Document:

Exhibit 10.15

 

Exhibit 10.15

      

	 	 	 
	 
	 	 
	 

	 	CorVel Corporation
	Notice of Grant of Stock Options

	 	ID: 33-0282651
	and Option Agreement

	 	2010 Main Street Suite 600
	 

	 	Irvine, California 92614
	 
	 	 

 

 

Donald McFarlane

18 Morningview Circle

Lake Oswego, OR United States 97035

ID:

 

You have been granted an option to acquire CorVel Corporation (the “Corporation”) common
stock (the “Common Stock”) as follows:

	 	 	 	 	 
	Non-Qualified Stock Option Grant No.

	 	 	003172	 
	 
	 	 	 	 
	Date of Grant

	 	 	5/26/2006	 
	 
	 	 	 	 
	Stock Option Plan

	 	 	1988	 
	 
	 	 	 	 
	Option Price Per Share

	 	$	23.64	 
	 
	 	 	 	 
	Total Number of Shares Granted

	 	 	2,500.00	 
	 
	 	 	 	 
	Total Price of Shares Granted

	 	$	59,100.00	 
	 
	 	 	 	 
	Expiration Date

	 	 	5/26/2011	 

 

Provided you continue to be a Service Provider (as defined in the Stock Option
Agreement attached hereto as Exhibit A) throughout the specified period, the
Option will become exercisable in accordance with Schedule A.

Optionee (and Optionee’s spouse) hereby agree(s) that the option is granted pursuant
to and in accordance with the express terms and conditions of the Stock Option
Agreement and the Corporation’s Restated 1988 Executive Stock Option Plan.

 

 

	 	 	 	 	 
	/s/ V. Gordon Clemons

	 	June 6, 2006
	 	 
	 

	 	 	 	 
	CorVel Corporation

	 	Date	 	 
	 
	 	 	 	 
	/s/ Donald McFarlane

	 	June 6, 2006	 	 
	 

	 	 	 	 
	Donald McFarlane

	 	Date	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	Spouse

	 	Date	 	 

 

Schedule A

Performance Option

Grant: 2,500 shares1

Definitions:

“EPS” shall mean fully diluted net income per share (as reported in the Company’s financial
statements filed with the Securities and Exchange Commission).

“Calendar 2008 Achieve Target” shall mean the Company achieves EPS of at least $*.** per share
during calendar year 2008.

“Calendar 2008 Achieve Alternate Target” shall mean the Company achieves EPS of at least $*.** per
share during calendar year 2008.

“Calendar 2009 Achieve Target” shall mean the Company achieves EPS of at least $*.** per share
during calendar year 2009.

“Calendar 2009 Achieve Alternate Target” shall mean the Company achieves EPS of at least $*.** per
share during calendar year 2009.

“Calendar 2010 Achieve Target” shall mean the Company achieves EPS of at least $*.** per share
during calendar year 2010.

“Calendar 2010 Achieve Alternate Target” shall mean the Company achieves EPS of at least $*.** per
share during calendar year 2010.

Unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to
them in the Stock Option Agreement.

 

			
	*	 	Confidential treatment requested pursuant to Rule 24b-2 under the Securities Exchange Act of
1934. In accordance with Rule 24b-2, these confidential portions have been omitted from this
exhibit and filed separately with the Securities and Exchange Commission.
	 
	1	 	Share and EPS amounts shown are the initial
amounts reflected in the original option grant prior to adjustment for the
3-for-2 stock split in the form of a 50% stock dividend distributed on December
8, 2006.

 

 

Vesting Schedule:

Upon the Company achieving the specified targets set forth in the table below, the Option shall
become exercisable during each stated calendar year for the number of Option Shares set forth
opposite such targets described in the table below.

Performance Vesting

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Performance	 	Number of Option Shares That Will Vest0	 
	 	 	 	 	 	 	Calendar	 	 	Calendar	 	 	Calendar	 	 	 	 
	Calendar 2008	 	Calendar 2009	 	Calendar 2010	 	2008	 	 	2009	 	 	2010	 	 	Total	 
	Achieve Target
	 	Fail to Achieve Any Target	 	Fail to Achieve Any Target	 	 	750	 	 	 	0	 	 	 	0	 	 	 	750	 
	Achieve Target
	 	Fail to Achieve Any Target	 	Achieve Alternate Target	 	 	750	 	 	 	0	 	 	 	625	 	 	 	1,375	 
	Achieve Target
	 	Fail to Achieve Any Target	 	Achieve Target	 	 	750	 	 	 	0	 	 	 	1,250	 	 	 	2,000	 
	Achieve Target
	 	Achieve Alternate Target	 	Fail to Achieve Any Target	 	 	750	 	 	 	375	 	 	 	0	 	 	 	1,125	 
	Achieve Target
	 	Achieve Alternate Target	 	Achieve Alternate Target	 	 	750	 	 	 	375	 	 	 	500	 	 	 	1,625	 
	Achieve Target
	 	Achieve Alternate Target	 	Achieve Target	 	 	750	 	 	 	375	 	 	 	1,000	 	 	 	2,125	 
	Achieve Target
	 	Achieve Target	 	Fail to Achieve Any Target	 	 	750	 	 	 	750	 	 	 	0	 	 	 	1,500	 
	Achieve Target
	 	Achieve Target	 	Achieve Alternate Target	 	 	750	 	 	 	750	 	 	 	500	 	 	 	2,000	 
	Achieve Target
	 	Achieve Target	 	Achieve Target	 	 	750	 	 	 	750	 	 	 	1,000	 	 	 	2,500	 
	Achieve Alternate Target
	 	Fail to Achieve Any Target	 	Fail to Achieve Any Target	 	 	375	 	 	 	0	 	 	 	0	 	 	 	375	 
	Achieve Alternate Target
	 	Fail to Achieve Any Target	 	Achieve Alternate Target	 	 	375	 	 	 	0	 	 	 	625	 	 	 	1,000	 
	Achieve Alternate Target
	 	Fail to Achieve Any Target	 	Achieve Target	 	 	375	 	 	 	0	 	 	 	1,250	 	 	 	1,625	 
	Achieve Alternate Target
	 	Achieve Alternate Target	 	Fail to Achieve Any Target	 	 	375	 	 	 	375	 	 	 	0	 	 	 	750	 
	Achieve Alternate Target
	 	Achieve Alternate Target	 	Achieve Alternate Target	 	 	375	 	 	 	375	 	 	 	500	 	 	 	1,250	 
	Achieve Alternate Target
	 	Achieve Alternate Target	 	Achieve Target	 	 	375	 	 	 	375	 	 	 	1,000	 	 	 	1,750	 
	Achieve Alternate Target
	 	Achieve Target	 	Fail to Achieve Any Target	 	 	375	 	 	 	750	 	 	 	0	 	 	 	1,125	 
	Achieve Alternate Target
	 	Achieve Target	 	Achieve Alternate Target	 	 	375	 	 	 	750	 	 	 	500	 	 	 	1,625	 
	Achieve Alternate Target
	 	Achieve Target	 	Achieve Target	 	 	375	 	 	 	750	 	 	 	1,000	 	 	 	2,125	 
	Fail to Achieve Any Target
	 	Fail to Achieve Any Target	 	Fail to Achieve Any Target	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 
	Fail to Achieve Any Target
	 	Fail to Achieve Any Target	 	Achieve Alternate Target	 	 	0	 	 	 	0	 	 	 	625	 	 	 	625	 
	Fail to Achieve Any Target
	 	Fail to Achieve Any Target	 	Achieve Target	 	 	0	 	 	 	0	 	 	 	1,250	 	 	 	1,250	 
	Fail to Achieve Any Target
	 	Achieve Alternate Target	 	Fail to Achieve Any Target	 	 	0	 	 	 	500	 	 	 	0	 	 	 	500	 
	Fail to Achieve Any Target
	 	Achieve Alternate Target	 	Achieve Alternate Target	 	 	0	 	 	 	500	 	 	 	500	 	 	 	1,000	 
	Fail to Achieve Any Target
	 	Achieve Alternate Target	 	Achieve Target	 	 	0	 	 	 	500	 	 	 	1,000	 	 	 	1,500	 
	Fail to Achieve Any Target
	 	Achieve Target	 	Fail to Achieve Any Target	 	 	0	 	 	 	1,000	 	 	 	0	 	 	 	1,000	 
	Fail to Achieve Any Target
	 	Achieve Target	 	Achieve Alternate Target	 	 	0	 	 	 	1,000	 	 	 	500	 	 	 	1,500	 
	Fail to Achieve Any Target
	 	Achieve Target	 	Achieve Target	 	 	0	 	 	 	1,000	 	 	 	1,000	 	 	 	2,000	 

