Document:

exhibi101.htm

    Exhibit
10.1

      December
30, 2009

      

      

      

      

      

      Dear
Don:

      

      This
letter will summarize our agreement regarding your continued employment as
Chairman and Chief Executive Officer of Massey Energy Company, through
December 31, 2011.  Your current employment agreement will expire
December 31, 2009.  I am very pleased that you will continue your
leadership of Massey and look forward to the productive years
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 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 returning
it to me.

      

      Sincerely,

      

      /s/ Robert H.
Foglesong

      Robert H.
Foglesong

      Chairman,
Compensation Committee

      Massey
Energy Company

      

      Acknowledged
and agreed:

      

      /s/ Don L.
Blankenship                                               
12/30/09

      Don L.
Blankenship                                                      Date

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      APPENDIX A
TO LETTER AGREEMENT

      

      THIS
APPENDIX A is part of a letter agreement dated December 30, 2009 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 years 2010 and 2011 subject to extension as set forth in
Section 7 below.

      

      SECTION
1.                      Compensation.

      

      1.1.  Base Monthly Salary –
$83,333, payable no less frequently than monthly in accordance with Massey’s
ordinary payroll practices.

      

      1.2.  Cash Incentive Bonus
Awards – A target cash incentive bonus award for fiscal year 2010 of
$1,500,000 (the “2010 Cash Incentive Bonus Award”) and a target cash incentive
bonus award for fiscal year 2011 of $1,500,000 (the “2011 Cash Incentive Bonus
Award”), each 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 2010 (for the 2010 Cash Incentive Bonus Award) and for fiscal year
2011 (for the 2011 Cash Incentive Bonus Award) using qualifying performance
criteria contained in the 2006 Plan. The target 2010 Cash Incentive Bonus Award
was granted and performance objectives set by the Compensation Committee of the
Board of Directors of Massey on December 12, 2009. The target 2011 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 2011. 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 amount of
which can be up to and including two and a half times the target amount, above
which no additional payment will occur. The achievement of each of the Cash
Incentive Bonus Awards 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
2010 Cash Incentive Bonus Award, if payable, shall be paid on or about February
28, 2011 (but in no event later than March 15, 2011) and the 2011 Cash
Incentive Bonus Award, if payable, shall be paid on or about February 28, 2012
(but in no event later than March 15, 2012). Notwithstanding any other
provision hereof, the Compensation Committee shall have the right, in its sole
discretion, to reduce the actual award payout for any Cash Incentive Bonus Award
by up to and including 5% of the maximum award payout provided that such
discretion shall only be exercised based on the Compensation Committee’s review
and its judgment as to whether the Executive has satisfactorily proposed,
updated as appropriate, and implemented a successorship plan for all executive
ranks.

      

      1.3.  Restricted Stock and
Restricted Unit Awards – The Executive shall be granted on December 30,
2009, pursuant to the 2006 Plan, 12,700 shares of restricted stock (the “2010
Restricted Stock Award”) and 7,300 restricted units (the “2010 Restricted Unit
Award”), both of which will vest at the rate of one-third on each of December
30, 2010 , December 30, 2011 and December 30, 2012. The Executive shall be
granted on December 30, 2010, pursuant to the 2006 Plan, 12,700 shares of
restricted stock (the “2011 Restricted Stock Award”) and 7,300 restricted units
(the “2011 Restricted Unit Award”), both of which will vest at the rate of
one-third on each of December 30, 2011, December 30, 2012 and December 30,
2013.

      

