Exhibit 10.27

 



 

June 24, 2011

 

Mr. James Griffin

71 Woodcliffe Lake Road

Saddle River, NJ 07458

 

Dear Jim,

 

We are pleased that you have accepted the position of Global Head — Business Development of Walter Energy, Inc. (“Walter” or the “Company”) effective as of April 1, 2011. The attached schedules outline the remuneration and benefits and terms and conditions of your employment.

 

As the Global Head — Business Development of Walter, you will have such duties, responsibilities and authorities as the Chief Executive Officer of Walter (the “CEO”) determines are appropriate for your position. You will report to the CEO or to his designee.

 

It is agreed and understood that this letter agreement (including the schedules and exhibits attached hereto) (collectively, the “Agreement”) and the other agreements referred to in this Agreement shall constitute our entire agreement with respect to the subject matter hereof and shall supersede all prior agreements, discussions, understandings and proposals (written or oral) relating to your employment with the Company and its affiliates, including, for the avoidance of doubt, Western Coal Corp. (“Western”). This Agreement may only be amended or modified by a written agreement executed by you and Walter (or any of its respective successors) and will be interpreted under and in accordance with the laws of the State of Delaware without regard to conflicts of laws.

 

This Agreement may be executed by fax or pdf and in any number of counterparts, all of which, when taken together, will constitute one and the same instrument.

 











 

Jim, we are delighted that you are joining Walter and we look forward to working with you. If the terms contained within this Agreement are acceptable, please sign one of the enclosed copies and return it to me in the envelope provided.

 

	
Best   regards,
    	
 
    
	
 
    	
 
    
	
/s/   Keith Calder
    	
 
    	
July   7/2011
    
	
Keith   Calder 
    	
Date
    
	
Chief   Executive Officer
    	
 
    
	
Walter   Energy, Inc.
    	
 
    
			


 

ACCEPTANCE

 

I have read the Agreement, have been advised to consult with counsel of my choice concerning the same, and I fully understand the same. I approve and accept the terms set forth in the Agreement as governing my employment relationship with Walter.

 

	
/s/   James Griffin
    	
 
    	
July   7, 2011
    
	
James   Griffin
    	
Date
    
	
 
    	
 
    
	
 
    	
 
    
	
Enclosures:
    	
 
    
	
 
    	
 
    
	
Schedule   A       Remuneration & Benefits
    	
 
    
	
Schedule   B       Terms and Conditions
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Initials
    	
 
    	
/s/
    


 

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SCHEDULE A

 

REMUNERATION & BENEFITS

 

	
Name:
    	
 
    	
James   Griffin
    
	
 
    	
 
    	
 
    
	
Role Title:
    	
 
    	
Global   Head — Business Development
    
	
 
    	
 
    	
 
    
	
Role Band:
    	
 
    	
n/a
    
	
 
    	
 
    	
 
    
	
Department:
    	
 
    	
Corporate
    
	
 
    	
 
    	
 
    
	
Employer:
    	
 
    	
Walter
    
	
 
    	
 
    	
 
    
	
Date of Appointment:
    	
 
    	
April 1,2011
    
	
 
    	
 
    	
 
    
	
Continuous Employment Date:
    	
 
    	
September 13,   2010
    


 

This schedule should be read in conjunction with the remainder of the Agreement. The policies covering these benefits and their terms and conditions may be varied from time to time.

 

	
Base Salary and Remuneration: 
    	
 
    	
The   remuneration for this position is a base salary of USD$400,000 per annum   which will be subject to review and adjustment by the Compensation and Human   Resources Committee of the Board of Directors (the “Compensation Committee”)   and paid in accordance with Walter’s payroll practices, as they may change   from time to time. Your annual base salary, as in effect from time to time,   is hereinafter referred to as the “Base Salary.”
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The   remuneration structure is designed to provide competitive levels of total   remuneration for strong individual and corporate performance and achieve a   close alignment between personal and business performance and remuneration.
    
