Document:

EX-10.1

 

Exhibit 10.1

ALPHA NATURAL RESOURCES, INC and Subsidiaries

DEFERRED COMPENSATION PLAN

Amended and restated

For reference purposes, Alpha Natural Resources, Inc. (Alpha) and each of its direct and
indirect subsidiaries that has adopted this Plan are referred to herein as the “Company”.
Consequently, for employees of Alpha’s subsidiaries that have adopted this Plan, any reference
herein to the “Company” should be interpreted as a reference to your particular employer (Alpha or
one of its subsidiaries that has adopted this Plan).

 

 

ALPHA NATURAL RESOURCES, INC and Subsidiaries

DEFERRED COMPENSATION PLAN

ARTICLE I — PURPOSE; EFFECTIVE DATE

	1.1.	 	Purpose. The purpose of this Deferred Compensation Plan (hereinafter, the “Plan”) is
to permit a select group of management and highly compensated employees of ALPHA NATURAL
RESOURCES, INC and its subsidiaries that have adopted the Plan to defer the receipt of income
which would otherwise become payable to them. It is intended that this plan, by providing
this deferral opportunity, will assist the Company in retaining and attracting individuals of
exceptional ability by providing them with these benefits.
	 
	1.2.	 	Effective Date. The Plan shall be effective as of December 31, 2004, and has been
amended and restated as of May 1, 2005.

ARTICLE II — DEFINITIONS

               For the purpose of this Plan, the following terms shall have the meanings indicated, unless
the context clearly indicates otherwise:

	2.1.	 	Account(s). “Account(s)” means the account or accounts maintained on the books of
the Company used solely to calculate the amount payable to each Participant under this Plan
and shall not constitute a separate fund of assets. The Accounts available for each
Participant shall be identified as:

	 	a)	 	Retirement Account;
	 
	 	b)	 	In-Service Account; each Participant may maintain up to two (2) In-Service Accounts
based on selecting different times of payments as selected under Article 5, below; and,
	 
	 	c)	 	SRP (Supplemental Retirement Plan) Account

	2.2.	 	Beneficiary. “Beneficiary” means the person, persons or entity as designated by the
Participant, entitled under Article VI to receive any Plan benefits payable after the
Participant’s death.
	 
	2.3.	 	Board. “Board” means the Board of Managers of the Company.
	 
	2.4.	 	Committee. “Committee” means the Committee appointed by the Board to administer the
Plan pursuant to Article VII. The initial Committee so designated by the Board shall consist
of the Vice President of Human Resources, Executive Vice President/Chief Administrative
Officer and the President/CEO.
	 
	2.5.	 	Company. “Company” means ALPHA NATURAL RESOURCES, INC, a Delaware

 

 

	 	 	company, and any directly or indirectly affiliated subsidiary that has adopted this Plan or any
successor to the business thereof. A list of subsidiaries that have adopted this Plan are
attached to this document as Annex A.
	 
	2.6.	 	Compensation. “Compensation” means the Alpha Natural Resources Annual Incentive
Bonus Plan earned by and payable to a Participant with respect to employment services
performed for the Company by the Participant and which are or will be considered to be “wages”
for purposes of federal income tax withholding. For purposes of this Plan only, Compensation
shall be calculated before reduction for any amounts deferred by the Participant pursuant to
the Company’s tax qualified plans which may be maintained under § 401(k) or § 125 of the
Internal Revenue Code of 1986, as amended, (the “Code”), or pursuant to this Plan or any other
non-qualified plan which permits the voluntary deferral of compensation. Inclusion of any
other forms of compensation is subject to Committee approval.
	 
	2.7.	 	Compensation Limit. “Compensation Limit” means of the amount of total annual
compensation (base salary paid plus bonus paid during the deferral period) which can be
considered for purposes of determining benefits provided under a tax-qualified employee
pension or profit-sharing plan as provided in § 401(a)(17) of the Code.
	 
	2.8.	 	Deferral Commitment. “Deferral Commitment” means a commitment made by a Participant
to defer a portion of Compensation as set forth in Article III. The Deferral Commitment shall
apply to each payment of bonus made by a Participant during a Deferral Period, and shall
specify the Account or Accounts to which the Compensation deferred shall be credited as well
as the time and form of payment from such Account. Such designation shall be made in whole
percentages, or as otherwise permitted by the Committee and shall be made in a form and at a
time deemed acceptable to the Committee. A Deferral Commitment shall remain in effect until
amended or revoked as provided under Section 3.3, below.
	 
	2.9.	 	Deferral Period.“Deferral Period” means each calendar year, except as otherwise set forth in Section 3.1(b or c) herein.
	 
	2.10.	 	Determination Date. “Determination Date” means the last day of each calendar month.
	 
	2.11.	 	Disability. “Disability” means a physical or mental condition whereby
the Participant: (i) is unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be
expected to result in death or can be expected to last for
a continuous period of not less than 12 months, or (ii)
is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death
or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits
for a period of not less than 3 months under an accident
and health plan covering employees of the Participant’s
employer.
	 
	2.12.	 	Discretionary Contribution. “Discretionary Contribution” means the Company
contribution credited to a Participant’s Account(s) under Section 4.6, below.

