-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HLkTvPaGg4jfkt/89weladbF63s3IRpZOtwtw/9KJXn3XBeNvkWh2yG6dMSXfpsS 5I/hZTOw6asayrdT0YPssg== 0000916641-01-000088.txt : 20010130 0000916641-01-000088.hdr.sgml : 20010130 ACCESSION NUMBER: 0000916641-01-000088 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 24 CONFORMED PERIOD OF REPORT: 20001031 FILED AS OF DATE: 20010129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MASSEY ENERGY CO CENTRAL INDEX KEY: 0000037748 STANDARD INDUSTRIAL CLASSIFICATION: HEAVY CONSTRUCTION OTHER THAN BUILDING CONST - CONTRACTORS [1600] IRS NUMBER: 950740960 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 001-07775 FILM NUMBER: 1517958 BUSINESS ADDRESS: STREET 1: 4 NORTH 4TH STREET CITY: RICHMOND STATE: VA ZIP: 23219 BUSINESS PHONE: 8047881800 MAIL ADDRESS: STREET 1: 4 NORTH 4TH STREET CITY: RICHMOND STATE: VA ZIP: 23219 FORMER COMPANY: FORMER CONFORMED NAME: FLUOR CORP/DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: FLUOR CORP LTD DATE OF NAME CHANGE: 19710624 10-K 1 0001.txt FORM 10-K DATED 10/31/00 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended October 31, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to __________ Commission File No. 1-7775 MASSEY ENERGY COMPANY (Exact name of registrant as specified in its charter) Delaware 95-0740960 (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification Number) 4 North 4th Street, Richmond, Virginia 23219 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (804) 788-1800 Securities registered pursuant to Section 12(b) of the Act: Title of each class Common stock, $0.625 par value Name of each exchange on which registered New York Stock Exchange Pacific Exchange, Inc. Chicago Stock Exchange, Inc. Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the registrant's voting stock held by non-affiliates was $940,876,475 on December 31, 2000 based upon the average between the highest and lowest sales prices of the registrant's Common Stock as reported in the consolidated transactions reporting system. Common Stock, $0.625 par value, outstanding as of December 31, 2000 - 73,496,939 shares. DOCUMENTS INCORPORATED BY REFERENCE Part III incorporates certain information by reference from the registrant's definitive proxy statement for the 2001 annual meeting of shareholders, which proxy statement will be filed no later than 120 days after the close of the registrant's fiscal year ended October 31, 2000. 1 From time to time, Massey Energy Company (("Massey" or the "Company")(formerly named Fluor Corporation ("Fluor")) makes certain comments and disclosures in reports and statements, including this report, or statements made by its officers or directors which may be forward-looking in nature. Examples include statements related to Company growth, the adequacy of funds to service debt and the Company's opinions about trends and factors which may impact future operating results. These forward-looking statements could also involve, among other things, statements regarding the Company's intent, belief or expectation with respect to (i) the Company's results of operations and financial condition, (ii) the consummation of acquisition, disposition or financing transactions and the effect thereof on the Company's business, and (iii) the Company's plans and objectives for future operations and expansion or consolidation. Any forward-looking statements are subject to the risks and uncertainties that could cause actual results of operations, financial condition, cost reductions, acquisitions, dispositions, financing transactions, operations, expansion, consolidation and other events to differ materially from those expressed or implied in such forward-looking statements. Any forward-looking statements are also subject to a number of assumptions regarding, among other things, future economic, competitive and market conditions generally. These assumptions would be based on facts and conditions as they exist at the time such statements are made as well as predictions as to future facts and conditions, the accurate prediction of which may be difficult and involve the assessment of events beyond the Company's control. As a result, the reader is cautioned not to rely on these forward-looking statements. The Company wishes to caution readers that forward-looking statements, including disclosures which use words such as the Company "believes," "anticipates," "expects," "estimates" and similar statements, are subject to certain risks and uncertainties which could cause actual results of operations to differ materially from expectations. Any forward-looking statements should be considered in context with the various disclosures made by the Company about its businesses, including without limitation the risk factors more specifically described below in Item 1. Business, under the heading "Business Risks." Part I Item 1. Business On November 30, 2000, the Company completed a reverse spin-off, which divided it into two separate publicly-traded corporations. As a result of the reverse spin-off (the "Spin-Off"), the Company separated into: (1) the spun-off corporation, "new" Fluor Corporation ("New Fluor"), which owns all of the Company's then existing businesses except for the coal-related business conducted by A.T. Massey Coal Company, Inc. ("A. T. Massey"); and (2) Fluor, subsequently renamed Massey Energy Company, which owns the coal-related business through its sole subsidiary A. T. Massey. Except as the context otherwise requires, the terms "Massey" or the "Company" as used herein shall include Massey Energy Company, A. T. Massey and A. T. Massey's subsidiaries. This Form 10-K discusses the business, operations and financial condition of Massey, and not New Fluor. In the Energy Ventures Analysis ranking of coal companies by 1999 revenues, Massey is the fifth largest coal company in the United States, and the largest in the Central Appalachian region. Massey produces, processes and sells bituminous, low sulfur coal of steam and metallurgical grades through its 18 processing and shipping centers, called "resource groups," many of which receive coal from multiple coal mines. Massey currently operates more than 50 coal mines in West Virginia, Kentucky and Virginia. Its steam coal is primarily purchased by utilities and industrial clients as fuel for power plants. Its metallurgical coal is used primarily to make coke for use in the manufacture of steel. 1 A. T. Massey was originally incorporated in Richmond, Virginia in 1920 as a coal brokering business. In the late 1940s, A. T. Massey expanded its business to include coal mining and processing. In 1974, St. Joe Minerals acquired a majority interest in A. T. Massey. St. Joe Minerals was then acquired by Fluor in 1981. A. T. Massey has been wholly owned by Fluor (now Massey) from 1987 and operated as one of Fluor's principal business segments until the Spin-Off. Industry Overview A major contributor to the world energy supply, coal currently represents approximately 26% of the world's primary energy consumption. The primary use for coal is to fuel electrical power generation. In calendar year 2000, coal was used to generate 55% of the electricity produced in the United States and 37% worldwide. The United States is the second largest coal producer in the world, exceeded only by China. Other leading coal producers include India, South Africa, and Australia. The United States is the largest holder of coal reserves in the world, with over 250 years supply at current production rates. U.S. coal reserves are more plentiful than oil or natural gas, with coal representing approximately 95% of the nation's fossil fuel reserves. U.S. coal production has more than doubled during the last 30 years. In 2000, total coal production was 1.09 billion tons. The primary producing regions were the Powder River Basin (33%), Central Appalachia (24%), Midwest (14%), West (other than the Powder River Basin) (14%) and Northern Appalachia (13%). Approximately 62% of U.S. coal is produced by surface mining methods. The remaining 38% is produced by underground mining methods that include room and pillar mining and longwall mining. Coal is used in the United States by utilities to generate electricity, by steel companies to make steel products with blast furnaces, and by a variety of industrial users to heat and power foundries, cement plants, paper mills, chemical plants and other manufacturing and processing facilities. Significant quantities of coal are also exported from both east and west coast terminals. The breakdown of 2000 U.S. coal demand, as estimated by Resource Data International, Inc. ("RDI"), is as follows: End Use Tons (millions) % of Total ------- -------------- ---------- Electrical generation...... 928 85% Industrial users........... 68 6% Exports.................... 59 5% Steel making............... 28 3% Residential & commercial... 5 1% -------------- ---- Total...................... 1,088 100% ============== ==== Coal has long been favored as an electrical generating fuel because of its basic economic advantage. The largest cost component in electrical generation is fuel. This fuel cost is typically lower for coal than competing fuels such as oil and natural gas. RDI estimated the average total production costs of electricity-using coal and competing generation alternatives in 2000 (January - September) as follows: Electrical Generation Type Cost per million -------------------------- ---------------- Kilowatt Hours -------------- Oil........................... $ 5.766 Natural Gas................... $ 5.307 Other (solar, wind, etc.)..... $ 2.453 Nuclear....................... $ 1.811 Coal.......................... $ 1.732 Hydroelectric................. $ 0.893 2 According to RDI, 19 of the 25 lowest operating cost electrical generation power plants in the United States during 1999 were fueled by coal. Coal used as fuel to generate electricity is commonly referred to as "steam coal." 3 There are several factors other than fuel cost that influence each utility's choice of electrical generation mode, including facility construction cost, access to fuel transportation infrastructure, environmental restrictions, and other factors. The breakdown of U.S. electrical generation by fuel source in 2000, as estimated by RDI, is as follows: Electrical Generation Source % of Total Electrical Generation ---------------------------- -------------------------------- Coal.................. 55% Nuclear............... 20% Natural Gas........... 14% Hydro................. 8% Oil................... 2% Other................. 1% ---- Total................. 100% ==== RDI projects that generators of electricity will increase their demand for coal as demand for electricity increases. Because coal-fired generation is used in most cases to meet base load requirements, coal consumption has generally grown at the pace of electricity demand growth. Demand for electricity has historically grown in proportion to U.S. economic growth. The United States ranks second among worldwide exporters of coal. Australia is the largest exporter, with other major exporters including South Africa, Indonesia, Canada, Taiwan, and Colombia. U.S. exports have decreased by over 40% since 1992 as a result of increased international competition and the U.S. dollar's strength in comparison to foreign currencies. According to RDI, the usage breakdown for 1999 U.S. exports of 59 million tons was 46% for electrical generation and 54% for steel making. U.S. coal exports were shipped to more than 40 countries. The largest purchaser of exported steam coal was Canada, which took 16 million tons or 59% of total steam coal exports. The largest purchaser of exported metallurgical coal was Europe, which represented 19 million tons or 61% of total metallurgical coal exports. The type of coal used in steel making is referred to as metallurgical coal, and is distinguished by special quality characteristics that include high carbon content, low expansion pressure, low sulfur content, and various coal chemistry attributes. Metallurgical coal is also high in heat content, and therefore is desirable to utilities as fuel for electrical generation. Consequently, metallurgical coal producers have the ongoing opportunity to select the market that provides maximum revenue. The premium price offered by steel makers for the metallurgical quality attributes is typically higher than the price offered by utility coal buyers that value only the heat content. The primary concentration of U.S. metallurgical coal reserves is located in the Central Appalachian region. RDI estimates that the Central Appalachian region supplied 83% of domestic metallurgical coal and 92% of U.S. exported metallurgical coal during 1999. Industrial users of coal typically purchase high Btu products with the same type of quality focus as utility coal buyers. The primary goal is to maximize heat content, with other specifications like ash content, sulfur content, and size varying considerably among different customers. Because most industrial coal consumers use considerably less tonnage than electric generating stations, they typically prefer to purchase coal that is screened and sized to specifications that streamline coal handling processes. Due to the more stringent size and quality specifications, industrial customers often pay a 10% to 15% premium above utility coal pricing (on comparable quality). The largest regional supplier to the industrial market sector has historically been Central Appalachia, which supplied 39% of all U.S. industrial coal demand in 1999. Coal shipped for North American consumption is typically sold at the mine loading facility with transportation costs being borne by the purchaser. Offshore export shipments are normally sold at the ship-loading terminal, with the purchaser paying the ocean freight. According to the National Mining Association, approximately two-thirds of U.S. coal production is shipped via railroads. Final delivery to consumers often involves more than one transportation mode. A significant portion of U.S. production is delivered to customers via barges on the inland waterway system and ships loaded at Great Lakes ports. 4 Mining Methods - -------------- Massey produces coal using three distinct mining methods: underground room and pillar, underground longwall and surface/highwall mining. Use of continuous miner machines in the room and pillar method of underground mining represented approximately 52% of Massey's 2000 production. Production from underground longwall mining operations constituted about 14% of Massey's 2000 production. Massey's Upper Big Branch Mine was ranked (per 1999 Department of Labor productivity statistics) as the most productive longwall mine in the Eastern United States. Massey now operates three additional longwall units, adding one each in 1999, 2000 and 2001. Surface mining represented approximately 34% of Massey's 2000 coal production. Massey has established large-scale surface mines in Boone and Nicholas counties of West Virginia. Other Massey surface mines are smaller in scale. Massey surface mines also use highwall mining systems to produce coal from high overburden areas. Mining Operations Massey currently has eighteen distinct resource groups or mining complexes, including thirteen in West Virginia, four in Kentucky and one in Virginia. These complexes receive, blend, process and ship coal that is produced from one or more mines, with a single complex handling the coal production of as many as eight distinct underground or surface mines. These mines have been developed at strategic locations in close proximity to the Massey preparation plants and rail shipping facilities. Coal is transported from Massey's mining complexes to customers by means of railroad cars or trucks, with rail shipments representing approximately 92% of 2000 coal shipments. 5 The following table provides key summary information on all Massey mining complexes (Resource Groups) that were active in 2000. Massey Resource Groups
2000 2000 Year Established ---- ---- ---------------- Resource Group Name Location Production(1) Shipments Coal Quality Reserves or Acquired - ------------------- -------- ------------- --------- ------------ -------- ----------- (000's (000's (000's of Tons) of Tons) of Tons)(2) Delbarton.......... Mingo County, WV 760 0 Low Sulfur Utility 34,000 1999 Low Sulfur Industrial Eagle Energy....... Boone County, WV 136 218 High Vol Met 0 1996 Elk Run............ Boone County, WV 4,535 7,313 High Vol Met 134,000 1978 Low Sulfur Utility Low Sulfur Industrial Green Valley....... Nicholas County, WV 490 465 High Vol Met 11,000 1996 Low Sulfur Utility Low Sulfur Industrial Independence....... Boone County, WV 5,892 3,101 High Vol Met 59,000 1994 Low Sulfur Utility Low Sulfur Industrial Knox Creek......... Tazewell County, VA 583 631 High Vol Met 50,000 1997 Low Sulfur Utility Low Sulfur Industrial Logan County....... Logan County, WV 1,589 1,268 Low Sulfur Utility 91,000 1998 Low Sulfur Industrial Long Fork.......... Pike County, KY 0 1,153 Low Sulfur Utility 17,000 1991 Low Sulfur Industrial Marfork............ Raleigh County, WV 3,139 6,347 High Vol Met 77,000 1993 Low Sulfur Utility Low Sulfur Industrial Martin County...... Martin County, KY 3,453 3,326 Low Sulfur Utility 66,000 1969 Low Sulfur Industrial New Ridge.......... Pike County, KY 0 1,740 Low Sulfur Utility 0 1992 Low Sulfur Industrial Nicholas Energy.... Nicholas County, WV 4,395 4,227 High Vol Met 114,000 1997 Low Sulfur Utility Low Sulfur Industrial Omar............... Boone County, WV 0 466 Low Sulfur Utility 35,000 1954 Low Sulfur Industrial Performance........ Raleigh County, WV 4,099 1,477 High Vol Met 45,000 1994 Progress........... Boone County, WV 4,338 2,072 Low Sulfur Utility 84,000 1998 Low Sulfur Industrial Rawl............... Mingo County, WV 2,356 2,471 High Vol Met 111,000 1974 Low Sulfur Utility Low Sulfur Industrial Sidney............. Pike County, KY 5,713 3,140 Low Sulfur Utility 151,000 1984 Low Sulfur Industrial Stirrat............ Logan County, WV 0 368 High Vol Met 34,000 1993 Low Sulfur Utility Low Sulfur Industrial Other/Unassigned... N/A N/A 459 N/A 810,000 N/A ------ ------ --------- Total............ 41,478 40,242 1,923,000 ====== ====== =========
- -------------- (1) For purposes of this table, coal production has been allocated to the Resource Group where the coal is mined, rather than the Resource Group where the coal is processed and shipped. Several Massey Resource Groups provide processing and rail shipping services for coal mined at other nearby Massey operations. (2) Reserves allocated to individual mining complexes include both assigned reserves and unassigned reserves that are accessible from the established operations. 6 West Virginia Resource Groups Delbarton. The Delbarton complex processes coal produced by an underground room and pillar mine in the Lower Cedar Grove seam. Production from this mine, located adjacent to the Delbarton complex, is transported to the Delbarton preparation plant via overland conveyor. The Delbarton preparation plant can process 800 tons per hour of raw coal. The clean coal product is shipped to customers via the Norfolk Southern railway in unit trains of up to 110 railcars. Eagle Energy. The Eagle Energy complex is currently inactive but has historically processed coal production from the adjacent underground longwall mine in the Eagle seam. The economically accessible Eagle seam reserves were depleted in January 2000 and the operation was idled. The Eagle Energy preparation plant is a modern facility with a rated feed capacity of 750 tons per hour. Customers can be served via CSX railway shipments loaded in unit trains of up to 90 railcars. Plans are now under review to re-activate this complex using production from new mines in seams above the Eagle seam. Elk Run. The Elk Run complex is Massey's largest shipper of coal. Elk Run produces coal from five underground room and pillar mines that are belted directly to the preparation plant. Elk Run also has a large surface mine that ships direct to customers via the Kanawha River docks. Additionally, the Elk Run complex processes coal for shipment that is produced from two other Massey resource groups. The Independence production shipped from Elk Run includes coal produced from underground mines in the Upper Cedar Grove and the Hernshaw seams. The Twilight surface mine in the Progress resource group transports all of its production to the Elk Run facilities via underground conveyor system. The Elk Run preparation plant has a processing capacity of 2200 tons per hour. Customer shipments are loaded on the CSX rail system in unit trains of up to 150 railcars. Green Valley. The Green Valley complex specializes in premium quality coals servicing industrial customers in a variety of industries. The Green Valley preparation plant receives coal via truck that is produced from two underground room and pillar mines in the Sewell seam. The Green Valley preparation plant has a processing capacity of 600 tons per hour. The rail loading facility services customers on the CSX rail system with unit train shipments of up to 75 railcars. Independence. The Independence complex processes coal from one large underground longwall mine and one room and pillar mine. Production from both mines is transported via underground conveyor system directly to the Independence preparation plant. Independence has five additional underground mining operations that produce coal for processing and shipment by other Massey resource groups. The Independence plant has a processing capacity of 1400 tons per hour. Customers are served via rail shipments on the CSX rail system in unit trains of up to 150 railcars. Logan County. The Logan County complex processes coal through the Bandmill preparation plant from three surface mining operations and two underground mines. All three surface mines and one underground mine deliver coal to the Bandmill plant via truck. The Aracoma underground mine, which belts coal directly to the Bandmill plant, currently produces with two continuous miner sections but plans call for a future longwall installation. The Bandmill preparation plant completed a major renovation in 2000 and has a processing capacity of 1200 tons per hour. The rail loading facility