      1.4.  Performance-Based Restricted
Unit Awards – Two performance-based restricted unit awards, granted on
December 30, 2009, pursuant to the 2006 Plan, which shall vest based on the
achievement of certain performance objectives for fiscal year 2010 using
qualifying performance criteria contained in the 2006 Plan (the “2010
Performance Restricted Unit Awards”) and two performance-based restricted unit
awards, granted on December 30, 2010, pursuant to the 2006 Plan, which shall
vest based on the achievement of certain performance objectives for fiscal year
2011 using qualifying performance criteria contained in the 2006 Plan (the “2011
Performance Restricted Unit Awards”). The 2010 Performance Restricted Unit
Awards were granted and the performance objectives were set by the Compensation
Committee on December 12, 2009 and the 2011 Performance Restricted Unit Awards
shall be granted and the performance shall be set by the Compensation Committee
prior to the commencement of fiscal year 2011. 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
2010 Performance Restricted Unit Award shall be for a total of 81,500 restricted
units, comprised of a certain number of restricted units attributed to each
performance objective, and the Level 2 2010 Performance Restricted Unit Award
shall be for a total of 32,250 restricted units, comprised of a certain number
of restricted units attributed to each performance objective. The terms and
conditions and the number of restricted units of the Level 1 and Level 2 2011
Performance Restricted Unit Awards shall be set by the Compensation Committee
prior to the commencement of fiscal year 2011 and shall be comprised of a
certain number of restricted units attributed to each performance objective. 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 28, but in no event later than March 15, of the year
following the completion of the fiscal year of performance to which it relates,
and shall be based on the closing market price of Massey common stock on the New
York Stock Exchange on the last trading day of the fiscal year of performance to
which it relates. 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 28, but in no event later than the following March 15, of
the year following the completion of the fiscal year of performance to which it
relates, and shall be based on the closing market price of Massey common stock
on the New York Stock Exchange on the last trading day of the fiscal year of
performance to which it relates. 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 28, but in no event later than March 15, of the
year following completion of the fiscal year of performance to which it relates
and shall be based on the closing market price of Massey common stock on the New
York Stock Exchange on the last trading day of the fiscal year of performance to
which it relates and that portion of the Level 2 Performance Restricted Unit
Award which did not vest shall be forfeited.

      

      1.5.  Performance-Based Cash
Incentive Awards – Two performance-based cash incentive awards
granted on December 30, 2009, pursuant to the 2006 Plan, based on the
achievement of certain performance objectives for fiscal year 2010 using
qualifying performance criteria contained in the 2006 Plan (the “2010
Performance Cash Awards”). Two performance-based cash incentive awards granted
prior to the commencement of fiscal year 2011, pursuant to the 2006 Plan, based
on the achievement of certain performance objectives for fiscal year 2011 using
qualifying performance criteria contained in the 2006 Plan (the “2011
Performance Cash Awards”). The 2010 Performance Cash Awards were granted and the
performance objectives set by the Compensation Committee on December 12, 2009,
and the 2011 Performance Cash Awards shall be granted and the performance
objectives set by the Compensation Committee prior to the commencement of fiscal
year 2011. 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 2010 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 32,250 units. The 2010 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 334,000 units. The terms and conditions and the number of units
of the Level 3 and Level 4 2011 Performance Cash Awards, including the
performance objective(s) therefor, shall be set by the Compensation Committee
prior to the commencement of fiscal year 2011. 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 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 the fiscal year of performance to which it relates. Any and
all earned portions of each Performance Cash Award shall be paid on or about
February 28, but in no event later than March 15, following completion of
the fiscal year of performance to which it relates. 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 and the Performance Cash Award in this Section
1.5) for any fiscal year shall not exceed $10,000,000.

      

      1.6.  Performance-Based Restricted
Stock Awards – One performance-based restricted stock award granted on
December 30, 2009, pursuant to the 2006 Plan, that shall vest on December 30,
2010 based on the achievement of certain performance objectives for fiscal year
2010 using qualifying criteria contained in the 2006 Plan (the “2010 Performance
Restricted Stock Award”) and one performance-based restricted stock award
granted on December 30, 2010, pursuant to the 2006 Plan, that shall vest on
December 30, 2011 based on the achievement of certain performance objectives for
fiscal year 2011 using qualifying criteria contained in the 2006 Plan (the “2011
Performance Restricted Stock Award”). The target 2010 Performance Restricted
Stock Award was granted and performance objectives set by the Compensation
Committee of the Board of Directors of Massey on December 12, 2009. The 2011
Performance Restricted Stock Award shall be granted and the performance
objective(s) set by the Compensation Committee of the Board of Directors of
Massey prior to commencement of fiscal year 2011. There shall be a threshold
level of performance for each performance objective below which no stock shall
be earned, a target level of performance, and a maximum level of performance,
the amount of which can be up to and including two and a half times the target
amount, above which no additional stock shall be earned. The target number of
restricted shares that shall be earnable for 2010 is 71,076 shares. The total
number of restricted shares that can be earned by the Executive for 2010 is
71,076. The target number of restricted shares that shall be earnable for 2011
and the total number of restricted shares that can be earned by the Executive
for 2011, shall be determined by the Compensation Committee on its award date.
The achievement of the 2010 Performance Restricted Stock Award and the 2011
Performance Restricted Stock Award for purposes of this Section 1.6 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 IRC, and as permitted by the 2006 Plan.  Notwithstanding any other
provision hereof, the Compensation Committee shall have the right, in its sole
discretion, to reduce the actual award payout for any Performance Restricted
Stock Award by up to and including 5% of the maximum award payout provided that
such discretion shall only be exercised based on the Compensation Committee’s
review and its judgment as to whether the Executive has satisfactorily proposed,
updated as appropriate, and implemented a successorship plan for all executive
ranks.

