Document:

Exhibit 10.10

 

Amendment Number 1 to

NONQUALIFIED STOCK OPTION AGREEMENT

 

THIS AMENDMENT, is made effective as of November 1,
2005, between Foundation Coal Holdings, Inc. (the “Company”) and                      
(the “Participant”).

 

R
E  C  I  T  A  L  S:

 

WHEREAS, the Company executed a Nonqualified
Stock Option Agreement with the Participant dated August 10, 2004 (the “Option
Agreement”); and

 

WHEREAS, the Compensation Committee of the
Board of Directors of the Company (“Committee”) has considered the Performance
Targets contained in the Option Agreement; and

 

WHEREAS, the Committee established an ad hoc
subcommittee of the Board of Directors to review the Actual Cost Per Ton and
Target Cost Per Ton Performance Target and to make a recommendation to the
Committee; and

 

WHEREAS, after consultation with the ad hoc
subcommittee, management presented to the Committee an alternative to the cost
per ton related Performance Target and proposed an “EBITDA/Revenue” Margin;

 

WHEREAS, the Committee has reviewed the
information presented and has determined that it would be in the best interests
of the Company and its Stockholders to amend the Employment Agreement to
replace the “cost per ton” Performance Target with an “EBITDA/Revenue Margin”
Performance Target; and

 

WHEREAS, the Chief Executive Officer or any
other officer of this Company, and any other individual whom any of the
officers referenced above shall designate, be, and each of them hereby is,
authorized to take any and all such actions as are necessary or appropriate to
give effect to the desires of the Committee.

 

NOW, THEREFORE, in consideration of the
mutual covenants hereinafter set forth, the parties agree as follows:

 

Section 1(b) shall be replaced with
the following paragraph:

 

(b)                                 Actual EBITDA/Revenue Margin:  In respect of a fiscal year, the Actual EBITDA
divided by the Revenue as reported in the December 31st audited
statement of Consolidation Operations and Comprehensive Income (Loss) multiplied
by 100 to result in a percentage.

 

1

 

Sections 1 (n), (o) and (r) shall be replaced
with the following paragraphs:

 

(n)                                 Performance
Actual:  Each of the Actual Free Cash
Flow, the Actual EBITDA/Revenue Margin, Actual EBITDA and Actual Production.

 

(o)                                 Performance
Target:  Each of the Target Free Cash
Flow, the Target EBITDA/Revenue Margin, Target EBITDA and Target Production.

 

(r)                                    Target EBITDA/Revenue Margin:  20% with respect of 2004 through 2008; provided
that the Board may make such equitable adjustments to Margin as it reasonably
deems to be appropriate in order to achieve the intention of this Agreement
after giving effect to significant events including , without limitation,
acquisitions, dispositions, mergers, or similar transactions.

 

The following phrase:

“(or in the
case of Actual Cost Per Ton, equals or is less than)” shall be deleted from Section 3(b)(ii) and
(iii) and Section 4(a)(iv).

 

Exhibit A shall be deleted in its
entirety.

 

Except as otherwise noted in this Amendment Number 1, all other terms
and conditions of the Option Agreement remain as originally written.  In the event of any inconsistency between the
terms of this Amendment Number 1 and the terms of the Option Agreement, the
terms of this Amendment Number 1 shall be controlling.

 

IN WITNESS WHEREOF, this Amendment has been
executed this 1st day of November 2005 and delivered by the parties
hereto.

 

 

	
   

  	
  Foundation Coal Holdings, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Participant)

  

 

2EXHIBIT 10.11

 

SUPPLEMENT NO. 1 dated as of September 2, 2005
(this “Supplement”), to the Guarantee and Collateral Agreement dated as
of July 30, 2004 (the “Guarantee and Collateral Agreement”), among
FC 2 CORP., a Delaware corporation (“Holdings”), FOUNDATION COAL
CORPORATION, a Delaware Corporation (“Acquisition Corp.”), S2
ACQUISITION CORP., a Delaware Corporation (which, on the Closing Date, shall be
merged with and into, Foundation PA Coal Company, the “Borrower”), each
Domestic Subsidiary of Borrower identified herein (each, a “Subsidiary Party”)
and CITICORP NORTH AMERICA, INC. (“CNAI”), as collateral agent (in such
capacity, the “Collateral Agent”) for the Secured Parties.

 

A. 
Reference is made to the Credit Agreement dated as of July 30, 2004
(as amended, supplemented, waived or otherwise modified from time to time, the “Credit
Agreement”), among Holdings, Acquisition Corp., the Borrower, the lenders
party thereto from time to time (the “Lenders”), CNAI as Administrative
Agent and as Collateral Agent for the Lenders, UBS AG, STAMFORD BRANCH, BEAR
STEARNS CORPORATE LENDING INC. and NATEXIS BANQUES POPULAIRES, each a Co-Documentation
Agent, CITIGROUP GLOBAL MARKETS, INC. (“CGMI”) and CREDIT SUISSE FIRST
BOSTON (“CSFB”) as Co-Syndication Agents and CGMI and CSFB, as Joint
Lead Arrangers and Joint Book Managers.

 

B. 
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement and the
Guarantee and Collateral Agreement referred to therein.