services customers via the CSX rail system with unit train shipments of up to 150 cars. Marfork. The Marfork complex is Massey's leading shipper of premium metallurgical coal. The largest production source for the Marfork complex is the Upper Big Branch underground longwall mine of Massey's Performance resource group. Other production sources for the Marfork complex include a new longwall mine and five underground room and pillar mines. All Marfork production sources are belted directly to the preparation plant via conveyor systems. The Marfork preparation plant is a high capacity processing facility that processes 2300 tons per hour. All customers are serviced via the CSX rail system with unit trains of up to 150 railcars. Nicholas Energy. The Nicholas Energy complex processes coal from one new longwall mine, two large surface mines and one underground room and pillar mine. All coal from the underground mines, as well as the 7 portion of surface mined coal requiring processing, is transported to the Power Mountain preparation plant via overland conveyor system. The Power Mountain plant was upgraded in 1999, and currently has a processing capacity of 1200 tons per hour. All coal shipments are loaded into rail cars for delivery via the Norfolk Southern railway in unit trains of up to 140 railcars. Omar. The Omar mining complex processes coal from adjacent mining operations of Massey's Independence and Elk Run resource groups. All production sources are transported via underground conveyor system to the Omar preparation plant. The Omar plant can process 800 tons per hour. A new rail loading facility was completed in May 2000. Omar can now service its CSX rail system customers with unit train shipments of up to 150 railcars. Performance. The Performance mining complex includes the Upper Big Branch underground mine and the Goals preparation plant. The Upper Big Branch mine is a longwall operation in the Eagle seam, with most production being processed and shipped from Massey's Marfork resource group. The Goals preparation plant processes the balance of the Upper Big Branch mine's production, as well as production from adjacent underground mines of Massey's Independence resource group. The Goals preparation plant can process 800 tons per hour. The rail loading facility services CSX railway customers with unit trains of up to 90 railcars. Progress. The Progress mining complex includes the Twilight MTR surface mine, coal handling system and stoker plant. All production is processed through a coal handling system and transported via underground conveyor to Massey's Elk Run resource group for rail shipment. Rawl. The Rawl complex includes six underground room and pillar mines and the Sprouse Creek Processing plant. Four mines transport coal to the Sprouse Creek plant--three via trucks and one via short-tagged rail cars. The other two mines produce coal that is processed for shipment by Massey's Stirrat resource group. The Sprouse Creek preparation plant has a throughput capacity of 1450 tons per hour. Customers are serviced via the Norfolk Southern railway with unit trains of up to 150 railcars. Stirrat. The Stirrat complex processes coal produced by the adjacent Diamond Energy and Spring Branch underground mines of Massey's Rawl resource group. All production is transported via truck to the Stirrat preparation plant. The plant has a rated capacity of 500 tons per hour. Customers are serviced via the CSX rail system with unit trains of up to 100 railcars. Kentucky Resource Groups Long Fork. The Long Fork complex processes coal produced by the adjacent Solid Energy mine of Massey's Sidney resource group. All production is transported via overland conveyor system to the Long Fork preparation plant. The Long Fork plant has a rated capacity of 1100 tons per hour. The rail loading facility services customers on the Norfolk Southern railway with unit trains of up to 150 railcars. Martin County. Production at the Martin County complex is sourced from one surface mine and one underground room and pillar mine. Approximately 70% of all surface mined production is saleable without processing and is shipped to customers at the Ohio/Big Sandy river docks via truck. Both the underground mine production and the portion of surface mine production requiring processing are transported to the preparation plant via underground conveyor system. The Martin County preparation plant has a throughput capacity of 1500 tons per hour. All coal processed through the preparation plant is shipped via the Norfolk Southern railway in unit trains of up to 125 railcars. Because of a partial failure at the Martin County coal refuse impoundment on October 11, 2000, the preparation plant is currently idled for an indefinite period. Raw coal production that requires processing (approximately 40% of total Martin County production) is being shipped to the Sprouse Creek plant of Massey's Rawl resource group for processing and shipment on to customers. 8 New Ridge. The New Ridge complex processes coal that is transported via truck from mining operations of Massey's Sidney resource group. The New Ridge preparation plant has a throughput capacity of 800 tons per hour. All coal is loaded for shipment to customers via the CSX rail system in unit trains of up to 100 railcars. Sidney. The Sidney complex includes five underground room and pillar mines and the Big Creek preparation plant. All mines transport production via underground conveyor to the Big Creek plant, except one mine that belts coal to Massey's Long Fork resource group for processing and shipment. The Big Creek preparation plant has a throughput capacity of 1500 tons per hour. The Sidney rail loading facility services customers on the Norfolk Southern rail system with unit trains of up to 140 railcars. Virginia Resource Group Knox Creek. The Knox Creek complex processes coal from one underground room and pillar mine. Production from the Tiller No. 1 mine is belted directly to the Knox Creek preparation plant. The Knox Creek plant has a feed capacity of 850 tons per hour. The rail loading facility services customers on the Norfolk Southern rail system with unit trains of up to 100 railcars. Other Related Operations Massey has other related operations and activities in addition to its normal coal production and sales business. The following business activities are included in this category: Appalachian Synfuel Plant: Appalachian Synfuel, LLC ("Appalachian Synfuel"), a subsidiary of the Company, owns a synthetic fuel manufacturing facility located adjacent to the Marfork complex in Boone County, West Virginia. This facility converts coal products to synthetic fuel and has operated since June 1998. Appalachian Synfuel has obtained a private letter ruling from the IRS that production from this synfuel facility qualifies the owner for tax credits pursuant to Section 29 of the Code. Synthetic fuel sales during fiscal year 2000 were approximately 456,000 tons. Massey has been exploring the sale of the Appalachian Synfuel manufacturing facility to optimize value of the associated tax credit benefits. Westvaco Coal Handling Facility: Massey subsidiaries own and operate the coal unloading, storage and conveying facilities at Westvaco Corporation's paper manufacturing facility in Covington, Virginia ("Westvaco CHF"). The Westvaco CHF was constructed by Massey in 1992 as a means of reducing coal transportation and handling costs for Westvaco Corporation, a long term industrial coal customer. The Westvaco CHF operating agreement extends through 2007, and provides that Massey be paid a per ton fee (annually adjusted) for coal handling services and allows Massey to supply 100% of the coal required by Westvaco's facility. Other: Massey also engages in the sale of timber, gas & oil rights and the sale of non-strategic surface properties and reserves to third parties. Marketing and Sales The Massey marketing and sales force, based in the corporate office in Richmond, Virginia, includes sales managers, distribution/traffic managers, technical support and administrative personnel. During the fiscal year ended October 31, 2000, Massey sold 40.2 million tons of produced coal for total revenues of $1.08 billion. The breakdown by market served was 56% utility, 35% metallurgical and 9% industrial. Sales were concluded with over 120 customers. Export shipments (including Canada) represented approximately 20% of 2000 tonnage sold. Massey's 2000 export shipments serviced customers in 10 countries across North America, South America, Europe and Asia. Almost all sales are made in U.S. dollars, which eliminates the foreign currency risk. 9 The Company has established several partnering arrangements with customers wherein services other than coal supply are provided on an ongoing basis. Examples of such partnership arrangements include: . The Westvaco CHF (described above). A Massey subsidiary owns and operates the coal unloading and storage facilities. As consideration for performing this service, the Massey subsidiary receives a per ton processing fee and also secures the right to supply 100% of the coal required by this plant. . At two large steel companies, one synthetic fiber manufacturer and one tobacco processing plant, a Massey subsidiary coordinates shipment of coal to the customer's stockpile, maintains ownership of the coal inventory on site and sells tonnage to the customer as it is consumed. Other such partnering services are provided periodically in response to the current needs of each individual customer. Distribution Massey employs transportation specialists who negotiate freight and terminal agreements with various providers, including railroads, barge lines, steamship lines, bulk motor carriers and terminal facilities. Transportation specialists also coordinate with customers, mining facilities and transportation providers to establish shipping schedules that meet the customer's needs. Massey's 2000 shipments of 40.2 million tons were loaded from 18 mining complexes. Rail shipments constituted 92% of total shipments, with 33% loaded on Norfolk Southern trains and 59% loaded on CSX trains. The 8% balance was shipped from Massey mining complexes via truck. Approximately 18% of Massey's production is ultimately delivered via the inland waterway system. Coal is transported by rail or truck to docks on the Ohio, Big Sandy and Kanawha Rivers and then ultimately transported by barge to electric utilities, integrated steel producers and industrial consumers served by the inland waterway system. Massey also moves approximately 15% of its production to Great Lakes Ports for transport beyond to various U.S. and Canadian customers. Customers and Coal Contracts Massey has coal supply commitments with a wide range of electric utilities, steel manufacturers and industrial customers. The majority of Massey's customers purchase coal for terms of one year or longer, but Massey also supplies coal on a spot basis for some of its customers. Massey's biggest customer, Duke Energy, accounted for 14% of Massey's total fiscal year 2000 revenues. Massey has been serving this customer for over thirty years and has agreements in place to continue to supply coal through June 2003. As the largest supplier of metallurgical coal to the American steel industry, Massey is subject to being adversely affected by any decline in the financial condition or production volume of American steel producers. Recently, American steel producers have experienced a substantial decline in the prices received for their products, due at least in part to a heavy volume of foreign steel imported into this country. As a result, two of the largest producers filed for bankruptcy protection in late 2000, including Wheeling-Pittsburgh Steel Corporation, a substantial customer of Massey. Further deterioration in conditions in the steel industry could reduce the demand for Massey's coal and impact the collectibility of Massey's accounts receivable from steel industry customers. Since Massey's metallurgical grade coal can also be marketed as a high-Btu steam coal for use by utilities, a decline in the metallurgical market could result in some coal being switched from the metallurgical market to the utility market. As is customary in the coal industry, Massey has entered into long-term contracts (exceeding one year in duration) with many of its customers. These arrangements allow customers to secure a supply for their future 10 needs and provide Massey with greater predictability of sales volume and sales prices. During fiscal year 2001, Massey's sales pursuant to long-term sales arrangements are projected to be at or above 75%. By offering coal of both metallurgical and steam grades, Massey is able to serve a diverse customer base. This market diversity allows Massey to adjust to changing market conditions and sustain high sales volumes. The terms of Massey's long-term contracts are a result of extensive negotiations with the customer. As a result, the terms of these contracts vary with respect to price adjustment mechanisms, pricing terms, permitted sources of supply, force majeure provisions, quality adjustments and other parameters. Most of the contracts contain price adjustment mechanisms that allow for changes to prices based on statistics from the U.S. Department of Labor. Contracts contain specifications for coal quality, which may be especially stringent for steel customers. Many of these contracts also specify the approved locations from which the coal is to be mined. Competition The coal industry in the United States is highly competitive. Massey competes with other large producers and many small coal producers. Massey competes with other producers primarily on the basis of price, coal quality, transportation cost and reliability of supply. Continued demand for coal is also dependent on factors outside Massey's control, including demand for electricity, environmental and governmental regulations, technological developments and the availability of alternative fuel sources. The price at which the Company's production can be sold is dependent upon a variety of factors, many of which are beyond the Company's control. The Company sells coal under long-term contracts and on the spot market. See the "Customers and Coal Contracts" section above. Generally, the relative competitiveness of coal vis-a-vis other fuels or other coals is evaluated on a delivered cost per heating value unit basis. In addition to competition from other fuels, coal quality, the marginal cost of producing coal in various regions of the country and transportation costs are major determinants of the price for which the Company's production can be sold. Factors that directly influence production cost include geological characteristics (including seam thickness), overburden ratios, depth of underground reserves and transportation costs. The Company's central Appalachian coal is more expensive to mine than western coal because there is a high percentage of underground coal in the east and eastern surface coal tends to have thinner coal seams. Additionally, underground mining has higher labor (including reserves for future costs associated with labor benefits and health care) and capital (including modern mining equipment and construction of extensive ventilation systems) costs than those of surface mining. In recent years, increased development of large surface mining operations, particularly in the western United States, and more efficient mining equipment and techniques, have contributed to excess coal production capacity in the United States. Competition resulting from excess capacity has encouraged producers to reduce prices and to pass productivity gains through to customers. The lower production cost in the western mines is offset somewhat by the higher quality of many eastern coals and higher transportation cost from these western mines to many coal-fired power plants in the country. Demand for the Company's low-sulfur coal and the prices that the Company will be able to obtain for it will also be affected by the price and availability of high-sulfur coal, which can be marketed in tandem with emissions allowances. Intraregional and interregional competition is keen as producers seek to position themselves as the low-cost producer and supplier of high-demand product to the electricity generating industry. Transportation costs are another fundamental factor affecting coal industry competition. Coordination of the many eastern loadouts, the large number of small shipments, terrain and labor issues all combine to make shipments originating in the eastern United States inherently more expensive on a per-mile basis than shipments originating in the western United States. Historically, coal transportation rates from the western coal producing areas into central Appalachian markets limited the use of western coal in those markets. More recently, however, lower rail rates from the western coal producing areas to markets served by eastern producers have created major competitive challenges for eastern producers. Barge transportation is the lowest-cost method of transporting coal long distances in the eastern United States, and the large numbers of eastern producers with river access keep coal prices competitive. The Company believes that many utilities with plants located on the Ohio River system are 11 well positioned for deregulation as competition for river shipments should remain high for central Appalachian coal. With close proximity to competitively-priced central Appalachian coal and the ability to receive western coals, the Company believes utilities with plants located on the Ohio River system will become price setters in a deregulated environment. The ability of these utilities to blend western and eastern coal will also create a new, dynamic fuel procurement environment that could place western and eastern coals in even greater competition and limit rail price premiums. River transport is an important transportation option not available to Powder River Basin producers between Wyoming and midwestern river terminals. Although undergoing significant consolidation, the coal industry in the United States remains highly fragmented. There can be no assurance that the Company's costs will permit it to compete effectively with other producers seeking to provide coal to a customer, however, the Company expects to be able to maintain low production costs, offer a variety of products and have access to multiple transportation systems that will enable it to compete effectively with other producers. Employees and Labor Relations As of October 31, 2000, Massey had 3,610 employees, including 152 employees affiliated with the United Mine Workers of America. Relations with employees are generally good, and there have been no material work stoppages in the past ten years. Environmental, Safety and Health Matters Massey is subject to federal, state and local laws and regulations relating to environmental protection and plant and mine safety and health, including but not limited to the federal Surface Mining Control and Reclamation Act of 1977; Occupational Safety and Health Act; Mine Safety and Health Act of 1977; Water Pollution Control Act, as amended by the Clean Water Act of 1977; Black Lung Benefits Revenue Act of 1977; and Black Lung Benefits Reform Act of 1977. On October 20, 1999, the United States District Court for the Southern District of West Virginia ( the "District Court") issued an injunction which prohibits the construction of valley fills over both intermittent and perennial stream segments as part of mining operations. While Massey is not a party to this litigation, virtually all mining operations (including those of Massey) utilize valley fills to dispose of excess materials mined during coal production. This decision is now under appeal to the Fourth Circuit Court of Appeals and the District Court has issued a stay of its decision pending the outcome of the appeal. Based upon the current state of the appeal, the Company does not believe that the Massey mining operations will be materially affected while the appeal is pending. If and to the extent that the District Court's decision is upheld and legislation is not passed which limits the impact of the decision, all or a portion of Massey's mining operations could be affected. The potential impact on Massey arising from this proceeding is currently not estimable. On October 11, 2000, a partial failure of Martin County Coal Corporation's coal refuse impoundment released approximately 230 million gallons of coal slurry into adjacent underground mine workings. The slurry then discharged into two tributary streams of the Big Sandy River in eastern Kentucky. Further information on this release is set forth in Item 3, Legal Proceedings. On June 27, 2000, the West Virginia Division of Environmental Protection issued an administrative order to one of Massey's subsidiaries, Elk Run Coal Company. Further information on this order is set forth in Item 3. Legal Proceedings. The U.S. Department of Labor has issued new regulations implementing the federal black lung laws which, among other things, establish a presumption in favor of a claimant's treating physician and limit a coal operator's ability to introduce medical evidence regarding the claimant's medical condition. The validity of these regulations is currently being challenged in litigation. If upheld, the amendments could have an adverse impact on Massey, the extent of which cannot be accurately predicted. The Clean Air Act and corresponding state laws extensively regulate emissions into the air of particulate matter and other substances, including sulfur dioxide, nitrogen oxides and mercury. Although these regulations apply directly to impose certain requirements for the permitting and operation of Massey's mining facilities, by 12 far their greatest impact on Massey and the coal industry generally is the effect of emission limitations applicable to utilities and other Massey customers. The Environmental Protection Agency has imposed or attempted to impose tighter emission restrictions in a number of areas, some of which are currently subject to litigation. The general effect of such tighter restrictions could be to reduce demand for coal. The United States and more than 160 other nations