      

      1.7.  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.

      

      1.8.  Life Insurance –
Massey shall pay the premiums, if any, on the Executive’s $4,000,000 split
dollar life insurance policies payable in 2010 and 2011 (payable no later than
30 days after the premium becomes due).

      

      1.9.  Severance – The
Executive entered into a certain Change in Control Agreement with Massey dated
December 21, 2005, as amended and restated effective January 1, 2009 (which
agreement, as the same may be amended or replaced, is referred to as 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, 2010 through December 30, 2011 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, the sum of $5,000,000,
unless the Executive elects to terminate his employment voluntarily during the
period commencing January 1, 2010 through December 30, 2011 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 Associated with a Change in Control is not covered by
the Change in Control Agreement and disregarding the need for an actual or
potential Change in Control). Any such payment shall be made in six (6) equal
monthly payments beginning the 1st day
of the month after the Executive’s employment with Massey terminates and on the
first day of each month following thereafter until all such payments are
made.

      

      In the event the Executive ceases to be
employed on or before December 30, 2010 and is entitled to payments and benefits
under the Change in Control Agreement (as defined in Section 1.10 below), then
Massey shall pay to the Executive, or if the Executive is deceased to his
Estate, the sum of $2,000,000 on the date of termination.  In the
event the Executive ceases to be employed on or after January 1, 2011 through
December 31, 2011 and is entitled to payments and benefits under the Change in
Control Agreement (as defined in Section 1.10 below), then Massey shall pay to
the Executive, or if the Executive is deceased to his Estate, the sum of
$2,000,000 on the date of termination.  Either of these payments shall
be in addition to any payments and benefits to which the Executive is entitled
under the Change in Control Agreement, but shall be subject to any payment
limitations under the Change in Control Agreement.

      

      1.10.  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, 2010
through December 30, 2010 for any reason, all of the Executive’s rights
with respect to the following awards covering the 2010 fiscal year (unearned or
unvested Cash Incentive Bonus Award, Performance Restricted Unit Awards,
Performance Cash Awards, and Performance Restricted Stock Award), as set forth
in Sections 1.2, 1.4, 1.5, and 1.6 above, shall terminate and all rights
thereunder shall cease and payment of life insurance premiums as set forth in
Section 1.8 above shall cease. In the event that the Executive’s employment with
Massey terminates during the period commencing January 1, 2011 through
December 30, 2011 for any reason, all of the Executive’s rights with
respect to the following awards covering the 2011 fiscal year (unearned or
unvested Cash Incentive Bonus Award, Performance Restricted Unit Awards,
Performance Cash Awards, and Performance Restricted Stock Award), as set forth
in Sections 1.2, 1.4, 1.5, and 1.6 above, shall terminate and all rights
thereunder shall cease and payment of life insurance premiums as set forth in
Section 1.8 above shall cease.

      