 

C.  The
Guarantors have entered into the Guarantee and Collateral Agreement in order to
induce the Lenders to make Loans and each Issuing Bank to issue Letters of
Credit.  Section 7.15 of the
Guarantee and Collateral Agreement provides that additional Subsidiaries may
become Subsidiary Parties under the Guarantee and Collateral Agreement by
execution and delivery of an instrument in the form of this Supplement.  The undersigned Subsidiary (the “New
Subsidiary”) is executing this Supplement in accordance with the
requirements of the Credit Agreement to become a Subsidiary Party under the
Guarantee and Collateral Agreement in order to induce the Lenders to make
additional Loans and each Issuing Bank to issue additional Letters of Credit
and as consideration for Loans previously made and Letters of Credit previously
issued.

 

Accordingly, the Collateral Agent and the New
Subsidiary agree as follows:

 

SECTION 1.                                In
accordance with Section 7.15 of the Guarantee and Collateral Agreement,
the New Subsidiary by its signature below becomes a Subsidiary Party and a
Guarantor under the Guarantee and Collateral Agreement with the same force and
effect as if originally named therein as a Subsidiary Party and a Guarantor,
and the New Subsidiary hereby (a) agrees to all the terms and provisions
of the Guarantee and

 

 

Collateral Agreement applicable to it as a Subsidiary Party and
Guarantor thereunder and (b) represents and warrants that the
representations and warranties made by it as a Guarantor thereunder are true and
correct, in all material respects, on and as of the date hereof.  In furtherance of the foregoing, the New
Subsidiary, as security for the payment and performance in full of the
Obligations (as defined in the Guarantee and Collateral Agreement), does hereby
create and grant to the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, their successors and assigns, a
security interest in and Lien on all the New Subsidiary’s right, title and
interest in and to the Collateral (as defined in the Guarantee and Collateral
Agreement) of the New Subsidiary.  Each
reference to a “Subsidiary Party” or a “Guarantor” in the Guarantee and
Collateral Agreement shall be deemed to include the New Subsidiary.  The Guarantee and Collateral Agreement is
hereby incorporated herein by reference.

 

SECTION 2.                                The
New Subsidiary represents and warrants to the Collateral Agent and the other
Secured Parties that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to (i) the
effects of bankruptcy, insolvency, moratorium, reorganization, fraudulent
conveyance or other similar laws affecting creditors’ rights generally, (ii) general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law) and (iii) implied covenants of good
faith and fair dealing.

 

SECTION 3.                                This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together shall constitute
but one contract.  This Supplement shall
become effective when (a) the Collateral Agent shall have received a
counterpart of this Supplement that bears the signature of the New Subsidiary
and (b) the Collateral Agent has executed a counterpart hereof.

 

SECTION 4.                                The
New Subsidiary hereby represents and warrants that (a) set forth on Schedule I
attached hereto is a true and correct schedule of the location of any and
all Article 9 Collateral of the New Subsidiary, (b) set forth on Schedule II
attached hereto is a true and correct schedule of all the Pledged
Securities of the New Subsidiary and (c) set forth under its signature
hereto, is the true and correct legal name of the New Subsidiary, its
jurisdiction of formation and the location of its chief executive office.

 

SECTION 5.                                Except
as expressly supplemented hereby, the Guarantee and Collateral Agreement shall
remain in full force and effect.

 

SECTION 6.                            THIS
SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SUPPLEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.

 

SECTION 7.                                In
the event any one or more of the provisions contained in this Supplement should
be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and in
the

 

 

Guarantee and Collateral Agreement shall not in any way be affected or
impaired thereby.  The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

SECTION 8.                                All
communications and notices hereunder shall be in writing and given as provided
in Section 7.01 of the Guarantee and Collateral Agreement.

 

SECTION 9.                                The
New Subsidiary agrees to reimburse the Collateral Agent for its reasonable out-of-pocket
expenses in connection with this Supplement, including the reasonable fees,
disbursements and other charges of counsel for the Collateral Agent.

 

IN WITNESS WHEREOF, the New Subsidiary and
the Collateral Agent have duly executed this Supplement to the Guarantee and
Collateral Agreement as of the day and year first above written.

 

	
   

  	
  FOUNDATION MINING, LP

  
	
   

  	
  By:

  	
  Pennsylvania Services Corporation

  
	
   

  	
   

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank J. Wood

  	
   

  
	
   

  	
  Name:

  	
  Frank J. Wood

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Legal Name: FOUNDATION MINING, LP

  
	
   

  	
   

  	
   

  
	
   

  	
  Jurisdiction of Formation: Delaware

  
	
   

  	
   

  
	
   

  	
  Location of Chief

  
	
   

  	
   

  	
  Executive Office:

  
	
   

  	
   

  	
  158 Portal Road

  
	
   

  	
   

  	
  Waynesburg, PA 15370

  
					

 

 

	
  CITICORP NORTH AMERICA, INC., as

  	
   

  	
   

  
	
  Collateral
  Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel J. Miller

  	
   

  
	
   

  	
  Name:

  	
  Daniel J. Miller

  
	
   

  	
  Title:

  	
  Vice President

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