Document:

anrexhibit1026.htm

    Exhibit
10.26

    Alpha
Natural Resources, Inc.

    2004
Stock Incentive Plan

     

    DIRECTOR DEFERRED COMPENSATION
AGREEMENT

     

    

     

     

    This
Director Deferred Compensation Agreement, as amended (this
“Agreement”), is entered into by and between Alpha Natural Resources, Inc., a Delaware corporation
(the “Company”), and __________________________ (“Director”), effective
____________. 

     

     

    RECITALS

     

     

    WHEREAS, the Company has
established the Alpha Natural Resources, Inc. 2004 Stock Incentive Plan (the
“Plan”) to recruit key employees, directors or consultants of outstanding
ability and motivate such persons to exert their best efforts on behalf of the
Company and its affiliates by providing compensation and incentives through the
granting of awards thereunder.  All capitalized terms not otherwise
defined in this Agreement have the same meaning given such capitalized terms in
the Plan.

     

     

    WHEREAS, the Board of
Directors of the Company (the “Board”) has authorized the grant by the Company
to Non-Employee Directors of the Board, in consideration for serving on the
Board and, in the case of (iv) and (v) below, as applicable, committees of the
Board, the following cash compensation: (i) an annual cash retainer (“Annual
Board Retainer”); (ii) in the case of the Lead Independent Director, if any, an
annual cash retainer (the "Annual Lead Director Retainer"); (iii) fees for
attending Board meetings (“Board Meeting Fees”); (iv) an annual cash retainer
for serving as the chairman of a committee of the Board (“Annual Committee Chair
Retainer”); and (v) fees for attending Board committee meetings (“Committee
Meeting Fees”, and together with the Annual Board Retainer, Annual Lead Director
Retainer, Board Meeting Fees and Annual Committee Chair Retainer,
“Compensation”);

     

     

    WHEREAS, pursuant to Section 8
of the Plan, a Non-Employee Director may elect to defer delivery of Compensation
that would otherwise be payable to the Non-Employee Director under the Plan,
with the permission of and on such terms as are established by the Committee (as
such term is defined in the Plan) in its discretion;

     

     

    WHEREAS, the Committee has
determined that a Non-Employee Director may elect to defer the receipt of such
Compensation, on the terms set forth in this Agreement, by entering into this
Agreement and executing and delivering to the Company an Election Form (as
defined below) to that effect;

     

     

    WHEREAS, Director is a
Participant for purposes of the Plan;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS, the Company and
Director desire to establish the terms upon which Director may elect to defer
all or a portion of his or her Compensation;

     

     

    WHEREAS, the Company and
Director desire to clarify, amend and restate the terms and conditions under
which deferrals, including prior deferrals, are governed; and

     

     

    WHEREAS, pursuant to the
provisions of the Plan, the Committee or its Designated Administrator has full
power and authority to direct the execution and delivery of this Agreement in
the name and on behalf of the Company, and has authorized the execution and
delivery of this Agreement.

     

     

    NOW, THEREFORE, in consideration of
the mutual covenants and promises contained herein, and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:

     

     

    AGREEMENT

     

     

    Section 1.  Election
to Defer.  Director may elect to defer, in accordance with the
terms set forth in Section 2 of this Agreement, receipt of up to 100% of the
Compensation payable to him or her until the date of a distribution event
described in Section 4.  If such an election is made, the Compensation
shall, at the election of the Director, either be credited to the Cash Account
(as defined below) established for the Director, or credited to the Director’s
Share Unit Account, and converted to Share Units pursuant to Section 3 of this
Agreement.

     

     

    Section 2.Deferral
Election and Election Form.  Director may make an election to
defer up to 100% of the Compensation payable to him or her by completing and
delivering an election form in the form attached hereto as Exhibit A (the
“Election Form”) to the Company.  An Election Form delivered to the
Company with respect to Compensation shall indicate whether the amount of such
Compensation shall be credited to the Director’s Cash Account or Share Unit
Account; provided, that if an
Election Form delivered to the Company with respect to Compensation does not
indicate whether the amount of such Compensation shall be credited to the
Director’s Cash Account or Share Unit Account, the amount of such Compensation
shall be credited to the Director’s Cash Account.  An Election Form
effective for Compensation payable to he Director must be delivered to the
Company prior to the first day of the calendar year in which the Director's
annual service period begins and shall apply only to Compensation earned and
otherwise payable for service periods beginning after the end of the calendar
year in which such Election Form is delivered to the Company.  If,
however, the Director is newly eligible to participate in the program, the
Director may make an election and deliver the Election Form to the Company
within 30 days after the date on which Director initially became eligible to
defer such Compensation and otherwise participate in the program; provided,
however, any such Election Form will apply only to Compensation earned and
payable after the date on which the Election Form is delivered to the
Company.  An Election Form will remain in effect from year to year and
be irrevocable unless otherwise changed in a timely manner; provided, however, if
the Director suffers a disability, receives a distribution on account of
Unforeseeable Emergency or dies, the Director's deferral election shall be
cancelled.  For purposes of this Section, a disability refers
to any medically determinable physical or mental impairment resulting in the
Director’s inability to perform the duties of his or her position or any
substantially similar position, where such impairment can be expected to result
in death or can be expected to last for a continuous period of not less than six
months.  A new Election Form shall apply only to Compensation earned
and otherwise payable for service periods beginning in calendar years after the
last day of the calendar year in which the revised Election Form is delivered to
the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section 3.  Director
Accounts.

     

     

    (a)  Share
Unit Accounts.

     

     

    (i)           Compensation
deferred and elected by the Director to be credited to the Director’s Share Unit
Account, as provided in the Election Form delivered to the Company pursuant to
Section 2 of this Agreement, shall be credited to the Director’s share unit
bookkeeping account (the “Share Unit Account”).  The amount so
credited to each Share Unit Account shall be equal to the amount of such
Compensation, converted as of the payment dates established by the Committee
into share units (the “Share Units”) equivalent to whole Shares based on the
Fair Market Value of a Share on such payment date.  For purposes of
this Agreement, “Fair Market Value” shall mean the closing price per share of
the Company’s common stock as reported on The New York Stock Exchange, or if
such date is not a regular trading date on such exchange, on the next following
regular trading date.  The number of Share Units for full Shares so
determined shall be credited to the Director’s Share Unit
Account.  Any unconverted balance remaining in the Director’s Share
Unit Account after such conversion, together with other subsequent credits of
deferred Compensation thereto, shall be converted into Share Units to the extent
possible on the next designated payment date.

     

     

    (ii)           Additional
credits shall be made to the Director’s Share Unit Account equal to the cash
dividends (or the fair market value of dividends paid in property other than
Shares) that the Director would have received had he or she been the owner on
each cash dividend record date of a number of Shares equal to the number of
Share Units in his or her Share Unit Account on such date.  In the
case of a dividend paid in Shares or a common stock split, additional credits
will be made to a Director’s Share Unit Account of a number of Share Units equal
to the number of full Shares that the Director would have received had he or she
been the owner on each record date of a number of Shares equal to the number of
Share Units in his or her Share Unit Account on such date.  Any cash
dividends (or dividends paid in property other than Shares) shall be distributed
to the Director on or before December 31 of each year, as
applicable.  In the event of a stock split, stock dividend,
reclassification, reorganization, redesignation, or other change in the
Company’s capitalization, the number of Share Units in the Director’s Share Unit
Account shall be proportionately adjusted or substituted to reflect such
change.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)  Cash
Accounts.  Compensation deferred and elected by the Director to
be credited to the Director’s Cash Account, as provided in the Election Form
delivered to the Company pursuant to Section 2 of this Agreement, shall be
credited as a dollar amount to the Director’s cash bookkeeping account (the
“Cash Account”).  The amount so credited to each Cash Account shall be
equal to the amount of the Compensation on the payment dates therefor specified
by the Committee.  Interest on the amount of the Cash Account shall be
credited thereto as of the last day of each calendar quarter and shall accrue at
the rate of the Moody's AAA corporate bond rate or such other rate as approved
by the Board and/or Committee.

