compensation rules of Section 162(m) of the IRC, and as
permitted by the 2006 Plan. Each Performance Cash Award shall consist of a certain number of units attributed to each performance objective earnable, in whole or in part, by the Executive based on the achievement, in whole or in part, of the levels
of targeted performance set for each performance objective (the “Earned Units”). The Level 3 Performance Cash Award that may be earned by the Executive, assuming the satisfaction of Level 3 targeted performance for all the selected
performance objectives combined, shall consist of a total of 90,000 units. The Level 4 Performance Cash Award that may be earned by the Executive, assuming the satisfaction of Level 4 targeted performance for all the selected performance objectives
combined, shall consist of an additional 200,000 units. If Level 3 targeted performance for a given performance objective is confirmed, as set forth above, the Executive shall earn that portion of the Level 3 Performance Cash Award that has been
allocated to the achievement of the targeted performance for such performance objective. If the targeted performance for a given performance objective is confirmed, as set forth above, to have fallen between Level 2 and Level 3 targeted performance
for such performance objective, the Executive shall earn that portion of the Level 3 Performance Cash Award that is equal to the number of units allocated to Level 3 targeted performance for such performance objective times a fraction, the numerator
of which is that amount of performance achieved over and above Level 2 targeted performance for such performance objective and the denominator of which is the difference between Level 3 targeted performance for such performance objective and Level 2
targeted performance for such performance objective. If Level 4 targeted performance for a given performance objective is confirmed, as set forth above, the Executive shall earn that portion of the Level 4 Performance Cash Award that has been
allocated to the achievement of the targeted performance for such performance objective. If the targeted performance for a given performance objective is confirmed, as set forth above, to have fallen between Level 3 and Level 4 targeted performance
for such performance objective, the Executive shall earn that portion of the Level 4 Performance Cash Award that is equal to the number of units allocated to Level 4 targeted performance for such performance objective times a fraction, the numerator
of which is that amount of performance achieved over and above Level 3 targeted performance for such performance objective and the denominator of which is the difference between Level 4 targeted performance for such performance objective and Level 3
targeted performance for such performance objective. The portions of each Performance Cash Award that are earned by the 

  

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Executive shall be equal to the product obtained by multiplying (i) the Earned Units by (ii) the closing market price of Massey common stock on the
New York Stock Exchange on the last trading day of 2007. In the event the Executive’s employment is terminated by Massey or the Executive prior to the end of fiscal year 2007 then both Performance Cash Awards shall be forfeited, except for a
termination which could occur on December 31, 2007, in which case any and all earned portions of each Performance Cash Award shall be paid in accordance with this Section 1.5. Any and all earned portions of each Performance Cash Award
shall be paid on or about February 29, 2008. No additional Performance Cash Award will be granted for the achievement of performance above Level 4 for any selected performance objective. As provided in Section 11.1 of the 2006 Plan, the
aggregate maximum amount payable as Incentive Awards under the 2006 Plan (which in the case of this letter agreement consist of the Cash Incentive Bonus Award in Section 1.2 above, the cash incentive award in Section 1.3 above and the
Performance Cash Award in this Section 1.5) for any fiscal year shall not exceed $10,000,000. 
 1.6. Additional Stock Option
Award – 200,000 non-qualified stock options (the “Additional Stock Option Award”) granted under the 2006 Plan on December 28, 2006, with an exercise price based on the closing market price of Massey’s common stock on
such date, with service-based vesting on December 30, 2007. Once vested, the stock options must be exercised by the Executive in the first twenty days exercise is permissible for the Executive pursuant to Massey’s trading window policy and
applicable securities laws following their vesting, otherwise they will be automatically forfeited. 
 1.7. Retention Cash Bonus
Awards – If employed through December 30, 2007, $300,000, payable on or about February 29, 2008 (the “Retention Cash Bonus Award”). 
 1.8. Discretionary Award. Notwithstanding anything herein to the contrary, the Compensation Committee retains the discretion to cause the Company to pay or provide for additional or other compensation for
extraordinary performance regardless of the outcome on any performance-based pay contained in this letter agreement provided such extraordinary performance relates to performance which is not based on the performance criteria or goals contained
herein. 
 1.9. Life Insurance – Massey shall pay the premiums, if any, on the Executive’s $4,000,000 split dollar life
insurance policies payable in 2007. 
 1.10. Severance – The Executive entered into a certain Change in Control Agreement with
Massey dated December 21, 2005 (the “Change in Control Agreement”) which governs the Executives’ rights, duties and obligations in the event of the Executive’s cessation of employment with Massey (or any successor) covered
by the Change in Control Agreement. In the event of the Executive’s cessation of employment with Massey during the period commencing January 1, 2007 through December 30, 2007 for any reason other than for “Cause” (as
defined, and determined pursuant to the procedure, in the aforesaid Change in Control Agreement) under circumstances where such cessation of employment is not covered by the Change in Control Agreement, then Massey shall pay to the Executive, or if
the Executive is deceased to his Estate, 2.5 times the sum of the Executive’s Annual Base Salary of $1,000,000 plus the Executive’s target Cash Incentive Bonus Award of $900,000, unless the Executive elects 