      1.11           Order of Payout and Total
Compensation Cap. The amount of performance-based compensation that the
Executive earns during fiscal year 2010 (assuming he is employed by the Company
from January 1, 2010 through December 30, 2010) under Sections 1.2, 1.4, 1.5,
and 1.6 shall be capped at $11,000,000 less the product obtained by multiplying
6,668 by the closing market price of Massey common stock on the New York Stock
Exchange on December 30, 2010 (the “2010 Cap”), which limitation shall be
based on the IRS Form W-2 reporting (as the same may be modified herein for this
purpose). The order in which the Executive’s earned compensation for 2010 shall
be applied to the cap for 2010 shall be as follows:  (i) Section
1.2 – the 2010 Cash Incentive Bonus Award earned by the Executive during 2010,
(ii) Section 1.4 – the Level 1 2010 Performance Restricted Unit Award
earned by the Executive during 2010, based on the closing market price of Massey
common stock on the New York Stock Exchange on the last trading day of 2010,
(iii) Section 1.4 – the Level 2 2010 Performance Restricted Unit Award
earned by the Executive during 2010, based on the closing market price of Massey
common stock on the New York Stock Exchange on the last trading day of 2010,
(iv) Section 1.5 – the Level 3 2010 Performance Cash Award earned by the
Executive during 2010, based on the closing market price of Massey common stock
on the New York Stock Exchange on the last trading day of 2010, (v) Section
1.5 – the Level 4 2010 Performance Cash Award earned by the Executive during
2010, based on the closing market price of Massey common stock on the New York
Stock Exchange on the last trading day of 2010, and (vi) Section 1.6 – the
value of the 2010 Performance Restricted Stock Award earned by the Executive
during 2010 based on the closing market price of Massey’s common stock on the
New York Stock Exchange on the date of payment for federal income tax purposes.
Any compensation that would have otherwise been payable to the Executive but for
the 2010 Cap shall not be considered earned and shall not be paid. The amount of
performance-based compensation that the Executive earns during fiscal year 2011
(assuming he is employed by the Company from January 1, 2011 through December
30, 2011) under Sections  1.2,  1.4, 1.5, and 1.6 shall be
capped at $11,000,000 less the product obtained by multiplying 13,334 by the
closing market price of Massey common stock on the New York Stock Exchange on
December 30, 2011 (the “2011 Cap”). The order in which the Executive’s
earned compensation for 2011 shall be applied to the cap for 2011 shall be as
follows:  (i) Section 1.2 – the 2011 Cash Incentive Bonus Award
earned by the Executive during 2011, (ii) Section 1.4 – the Level 1 2011
Performance Restricted Unit Award earned by the Executive during 2011, based on
the closing market price of Massey common stock on the New York Stock Exchange
on the last trading day of 2010, (iii) Section 1.4 – the Level 2 2011
Performance Restricted Unit Award earned by the Executive during 2011, based on
the closing market price of Massey common stock on the New York Stock Exchange
on the last trading day of 2010, (iv) Section 1.5 – the Level 3 2011
Performance Cash Award earned by the Executive during 2011, based on the closing
market price of Massey common stock on the New York Stock Exchange on the last
trading day of 2010, (v) Section 1.5 – the Level 4 2011 Performance Cash
Award earned by the Executive during 2011, based on the closing market price of
Massey common stock on the New York Stock Exchange on the last trading day of
2010, and (vi) Section 1.6 – the value of the 2011 Performance Restricted
Stock Award earned by the Executive during 2011 based on the closing market
price of Massey’s common stock on the New York Stock Exchange on the date of
payment for federal income tax purposes. Any compensation that would have
otherwise been payable to the Executive but for the 2011 Cap shall not be
considered earned and shall not be paid.

      

      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 promptly upon the
submission of appropriate documentation, but, in any event, no later than the
last day of the year following the year in which the Executive incurs the
reimbursable expenses.

      

      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
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 to the extent required by IRC Section 409A
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. For purposes of this
letter agreement, all rights to payments and benefits hereunder shall be treated
as rights to a series of separate payments and benefits to the fullest extent
allowable by IRC Section 409A, and for purposes of determining payment of
nonqualified deferred compensation for purposes of IRC Section 409A in
connection with a termination of employment, termination of employment will be
read to mean a "separation from service" within the meaning of IRC Section 409A
where it is reasonably anticipated that no further service would be performed
after that date or that the level of bona fide services the Executive would
perform after that date (whether as an employee or independent contractor) would
permanently decrease to no more than 20 percent of the average level of bona
fide services performed over the immediationly preceding thirty-six (36) month
period.