     

     

    (c)  Book-entry
Accounts.  Each Share Unit Account and Cash Account (together,
the “Director Accounts”) shall be maintained on the books of the Company until
full payment of the balance thereof has been made to the applicable Director (or
the beneficiaries of a deceased Director) as provided under the terms of this
Agreement.  No funds shall be set aside or earmarked for any Director
Account, which shall be purely a bookkeeping device.

     

     

    Section 4. Distribution
of Director Accounts.

     

     

    (a)  Distribution
of Share Unit Accounts.  Upon the Director’s Separation from
Service (as defined below), the Company shall distribute the Director’s Share
Unit Account to the Director in the form of Shares (which may be originally
issued Shares or treasury Shares held by the Company or one or more of its
subsidiaries) in a lump sum on the six month anniversary of the date the
Director Separates from Service (or, if sooner, the date of the Director's
death).

     

     

    (b)  Distribution
of Cash Accounts.  Upon the Director’s Separation from Service,
the Company shall distribute the Director’s Cash Account to the Director in the
form of cash in a lump sum on the six month anniversary of the date the Director
Separates from Service (or, if sooner, the date of the Director's
death).

     

     

    (c)  Special
Circumstances.

     

     

    (i)           Notwithstanding
any provision herein to the contrary, the Director shall receive the value of
his Director Accounts (Share Units to be valued at the then fair market value as
determined by the Board) in a single lump sum cash payment, on or within 30 days
of, the date of any of the following events (each, a "Change in
Control"):

     

     

    (A)           a
person, or several persons acting as a group, acquires more than 50% of the
outstanding stock of the Company (which stock remains outstanding), measured by
voting power or fair market value; persons will not be considered to be “acting
as a group” solely because they purchase or own stock of the same corporation at
the same time, or as a result of the same public offering; persons will be
considered to be “acting as a group” if they are owners of an entity that enters
into a merger, consolidation, reorganization, or purchase or acquisition of
stock, in which the Company is not the surviving entity, or as otherwise
provided in the applicable guidance issued under Section 409A;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (B)           a
person, or several persons acting as a group, acquires, during any 12-month
period ending on the date of the most recent acquisition by such person or
persons, 30% or more of the outstanding voting stock of the
Company;

     

     

    (C)           a
majority of the members of the Board are replaced during any 12-month period by
members whose appointment or election is not endorsed by a majority of the
members of the Board before the date of appointment or election; or

     

     

    (D)           a
person, or several persons acting as a group, acquires (or has acquired during
any 12-month period ending on the date of the most recent acquisition by such
person or persons) assets from the Company that have a total gross fair market
value equal to or greater than 40% of the total gross fair market value of the
Company’s assets immediately prior to such acquisition or acquisitions; “gross
fair market value” means the value of the assets of the Company, or the value of
the assets being disposed of, determined without regard to any liabilities
associated with such assets.

     

     

     (ii)           Notwithstanding
any provision herein to the contrary, the Director may apply to the Committee or
Designated Administrator for a lump sum distribution from the Director Accounts
upon the occurrence of an Unforeseeable Emergency (as defined
below).  Amounts distributed in the case of an Unforeseeable Emergency
shall not exceed the amount necessary to satisfy such Unforeseeable Emergency
plus amounts necessary to pay taxes and penalties reasonably anticipated as a
result of such distribution.  In making the forgoing determination,
the Committee or Designated Administrator shall consider the extent to which the
Director’s financial hardship resulting from the Unforeseeable Emergency is or
may be relieved through reimbursement or compensation by insurance or otherwise,
or by liquidation of his or her assets (to the extent such liquidation would not
itself cause severe financial hardship).  For purposes of this
Agreement, “Unforeseeable Emergency” means that the Director experiences a
severe financial hardship resulting from one of the following:  an
illness or accident of the Director, his or her spouse, beneficiary or dependent
(as defined in Sec.
152(a) of the Code, without regard to Section 152(b)(1), (b)(2) and
(d)(1)(B)); the need to pay for the
funeral expenses of a spouse, beneficiary or dependent (as defined
above); loss of the Director’s property due to casualty; or other similar
extraordinary and unforeseeable circumstances arising from events beyond the
Director’s control.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d) Manner of
Payment/Beneficiary Designation.

     

     

    Upon
distribution pursuant to this Section 4, the Company, or its designee, shall
deliver to the Director a certificate, or other evidence of ownership,
representing a number of Shares equal to the number of Share Units in the
Director’s Share Unit Account, registered in the name of such Director (or his
or her beneficiaries), and any remaining cash shall be distributed to the
Director (or his or her beneficiaries), together with the cash distributed from
the Cash Account.  In the event of the Director’s death, payment of
any amount due under this Agreement shall be made to the beneficiary or
beneficiaries designated by the Director in a writing delivered to the
Company.  If the Director fails to designate a beneficiary, payment of
any amount due under the Agreement shall be made to the duly appointed and
qualified executor or other personal representative of the Director to be
distributed in accordance with his or her will or applicable intestacy law; or
in the event that there shall be no such representative duly appointed and
qualified within six months after the date of death, then to such persons as, at
the date of the Director’s death, would be entitled to share in the distribution
of such Director’s personal estate under the provisions of the applicable
statute then in force governing the descent of intestate property, in the
proportions specified in such statute.

     

     

    Notwithstanding
any other provision of this Agreement, if a Director’s service as a member of
the Board is terminated, the Director shall not be entitled to any Compensation
for any period of time after the Director’s termination.

     

     

    (e)  Section
409A.

     

     

     It
is intended that distribution events authorized under this Agreement qualify as
a permissible distribution events for purposes of Section 409A of the Code, and
this Agreement shall be interpreted and construed accordingly in order to comply
with Section 409A of the Code, the regulations and other binding guidance
promulgated thereunder ("Section 409A").  This Agreement and all
deferral elections made hereunder shall be administered, interpreted and
construed in accordance with Section 409A.  The Company reserves the
right to accelerate, delay or modify distributions to the extent permitted under
Section 409A. For purposes of this Agreement, "Separation from Service" shall
mean the Director's death, retirement or other termination of service with the
Company and all of its controlled group members within the meaning of Section
409A of the Code.  For purposes hereof, the determination of
controlled group members shall be made pursuant to the provisions of Section
414(b) and 414(c) of the Code; provided that the language "at least 50 percent"
shall be used instead of "at least 80 percent" in each place it appears in
Section 1563(a)(1),(2) and (3) of the Code and Treas. Reg. Sec. 1.414(c)-2;
provided, further, where legitimate business reasons exist (within the meaning
of Treas. Reg. Sec. 1.409A-1(h)(3)), the language "at least 20 percent" shall be
used instead of "at least 80 percent" in each place it
appears.  Whether the Director has a Separation from Service will be
determined based on all of the facts and circumstances and in accordance with
the guidance issued under Section 409A. Notwithstanding any provision herein to
the contrary, if the Director is a "specified employee" for purposes of Section
409A any payment to the Director due upon Separation from Service will be
delayed for a period of six (6) months after the date the Director Separates
from Service (or, if earlier, the death of the Director).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section 5. Nontransferability.  Director
Accounts, and any rights and privileges pertaining thereto, may not be
transferred, assigned, pledged or hypothecated in any manner, by operation of
law or otherwise, other than (i) by will or by the laws of descent and
distribution or (ii) if permitted by the Committee and to the extent allowed by
the Code and by law, to a grantor trust in which the Director is the sole
beneficial owner pursuant to Code Section 671 and state law, and shall not be
subject to execution, attachment or similar process.