  

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to terminate his employment voluntarily during the period commencing January 1, 2007 through December 30, 2007 other than for any reason which
would constitute “a Constructive Termination Associated With a Change in Control” (as defined, and determined pursuant to the procedure, in the aforesaid Change in Control Agreement, under circumstances where such Constructive Termination
is not covered by the Change in Control Agreement). Any such payment shall be made in six (6) equal monthly payments beginning the month after the Executive’s employment with Massey terminates. 
 1.11. Termination of Certain Rights on Cessation of Employment – In the event that the Executive’s employment with Massey terminates
during the period commencing January 1, 2007 through December 30, 2007 for any reason, all of the Executive’s rights with respect to unearned or unvested Performance Restricted Unit Awards, Performance Cash Awards, Additional Stock
Option Awards, and Retention Cash Bonus Awards, as set forth in Sections 1.4, 1.5, 1.6, and 1.7 above, shall terminate and all rights thereunder shall cease, except as otherwise is set forth in Section 1.4, and payment of life insurance
premiums as set forth in Section 1.9 above shall cease. 
 SECTION 2. Expenses. Subject to prevailing Massey policy or such
guidelines as may be established by the Board of Massey, Massey will reimburse the Executive for all reasonable expenses incurred by the Executive in carrying out his duties. 
 SECTION 3. Withholding of Taxes. Massey may withhold from any amounts payable under this letter agreement all federal, state, city or other taxes
as Massey is required to withhold pursuant to any applicable law, regulation or ruling. 
 SECTION 4. Validity. If any provision of
this letter agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this letter agreement and the application of such provision to any other person or
circumstances will not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal will be reformed to the extent (and only to the extent) necessary to make it enforceable, valid or legal. 
 SECTION 5. Governing Law. The validity, interpretation, construction and performance of this letter agreement will be governed by and construed in
accordance with the substantive laws of the State of Delaware, without giving effect to the principles of conflict of laws of such State. 
 SECTION 6. Nonqualified Deferred Compensation Omnibus Provision. Any compensation or benefits which are provided or available to the Executive pursuant to or in connection with any plan or program (including without limitation this
letter agreement) to which Massey or any of its subsidiaries or affiliates is a party and which is considered to be provided under a nonqualified deferred compensation plan or program subject to IRC Section 409A shall be provided and paid in a
manner, and at such time and in such form, as complies with the applicable requirements of IRC Section 409A to avoid the unfavorable tax consequences provided therein for non-compliance. The Executive hereby consents to the amendment of any
such plan or program as may be determined by Massey to be necessary or appropriate to evidence or further evidence required compliance with IRC Section 409A. In the 

  

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event the Executive is a specified employee described in IRC Section 409A(a)(2)(B)(i) whose nonqualified deferred compensation subject to IRC
Section 409A must be deferred until six (6) months after his separation from service, then payment of any amount or provision of any benefit under this letter agreement which is considered to be nonqualified deferred compensation subject
to IRC Section 409A shall be deferred until six (6) months after the Executive’s separation from service (the “409A Deferral Period”), absent an intervening payment event under IRC Section 409A such as his death. In the
event such payments are otherwise due to be made in installments or periodically during the 409A Deferral Period, the payments which would otherwise have been made in the 409A Deferral Period shall be accumulated and paid in a lump sum as soon as
the 409A Deferral Period ends, and the balance of the payments shall be made as otherwise scheduled. In the event, benefits are required to be deferred, any such benefit may be provided during the 409A Deferral Period at the Executive’s
expense, with the Executive having a right to reimbursement from Massey once the 409A Deferral Period ends, and the balance of the benefits shall be provided as otherwise scheduled. 
 SECTION 7. Extension. This letter agreement may be extended by mutual agreement between the Executive and Massey for an additional two years.

  

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