 

 

	2.13.	 	Interest. “Interest” means the amount credited to a Participant’s Account(s) on
each Determination Date, which shall be based on the Valuation Funds chosen by the Participant
as provided in Section 2.20, below and in a manner consistent with Section 4.5, below. Such
credits to a Participant’s Account may be either positive or negative to reflect the increase
or decrease in value of the Account in accordance with the provisions of this Plan.
	 
	2.14.	 	Financial Hardship. “Financial Hardship” means a severe financial hardship to the
Participant resulting from an illness or accident of the Participant, the Participant’s
spouse, or a dependent (as defined in § 152(a) of the Code) of the Participant, loss of the
Participant’s property due to casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the Participant.
	 
	2.15.	 	Participant. “Participant” means any employee who is eligible, pursuant to Section
3.1, below, to participate in this Plan, and who has elected to defer Compensation under this
Plan in accordance with Article III, below, or who has received a Discretionary Contribution
or SRP Contribution. Such employee shall remain a Participant in this Plan for the period of
deferral and until such time as all benefits payable under this Plan have been paid in
accordance with the provisions hereof.
	 
	2.16.	 	Plan. “Plan” means this Deferred Compensation Plan as amended from time to time.
	 
	2.17.	 	Retirement. “Retirement” means the termination of the Participant’s employment with
Alpha Natural Resources, Incorporated or any of its subsidiaries that has adopted this Plan
after the Participant has attained age 55.
	 
	2.18.	 	SRP Contribution. “SRP Contribution” means the contribution made by the Company
credited to the Participant’s SRP Account under Section 4.4, below.
	 
	2.19.	 	Specified Employees. “Specified Employees” means key employees, as defined in
Section 416 (i) of the Code without regard to paragraph (5) thereof, of the Company.
	 
	2.20.	 	Valuation Funds. “Valuation Funds” means one or more of the independently
established funds or indices that are identified and listed by the Committee. These
Valuation Funds are used solely to calculate the Interest that is credited to each
Participant’s Account(s) in accordance with Article IV, below, and does not represent, nor
should it be interpreted to convey any beneficial interest on the part of the Participant in
any asset or other property of the Company. The determination of the increase or decrease in
the performance of each Valuation Fund shall be made by the Committee in its reasonable
discretion. The Committee shall select the various Valuation Funds available to the
Participants with respect to this Plan and shall set forth a list of these Valuation Funds
attached hereto as Exhibit A, which may be amended from time to time in the discretion of the
Committee.

ARTICLE III — ELIGIBILITY AND PARTICIPATION

 

 

	3.1.	 	Eligibility and Participation.

	 	a)	 	Eligibility. Eligibility to participate in the Plan shall be limited to those
select key employees of the Company who are designated by management, from time to time,
and approved by the Committee.
	 
	 	b)	 	Participation. An employee’s participation in the Plan shall be effective
upon notification to the employee by the Committee of eligibility to participate, and
completion and submission of a Deferral Commitment, and an Allocation Form to the
Committee no later than fifteen (15) days prior to the beginning of the Deferral Period or
as otherwise provided by the Committee. Notwithstanding, a Participant may submit a
Deferral Commitment with respect to Compensation payable during 2005 provided that the
Deferral Commitment must be submitted no later than the earlier of: (i) March 15, 2005;
or, (ii) the date on which the Compensation is paid or becomes payable to the Participant.
	 
	 	c)	 	First-Year Participation. When an individual first becomes eligible to
participate in this Plan during a Deferral Period, a Deferral Commitment may be submitted
to the Committee within thirty (30) days after the Committee notifies the individual of
eligibility to participate. Such Deferral Commitment will be effective only with regard
to Compensation earned and payable following submission of the Deferral Commitment to the
Committee.

	3.2.	 	Form of Deferral Commitment. A Participant may elect to make a Deferral Commitment
in the form permitted by the Committee. The Deferral Commitment shall specify the following:

	 	a)	 	Deferral Amounts; Accounts. A Deferral Commitment shall be made with
respect to bonus that is earned by or payable to the Participant during the Deferral
Period, and shall designate the portion of each that shall be allocated among the various
Accounts, except that no amount of Compensation may be deferred into the Participant’s SRP
Account. No deferral shall be made to an Account at the same time that a distribution is
to be made from that Account. The Participant shall set forth the amount of Compensation
to be deferred as a full percentage of bonus, a stated dollar amount, or as a full
percentage of bonus in excess of a stated dollar amount.
	 
	 	b)	 	Allocation to Valuation Funds. The Participant shall specify in a separate
form (known as the “Allocation Form”) filed with the Committee, the Participant’s initial
allocation of the amounts deferred into each Account among the various available Valuation
Funds.
	 
	 	c)	 	Maximum Deferral. The maximum amount of each payment of bonus or incentive
compensation that may be deferred shall be one hundred percent (100%).

	3.3.	 	Period of Commitment. Once a Participant has made a Deferral Commitment, that
Commitment shall remain in effect for the next succeeding Deferral Period and shall remain in
effect for all future Deferral Periods unless revoked or amended in writing by the Participant
and delivered to the Committee no later than fifteen (15) days prior to the beginning of a
subsequent Deferral Period.
	 