     

     

    Section 6.  Director’s
Rights Unsecured.  The right of the Director or his or her
beneficiary to receive a distribution hereunder shall be an unsecured claim
against the general assets of the Company, and neither the Director nor his or
her beneficiary shall have any rights in or against any amounts credited to the
Director’s Share Unit Account, Cash Account or any other specific assets of the
Company.  All amounts credited to the Director’s Share Unit Account or
Cash Account shall constitute general assets of the Company and may be disposed
of by the Company at such time and for such purposes as it may deem
appropriate.

     

     

    Section 7. Tax
Advisor.  Nothing contained in this Agreement is intended, nor
shall it be construed, as providing advice to the Director regarding the tax
consequences of this Agreement and the Election Form to the
Director.  The Company urges the Director to consult his or her own
personal tax advisor to determine the particular tax consequences of this
Agreement and the Election Form to the Director, including the effect of
federal, state and local taxes, and any changes in the tax laws from the date of
this Agreement.

     

     

    Section 8. Company’s
Election to Terminate.  At any time and for any reason, the
Board may terminate the Agreement; provided however, that any such termination
shall not reduce the accrued benefit of any Director.  Termination of
this Agreement shall not be a distribution event under the Plan or this
Agreement unless otherwise permitted under Section 409A of the Code or other
applicable law.

     

     

    Section 9.  Withholding
for Taxes and other Deductions.  The Company shall have the
right to deduct from any Compensation, or from any deferral, distribution or
payment thereof or withdrawal therefrom, any applicable taxes that the Company
is required by applicable law to withhold and any amounts owed by the Director
to the Company.  

     

     

    Section 10.No Right
to Directorship.  Nothing contained in the Plan, this
Agreement, any Election Form or other related document shall be construed to
(a) confer upon Director any right to continue to serve as a director of
the Company, (b) restrict in any way the Company’s right to terminate or
change the terms or conditions of Director’s directorship at any time, or
(c) confer upon Director or any other person any claim or right to any
Compensation or other Award or distribution under this Agreement or the Plan
except in accordance with their terms.

     

     

    Section 11.  No Rights
as a Stockholder.  Director shall have no voting or any other
rights as a stockholder of the Company with respect to the Share Units. Upon,
but not prior to, distribution of the Share Unit Accounts in the form of Shares
to Director (in accordance with Section 4 hereof), Director shall have all of
the rights of a stockholder of the Company.  Director’s right to
receive Shares under this Agreement shall be no greater than the right of any
unsecured general creditor of the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section 12.Further
Assurances.  Director will provide assistance reasonably
requested by the Company in connection with actions taken by Director while
serving as a director of the Company, including, but not limited to, assistance
in connection with any lawsuits or other claims against the Company arising from
events during the period in which Director was serving as a director of the
Company.

     

     

    Section 13.  Confidentiality.  Director
acknowledges that the business of the Company and its affiliates is highly
competitive and that the Company’s and its affiliates' strategies, methods,
books, records and documents, technical information concerning their products,
equipment, services and processes, procurement procedures and pricing
techniques, and the names of and other information (such as credit and financial
data) concerning former, present or prospective customers and business
affiliates, all comprise confidential business information and trade secrets
which are valuable, special and unique assets which the Company uses in its
business to obtain a competitive advantage over competitors.  Director
further acknowledges that protection of such confidential business information
and trade secrets against unauthorized disclosure and use is of critical
importance to the Company in maintaining its competitive
position.  Director acknowledges that by reason of Director’s duties
to and association with the Company, Director has had and will have access to,
and has and will become informed of, confidential business information which is
a competitive asset of the Company and its affiliates.  Director
hereby agrees that he or she will not, at any time, make any unauthorized
disclosure of any confidential business information or trade secrets of the
Company or its affiliates, or make any use thereof, except in the carrying out
of responsibilities as a member of the Board.  Director shall take all
necessary and appropriate steps to safeguard confidential business information
and protect it against disclosure, misappropriation, misuse, loss and
theft.  Confidential business information shall not include
information in the public domain (but only if the same becomes part of the
public domain through a means other than a disclosure prohibited
hereunder).  The above notwithstanding, a disclosure shall not be
unauthorized if (i) it is required by law or by a court of competent
jurisdiction or (ii) it is in connection with any judicial, arbitration, dispute
resolution or other legal proceeding in which Director’s legal rights and
obligations as a director or under this Agreement are at issue; provided however,
that Director shall, to the extent practicable and lawful in any such events,
give prior notice to the Company of Director’s intent to disclose any such
confidential business information in such context so as to allow the Company an
opportunity (which Director will not oppose) to obtain such protective orders or
similar relief with respect thereto as may be deemed appropriate.  Any
information not specifically related to the Company would not be considered
confidential to the Company.  In addition to any other remedy
available at law or in equity, in the event of any breach by Director of the
provisions of this Section 13 which is not waived in writing by the Company, all
Shares and cash in the Director Accounts shall be forfeited to the Company upon
the occurrence of the actions or inactions by Director constituting a breach by
Director of the provisions of this Section 13.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section 14. Expenses.  Costs
of administration of this Agreement will be paid by the Company.

     

     

    Section 15.  Notices.  All
notices, requests, demands, claims and other communi­cations under this
Agreement (including, but not limited to, the Election Form) shall be in
writing.  Any notice, request, demand, claim or other communication
under this Agree­ment shall be deemed duly given if (and then two business
days after) it is sent by regis­tered or certified mail, return receipt
requested, postage prepaid, and addressed to the in­tended recipient at the
address set forth in the Company records.  Either party to this
Agreement may send any notice, request, demand, claim or other communication
under this Agreement to the intended recipient at such address using any other
means (including personal delivery, expedited courier, messenger service,
telecopy, ordinary mail or electronic mail), but no such notice, request,
demand, claim or other communication shall be deemed to have been duly given
unless and until it actually is received by the intended
recipient.  Either party to this Agreement may change the address to
which notices, requests, demands, claims and other communications hereunder are
to be delivered by giving the other party notice in the manner set forth in this
Section 10.

     

     

    Section 16. Waiver.  No
waiver by any party at any time of any breach by any other party of, or
compliance with, any condition or provision of this Agreement to be performed by
any other party shall be deemed a waiver of any other provisions or conditions
at the same time or at any prior or subsequent time.

     

     

    Section 17.  Binding
Effect; No Third-Party Beneficiaries.  This Agreement shall be
binding upon and inure to the benefit of the Company and the Director and their
respective heirs, representatives, successors and permitted
assigns.  This Agreement shall not confer any rights or remedies upon
any person other than the Company and the Director and their respective heirs,
representatives, successors and permitted assigns.

     

     

    Section 18. Agreement
to Abide by Plan; Conflict between Plan and
Agree­ment.  The Plan is hereby incorporated by reference
into this Agreement and made a part hereof as though fully set forth in this
Agreement.  Director, by execution of this Agreement, (i) represents
that he or she is familiar with the terms and provisions of the Plan, and (ii)
agrees to abide by all of the terms and conditions of this Agreement and the
Plan.  Director ac­cepts as binding, conclusive and final all
decisions or interpretations of the Committee or Designated Administrator of the
Plan upon any question arising under the Plan and this Agreement (including,
without limitation, the date of any termination of the Director’s term of
service as a director of the Company).  In the event of any conflict
between the Plan and this Agreement and/or an Election Form, the Committee shall
have exclusive authority and discretion to reconcile such conflict, and in the
absence of any such determination, the Plan shall govern.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section 19.  Entire
Agreement.  Except as otherwise provided herein, in any Company
plan applicable to the Director, or in any other agreement between the Director
and the Company, this Agreement, the Election Form and the Plan, which the
Director has reviewed and accepted in connection with the grant of the
Compensation reflected by this Agreement, constitute the entire agreement
between the parties and supersede any prior understandings, agreements, or
representations by or between the parties, written or oral, to the extent they
related in any way to the subject matter of this Agreement.

