Document:

Exhibit 10.27.1

 

	

    	
Western Coal Corp.
    
	
Suite 1000 - 885   Dunsmuir Street
    
	
Vancouver, BC V6C 1N5
    
	
 
    
	
www.walterenergy.com
    

 

October 28, 2011

 

Attention: James (Jim) Griffin

RE: Change of Terms and conditions of employment

 

Dear Jim,

 

This is to confirm our conversation earlier this week when I informed you that we are pleased to confirm the following terms:

 

1.       Until December 31, 2012 you will be entitled to 2 family unification trips per month. The Company will meet any tax obligations as a result of this;

 

2.       The Company will continue to provide you with accommodations until December 31, 2012. The Company will meet any tax obligations as a result of this;

 

3.       You will be eligible to receive tax consultations with the Company’s Canadian tax service provider for the 2011 and 2012 tax years. You are responsible for ensuring that you understand the tax implications directly associated with your personal assets and investments.

 

4.       Your salary will be paid in US dollars; and

 

5.       All benefits, terms and conditions of your employment agreement will remain in effect and unchanged. (except as stated in the extension letter dated Oct. 28, 2011) 

 

Please sign a copy of this letter in the space provided and return to Tanya McCarthy, Human Resources Business Partner. Thank you.

 

	
Sincerely,
    	
 
    
	
 
    	
 
    
	
/s/ Graham Foyle-Twining
    	
 
    
	
Graham Foyle-Twining
    	
 
    
	
Global Head of HR and Organizational Development
    	
 
    

 

I accept the offer as outlined above.

 

	
/s/ James (Jim) Griffin
    	
 
    	
Nov. 9, 2011
    
	
James (Jim) Griffin
    	
 
    	
DateExhibit 10.28

 

 

June 24, 2011

 

Mr. Graham Foyle-Twining

558, Ballentree Road

West Vancouver, BC Canada V7S 1W3

 

Dear Graham,

 

We are pleased that you have accepted the position of Global Head — Human Resources & Organization Design of Walter Energy, Inc. (“Walter” or the “Company”) effective as of April 1, 2011. The attached schedules outline the remuneration and benefits and terms and conditions of your employment.

 

As the Global Head — Human Resources & Organization Design of Walter, you will have such duties, responsibilities and authorities as the Chief Executive Officer of Walter (the “CEO”) determines are appropriate for your position. You will report to the CEO or to his designee.

 

It is agreed and understood that this letter agreement (including the schedules and exhibits attached hereto) (collectively, the “Agreement”) and the other agreements referred to in this Agreement shall constitute our entire agreement with respect to the subject matter hereof and shall supersede all prior agreements, discussions, understandings and proposals (written or oral) relating to your employment with the Company and its affiliates, including, for the avoidance of doubt, Western Coal Corp. (“Western”). This Agreement may only be amended or modified by a written agreement executed by you and Walter (or any of its respective successors) and will be interpreted under and in accordance with the laws of the State of Delaware without regard to conflicts of laws. This Agreement is contingent upon your successful application for an immigration Visa allowing you to work in the United States.

 

This Agreement may be executed by fax or pdf and in any number of counterparts, all of which, when taken together, will constitute one and the same instrument.

 

 

Graham, we are delighted that you are joining Walter and we look forward to working with you. If the terms contained within this Agreement are acceptable, please sign one of the enclosed copies and return it to me in the envelope provided.

 

Best regards,

 

	
/s/Keith Calder 
    	
 
    	
 
    
	
Keith Calder 
    	
 
    	
Date
    
	
Chief Executive Officer
    	
 
    	
 
    
	
Walter Energy, Inc.
    	
 
    	
 
    	
 
    

 

ACCEPTANCE

 

I have read the Agreement, have been advised to consult with counsel of my choice concerning the same, and I fully understand the same. I approve and accept the terms set forth in the Agreement as governing my employment relationship with Walter.

 

	
/s/ Graham Foyle-Twining
    	
 
    	
18th July 2011.
    
	
Graham Foyle-Twining
    	
 
    	
Date
    

 

 

Enclosures:

 

Schedule A            Remuneration & Benefits

Schedule B            Terms and Conditions

 

 

	
 
    	
  Initials 
    	
 
    	
/s/
    

 

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SCHEDULE A

 

REMUNERATION & BENEFITS

 

	
Name:
    	
 
    	
Graham Foyle-Twining
    
	
 
    	
 
    	
 
    
	
Role Title:
    	
 
    	
Global Head — Human Resources & Organization Design
    
	
 
    	
 
    	
 
    
	
Role Band:
    	
 
    	
n/a
    
	
 
    	
 
    	
 
    
	
Department:
    	
 
    	
Corporate
    
	
 
    	
 
    	
 
    
	
Employer:
    	
 
    	
Walter
    
	
 
    	
 
    	
 
    
	
Date of Appointment:
    	
 
    	
April 1, 2011
    
	
 
    	
 
    	
 
    
	
Continuous Employment Date:
    	
 
    	
February 1, 2010
    

 

This schedule should be read in conjunction with the remainder of the Agreement. The policies covering these benefits and their terms and conditions may be varied from time to time.