Notwithstanding anything to the contrary in this Schedule A or the Stock Option
Agreement to which this Schedule A is attached, the Company shall have the right, in its
sole discretion, with or without the consent of the Optionee, to amend this Schedule A to
adjust any or all of the targets, dates and/or target EPS amounts as it deems equitable to
recognize unusual or non-recurring events, including, but not limited to the Company’s
acquisition of another business entity or assets, a corporate merger or other consolidation, or the
sale or discontinuation of significant business operations or business units of the Company;
changes in tax laws or accounting procedures; and any other extraordinary circumstances.

 

			
	1	 	Share and EPS amounts shown are the initial
amounts reflected in the original option grant prior to adjustment for the
3-for-2 stock split in the form of a 50% stock dividend distributed on December 8, 2006.

 

 

Discretionary Option Grant Program

CorVel Corporation

Stock Option Agreement

     A. The Board has adopted the Plan for the purpose of retaining the services of selected
Employees, non-employee members of the Board (or the board of directors of any Parent or
Subsidiary) and consultants and advisors who provide services to the Company (or any Parent or
Subsidiary).

     B. Optionee is to render valuable services to the Company (or a Parent or Subsidiary), and
this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the Company’s grant of an option to Optionee.

     C. All capitalized terms in this Agreement shall have the meaning assigned to them in the
attached Appendix.

          Now, therefore, it is hereby agreed as follows:

          1. Grant of Option. Subject to and upon the terms and conditions set forth in this
Agreement, Optionee is hereby granted, as of the Grant Date, an option to purchase the Option
Shares. The Option Shares shall be purchasable from time to time during the option term at the
Exercise Price.

          2. Option Term. This option shall expire at the close of business on the Expiration
Date, unless sooner terminated in accordance with this Agreement.

          3. Limited Transferability.

               (a) During Optionee’s lifetime, this option shall be exercisable only by Optionee and shall
not be assignable or transferable other than by will, by the laws of descent and distribution
following the Optionee’s death, or to any “Family Member” (as such term is defined in the General
Instructions to Form S-8 (or any successor to such Instructions or such Form) under the Securities
Act), provided that Optionee may not receive any consideration for such transfer, the Family Member
may not make any subsequent transfers other than by will or by the laws of descent and distribution
and the Company receives written notice of such transfer. This assigned portion may only be
exercised by the person or persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as those in effect for
this option immediately prior to such assignment and shall be set forth in such documents issued to
the assignee as the Company may deem appropriate.

               (b) Should Optionee die while holding this option, then this option shall be transferred in
accordance with Optionee’s will or the laws of inheritance. However, Optionee may designate one or
more persons as the beneficiary or beneficiaries of this option, and this option shall, in
accordance with such designation, automatically be transferred to such

 

 

beneficiary or beneficiaries upon Optionee’s death while holding this option. Such beneficiary
or beneficiaries shall take the transferred option subject to all the terms and conditions of this
Agreement, including (without limitation) the limited time period during which this option may,
pursuant to Paragraph 5, be exercised following Optionee’s death.

     4. Exercisability. This option shall become exercisable in one or more installments
as specified in the Grant Notice. As the option becomes exercisable for such installments, those
installments shall accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term.

     5. Effect of Cessation of Service.

          (a) Should Optionee cease to be a Service Provider for any reason (other than death, Permanent
Disability or Misconduct) while this option is outstanding, then this option shall remain
exercisable until the earlier of (i) the expiration of the three month period commencing with the
date of such cessation of Service Provider status or (ii) the Expiration Date.

          (b) Should Optionee cease to be a Service Provider by reason of Permanent Disability or death
while this option is outstanding, then the option shall remain exercisable until the earlier of (i)
the expiration of the twelve month period commencing with the date of such cessation of Service
Provider status or (ii) the Expiration Date.

          (c) Should Optionee cease to be a Service Provider due to termination for Misconduct, then
this option shall terminate immediately.

          (d) During the limited period of post-service exercisability, this option may not be exercised
in the aggregate for more than the number of Option Shares for which the option is exercisable at
the time Optionee ceased to be a Service Provider. This option shall, immediately when Optionee
ceases to be a Service Provider for any reason, terminate with respect to any Option Shares for
which this option is not otherwise at that time exercisable. Upon the expiration of the limited
post-service exercise period or (if earlier) upon the Expiration Date, this option shall terminate
entirely.