are signatories to the 1992 Framework Convention on Global Climate Change (the "Kyoto Protocol") which is intended to limit or reduce emissions of greenhouse gases, such as carbon dioxide. Under the terms of the Kyoto Protocol, the United States would be required to reduce emissions to 93% of 1990 levels over a five-year period from 2008 through 2012. Although the U.S. Senate has not yet ratified the Kyoto Protocol and no comprehensive regulations focusing on greenhouse gas emissions have been issued, efforts to control greenhouse gas emissions could result in reduced use of coal if electric power generators switch to lower carbon sources of fuel. It is impossible to predict the full impact of future judicial, legislative or regulatory developments on Massey's operations, because the standards to be met, as well as the technology and length of time available to meet those standards, continue to develop and change. In fiscal year 2000, Massey spent approximately $6.4 million to comply with environmental, health and safety laws and regulations, none of which expenditures were capitalized. Massey anticipates making $6.8 million and $6.4 in such non-capital expenditures in fiscal 2001 and 2002, respectively. Of these expenditures, $6.0 million, $6.4 million and $6.0 million for fiscal 2000, 2001 and 2002, respectively, were or are anticipated to be for surface reclamation. Existing financial reserves are believed to be adequate to cover actual and anticipated reclamation expenditures. The Company believes, based upon present information available to it, that its accruals with respect to future environmental costs are adequate and such future costs will not have a material effect on the Company's consolidated financial position, results of operations or liquidity. However, the imposition of more stringent requirements under environmental laws or regulations, new developments or changes regarding site cleanup costs or the allocation of such costs among potentially responsible parties, or a determination that the Company is potentially responsible for the release of hazardous substances at sites other than those currently identified, could result in additional expenditures or the provision of additional accruals in expectation of such expenditures. Business Risks Coal markets are highly competitive and affected by factors beyond Massey's control. Massey competes with coal producers in various regions of the United States for domestic sales and with both domestic and overseas producers for sales to international markets. Continued demand for Massey's coal and the prices that it will be able to obtain primarily will depend upon coal consumption patterns of the domestic electric utility industry and the domestic steel industry. Consumption by the domestic utility industry is affected by the demand for electricity, environmental and other governmental regulations, technological developments and the price of competing coal and alternative fuel supplies including nuclear, natural gas, oil and renewable energy sources, including hydroelectric power. Consumption by the domestic steel industry is primarily affected by the demand for U.S. steel. Massey's sales of metallurgical coal are dependent on the continued financial viability of domestic steel companies and their ability to compete with steel producers abroad. Massey depends on continued demand from its customers. Reduced demand from Massey's largest customers could have an adverse impact on Massey's ability to achieve its projected revenues. When Massey's contracts with its customers reach expiration, there can be no assurance that the customers either will extend or enter into new long-term contracts or, in the absence of long-term contracts, that they will continue to purchase the same amount of coal as they have in the past or on terms, including pricing terms, as favorable as under existing agreements. 13 Union represented labor creates an increased risk of work stoppages and higher labor costs. Eight of Massey's coal processing plants and one of its smaller surface mines have a workforce that is represented by the United Mine Workers of America. In fiscal 2000, these eight processing plants handled approximately 25% of Massey's coal production. There may be an increased risk of strikes and other related work actions, in addition to higher labor costs, associated with these operations. At October 31, 2000, less than 5% of Massey's total workforce was represented by a union. Massey has experienced some union organizing campaigns at some of its open shop facilities within the past five years. If some or all of Massey's current open shop operations were to become union represented, Massey could incur additional risk of work stoppages and higher labor costs. Transportation disruptions could impair Massey's ability to sell coal. Massey's transportation providers are important in order to provide access to markets. Massey's major rail transportation providers, CSX Transportation, Inc. and Norfolk Southern Corporation, have experienced some operational difficulties due to the integration by each of a portion of Conrail's operations. In mid-1999, these providers' delays in service caused Massey to miss some of its shipments. There has been recent improvement by these carriers; however, Massey cannot be assured that these transportation providers will not face continued difficulties. Disruption of transportation services because of such problems or from weather-related problems, strikes, lockouts or other events could temporarily impair Massey's ability to supply coal to customers. Fluctuations in transportation costs could affect the demand for Massey's coal. Transportation costs represent a significant portion of the delivered cost of coal and, as a result, the cost of delivery is a critical factor in a customer's purchasing decision. Increases in transportation costs could make coal a less competitive source of energy. Such increases could have a material adverse effect on Massey's ability to compete with other energy sources and on its business, financial condition and results of operations. On the other hand, significant decreases in transportation costs could result in increased competition from coal producers in other parts of the country. For instance, coal mines in the western United States could become an attractive source of coal to consumers in the eastern part of the country if the costs of transporting coal from the west were significantly reduced. Foreign currency fluctuations could adversely affect the competitiveness of Massey's coal abroad. Massey relies on customers in other countries for a portion of its sales, with shipments to countries in Europe, North America, South America and Asia. Massey competes in these international markets against coal produced in other countries. Coal is sold internationally in U.S. dollars. As a result, mining costs in competing producing countries may be reduced in U.S. dollar terms based on currency exchange rates, providing an advantage to foreign coal producers. Currency fluctuations in producing countries could adversely affect the competitiveness of U.S. coal in international markets. Coal mining is subject to inherent risks. Massey's operations are subject to certain events and conditions which could disrupt operations, including fires and explosions from methane, accidental minewater discharges, natural disasters, equipment failures and maintenance problems, flooding, changes in geologic conditions, failure of reserve estimates to prove correct and inability to acquire mining rights or permits. Massey maintains business interruption insurance and property and general liability insurance policies that provide limited coverage for some, but not all, of these risks. Even where 14 insurance coverage applies, there can be no assurance that these risks would be fully covered by Massey's insurance policies. Government regulations increase Massey's costs and may discourage customers from buying Massey's coal. Numerous governmental permits and approvals are required for coal mining operations. Massey may be required to prepare and present to federal, state and local authorities more extensive data describing the effect or impact that any proposed mining operations may have upon the environment. For example, the West Virginia Division of Environmental Protection is involved in litigation regarding its alleged failure to consider the hydrologic effects of mining operations in issuing mining permits. This suit could lead to additional requirements that Massey and other mining companies assess potential hydrologic risks. These and any other increased requirements may be costly and time-consuming and may delay commencement or continuation of mining operations. New legislation and new regulations may be adopted which could materially adversely affect Massey's mining operations, cost structure or its customers' ability to use coal. New legislation and new regulations may also require Massey or its customers to change operations significantly or incur increased costs. The U.S. Environmental Protection Agency (the "EPA") has undertaken broad initiatives aimed at increasing compliance with emissions standards and to provide incentives to customers for decreasing emissions, often by switching to an alternative fuel source. The Clean Air Act affects Massey's customers and could influence their purchasing decisions. The Clean Air Act and corresponding state laws extensively regulate emissions into the air of particulate matter and other substances, including sulfur dioxide, nitrogen oxides and mercury. In order to comply with limitations on emissions, Massey's customers may switch to other fuels or coal from other regions. The Clean Air Act affects coal mining operations by requiring utilities that currently are major sources of nitrogen oxides in moderate or higher ozone nonattainment areas to install reasonably available control technology. In July 1997, the EPA adopted new, more stringent National Ambient Air Quality Standards for particulate matter and ozone. The adoption and implementation of these more stringent standards have been challenged in litigation and the outcome of that challenge is uncertain at this time. The specific provisions of these standards could be revised by the EPA. In October 1998, the EPA issued its final rule entitled "Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone" (the NOx SIP Call rule). In the final rule, the EPA found that sources in 22 states and the District of Columbia emit NOx in amounts that significantly contribute to nonattainment of National Ambient Air Quality Standards, or will interfere with maintenance of those standards, in one or more downwind states. The rule requires the 22 upwind states and the District of Columbia to submit state implementation plan revisions to prohibit specified amounts of emissions of oxides of nitrogen (NOx)--one of the precursors to ozone (smog) pollution--for the purpose of reducing NOx and ozone transport across state boundaries in the eastern half of the United States. Although states may choose any mix of pollution reduction measures that will achieve the required reductions, it is widely anticipated that states will target large utility and industrial boilers, which could materially reduce the demand for coal by these users. Additionally, the EPA has granted petitions filed by four northeast states under section 126 of the Clean Air Act. The granting of these petitions means that stationary sources located in upwind states--mostly coal-fired utilities--must reduce their emissions of NOx. The deadline for compliance under the section 126 petitions is May 2003. 15 The EPA has filed suit against a number of leading electric utilities (including Massey customers) in U.S. District Court, asserting that these utilities must install new emission controls at plants previously "grandfathered" from the more stringent requirements now applicable under the Clean Air Act. The EPA is also pursuing an administrative proceeding against the Tennessee Valley Authority on the same basis. Installation of these controls would require very significant capital investment, and some utilities might choose to switch to non-coal generation rather than make such investment. This could materially decrease the demand for coal. The passage of legislation responsive to the Framework Convention on Global Climate Change could have an adverse effect on Massey's business. The United States and more than 160 other nations are signatories to the 1992 Framework Convention on Global Climate Change ("Kyoto Protocol") which is intended to limit emissions of greenhouse gases, such as carbon dioxide. Although the U.S. Senate has not yet ratified the Kyoto Protocol and no comprehensive regulations controlling greenhouse gas emissions have been issued, efforts to control greenhouse gas emissions could result in reduced use of coal if electric power generators switch to lower carbon sources of fuel. Massey is subject to the Clean Water Act which imposes monitoring and reporting obligations. The federal Clean Water Act affects coal mining operations by imposing restrictions on discharge of pollutants into waters and dredging and filling of wetlands. Regular monitoring, as well as compliance with reporting requirements and performance standards, are preconditions for the issuance and renewal of permits governing the discharge of pollutants into water. On October 20, 1999, the U.S. District Court for the Southern District of West Virginia issued an injunction which prohibits the construction of valley fills over both intermittent and perennial stream segments as part of mining operations. While Massey is not a party to this litigation, virtually all mining operations (including Massey's) utilize valley fills to dispose of excess materials mined during coal production. This decision is now under appeal to the Fourth Circuit Court of Appeals and the district court has issued a stay of its decision pending the outcome of the appeal. If and to the extent that the district court's decision is upheld and legislation is not passed which limits the impact of the decision, all or a portion of Massey's mining operations could be affected. Deregulation of the electric utility industry could lead to efforts to reduce coal prices. Deregulation of the electric utility industry, when implemented, will enable industrial, commercial and residential customers to shop for the lowest cost supply of electricity. This fundamental change in the power industry may result in efforts to reduce coal prices. Item 2. Properties Operations of Massey and its subsidiaries are conducted in both owned and leased properties totaling approximately 900,000 acres in West Virginia, Kentucky and Virginia. In addition, certain owned or leased properties of Massey and its subsidiaries are leased or subleased to third party tenants. Massey and its subsidiaries currently own or lease the equipment that is utilized in their mining operations. The following table describes the location and general character of the major existing facilities, exclusive of mines, coal preparation plants and their adjoining offices. Coal Offices: Richmond, Virginia Owned Massey Corporate Headquarters Charleston, West Virginia Leased Massey Coal Services Headquarters 16 Coal Reserves Massey estimates that, as of October 31, 2000, Massey had total recoverable reserves of approximately 1.9 billion tons of proven and probable reserves. Reserves are coal deposits that could be economically and legally extracted or produced. "Recoverable" reserves means coal that is recoverable using existing equipment and methods under federal and state laws currently in effect. Approximately 1.4 billion tons of Massey's reserves are classified as proven reserves. This means that these deposits have been substantiated by adequate information, including information derived from exploration, current and previous mining operations, outcrop data and knowledge of mining conditions. The remaining 500 million tons of Massey's reserves are classified as probable reserves. These are deposits of coal which are based on information of a more preliminary or limited extent or character, but which are considered likely. Reserve estimates are updated annually using geologic data taken from drill holes, adjacent mine workings, outcrop prospect openings and other sources. Coal tonnages are categorized according to coal quality, seam thickness, mineability and location relative to existing mines and infrastructure. In accordance with applicable industry standards, proven reserves are those for which reliable data points are spaced no more than 2,700 feet apart. Probable reserves are those for which reliable data points are spaced 2,700 feet to 7,900 feet apart. Further scrutiny is applied using geological criteria and other factors related to profitable extraction of the coal. These criteria include seam height, roof and floor conditions, yield and marketability. The following table provides reserve data by state as of October 31, 2000, as follows: Tons % of Total ---------- ---------- (millions) Southern West Virginia...... 1,491 78% Eastern Kentucky............ 343 18 Southwestern Virginia....... 55 3 Southeastern Tennessee...... 34 1 ---------- ---------- Total....................... 1,923 100% ========== ========== When categorized by sulfur content, the reserve breakdown is as follows: Tons % of Total ---------- ---------- (millions) Sulfur Content Compliance sulfur or less..................... 820 43% Greater than compliance and less than 1%...... 466 24 Greater than 1% sulfur and less than 2%....... 587 31 Greater than 2% sulfur........................ 50 2 ---------- ---------- Total......................................... 1,923 100% ========== ========== Massey's reserve holdings include high volatile metallurgical coal reserves. Although these metallurgical coal reserves receive the highest selling price in the current coal market when marketed to steel-making customers, they can also be marketed as an ultra high Btu, low sulfur steam coal for electrical generation. The categorization of Massey's coal reserves as utility/industrial or metallurgical quality is as follows: Tons % of Total ---------- ---------- (millions) Coal Type High volatile metallurgical..... 625 33% Low volatile metallurgical...... 98 5 Utility or industrial markets... 1,200 62 ---------- ---------- Total........................... 1,923 100% ========== ========== 17 As with most coal-producing companies in Central Appalachia, the majority of Massey's coal reserves are controlled pursuant to leases from third party landowners. These leases convey mining rights to the coal producer in exchange for a per ton or percentage of gross sales price royalty payment to the lessor. However, a significant portion of Massey's reserves holdings are owned and require no royalty or per ton payment to other parties. The following table summarizes the portion of Massey reserves controlled by ownership versus lease: Tons % of Total ---------- ---------- (millions) Method of Reserve Control Owned reserves.................. 321 17% Leased reserves................. 1,602 83 ---------- ---------- Total........................... 1,923 100% ========== ========== See Item 1. Business, of this report for additional information regarding the coal operations and properties of Massey. Item 3. Legal Proceedings Big Sandy Dispute Sidney Coal Company, Inc. ("Sidney"), a wholly-owned subsidiary of Massey, is the sublessee of Cliffs Mining Company ("Cliffs") under two coal leases from Big Sandy Company, L.P. ("Big Sandy"). The leases cover coal reserves in Pike County, Kentucky, and include active mining areas and reserves for Sidney's Clean Energy and Freedom Energy Mines. Big Sandy claims that Sidney breached the terms of the leases by underpaying certain coal royalties and that Big Sandy has terminated both leases. Sidney and Cliffs deny that Big Sandy was underpaid any royalties and deny that Big Sandy has terminated, or is entitled to terminate, the leases. Big Sandy filed an action in the Fayette Circuit Court, Lexington, Kentucky, seeking a declaration that the leases have been terminated and seeking to recover unpaid royalties in the amount of approximately $100,000 with interest through December 31, 1996, plus additional royalties and interest through the date of judgment. Cliffs successfully sought an order compelling arbitration and the case was heard by a panel of three arbitrators in October 2000. Sidney has continued to mine and pay royalties throughout the controversy based upon its interpretation of the leases. Big Sandy has made no effort to evict Sidney from the property or to compel it to cease mining although Big Sandy obtained an order from the Fayette Circuit Court permitting it to pay the royalties received from Sidney into escrow pending the outcome of the arbitration. Sidney believes that it has paid all royalties in accordance with the terms of the leases and that it has good defenses to the claim that the leases have been terminated. Sidney expects that the arbitrators will render their decision in February, 2001. Harman Litigation Harman Mining Corporation and certain of its affiliates (collectively "Harman") have instituted two civil actions against Massey or its present or former subsidiaries. In June 1998, Harman filed a breach of contract action against Wellmore Coal Corporation ("Wellmore"), a former Massey subsidiary, in Buchanan County, Virginia Circuit Court. Harman claims that Wellmore breached a coal supply agreement, pursuant to which Harman sold coal to Wellmore, by declaring a force majeure event and reducing the amount of coal to be purchased from Harman as a result thereof. Wellmore claimed force majeure when its major customer was forced to close its Pittsburgh coke plant due to regulatory action. In May 2000, in a trial to determine liability only, Harman received a jury verdict that Wellmore breached the contract. The damages phase of the trial was held in August 2000. On August 24, 2000, Harman received a jury verdict against Wellmore assessing $6 million in damages. Massey's subsidiary, Knox Creek Coal Corporation, has assumed the defense of this action under the terms of the stock purchase agreement by which it sold the stock of Wellmore. The adverse determination on liability and damages will be appealed. Massey believes that it has several grounds for reversal on appeal. 