     

     

    Section 20. Interpretation;
Amendment.  No amendment or modification of the terms of the
Agreement shall be binding on the parties hereto unless reduced to writing and
signed by the Director and the Company; provided, however, that the
Company may, in its sole discretion and without the Director’s consent, modify
or amend the terms of this Agreement or a deferral election, or take any other
action it deems necessary or advisable, to cause this Agreement to comply with
Section 409A (or an exception thereto).  Director recognizes and
acknowledges that Section 409A may impose upon the Director certain taxes or
interest charges for which the Director is and shall remain solely
responsible.

     

     

    Section 21.  Choice of
Law.  To the extent not superseded by federal law, the laws of
the State of Delaware (without regard to the conflicts laws of Delaware) shall
control in all matters relating to this Agreement and any action relating to
this Agreement must be brought in State and Federal Courts located in the
Commonwealth of Virginia.

     

     

    Section 22.  Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together shall constitute one and the
same instrument.

     

     

    Section 23. Severability.  In
the event any provision of this Agreement is held illegal or invalid, the
remaining provisions of this Agreement shall not be affected
thereby.

     

     

    Section 24. Acknowledgements.

     

    (a)           By
submitting an Election Form, the Director acknowledges receipt of a copy of the
Plan, and the prospectus relating to the Shares, and agrees to be bound by the
terms and conditions set forth in the Plan, the Election Form and this
Agreement, as in effect and/or amended from time to time.

     

    (b)           The
Plan and related documents, which may include but do not necessarily include the
Plan prospectus, this Agreement and financial reports of the Company, may be
delivered to the Director electronically.  Such means of delivery may
include but do not necessarily include the delivery of a link to a Company
intranet site or the internet site of a third party involved in administering
the Plan, the delivery of the documents via e-mail or CD-ROM or such other
delivery determined at the Committee’s or Designated Administrator’s
discretion.  Both Internet Email and access to the World Wide Web are
required in order to access documents electronically.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)           By
submitting an Election Form, the Director acknowledges that he or she has read
this Section 24 and consents to the electronic delivery of the Plan and related
documents, as described herein.  Director acknowledges that he or she may
receive from the Company a paper copy of any documents delivered electronically
at no cost if Director contacts the Vice President of Human Resources of the
Company by telephone at (276) 619-4410 or by mail to One Alpha Place, P.O. Box
2345, Abingdon, VA 24212.  Director further acknowledges that he or she
will be provided with a paper copy of any documents delivered electronically if
electronic delivery fails.

     

    IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first written
above.

     

    ALPHA NATURAL RESOURCES,
INC.

    

    

    ________________________                                                     
 By __________________________________

    Date

                                  
Its ___________________________________

    

    

                                  
DIRECTOR

    

    

    _________________________                                                      ______________________________________

    Date                                                                                                      
 [Name]

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit A

     

    ALPHA
NATURAL RESOURCES, INC.

    DIRECTOR
DEFERRED COMPENSATION AGREEMENT

     

    Election,
Deferral and Beneficiary Designation Form

    for
Non-Employee Directors

    under
the Alpha Natural Resources, Inc. 2004 Incentive Plan

     

    I, ___________________________, a
director of Alpha Natural Resources, Inc., a Delaware corporation (the
“Company”), pursuant to the Director Deferred Compensation Agreement, by and
between me (as the “Director”) and the Company (the “Agreement”), hereby make
the following elections with respect to my Compensation (as defined in the
Agreement) on the date indicated below, subject to the terms and conditions of
the Agreement.  Capitalized terms used herein but not otherwise
defined have the meanings given to such terms in the Agreement.

     

     

    1.           Irrevocable Elections
Regarding Deferral of Compensation

     

     

    a.           Election Regarding Deferral
of Annual Board Retainer

     

    
      	
              _____

            	
              TO
      DEFER receipt of 100% of the Annual Board Retainer that is otherwise
      payable to me, and to credit such amount to my Cash
      Account.

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 100% of the Annual Board Retainer that is otherwise
      payable to me, and to credit such amount to my Share Unit
      Account.

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 50% of the Annual Board Retainer that is otherwise
      payable to me, and to credit such amount to my Cash
      Account.

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 50% of the Annual Board Retainer that is otherwise
      payable to me, and to credit such amount to my Share Unit
      Account.

            

    

     

    
      	
              _____

            	
              NOT
      TO DEFER receipt of the Annual Board Retainer payable to
    me.

            

    

     

     

    b.           Election Regarding Deferral
of Annual Lead Director Retainer

     

    
      	
              _____

            	
              TO
      DEFER receipt of 100% of the Annual Lead Director Retainer that is
      otherwise payable to me, and to credit such amount to my Cash
      Account.

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 100% of the Annual Lead Director Retainer that is
      otherwise payable to me, and to credit such amount to my Share Unit
      Account.

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 50% of the Annual Lead Director Retainer that is
      otherwise payable to me, and to credit such amount to my Cash
      Account.

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 50% of the Annual Lead Director Retainer that is
      otherwise payable to me, and to credit such amount to my Share Unit
      Account.

            

    

     

    
      	
              _____

            	
              NOT
      TO DEFER receipt of the Annual Lead Director Retainer payable to
      me.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              c.

            	
              Election Regarding
      Deferral of Annual Committee Chair
  Retainer

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 100% of the Annual Committee Chair Retainer that is
      otherwise payable to me, and to credit such amount to my Cash
      Account.

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 100% of the Annual Committee Chair Retainer that is
      otherwise payable to me, and to credit such amount to my Share Unit
      Account.

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 50% of the Annual Committee Chair Retainer that is
      otherwise payable to me, and to credit such amount to my Cash
      Account.

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 50% of the Annual Committee Chair Retainer that is
      otherwise payable to me, and to credit such amount to my Share Unit
      Account.

            

    

     

    _____    NOT
TO DEFER receipt of the Annual Committee Chair Retainer payable to
me.

     

     

    d.           Election Regarding Deferral
of Board Meeting Fees

     

    
      	
              _____

            	
              TO
      DEFER receipt of 100% of the Board Meeting Fees that are otherwise payable
      to me, and to credit such amount to my Cash
      Account.

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 100% of the Board Meeting Fees that are otherwise payable
      to me, and to credit such amount to my Share Unit
      Account.

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 50% of the Board Meeting Fees that are otherwise payable
      to me, and to credit such amount to my Cash
      Account.

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 50% of the Board Meeting Fees that are otherwise payable
      to me, and to credit such amount to my Share Unit
      Account.

            

    

     

    _____    NOT
TO DEFER receipt of the Board Meeting Fees payable to me.

     

     

    
      	
               
      

            	
              e.

            	
              Election Regarding
      Deferral of Committee Meeting
Fees

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 100% of the Committee Meeting Fees that are otherwise
      payable to me, and to credit such amount to my Cash
      Account.

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 100% of the Committee Meeting Fees that are otherwise
      payable to me, and to credit such amount to my Share Unit
      Account.

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 50% of the Committee Meeting Fees that are otherwise
      payable to me, and to credit such amount to my Cash
      Account.

            

    

     

    
      	
              _____

            	
              TO
      DEFER receipt of 50% of the Committee Meeting Fees that are otherwise
      payable to me, and to credit such amount to my Share Unit
      Account.