     6. Effect of Corporate Transaction.

          (a) This option, to the extent outstanding at the time of a Corporate Transaction but not
otherwise fully exercisable, shall automatically accelerate so that this option shall, immediately
prior to the effective date of such Corporate Transaction, become exercisable for all of the Option
Shares at the time subject to this option. However, this option shall not become exercisable on
such an accelerated basis, if and to the extent: (i) this option is, in connection with the
Corporate Transaction, to be assumed by the successor corporation (or parent thereof) or to be
replaced with a comparable option to purchase shares of the capital stock of the successor
corporation (or parent thereof) or (ii) this option is to be replaced with a cash incentive program
of the successor corporation which preserves the spread existing at the time of the Corporate
Transaction on any Option Shares for which this option is not otherwise at that

2

 

time exercisable (the excess of the Fair Market Value of those Option Shares over the
aggregate Exercise Price payable for such shares) and provides for subsequent payout in accordance
with the same exercise schedule for those Option Shares set forth in the Grant Notice.

          (b) Upon the consummation of the Corporate Transaction, this option shall terminate, except to
the extent assumed by the successor corporation (or parent thereof) in connection with the
Corporate Transaction.

          (c) If this option is assumed in connection with a Corporate Transaction, then this option
shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the
number and class of securities which would have been issuable to Optionee as a result of the
consummation of such Corporate Transaction had the option been exercised immediately prior to such
Corporate Transaction, and appropriate adjustments shall also be made to the Exercise Price,
provided the aggregate Exercise Price shall remain the same.

          (d) This Agreement shall not in any way affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or assets.

     7. Adjustment in Option Shares. Should any change be made to the Common Stock by
reason of any stock split, reverse stock split, stock dividend, recapitalization, combination of
shares, exchange of shares, reorganization, merger, consolidation, split-up, spin-off, or other
change affecting the outstanding Common Stock as a class without the Company’s receipt of
consideration, appropriate adjustments shall be made to (a) the total number and/or class of
securities subject to this option and (b) the Exercise Price in order to reflect such change and
thereby preclude a dilution or enlargement of benefits hereunder.

     8. Stockholder Rights. The holder of this option shall not have any stockholder
rights with respect to the Option Shares until such person shall have exercised the option in
accordance with the provisions of Paragraph 9, paid the Exercise Price and become a holder of
record of the purchased shares.

     9. Manner of Exercising Option.

          (a) In order to exercise this option with respect to all or any part of the Option Shares for
which this option is at the time exercisable, Optionee (or any other person or persons exercising
the option) must take the following actions:

     (i) Execute and deliver to the Company (A) a Notice of Exercise, in
substantially the form attached hereto as Exhibit I, that specifies the number of
Option Shares for which the option is being exercised and (B) any additional
documents which the Committee may, in its discretion, deem advisable.

3

 

     (ii) Pay the aggregate Exercise Price for the purchased shares in one or more
of the following forms:

     (A) cash or check payable to the Company’s order;

     (B) shares of Common Stock held by Optionee for the requisite period
necessary to avoid a charge to the Company’s reported earnings and valued at
Fair Market Value on the Exercise Date;

     (C) through a special sale and remittance procedure pursuant to which
Optionee is to provide irrevocable written instructions (1) to a
Company-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Company, out of the sale proceeds
available on the settlement date, an amount sufficient to cover the
aggregate Exercise Price payable for the purchased shares plus all
applicable Federal and state income and employment taxes required to be
withheld by the Company by reason of such purchase and (2) to the Company to
deliver the certificates for the purchased shares directly to such brokerage
firm in order to complete the sale transaction; or

     (D) payment in the form of a promissory note which the Committee, in
its discretion, may approve at the time of exercise in accordance with
Paragraph 10.

     (iii) Furnish to the Company appropriate documentation that the person or
persons exercising the option (if other than Optionee) have the right to exercise
this option.

     (iv) Make appropriate arrangements with the Company (or Parent or Subsidiary
employing or retaining Optionee) for the satisfaction of all Federal, state and
local income and employment tax withholding requirements applicable to the option
exercise.

          (b) If payment of the exercise price is made by means of the surrender of shares of Common
Stock which are subject to certain restrictions, the number of shares of Common Stock issued upon
the exercise of the option equal to the number of shares of restricted stock surrendered shall be
subject to the same restrictions as the restricted stock that was surrendered.

          (c) Except to the extent the sale and remittance procedure specified in Paragraph 9(a)(ii)(C)
is utilized in connection with the option exercise, payment of the option price for the purchased
shares must accompany the Notice of Exercise.

          (d) Assuming Optionee does not sell the purchased shares of Common Stock on the Exercise Date,
as soon as practical after the Exercise Date, the Company shall either

4

 

(i) issue to or on behalf of Optionee (or any other person or persons exercising this option)
a certificate for the purchased Option Shares, with the appropriate legends affixed thereto, or
(ii) instruct the Company’s transfer agent to make a book-entry reflecting the purchase on its
stockholder ledger.

          (e) In no event may this option be exercised for any fractional shares.

     10. Financing. The Committee may, in its absolute discretion and without any
obligation to do so, (a) authorize the extension of a full-recourse interest-bearing loan to such
Optionee from the Company, (b) permit Optionee to pay the option price for the purchased Common
Stock in installments over a period of years or (c) authorizing a guarantee by the Company of a
third-party loan to Optionee. The terms of any loan, installment method of payment or guarantee
(including the interest rate and terms of repayment) shall be established by the Committee in its
sole discretion, after taking into account the tax and accounting consequences. The maximum credit
available to Optionee shall not exceed the sum of (i) the aggregate option price of the purchased
shares (less the par value) plus (ii) any Federal and state income and employment tax liability
incurred by Optionee in connection with the exercise of the option.

     11. Tax Withholding. The Committee may, in its discretion and upon such terms and
conditions as it may deem appropriate (including the applicable safe-harbor provisions of
Securities and Exchange Commission Rule 16b-3 or any successor rule or regulation) provide Optionee
(if Optionee is an Employee) with the election to surrender previously acquired shares of Common
Stock or have shares withheld in satisfaction of the tax withholding obligations. To the extent
necessary to avoid adverse accounting treatment, the number of shares that may be withheld for this
purpose shall not exceed the minimum number needed to satisfy the applicable income and employment
tax withholding rules. If Common Stock is used to satisfy the Company’s tax withholding
obligations, the shares of Common Stock shall have been held by Optionee for the requisite period
necessary to avoid a charge to the Company’s reported earnings and shall be valued at their Fair
Market Value when the tax withholding is required to be made.