18 Additionally, Harman and its sole shareholder, Hugh Caperton, filed a separate action against Massey and certain subsidiaries in Boone County, West Virginia Circuit Court, alleging that Massey and its subsidiaries tortiously interfered with Harman's contract with Wellmore and, as a result, caused Harman to go out of business. Massey has filed a notice to remove this action to federal court. The plaintiffs seek unspecified compensatory damages and punitive damages. Massey believes that compensatory damages, if any, are duplicative of any damages that may be awarded in the contract action, and are limited by the same factors as in the contract action. Massey is defending this action vigorously and believes that it has numerous valid defenses to the claims. Environmental Protection Order On June 27, 2000, the West Virginia Division of Environmental Protection issued an administrative order to one of Massey's subsidiaries, Elk Run Coal Company, requiring Elk Run either to suspend operations for three days beginning July 17, 2000 or expend $100,000 on local community improvement projects. The order was based on alleged violations of the surface mining laws relating to dust, and Elk Run appealed the order to the West Virginia Surface Mining Board. On October 25, 2000 the West Virginia Surface Mining Board upheld the order. Elk Run has appealed the Surface Mining Board's order to the Kanawha Circuit Court, Charleston, West Virginia. Elk Run believes that it has good defenses to the alleged violations. Martin County Impoundment Discharge On October 11, 2000, a partial failure of Martin County Coal Corporation's coal refuse impoundment released approximately 230 million gallons of coal slurry into adjacent underground mine workings. The slurry then discharged into two tributary streams of the Big Sandy River in eastern Kentucky. No one was injured in the discharge. Clean up efforts began immediately and are continuing. The States of Kentucky and West Virginia have issued various notices of violation related to the discharge and ordered remedial measures. Fines and penalties, which may not be covered by insurance, have not yet been assessed. The Company has begun informal discussions with various agencies with respect to the resolution of the notices of violation, including potential fines and penalties. Several lawsuits have been brought by downstream residents and other individual plaintiffs claiming to be damaged by the spill. These suits assert trespass, property damage, nuisance and other claims, and seek compensatory and punitive damages. Certain of these suits seek to be certified as class action lawsuits. These lawsuits remain in their initial stages. Massey recorded a $3.0 million charge in the fourth quarter of 2000 relating to the Martin County slurry spill representing an accrual of $46.5 million in estimated spill-related clean up costs and liabilities, net of $43.5 million in probable insurance recoveries with respect to such clean up costs and liabilities. Approximately $26 million in clean up costs have been incurred through January 25, 2001. Massey has pollution insurance coverage and believes that such insurance will cover clean up costs and third party claims arising out of this event. Massey has not as yet received a formal coverage determination from its insurance carriers. As a result of the discharge described above, the Martin County preparation plant is currently idled. It is still uncertain as to when or under what conditions the plant will be able to resume operations. At this early stage, it is not possible to accurately predict the full scope of the cleanup costs, related liabilities or insurance recoveries and, therefore, no assurance can be given at this time that the Martin County discharge will not have material adverse impact on Massey's business. Other Legal Proceedings Fluor Daniel, a division of Fluor Enterprises, Inc., a former subsidiary of the Company, is a party to dispute resolution with Anaconda Nickel in connection with the Murrin Murrin Nickel Cobalt project located in Western Australia. Anaconda contends that it is entitled to damages of $500,000,000, the majority of which is alleged consequential damages. Prior to the Spin-Off, the Company had guaranteed such subsidiary's obligations under the subsidiary's construction agreement with Anaconda. Pursuant to an agreement between the Company and New Fluor, New Fluor has assumed all liability and costs arising in connection with this litigation. In addition, Massey and its subsidiaries, incident to their normal business activities, are parties to a number of other legal proceedings and other matters in various stages of development. While Massey cannot predict the 19 outcome of these proceedings, in the opinion of Massey and based on reports of counsel, any liability arising from these matters individually and in the aggregate should not have a material adverse effect upon the consolidated financial position, cash flows or results of operations of Massey. The Company also is party to numerous lawsuits and other legal proceedings related to the non-coal businesses previously conducted by the Company but now conducted by New Fluor. Under the terms of the Distribution Agreement entered into by the Company and New Fluor as of November 30, 2000, in connection with the Spin-Off of New Fluor by the Company, New Fluor has agreed to indemnify the Company with respect to all such legal proceedings and has assumed their defense. Item 4. Submission of Matters to a Vote of Security Holders. There were no matters submitted to a vote of security holders of the Company through a solicitation of proxies or otherwise during the fourth quarter of the Company's fiscal year ended October 31, 2000. However, on November 1, 2000, Fluor issued a Proxy Statement notifying its shareholders of a special meeting on November 30, 2000, to vote on a reverse spin-off under which the Company would be separated into: (1) the spun-off corporation, New Fluor, which would own all of Fluor's existing businesses except for the coal-related business conducted by A.T. Massey, and (2) Fluor, subsequently renamed Massey Energy Company, which owns the coal-related business. On November 30, 2000, the shareholders approved the reverse spin-off by a vote of 60,487,215 to 434,352 with 399,715 shares abstaining, and the reverse spin-off was consummated on the same day. The current executive officers of Massey are: Don L. Blankenship, Age 50 Mr. Blankenship has been a Director since 1996 and the Chairman, President and Chief Executive Officer of Massey since November 30, 2000. He has been Chairman, President and Chief Executive Officer of A.T. Massey Coal Company, Inc.(1) since 1992. He was formerly the President and Chief Operating Officer of A.T. Massey from 1990 and President of Massey Coal Services, Inc.(2) from 1989. He joined Rawls Sales & Processing Co.(3) in 1982. He is also Director of the National Mining Association, the Governor's Mission West Virginia Board and the Norfolk Southern Advisory Board. Bennett K. Hatfield, Age 44 Mr. Hatfield has been Executive Vice President and Chief Operating Officer of Massey since November 30, 2000. He also has been Executive Vice President and Chief Operating Office of A.T. Massey since June 1998. Mr. Hatfield was formerly Senior Vice President and Chief Administrative Officer of A.T. Massey from December 1997 to May 1998, Vice President--Planning of A.T. Massey from November 1994 to November 1997, and Executive Vice President and Chief Coordinating Officer, NS Region of Massey Coal Services, Inc. from 1991. Mr. Hatfield joined A.T. Massey in 1979. H. Drexel Short, Age 44 Mr. Short has been Senior Vice President, Group Operations of Massey since November 30, 2000. He also has been Senior Vice President, Group Operations of A.T. Massey since May 1995. Mr. Short was formerly Chairman of the Board and Chief Coordinating Officer of Massey Coal Services from April 1991 to April 1995. Mr. Short joined A.T. Massey in 1981. Roger L. Nicholson, Age 40 Mr. Nicholson has been Vice President, Secretary and General Counsel of Massey since November 30, 2000. He also has been Vice President and General Counsel of A.T. Massey since February 2000. Mr. Nicholson joined A.T. Massey in 1995 as Assistant General Counsel. Prior to joining A.T. Massey, Mr. Nicholson was associated with the law firm of Robinson & McElwee in Lexington, Kentucky. Prior to that, Mr. 20 Nicholson served as chief real estate counsel for Arch Mineral Corporation and as vice president, secretary and general counsel of its land-holding subsidiary, Ark Land Company. Jeffrey M. Jarosinski, Age 40 Mr. Jarosinski has been Vice President, Finance and Chief Financial Officer of Massey since November 30, 2000. He also has been Vice President, Finance and Chief Financial Officer of A.T. Massey since September 1998. Mr. Jarosinski was formerly Vice President, Taxation of A.T. Massey from 1997 to August 1998 and Assistant Vice President, Taxation of A.T. Massey from 1993 to 1997. Mr. Jarosinski joined A.T. Massey in 1988. Prior to joining A.T. Massey, Mr. Jarosinski held various positions in accounting, most recently as Manager at Womack, Burke & Associates, CPAs in Richmond, Virginia. Baxter F. Phillips, Jr., Age 54 Mr. Phillips has been Vice President and Treasurer of Massey since November 30, 2000. He also has been Vice President and Treasurer of A.T. Massey since October 2000. Mr. Phillips joined A.T. Massey in 1981 and has served in various capacities with A.T. Massey, including Corporate Treasurer, Manager of Export Sales, Corporate Human Resources Manager, Vice President of Benefits and Vice President, Purchasing and Administration. Prior to joining A.T. Massey, Mr. Phillips held various positions in banking and investments. Madeleine M. Curle, Age 41 Ms. Curle has been Vice President, Human Resources of Massey since November 30, 2000. She also has been Vice President, Human Resources of A.T. Massey since May 2000. Ms. Curle was formerly Vice President, Benefits from December 1995 to April 2000, Assistant Vice President, Benefits Planning and Administration from May 1995 to November 1995, and Director, Medical and Retirement Programs from January 1995 to April 1995. Ms. Curle joined A.T. Massey in October 1993. Prior to joining A.T. Massey, Ms. Curle served as an employee benefits consultant at Foster Higgins, a national consulting firm (recently merged with William M. Mercer, Inc.). (1) A.T. Massey Coal Company, Inc., or A.T. Massey, is a wholly-owned subsidiary of Massey Energy Company. (2) Massey Coal Services, Inc. is a wholly-owned subsidiary of Massey Coal Sales Company, Inc., a wholly-owned subsidiary of A.T. Massey. (3) Rawl Sales & Processing Co. is a wholly-owned subsidiary of A.T. Massey. Part II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters. The Company's stock is currently listed on the New York Stock Exchange, the Chicago Stock Exchange, Inc. and the Pacific Exchange, Inc. The Company has voluntarily applied for delisting of its stock from the Chicago Stock Exchange, Inc. and the Pacific Exchange, Inc. and such delisting is in progress. The Company's Common Stock trading symbol is MEE. At December 31, 2000, there were 73,496,939 shares outstanding and approximately 8,031 shareholders of record of Massey's common stock. As discussed above, on November 30, 2000, Fluor completed the spin-off of New Fluor, which is conducting all of the businesses previously conducted by Fluor, other than the coal business. New Fluor is treated as the accounting successor of Fluor. As a result, information regarding dividends previously paid by, or prices paid for the common stock of, Fluor is not indicative of the past or future performance of Massey and has not been included. 21 The dividends paid and the stock prices of Fluor stock for the past two years can be found in Fluor's Annual Report on Form 10-K for the fiscal year ended October 31, 2000. Transfer Agent and Registrar Mellon Investor Services LLC (formerly known as ChaseMellon Shareholder Services, L.L.C.) acts as transfer agent and registrar for the Massey Common Stock. Item 6. Selected Financial Data. SELECTED FINANCIAL DATA (3)
For the Year Ended October 31, 2000 1999 1998 1997 1996 ---- ---- ---- ---- ---- (in millions, except per share, per ton and number of employees amounts) (unaudited) COMBINED STATEMENT OF EARNINGS DATA: Net Sales................................. $ 1,081.0 $ 1,076.1 $ 1,121.1 $ 1,077.9 $ 957.8 Other Revenue............................. 59.6 38.4 32.8 31.9 18.0 Income from Operations.................... 96.9 139.4 170.1 154.8 134.5 Net Earnings.............................. 78.8 103.4 128.3 119.0 107.6 Pro forma earnings per share (1).......... Basic and diluted (unaudited).......... 1.07 1.40 1.74 1.61 1.46 COMBINED BALANCE SHEET DATA: Working capital (deficit)................. $ 109.1 $ 43.9 $ 4.0 $ (2.4) $ (5.3) Total assets.............................. 2,161.1 1,980.0 1,836.9 1,641.6 1,398.9 Shareholder's equity...................... 1,374.6 1,277.4 1,181.2 1,054.8 905.2 OTHER DATA: EBIT...................................... $ 96.9 $ 139.4 $ 170.1 $ 154.8 $ 134.5 EBITDA (2)................................ 268.2 306.9 320.6 286.1 239.9 Tons Sold................................. 40.2 37.9 37.6 35.6 31.1 Tons Produced............................. 41.5 38.4 38.0 36.6 31.2 Average cost per ton...................... $ 20.82 $ 20.39 $ 21.36 $ 22.47 $ 22.99 Average sales price per ton............... 26.89 28.40 29.83 30.24 30.81 Capital expenditures...................... $ 204.8 $ 230.0 $ 307.9 $ 305.2 $ 225.7 Number of employees....................... 3,610 3,190 3,094 2,968 2,809
(1) Shares used to calculate basic pro forma earnings per share is based on the number of shares expected to be outstanding at the date of the Spin-Off (assumed to be equal to the 75,743,345 shares of Fluor Corporation common stock outstanding on October 31, 2000 less 1.85 million shares of common stock acquired upon the settlement of its forward purchase contract). Shares used to calculate diluted earnings per share is based on the number of shares expected to be issued in connection with the Spin-Off and the dilutive effect of stock options and other stock-based instruments of Fluor Corporation, held by Massey employees, that were converted to equivalent instruments in Massey Energy Company in connection with the Spin-Off. (2) EBITDA is defined as earnings before deducting net interest expense (interest expense less interest income), income taxes and depreciation, depletion and amortization. Although EBITDA is not a measure of performance calculated in accordance with generally accepted accounting principles, management believes that it is useful to an investor in evaluating Massey because it is widely used in the coal industry as a measure to evaluate a company's operating performance before debt expense and its cash flow. EBITDA does not 22 purport to represent cash generated by operating activities and should not be considered in isolation or as a substitute for measures of performance in accordance with generally accepted accounting principles. In addition, because EBITDA is not calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies. Management's discretionary use of funds depicted by EBITDA may be limited by working capital, debt service and capital expenditure requirements and by restrictions related to legal requirements, commitments and uncertainties. (3) This selected Financial Data may not necessarily be indicative of the results of operations, financial position and cash flows of Massey in the future or had it operated as a separate independent company during the periods presented. The Selected Financial Data do not reflect any changes that have or may occur in the financing and operations of Massey Energy as a result of the Spin-Off. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations 2000 Compared with 1999 Net sales have remained essentially unchanged in 2000 compared with 1999. Net sales were $1,081.0 million in 2000 compared with $1,076.0 million for 1999. Three factors that impacted revenues during 2000 were: . The volume of steam coal sold increased by 14 percent in 2000 compared to 1999. . The volume of the higher priced metallurgical coal declined by 6 percent in 2000 compared to 1999. . The average realized prices for both steam and metallurgical coal declined by 5 percent in 2000 compared with 1999. The metallurgical coal market continued to be adversely affected by a weak coal export market and the slow recovery of the domestic steel market. Demand was weak for United States coal exported to foreign markets as the U.S. dollar remained strong. The market for steam coal continued to be adversely impacted by two factors: (1) mild weather and (2) competition from western coals, which increased its penetration of traditional eastern coal market areas. Other revenue, which consists of royalties, rentals, miscellaneous income and gains on the sale of non-strategic assets, increased 55 percent to $59.6 million for 2000 compared with $38.4 million for 1999. The increase was primarily due to an increase in income from dispositions of non-strategic mineral reserves which generated $26.5 million in 2000 compared with $10.2 million in 1999. As part of its management of coal reserves, Massey regularly sells non-strategic reserves or exchanges them for reserves located in more synergistic locations. Cost of sales increased 8 percent to $837.1 million for 2000 from $774.8 million in 1999. This was primarily due to the increase in tons sold by 6 percent from 37.9 million tons in 1999 to 40.2 million tons in 2000. Cost of sales for 2000 includes a $15.0 million credit related to refunds of black lung excise taxes paid on coal export sales tonnage. The payment of black lung excise taxes on exported coal was determined to be unconstitutional by a 1998 federal district court decision. During 2000, the Internal Revenue Service issued procedures for obtaining refunds related to such excise taxes. Cost of sales also included charges of $9 million related to a geological impairment related to the longwall development at the Upper Cedar Grove mine and a $3 million charge related to a slurry spill from the impoundment breach at Martin County Coal Corporation. Cost of sales on a per ton of coal sold basis, excluding the aforementioned items, increased by approximately 2 percent in 2000 compared with 1999 as operational problems and adverse geologic conditions encountered during the third and fourth quarters of 2000 more than offset cost reductions that had been achieved in the first two quarters of 2000. Depreciation, depletion and amortization slightly increased to $171.3 million for 2000 from $167.6 million in 1999. The increase of $3.7 million was primarily due to capital expenditures made in recent years. 23 Selling, general and administrative expenses increased 8 percent to $35.4 million for 2000 compared with $32.7 million for 1999, due in part to a $5.8 million bad debt expense associated with the bankruptcy of a major steel industry customer offset some by a reduction in accruals related to long-term executive compensation plans. Interest income increased to $25.7 million for 2000 compared with $14.4 million for 1999. This increase of $11.3 million was primarily due to the additional interest income of $5.3 million related to the black lung excise tax refunds discussed above and a general increase in the floating interest rate on a note receivable from Fluor Corporation. Income taxes decreased 13 percent to $43.4 million for 2000 compared with $49.6 million in 1999. The decrease primarily reflects the decreased earnings in 2000 compared with 1999, partially offset by a rise in the effective tax rate to 35.5 percent for 2000 compared with 32.4 percent for 1999. 1999 Compared with 1998 Net sales for 1999 decreased 4 percent to $1,076.1 million from $1,121.1 million for 1998. Sales decreased $45.0 million in 1999 compared with 1998 primarily due to the combination of a reduction in volume of the higher priced metallurgical coal and a decline in prices. Metallurgical coal volume decreased nearly 18 percent during 1999 compared with 1998. This decrease was more than offset by an increase in lower priced steam coal volume. Also contributing to the decline in coal revenues were lower realized prices for both steam and metallurgical coal. Steam coal prices declined 4 percent while metallurgical coal prices declined 2 percent. The metallurgical coal market was adversely affected by steel imports from outside the United States and a weak U.S. coal export market. The imports reduced demand for steel produced in the U.S. and thereby reduced U.S. demand for metallurgical coal, which is used in steel production. Demand was weak for U.S. coal exported to foreign markets as the U.S. dollar was strong and the Asian economies slowly recover from their financial crises. Additionally, the market for steam coal continued to be impacted by two factors: (1) a mild winter in 1998 and (2) competition from western coals, which have continued to penetrate the traditional eastern coal market areas. Other revenue, which consists of royalties, rentals, miscellaneous income and gains on the sale of non-strategic assets, increased 17 percent to $38.4 million for 1999 compared with $32.8 million for 1998. The increase of $5.6 million was primarily due to an increase in rebates received from railroads. Cost of sales decreased 4 percent to $774.8 million for 1999 from $805.8 million in 1998 as a result of lower production costs. Cost reductions were achieved which lowered the cost per ton of coal sold during the period by 5 percent from $21.36 per ton in 1998 to $20.39 in 1999. Massey continues to focus on reducing mining production costs through expansion of its surface mining capabilities and utilization of longwall mining. Depreciation, depletion and amortization increased 11 percent to $167.6 million for 1999 from $150.5 million in 1998. The increase of $17.1 million was primarily due to the start-up of Appalachian Synfuel; LLC's synthetic fuel plant and the development of a new surface mine and a new longwall mine. Selling, general and administrative expenses increased 19 percent to $32.7 million for 1999 compared with $27.6 million for 1998 as a result of a long-term retention agreement negotiated with Massey's Chief Executive Officer. Interest income decreased to $14.4 million for 1999 compared with $16.1 million for 1998. This decrease of $1.7 million was primarily due to a lower outstanding balance on the note receivable from Fluor caused by capital spending exceeding cash generated from operations. Income taxes decreased 14 percent to $49.6 million for 1999 compared with $57.4 million in 1998. The $7.8 million decrease reflects decreased earnings in 1999 compared with 1998. The effective tax rate was 32.4 percent for 1999 compared with 30.9 percent for 1998. 