Exhibit 10.6


 


Amendment Number 1 to

EMPLOYMENT AGREEMENT


 


THIS AMENDMENT, is made effective as of November 1,
2005, between Foundation Coal Corporation (the “Company”) and John R. Tellmann
(the “Participant”).


 


R
E  C  I  T  A  L  S:


 


WHEREAS, the Company executed an Employment
Agreement with the Participant dated July 30, 2004 (the “Employment
Agreement”); and


 


WHEREAS, the Compensation Committee of the
Board of Directors of the Company (“Committee”) has considered the Performance
Targets contained in the Employment Agreement; and


 


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


 


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


 


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


 


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


 


Exhibit A - (Performance Vesting) shall
be amended as follows:


 


Replace “Cost per ton” with “EBITDA/Revenue Margin.”


 


Schedule II (Performance Targets) shall
be amended as follows:


 


Replace the “Actual Cost Per Ton” paragraph with the following
paragraph:


 


Actual EBITDA/Revenue Margin:  In respect of a fiscal year, the Actual
EBITDA divided by the Revenue as reported in the December 31st audited
Statement of Consolidated Operations and Comprehensive Income (Loss) multiplied
by 100 to result in a percentage.


 


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Replace the “Target Cost Per Ton” paragraph with the following
paragraph:


 


“Target EBITDA/Revenue Margin” means,
in respect of any fiscal year, the Target EBITDA divided by the Revenue as
reported in the December 31st audited Statement of Consolidated
Operations and Comprehensive Income (Loss) multiplied by 100 to result in a
percentage.  The Margin shall be 20% with
respect of 2004 through 2008; provided that the Board may make such
equitable adjustments to Margin as it reasonably deems to be appropriate in
order to achieve the intention of this Agreement after giving effect to
significant events including, without limitation, acquisitions, dispositions,
mergers, or similar transactions.”


 


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


 


IN WITNESS WHEREOF, this Amendment has been
executed this 1st day of November 2005 and delivered by the parties
hereto.


 


 


	
   

  	
  Foundation Coal Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  John R. Tellmann

  



 


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