     12. Compliance with Laws and Regulations.

     (a) The exercise of this option and the issuance of the Option Shares upon such exercise shall
be subject to compliance by the Company and Optionee with all applicable requirements of law
relating thereto and with all applicable regulations of any Stock Exchange (or the Nasdaq Stock
Market, if applicable) on which the Common Stock may be listed for trading at the time of such
exercise and issuance.

     (b) The inability of the Company to obtain approval from any regulatory body having authority
deemed by the Company to be necessary to the lawful issuance and sale of any Common Stock pursuant
to this option shall relieve the Company of any liability with respect to the non-issuance or sale
of the Common Stock as to which such approval shall not have been obtained. The Company, however,
shall use reasonable efforts to obtain all such approvals.

5

 

     13. Successors and Assigns. Except to the extent otherwise provided in this
Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the
Company and its successors and assigns and Optionee, Optionee’s assigns, the legal representatives,
heirs and legatees of Optionee’s estate and any beneficiaries of this option designated by
Optionee.

     14. Notices. Any notice required to be given or delivered to the Company under the
terms of this Agreement shall be in writing and addressed to the Company at its principal corporate
offices. Any notice required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated below Optionee’s signature line on the Grant Notice.
All notices shall be deemed effective upon personal delivery or three days after deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.

     15. Construction. This Agreement and the option evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. In
the event of a conflict between the terms and conditions of the Plan and the terms and conditions
of this Agreement, the terms and conditions of this Agreement shall prevail. All decisions of the
Committee with respect to any question or issue arising under the Plan or this Agreement shall be
conclusive and binding on all persons having an interest in this option.

     16. Governing Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of Delaware without resort to its conflict-of-laws
rules.

     17. No Employment/Service Contract. Nothing in this Agreement or in the Plan shall
confer upon Optionee any right to continue to be a Service Provider of the Company (or any Parent
or Subsidiary) for any period of specific duration or otherwise interfere with or restrict in any
way the rights of the Company (or such Parent or Subsidiary) or Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee’s Service Provider status at any time and for any
reason whatsoever, with or without cause.

6

 

EXHIBIT I

Notice of Exercise

     I hereby notify CorVel Corporation (the “Company”) that I elect to purchase
___shares of the Company’s common stock (the “Purchased Shares”) at the option exercise
price of $  per share (the “Exercise Price”) pursuant to that certain option (the “Option”) granted
to me under the CorVel Corporation Restated Omnibus Incentive Plan (Formerly The Restated 1988
Executive Stock Option Plan) on , ___.

     Concurrently with the delivery of this Exercise Notice to the Company, I shall hereby pay to
the Company the aggregate Exercise Price for the Purchased Shares in accordance with the provisions
of my agreement with the Company (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker-dealer sale and remittance procedure specified in
my agreement to effect payment of the aggregate Exercise Price.

____________________, _______

Date

	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Optionee	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Print name in exact manner it is to appear on the stock
certificate:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Address to which certificate is to be sent, if different from
address above:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Social Security Number:
	 	 	 	 	 	 
	 	 	 	 	 

 

 

APPENDIX

     The following definitions shall be in effect under this Agreement:

     A. Agreement shall mean this Stock Option Agreement.

     B. Board shall mean the Board of Directors of the Company.

     C. Common Stock shall mean shares of the Company’s common stock, $0.0001 par value.

     D. Code shall mean the Internal Revenue Code of 1986, as amended.

     E. Committee shall mean a committee designated by the Board to administer the Plan,
which initially shall be the compensation committee of the Board. The Committee shall be comprised
of at least two directors but not less than such number of directors as shall be required to permit
awards granted under the Plan to qualify under Rule 16b-3 under the Securities Act and Section
162(m) of the Code, and each member of the Committee shall be a “Non-Employee Director ” within the
meaning of Rule 16b-3 under the Securities Act and an “Outside Director” within the meaning of
Section 162(m) of the Code.

     F. Company shall mean CorVel Corporation, a Delaware corporation, or any corporate
successor which shall assume the Plan.

     G. Corporate Transaction shall mean any of the following transactions for which the
approval of the Company’s stockholders is obtained:

     (i) a merger or acquisition in which the Company is not the surviving entity,
except for a transaction the principal purpose of which is to change the state of
the Company’s incorporation,

     (ii) the sale, transfer or other disposition of all or substantially all of
the assets of the Company to any entity other than a parent or subsidiary of the
Company, or

     (iii) any reverse merger in which the Company is the surviving entity but in
which fifty percent (50%) or more of the Company’s outstanding voting stock is
transferred to holders different from those who held such fifty percent (50%) or
greater interest immediately prior to such merger.

     H. Employee shall mean an individual for whom the Company or one or more of its Parent
or Subsidiaries reports his or her earnings on a Form W-2.

     I. Exercise Date shall mean the date on which the option shall have been exercised in
accordance with Paragraph 9.

A-1

 

     J. Exercise Price shall mean the exercise price per Option Share as specified in the
Grant Notice.

     K. Expiration Date shall mean the date on which the option expires as specified in the
Grant Notice.

     L. Fair Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:

     (i) If the Common Stock is at the time listed on the Nasdaq National Market or
the Nasdaq Capital Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as such price is reported
by the National Association of Securities Dealers on the Nasdaq National Market or
the Nasdaq Capital Market and published in The Wall Street Journal.

     (ii) If the Common Stock is at the time listed on any Stock Exchange, then the
Fair Market Value shall be the closing selling price per share of Common Stock on
the date in question on the Stock Exchange determined by the Committee to be the
primary market for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange and published in The Wall Street
Journal.

     (iii) If the Common Stock is not listed on the Nasdaq National Market, Nasdaq
Capital Market or a national securities exchange, the Fair Market Value shall be the
average of the closing bid and ask prices of the Common Stock on that day as
reported by the Nasdaq bulletin board or any comparable system on that day.

     (iv) If the Common Stock is not traded included in the Nasdaq bulletin board
or any comparable system, the Fair Market Value shall be the average of the closing
bid and ask prices on that day as furnished by any member of the National
Association of Securities Dealers, Inc. selected from time to time by the Company
for that purpose.

     (v) If the date in question is not a trading day, then the Fair Market Value
shall be determined based on prices for the trading day prior to the date in
question.