24 Liquidity and Capital Resources Massey's cash and cash equivalents were $6.9 million at October 31, 2000. The cash flow provided by operating activities was $285.5 million in 1998 and $236.5 million in 1999 and $154.3 million in 2000. Cash provided by operating activities reflects net earnings adjusted for non-cash charges and changes in working capital requirements. Net cash used in investing activities was $282.3 million in 1998, $223.6 million in 1999 and $173.4 million in 2000. The cash used in investing activities reflects expenditures for replacement of mining equipment, the expansion of mining capacity and projects to improve the efficiency of mining operations. Financing activities primarily reflect changes in the note receivable from Fluor. Immediately subsequent to the Spin-Off, Massey had $578.5 million in debt. Fluor's previously-issued $300 million of 6.95% Senior Notes due March 1, 2007 remained an obligation of Massey following the Spin-Off. In addition, Massey has a commercial paper program that provides up to $400 million of operating liquidity. Massey has $150 million 364-day and $250 million 3-year revolving credit facilities that serve to provide liquidity backstop to Massey's commercial paper program and are also available to meet the Company's ongoing liquidity needs. As of the Spin-Off, Massey's commercial paper borrowings were $278.5 million. Massey generally has satisfied its working capital requirements and funded its capital expenditures from cash generated from operations. Massey believes that cash generated from operations and its borrowing capacity will be sufficient to meet its working capital requirements, anticipated capital expenditures (other than major acquisitions), scheduled debt payments and anticipated dividend payments for at least the next several years. Nevertheless, the ability of Massey to satisfy its debt service obligations, to fund planned capital expenditures or pay dividends will depend upon its future operating performance, which will be affected by prevailing economic conditions in the coal industry and financial, business and other factors, some of which are beyond Massey's control. Massey frequently evaluates potential acquisitions. In the past, Massey has funded acquisitions primarily with cash generated from operations, but Massey may consider a variety of other sources, depending on the size of any transaction, including debt or equity financing. There can be no assurance that such additional capital resources will be available to Massey on terms which Massey finds acceptable, or at all. Inflation Inflation in the United States has been relatively low in recent years and did not have a material impact on Massey's results of operations for the years presented. New Accounting Standards Accounting for Derivative Instruments and Hedging Activities. In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, (collectively referred to as derivatives) and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. In June 1999, FASB issued SFAS No. 137 which deferred the effective date of SFAS No. 133 for all fiscal quarters of all fiscal years beginning after June 15, 2000. Massey will adopt SFAS No. 133 in the first fiscal quarter of 2001. Massey believes that the adoption of SFAS No. 133 will not have a significant impact on Massey's financial position, results of operations or liquidity, however, the FASB continues to finalize and release interpretive guidance and, therefore, no assurance can be given that any new interpretive guidance, if contrary to Massey's current interpretation of SFAS No. 133, will not have significant impact on Massey. Item 7A. Quantitative and Qualitative Discussions about Market Risk 25 Massey's interest expense is sensitive to changes in the general level of interest rates in the United States. At December 31, 2000, Massey had outstanding $300 million aggregate principal amount of debt under fixed-rate instruments and $275.1 million aggregate principal amount of debt under variable-rate instruments. Massey's primary exposure to market risk for changes in interest rates relates to its commercial paper program. At December 31, 2000, Massey has an aggregate of $275.1 million in commercial paper outstanding. Massey's commercial paper bore interest at an average rate of 7.79% at December 31, 2000. Based on the commercial paper balance outstanding at December 31, 2000, a 100 basis point increase in the average issuance rate for Massey's commercial paper would increase Massey's annual interest expense by approximately $2.8 million. The fair value of Massey's financial instruments is set forth in Note 4 of the Notes to Consolidated Financial Statements. Almost all of Massey's transactions are denominated in U.S. dollars, and, as a result, it does not have material exposure to currency exchange-rate risks. Massey has not engaged in any interest rate, foreign currency exchange-rate or commodity price hedging transactions. Item 8. Financial Statements and Supplementary Data REPORT OF INDEPENDENT AUDITORS To the Shareholder of Massey Energy Company We have audited the accompanying combined balance sheets of Massey Energy Company (see Note 1) as of October 31, 2000 and 1999, and the related combined statements of earnings, cash flows, and shareholder's equity for each of the three years in the period ended October 31, 2000. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the combined financial position of Massey Energy Company at October 31, 2000 and 1999, and the combined results of its operations and its cash flows for each of the three years in the period ended October 31, 2000, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG LLP Richmond, Virginia January 11, 2001 26 MASSEY ENERGY COMPANY COMBINED STATEMENTS OF EARNINGS (In Thousands, Except Per Share Amounts)
Year Ended October 31, ----------------------------------------- 2000 1999 1998 ----------- ----------- ----------- (in thousand, except per share amount) Net sales.................................. $ 1,081,027 $ 1,076,059 $ 1,121,136 Other revenue ............................. 59,645 38,393 32,818 ----------- ----------- ----------- Total revenue ................ 1,140,672 1,114,452 1,153,954 ----------- ----------- ----------- Costs and expenses Cost of sales ..................... 837,072 774,820 805,771 Depreciation, depletion and amortization .................... 171,336 167,558 150,459 Selling, general and administrative .................. 35,364 32,696 27,584 ----------- ----------- ----------- Total costs and expenses ..... 1,043,772 975,074 983,814 ----------- ----------- ----------- Income from operations .................... 96,900 139,378 170,140 Interest income ........................... 25,661 14,426 16,073 Interest expense .......................... (347) (803) (514) ----------- ----------- ----------- Earnings before taxes ..................... 122,214 153,001 185,699 Income tax expense ........................ 43,410 49,561 57,403 ----------- ----------- ----------- Net earnings ................. $ 78,804 $ 103,440 $ 128,296 =========== =========== =========== Pro forma earnings per share (unaudited) Basic ............................. $ 1.07 $ 1.40 $ 1.74 =========== =========== =========== Diluted ........................... $ 1.07 $ 1.40 $ 1.74 =========== =========== =========== Shares used to calculate pro forma earnings per share Basic ............................. 73,893 73,893 73,893 ====== ====== ====== Diluted ........................... 73,893 73,900 73,900 ====== ====== ======
See Notes to Combined Financial Statements. 27 MASSEY ENERGY COMPANY COMBINED BALANCE SHEETS (In Thousands of Dollars)
At October 31, ------------------------ 2000 1999 ---------- ---------- ASSETS - -------------------------------------------------------- Current Assets Cash and cash equivalents....................... $ 6,929 $ 8,051 Trade and other accounts receivable............. 215,574 141,480 Inventories..................................... 104,132 91,723 Deferred taxes.................................. 8,398 8,666 Prepaid expenses and other...................... 48,966 36,724 ---------- ---------- Total current assets....................... 383,999 286,644 Net Property, Plant and Equipment....................... 1,559,426 1,508,728 Other Noncurrent Assets Pension assets.................................. 67,740 55,908 Other........................................... 149,965 128,717 ---------- ---------- Total other noncurrent assets.............. 217,705 184,625 ---------- ---------- Total assets............................... $2,161,130 $1,979,997 ========== ========== LIABILITIES AND SHAREHOLDER'S EQUITY - -------------------------------------------------------- Current Liabilities Accounts payable, principally trade............. $ 120,891 $ 109,826 Notes payable and bank overdrafts............... 32,566 50,360 Payroll and employee benefits................... 30,784 29,115 Income taxes payable............................ 12,222 10,025 Other current liabilities....................... 78,420 43,393 ---------- ---------- Total current liabilities.................. 274,883 242,719 Noncurrent Liabilities Deferred taxes.................................. 254,022 226,062 Other........................................... 257,607 233,823 ---------- ---------- Total noncurrent liabilities............... 511,629 459,885 Shareholder's Equity Net investment by Fluor Corporation............. 1,653,682 1,557,809 Due from Fluor Corporation...................... (279,064) (280,416) ---------- ---------- Total shareholder's equity................. 1,374,618 1,277,393 ---------- ---------- Total liabilities and shareholder's equity. $2,161,130 $1,979,997 ========== ==========
See Notes to Combined Financial Statements. 28 MASSEY ENERGY COMPANY COMBINED STATEMENTS OF CASH FLOWS (In Thousands of Dollars)
Year Ended October 31, ----------------------------------- 2000 1999 1998 --------- --------- --------- Cash Flows From Operating Activities Net earnings .................................................. $ 78,804 $ 103,440 $ 128,296 Adjustments to reconcile net earnings to cash provided by operating activities: Depreciation, depletion and amortization ................. 171,336 167,558 150,459 Deferred taxes ........................................... 28,228 42,409 32,683 Gain on disposal of assets ............................... (26,330) (8,982) (4,555) Changes in operating assets and liabilities (Increase) decrease in accounts receivable ........... (42,801) (6,653) 7,941 (Increase) decrease in inventories ................... (12,349) (20,089) 1,858 Increase in prepaid expenses and other current assets ............................................. (13,983) (7,578) (10,374) Increase in pension and other assets ................. (30,013) (36,733) (23,841) Increase (decrease) in accounts payable and bank overdrafts .................................... (6,729) 19,850 (4,588) Increase (decrease) in accrued income taxes .......... 2,197 (11,340) 1,722 Increase (decrease) in other accrued liabilities ..... (5,204) (10,007) 3,035 Increase in other non-current liabilities ............ 11,135 4,609 2,873 --------- --------- --------- Cash provided by operating activities ........... 154,291 236,484 285,509 --------- --------- --------- Cash Flows From Investing Activities Capital expenditures ..................................... (204,835) (230,001) (307,898) Proceeds from sale of assets ............................. 31,468 6,437 25,549 --------- --------- --------- Cash utilized by investing activities ........... (173,367) (223,564) (282,349) --------- --------- --------- Cash Flows From Financing Activities Decrease (increase) in amount due from Fluor Corporation ............................................ 1,352 (15,012) (14,238) Equity contributions from Fluor Corporation .............. 17,069 7,739 12,335 Other, net ............................................... (467) (1,247) (1,189) --------- --------- --------- Cash provided (utilized) by financing activities .................................... 17,954 (8,520) (3,092) --------- --------- --------- (Decrease) increase in cash and cash equivalents .............. (1,122) 4,400 68 Cash and cash equivalents at beginning of period .............. 8,051 3,651 3,583 --------- --------- --------- Cash and cash equivalents at end of period .................... 6,929 $ 8,051 $ 3,651 ========= ========= ========= Supplemental disclosure of cash flow information Cash paid during the fiscal year for income taxes ........ $ 12,834 $ 18,492 $ 21,736 ========= ========= =========
See Notes to Combined Financial Statements. 29 MASSEY ENERGY COMPANY COMBINED STATEMENTS OF SHAREHOLDER'S EQUITY (In Thousands of Dollars)
Net --- Investment Due From Total ---------- -------- ----- by Fluor Fluor Corporation Shareholder's -------- ----------------- ------------- Corporation Equity ----------- ------ Balance at October 31, 1997........................ $ 1,305,999 $ (251,166) $ 1,054,833 Net earnings....................................... 128,296 128,296 Capital contributions.............................. 12,335 12,335 Net change in amount due from Fluor Corporation.... (14,238) (14,238) ----------- ------------ ----------- Balance at October 31, 1998........................ 1,446,630 (265,404) 1,181,226 Net earnings....................................... 103,440 103,440 Capital contributions.............................. 7,739 7,739 Net change in amount due from Fluor Corporation.... (15,012) (15,012) ----------- ------------ ----------- Balance at October 31, 1999........................ 1,557,809 (280,416) 1,277,393 Net earnings ...................................... 78,804 78,804 Capital contributions ............................. 17,069 17,069 Net change in amount due from Fluor Corporation.... 1,352 1,352 ----------- ------------ ----------- Balance at October 31, 2000........................ $ 1,653,682 $ (279,064) $ 1,374,618 =========== ============ ===========
See Notes to Combined Financial Statements. 30 MASSEY ENERGY COMPANY NOTES TO COMBINED FINANCIAL STATEMENTS 1. Major Accounting Policies Basis of Presentation The accompanying combined financial statements of Massey Energy Company ("Massey" or the "Company") includes the accounts of A. T. Massey Coal Company, Inc. ("A. T. Massey") and its subsidiaries, and Appalachian Synfuel LLC ("Appalachian"). Until the spin-off transaction on November 30, 2000 (See Note 9)(the "Spin-Off"), A. T. Massey and Appalachian were 100% controlled by Fluor Corporation (Fluor). All significant intercompany transactions and accounts have been eliminated. These Combined Financial Statements may not necessarily be indicative of the results of operations, financial position and cash flows of Massey in the future or had it operated as a separate independent company during the periods presented. The Combined Financial Statements do not reflect any changes that occurred in the financing and operations of Massey as a result of the Spin-Off. Use of Estimates The preparation of the financial statements of the Company in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect reported amounts. These estimates are based on information available as of the date of the financial statements. Therefore, actual results could differ from those estimates. Cash and Cash Equivalents Securities with maturities of 90 days or less at the date of purchase are classified as cash equivalents. Revenue Recognition Coal sales are generally recognized when coal is loaded onto transportation vehicles for shipment to customers. For domestic sales, this generally occurs when coal is loaded at the mine or at off-site storage locations. For export sales, this generally occurs when coal is loaded onto marine vessels at terminal locations. Other revenue generally consists of royalties, rentals, miscellaneous income and gains on the sale of non-strategic assets. For the years ended October 31, 2000, 1999 and 1998, the Company recorded gains on the sale of non- strategic reserves of $26.5 million, $10.2 million and $7.2 million, respectively. Property, Plant and Equipment Property, plant and equipment is carried at cost and comprises:
At October 31, ------------------------ 2000 1999 ---------- ---------- (in thousands) Land, buildings and equipment.............................. $1,561,122 $1,479,784 Mining properties and mineral rights....................... 582,512 566,492 Mine development........................................... 373,418 292,473 ---------- ---------- Total property, plant and equipment 2,517,052 2,338,749 Less accumulated depreciation, depletion and amortization.. (957,626) (830,021) ---------- ---------- Net property, plant and equipment..................... $1,559,426 $1,508,728 ========== ==========
31 Expenditures which extend the useful lives of existing building and equipment are capitalized. Maintenance, repairs and minor renewals are expensed as incurred. Coal exploration costs are expensed as incurred. Development costs applicable to the opening of new coal mines and certain mine expansion projects are capitalized. When properties are retired or otherwise disposed, the related cost and accumulated depreciation are removed from the respective accounts and any profit or loss on disposition is credited or charged to income. Depreciation of buildings and equipment is calculated on the straight-line method over their estimated useful lives, generally ranging from 3 to 50 years. Depletion of mining properties and mineral rights and amortization of mine development costs are computed using the units-of-production method over the estimated recoverable tons. Reclamation The Company accrues for post-mining reclamation costs, as coal is mined, on a unit of production basis over the estimated recoverable tons. Accrued reclamation costs are regularly reviewed by management and are revised for changes in future estimated costs and regulatory requirements. Reclamation of disturbed acreage is performed as a normal part of the mining process. Impairment of Long-Lived Assets Impairment of long-lived assets is recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying value. The carrying value of the assets is then reduced to their estimated fair value which is usually measured based on an estimate of future discounted cash flows. During the fourth quarter of 2000, due to poor and unsafe mining conditions, the Company abandoned certain longwall mining equipment and related longwall panel development costs. This resulted in a write-off of approximately $9 million which is included in cost of sales. Advance Mining Royalties Leases which require minimum annual or advance payments and are recoverable from future production are generally deferred and charged to expense as the coal is subsequently produced. At October 31, 2000 and 1999, advance mining royalties included in other noncurrent assets totaled $27.5 million and $21.6 million, respectively. Black Lung Benefits Coal mining subsidiaries are obligated to pay coal workers' pneumoconiosis (black lung) benefits to eligible recipients with respect to claims awarded on or after July 1, 1973. Charges are being made to operations as determined by independent actuaries. Income Taxes Income tax expense was calculated as if Massey filed separate tax returns. Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. Pro Forma Earnings per Share (unaudited) Shares used to calculate basic pro forma earnings per share is based on the number of shares expected to be outstanding at the date of the Spin-Off (assumed to be equal to the 75,743,345 shares of Fluor Corporation common stock outstanding on October 31, 2000 less 1.85 million shares of common stock acquired upon the settlement of its forward purchase contract). Shares used to calculate diluted earnings per share is based on the number of shares expected to be 32 issued in connection with the Spin-Off and the dilutive effect of stock options and other stock-based instruments of Fluor Corporation, held by Massey employees, that were converted to equivalent instruments in Massey Energy Company in connection with the Spin-Off. Inventories Purchased coal inventories are stated at the lower of cost, computed on the first-in, first-out method, or market value. Produced coal and supplies generally are stated at the lower of average cost or net realizable value. Inventories are comprised of: At October 31, 2000 1999 -------- ------- (in thousands) Coal.... $ 82,636 $72,070 Other... 