 

	
Base Salary and Remuneration:
    	
The remuneration for this position is a base salary of USD$360,000   per annum which will be subject to review and adjustment by the Compensation   and Human Resources Committee of the Board of Directors (the “Compensation   Committee”) and paid in accordance with Walter’s payroll practices, as   they may change from time to time. Your annual base salary, as in effect from   time to time, is hereinafter referred to as the “Base Salary.”
    
	
 
    	
 
    
	
 
    	
The remuneration structure is designed to provide competitive levels   of total remuneration for strong individual and corporate performance and   achieve a close alignment between personal and business performance and   remuneration.
    
	
 
    	
 
    
	
Annual Bonus (EIP): 
    	
You will participate in Walter’s Executive Incentive Plan, as it may   be amended from time to time (the “EIP”) and will be eligible to earn   an annual target bonus of 65% of your Base Salary (the “Target Bonus”),   with an upside potential of 2 times your Target Bonus for top performance. The   actual
    

 

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amount of your bonus, if any, will fluctuate based upon actual   performance under the performance metrics associated with the EIP.   Participation in the bonus pool is dependent upon the achievement of Walter’s   annual performance goals, as well as the accomplishment of (x) individual   objectives and/or (y) departmental goals, in each case, as determined and   recommended by the management of Walter and subsequently approved by the   Compensation Committee. In order to receive a bonus under the EIP, you must   be employed at the time the bonus is paid. Notwithstanding anything in this   Agreement to the contrary, your bonus, if any, under the EIP, earned in   respect of the 2011 fiscal year, will be pro-rated based upon the percentage   of such fiscal year that will have elapsed from your commencement date   through the last day of such fiscal year and based solely on the Base Salary   actually earned in such fiscal year from your commencement date through the last   day of such fiscal year. Notwithstanding anything in this Agreement to the   contrary, with respect to any bonus to be paid hereunder, such bonus will be   paid in accordance with the EIP and, to the extent possible, will be   structured to comply with Section 162(m) of the Internal Revenue Code of   1986, as amended (the “Code”) as performance based compensation   thereunder; provided however, to the extent not deductible by Walter, such   payment will be deferred until it can be paid by Walter on a tax deductible basis.
    
	
 
    	
 
    
	
 
    	
Please note that participation in Walter’s Employee Stock Purchase   Plan is a condition to participation in the bonus pool under the EIP.
    
	
 
    	
 
    
	
Long Term Incentive:
    	
Subject to your continued employment with Walter, you will be   eligible to participate in Walter’s Amended and Restated 2002 Long-Term   Incentive Award Plan, as it may be amended and restated from time to time   (and any successor long term incentive award plan) (collectively, the “LTIP”),   and will be eligible to receive annual equity grants from Walter.
    
	
 
    	
 
    
	
 
    	
Your annual equity grant in respect of the 2011 fiscal year will be   valued at 80% of Base Salary, based on the Black-Scholes value at the date of   grant, fifty percent (50%) of which will be in the form of non-qualified   stock options and fifty percent (50%) of which will be in the form of   restricted stock units. Such equity grants will be awarded under and subject   to the terms and conditions of the LTIP and the
    

 

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terms and conditions applicable to other awards granted by Walter   under the LTIP to employees of Walter.
    
	
 
    	
 
    
	
Expenses:
    	
Reimbursement for all reasonable and customary out-of-pocket business   expenses incurred by you in the performance of your duties hereunder, in   accordance with the policies, practices and procedures of Walter relating to   reimbursement of business expenses incurred by Walter employees in effect at   any time during the 12 month period preceding the date you incur the   expenses; provided, however, that any such expense reimbursement will be made   no later than the last day of the calendar year following the calendar year   in which you incur the expense, will not affect the expenses eligible for   reimbursement in any other calendar year, and cannot be liquidated or exchanged   for any other benefit.
    
	
 
    	
 
    
	
Health Care:
    	
Participation in Walter’s life and health insurance benefit programs   beginning the first day of the month following your commencement date and in   accordance with their terms, as they may change from time to time. Additional   benefit plan information will be available for your review upon request.   After you are enrolled in the U.S. benefit plans, you and all eligible family   members will be covered.
    