	3.4.	 	Commitment Limited by Termination or Disability. If a Participant suffers a
Disability or terminates employment with Company prior to the end of the Deferral Period, the
Deferral

 

 

	 	 	Period shall end as of the date of Disability or termination.
	 
	3.5.	 	Modification of Deferral Commitment. Except as provided in Sections 3.3, 3.4, above,
and 5.5 below, a Deferral Commitment shall be irrevocable by the Participant during a Deferral
Period.
	 
	3.6.	 	Change in Employment Status. If the Committee determines that a Participant’s
employment performance is no longer at a level that warrants reward through participation in
this Plan, but does not terminate the Participant’s employment with Company, the Participant’s
existing Deferral Commitment shall terminate at the end of the Deferral Period, and no new
Deferral Commitment may be made by such Participant after notice of such determination is
given by the Committee, unless the Participant later satisfies the requirements of §3.1,
above. If the Committee, in its sole discretion, determines that the Participant no longer
qualifies as a member of a select group of management or highly compensated employees, as
determined in accordance with the Employee Retirement Income Security Act of 1974, as amended,
the Committee may, in its sole discretion terminate any Deferral Commitment for that year,
prohibit the Participant from making any future Deferral Commitments and/or distribute the
Participant’s Account Balances in accordance with Article V of this Plan as if the Participant
had terminated employment with the Company as of that time.
	 
	3.7.	 	Defaults in Event of Incomplete or Inaccurate Deferral Commitments. In the event
that a Participant submits a Deferral Commitment to the Committee that contains information
necessary to the efficient operation of this Plan which, in the sole discretion of the
Committee, is incomplete or inaccurate, the Committee shall be authorized to assume the
following, and such assumptions shall be communicated to the Participant:

	 	a)	 	If no Account is listed – assume Retirement Account was selected;
	 
	 	b)	 	If Accounts listed equal less than 100% — assume balance is deferred into Retirement
Account;
	 
	 	c)	 	If Accounts listed equal more than 100% – assume proportionate reduction to each
Account selected;
	 
	 	d)	 	If no Valuation Fund is selected – assume Moody’s Long-term Corporate Bond Monthly
Average Corporate Rate was selected;
	 
	 	e)	 	If Valuation Fund(s) selected equal less than 100% — assume that Moody’s Long-term
Corporate Bond Monthly Average Corporate Rate was selected for balance;
	 
	 	f)	 	If Valuation Fund(s) selected equal more than 100% — assume proportionate reduction
to each Valuation Fund selected;
	 
	 	g)	 	If no form of payment is selected – assume lump sum was selected; and,
	 
	 	h)	 	If no time of payment is chosen for In-Service Account – assume the earliest possible
date available under the provisions of Section 5.2, below was selected.

ARTICLE IV — DEFERRED COMPENSATION ACCOUNT

 

 

	4.1.	 	Accounts. The Compensation deferred by a Participant under the Plan, any
Discretionary Contributions, SRP Contributions and Interest shall be credited to the
Participant’s Account(s). Separate accounts may be maintained on the books of the Company to
reflect the different Accounts chosen by the Participant, and the Participant shall designate
the portion of each deferral that will be credited to each Account as set forth in Section
3.2(a), above. These Accounts shall be used solely to calculate the amount payable to each
Participant under this Plan and shall not constitute a separate fund of assets.
	 
	4.2.	 	Timing of Credits. A Participant’s Compensation which has been elected to be
deferred shall be credited to each Account designated by the Participant on the last day of
the month during which the Compensation deferred would have otherwise been payable to the
Participant. Any Discretionary Contributions shall be credited to the appropriate Account(s)
at a time as provided by the Committee. SRP Contributions shall be credited to the SRP
Account as set forth below in Section 4.4.
	 
	4.3.	 	Withholding. Any withholding of taxes or other amounts with respect to deferred
Compensation that is required by local, state or federal law shall be withheld from the
Participant’s corresponding non-deferred portion of the Compensation to the maximum extent
possible, and any remaining amount shall reduce the amount credited to the Participant’s
Account in a manner specified by the Committee.
	 
	4.4.	 	Contributions To SRP Account. Company shall make a contribution to each
Participant’s SRP Account as soon as is practical after the close of each calendar year, but
in no event later than March 15th. The amount of the contribution under this
Section shall be equal to the sum of (a), (b) and (c) where:

	 	a)	 	Equals three percent (3%) of the Participant’s total annual compensation for the
preceding calendar year in excess of the Compensation Limit for that prior calendar year;
	 
	 	b)	 	Equals fifty percent (50%) of the amount of Compensation deferred by the Participant
in the prior calendar year under this Plan, but in no event will the amount determined
under this sub-Section (b) exceed two percent (2%) of the Participant’s total annual
compensation for the preceding calendar year in excess of the Compensation Limit for that
prior calendar year; and,
	 
	 	c)	 	Equals an amount determined by the Committee to equal the Company contributions not
made by the Company to other Company-sponsored benefit plans solely as a result of the
Participant’s participation in this Plan.

