Exhibit 10.10


 


Amendment Number 1 to

NONQUALIFIED STOCK OPTION AGREEMENT


 


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


 


R
E  C  I  T  A  L  S:


 


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


 


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


 


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; and


 


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


 


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


 


Section 1(b) shall be replaced with
the following paragraph:


 


(b)                                 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 Consolidation Operations and Comprehensive Income (Loss) multiplied
by 100 to result in a percentage.


 


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


 


(n)                                 Performance
Actual:  Each of the Actual Free Cash
Flow, the Actual EBITDA/Revenue Margin, Actual EBITDA and Actual Production.


 


(o)                                 Performance
Target:  Each of the Target Free Cash
Flow, the Target EBITDA/Revenue Margin, Target EBITDA and Target Production.


 


(r)                                    Target EBITDA/Revenue Margin:  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.


 


The following phrase:


“(or in the
case 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 its
entirety.


 


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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Participant)

  



 


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