	
 
    	
 
    
	
Retirement Plan:
    	
Participation in Walter’s retirement plan according to its terms as   they may change from time to time. Information on the retirement plan will be   available for your review upon request. Your eligibility to participate will   be consistent with the requirements of the Employee Retirement Income   Security Act of 1974, as amended.
    
	
 
    	
 
    
	
Leave:
    	
Eligibility for 20 business days of vacation and 10 company paid   holidays to be used each year in accordance with Walter’s policy, as it may   change from time to time.
    
	
 
    	
 
    
	
Change in Control: 
    	
An Executive Change-in-Control Severance Agreement in a form   substantially similar to the form attached hereto as Exhibit A (the “CIC   Agreement”).
    
	
 
    	
 
    
	
Severance:
    	
Subject to (a) your compliance with the restrictive covenants set   forth in Sections 5 through 7 of Schedule B and (b) your execution, delivery   and non-revocation of a waiver and release of claims in a form substantially   similar to the form attached hereto as Exhibit B (the “Release”) on
    

 

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or prior to the 21st day following the date on   which your employment with Walter terminates due to (x) the termination of   your employment by Walter, other than for “Cause” (as defined below) or (y) the   termination of your employment by you for “Good Reason” (as defined below),   but in each case, excluding any separation from service by reason of your   death or Disability (as defined below) (such date, the “Severance Date”),   you will be entitled to receive the following severance payments and   benefits:
    
	
 
    	
 
    
	
 
    	
· For the period commencing   on the day immediately following the Severance Date and ending on the first   anniversary of the Severance Date, monthly pay continuation with each monthly   payment equal to one-twelfth (1/12) times the sum of your Base Salary and   Target Bonus, in each case, as in effect on the Severance Date. Monthly   payments will occur in accordance with the payroll dates in effect on the   Severance Date, and such payment dates will not be affected by any subsequent   change in payroll practices.
    
	
 
    	
 
    
	
 
    	
· Except as provided below,   continuation of group medical, dental, vision, group basic term life   insurance, accidental death and dismemberment insurance, voluntary term life   insurance, voluntary accidental death and dismemberment insurance, dependent   life insurance and employee assistance program benefits, provided, to the   extent applicable, regular contributions are made, at the level in effect on   the Severance Date, in each case, for a period (such period, the “Continuation   Coverage Period”) beginning immediately upon the Severance Date and continuing   until the earliest to occur of (A) the first anniversary of the Severance   Date, (B) the last date you are eligible to participate in the benefit under   applicable law, or (C) the date you are eligible to receive comparable   benefits from a subsequent employer, as determined solely by Walter in good   faith; provided, however, that if you fail to execute and deliver the Release   or revoke the Release, in either case, the Continuation Coverage Period shall   cease immediately upon such date. Such benefits shall be provided to you at   the same coverage and cost to you as in effect on the Severance Date. To the   extent permitted by law, you shall be eligible to qualify for COBRA health   care continuation coverage under Section 4980B of the Code, or any   replacement or successor
    

 

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provision of United States tax law, beginning following the   expiration of the period described above. Notwithstanding the foregoing, your   participation in the Employee Stock Purchase Plan and long-term disability   insurance plan, and your ability to make deferrals under the 401(k) plan,   will cease effective on the Severance Date. For purposes of this subsection,   you shall send written notice of the terms and conditions of any subsequent   employment and the corresponding benefits earned from such employment and   shall provide, or cause to be provided, to Walter, in writing, correct,   complete and timely information concerning the same to the extent requested   by Walter;
    
	
 
    	
 
    
	
 
    	
provided, however, that Walter shall have the right to cease making   such payments and you shall be obligated to repay any such amounts to Walter   already paid if you fail to execute and deliver the Release within the time   period provided for above or, after timely delivery, revoke it within the   time period specified in such Release.
    
	
 
    	
 
    
	
 
    	
If your employment with Walter is terminated by you without Good   Reason upon 60 days’ prior written notice to the CEO and such termination   occurs on or before December 31, 2011, subject to your execution, delivery   and non-revocation of the Release on or prior to the 21st day following the date on which your   employment with Walter terminates, you will be entitled to receive a lump sum   cash payment in an amount equal to $514,000. In addition you will receive a   further lump sum cash payment in the amount of $514,000 in recognition of   your legacy Western Coal Annual Incentive Plan (AIP) award. These amounts   will be payable as soon as administratively feasible following the   termination date, but in no event later than December 31, 2011; provided,   however, that you shall be obligated to repay any such amounts to Walter   already paid if you fail to execute and deliver the Release within the time   period provided for above or, after timely delivery, revoke it within the   time period specified in such Release
    
	
 
    	
 
    
	
 
    	
Notwithstanding anything in this Agreement to the contrary and for   the avoidance of doubt, you shall not be entitled to severance payments or   benefits under this
    

 

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Agreement in the event you experience a separation from service   within twenty-four (24) months following a Change in Control of the Company   (as defined in the CIC Agreement). Severance payments and benefits payable   upon a separation from service in connection with such a termination of   employment, if any, shall be determined and paid under the CIC Agreement.
    