	4.5.	 	Valuation Funds. A Participant shall designate, at a time and in a manner acceptable
to the Committee, one or more Valuation Funds for each Account for the sole purpose of
determining the amount of Interest to be credited or debited to such Account. Such election
shall designate the portion of each deferral of Compensation made into each Account that shall
be allocated among the available Valuation Fund(s), and such election shall apply to each
succeeding deferral of Compensation until such time as the Participant shall file a new
election with the Committee. Upon notice to the Committee, the Participant may also reallocate
the balance in each Valuation

 

 

	 	 	Fund among the other available Valuation Funds as of the next succeeding Determination Date.
	 	 	 
	4.6.	 	Discretionary Contributions. Company may make Discretionary Contributions to a
Participant’s Account. Discretionary Contributions shall be credited at such times and in
such amounts as recommended by the Committee and approved by the Compensation Committee of the
Board, or the Board in its sole discretion. Unless the Committee specifies otherwise, such
Discretionary Contribution shall be allocated among the various Accounts in the same
proportion as set forth in section 4.1, above.
	 
	4.7.	 	Determination of Accounts. Each Participant’s Account as of each Determination Date
shall consist of the balance of the Account as of the immediately preceding Determination
Date, adjusted as follows:

	 	a)	 	New Deferrals; SRP Contributions. The appropriate Account shall be increased
by any deferred Compensation credited since such prior Determination Date in the
proportion chosen by the Participant, and by any SRP Contributions credited to the SRP
Account since such prior Determination Date, except that no amount of new deferrals shall
be credited to an Account at the same time that a distribution is to be made from that
Account.
	 
	 	b)	 	Discretionary Contributions. Each Account shall be increased by any
Discretionary Contributions credited since such prior Determination as set forth above in
sections 4.1 and 4.6 or as otherwise directed by the Committee.
	 
	 	c)	 	Distributions. Each Account shall be reduced by the amount of each benefit
payment made from that Account since the prior Determination Date. Distributions shall be
deemed to have been made proportionally from each of the Valuation Funds maintained within
such Account based on the proportion that such Valuation Fund bears to the sum of all
Valuation Funds maintained within such Account for that Participant as of the
Determination Date immediately preceding the date of payment.
	 
	 	d)	 	Interest. Each Account shall be increased or decreased by the Interest
credited to such Account since such Determination Date as though the balance of that
Account as of the beginning of the current month had been invested in the applicable
Valuation Funds chosen by the Participant.

	4.8.	 	Vesting of Accounts. Each Participant shall be vested in the amounts credited to
such Participant’s Account and Interest thereon as follows:

	 	a)	 	Amounts Deferred. A Participant shall be one hundred percent (100%) vested
at all times in the amount of Compensation elected to be deferred under this Plan and
Interest thereon.
	 
	 	b)	 	Discretionary Contributions. Discretionary Contributions into a
Participant’s Retirement and In-Service Account(s) and Interest thereon shall become
vested as determined by the Compensation Committee of the Board, or the Board.
	 
	 	c)	 	SRP Account Contributions. Contributions under Section 4.4 of this Plan to a
Participant’s SRP Account and Interest thereon shall become one hundred percent (100%)
vested upon the Participant’s completion of five (5) years of complete service with the
Company.

	4.9.	 	Statement of Accounts. The Committee shall give to each Participant a statement
showing the

 

 

	 	 	balances in the Participant’s Account on a quarterly basis.

ARTICLE V — PLAN BENEFITS

	5.1.	 	Retirement Account. The vested portion of a Participant’s Retirement Account shall
be distributed to the Participant upon the termination of employment with the Company.

	 	a)	 	Timing of Payment. Subject to Section 5.6, benefits under this section shall
be payable as soon as administratively practical after termination of employment, and
subsequent payments, if the form of payment selected provides for subsequent payments,
shall be made on the anniversary of the initial payment.
	 
	 	b)	 	Form of Payment. The form of benefit payment shall be that form selected by
the Participant in the first Deferral Commitment which designated a portion of the
Compensation deferred be allocated to the Retirement Account, and as permitted pursuant to
Section 5.7, below, except that if the Participant terminates employment prior to
Retirement, the Retirement Account shall be paid in the form of a lump sum payment.

	5.2.	 	SRP Account. The vested portion of a Participant’s SRP Account shall be distributed
to the Participant upon the termination of employment with the Company.

	 	a)	 	Timing of Payment. Subject to Section 5.6, benefits under this section shall
be payable as soon as administratively practical after termination of employment, and
subsequent payments, if the form of payment selected provides for subsequent payments,
shall be made on the anniversary of the initial payment.
	 
	 	b)	 	Form of Payment. The form of benefit payment shall be that form selected by
the Participant at the time a SRP contribution is first allocated to the Participant’s SRP
Account, and as permitted pursuant to Section 5.7, below, except that if the Participant
terminates employment prior to Retirement, the SRP Account shall be paid in the form of a
lump sum payment.