	
 
    	
 
    	
 
    
	
Annual Bonus  (EIP): 
    	
 
    	
You   will participate in Walter’s Executive Incentive Plan, as it may be amended   from time to time (the “EIP”) and will be eligible to earn an annual   target bonus of 70% of your Base Salary (the “Target Bonus”), with an   upside potential of 2 times your Target Bonus for top performance. The actual
    


 

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amount   of your bonus, if any, will fluctuate based upon actual performance under the   performance metrics associated with the EIP. Participation in the bonus pool   is dependent upon the achievement of Walter’s annual performance goals, as   well as the accomplishment of (x) individual objectives and/or   (y) departmental goals, in each case, as determined and recommended by   the management of Walter and subsequently approved by the Compensation   Committee. In order to receive a bonus under the EIP, you must be employed at   the time the bonus is paid. Notwithstanding anything in this Agreement to the   contrary, your bonus, if any, under the EIP, earned in respect of the 2011   fiscal year, will be pro-rated based upon the percentage of such fiscal year   that will have elapsed from your commencement date through the last day of   such fiscal year and based solely on the Base Salary actually earned in such   fiscal year from your commencement date through the last day of such fiscal   year. Notwithstanding anything in this Agreement to the contrary, with   respect to any bonus to be paid hereunder, such bonus will be paid in   accordance with the EIP and, to the extent possible, will be structured to   comply with Section 162(m) of the Internal Revenue Code of 1986, as   amended (the “Code”) as performance based compensation thereunder;   provided however, to the extent not deductible by Walter, such payment will   be deferred until it can be paid by Walter on a tax deductible basis.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Please   note that participation in Walter’s Employee Stock Purchase Plan is a   condition to participation in the bonus pool under the EIP.
    
	
 
    	
 
    	
 
    
	
Long Term Incentive:
    	
 
    	
Subject   to your continued employment with Walter, you will be eligible to participate   in Walter’s Amended and Restated 2002 Long-Term Incentive Award Plan, as it   may be amended and restated from time to time (and any successor long term   incentive award plan) (collectively, the “LTIP”), and will be eligible   to receive annual equity grants from Walter.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Your   annual equity grant in respect of the 2011 fiscal year will be valued at 90%   of Base Salary, based on the Black-Scholes value at the date of grant, fifty percent   (50%) of which will be in the form of non-qualified stock options and fifty   percent (50%) of which will be In the form of restricted stock units. Such   equity grants will be awarded under and subject to the terms and conditions   of the LTIP and the
    


 

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terms   and conditions applicable to other awards granted by Walter under the LTIP to   employees of Walter.
    
	
 
    	
 
    	
 
    
	
Expenses: 
    	
 
    	
Reimbursement   for all reasonable and customary out-of-pocket business expenses incurred by   you in the performance of your duties hereunder, in accordance with the   policies, practices and procedures of Walter relating to reimbursement of   business expenses incurred by Walter employees in effect at any time during   the 12 month period preceding the date you incur the expenses; provided,   however, that any such expense reimbursement will be made no later than the   last day of the calendar year following the calendar year in which you incur   the expense, will not affect the expenses eligible for reimbursement in any   other calendar year, and cannot be liquidated or exchanged for any other   benefit.
    
	
 
    	
 
    	
 
    
	
Health Care: 
    	
 
    	
Participation   in Walter’s life and health insurance benefit programs beginning the first   day of the month following your commencement date and in accordance with   their terms, as they may change from time to time. Additional benefit plan   information will be available for your review upon request. After you are   enrolled in the U.S. benefit plans, you and all eligible family members will   be covered.
    
	
 
    	
 
    	
 
    
	
Retirement Plan: 
    	
 
    	
Participation   in Walter’s retirement plan according to its terms as they may change from   time to time. Information on the retirement plan will be available for your   review upon request. Your eligibility to participate will be consistent with   the requirements of the Employee Retirement Income Security Act of 1974, as   amended.
    
	
 
    	
 
    	
 
    
	
Leave: 
    	
 
    	
Eligibility   for 20 business days of vacation and 10 company paid holidays to be used each   year in accordance with Walter’s policy, as it may change from time to time.
    
	
 
    	
 
    	
 
    
	
Change in Control: 
    	
 
    	
An   Executive Change-in-Control Severance Agreement in a form substantially   similar to the form attached hereto as Exhibit A (the “CIC Agreement”).
    