            

    

     

    _____    NOT
TO DEFER receipt of the Committee Meeting Fees payable to me.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.           Terms Common to the
Elections

     

     

    With
respect to the foregoing elections, I understand that:

     

     

    (a)           except
as specified below, I understand that this deferral election shall be subject to
the terms and conditions of the Agreement, as amended, and will remain in effect
from year to year and be irrevocable unless otherwise changed by me in a timely
manner or otherwise terminated in accordance with the terms of the
Agreement;

     

     

    (b)           if
I have filed this Election Form within 30 calendar days of the date on which I
first become eligible to make elections with respect to my Compensation under
the Agreement, the election(s) I have made will be effective for the
Compensation that I earn and that is payable to me after the date that I file
this Election Form with the Company;

     

     

    (c)           neither
I nor my legal representative shall be, or have any of the rights and privileges
of, a stockholder of the Company with respect to any Shares payable upon
distribution of a deferred Share Unit unless and until certificates for such
Shares, or other evidence of ownership, have been issued and delivered to
me;

     

     

    (g)           this
Election Form is intended to comply with Section 409A and shall be administered,
interpreted and construed accordingly;

     

     

    (h)           this
Election Form shall become irrevocable as of the close of business on each
December 31st of the calendar year preceding the calendar year that contains the
start of the service period to which it applies (or immediately with respect to
initial eligibility elections), and shall be cancelled only upon the death or
disability of the Director or an Unforeseeable Emergency to the extent
consistent with Section 409A;

     

     

    (i)           the
Company has not and will not provide me with any advice or opinion regarding the
tax consequences of this election and the Agreement, and I am solely responsible
for obtaining my own tax advisor with respect to these matters;

     

     

    (j)           the
Company shall not be liable for, and nothing provided or contained in this
Election Form, the Agreement or the Plan will be construed to obligate or cause
the Company to be liable for, any tax, interest or penalties imposed on the
Director related to or arising with respect to any violation of Section 409A;
and

     

     

    (k)           in
the event of any discrepancy between the Agreement and this Election Form, the
Agreement shall control.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    If I
shall cease to be a director of the Company by reason of my death, or if I shall
die after I become entitled to a distribution under the Agreement but prior to
receipt of the entire distribution to which I am entitled, then all of the
distribution to which I am enti­tled under the Agreement and which has not
been distributed to me at the date of my death shall be distributed to
____________________________ (insert name of benefici­ary). If no
beneficiary is named, distri­butions shall be made as provided in the
Agreement.

     

    

    Date:

    

    ________________________                                                      ______________________________________

                                 
[Name]

    

    

                                 
Receipt acknowledged on behalf of the Company:

    

    

    Date:                                                                                                    
By ___________________________________

    

    ________________________                                                      Its
____________________________________anrexhibit1027.htm

    Exhibit
10.27

    AGREEMENT

     

    THIS
AGREEMENT (the “Agreement”) is made as of this 31st day of July, 2009, by and
between Alpha Natural Resources Services, LLC (the “Company”) and Michael J.
Quillen (“Executive”).

     

    WHEREAS,
the indirect parent company of the Company, Alpha Natural Resources, Inc.
("Alpha"), has entered into a Merger Agreement with Foundation Coal Holdings,
Inc., dated May 11, 2009 (the "Merger Agreement), pursuant to which Alpha is to
merge with and into Foundation (the "Merger"), with Foundation as the surviving
corporation (the "Surviving Corporation");

     

    WHEREAS,
it is anticipated that the Merger will be finalized and effectuated in the
future ("Closing") at a date and time not yet set ("Closing Date");

     

    WHEREAS,
the Merger Agreement contemplates that the Executive's position as Alpha's Chief
Executive Officer will terminate at the effective time of the
Merger;

     

    WHEREAS,
the Company employs Executive pursuant to the terms and conditions set forth in
that certain Employment Agreement, dated as of January 1, 2003, between
Executive and Alpha Natural Resources, LLC, that was assigned to the Company as
of December 31, 2003, amended and restated March 31, 2004, further amended and
restated as of January 28, 2005, further amended and restated as of January 1,
2006 and further amended and restated as of November 17, 2008 (as amended from
time to time, the “Employment Agreement”) which provides for certain payments
and benefits in the event that the Executive's employment is terminated under
certain circumstances;

     

    WHEREAS,
the Executive and the Company acknowledge and agree that the termination of
Executive's position as Chief Executive Officer would, except as provided in the
following paragraph, give rise to Executive's involuntary termination without
"Cause" (as defined in the Employment Agreement), with severance payments and
benefits to be provided to Executive in accordance with the terms of the
Executive's Employment Agreement, provided that the Executive executes and does
not revoke a release of claims;

     

    WHEREAS,
pursuant to Section 1.4(c) of the Merger Agreement, the Surviving Corporation is
to use commercially reasonable efforts to elect Executive as Chairman of the
Board of Directors of the Surviving Corporation to assist the Surviving
Corporation in connection with certain transitional matters; and

     

    WHEREAS,
the Company desires to terminate the Executive's position as Chief Executive
Officer of Alpha effective upon the consummation of the Closing (“Date of
Termination”) under the terms and conditions provided
herein.  

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    NOW,
THEREFORE, IT IS HEREBY AGREED by and between the Executive and the Company as
follows:

     

    1.           (a)           The
Executive, for and in consideration of the commitments of the Company as set
forth in this Agreement, and intending to be legally bound, does hereby REMISE,
RELEASE AND FOREVER DISCHARGE the Company, its present and future affiliates,
predecessors, subsidiaries and parents, and their present or former officers,
directors, shareholders, employees, attorneys and agents, and its and their
respective successors, assigns, heirs, executors, and administrators and the
current and former trustees or administrators of any pension or other benefit
plan applicable to the employees or former employees of the Company
(collectively, “Releasees”) from all causes of action, suits, debts, claims and
demands whatsoever in law or in equity, which the Executive ever had, now has,
or hereafter may have, whether known or unknown, or which the Executive's heirs,
executors, or administrators may have, by reason of any matter, cause or thing
whatsoever, from any time prior to the date of this Agreement, and particularly,
but without limitation of the foregoing general terms, any claims arising from
or relating in any way to the Executive's position with the Company as Alpha's
Chief Executive Officer, any right to severance payments or benefits under
Executive's Employment Agreement, the terms and conditions of that employment
relationship, and the termination of that employment relationship, including,
but not limited to, any claims arising under the Age Discrimination in
Employment Act, the Older Workers Benefit Protection Act, Title VII of the Civil
Rights Act of 1964, the Americans with Disabilities Act, the Employee Retirement
Income Security Act of 1974, The Family Medical Leave Act, and any other claims
under any federal, state or local common law, statutory, or regulatory
provision, now or hereafter recognized, and any claims for attorneys' fees and
costs; provided, however, that nothing contained herein shall be deemed to be a
release of the obligations of the Company under this Agreement.  This
Agreement is effective without regard to the legal nature of the claims raised
and without regard to whether any such claims are based upon tort, equity,
implied or express contract or discrimination of any sort.

     

    (b)           To
the fullest extent permitted by law, and subject to the provisions of
paragraph 9 and paragraph 11 below, the Executive represents and affirms
that the Executive has not filed or caused to be filed on the Executive's behalf
any charge, complaint or claim for relief against the Company or any Releasee
and, to the best of the Executive's knowledge and belief, no outstanding
charges, complaints or claims for relief have been filed or asserted against the
Company or any Releasee on the Executive's behalf; and the Executive has not
reported any improper, unethical or illegal conduct or activities to any
supervisor, manager, department head, human resources representative, agent or
other representative of the Company or any Releasee, to any member of the
Company's or any Releasee's legal or compliance departments, or to the ethics
hotline, and has no knowledge of any such improper, unethical or illegal conduct
or activities.  In the event that there is outstanding any such
charge, complaint or claim for relief, Executive agrees to seek its immediate
withdrawal and dismissal with prejudice.  In the event that for any
reason said charge, complaint or claim for relief cannot be withdrawn, Executive
shall not voluntarily testify, provide documents or otherwise participate in any
investigation or litigation arising therefrom or associated therewith and shall
execute such other papers or documents as the Company's counsel determines may
be necessary to have said charge, complaint or claim for relief dismissed with
prejudice.  Nothing herein shall prevent Executive from testifying in
any cause of action when required to do so by process of
law.  Executive shall promptly inform the Company if called upon to
testify.