	5.3.	 	In-Service Account. The vested portion of a Participant’s In-Service Account shall be
distributed to the Participant upon the date chosen by the Participant.

	 	a)	 	Timing of Payment. Subject to Section 5.6, benefits under this section shall
be payable on the date specified in the first Deferral Commitment which designated a
portion of the Compensation deferred be allocated to the In-Service Account, and
subsequent payments, if the form of payment selected provides for subsequent payments,
shall be made on the anniversary of the initial payment. In no event shall the date
selected be earlier than the first day of the sixth calendar year following the initial
filing of the Deferral Commitment with respect to that In-Service Account. In the event
that the Participant terminates employment with the Company prior to the date so
specified, the benefits under this section shall commence as soon as administratively
practical after termination of employment.
	 
	 	b)	 	Form of Payment. The form of benefit payment shall be that form selected by
the Participant in the first Deferral Commitment which designated a portion of the
Compensation deferred be allocated to the In-Service Account, and as permitted pursuant to

 

 

	 	 	 	Section 5.7, below, except that if the Participant terminates employment with the Company
prior to the date so specified and such termination occurs prior to Retirement, then the
In-Service Account shall be paid in the form of a lump sum payment.
	 	 	 	 
	 
	 	c)	 	Change of Time of Payment. The Participant may request to amend the intended
date of payment initially chosen for an In-Service Account, and the Committee may grant or
deny such request in its sole and complete discretion. The Participant must file this
request no later than twelve (12) months prior to the date of payment in force immediately
prior to the filing of such request. The date of payment specified in such request shall
be no earlier than five (5) years after the date of payment in force immediately prior to
the filing of such request.

	5.4.	 	Death Benefit. Upon the death of a Participant prior to the commencement of benefits
under this Plan from any particular Account, Company shall pay to the Participant’s
Beneficiary an amount equal to the vested Account balance in that Account in the form of a
lump sum payment. In the event of the death of the Participant after the commencement of
benefits under this Plan from any Account, the benefits from that Account(s) shall be paid to
the Participant’s designated Beneficiary from that Account at the same time and in the same
manner as if the Participant had survived, except that the Committee may, in its sole
discretion, approve a request for payment in an Actuarial Equivalent form.
	 
	5.5.	 	Hardship Distributions. Upon a finding that a Participant has suffered a Financial
Hardship or Disability, the Committee may, in its sole discretion, amend the existing Deferral
Commitment, or make distributions from any or all of the Participant’s vested Account
balances. The amount of such distribution shall be limited to the amount reasonably necessary
to meet the Participant’s needs resulting from the Financial Hardship or Disability, plus
amounts necessary to pay taxes reasonably anticipated as a result of such distribution. In
determining the amount of such distribution, the Committee shall take into account the extent
to which such hardship is or may be relieved through reimbursement or compensation by
insurance or otherwise or by liquidation of the Participant’s assets (to the extent that the
liquidation of such assets would not itself cause severe financial hardship).
	 
	5.6.	 	Payment to Specified Employees. Payments of benefits from the Retirement Account and
benefits payable from an In-Service Account caused by the termination of employment (including
death) of a Participant who is determined to meet the definition of Specified Employee shall
be payable as otherwise provided, except that the initial payment shall be made no earlier
than the six (6) months following the termination of employment with the Employer.
	 
	5.7.	 	Form of Payment. Unless otherwise specified in Sections 5.4 and 5.8, the benefits
payable from any Account under this Plan shall be paid in the form of benefit as provided
below, and specified by the Participant in the Deferral Commitment. The permitted forms of
benefit payments are:

	 	a)	 	A lump sum amount which is equal to the vested Account balance; and,
	 
	 	b)	 	Annual installments for a period of up to a maximum of ten (10) years in the event of
payment of a Retirement Account, fifteen (15) years in the event of a SRP Account, or five
(5) years in the event of an In-Service Account, where the annual payment shall be

 

 

	 	 	 	equal to the balance of the Account immediately prior to the payment, multiplied by a
fraction, the numerator of which is one (1) and the denominator of which commences at the
number of annual payment initially chosen and is reduced by one (1) in each succeeding
year. Interest on the unpaid balance shall be based on the most recent allocation among
the available Valuation Funds chosen by the Participant, made in accordance with Section
4.5, above.

	5.8.	 	Small Account. If the total of a Participant’s vested, unpaid Account balance as of
the time the payments are to commence from the Participant’s Account is less than $15,000, the
remaining unpaid, vested Account shall be paid in a lump sum, notwithstanding any election by
the Participant to the contrary.
	 
	5.9.	 	Withholding; Payroll Taxes. Company shall withhold from any payment made pursuant to
this Plan any taxes required to be withheld from such payments under local, state or federal
law. A Beneficiary, however, may elect not to have withholding of federal income tax pursuant
to Section 3405(a)(2) of the Code, or any successor provision thereto.
	 
	5.10.	 	Payment to Guardian. If a Plan benefit is payable to a minor or a person declared
incompetent or to a person incapable of handling the disposition of the property, the
Committee may direct payment to the guardian, legal representative or person having the care
and custody of such minor, or incompetent person. The Committee may require proof of
incompetency, minority, incapacity or guardianship as it may deem appropriate prior to
distribution. Such distribution shall completely discharge the Committee and Company from all
liability with respect to such benefit. 
	 
	5.11.	 	Effect of Payment. The full payment of the applicable benefit under this Article V
shall completely discharge all obligations on the part of the Company to the Participant (and
the Participant’s Beneficiary) with respect to the operation of this Plan, and the
Participant’s (and Participant’s Beneficiary’s) rights under this Plan shall terminate.