	
 
    	
 
    	
 
    
	
Severance:  
    	
 
    	
Subject   to (a) your compliance with the restrictive covenants set forth in   Sections 5 through 7 of Schedule B and (b) your execution, delivery and   non-revocation of a waiver and release of claims in a form substantially   similar to the form attached hereto as Exhibit B (the “Release”)   on
    


 

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or   prior to the 21st day following the date on which your   employment with Walter terminates due to (x) the termination of your   employment by Walter, other than for “Cause” (as defined below) or   (y) the termination of your employment by you for “Good Reason” (as   defined below), but in each case, excluding any separation from service by   reason of your death or Disability (as defined below) (such date, the “Severance   Date”), you will be entitled to receive the following severance payments   and benefits:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
· For the   period commencing on the day immediately following the Severance Date and   ending on the first anniversary of the Severance Date, monthly pay   continuation with each monthly payment equal to one-twelfth (1/12) times the   sum of your Base Salary and Target Bonus, in each case, as in effect on the   Severance Date. Monthly payments will occur in accordance with the payroll   dates in effect on the Severance Date, and such payment dates will not be affected   by any subsequent change in payroll practices.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
· Except as   provided below, continuation of group medical, dental, vision, group basic   term life insurance, accidental death and dismemberment insurance, voluntary   term life insurance, voluntary accidental death and dismemberment insurance,   dependent life Insurance and employee assistance program benefits, provided,   to the extent applicable, regular contributions are made, at the level in   effect on the Severance Date, in each case, for a period (such period, the “Continuation   Coverage Period”) beginning immediately upon the Severance Date and   continuing until the earliest to occur of (A) the first anniversary of   the Severance Date, (B) the last date you are eligible to participate in   the benefit under applicable law, or (C) the date you are eligible to   receive comparable benefits from a subsequent employer, as determined solely   by Walter in good faith; provided, however, that if you fall to execute and   deliver the Release or revoke the Release, in either case, the Continuation   Coverage Period shall cease immediately upon such date. Such benefits shall   be provided to you at the same coverage and cost to you as in effect on the   Severance Date. To the extent permitted by law, you shall be eligible to qualify   for COBRA health care continuation coverage under Section 4980B of the Code,   or any replacement or successor
    


 

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provision   of United States tax law, beginning following the expiration of the period   described above. Notwithstanding the foregoing, your participation in the   Employee Stock Purchase Plan and long-term disability insurance plan, and   your ability to make deferrals under the 401(k) plan, will cease   effective on the Severance Date. For purposes of this subsection, you shall   send written notice of the terms and conditions of any subsequent employment   and the corresponding benefits earned from such employment and shall provide,   or cause to be provided, to Walter, In writing, correct, complete and timely   information concerning the same to the extent requested by Walter;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
provided,   however, that Walter shall have the right to cease making such payments and   you shall be obligated to repay any such amounts to Walter already paid if   you fall to execute and deliver the Release within the time period provided   for above or, after timely delivery, revoke it within the time period   specified in such Release.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
If   your employment with Walter is terminated by you without Good Reason upon 60   days’ prior written notice to the CEO and such termination occurs on or   before December 31, 2011, subject to your execution, delivery and   non-revocation of the Release on or prior to the 21st day following the date on   which your employment with Walter terminates, you will be entitled to receive   a lump sum cash payment in an amount equal to $680,000, payable as soon as   administratively feasible following the termination date, but in no event   later than December 31, 2011; provided, however, that you shall be obligated   to repay any such amounts to Walter already paid if you fall to execute and   deliver the Release within the time period provided for above or, after   timely delivery, revoke it within the time period specified in such Release.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding   anything in this Agreement to the contrary and for the avoidance of doubt,   you shall not be entitled to severance payments or benefits under this   Agreement in the event you experience a separation from service within   twenty-four (24) months following a Change in Control of the Company (as   defined in the CIC Agreement). Severance payments and benefits payable upon a   separation from service in connection with such a
    


 