	
 
    	
 
    
	
 
    	
For purposes of this Agreement, the term “Cause” shall mean: (i) your   willful and continued refusal to perform the duties of your position (other   than any such failure resulting from your incapacity due to physical or   mental illness); (ii) your conviction or guilty plea of a felony involving   fraud or dishonesty; (iii) theft or embezzlement by you of property from   Walter or any subsidiary or affiliate; or (iv) fraudulent preparation by you   of financial information of Walter or any subsidiary or affiliate.
    
	
 
    	
 
    
	
 
    	
For purposes of this Agreement, the term “Good Reason” shall mean the   occurrence of any of the following conditions (in each case arising without   your consent): (A) a material breach of this Agreement by Walter or (B) a   material diminution in your authority, duties or responsibilities.   Notwithstanding the foregoing, your voluntary separation from service shall   be for “Good Reason” only if (x) you provide written notice of the facts or   circumstances constituting a “Good Reason” condition to Walter within 30 days   after the initial existence of the Good Reason condition, (y) the Company   does not remedy the Good Reason condition within 30 days after it receives   such notice and (z) the voluntary separation from service occurs within 90   days after the initial existence of the Good Reason condition. For purposes   of this Agreement, the parties agree that “Good Reason” will not exist solely   because the amount of your bonus fluctuates due to performance considerations   under the EIP or other Walter incentive plan applicable to you and in effect   from time to time.
    
	
 
    	
 
    
	
 
    	
For purposes of this Agreement, the term “Disability” shall mean any   medical condition whatsoever which leads to your absence from your job   function for a continuous period of six months without you being able to   resume such functions on a full time basis at the expiration of such period,   it being understood that unsuccessful attempts to
    

 

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return to work for periods under thirty days shall not be deemed to   have interrupted said continuity.
    
	
 
    	
 
    
	
Relocation:
    	
The location of the Walter Corporate Office will be Chicago, Illinois.   You will be provided with relocation assistance in accordance with the Walter   Energy Relocation policy, a copy of which will be provided under separate   cover.
    

 

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SCHEDULE B

 

TERMS AND CONDITIONS

 

1.                                      It is agreed and understood that your employment with Walter is to be at will, and either you or Walter may terminate the employment relationship at any time for any reason, with or without cause, and with or without notice to the other; nothing in this Agreement or elsewhere constitutes or shall be construed as a commitment to employ you or pay you severance, other than as stated in Schedule A or in the CIC Agreement, for any period of time.

 

2.                                      Outside Interest. While employed by Walter, you agree to devote your full business time and best efforts to the performance of your duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly without the prior written consent of the CEO or his designee.

 

3.                                      You agree that all inventions, improvements, trade secrets, reports, manuals, computer programs, systems, tapes and other ideas and materials developed or invented by you during the period of your employment with Walter, either solely or in collaboration with others, which relate to the actual or anticipated business or research of Walter or any of its subsidiaries or affiliates, which result from or are suggested by any work you may do for Walter or any of its subsidiaries or affiliates, or which result from use of Walter’s or any of its subsidiaries’ or affiliates’ premises or Walter’s, its subsidiaries’, its affiliates’, or its customers’ property (collectively, the “Developments”) shall be the sole and exclusive property of Walter. You hereby assign to Walter your entire right and interest in any such Developments, and will hereafter execute any documents in connection therewith that Walter may reasonably request. This section does not apply to any inventions that you made prior to your employment by Walter or Western, or to any inventions that you develop entirely on your own time without using any of Walter’s or Western’s equipment, supplies or facilities, or Walter’s or Western’s or their respective subsidiaries’, affiliates’, or customers’ confidential information which do not relate to Walter’s, Western’s, their respective subsidiaries’ or its affiliates’ business, anticipated research and development, or the work you have performed for Walter, Western and their respective subsidiaries and affiliates.

 

4.                                      As an inducement of Walter to make this offer to you, you represent and warrant that there exists no impediment or restraint, contractual or otherwise on your power, right or ability to accept this offer and to perform the duties and obligations specified in this Agreement.