ARTICLE VI — BENEFICIARY DESIGNATION

	6.1.	 	Beneficiary Designation. Each Participant shall have the right, at any time, to
designate one (1) or more persons or entity as Beneficiary (both primary as well as secondary)
to whom benefits under this Plan shall be paid in the event of Participant’s death prior to
complete distribution of the Participant’s vested Account balance. Each Beneficiary
designation shall be in a written form prescribed by the Committee and shall be effective only
when filed with the Committee during the Participant’s lifetime. Designation by a married
Participant to the Participant’s spouse of less than a fifty percent (50%) interest in the
benefit due shall not be effective unless the spouse executes a written consent that
acknowledges the effect of the designation, or it is established that the consent cannot be
obtained because the spouse cannot be located.
	 
	6.2.	 	Changing Beneficiary. Any Beneficiary designation may be changed by an unmarried

 

 

	 	 	Participant without the consent of the previously named Beneficiary by the filing of a new
Beneficiary designation with the Committee. A married Participant’s Beneficiary designation may
be changed by a Participant with the consent of the Participant’s spouse as provided for in
Section 6.1 above, by the filing of a new designation and such new filing shall cancel all
designations previously filed.
	 	 	 
	 
	6.3.	 	Change in Marital Status. If the Participant’s marital status changes after the
Participant has designated a Beneficiary, the following shall apply:

	 	a)	 	If the Participant is married at death but was unmarried when the designation was
made, the designation shall be void unless the spouse has consented to it in the manner
prescribed in Section 6.1 above.
	 
	 	b)	 	If the Participant is unmarried at death but was married when the designation was
made:

	 	i)	 	The designation shall be void if the spouse was named as Beneficiary.

	 
	 	ii)	 	The designation shall remain valid if a non-spouse Beneficiary was named.

	 	c)	 	If the Participant was married when the designation was made and is married to a
different spouse at death, the designation shall be void unless the new spouse has
consented to it in the manner prescribed in Section 6.1 above.

	6.4.	 	No Beneficiary Designation. If any Participant fails to designate a Beneficiary in
the manner provided above, if the designation is void, or if the Beneficiary designated by a
deceased Participant dies before the Participant or before complete distribution of the
Participant’s benefits, the Participant’s Beneficiary shall be the person in the first of the
following classes in which there is a survivor:

	 	a)	 	The Participant’s surviving spouse;
	 
	 	b)	 	The Participant’s children in equal shares, except that if any of the children
predeceases the Participant but leaves surviving issue, then such issue shall take by
right of representation the share the deceased child would have taken if living;
	 
	 	c)	 	The Participant’s estate.

	6.5.	 	Effect of Payment. Payment to the Beneficiary shall completely discharge the
Company’s obligations under this Plan.

ARTICLE VII — ADMINISTRATION

	7.1.	 	Committee; Duties. This Plan shall be administered by the Committee, which shall
consist of not less than three (3) persons appointed by the Board, except in the event of a
Change in Control as provided in Section 7.5 below. The Committee shall have the authority to
make, amend, interpret and enforce all appropriate rules and regulations for the
administration of the Plan and decide or resolve any and all questions, including
interpretations of the Plan, as they may arise in such administration. A majority vote of the
Committee members shall control any decision. Members of the Committee may be Participants
under this Plan.
	 
	7.2.	 	Agents. The Committee may, from time to time, employ agents and delegate to them
such

 

 

	 	 	administrative duties as it sees fit, and may from time to time consult with counsel who may be
counsel to the Company.
	 
	7.3.	 	Binding Effect of Decisions. The decision or action of the Committee with respect
to any question arising out of or in connection with the administration, interpretation and
application of the Plan and the rules and regulations promulgated hereunder shall be final,
conclusive and binding upon all persons having any interest in the Plan.
	 
	7.4.	 	Indemnity of Committee. The Company shall indemnify and hold harmless the members
of the Committee against any and all claims, loss, damage, expense or liability arising from
any action or failure to act with respect to this Plan on account of such member’s service on
the Committee, except in the case of gross negligence or willful misconduct.

ARTICLE VIII — CLAIMS PROCEDURE

	8.1.	 	Claim. Any person or entity claiming a benefit, requesting an interpretation or
ruling under the Plan (hereinafter referred to as “Claimant”), or requesting information under
the Plan shall present the request in writing to the Committee, which shall respond in writing
as soon as practical.
	 
	8.2.	 	Denial of Claim. If the claim or request is denied, the written notice of denial
shall state:

	 	a)	 	The reasons for denial, with specific reference to the Plan provisions on which the
denial is based;
	 
	 	b)	 	A description of any additional material or information required and an explanation
of why it is necessary; and
	 
	 	c)	 	An explanation of the Plan’s claim review procedure.

	8.3.	 	Review of Claim. Any Claimant whose claim or request is denied or who has not
received a response within sixty (60) days may request a review by notice given in writing to
the Committee. Such request must be made within sixty (60) days after receipt by the Claimant
of the written notice of denial, or in the event Claimant has not received a response sixty
(60) days after receipt by the Committee of Claimant’s claim or request. The claim or request
shall be reviewed by the Committee which may, but shall not be required to, grant the Claimant
a hearing. On review, the claimant may have representation, examine pertinent documents, and
submit issues and comments in writing.
	 