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termination   of employment, if any, shall be determined and paid under the CIC Agreement.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For   purposes of this Agreement, the term “Cause” shall mean: (i) your   willful and continued refusal to perform the duties of your position (other   than any such failure resulting from your incapacity due to physical or   mental illness); (ii) your conviction or guilty plea of a felony   involving fraud or dishonesty; (iii) theft or embezzlement by you of   property from Walter or any subsidiary or affiliate; or (iv) fraudulent   preparation by you of financial information of Walter or any subsidiary or   affiliate.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For   purposes of this Agreement, the term “Good Reason” shall mean the occurrence   of any of the following conditions [in each case arising without your   consent): (A) a material breach of this Agreement by Walter or   (B) a material diminution in your authority, duties or responsibilities.   Notwithstanding the foregoing, your voluntary separation from service shall   be for “Good Reason” only if (x) you provide written notice of the facts   or circumstances constituting a “Good Reason” condition to Walter within 30   days after the initial existence of the Good Reason condition, (y) the   Company does not remedy the Good Reason condition within 30 days after it   receives such notice and (z) the voluntary separation from service   occurs within 90 days after the initial existence of the Good Reason   condition. For purposes of this Agreement, the parties agree that “Good   Reason” will not exist solely because the amount of your bonus fluctuates due   to performance considerations under the EIP or other Walter incentive plan   applicable to you and in effect from time to time.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For   purposes of this Agreement, the term “Disability” shall mean any medical   condition whatsoever which leads to your absence from your job function for a   continuous period of six months without you being able to resume such   functions on a full time basis at the expiration of such period, it being   understood that unsuccessful attempts to return to work for periods under   thirty days shall not be deemed to have interrupted said continuity.
    
	
 
    	
 
    	
 
    
	
Location:  
    	
 
    	
The   location of the Walter Corporate Office will be Chicago, Illinois. You   will be provided with relocation
    


 

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assistance   in accordance with the Walter Energy Relocation policy, a copy of which will   be provided under separate cover.
    


 

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SCHEDULE B

 

TERMS AND CONDITIONS

 

1.                          It is agreed and understood that your employment with Walter is to be at will, and either you or Walter may terminate the employment relationship at any time for any reason, with or without cause, and with or without notice to the other; nothing in this Agreement or elsewhere constitutes or shall be construed as a commitment to employ you or pay you severance, other than as stated in Schedule A or in the CSC Agreement, for any period of time.

 

2.                          Outside interest. While employed by Walter, you agree to devote your full business time and best efforts to the performance of your duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly without the prior written consent of the CEO or his designee.

 

3.                          You agree that all inventions, improvements, trade secrets, reports, manuals, computer programs, systems, tapes and other ideas and materials developed or invented by you during the period of your employment with Walter, either solely or in collaboration with others, which relate to the actual or anticipated business or research of Walter or any of its subsidiaries or affiliates, which result from or are suggested by any work you may do for Walter or any of its subsidiaries or affiliates, or which result from use of Walter’s or any of its subsidiaries’ or affiliates’ premises or Walter’s, its subsidiaries’, its affiliates’, or its customers’ property (collectively, the “Developments”) shall be the sole and exclusive property of Walter. You hereby assign to Walter your entire right and interest in any such Developments, and will hereafter execute any documents in connection therewith that Walter may reasonably request. This section does not apply to any inventions that you made prior to your employment by Walter or Western, or to any inventions that you develop entirely on your own time without using any of Walter’s or Western’s equipment, supplies or facilities, or Walter’s or Western’s or their respective subsidiaries’, affiliates’, or customers’ confidential information which do not relate to Walter’s, Western’s, their respective subsidiaries’ or its affiliates’ business, anticipated research and development, or the work you have performed for Walter, Western and their respective subsidiaries and affiliates.

 

4.                          As an inducement of Walter to make this offer to you, you represent and warrant that there exists no impediment or restraint, contractual or otherwise on your power, right or ability to accept this offer and to perform the duties and obligations specified in this Agreement.