     

    (c)           Executive
does not waive any right to file a charge with the Equal Employment Opportunity
Commission (“EEOC”) or participate in an investigation or proceeding conducted
by the EEOC, but explicitly waives any right to file a personal lawsuit or
receive monetary damages that the EEOC might recover if said charge results in
an EEOC lawsuit against the Company or Releasees.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d)           The
Company, Alpha and their successors and assigns ("Company Releasors"), for and
in consideration of the commitments of Executive as set forth in this Agreement,
and intending to be legally bound, do hereby REMISE, RELEASE AND FOREVER
DISCHARGE Executive, his heirs, executors, administrators and assigns from all
causes of action, suits, debts, claims and demands whatsoever in law or in
equity, which the Company Releasors ever had, now have, or hereafter may have,
whether known or unknown by reason of any matter, cause or thing whatsoever,
from any time prior to the date of this Agreement, and particularly, but without
limitation of the foregoing general terms, any claims arising from or relating
in any way to the Executive's position with the Company as Alpha's Chief
Executive Officer, the terms and conditions of that employment relationship, and
the termination of that employment relationship, and any other claims under any
federal, state or local common law, statutory, or regulatory provision, now or
hereafter recognized, and any claims for attorneys' fees and costs; provided,
however, that this release shall not include any claims or causes of action
arising out of , based upon or attributable to (i) Executive's commission of any
improper act from which he derived an improper personal benefit which act and
benefit are not actually known to the Company as of the date it executes this
Agreement and/or (ii) Executive's commission of any act of intentional
misconduct, including any fraudulent act.  This Agreement is effective
without regard to the legal nature of the claims raised and without regard to
whether any such claims are based upon tort, equity, implied or express contract
or discrimination of any sort.

     

    2.           In
consideration of the Company's agreements as set forth in paragraph 4 herein,
the Executive agrees to comply with the limitations described in Article 4 and
Article 5 of the Employment Agreement which are expressly incorporated
herein.

     

    3.           The
Executive further agrees that the Executive will not disparage or subvert the
Company or any Releasee, or make any statement reflecting negatively on the
Company or Releasees, including, but not limited to, on any matters relating to
the operation or management of the Company or any Releasee, the Executive's
position as Chief Executive Officer of Alpha and the termination of the
Executive's position as Chief Executive Officer of Alpha, irrespective of the
truthfulness or falsity of such statement.

     

    4.           The
Company agrees to pay or provide to or for the Executive the following payments
and benefits:

     

    (a)           Regardless
of whether the Executive signs and does not revoke this Agreement, the Executive
will receive the following.

    

    
      	
               
      

            	
              i.

            	
              All
      base salary earned, accrued or owing to the Executive through the Date of
      Termination, payable with your final paycheck as Chief Executive Officer
      of Alpha in accordance with the Company's established payroll
      practices.

            

    

     

    
      	
               
      

            	
              ii.

            	
              Reimbursement
      for all reasonable and customary expenses incurred by the Executive in
      performing services for the Company prior to the Date of Termination, in
      accordance with the Company's business expense reimbursement
      policies.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
               
      

            	
              iii.

            	
              All
      vested amounts under the Alpha Natural Resources, Inc. and Subsidiaries
      Deferred Compensation Plan, as amended (the "Deferred Compensation Plan"),
      shall be paid in accordance with, and at such time as provided under, such
      plan's terms; provided, however, if the Executive continues in employment
      with the Surviving Corporation through December 31, 2009 as Chairman of
      the Board of Directors of the Surviving Corporation, the Executive will
      continue to participate in the Deferred Compensation Plan and accrue
      additional benefits in accordance with such plan's
  terms.

            

    

     

    
      	
               
      

            	
              iv.

            	
              A
      payment equal to the amount of accrued, but unused, vacation time as of
      the Date of Termination, payable with your final paycheck as Chief
      Executive Officer of Alpha in accordance with the Company's established
      payroll practices and the Company's vacation
  policy.

            

    

     

    (b)       Additionally,
in consideration for the Executive's promises, as set forth herein, the Company
agrees to pay or provide to or for the Executive the following payments and
benefits provided Executive executes this Agreement without
revocation:

     

    
      	
               
      

            	
              i.

            	
              A
      lump sum cash payment in an amount of $2,815,000, less required
      withholdings.

            

    

     

    
      	
               
      

            	
              ii.

            	
              The
      Executive shall continue to participate in Alpha's Annual Incentive Bonus
      Plan for calendar year 2009 and shall be entitled to receive a pro rata
      share of such bonus, based on the 2009 target bonus amount established for
      the Executive, for the portion of the 2009 calendar year that Executive
      remains employed with the Company, which amount will be paid, in all cases, within the
      “applicable 21⁄2 month period” specified in Treas. Reg.
      Sec.1.409A-1(b)(4).

            

    

     

    
      	
               
      

            	
              iii.

            	
              The
      Executive's rights under Alpha's 2005 Long-Term Incentive Plan will be as
      follows and, upon the closing of the Merger, the shares of Alpha common
      stock subject to such awards will be shares of common stock of the
      Surviving Corporation.

            

    

     

    (A)
Restricted Stock: The unvested portion of the following restricted stock awards
will accelerate and vest as of the Date of Termination, subject to applicable
withholding requirements in accordance with the terms of Alpha's 2005 Long-Term
Incentive Plan:

     

    
      	
               
      

            	
              1.

            	
              Restricted
      Stock Award for 75,000 shares granted on January 16,
  2007;

            

    

     

    
      	
               
      

            	
              2.

            	
              Restricted
      Stock Award for 3,051 shares granted on February 26,
  2007;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
               
      

            	
              3.

            	
              Restricted
      Stock Award for 34,290 shares granted on January 15, 2008;
    and

            

    

     

    
      	
               
      

            	
              4.

            	
              Restricted
      Stock Award for 43,320 shares granted on January 7,
  2009.

            

    

     

    (B)
Retention Plan Restricted Stock:  Executive will accelerate and vest
in 15,042 shares of restricted stock granted to him on February 25, 2009 (which
represents a pro rata portion of the total award (108,304 shares) based on the
ratio of the number of complete months Executive was employed as Alpha's Chief
Executive Officer during the vesting period to the total number of months in the
vesting period), subject to applicable withholding requirements in accordance
with the terms of the Alpha's 2005 Long-Term Incentive Plan, with the remaining
unvested portion of such award to remain subject to the original terms and
conditions of the restricted stock granted on February 25, 2009; provided,
however, if the Executive continues in employment with the Surviving Corporation
through December 31, 2009 as Chairman of the Board of Directors of the Surviving
Corporation, the Executive will accelerate and vest in 15,042 additional shares
of restricted stock granted to him on February 25, 2009 (which represents a pro
rata portion of the total award (108,304 shares) based on the ratio of the
number of complete months Executive was employed as Chairman of the Board of
Directors of the Surviving Corporation during the vesting period to the total
number of months in the vesting period), subject to applicable withholding
requirements in accordance with the terms of Alpha's 2005 Long-Term Incentive
Plan and the Alpha Board of Directors' approval of this Agreement shall
constitute its approval that the forfeiture of the unvested balance of the award
to the Surviving Corporation is intended to be exempt under Section 16(b) of the
Securities Exchange Act of 1934, as amended, pursuant to Rule 16b-3(e) of such
act.

     

    (C)
Performance Share Awards: The following performance share awards shall be deemed
vested and will be paid in shares, if at all, to the extent an amount becomes
earned and payable under, and subject to, the terms of such award and Alpha's
2005 Long-Term Incentive Plan after the end of the performance period (as set
forth below):

     

    
      	
               
      

            	
              1.

            	
              Performance
      Share Award for 75,000 shares (at a target award opportunity) granted on
      January 16, 2007 with a performance period of January 1, 2007 through
      December 31, 2009;

            

    

     

    
      	
               
      

            	
              2.

            	
              Performance
      Share Award for 3,051 shares (at a target award opportunity) granted on
      February 26, 2007 with a performance period of  January 1, 2007
      through December 31, 2009;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

       

      
        
        

      

    

    
      	
               
      

            	
              3.