     M. Grant Date shall mean the date of grant of the option as specified in the Grant
Notice.

     N. Grant Notice shall mean the Notice of Grant of Stock Option accompanying this
Agreement, pursuant to which Optionee has been informed of the basic terms of the option evidenced
hereby.

A-2

 

     O. Misconduct shall mean any of the following:

     (i) Optionee’s intentional misconduct or continuing gross neglect of duties
which materially and adversely affects the business and operations of the Company or
any Parent or Subsidiary employing Optionee;

     (ii) Optionee’s unauthorized use or disclosure of (or attempt to use or
disclose) confidential information or trade secrets of the Company or any Parent or
Subsidiary; or

     (iii) Optionee’s commission of an act involving embezzlement, theft, fraud,
falsification of records, destruction of property or commission of a crime or other
offense involving money or other property of the Company or any Parent or Subsidiary
employing Optionee.

     The reasons for termination of Optionee as a Service Provider set forth in this subparagraph
are not intended to be an exclusive list of all acts or omissions which the Company (or any Parent
or Subsidiary) may deem to constitute misconduct or other grounds for terminating Optionee (or any
other individual).

     P. Non-Statutory Option shall mean an option not intended to satisfy the requirements
of Code Section 422.

     Q. Notice of Exercise shall mean the notice of exercise in the form attached hereto as
Exhibit I.

     R. Option Shares shall mean the number of shares of Common Stock subject to the option
as specified in the Grant Notice.

     S. Optionee shall mean the person to whom the option is granted as specified in the
Grant Notice.

     T. Parent shall mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, provided each such corporation in the unbroken chain (other
than the Company) owns, at the time of the determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the other corporations in
such chain.

     U. Permanent Disability shall have the meaning assigned to “permanent and total
disability” as set forth in Code Section 22(e)(3).

     V. Plan shall mean the CorVel Corporation Restated Omnibus Incentive Plan (Formerly
The Restated 1988 Executive Stock Option Plan).

     W. Securities Act shall mean the Securities Act of 1933, as amended.

A-3

 

     X. Service Provider shall mean an individual who renders service on a periodic basis
to the Company, its Parent and/or any of its Subsidiaries as an Employee, a non-Employee member of
the board of directors or a consultant or independent advisor.

     Y. Stock Exchange shall mean the American Stock Exchange or the New York Stock
Exchange, or any other national stock exchange.

     Z. Subsidiary shall mean any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company, provided such corporation (other than the last
corporation in the unbroken chain) owns, at the time of determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain. For purposes of all Non-Statutory Option grants under the Plan
and all Corporate Transaction provisions of the Plan, the term “Subsidiary” shall also include any
partnership, joint venture or other business entity of which the Company owns, directly or
indirectly through another entity, more than a fifty percent (50%) interest in voting power,
capital or profits.

A-4exv10w1

 

Exhibit 10.1

FIRST AMENDMENT TO STANDBY PURCHASE AGREEMENT

     This FIRST AMENDMENT (this “Amendment”), dated as of July 3, 2007, by and among Westmoreland
Coal Company, a Delaware corporation (the “Company”), Tontine Capital Partners, L.P., a Delaware
limited partnership (“Standby Purchaser”), and Silverhawk Capital GP, LLC, a Delaware limited
liability company (“Additional Purchaser”), amends that certain Standby Purchase Agreement (the
“Original Agreement”), dated as of May 2, 2007, by and between the Company and Standby Purchaser.

W I T N E S S E T H :

     WHEREAS, the parties hereto wish to amend the terms of the Original Agreement, as set forth
herein;

     NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, the
parties hereto agree (i) that Additional Purchaser shall be added as a party to the Original
Agreement and shall be entitled to the rights under, and bound by the terms of the Original
Agreement, as amended by this Amendment, applicable to Additional Purchaser (capitalized terms used
herein without definition shall have the respective meaning assigned to such terms in the Original
Agreement), and (ii) as follows:

          1. Amendment to Certain Other Definition. Section 1 of the Original Agreement is
hereby amended as follows:

               (a) The following definition will be added to Section 1 of the Original Agreement immediately
after the definition of the term “Agreement”:

                    “‘AP Securities’ shall mean the shares of Common Stock that are to be purchased by Additional
Purchaser pursuant to Section 22 hereof.”

                    “‘Change of Control Transaction’ shall mean any merger, consolidation, recapitalization, stock
purchase, share exchange, asset acquisition or other business combination involving the Company or
any of its Subsidiaries in one or a series of related events in which the holders of at least a
majority of the Company’s Common Stock are entitled to sell or exchange their shares of Common
Stock for cash, equity securities of another issuer, any combination thereof or any other
consideration.”

                    “‘Immediate Family Member’ shall have the meaning set forth in Item 404 of Regulation S-K.”

               (b) The term “Closing” is hereby amended to add the words “and Section 22” after the words
“Section 2”.

1

 

          2. New Section 22. The Original Agreement is hereby amended by adding the following
immediately after Section 21 of the Original Agreement:

               Section 22. Additional Purchaser.

                    “(a) Purchase of Shares of Common Stock by Additional Purchaser. Subject to the terms and
conditions set forth in this Agreement:

                         (i) If there are any Unsubscribed Shares that Standby Purchaser is not permitted to purchase
as a result of the cap set forth in Section 2(c) hereof, then Additional Purchaser shall purchase
such Unsubscribed Shares at the Subscription Price; provided, however, that
Additional Purchaser shall not purchase any Unsubscribed Shares that would cause Additional
Purchaser to pay an aggregate purchase price hereunder in excess of ten million two hundred
thousand dollars ($10,200,000).

                         (ii) If after giving effect to Additional Purchaser’s purchase of Unsubscribed Shares, if
any, Additional Purchaser has not purchased a number of shares of Common Stock equal to a purchase
price of ten million two hundred thousand dollars ($10,200,000), Additional Purchaser shall have
the option, exercisable in its sole discretion, to purchase at the Closing, at the Subscription
Price, a number of shares of Common Stock up to such shortfall.

                         (iii) Payment of the Subscription Price for the AP Securities shall be made, on the Closing
Date, against delivery of certificates evidencing the AP Securities, in United States dollars by
means of certified or cashier’s checks, bank drafts, money orders or wire transfers. Additional
Purchaser shall be made a party to the Registration Rights Agreement.

                    (b) Representations and Warranties of the Company.