 

5.                          Non-Compete/Non-Solicit. It is understood and agreed that you will have substantial relationships with specific businesses and personnel, prospective and existing, vendors, contractors, customers, and employees of Walter and its subsidiaries that result in the creation of customer goodwill. Therefore, while you are employed by Walter and following

 

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the termination of your employment for any reason and continuing for a  period of 12 months from the date of your termination, so long as Walter or any affiliate, successor or assigns thereof is in the coal mining business or like business within the Restricted Area (defined as mining industries in the geographical areas in which Walter or any of its subsidiaries competes at the time of your termination), unless the Board of Directors approves an exception, you shall not, directly or indirectly, for yourself or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity or otherwise;

 

(a)  Call upon, solicit, write, direct, divert, influence, or accept business (either directly or indirectly) with respect to any account or customer or prospective customer of the Company or any corporation controlling, controlled by, under common control with, or otherwise related to Walter, including but not limited to Western or any other affiliated companies; or

 

(b)  Hire away any independent contractors or personnel of Walter and/or entice any such persons to leave the employ of Walter or its affiliated entities without the prior written consent of Walter.

 

6.                          Non-Disparagement. Following the termination of your employment for any reason and continuing for so long as Walter or any affiliate, successor or assigns thereof carries on the name or like business within the Restricted Area, you shall not, directly or indirectly, for yourself or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity or otherwise:

 

(a)  Make any statements or announcements or permit anyone to make any public statements or announcements concerning the termination of your employment with Walter, or

 

(b)  Make any statements that are inflammatory, detrimental, slanderous, or negative in any way to the interests of Walter or its affiliated entities.

 

7.                          You acknowledge and agree that you will respect and safeguard Walter’s and its subsidiaries’ property, trade secrets and confidential information. You acknowledge that Walter’s electronic communication systems (such as email and voicemail) are maintained to assist in the conduct of Walter’s and its subsidiaries’ business and that such systems and data exchanged or stored thereon are Walter property. In the event you leave the employ of Walter, you will not disclose any trade secrets or confidential information you acquired while an employee of Walter to any other person or entity, including without limitation, a subsequent employer, or use such information in any manner.

 

8.                          Compensation Recovery Policy. You understand and agree that if any of Walter’s financial statements are required to be restated due to errors, omissions, fraud or misconduct, the Compensation Committee may, in its sole discretion but acting in good faith, direct that Walter recover all or a portion of any cash incentive, equity compensation or severance

 

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disbursements paid to you with respect to any fiscal year of Walter for which the financial results are negatively affected by such restatement. For purposes of this provision, errors, omissions, fraud or misconduct may include and are not limited to circumstances where Walter has been required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement, as enforced by the Securities and Exchange Commission, and the Compensation Committee has determined in its sole discretion that you had knowledge of the material noncompliance or the circumstances that gave rise to such noncompliance and failed to take reasonable steps to bring it to the attention of the appropriate individuals within Walter, or you personally and knowingly engaged in practices which materially contributed to the circumstances that enabled a material noncompliance to occur.

 

9.                          This Agreement is intended to comply with Section 409A of the Code and will be interpreted accordingly. References under this Agreement to the termination of your employment shall be deemed to refer to the date upon which you have experienced a “separation from service” within the meaning of Section 409A of the Code. Notwithstanding anything in this Agreement to the contrary, (i) if at the time of your separation from service with Walter you are a “specified employee” as defined in Section 409A of the Code (and any related regulations or other pronouncements thereunder) and the deferral of the commencement of any payments or benefits otherwise payable hereunder or payable under any other compensatory arrangement between you and Walter as a result of such separation from service is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then Walter will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to you) until the first business day after the date that is six months following your separation from service (or the earliest date as is permitted under Section 409A of the Code), at which point all payments deferred pursuant to this paragraph shall be paid to you in a lump sum and (ii) if any other payments of money or other benefits due to you hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner that does not cause such an accelerated or additional tax. To the extent any reimbursements or in-kind benefits due to you under this Agreement constitute “deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to you in a manner consistent with Treasury Regulation Section 1.409A-3(i)(l)(iv). For purposes of Section 409A of the Code, each payment made under this Agreement shall be designated as a “separate payment” within the meaning of Section 409A of the Code.

 

10.                   Walter shall withhold from any amounts payable hereunder all Federal, state, city or other taxes as legally shall be required.

 

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11.                   You acknowledge and agree that you have read this Agreement carefully, have been advised by the Company to consult with an attorney regarding its contents, and that you fully understand the same.

 

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