            	
              Performance
      Share Award for 34,290 shares (at a target award opportunity) granted on
      January 15, 2008 with a performance period of  January 1, 2008
      through December 31, 2010; and

            

    

     

    
      	
               
      

            	
              4.

            	
              Performance
      Share Award for 64,980 shares (at a target award opportunity) granted
      January 7, 2009 with a performance period of January 1, 2009 through
      December 31, 2011.

            

    

     

    (c)       Except
as otherwise specifically provided in this Agreement, all cash payments and/or
reimbursements to be made pursuant to paragraphs 4(a) and 4(b) of this Agreement
shall be made by the Company to the Executive no later than 60 days after the
Date of Termination.

     

    (d)       Executive
hereby acknowledges that Alpha, the Company and their respective subsidiaries do
not maintain or sponsor pension plans such that Executive is not entitled to any
payments under such plans.

     

    (e)                 Following
the Executive's termination of employment with the Surviving Corporation and to the extent
permitted by law and the Company's benefit plans,  the Company shall
maintain, or cause the Surviving Corporation to maintain, the Executive's paid
coverage for health and dental insurance (through the payment of the Executive's
COBRA premiums provided the Executive has timely elected COBRA continuation
coverage) and life insurance benefits (through the reimbursement of Employee's
premiums upon conversion to individual policy and subject to and in accordance
with the limitations of paragraph 4(g)) until the first to occur of: (i) the
Executive obtaining the age of 65, (ii) the date the Executive is provided by
another employer benefits substantially comparable benefits, or (iii) with
respect to the health and dental benefits, the expiration of the COBRA
Continuation Period (as defined below).  During the applicable period
of coverage, the Executive shall be entitled to benefits on substantially the
same basis as would have otherwise been provided had the Executive not been
terminated and the Company will have no obligation to pay any benefits to, or
premiums on behalf of, the Executive after such period ends.  To the
extent that such benefits are available under the Company's plans and the
Executive had such coverage immediately prior to termination of employment, such
continuation of benefits for the Executive shall also cover the Executive's
dependents for so long as the Executive is receiving benefits under this
paragraph.  The COBRA continuation period for medical and dental
insurance under this paragraph shall be deemed to run concurrent with the
continuation period federally mandated by COBRA (generally 18 months), or any
other legally mandated and applicable federal, state, or local coverage period
for benefits provided to terminated employees under the health care
plan.  For purposes of this Agreement, (1) "COBRA" means the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and (2)
"COBRA Continuation Period" shall mean the continuation period for medical and
dental insurance to be provided under the terms of this Agreement which shall
commence on the first day of the calendar month following the month in which the
date of termination falls and generally shall continue for an 18 month
period.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (f)                 Following
the end of the COBRA continuation period, in the event the Executive elects to
enroll in the Company's Retiree Medical Benefit Plan in accordance with its
terms, health insurance benefits shall be provided solely in accordance with the
terms of such plan without further obligation by the Company.  If,
however, the Executive is not able to enroll in the Retiree Medical Benefit Plan
because the plan has been terminated, or has been modified to preclude the
Executive's participation, then Company will reimburse the Executive for the
actual and reasonable after-tax cost to the Executive of any individual health
insurance policy obtained by the Executive, subject to and in accordance with
the limitations of paragraph 4(g).

     

    (g)       Subject
to the provisions of paragraph 4(e), the Executive shall be entitled to
reimbursement of life insurance premiums, and to the extent reimbursements are
required for health and dental benefits as set forth in 4(f) above, in
accordance with and subject to the following limitations and provisions: (i)
reimbursement will be available only to the extent such expense is actually
incurred for any particular calendar year and reasonably substantiated; (ii)
reimbursement shall be made no later than the end of the calendar year following
the year in which such expense is incurred by the Executive; and (iii) no
reimbursement will be provided for any expense incurred following the 24th month
anniversary of the date of termination or for any expense which relates to
insurance coverage after such date.  Notwithstanding the foregoing, no
reimbursement provided for any expense incurred in one taxable year will affect
the amount available in another taxable year, and the right to this
reimbursement is not subject to liquidation or exchange for another
benefit.  Reimbursements of life insurance premiums shall be delayed
for a period of six-months after the date of the Executive's termination of
employment to the extent required by paragraph 14.

     

    (h)       Except
as set forth in this Agreement, it is expressly agreed and understood that
Releasees do not have, and will not have, any obligations to provide the
Executive at any time in the future with any payments, benefits or
considerations other than those recited in this Agreement, those required by
law, or pursuant to the terms of any compensatory arrangements agreed to between
the Executive and the Board of Directors of the Surviving
Corporation.

     

    5.           In
consideration for the Executive's promises, as set forth herein, the Company
agrees to pay or provide to or for the Executive the payments and benefits
described herein.  Except as set forth in this Agreement, it is
expressly agreed and understood that Releasees do not have, and will not have,
any obligations to provide the Executive at any time in the future with any
payments, benefits or considerations other than those recited in this Agreement,
those required by law, pursuant to the terms of any benefit plans which provide
benefits or payments to former or present employees according to their terms or
pursuant to the terms of any compensatory arrangements agreed to between the
Executive and the Board of Directors of the Surviving Corporation.

     

    6.           The
Executive understands and agrees that the payments, benefits and agreements
provided in this Agreement are being provided to him in consideration for the
Executive's acceptance and execution of, and in reliance upon the Executive's
representations in, this Agreement.  The Executive acknowledges that
if the Executive had not executed this Agreement containing a release of all
claims against the Releasees, the Executive would not have been entitled to all
of the payments and benefits set forth herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7.           The
Executive acknowledges and agrees that, except as expressly stated herein and
for Article 6 and Sections 7.3 through 7.8 of the Employment Agreement, this
Agreement supersedes and replaces the Employment Agreement and any other
agreement Executive has with the Company or any Releasee.  To the
extent Executive has entered into any other enforceable written agreement with
the Company or any Releasee that contains provisions that are outside the scope
of this Agreement and are not in direct conflict with the provisions in this
Agreement, the terms in this Agreement shall not supersede, but shall be in
addition to, any other such agreement.   Except as set forth
expressly herein, no promises or representations have been made to Executive in
connection with the termination of the Executive's Employment Agreement with the
Company, or the terms of this Agreement.

     

    8.           Subject
to the provisions of paragraph 9 of this Agreement, the Executive agrees not to
disclose the terms of this Agreement to anyone, except the Executive's spouse,
attorney and, as necessary, tax/financial advisor.  It is expressly
understood that any violation of the confidentiality obligation imposed
hereunder constitutes a material breach of this Agreement.

     

    9.           Nothing
in this Agreement shall prohibit or restrict the Executive
from:  (i) making any disclosure of information required by law;
(ii) providing information to, or testifying or otherwise assisting in any
investigation or proceeding brought by, any federal regulatory or law
enforcement agency or legislative body, any self-regulatory organization, or the
Company's designated legal, compliance or human resources officers; or
(iii) filing, testifying, participating in or otherwise assisting in a
proceeding relating to an alleged violation of any federal, state or municipal
law relating to fraud, or any rule or regulation of the Securities and Exchange
Commission or any self-regulatory organization.

     

    10.           The
parties agree and acknowledge that the agreement by the Company described
herein, and the settlement and termination of any asserted or unasserted claims
against the Releasees, are not and shall not be construed to be an admission of
any violation of any federal, state or local statute or regulation, or of any
duty owed by any of the Releasees to the Executive.

