**Exhibit 10.10**

 

Amendment Number 1 toNONQUALIFIED STOCK OPTION AGREEMENT

 

THIS AMENDMENT, is made effective as of November 1,2005, between Foundation Coal Holdings, Inc. (the “Company”) and                      (the “Participant”).

 

RECITALS:

 

WHEREAS, the Company executed a NonqualifiedStock Option Agreement with the Participant dated August 10, 2004 (the “OptionAgreement”); and

 

WHEREAS, the Compensation Committee of theBoard of Directors of the Company (“Committee”) has considered the PerformanceTargets contained in the Option Agreement; and

 

WHEREAS, the Committee established an ad hocsubcommittee of the Board of Directors to review the Actual Cost Per Ton andTarget Cost Per Ton Performance Target and to make a recommendation to theCommittee; and

 

WHEREAS, after consultation with the ad hocsubcommittee, management presented to the Committee an alternative to the costper ton related Performance Target and proposed an “EBITDA/Revenue” Margin;

 

WHEREAS, the Committee has reviewed theinformation presented and has determined that it would be in the best interestsof the Company and its Stockholders to amend the Employment Agreement toreplace the “cost per ton” Performance Target with an “EBITDA/Revenue Margin”Performance Target; and

 

WHEREAS, the Chief Executive Officer or anyother officer of this Company, and any other individual whom any of theofficers referenced above shall designate, be, and each of them hereby is,authorized to take any and all such actions as are necessary or appropriate togive effect to the desires of the Committee.

 

NOW, THEREFORE, in consideration of themutual covenants hereinafter set forth, the parties agree as follows:

 

Section 1(b) shall be replaced withthe following paragraph:

 

(b)                                 **Actual EBITDA/Revenue Margin**:  In respect of a fiscal year, the Actual EBITDAdivided by the Revenue as reported in the December 31st auditedstatement of Consolidation Operations and Comprehensive Income (Loss) multipliedby 100 to result in a percentage.

 

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Sections 1 (n), (o) and (r) shall be replacedwith the following paragraphs:

 

(n)                                 **PerformanceActual**:  Each of the Actual Free CashFlow, the Actual EBITDA/Revenue Margin, Actual EBITDA and Actual Production.

 

(o)                                 **PerformanceTarget**:  Each of the Target Free CashFlow, the Target EBITDA/Revenue Margin, Target EBITDA and Target Production.

 

(r)                                    **Target EBITDA/Revenue Margin**:  20% with respect of 2004 through 2008; providedthat the Board may make such equitable adjustments to Margin as it reasonablydeems to be appropriate in order to achieve the intention of this Agreementafter giving effect to significant events including , without limitation,acquisitions, dispositions, mergers, or similar transactions.

 

The following phrase:

“(or in thecase of Actual Cost Per Ton, equals or is less than)” shall be deleted from Section 3(b)(ii) and(iii) and Section 4(a)(iv).

 

Exhibit A shall be deleted in itsentirety.

 

Except as otherwise noted in this Amendment Number 1, all other termsand conditions of the Option Agreement remain as originally written.  In the event of any inconsistency between theterms of this Amendment Number 1 and the terms of the Option Agreement, theterms of this Amendment Number 1 shall be controlling.

 

IN WITNESS WHEREOF, this Amendment has beenexecuted this 1st day of November 2005 and delivered by the partieshereto.

 

 
|   | Foundation Coal Holdings, Inc. |
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|   | (Participant)                       |

 

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