21,496 19,653 -------- ------- $104,132 $91,723 ======== ======= Internal Use Software Effective for fiscal year 1999, the Company adopted the American Institute of Certified Public Accountants' Statement of Position (SOP) 98-1, "Accounting for the Costs of Computer Software Developed for or Obtained for Internal Use." The statement requires capitalization of certain costs incurred in the development of internal-use software, including external direct material and service costs, employee payroll and payroll-related costs. All costs capitalized are amortized using the straight-line method over the estimated useful life not to exceed 7 years. Prior to the adoption of SOP 98-1, the Company capitalized only purchased software which was ready for service; all other costs were expensed as incurred. The adoption of this statement did not have a material effect on the Company's financial statements. Concentrations of Credit Risk and Major Customers A. T. Massey is engaged in the production of high-quality low sulfur steam coal for the electric generating industry, as well as industrial customers and metallurgical coal for the steel industry. Steam coal sales accounted for approximately 60%, 55%, and 46% of combined net sales during 2000, 1999, and 1998, respectively. Metallurgical coal sales accounted for approximately 40%, 45% and 54% of combined net sales during 2000, 1999 and 1998, respectively. A. T. Massey's mining operations are conducted in eastern Kentucky, West Virginia, Virginia and Tennessee and the coal is marketed primarily in the United States. For the years ended October 31, 2000, 1999, and 1998, approximately 14%, 12% and 13%, respectively, of combined net sales were made to one utility customer, Duke Energy. At October 31, 2000, approximately 40% and 51% of combined trade receivables represent amounts due from utility customers and steel-producing customers, respectively, compared with 49% and 42%, respectively, as of October 31, 1999 and 37% and 49%, respectively, as of October 31, 1998. Credit is extended based on an evaluation of the customer's financial condition and generally collateral is not required. Derivatives In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, 33 (collectively referred to as derivatives) and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. In June 1999, FASB issued SFAS No. 137 which deferred the effective date of SFAS No. 133 for all fiscal quarters of all fiscal years beginning after June 15, 2000. Massey will adopt SFAS No. 133 in the first fiscal quarter of 2001. Massey believes that the adoption of SFAS No. 133 will not have a significant impact on Massey's financial position, results of operations or liquidity, however, the FASB continues to finalize and release interpretive guidance and, therefore, no assurance can be given that any new interpretive guidance, if contrary to Massey's current interpretation of SFAS No. 133, will not have significant impact on Massey. Stock Plans The Company accounts for stock-based compensation using the intrinsic value method prescribed by Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations. Accordingly, compensation cost for Fluor stock options granted to Massey employees is measured as the excess, if any, of the quoted market price of Fluor stock at the date of grant over the amount an employee must pay to acquire the stock. Compensation cost for stock appreciation rights and performance equity units is recorded based on the quoted market price of Fluor's stock at the end of the period. 2. Income Taxes Income tax expense (benefit) included in the Combined Statement of Earnings is as follows: Year Ended October 31, ---------------------------- 2000 1999 1998 ------- ------- ------- (in thousands) Current: Federal........................ $13,735 $9,048 $22,518 State and local................ 1,447 (1,896) 2,202 ------- ------- ------- Total current............. 15,182 7,152 24,720 ------- ------- ------- Deferred: Federal........................ 24,719 36,912 29,751 State and local................ 3,509 5,497 2,932 ------- ------- ------- Total deferred............ 28,228 42,409 32,683 ------- ------- ------- Total income tax expense. $43,410 $49,561 $57,403 ======= ======= ======= A reconciliation of U.S. statutory federal income tax expense to the Company's income tax expense on earnings is as follows:
Year Ended October 31, ----------------------------- 2000 1999 1998 ------- ------- ------- (in thousands) U.S. statutory federal tax expense.......... $42,775 $53,550 $64,995 Increase (decrease) in taxes resulting from: State taxes............................ 3,799 2,341 3,337 Items without tax effect............... 4,283 2,487 871 Depletion.............................. (7,657) (9,625) (12,273) Other, net............................. 210 808 473 ------- ------- ------- Total income tax expense.......... $43,410 $49,561 $57,403 ======= ======= =======
34 Deferred taxes reflect the tax effects of differences between the amounts recorded as assets and liabilities for financial reporting purposes and the amounts recorded for income tax purposes. The tax effects of significant temporary differences giving rise to deferred tax assets and liabilities are as follows:
October 31, ---------------------- 2000 1999 --------- --------- (in thousands) Deferred tax assets: Accrued liabilities not currently deductible........................ $ 40,579 $ 43,959 Alternative minimum tax credit carryforwards........................ 49,676 42,386 Other............................................................... 31,710 34,299 --------- --------- 121,965 120,644 Valuation allowance for deferred tax assets................................. (37,512) (38,199) --------- --------- Deferred tax assets, net.................................................... 84,453 82,445 --------- --------- Deferred tax liabilities: Book basis of property, equipment and other capital costs in excess of tax basis...................................................... (268,605) (247,919) Other............................................................... (61,472) (51,922) --------- --------- Total deferred tax liabilities................................. (330,077) (299,841) --------- --------- Net deferred tax liabilities................................................ $(245,624) $(217,396) ========= =========
The Company maintains a valuation allowance to reduce certain deferred tax assets to amounts that are more likely than not to be realized. This allowance primarily relates to the deferred tax assets established for the alternative minimum tax credits. 3. Retirement Benefits Massey sponsors a number of noncontributory defined benefit pension plans covering substantially all administrative and non-union employees hired prior to September 1, 1994. These plans generally provide pension benefits based on each employee's compensation during the highest five of the last ten years before retirement and years of service. Funding for such plans is generally at the minimum annual contribution level required by applicable regulations. Plan assets are held by an independent trustee or, in certain circumstances, by insurance carriers. The plans' assets include cash and cash equivalents, corporate and government bonds, preferred and common stocks, investments in mutual funds and annuity contracts. Prior to the spin-off, the Massey plan assets were invested in the Fluor Master Trust. The fair market value of Massey investments in the Fluor Master Trust was $229.9 million at October 31, 2000. The fair market value of Massey investments in the Fluor Master Trust and Fluor common stock were $206 million and $6.9 million, respectively, at October 31, 1999. In connection with the spin-off, the Massey plan assets have been withdrawn from the Fluor Master Trust and are now invested in funds separately managed from the Fluor Master Trust. Net periodic pension income for defined benefit pension plans includes the following components:
Year Ended October 31, ------------------------------- 2000 1999 1998 -------- -------- -------- (in thousands) Service cost............................ $ 2,509 $ 3,451 $ 3,372 Interest cost........................... 9,114 8,987 8,470 Expected return on plan assets.......... (20,732) (18,281) (17,797) Amortization of unrecognized net asset.. (2,116) (872) (2,024) Amortization of prior service cost...... 56 56 56 -------- -------- -------- Net periodic pension income............. $(11,169) $ (6,659) $ (7,923) ======== ======== ========
35 The weighted average assumptions used in determining pension obligations are as follows: At October 31, --------------- 2000 1999 ----- ----- Discount rate..................................... 7.75% 7.75% Rate of increase in compensation levels........... 4.00% 4.50% Expected long-term rate of return on plan assets.. 9.50% 9.50% 36 The following table sets forth the change in benefit obligation, plan assets and funded status of the Company's defined benefit pension plans: At October 31, -------------------- 2000 1999 -------- -------- (in thousands) Change in benefit obligation Benefit obligation at beginning of year.. $123,865 $136,028 Service cost............................. 2,509 3,451 Interest cost............................ 9,114 8,987 Actuarial gain........................... (3,262) (19,576) Benefits paid............................ (5,539) (5,025) -------- -------- Benefit obligation at end of year... $126,687 $123,865 ======== ======== Change in plan assets Fair value at beginning of year.......... $221,223 $195,136 Actual return on assets.................. 21,840 31,108 Company contributions.................... 27 4 Benefits paid............................ (5,539) (5,025) -------- -------- Fair value at end of year........... $237,551 $221,223 ======== ======== Funded status................................. $110,864 $ 97,358 Unrecognized net actuarial gain............... (46,083) (43,886) Unrecognized prior service cost............... 518 571 -------- -------- Pension assets................................ 65,299 54,043 Amount included in current liabilities........ 2,441 1,865 -------- -------- Noncurrent asset.............................. $ 67,740 $ 55,908 ======== ======== Under labor contracts with the United Mine Workers of America Benefit Funds, certain operations make payments into two multi-employer defined benefit pension plan trusts established for the benefit of union employees. The contributions are based on tons of coal produced and hours worked. Such payments aggregated approximately, $0.1 million in 2000 and 1999, and $0.4 million in 1998. Under the Coal Industry Retiree Health Benefits Act of 1992, coal producers are required to fund medical and death benefits of certain retired union coal workers based on premiums assessed by the United Mine Workers of America. Based on available information at October 31, 2000, the Company's obligation (discounted at 7.75%) under the Act is estimated at approximately $50.4 million. This cost will be recognized as expense as payments are assessed and for the years ended October 31, 2000, 1999, and 1998 totaled $3.6 million, $3.5 million, and $4.1 million, respectively. The Company sponsors three noncontributory defined contribution pension plans for eligible employees. Contributions to defined contribution retirement plans are based on hours worked. For the years ended October 31, 2000, 1999, and 1998, contributions to these plans aggregated approximately $5.6 million, $5.4 million, and $4.9 million, respectively. The Company also sponsors a salary deferral and profit sharing plan covering substantially all administrative and non-union employees. Eligible employees may elect to contribute up to 10% of their compensation, as defined by the plan. The Company may contribute to the plan at its discretion. Such contributions aggregated approximately $2.2 million, $2.6 million, and $4.1 million in 2000, 1999, and 1998, respectively. The Company also sponsors a defined benefit health care plan that provides post-retirement medical benefits to eligible union and non-union members. To be eligible, retirees must meet certain age and service requirements. Depending on year of retirement, benefits may be subject to annual deductibles, coinsurance requirements, lifetime limits, and retiree contributions. Service costs are accrued currently. The accumulated postretirement benefit obligation at October 31, 2000 and 1999 was determined in accordance with the current terms of the 37 Company's health care plans, together with relevant actuarial assumptions and health care cost trend rates projected at annual rates ranging from 5.7 percent (5.3 percent for participants age 65 or older) in 2000 (6.4 percent and 5.7 percent, respectively in 1999) down to 5 percent in 2002 and beyond. The effect of a one percent annual increase in the assumed cost trend rates would increase the accumulated postretirement benefit obligation and the aggregate of the annual service and interest costs by approximately $12.0 million and $1.7 million, respectively. The effect of a one percent annual decrease in these assumed cost trend rates would decrease the accumulated postretirement benefit obligation and the aggregate of the annual service and interest costs by approximately $10.0 million and $1.4 million, respectively. Net periodic postretirement benefit cost includes the following components: Year Ended October 31, ------------------------ 2000 1999 1998 ------ ------ ------ (in thousands) Service cost............................ $3,543 $3,850 $3,506 Interest cost........................... 4,611 4,092 4,055 Amortization of prior service cost...... 140 140 140 ------ ------ ------ Net periodic postretirement benefit cost.................................. $8,294 $8,082 $7,701 ====== ====== ====== The following table sets forth the change in benefit obligation of the Company's postretirement benefit plan: At October 31, ------------------- 2000 1999 -------- -------- (in thousands) Change in benefit obligation Benefit obligation at beginning of year.. $ 58,203 $ 68,421 Service cost............................. 3,543 3,850 Interest cost............................ 4,611 4,092 Actuarial (gain) loss.................... 2,397 (16,515) Benefits paid............................ (2,399) (1,645) -------- -------- Benefit obligation at end of year... $ 66,355 $ 58,203 ======== ======== Funded status................................. $(66,355) $(58,203) Unrecognized net actuarial (gain) loss........ (3,892) (6,296) Unrecognized prior service cost............... 1,636 1,776 -------- -------- Accrued postretirement benefit obligation..... (68,611) (62,723) Amount included in other current liabilities.. 2,659 2,186 -------- -------- Noncurrent liability................ $(65,952) $(60,537) ======== ======== The discount rate used in determining the postretirement benefit obligation was 7.75 percent at October 31, 2000 and 1999. 4. Fair Value of Financial Instruments Certain subsidiaries provide loans to West Virginia businesses at prevailing interest rates as part of an economic development program which provides tax credits as incentives. Outstanding loans at October 31, 2000 and 1999 amounted to $11.3 million and $12.2 million, respectively, of which $3.0 million and $4.0 million, respectively, is unsecured. These loans are estimated to be at fair value, after recording an allowance for loan losses of $2.9 million at October 31, 2000 and $2.7 million at October 31, 1999, based on future cash flows and related credit risk. The current portion of these notes is included in trade and other accounts receivable. The noncurrent portion is included in other noncurrent assets. 38 Prior to the Spin-Off (see Note 9), the Company loaned funds in excess of its operating and capital needs to Fluor and received interest on the average daily balance at 130% of the federal short-term rate determined in accordance with the Internal Revenue Code of 1986. Fluor repaid these loans to the Company as the needs arise. The Company believes these financial practices to be a fair arrangement with its parent and has concluded that any further assessment to determine fair market value of amounts due from Fluor would not be cost beneficial. Interest income for 2000, 1999, and 1998 related to these loans amounted to $16.6 million, $11.7 million, and $13.3 million, respectively. These loans have been classified as a reduction to shareholder's equity in the combined balance sheets. Included in other noncurrent assets is $21.8 million and $26.7 million, respectively, as of October 31, 2000 and 1999, of Fluor commercial paper acquired in the open market at prevailing interest rates. Interest income associated with commercial paper amounted to $1.6 million for the year ended October 31, 2000 and $1.1 million during the year ended October 31, 1999. The commercial paper is classified as an available-for-sale security, and is carried at cost which approximates fair value. Unrealized gains or losses are insignificant. Due to restrictions on the use of the commercial paper, it has been classified as a noncurrent asset. As of the Spin-Off, Massey ceased to have any investment in Fluor commercial paper. 5. Other Noncurrent Liabilities Other noncurrent liabilities comprise the following: At October 31, ------------------- 2000 1999 -------- -------- (in thousands) Black lung obligation..................... $ 24,033 $ 25,616 Reclamation............................... 111,101 98,677 Other post-employment benefits (Note 3)... 65,953 60,537 Workers' compensation..................... 24,429 20,329 Other..................................... 32,091 28,664 -------- -------- $257,607 $233,823 ======== ======== Coal mining companies are subject to the Federal Coal Mine Health and Safety Act of 1969, as amended, and various states' statutes for the payment of medical and disability benefits to eligible recipients with respect to black lung claims awarded on or after July 1, 1973. The Company provides for these claims principally through a self-insurance program. Black lung costs for West Virginia operations are funded through trusts. The West Virginia trusts are irrevocable grantor trusts which have been funded at a level such that no contributions will be required in the foreseeable future. Trusteed assets of approximately $29.8 million and $26.6 million are applied to reduce the balance sheet amount of black lung obligations at October 31, 2000 and 1999, respectively. Subsidiaries in other states pay awarded claims on a current basis. Charges are being made to operations as determined by independent actuaries. The expense was determined using a discount rate of 7.75%. Black lung expense includes the following components: Year Ended October 31, ------------------------------ 2000 1999 1998 ------- ------- ------- (in thousands) Service cost................... $ 950 $ 767 $ 980 Interest cost.................. 2,344 1,960 2,129 Amortization of actuarial gain.......................... (3,492) (1,163) (2,191) Interest on actuarial gain..... (270) (314) (498) ------- ------- ------- Total black lung expense.. $ (468) $ 1,250 $ 420 ======= ======= ======= 39 Under the Federal Surface Mining Control and Reclamation Act of 1977 and similar state statutes, mine property is required to be restored in accordance with regulated standards. The Company performs a certain amount of required reclamation of disturbed acreage as an integral part of its normal mining process. All such costs are expensed as incurred. Reclamation costs to be incurred upon final mine closure are estimated and accrued as mining progresses over the estimated useful mining life of the property. The costs relate to reclaiming the pit and support acreage of surface mines and sealing portals of deep mines. Other costs common to both types of mining are related to reclaiming refuse and slurry ponds. The establishment of the reclamation liability is based on permit requirements and requires various estimates and assumptions, principally associated with costs and productivities. For the years ended October 31, 2000, 1999, and 1998, the Company accrued approximately $5 million, and $6 million, and $6 million, respectively, towards final mine closure reclamation, excluding reclamation recosting adjustments identified below. The Company reviews its entire environmental liability annually and makes necessary adjustments, including permit changes and revisions to costs and productivities to reflect current experience. These recosting adjustments are recorded as a decrease in cost of sales and totaled $4.2 million, $0.8 million, and $7.2 million for the years ended October 31, 2000, 1999 and 1998, respectively. The Company's management believes it is making adequate provision for all expected future reclamation costs. Final reclamation costs for all operations as of October 31, 2000 are estimated to be approximately $166 million. 6. Stock Plans Massey maintains various stock plans for its employees. These stock plans provide for grants of non-qualified or incentive stock options, restricted stock awards and stock appreciation rights ("SARS"). Awards to employees of the Company prior to the Spin-Off were converted to equivalent instruments in Massey following its separation from Fluor. Restricted stock awards issued under the plans provide that shares awarded may not be sold or otherwise transferred until restrictions have lapsed or performance objectives have been attained. Upon termination of employment, shares upon which restrictions have not lapsed must be returned to the Company. Restricted stock issued to Massey employees totaled 31,390 shares in 2000, and 42,647 shares in 1999. No restricted stock was issued to Massey employees in 1998. A grant of 300,000 SARS was made to one Massey employee during 1998. These SARS vest at the end of fiscal year 2001. No other grants of SARS were made to Massey employees during the period 1998 through 2000. For the fiscal years ended October 31, 2000, 1999 and 1998, expenses related to Massey's various stock compensation plans totaled $3.8 million, $6.3 milliion and $1.4 million, respectively. During 2000, 1999 and 1998, 290,080, 113,860 and 135,675 options, respectively, were awarded to Massey employees. The 2000 awards cliff vest after four years and expire in ten years, the 1999 awards vest over four years and expire in ten years and the 1998 awards vest over four year periods and expire in five years. The 2000 and 1998 awards have accelerated vesting provisions based on the price of Massey's stock. The estimated fair value as of the date of grant for options granted to Massey employees in 2000, 1999 and 1998 was determined using the Black-Scholes option-pricing model based on the following weighted average assumptions: 2000 1999 1998 ----- ----- ----- Expected option lives (years). 6 6 5 Risk-free interest rates...... 6.03% 4.43% 5.86% Expected dividend yield....... 1.74% 1.37% 1.18% Expected volatility........... 