     

    11.           The
Executive agrees and recognizes that should the Executive breach any of the
obligations or covenants set forth in this Agreement or otherwise revoke this
Agreement, the Company will have no further obligation to provide the Executive
with the consideration set forth herein, and will have the right to seek
repayment of all consideration paid up to the time of any such breach or
revocation.  Further, the Executive acknowledges in the event of a
breach of this Agreement, Releasees may seek any and all appropriate relief for
any such breach, including equitable relief and/or money damages, attorneys'
fees and costs. Notwithstanding the foregoing, in the event the Company fails to
perform any material obligation under this Agreement, including, without
limitation, the failure of the Company to make timely payments of monies due to
Executive hereunder, this Agreement shall be null and void and Executive shall
have the right to pursue any and all appropriate relief for any such failure,
including monetary damages, attorneys' fees and costs; provided, that (i)
Executive has notified the Company in writing within 30 days of the date of the
failure of the Company to perform such material obligation and (ii) such failure
remains uncorrected and/or uncontested by the Company for 15 days following the
date of such notice.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    12.           The
Executive further agrees that the Company shall be entitled to preliminary and
permanent injunctive relief, without the necessity of proving actual damages, as
well as to an equitable accounting of all earnings, profits and other benefits
arising from any violations of this Agreement, which rights shall be cumulative
and in addition to any other rights or remedies to which the Company may be
entitled.

     

    13.           To
the maximum extent permitted by the Company's operating agreement and law, the
Company shall indemnify Executive in his current and former capacities as an
officer, director or manager of Alpha and its subsidiaries and hold him harmless
from any cost, attorneys' fees, expense or liability arising out of Executive's
performing of services for Alpha and its subsidiaries. The Company further
agrees that the Executive shall be indemnified and held harmless by the Company
to the fullest extent permitted or authorized by applicable law against any and
all taxes, interest or penalties imposed on the Executive with respect to any
violation of Section 409A occurring in connection with any payment made by the
Company to the Executive, including payments made pursuant to the Agreement or
any employee benefit plan or other compensatory arrangement of the Company in
which the Executive is a participant, and such indemnification shall continue as
to the Executive even if he has ceased to be a director, employee or agent of
the Company and shall inure to the benefit of the Executive’s heirs, executors
and administrators.  If a payment is required to be made by the
Company to the Executive with respect to a violation of Section 409A, the
Company shall make such payment no later than the end of the Executive's taxable
year following the Executive's taxable year in which the Executive remits the
related taxes.

     

    14.           This
Agreement and the obligations of the parties hereunder shall be construed,
interpreted and enforced in accordance with the laws of the Commonwealth of
Virginia.

     

    15.           The
provisions of this Agreement will be administered, interpreted and construed in
a manner intended to comply with Section 409A of the Internal Revenue Code
("Section 409A"), the regulations issued thereunder or any exception thereto (or
disregarded to the extent such provision cannot be so administered, interpreted,
or construed).

     

    (a)       For
purposes of Section 409A, each payment shall be treated as a separate
payment.  Each payment under this Agreement is intended to be excepted
from Section 409A to the maximum extent provided under Section 409A as follows:
(i) each payment that is scheduled to be made within the applicable 21⁄2 month
period specified in Treas. Reg. Sec. 1.409A-1(b)(4) is intended to be excepted
under the short-term deferral exception as specified in Treas. Reg. Sec.
1.409A-1(b)(4); (ii) post-termination medical benefits are intended to be
excepted under the medical benefits exception as specified in Treas. Reg. Sec.
1.409A-1(b)(9)(v)(B), and (iii) each payment that is not otherwise excepted
under the short-term deferral exception or medical benefits exception is
intended to be excepted under the involuntary pay exception as specified in
Treas. Reg. Sec. 1.409A-1(b)(9)(iii).  The Executive shall have no
right to designate the date of any payment under this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)       With
respect to payments subject to Section 409A of the Internal Revenue Code (and
not excepted therefrom), if any, it is intended that each payment is paid on a
permissible distribution event and at a specified time consistent with Section
409A of the Internal Revenue Code.  Notwithstanding any provision of
this Agreement to the contrary, to the extent that a payment hereunder is
subject to Section 409A of the Internal Revenue Code (and not excepted
therefrom) and payable on account or a termination of employment, such payment
shall be delayed for a period of six months after the date of termination of
employment (or, if earlier, the death of the Executive).  Any payment
that would otherwise have been due or owing during such six-month period will be
paid immediately following the end of the six-month period in the month
following the month containing the six (6) month anniversary of the date of
termination of employment.

     

    (c)       For
purposes of the Agreement, the Executive shall be considered to have experienced
a termination of employment only if the Executive has separated from service
with the Surviving Corporation and all of its controlled group members within
the meaning of Section 409A of the Internal Revenue Code.  For
purposes hereof, the determination of controlled group members shall be made
pursuant to the provisions of Section 414(b) and 414(c) of the Internal Revenue
Code; provided that the language "at least 50 percent" shall be used instead of
"at least 80 percent" in each place it appears in Section 1563(a)(1),(2) and (3)
of the Internal Revenue Code and Treas. Reg. Sec. 1.414(c)-2.  Whether
the Executive has separated from service will be determined based on all of the
facts and circumstances and in accordance with the guidance issued under Section
409A of the Internal Revenue Code.

     

    (d)       Notwithstanding
the foregoing or any provision of this Agreement to the contrary, the Company
or, as applicable, the Surviving Corporation, may at any time (after
consultation with the Executive) modify or amend the provisions of this
Agreement or take
any other action, to the extent necessary or advisable to conform the provisions
of this Agreement or the benefits provided thereunder with Section 409A of the
Internal Revenue Code, the regulations issued thereunder or an exception
thereto.

     

    16.           The
parties agree that this Agreement shall be deemed to have been made and entered
into in Abingdon, Virginia.  Jurisdiction and venue in any proceeding
by the Company or Executive to enforce their rights hereunder is specifically
limited to any court geographically located in Virginia.

     

    17.           The
Executive certifies and acknowledges as follows:

     

    (a)           That
the Executive has read the terms of this Agreement, and that the Executive
understands its terms and effects, including the fact that the Executive has
agreed to RELEASE AND FOREVER DISCHARGE the Releasees from any legal action
arising out of the Executive's employment relationship with the Company as Chief
Executive Officer and the termination from that position; and

     

    (b)           That
the Executive has signed this Agreement voluntarily and knowingly in exchange
for the consideration described herein, which the Executive acknowledges is
adequate and satisfactory to him and which the Executive acknowledges is in
addition to any other benefits to which the Executive is otherwise entitled;
and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)           That
the Executive has been and is hereby advised in writing to consult with an
attorney prior to signing this Agreement; and

     

    (d)           That
the Executive does not waive rights or claims that may arise after the date this
Agreement is executed; and

     

    (e)           That
the Company has provided Executive with a period of twenty-one (21) days within
which to consider this Agreement, and that the Executive has signed on the date
indicated below after concluding that this Agreement is satisfactory to
Executive; and

     

    (f)           The
Executive acknowledges that this Agreement may be revoked by him within seven
(7) days after execution, and it shall not become effective until the expiration
of such seven (7) day revocation period.  In the event of a timely
revocation by the Executive, this Agreement will be deemed null and void and the
Company will have no obligations hereunder.

     

    (g)           The
parties agree that this Agreement was provided to Executive in excess of
twenty-one (21) days in advance of the Closing Date to afford Executive the full
21 day consideration period to review this Agreement prior to the
Closing.  This Agreement shall be null and void in its entirety if the
Merger is not effectuated at a Closing.  A successful Closing is a
condition precedent to this Agreement.

     

    (h)           It
is a condition precedent that this Agreement be executed in conjunction with the
Closing and on the Closing Date to be effective.

     

    [SIGNATURE
PAGE FOLLOWS]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Intending
to be legally bound hereby, the Executive and the Company executed the foregoing
Agreement this 31st day of July, 2009.

     

     

      /s/  Michael
J.
Quillen                                                                Witness:  /s/  Susan
A.
Reynolds                                                                

    MICHAEL
J. QUILLEN

     

    

     

    ALPHA
NATURAL RESOURCES SERVICES, LLC

     

     

    By:  /s/  Vaughn
R.
Groves                                                                Witness:  /s/  Susan
A.
Reynolds                                                                

    Name: Vaughn R.
Groves                                                                

     

    Title:  Executive Vice
President

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