                         (i) Subject to the next sentence and to clause (ii) of this sub-section, the Company
represents and warrants to Additional Purchaser that the representations and warranties contained
in Section 4 of this Agreement are true and correct as of the date of the First Amendment to
Standby Purchase Agreement, dated as of July 3, 2007 (the “Amendment Date”), by and among the
Company, the Standby Purchaser and Additional Purchaser (the “Amendment”), as if made on the
Amendment Date. For purposes of the foregoing, each reference to “Standby Purchaser” in such
representations and warranties shall be deemed to be a reference to “Additional Purchaser.” All
references to the “Agreement” shall be deemed to refer to this Agreement as amended by the
Amendment.

                         (ii) Section 4(i) of the Original Agreement is hereby amended to read as follows: “Since
December 31, 2006, there have not been any events, changes, occurrences or state of facts that,
individually or in the aggregate, have had or would reasonably be expected to have a Material
Adverse Effect, except for matters disclosed

2

 

prior to the Amendment Date in the Company’s public filings pursuant to the Exchange Act and
matters disclosed prior to the Amendment Date in writing by the Company to Standby Purchaser and
Additional Purchaser.”

                    (c) Representations and warranties of Additional Purchaser.

                         (i) Additional Purchaser represents and warrants to the Company, as of the Amendment Date,
that Additional Purchaser is a limited liability company duly organized, validly existing and in
good standing under the laws of Delaware.

                         (ii) Subject to the next sentence, Additional Purchaser hereby makes, with respect to itself
as of the Amendment Date, each of the representations and warranties set forth in Sections 5(b),
5(c) and 5(d) of this Agreement to the Company. For purposes of the foregoing, each reference to
“Standby Purchaser” and “Securities” in such representations and warranties shall be deemed to be a
reference to “Additional Purchaser” and “AP Securities”, respectively.

                         (iii) Additional Purchaser represents and warrants to the Company that (A) neither it nor any
of its Affiliates is an Affiliate of Standby Purchaser, (B) none of it, its Affiliates and any
Immediate Family Member of any of its Affiliates is a director, officer, employee, partner (limited
or general) or member of Standby Purchaser or, to its knowledge, any Affiliate of Standby Purchaser
or any entity of which Standby Purchaser or any Affiliate thereof owns 5% or more, (C) from January
1, 2004 to the present, none of it, its Affiliates, and any Immediate Family Member of any of its
Affiliates has accepted any consulting, advisory or other compensatory fee or payment from Standby
Purchaser, or, to its knowledge, any Affiliate of Standby Purchaser or any entity of which Standby
Purchaser or any Affiliate thereof owns 5% or more, and (D) there are no contracts, arrangements,
understandings or relationships (legal or otherwise) between Additional Purchaser and Standby
Purchaser with respect to the voting of any shares of Common Stock.

                    (d) Deliveries at Closing.

                         (i) At the Closing, the Company shall deliver to Additional Purchaser the following:

                              (A) A certificate or certificates representing the number of shares of Common Stock issued to
Additional Purchaser pursuant to Section 22(a) of this Agreement; and

                              (B) A certificate of an officer of the Company on its behalf to the effect that the
representations and warranties of the Company contained in this Agreement are true and correct in
all material respects on and as of the Closing Date, with the same effect as if made on the Closing
Date.

3

 

                         (ii) At the Closing, Additional Purchaser shall deliver to the Company the following:

                              (A) Payment of the Subscription Price of the AP Securities purchased by Additional Purchaser
pursuant to Section 22(a) of this Agreement; and

                              (B) A certificate of Additional Purchaser to the effect that the representations and
warranties of Additional Purchaser contained in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as if made on the Closing Date.

                    (e) Conditions to Closing. The obligations of Additional Purchaser to consummate the
transactions contemplated hereunder are subject to the fulfillment, or waiver in writing by
Additional Purchaser, prior to or on the Closing Date, of the following conditions:

                         (i) the obligations of Standby Purchaser shall not have been terminated under this Agreement
and Standby Purchaser and/or its Affiliates shall have purchased the full number of Securities that
it is required to purchase pursuant to Section 2 hereof.

                         (ii) The representations and warranties of the Company in Section 22(b) of this Agreement
shall be true and correct in all material respects as of the date hereof and at and as of the
Closing Date as if made on such date (except for representations and warranties made as of a
specified date, which shall be true and correct in all material respects as of such specified
date).

                         (iii) The Company shall have executed and delivered to Additional Purchaser a duly executed
copy of the Registration Rights Agreement.

                         (iv) The AP Securities shall have been authorized for listing on the American Stock Exchange.

                         (vi) Each of the conditions set forth in (A) clauses (iii), (iv), and (v) of Section 9(a) of
this Agreement, and (B) Sections 9(c)(i) — (iv) of this Agreement shall have been satisfied.
Section 9(a)(iii) is hereby amended and restated to read in its entirety as follows:

                         “Subsequent to the execution and delivery of this Agreement and prior to the
Closing Date, and except for matters disclosed prior to the Amendment Date in the
Company’s public filings pursuant to the Exchange Act and matters disclosed prior
to the Amendment Date in writing by the Company to Standby Purchaser and
Additional Purchaser, there shall not have been any Material Adverse Effect and no
event shall have occurred or circumstance shall exist which would reasonably
likely result in a Material Adverse Effect;”

4

 

Notwithstanding anything else contained herein, waiver of a closing condition or termination by
Additional Purchaser shall not be deemed a waiver or termination by Standby Purchaser or vice versa
nor shall any waiver of a closing condition or termination by the Company with respect to its
obligations to either Additional Purchaser or Standby Purchaser be deemed a waiver or termination
with respect to the other party.

                    (f) Restrictions on Transfer of AP Securities. Additional Purchaser shall be bound by the
terms of Section 11 of the Agreement as if incorporated and made a part of this Section 22(f);
provided, however, that for purposes of the foregoing each reference in Section 11
of the Agreement to “Standby Purchaser” and to “Securities” shall be deemed to be a reference to
“Additional Purchaser” and “AP Securities”, respectively.