	8.4.	 	Final Decision. The decision on review shall normally be made within sixty (60) days
after the Committee’s receipt of claimant’s claim or request. If an extension of time is
required for a hearing or other special circumstances, the Claimant shall be notified and the
time limit shall be one hundred twenty (120) days. The decision shall be in writing and shall
state the reasons and

 

 

	 	 	the relevant Plan provisions. All decisions on review shall be final and bind all parties
concerned.

ARTICLE IX — AMENDMENT AND TERMINATION OF PLAN

	9.1.	 	Amendment. The Board may at any time amend the Plan by written instrument, notice
of which is given to all Participants and to Beneficiary receiving installment payments,
subject to the following:

	 	a)	 	Preservation of Account Balance. No amendment shall reduce the amount
accrued in any Account as of the date such notice of the amendment is given.
	 
	 	b)	 	Changes in Interest Rate. No amendment shall reduce, either prospectively
or retroactively, the rate of Interest to be credited to the amount already accrued in any
of the Participant’s Account and any amounts credited to the Account under Deferral
Commitments already in effect on that date, except as may be provided in section 2.19
above as a result of a selection or deletion of available Valuation Funds.

	9.2.	 	Company’s Right to Terminate. The Board may at any time partially or completely
terminate the Plan if, in its judgement, the tax, accounting or other effects of the
continuance of the Plan, or potential payments thereunder would not be in the best interests
of Company.

	a)	 	Partial Termination. The Board may partially terminate the Plan by
instructing the Committee not to accept any additional Deferral Commitments. If such a
partial termination occurs, the Plan shall continue to operate and be effective with
regard to Deferral Commitments entered into prior to the effective date of such partial
termination.
	 
	b)	 	Complete Termination. The Board may completely terminate the Plan by
instructing the Committee not to accept any additional Deferral Commitments, and by
terminating all ongoing Deferral Commitments provided that such termination of the Plan is
not treated as an “acceleration of benefits” as described in IRC §409A(a)(3) and
appropriate Treasury regulations or other guidance issued by the Internal Revenue Service
or Treasury. In the event of permitted complete termination, the Plan shall cease to
operate and Company shall distribute each Account to the appropriate Participant. Payment
shall be made as a lump sum or in the number of annual installments indicated below based
on the sum of the Participant’s Account Balances at the time of termination of the Plan by
the Board where the annual payment shall be equal to the balance of the Accounts
immediately prior to the payment, multiplied by a fraction, the numerator of which is one
(1) and the denominator of which commences at the number of annual payment indicated below
and is reduced by one (1) in each succeeding year:

	 	 	 
	Account Balance	 	Payout Period
	Less than $10,000
	 	Lump Sum
	$10,000 but less than $50,000
	 	3 Years
	More than $50,000
	 	5 Years

 

 

	 	 	Interest on the unpaid balance shall be based on the most recent allocation among the
available Valuation Funds chosen by the Participant in accordance with Section 4.5.

ARTICLE X — MISCELLANEOUS

	10.1.	 	Unfunded Plan. This plan is an unfunded plan maintained primarily to provide
deferred compensation benefits for a select group of “management or highly-compensated
employees” within the meaning of Sections 201, 301, and 401 of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), and therefore is exempt from the provisions of
Parts 2, 3 and 4 of Title I of ERISA. Accordingly, the Board may terminate the Plan and make
no further benefit payments or remove certain employees as Participants if it is determined by
the United States Department of Labor, a court of competent jurisdiction, or an opinion of
counsel that the Plan constitutes an employee pension benefit plan within the meaning of
Section 3 (2) of ERISA (as currently in effect or hereafter amended) which is not so exempt.
	 
	10.2.	 	Company Obligation. The obligation to make benefit payments to any Participant
under the Plan shall be an obligation solely of the Company with respect to the deferred
Compensation receivable from, and contributions by, that Company and shall not be an
obligation of another company.
	 
	10.3.	 	Unsecured General Creditor. Notwithstanding any other provision of this Plan,
Participants and Participants’ Beneficiary shall be unsecured general creditors, with no
secured or preferential rights to any assets of Company or any other party for payment of
benefits under this Plan. Any property held by Company for the purpose of generating the cash
flow for benefit payments shall remain its general, unpledged and unrestricted assets.
Company’s obligation under the Plan shall be an unfunded and unsecured promise to pay money in
the future.
	 
	10.4.	 	Trust Fund. Company shall be responsible for the payment of all benefits provided
under the Plan. At its discretion, Company may establish one (1) or more trusts, with such
trustees as the Board may approve, for the purpose of assisting in the payment of such
benefits. Although such a trust shall be irrevocable, its assets shall be held for payment of
all Company’s general creditors in the event of insolvency. To the extent any benefits
provided under the Plan are paid from any such trust, Company shall have no further obligation
to pay them. If not paid from the trust, such benefits shall remain the obligation of
Company.
	 
	10.5.	 	Nonassignability. Neither a Participant nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or
any part thereof, which are, and all rights to which are, expressly declared to be
unassignable and non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure or sequestration for the payment of any debts, judgements,
alimony or separate maintenance owed by a Participant or any other person, nor be transferable
by operation of law

 

 

	 	 	in the event of a Participant’s or any other person’s bankruptcy or insolvency.
	 	 	 