      

      SECTION
7.  Extension. This
letter agreement may be extended by mutual agreement between the Executive and
Massey for an additional two years.exhibit102.htm

     

    
      	Exhibit
      10.2 

    

     

    
      MASSEY
ENERGY COMPANY

       

      Amended
and Restated

      Incentive Award Agreement

      (Based
on Cumulative Earnings Before Taxes)

       

      THIS
AGREEMENT dated as of December 31, 2009, between MASSEY ENERGY COMPANY, a
Delaware Corporation (the “Company”) and [________] (“Participant”) is made
pursuant and subject to the provisions of the Massey Energy Company 2006 Stock
and Incentive Compensation Plan, as amended from time to time (the “Plan”), a
copy of which is attached.  This Agreement amends, restates and
replaces that certain Incentive Award Agreement (Based on Cumulative Earnings
Before Taxes) dated as of November 9, 2009 between the Company and
Participant.  All terms used herein that are defined in the Plan have
the same meaning given them in the Plan.

       

      1. Incentive
Award.  Pursuant to the
Plan, the Company, on November 9, 2009 (the “Grant Date”), awarded to
Participant, subject to the terms and conditions of the Plan and subject further
to the terms and conditions herein set forth, the opportunity to earn a cash
payment based on the satisfaction of the performance criteria set forth in
Paragraph 3 below (the “Incentive Award”).

       

      2. Definitions.

       

      (a)           Earnout Period
means the three year period from January 1, 2010
through December 31,
2012 (“Earnout Period”).

       

      (b)           Performance
Period EBT means the Company’s cumulative earnings before taxes, for the
three fiscal years of the Company ending December 31, 2010,
December 31,
2011, and December 31, 2012
(the “Performance Period EBT”), all as confirmed by the Company’s Chief
Financial Officer and the Chairman of the Compensation Committee (“Committee”);
provided, however, that extraordinary, unusual or infrequently occurring events
and transactions, may, in the sole discretion of the Committee, be excluded
pursuant to the Plan in such determination.

       

      3. Amount of
Award.  Subject to
Paragraph 5 and except as provided in Paragraph 4 below, Participant’s
Incentive Award will be calculated under the amount and formula shown in column
(b) below, based on satisfaction of the criteria set forth in column (a)
below:

       

      
        	 
      	
                (a)

                Performance Period EBT

              	
                (b)

                Participant’s Incentive
    Award

              
	
                High
      Target

              	
                $[________]

              	
                $[________]

              
	
                Middle
      Target

              	
                $[________]

              	
                $[________]

              
	
                Low
      Target

              	
                $[________]

              	
                $[________]

              

      

      

      If the
Performance Period EBT falls between any target amounts, the amount of
Participant’s Incentive Award is calculated proportionately between the two
nearest target levels.  No Incentive Award will be paid if the
Performance Period EBT is less than the low target of $[          ]
million and no increase to the Incentive Award will be made for
cumulative earnings before taxes above the high target of $[          ]
million.

       

      Participant’s
Incentive Award for the Earnout Period, to the extent earned, will be paid in
cash no later than the March 15 immediately following the calendar year in which
the Earnout Period ends.

       

      4. Death or
Disability.  If Participant
dies or becomes permanently and totally disabled within the meaning of Section
22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”)
(“Permanently and Totally Disabled”) while in the employ or service of the
Company or a Subsidiary within the Earnout Period, Participant or Participant’s
estate will be entitled to receive a pro rata portion of Participant’s Incentive
Award as calculated pursuant to Section 3, based on the portion of the Earnout
Period elapsed prior to Participant’s death or becoming Permanently and Totally
Disabled.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      
        5. Forfeiture.  Participant’s
right to receive an Incentive Award is forfeited if Participant’s employment or
service with the Company and its Subsidiaries terminates during the Earnout
Period for any reason other than on account of Participant’s death or becoming
Permanently and Totally Disabled.

         

      

      6. Change in
Control.  Notwithstanding
any other provision of this Agreement, if Participant's employment is terminated
during the Earnout Period by the Company or an Affiliate without Cause within
two years following a Change in Control that occurs on or after the date of this
Agreement and on or before the end of the Earnout Period, the Company shall pay
Participant in cash a lump sum amount equal to $__________ within ten (10) days
after his termination of employment.  For purposes of this Agreement, Cause
shall occur upon:

       

       

             
(i)     the willful and continued failure by Participant
substantially to perform Participant's duties with the Company or an Affiliate
(other than any such failure resulting from Participant's incapacity due to
physical or mental illness) after written demand for substantial performance is
delivered to Participant by the Company or an Affiliate which specifically
identifies the manner in which the Company or Affiliate believes that
Participant has not substantially performed Participant's duties,

       

       

             
(ii)     Participant’s willful breach of fiduciary
duty, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses), willful violation of a final cease and desist
order or willfully engaging in any other gross misconduct which is materially
and demonstrably injurious to the Company or any Affiliate, or

       

       

             
(iii)    Participant’s conviction of, or pleading guilty
or nolo condentere to,
the commission of a felony involving fraud, embezzlement, theft or moral
turpitude. 