                    (g) Lock-Up of AP Securities. Notwithstanding anything to the contrary set forth herein or in
the Registration Rights Agreement, Additional Purchaser agrees:

                         (i) provided that the last reported sale price of the Common Stock on the American Stock
Exchange on the trading date immediately preceding the date of the Closing is at least $22 per
share, that it will not Transfer any AP Securities to any Person until after the first anniversary
of the Closing; and

                         (ii) if the last reported sale price of the Common Stock on the American Stock Exchange on
the trading date immediately preceding the date of the Closing is less than $22 per share, that it
will not prior to the date that is six months following the Closing, Transfer any AP Securities to
any Person for consideration having a value exceeding $18 per share (subject to appropriate
adjustment to reflect any stock split, stock dividend, reverse stock split or like transaction
made, declared or effected with respect to the Common Stock);

provided, however, that the forgoing provisions of this Section 22(g) shall not
restrict (1) any Transfer by the Additional Purchaser to one or more of its Affiliates, provided
that the transferee in each case agrees to be subject to the terms of this Section 22(g) and
further provided that any Transfers by such transferees shall be aggregated with those of the
Additional Purchaser and with those of other such transferees for purposes of determining
compliance with clause (5) of this proviso; (2) any Transfer in connection with a tender offer for
the Company’s Common Stock, whether initiated by the Company or by a third party; (3) any other
transfer to the Company or its Affiliates; (4) any Transfer that is part of a Change of Control
Transaction; or (5) a Transfer of a number of AP Securities that, when aggregated with all previous
Transfers of AP Securities, does not exceed a percentage of the total AP Securities equal to the SP
Transfer Percentage. The “SP Transfer Percentage” shall be calculated from time to time by
dividing (A) the aggregate number of shares of Common Stock Transferred by the Standby Purchaser
and its Affiliates from and after the Closing Date, other than shares Transferred to any Affiliate
of the Standby Purchaser, by (B) the total number of shares of Common Stock

5

 

held by Standby Purchaser and its Affiliates immediately following the Closing plus, if applicable,
the number of Additional Subscription Shares purchased by the Standby Purchaser and its Affiliates.
For purposes of calculating the percentages contemplated by clause (5) and the SP Transfer
Percentage, appropriate adjustments shall be made to reflect any stock split, stock dividend,
reverse stock split or like transaction made, declared or effected with respect to the Common
Stock.

                    (h) Indemnification and Contribution. The Company and Additional Purchaser shall be bound by
the terms of Section 13 of this Agreement as if incorporated and made a part of this Section 22(h);
provided, however, that for purposes of the foregoing each reference in Section 13
of this Agreement to “Standby Purchaser” and to “Standby Indemnified Persons” shall be deemed to be
a reference to “Additional Purchaser” and “Additional Indemnified Persons”, respectively. The
obligations of each of the Standby Purchaser under Section 13(b) of this Agreement and the
Additional Purchaser under this Section 22(h) to provide indemnification to Company Indemnified
Persons with respect to losses, claims, damages or liabilities arising out of or are based upon
information provided in writing to the Company by Standby Purchaser or Additional Purchaser, as the
case may be, specifically for use in any registration statement under which Securities or AP
Securities, as the case may be, are registered under the Securities Act at the request of Standby
Purchaser or Additional Purchaser, as the case may be, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, shall be subject to the same
limitations as are set forth in Section 6(b) of the Registration Rights Agreement as if such
limitations were incorporated into and made a part of this Agreement.

                    (i) Obligations of the Standby Purchaser and Additional Purchaser. The obligations of the
Standby Purchaser and Additional Purchaser under this Agreement are several and not joint or joint
and several and neither Standby Purchaser nor Additional Purchaser shall be liable for any breach
of any of the obligations of the other under this Agreement.

                    (j) Reimbursement of Expenses of Mr. Gardner. The Company agrees to promptly reimburse Ted
Gardner, the Managing Member of the Additional Purchaser, for his reasonable travel and other
direct out-of-pocket expenses in meeting with representatives of the Company in connection with his
determination whether or not to become a member of the Board. The Company agrees that Mr.
Gardner’s reasonable out-of-pocket expenses in connection with his attendance at Board and Board
committee meetings shall be reimbursed by the Company consistent with the Company’s policy for
reimbursing independent directors for such expenses.”

          3. Amendment to Section 4(f). Section 4(f) of the Original Agreement is hereby
amended to add the words “, AP Securities” immediately after the word “Securities” in the first
line and fifth line thereof.

6

 

          4. Amendment to Section 7. Section 7 of the Original Agreement is hereby amended as
follows:

               (a) The words “and Additional Purchaser” shall be added immediately after the words “Standby
Purchaser” in each of clause (i) and clause (v) of Section 7(a) of the Original Agreement.

               (b) The words “and Additional Purchaser” shall be added immediately after the words “Standby
Purchaser” in the second line of clause (vii) of Section 7(a) of the Original Agreement and the
words “or Additional Purchaser” shall be added immediately after the words “Standby Purchaser” in
the fourth line of clause (vii) of Section 7(a) of the Original Agreement.

               (c) The words “, on the one hand,” shall be added immediately after the words “neither the
Company” and the words “or Additional Purchaser, on the other hand” shall be added immediately
after the words “nor Standby Purchaser” in Section 7(e) of the Original Agreement.

          5. Amendment to Section 9(b). Section 9(b) of the Original Agreement is hereby
amended as follows:

               (a) The words “and of Additional Purchaser in Section 22(c)” shall be added immediately after
the words “Section 5” in clause (i) of Section 9(b) of the Original Agreement.

               (b) The words “Each of Additional Purchaser and” shall be added immediately before the words
“Standby Purchaser” in clause (ii) of Section 9(b) of the Original Agreement.

          6. Amendment to Section 12. Section 12 of the Original Agreement is hereby amended as
follows:

               (a) Section 12(a) of the Original Agreement is hereby amended and restated to read in its
entirety as follows:

“Subject to the provisions of the last paragraph of Section 22(e), Standby Purchaser on one
hand may terminate at any time prior to the Closing Date its rights and obligations
hereunder and Additional Purchaser on the other hand may terminate at any time prior to the
Closing Date its rights and obligations hereunder by written notice to the Company if there
is a Material Adverse Effect or a Market Adverse Effect, in either case that is not cured
within twenty-one (21) days after the occurrence thereof (the “Cure Period”),
provided that the right to such termination after the occurrence of each Material
Adverse Effect or a Market Adverse Effect, which has not been cured within the Cure Period,
shall expire seven (7) days after the expiration of such Cure Period.”