 

5.                                      Non-Compete/Non-Solicit. It is understood and agreed that you will have substantial relationships with specific businesses and personnel, prospective and existing, vendors, contractors, customers, and employees of Walter and its subsidiaries that result in the creation of customer goodwill. Therefore, while you are employed by Walter and following

 

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the termination of your employment for any reason and continuing for a period of 12 months from the date of your termination, so long as Walter or any affiliate, successor or assigns thereof is in the coal mining business or like business within the Restricted Area (defined as mining industries in the geographical areas in which Walter or any of its subsidiaries competes at the time of your termination), unless the Board of Directors approves an exception, you shall not, directly or indirectly, for yourself or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity or otherwise:

 

(a)         Call upon, solicit, write, direct, divert, influence, or accept business (either directly or indirectly) with respect to any account or customer or prospective customer of the Company or any corporation controlling, controlled by, under common control with, or otherwise related to Walter, including but not limited to Western or any other affiliated companies; or

 

(b)         Hire away any independent contractors or personnel of Walter and/or entice any such persons to leave the employ of Walter or its affiliated entities without the prior written consent of Walter.

 

6.                                      Non-Disparagement. Following the termination of your employment for any reason and continuing for so long as Walter or any affiliate, successor or assigns thereof carries on the name or like business within the Restricted Area, you shall not, directly or indirectly, for yourself or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity or otherwise:

 

(a)         Make any statements or announcements or permit anyone to make any public statements or announcements concerning the termination of your employment with Walter, or

 

(b)         Make any statements that are inflammatory, detrimental, slanderous, or negative in any way to the interests of Walter or its affiliated entities.

 

7.                                      You acknowledge and agree that you will respect and safeguard Walter’s and its subsidiaries’ property, trade secrets and confidential information. You acknowledge that Walter’s electronic communication systems (such as email and voicemail) are maintained to assist in the conduct of Walter’s and its subsidiaries’ business and that such systems and data exchanged or stored thereon are Walter property. In the event you leave the employ of Walter, you will not disclose any trade secrets or confidential information you acquired while an employee of Walter to any other person or entity, including without limitation, a subsequent employer, or use such information in any manner.

 

8.                                      Compensation Recovery Policy. You understand and agree that if any of Walter’s financial statements are required to be restated due to errors, omissions, fraud or misconduct, the Compensation Committee may, in its sole discretion but acting in good faith, direct that Walter recover all or a portion of any cash incentive, equity compensation or severance

 

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disbursements paid to you with respect to any fiscal year of Walter for which the financial results are negatively affected by such restatement. For purposes of this provision, errors, omissions, fraud or misconduct may include and are not limited to circumstances where Walter has been required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement, as enforced by the Securities and Exchange Commission, and the Compensation Committee has determined in its sole discretion that you had knowledge of the material noncompliance or the circumstances that gave rise to such noncompliance and failed to take reasonable steps to bring it to the attention of the appropriate individuals within Walter, or you personally and knowingly engaged in practices which materially contributed to the circumstances that enabled a material noncompliance to occur.

 

9.                                      This Agreement is intended to comply with Section 409A of the Code and will be interpreted accordingly. References under this Agreement to the termination of your employment shall be deemed to refer to the date upon which you have experienced a “separation from service” within the meaning of Section 409A of the Code. Notwithstanding anything in this Agreement to the contrary, (i) if at the time of your separation from service with Walter you are a “specified employee” as defined in Section 409A of the Code (and any related regulations or other pronouncements thereunder) and the deferral of the commencement of any payments or benefits otherwise payable hereunder or payable under any other compensatory arrangement between you and Walter as a result of such separation from service is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then Walter will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to you) until the first business day after the date that is six months following your separation from service (or the earliest date as is permitted under Section 409A of the Code), at which point all payments deferred pursuant to this paragraph shall be paid to you in a lump sum and (ii) if any other payments of money or other benefits due to you hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner that does not cause such an accelerated or additional tax. To the extent any reimbursements or in-kind benefits due to you under this Agreement constitute “deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to you in a manner consistent with Treasury Regulation Section 1.409A-3(i)(1)(iv). For purposes of Section 409A of the Code, each payment made under this Agreement shall be designated as a “separate payment” within the meaning of Section 409A of the Code.

 

10.                               Walter shall withhold from any amounts payable hereunder all Federal, state, city or other taxes as legally shall be required.

 

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11.                               You acknowledge and agree that you have read this Agreement carefully, have been advised by the Company to consult with an attorney regarding its contents, and that you fully understand the same.

 

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