	 
	10.6.	 	Not a Contract of Employment. This Plan shall not constitute a contract of
employment between Company and the Participant. Nothing in this Plan shall give a Participant
the right to be retained in the service of Company or to interfere with the right of the
Company to discipline or discharge a Participant at any time.
	 
	10.7.	 	Protective Provisions. A Participant will cooperate with Company by furnishing any
and all information requested by Company, in order to facilitate the payment of benefits
hereunder, and by taking such physical examinations as Company may deem necessary and taking
such other action as may be requested by Company.
	 
	10.8.	 	Governing Law. The provisions of this Plan shall be construed and interpreted
according to the laws of the Commonwealth of Virginia, except as preempted by federal law.
	 
	10.9.	 	Validity. If any provision of this Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts hereof, but this
Plan shall be construed and enforced as if such illegal and invalid provision had never been
inserted herein.
	 
	10.10.	 	Notice. Any notice required or permitted under the Plan shall be sufficient if in
writing and hand delivered or sent by registered or certified mail. Such notice shall be
deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown
on the postmark on the receipt for registration or certification. Mailed notice to the
Committee shall be directed to the company’s address. Mailed notice to a Participant or
Beneficiary shall be directed to the individual’s last known address in company’s records.
	 
	10.11.	 	Successors. The provisions of this Plan shall bind and inure to the benefit of
Company and its successors and assigns. The term successors as used herein shall include any
corporate or other business entity which shall, whether by merger, consolidation, purchase or
otherwise acquire all or substantially all of the business and assets of Company, and
successors of any such corporation or other business entity.

	 	 	 
	 

	 	ALPHA NATURAL RESOURCES, INC
	 
	 	 
	 

	 	BY:
	 
	 	 
	 

	 	DATED:

 

 

Exhibit A

Valuation Funds as of April 12, 2005

Moody’s Long-term Corporate Bond Monthly Average Corporate Rate

 

 

Annex A

Subsidiaries adopting this Plan

Alpha Coal Sales Co., LLC

Alpha Natural Resources Services, LLC

AMFIRE Mining Company, LLC

Black Dog Coal Corp.

Brooks Run Mining Company, LLC

Dickenson-Russell Coal Company, LLC

Enterprise Mining Company, LLC

Herndon Processing Company, LLC

Kepler Processing Company, LLC

Kingwood Mining Company, LLC

Litwar Processing Company, LLC

Maxxim Rebuild Co., LLC

Maxxim Shared Services, LLC

Paramont Coal Company Virginia, LLC

Riverside Energy Company, LLCEX-10.2

 

Exhibit 10.2

	 	 	 
	American Metals & Coal International, Inc.

	 	First Reserve Corporation
	475 Steamboat Road, 2nd Floor

	 	One Lafayette Place
	Greenwich, CT 06830

	 	Greenwich, CT 06830

August 12, 2005

VIA FACSIMILE

Alpha Natural Resources, Inc.

406 West Main Street

Abingdon, Virginia 24210

Attention: Michael J. Quillen, President

Facsimile No.: (276) 628-3116

     Re: Amendment to Section 3.1 of Stockholder Agreement

Dear Mr. Quillen:

     We refer you to that certain Stockholder Agreement dated as of February 11, 2005 by and among
Alpha Natural Resources, Inc., a Delaware corporation (the “Company”), the “FRC
Parties” (as defined therein), the “AMCI Parties” (as defined therein) Madison Capital
Funding LLC, a Delaware limited liability company, and the “Employee Stockholders” (as
defined therein) (the “Agreement”). By our signatures below, Hans J. Mende in his capacity
as the AMCI Representative pursuant to Section 6.12 of the Agreement, and First Reserve Fund IX,
L.P. in its capacity as the FRC Representative pursuant to Section 6.13 of the Agreement, hereby
amend Section 3.1 of the Agreement by restating clause (b) of the third sentence of Section 3.1 to
read in its entirety as follows: “(b) Transfers in accordance with the requirements of Rule 144 or
Rule 701 or their successors under the Securities Act,”. This amendment is made pursuant to
Section 3.3(a) of the Agreement and is effective from and after the date of this letter. This
amendment may be executed in counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument, and facsimile signatures to this
amendment shall be valid for all purposes.

	 	 	 	 	 
	 	 	The AMCI Parties
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Hans J. Mende
	 

	 	 	 	 
	 

	 	 	 	Hans J. Mende, the AMCI Representative
	 
	 	 	 	 
	 	 	The FRC Parties
	 
	 	 	 	 
	 

	 	By:
	 	First Reserve Fund IX, L.P., the FRC Representative
	 

	 	By:
	 	First Reserve GP IX, L.P., its General Partner
	 

	 	By:
	 	First Reserve GP IX, Inc., its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Alex T. Krueger
	 

	 	 	 	 
	 

	 	 	 	Alex T. Krueger, Managing Director

cc: Leslie
A. Grandis, facsimile no.: (804) 698-2069

Thomas R. Denison, facsimile no.: (203) 661-6729

James L. Palenchar, facsimile no.: (303) 592-3140

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