7

 

               (b) Section 12(b) of the Original Agreement is hereby amended and restated to read in its
entirety as follows:

                    “(b) Subject to the provisions of the last paragraph of Section 22(e):

                         (i) if there is a material breach of this Agreement by Standby Purchaser or Additional
Purchaser that is not cured within fifteen (15) days after receipt of written notice by
such breaching party, the Company may terminate this Agreement with respect to such
breaching party by written notice to the other parties hereto;

                         (ii) if there is a material breach of this Agreement by the Company that is not cured
within fifteen (15) days after receipt of written notice by the Company, either Standby
Purchaser or Additional Purchaser may terminate its rights and obligations hereunder by
written notice to the other parties hereto; or

                         (iii) the Company may terminate this Agreement on one hand or either Standby Purchaser
or Additional Purchaser may terminate its rights and obligations hereunder on the other
hand if the Closing has not occurred on or prior to November 15, 2007, for any reason
whatsoever, other than a material breach hereunder by such terminating party or failure of
the closing condition specified in Section 9(a)(iv).”

          7. Amendment to Section 14. Section 14 of the Original Agreement is hereby amended by
adding the words “, Additional Purchaser” immediately after the word “Company”.

          8. Amendment to Section 15. Section 15 of the Original Agreement is hereby amended by
adding the following after subsection (b):

               (c) if to Additional Purchaser, at:

Silverhawk Capital GP, LLC

1901 Roxborough Road

Suite 200

Charlotte, North Carolina 28203

Attn: Ted A. Gardner

Telecopy No.: (704) 366-6666

with a copy to:

Morrison Cohen LLP

909 Third Avenue

New York, New York 10022

Attention: David A. Scherl

Telecopy No.: (212) 735-8708

8

 

          9. Amendment to Section 16. Section 16 of the Original Agreement is hereby amended
and restated in its entirety to read as follows:

               “Section 16. Assignment. This Agreement will be binding upon, and will inure to the
benefit of and be enforceable by, the parties hereto and their respective successors and assigns,
including any person to whom Securities or AP Securities are transferred in accordance herewith.
The rights and obligations under this Agreement, may be assigned, delegated or transferred, in
whole or in part, by Standby Purchaser or Additional Purchaser to any of its Affiliates over which
Standby Purchaser or Additional Purchaser, as the case may be, or any of its Affiliates exercises
investment authority, including, without limitation, with respect to voting and dispositive rights,
provided that any such assignee assumes the obligations of Standby Purchaser or Additional
Purchaser, as the case may be, hereunder and agrees to be bound by the terms of this Agreement in
the same manner as Standby Purchaser or Additional Purchaser, as the case may be. Standby
Purchaser or any of its Affiliates may assign, delegate or transfer, in whole or in part, its Basic
Subscription Privilege to any other Affiliate or to Standby Purchaser. Notwithstanding the
foregoing or any other provisions herein, no such assignment by Standby Purchaser or Additional
Purchaser will relieve Standby Purchaser or Additional Purchaser, as the case may be, or of its
obligations hereunder if such assignee fails to perform such obligations. In addition, upon the
request of Standby Purchaser, the Company and Standby Purchaser will negotiate in good faith to add
one or more third parties designated by Standby Purchaser as additional purchasers of Unsubscribed
Shares and to provide an option to each such additional purchaser, comparable to the Option set
forth in Section 3(a), to purchase additional shares of Common Stock in an amount to be mutually
agreed upon, at the Subscription Price. To the extent there are any such additional purchasers,
the Company and Standby Purchaser will negotiate in good faith to amend this Agreement to add any
such additional purchasers to this Agreement prior to the mailing of the Proxy Statement to the
stockholders of the Company.”

          10. Amendment to Section 17. Section 17 of the Original Agreement is hereby amended
by adding the words “, AP Securities” immediately after the words “Securities”.

          11. Amendment to Section 20. Section 20 of the Original Agreement is hereby amended
by adding the words “and Additional Purchaser” immediately after the words “Standby Purchaser” in
the second line thereof and the words “or Additional Purchaser” immediately after the words
“Standby Purchaser” in the fifth line thereof.

          12. Amendment to Section 21. Section 21 of the Original Agreement is hereby amended
as follows:

               (a) The words “or AP Securities” shall be added immediately after the word “Securities” in
Section 21(a) of the Original Agreement.

               (b) The following shall be added immediately after Section 21(c):

9

 

               “(d) Notwithstanding any provision in this Agreement to the contrary:

                    (i) any amendment, supplement or modification of or to any provision of this Agreement, any
waiver of any provision of this Agreement, and any consent to any departure by any party from the
terms of any provision of this Agreement, shall be effective (A) only in the specific instance and
for the specific purpose for which made or given, and (B) only if it is made or given in writing
and signed by the Company and Standby Purchaser, provided, however, that if any
such amendment, supplement, modification or waiver materially adversely affects Additional
Purchaser, Additional Purchaser shall have the option to terminate its rights and obligations
hereunder by sending written notice of such termination to the parties hereto within forty eight
(48) hours after Additional Purchaser’s receipt of written notice of such amendment, supplement,
modification or waiver, and if Additional Purchaser fails to send such written notice within such
forty eight (48) hour period, Additional Purchaser shall be deemed to have consented to such
amendment, supplement, modification or waiver; and

                    (ii) except where notice is specifically required by this Agreement, no notice to or demand on
the Company in any case shall entitle the Company to any other or further notice or demand in
similar or other circumstances.”

          13. Amendment to Annex B of the Original Agreement. Annex B of the Original Agreement
is hereby amended as follows:

The words “on a pro rata basis” shall be added after the words “Registrable Securities” in clause
(iii)(A) of Section 7(f) of Annex B of the Original Agreement.

          14. Ratification of Agreement. Except as amended hereby, the Agreement shall remain
in full force and effect and is hereby ratified and confirmed.

          15. Counterparts. This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all of which, when taken together, shall constitute
one and the same instrument.

          16. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.

[Remainder of Page Intentionally Left Blank]

10

 

     In Witness Whereof, the undersigned have executed this Amendment to the Agreement as
of the date first written above.

	 	 	 	 	 
	 	WESTMORELAND COAL COMPANY

 	 
	 	By:  	/s/ David J. Blair
 	 
	 	 	Name:  	David J. Blair 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	TONTINE CAPITAL PARTNERS, L.P.
 	 
	 	By:  	TONTINE CAPITAL MANAGEMENT, L.L.C.,

its general partner
 	 
	 	  	By: 	/s/ Jeffrey L. Gendell
 	 
	 	 	 	Name:  Jeffrey L. Gendell 	 
	 	 	 	Title:    Managing Member 	 
	 

	 	 	 	 	 
	 	SILVERHAWK CAPITAL GP, LLC

 	 
	 	By:  	/s/ Ted A. Gardner
 	 
	 	 	Name:  	Ted A. Gardner 	 
	 	 	Title:  	Managing Member 	 
	 

Signature
Page to First Amendment

11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]