       

      For
purposes hereof, no act, or failure to act, on Participant’s part described in
clause (i) or (ii) above shall be considered “willful” unless done, or omitted
to be done, by Participant not in good faith and without reasonable belief that
Participant's action or omission was in the best interest of the Company and its
Affiliates.  The fact that Participant is or shortly may be “retirement
eligible” and thus eligible for or entitled to post-retirement benefits from any
plan, arrangement or program sponsored, participated in or contributed to by the
Company or an Affiliate shall not prevent Participant’s termination from being
considered for Cause.

       

      7. Notice.  Any notice or
other communications given pursuant to this Agreement shall be in writing and
shall be personally delivered or mailed by United States registered or certified
mail, postage prepaid, return receipt requested, to the following
addresses:

       

      
        	
                 
      

              	
                If
      to the Company:

              

      

      

      
        	
                By
      hand-delivery:

              	
                By
      mail:

              

      

      
        	
                Massey
      Energy Company

              	
                Massey
      Energy Company

              

      

      
        	
                Attention:
      Corporate Secretary

              	
                Attention:
      Corporate Secretary

              

      

      
        	
                4
      North Fourth Street

              	
                P.O.
      Box 26765

              

      

      
        	
                Richmond,
      Virginia 23219

              	
                Richmond,
      Virginia 23261

              

      

      

      
        	
                 
      

              	
                If
      to Participant:

              

      

      

      
        	
                 
      

              	
                [Name]

              

      

      
        	
                 
      

              	
                [Address]

              

      

      
        	
                 
      

              	
                [Address]

              

      

      

      8. Confidentiality.  Participant
agrees that this Agreement and the receipt of this Incentive Award are
conditioned upon Participant not disclosing the terms of this Agreement or the
receipt of the Incentive Award to anyone other than Participant’s spouse,
confidential financial advisor, or senior management of the Company prior to end
of the Earnout Period. If Participant discloses such information to any person
other than those named in the prior sentence, except as may be required by law,
Participant agrees that this Incentive Award will be forfeited.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      
        
          9. No Right
to Continued Employment or Service.  This Agreement does not confer upon Participant any
right to continue in the employ or service of the Company or a Subsidiary, nor
shall it interfere in any way with the right of the Company or a Subsidiary to
terminate such employment or service at any time.

           
10. Governing Law.  This Agreement shall be governed by the laws of the
State of Delaware.

         

        11. Conflicts.  In the event of any conflict between the provisions
of the Plan as in effect on the date hereof and the provisions of this
Agreement, the provisions of the Plan shall govern. All references herein to the
Plan shall mean the Plan as in effect on the date hereof or as duly
amended.

         
12. Participant
Bound by Plan.  Participant
hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all
the terms and provisions thereof.

       

      13. Binding
Effect.  Subject to the
limitations stated above and in the Plan, this Agreement shall be binding upon
and inure to the benefit of the legatees, distributees, and personal
representatives of Participant and the successors of the Company.

       

      14. Taxes.  Participant shall
make arrangements acceptable to the Company for the satisfaction of income and
employment tax withholding requirements attributable to the vesting or payment
of this Award.

       

      15. Employment
and Service.  In determining
cessation of employment or service, transfers between the Company and/or any
Subsidiary shall be disregarded, and changes in status between that of a Member,
a Non-Employee Service Provider and a Non-Employee Director shall be
disregarded.

       

      IN
WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly
authorized officer, and Participant has affixed his signature hereto, thereby
evidencing his agreement hereto.

       

                           MASSEY
ENERGY COMPANY

      

      

                            By:
__________________________

         Name:

                            
Its:

      

                           _____________________________

                           [Participant]

       

      
      

       

      
        	 3

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