39.80% 33.40% 29.60% 40 The weighted average fair value of options granted during 2000, 1999 and 1998 was $18, $15 and $11, respectively. Option grant prices were established at the fair value of Fluor's common stock at the date of grant. As the Company measures compensation cost using the intrinsic value method, no compensation cost for stock options has been recognized. If compensation cost had been determined based on the estimated fair value of options granted as prescribed by Statement of Financial Accounting Standards No. 123, Massey's net income for the years ended October 31, 2000, 1999 and 1998 would have been reduced by approximately $1.6 million, $0.8 million and $0.5 million, respectively. 7. Lease Obligations Certain mining and other equipment is leased under operating leases. Certain of these leases provide options for the purchase of the property at the end of the initial lease term, generally at its then fair market value, or to extend the terms at its then fair rental value. Rental expense for the years ended October 31, 2000, 1999, and 1998 was $28.4 million, $22.0 million, and $8.9 million, respectively. The following presents future minimum rental payments, by year, required under operating leases with initial terms greater than one year, in effect at October 31, 2000: Minimum ------- Year Rentals ---- ------- (in thousands) -------------- 2001..................... $28,683 2002..................... 27,995 2003..................... 23,602 2004..................... 19,721 2005..................... 14,239 Thereafter 1,830 -------- $116,070 ======== 8. Contingencies and Commitments The Company is the subject of, or a party to, various suits and pending or threatened litigation involving governmental agencies or private interests. Also, the Company's operations are affected by federal, state and local laws and regulations regarding environmental matters and other aspects of its business. On October 20, 1999, the U.S. District Court for the Southern District of West Virginia issued an injunction which prohibits the construction of valley fills over both intermittent and perennial stream segments as part of mining operations. While the Company is not a party to this litigation, virtually all mining operations, including Massey, utilize valley fills to dispose of excess materials. This decision is now under appeal to the Fourth Circuit Court of Appeals and the District Court has issued a stay of its decision pending the outcome of the appeal. Based upon the current state of the appeal, the Company does not believe that their mining operations will be materially affected during the pendency of the appeal. If and to the extent that the District Court's decision is upheld and legislation is not passed which limits the impact of the decision, then all or a portion of the Company's mining operations could be affected. The potential impact to the Company arising from this proceeding is not currently estimable. Harman Mining Corporation and certain of its affiliates (collectively "Harman") filed a breach of contract actions against Wellmore Coal Corporation, a former Massey subsidiary, in Buchanan County, Virginia Circuit Court. On August 24, 2000, as part of the damages phase of the trial, a jury awarded damages in the amount of $6 million. Massey intends to appeal the award and will defend the action vigorously. On October 11, 2000, a partial failure of a coal refuse impoundment released approximately 230 million gallons of coal slurry into adjacent underground mine workings. The slurry then discharged into two tributary streams of the Big Sandy River in eastern Kentucky. Clean up efforts began immediately and are continuing. 41 The states of Kentucky and West Virginia have issued various notices of violation related to the discharge and ordered remedial measures. Fines and penalties have not yet been assessed. Several lawsuits have been brought asserting trespass, property damage, nuisance and other claims and seek compensatory and punitive damages. Certain of these suits seek to be certified as class action lawsuits. The Company has pollution insurance coverage and believes that such coverage will cover clean-up related costs and third party claims arising from this event. The Company recorded a $3 million charge in the fourth quarter of 2000 relating to the slurry spill. The charge represents an accrual of $46.5 million in estimated spill-related clean-up costs and liabilities net of $43.5 million in probable insurance recoveries. In the combined balance sheet, the $46.5 million environmental accrual is included in other current liabilities and the $43.5 million in probable insurance recoveries is included in trade and other accounts receivable. Given that the remediation efforts are still in progress and the degree of uncertainty with respect to potential claims, fines and penalties, it is reasonably possible the Company's estimates with respect to the slurry spill could change. The outcome or timing of current legal or environmental matters or the impact, if any, of pending legislation or regulatory developments (including the matters noted above) on future operations is not currently estimable. Management does not currently anticipate that such activity will result in amounts which in the aggregate would have a material effect on the Company's combined financial position. The Company believes, based upon present information available to it, that its reserves with respect to future environmental costs are adequate and such future costs will not have a material effect on the Company's combined financial position, results of operations or liquidity. However, the imposition of more stringent requirements under environmental laws or regulations, or changes in enforcement policies under such laws and regulations, could result in additional expenditures, or the provision of additional reserves in expectation of such expenditures. 9. Subsequent Events On November 30, 2000, Fluor completed the Spin-Off, which divided it into two separate publicly trade corporations. As a result of the Spin-Off, Fluor separated into (i) the spun-off corporation, New Fluor, which owns all of the Company's then existing businesses except for the coal-related business conducted by A. T. Massey, and (ii) Fluor, subsequently renamed Massey, which owns the coal-related business. Immediately after the spin-off, Massey had approximately 73,468,707 shares of $0.625 par value common stock outstanding. In connection with the Spin-Off, A. T. Massey became the sole direct, and wholly- owned subsidiary of Massey. A. T. Massey now represents the sole operating subsidiary of Massey, as Massey has no separate independent operations. As a result of the Spin-Off, the following occurred which will affect Massey's ongoing operations: . As described in Note 4, Massey no longer invests in the Fluor commercial paper; . As described in Note 4, Massey no longer loans amounts in excess of operating and capital needs to Fluor and the amounts due from Fluor were repaid as part of the Spin-Off; . Fluor's previously issued $300 million of 6.95% Senior Notes due March 1, 2007, with interest payable semi-annually on March 1 and September 1 of each year, became the obligation of Massey; and . Massey issued $275 million of its own commercial paper and utilized $3.5 million of cash to refund the $278.5 million of Fluor commercial paper assumed as a result of the Spin-Off. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. There have been no changes in, or disagreements with, accountants on accounting and financial disclosure. 42 Part III Item 10. Directors and Executive Officers of the Registrant. Biographical information of Executive Officers is included in Item 4 of this Form 10-K. Other information required by this item is included in the Biographical section of the Election of Directors portion of the definitive proxy statement pursuant to Regulation 14A, involving the election of directors, which is incorporated herein by reference and will be filed with the Securities and Exchange Commission (the "Commission") not later than 120 days after the close of Massey's fiscal year ended October 31, 2000. Item 11. Executive Compensation. Information required by this item is included in the Organization and Compensation Committee Report on Executive Compensation and Executive Compensation and Other Information sections of the definitive proxy statement pursuant to Regulation 14A, involving the election of directors, which is incorporated herein by reference and will be filed not later than 120 days after the close of Massey's fiscal year ended October 31, 2000. Item 12. Security Ownership of Certain Beneficial Owners and Management. Information required by this item is included in the Stock Ownership section of the Election of Directors portion of the definitive proxy statement pursuant to Regulation 14A, involving the election of directors, which is incorporated herein by reference and will be filed not later than 120 days after the close of Massey's fiscal year ended October 31, 2000. Item 13. Certain Relationships and Related Transactions. Information required by this item is included in the Other Matters section of the Election of Directors portion of the definitive proxy statement pursuant to Regulation 14A, involving the election of directors, which is incorporated herein by reference and will be filed not later than 120 days after the close of Massey's fiscal year ended October 31, 2000. Part IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K. (a) Documents filed as part of this report: 1. Financial Reports: Combined Statement of Earnings for the Fiscal Year Ended October 31, 2000, 1999 and 1998 Combined Balance Sheet at October 31, 2000 and October 31, 1999 Combined Statement of Cash Flows for the Fiscal Year Ended October 31, 2000, 1999 and 1998 Combined Statement of Shareholder's Equity for the Fiscal Year Ended October 31, 2000, 1999 and 1998 Notes to Combined Financial Statements 43 2. Financial Statement Schedules: All schedules have been omitted since the required information is not present or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the combined financial statements and notes thereto. 3. Exhibits: Exhibit No. Description - ----------- ----------- 3.1 Restated Certificate of Incorporation of Massey, as amended 3.2 Restated Bylaws (as amended effective November 30, 2000) of Massey Energy Company 4.1 Fluor Corporation Dividend Reinvestment Plan (as amended and restated June 30, 1995) [filed as Exhibit 4.2 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1995 and incorporated by reference] 4.2 Indenture dated as of February 18, 1997 between Fluor Corporation and Banker's Trust Company, trustee [filed as Exhibit 4.1 to Form 8-K filed March 7, 1997 and incorporated by this reference]. 10.1 Massey Energy Company 1999 Executive Performance Incentive Plan (as amended and restated effective November 30, 2000) 10.2 Massey Executive Deferred Compensation Program (as amended and restated effective November 30, 2000) 10.3 Massey Energy Company Executive Physical Program 10.4 Massey Energy Company Directors' Life Insurance Summary 10.5 Massey Energy Split Dollar Life Insurance Program Summary 10.6 Massey Energy Company 1988 Executive Stock Plan (as amended and restated effective November 30, 2000) 10.7 Massey Energy Company Change of Control Compensation Plan (as amended and restated effective November 30, 2000) 10.8 Massey Energy Company 1982 Shadow Stock Plan 10.9 Massey Energy Company 1997 Stock Appreciation Rights Plan 10.10 A. T. Massey Coal Company, Inc. Supplemental Benefit Plan 10.11 A. T. Massey Coal Company, Inc. Executive Deferred Compensation Plan 10.12 Massey Energy Company 1997 Restricted Stock Plan for Non-Employee Directors (as amended and restated effective November 30, 2000) 10.13 Massey Energy Company 1996 Executive Stock Plan (as amended and restated effective November 30, 2000) 10.14 Massey Energy Company Stock Plan for Non-Employee Directors (as amended and restated effective November 30, 2000) 10.15 Massey Energy Company Deferred Directors' Fees Program 10.16 Employment Agreement between Massey Energy Company, A.T. Massey Coal Company, Inc. and Don L. Blankenship dated as of October 1, 1998 [filed as Exhibit 10.20 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1998 and incorporated by this reference] 44 Exhibit No. Description - ----------- ----------- 10.17 Amendment to Employment Agreement between Massey Energy Company, A.T. Massey Coal Company, Inc. and Don L. Blankenship dated as of October 1, 1998 [filed as Exhibit 10.3 to Massey's current report on Form 8-K filed December 15, 2000 and incorporated by this reference] 10.18 Consulting Agreement between James L. Gardner and A. T. Massey Coal Company, Inc. dated as of February 23, 2000 10.19 Amendment to Consulting Agreement between James L. Gardner and A. T. Massey Coal Company dated February 23, 2000 10.20 Special Successor and Development Retention Program between Fluor Corporation and Don L. Blankenship dated as of September 1998 [filed as Exhibit 10.21 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1998 and incorporated by this reference] 10.21 Distribution Agreement between Fluor Corporation and Massey Energy Company dated as of November 30, 2000 [filed as Exhibit 10.1 to Massey's current report on Form 8-K filed December 15, 2000 and incorporated by this reference] 10.22 Tax Sharing Agreement between Fluor Corporation, Massey Energy Company and A.T. Massey Coal Company, Inc. dated as of November 30, 2000 [filed as Exhibit 10.2 to Massey's current report on Form 8-K filed December 15, 2000 and incorporated by this reference] 10.23 First Amendment to A.T. Massey Coal Company, Inc. Executive Deferred Compensation Plan 21 Massey Energy Company Subsidiaries 23 Consent of Independent Auditors 24 Manually signed Powers of Attorney executed by certain Fluor directors (b) Reports on Form 8-K: NONE SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MASSEY ENERGY COMPANY January 29, 2001 By: /s/ J. M. JAROSINSKI ------------------------------ J. M. Jarosinski, Vice President - Finance and Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- Principal Executive Officer and Director: /s/ D. L. BLANKENSHIP Chairman, Chief Executive Officer January 29, 2001 - ------------------------------------------------- and President D. L. Blankenship Principal Financial Officer: Vice President - Finance and Chief /s/ J. M. JAROSINSKI Financial Officer January 29, 2001 - -------------------------------------------------
45
Signature Title Date --------- ----- ---- J. M. Jarosinski Principal Accounting Officer /s/ E. B. TOLBERT Controller January 29, 2001 - ------------------------------------------------- E. B. Tolbert Other Directors: * Director January 29, 2001 - ------------------------------------------------- J. L. Gardner * Director January 29, 2001 - ------------------------------------------------- E. G. Gee. * Director January 29, 2001 - ------------------------------------------------- W. R. Grant * Director January 29, 2001 - ------------------------------------------------- B. R. Inman * Director January 29, 2001 - ------------------------------------------------- M. R. Seger By: /s/ R. L. NICHOLSON January 29, 2001 ---------------------------------------------- R. L. Nicholson Attorney-in-fact
Manually signed Powers of Attorney authorizing R. L. Nicholson Bennett K. Hatfield and Jeffrey M. Jarosinski and each of them, to sign the annual report on Form 10-K for the fiscal year ended October 31, 2000 and any amendments thereto as attorneys-in-fact for certain directors and officers of the registrant are included herein as Exhibits 24. 46 EX-3.1 2 0002.txt EXHIBIT 3.1 EXHIBIT 3.1 CERTIFICATE OF OWNERSHIP AND MERGER MERGING MASSEY ENERGY COMPANY WITH AND INTO FLUOR CORPORATION - -------------------- Pursuant to Section 253 of the General Corporation of Law of the State of Delaware - -------------------- Fluor Corporation, a Delaware corporation (the "Company"), does hereby certify to the following facts relating to the merger (the "Merger") of Massey Energy Company, a Delaware corporation (the "Subsidiary"), with and into the Company, with the Company remaining as the surviving corporation: FIRST: The Company is incorporated pursuant to the General Corporation Law of the State of Delaware (the "DGCL"). The Subsidiary is incorporated pursuant to the DGCL. SECOND: The Company owns all of the outstanding shares of each class of capital stock of the Subsidiary. THIRD: The Board of Directors of the Company, by the following resolutions duly adopted on November 30, 2000, determined to merge the Subsidiary with and into the Company pursuant to Section 253 of the DGCL: WHEREAS, Fluor Corporation, a Delaware corporation (the "Company"), owns all of the outstanding shares of the capital stock of Massey Energy Company, a Delaware corporation ("Subsidiary"); and WHEREAS, the Board of Directors of the Company has deemed it advisable that the Subsidiary be merged with and into the Company pursuant to Section 253 of the General Corporation Law of the State of Delaware; NOW, THEREFORE, BE IT AND IT HEREBY IS RESOLVED, that the Subsidiary be merged with and into the Company (the "Merger"); and it is further RESOLVED, that by virtue of the Merger and without any action on the part of the holder thereof, each then outstanding share of common stock of the Company shall remain unchanged and continue to remain outstanding as one share of common stock of the Company, held by the person who was the holder of such share of common stock of the Company immediately prior to the Merger; and it is further RESOLVED, that by virtue of the Merger and without any action on the part of the holder thereof, each then outstanding share of common stock of the Subsidiary shall be canceled and no consideration shall be issued in respect thereof; and it is further RESOLVED, that the proper officers of the Company be and they hereby are authorized and directed to make, execute and acknowledge, in the name and under the corporate seal of the Company, a certificate of ownership and merger for the purpose of effecting the Merger and to file the same in the office of the Secretary of State of the State of Delaware, and to do all other acts and things that may be necessary to carry out and effectuate the purpose and intent of the resolutions relating to the Merger; and it is further RESOLVED, that upon the filing of the Certificate of Merger, Article FIRST of the Restated Certificate of Incorporation of the Company shall be amended in its entirety to read as follows: "The name of the corporation is Massey Energy Company" FOURTH: This Certificate of Ownership and Merger shall be effective as of 5:00 p.m. Eastern Standard Time on November 30, 2000. IN WITNESS WHEREOF, the Company has caused this Certificate of Ownership and Merger to be executed by its duly authorized officer this 30th day of November, 2000. FLUOR CORPORATION By: /s/ E.P Helm ---------------------------------- Name: E. P. Helm Title: Assistant Secretary RESTATED CERTIFICATE OF INCORPORATION OF FLUOR CORPORATION (Incorporated January 23, 1978) FIRST: The name of the Corporation is: FLUOR CORPORATION SECOND: The address of the registered office of the Corporation in the State of Delaware is 229 South State Street in the City of Dover, County of Kent, and the name of its registered agent at that address is The Prentice-Hall Corporation System, Inc. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH: The Corporation shall be authorized to issue two classes of shares of stock to be designated, respectively, Preferred Stock and Common Stock; the total number of shares which the Corporation shall have authority to issue is 170,000,000; the total number of shares of Preferred Stock shall be 20,000,000 and each such share shall have no par value; the total number of shares of Common Stock shall be 150,000,000 and each such share shall have a par value of $0.625. Shares of Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby authorized to fix the voting rights, designations, powers, preferences and the relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, of any wholly unissued series of Preferred Stock; and to fix the number of shares constituting such series, and to increase or decrease the number of shares of any such series (but not below the number of shares thereof then outstanding). FIFTH: In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind the Bylaws of the Corporation. SIXTH: Bylaws shall not be made, repealed, altered, amended or rescinded by the stockholders of the Corporation except by the vote of the holders of not less than 80% of the total voting power of all outstanding shares of voting stock of the Corporation. SEVENTH: The number of Directors of the Corporation shall be fixed from time to time by a Bylaw or amendment thereof duly adopted by the Board of Directors. EIGHTH: The Board of Directors shall be and is divided into three classes, Class I, Class II and Class III. The number of directors in each class shall be the whole number contained in the quotient arrived at by dividing the authorized number of directors by three, and if a fraction is also contained in such quotient, then if such fraction is one-third, the extra director shall be a member of Class I, and if such fraction is two-thirds, one of the extra directors shall be a member of Class I and the other shall be a member of Class II. Each director shall serve for a term ending on the date of the third annual meeting following the annual meeting at which such director was elected; provided, however, that the directors first elected to Class I shall serve for a term ending on the date of the annual meeting next following the end of the calendar year 1978, the directors first elected to Class II shall serve for a term ending on the date of the second annual meeting next following the end of the calendar year 1978, and the directors first elected to Class III shall serve for a term ending on the date of the third annual meeting next following the end of the calendar year 1978. Notwithstanding the foregoing formula provisions, in the event that, as a result of any change in the authorized number of directors, the number of directors in any class would differ from the number allocated to that class under the formula provided in this Article immediately prior to such change, the following rules shall govern: (a) each director then serving as such shall nevertheless continue as a director of the class of which he is a member until the expiration of his current term, or his prior death, resignation or removal; (b) at each subsequent election of directors, even if the number of directors in the class whose term of office then expires is less than the number then allocated to that class under said formula, the number of directors then elected for membership in that class shall not be greater than the number of directors in that class whose term of office then expires, unless and to the extent that the aggregate number of directors then elected plus the number of directors in all classes then duly continuing in office does not exceed the then authorized number of directors of the Corporation; (c) at each subsequent election of directors, if the number of directors in the class whose term of office then expires exceeds the number then allocated to that class under said formula, the Board of Directors shall designate one or more of the directorships then being elected as directorships of another class or classes in which the number of directors then serving is less than the number then allocated to such other class or classes under said formula; (d) in the event of the death, resignation or removal of any director who is a member of a class in which the number of directors serving immediately preceding the creation of such vacancy exceeded the number then allocated to that class under said formula, the Board of Directors shall designate the vacancy thus created as a vacancy in another class in which the number of directors then serving is less than the number then allocated to such other class under said formula; (e) in the event of any increase in the authorized number of directors, the newly created directorships resulting from such increase shall be apportioned by the Board of Directors to such class or classes as shall, so far as possible, bring the composition of each of the classes into conformity with the formula in this Article, as it applies to the number of directors authorized immediately following such increase; and (f) designations of directorships or vacancies into other classes and apportionments of newly created directorships to classes by the Board of Directors under the foregoing items (c), (d) and (e) shall, so far as possible, be effected so that the class whose term of office is due to expire next following such designation or apportionment shall contain the full number of directors then allocated to said class under said formula. Notwithstanding any of the foregoing provisions of this Article, each director shall serve until his successor is elected and qualified or until his death, resignation or removal; or, if the holders of any Preferred Stock or any one or more series thereof, voting as a class, shall be en-titled to elect a specified number of directors, by reason of dividend arrearages or other provisions giving them the right to do so, then the division of the Board of Directors into three classes as provided in this Article shall be suspended during the period in which the holders of the Preferred Stock or any series thereof are entitled to elect a specified number of directors by reason of dividend arrearages or otherwise, and the terms of all directors serving on the Board at the time the holders of Preferred Stock become entitled to elect a specified number of directors shall terminate upon the election by the holders of Preferred Stock of the number of directors they are entitled to elect with the same effect as upon the expiration of the term for which they were then serving. NINTH: During any period when the holders of any Preferred Stock or any one or more series thereof voting as a class shall be entitled to elect a specified number of directors, by reason of dividend arrearages or other provisions giving them the right to do so, then and during such time as such right continues (1) the holders of such Preferred Stock or such series thereof, voting as a class, shall be entitled to elect such specified number of directors, pursuant to the provisions of such Preferred Stock or series thereof; (2) each such director shall serve for such term, and have such voting powers, as shall be stated in the provisions pertaining to such Preferred Stock or series thereof; and (3) whenever the holders of any such Preferred Stock or series thereof are divested of such rights to elect a specified number of directors, voting as a class, pursuant to the provisions of such Preferred Stock or series thereof, the terms of office of all persons who are then directors of the Corporation shall terminate upon the election of their successors by the holders of the shares entitled to vote thereon. The provision of Article EIGHTH (dealing with the classified Board) shall be applicable to the election of successors and directors shall be elected to classes as if they were the directors first elected to such class. TENTH: Elections of directors at an annual or special meeting of stockholders need not be by written ballot unless the Bylaws of the Corporation shall so provide. ELEVENTH: No action shall be taken by the stockholders except at an annual or special meeting of stockholders. TWELFTH: At all elections of directors of the Corporation, a holder of any class or series of stock then entitled to vote in such election shall be entitled to as many votes as shall equal the number of votes which (except for this Article as to cumulative voting) he would be entitled to cast for the election of directors with respect to his shares of stock multiplied by the number of directors to be elected in the election in which his class or series of stock is entitled to vote, and each stockholder may cast all of such votes for a single nominee for director or may distribute them among the number to be voted for, or for any two or more of them as he may see fit. THIRTEENTH: Special meetings of the stockholders of the Corporation for any purpose or purposes may be called at any time by the Board of Directors or by a committee of the Board of Directors which has been duly designated by the Board of Directors and whose powers and authority, as provided in a resolution of the Board of Directors or in the Bylaws of the Corporation, include the power to call such meetings, but such special meetings may not be called by any other person or persons; provided, however, that if and to the extent that any special meeting of stockholders may be called by any other person or persons specified in any provisions of the Restated Certificate of Incorporation or any amendment thereto or any certificate filed under Section 151(g) of the Delaware General Corporation Law (or its successor statute as in effect from time to time hereafter), then such special meeting may also be called by the person or persons, in the manner, at the times and for the purposes so specified. FOURTEENTH: The affirmative vote of the holders of not less than 80% of the total voting power of all outstanding shares of voting stock of the Corporation shall be required for the approval of any proposal that (1) the Corporation merge or consolidate with any other corporation or any affiliate of such other corporation if such other corporation and its affiliates singly or in the aggregate are directly or indirectly the beneficial owners of more than 5% of the total voting power of all outstanding shares of voting stock of the Corporation (such other corporation and any affiliate thereof being herein referred to as a "Related Corporation "), or that (2) the Corporation sell or exchange all or substantially all of its assets or business to or with such Related Corporation, or that (3) the Corporation issue or deliver any stock or other securities of its issue in exchange or payment for any properties or assets of such Related Corporation or securities issued by such Related Corporation, or in a merger of any affiliate of the Corporation with or into such Related Corporation or any of its affiliates, and to effect such transaction the approval of stockholders of the Corporation is required by law or by any agreement between the Corporation and any national securities exchange; provided, however, that the foregoing shall not apply to any such merger, consolidation, sale or exchange, or issuance or delivery of stock or other securities which was approved by resolution of the Board of Directors of the Corporation prior to the acquisition of the beneficial ownership or more than 5% of the total voting power of all outstanding shares of voting stock of the Corporation by such Related Corporation and its affiliates, nor shall it apply to any such transaction solely between the Corporation and another corporation, 50% or more of the voting stock of which is owned by the Corporation. For the purposes hereof, (1) an "affiliate" is any person (including a corporation, partnership, trust, estate or individual) who directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified; (2) "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise; and (3) in computing the percentage of outstanding voting stock beneficially owned by any person, the shares outstanding and the shares owned shall be determined as of the record date fixed to determine the stockholders entitled to vote or express consent with respect to such proposal. The stockholder vote, if any, required for mergers, consolidations, sales or exchanges of assets or issuances of stock or other securities not expressly provided for in this Article, shall be such as may be required by applicable law. FIFTEENTH: To the maximum extent permissible under Section 262 of the Delaware General Corporation Law, the stockholders of the Corporation shall be entitled to the statutory appraisal rights provided therein, notwithstanding any exception otherwise provided therein, with respect to any business combination involving the Corporation and any Related Corporation which requires the affirmative vote of the holders of not less than 80% of the total voting power of all outstanding shares of voting stock of the Corporation pursuant to the provisions of Article FOURTEENTH. SIXTEENTH: The provisions set forth in this Article SIXTEENTH and in Articles Sixth (dealing with the alteration of Bylaws by stockholders), EIGHTH (dealing with the classified board), ELEVENTH (dealing with the prohibition against stockholder action without meetings), TWELFTH (dealing with cumulative voting), FOURTEENTH (dealing with the 80% vote of stockholders required for certain mergers) and FIFTEENTH (dealing with appraisal rights of stockholders) may not be repealed or amended in any respect unless such repeal or amendment is approved by the affirmative vote of the holders of not less than 80% of the total voting power of all outstanding shares of voting stock of the Corporation. SEVENTEENTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation. Notwithstanding the foregoing, the provisions set forth in Articles SIXTH, EIGHTH, ELEVENTH, TWELFTH, FOURTEENTH, FIFTEENTH and SIXTEENTH may not be repealed or amended in any respect unless such repeal or amendment is approved as specified in Article SIXTEENTH. EIGHTEENTH: To the fullest extent permitted by the Delaware General Corporation Law, as the same exists or may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. NINETEENTH: Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in paragraph (a) hereof, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Article shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the Delaware General Corporation Law requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article or otherwise. The Corporation may, by action of its Board of Directors, provide indemnification to employees and agents of the Corporation with the same scope and effect as the foregoing indemnification of directors and officers. (a) If a claim under the foregoing paragraph is not paid in full by the Corporation within thirty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the Delaware General Corporation Law for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. (b) The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Restated Certificate of Incorporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise. (c) The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law. IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which restates and integrates and does not further amend the provisions of the Corporation's Restated Certificate of Incorporation, as heretofore amended, there being no discrepancies between those provisions and the provisions of this Restated Certificate of Incorporation, and having been duly adopted by the Board of Directors of the Corporation in accordance with the provisions of Section 245(b) of the General Corporation Law of the State of Delaware, has been executed on the 10th day of March, 1987. FLUOR CORPORATION By: /s/ P. J. Trimble --------------------- P. J. Trimble Senior Vice President ATTEST: By: /s/ L. N. Fisher --------------------------------- L. N. Fisher, Assistant Secretary EX-3.2 3 0003.txt EXHIBIT 3.2 EXHIBIT 3.2 RESTATED BYLAWS (as amended as of November 30, 2000) OF MASSEY ENERGY COMPANY (a Delaware corporation) ARTICLE I OFFICES Section 1.01 Registered Office. The registered office of MASSEY ENERGY COMPANY (hereinafter called the "Corporation") in the State of Delaware shall be at 9 East Loockerman Street, City of Dover, County of Kent, and the name of the registered agent at that address shall be National Registered Agents, Inc. Section 1.02 Principal Office. The principal office for the transaction of the business of the Corporation shall be at Four North Fourth Street, Richmond, Virginia 23219. The Board of Directors (hereinafter called the "Board") is hereby granted full power and authority to change said principal office from one location to another. Section 1.03 Other Offices. The Corporation may also have an office or offices at such other place or places, either within or without the State of Delaware, as the Board may from time to time determine or as the business of the Corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 2.01 Annual Meetings. Annual meetings of the stockholders of the Corporation for the purpose of electing directors and for the transaction of such other proper business as may come before such meetings may be held at such time, date and place as the Board shall determine by resolution. Section 2.02 Special Meetings. Special meetings of the stockholders of the Corporation for any purpose or purposes may be called at any time by the Board, or by a committee of the Board which has been duly designated by the Board and whose powers and authority, as provided in a resolution of the Board or in the Bylaws, include the power to call such meeting, but such special meetings may not be called by any other person or persons; provided, however, that if and to the extent that any special meetings of stockholders may be called by any other person or persons specified in any provisions of the 1 Certificate of Incorporation or any amendment thereto or any certificate filed under Section 151(g) of the Delaware General Corporation Law (or its successor statute as in effect from time to time hereafter), then such special meeting may also be called by the person or persons, in the manner, at the times and for the purposes so specified. Section 2.03 Place of Meetings. All meetings of the stockholders shall be held at such places, within or without the State of Delaware, as may from time to time be designated by the person or persons calling the respective meeting and specified in the respective notices or waivers of notice thereof. Section 2.04 Notice of Stockholder Business. At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting (a) by or at the direction of the Board of Directors or (b) by any stockholder of the Corporation who complies with the notice procedures set forth in this Section 2.04. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal office of the Corporation, not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 40 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the books of the Corporation, of the stockholder proposing such business, (c) the class and number of shares of the Corporation which are beneficially owned by the stockholder, and (d) any material interest of the stockholder in such business. Notwithstanding anything in the Bylaws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 2.04. The Chairman of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 2.04, and if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Section 2.05 Notice of Meetings. Except as otherwise required by law, notice of each meeting of the stockholders, whether annual or special, shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder of record entitled to vote at such meeting by delivering a typewritten or printed notice thereof to him or her personally, or by depositing such notice in the United States mail, in a postage prepaid envelope, directed to him or her at his or her post office address furnished by him or her to the Secretary of the Corporation for such purpose or, if he or she 2 shall not have furnished to the Secretary his or her address for such purposes, then at his or her post office address last known to the Secretary, or by transmitting a notice thereof to him or her at such address by telegraph, cable or wireless. Except as otherwise expressly required by law, no publication of any notice of a meeting of the stockholders shall be required. Every notice of a meeting of the stockholders shall state the place, date and hour of the meeting, and, in the case of a special meeting, shall also state the purpose or purposes for which the meeting is called. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall have waived such notice and such notice shall be deemed waived by any stockholder who shall attend such meeting in person or by proxy, except a stockholder who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Except as otherwise expressly required by law, notice of any adjourned meeting of the stockholders need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken. Section 2.06 Quorum. Except in the case of any meeting for the election of directors summarily ordered as provided by law, the holders of record of a majority in voting interest of the shares of stock of the Corporation entitled to be voted thereat, present in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of the stockholders of the Corporation or any adjournment thereof. In the absence of a quorum at any meeting or any adjournment thereof, a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat or, in the absence therefrom of all the stockholders, any officer entitled to preside at, or to act as secretary of, such meeting may adjourn such meeting from time to time. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the meeting as originally called. Section 2.07 Voting. (a) Each stockholder shall, at each meeting of the stockholders, be entitled to vote in person or by proxy each share or fractional share of the stock of the Corporation having voting rights on the matter in question and which shall have been held by him or her and registered in his or her name on the books of the Corporation: (i) on the date fixed pursuant to Section 6.05 of the Bylaws as the record date for the determination of stockholders entitled to notice of and to vote at such meeting, or (ii) if no such record date shall have been so fixed, then (a) at the close of business on the day next preceding the day on which notice of the meeting shall be given or (b) if notice of the meeting shall be waived, at the close of business on the day next preceding the day on which meeting shall be held. 3 (b) Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors in such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. Persons holding stock of the Corporation in a fiduciary capacity shall be entitled to vote such stock. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the Corporation he or she shall have expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his or her proxy, may represent such stock and vote thereon. Stock having voting power standing of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or with respect to which two or more persons have the same fiduciary relationship, shall be voted in accordance with the provisions of the General Corporation Law of the State of Delaware. (c) Any such voting rights may be exercised by the stockholder entitled thereto in person or by his or her proxy appointed by an instrument in writing, subscribed by such stockholder or by his or her attorney thereunto authorized and delivered to the secretary of the meeting; provided, however, that no proxy shall be voted or acted upon after three years from its date unless said proxy shall provide for a longer period. The attendance at any meeting of a stockholder who may theretofore have given a proxy shall not have the effect of revoking the same unless he or she shall in writing so notify the secretary of the meeting prior to the voting of the proxy. At any meeting of the stockholders all matters, except as otherwise provided in the Certificate of Incorporation, in the Bylaws or by law, shall be decided by the vote of a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat and thereon, a quorum being present. The vote at any meeting of the stockholders on any question need not be by ballot, unless so directed by the chairman of the meeting. On a vote by ballot each ballot shall be signed by the stockholder voting, or by his or her proxy, if there be such proxy, and it shall state the number of shares voted. Section 2.08 List of Stockholders. The Secretary of the Corporation shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the entire duration thereof, and may be inspected by any stockholder who is present. Section 2.09 Judges. If at any meeting of the stockholders a vote by written ballot shall be taken on any question, the chairman of such meeting may appoint a judge or judges to act with respect to such vote. Each judge so appointed shall first subscribe an oath faithfully to execute the duties of a 4 judge at such meeting with strict impartiality and according to the best of his or her ability. Such judges shall decide upon the qualification of the voters and shall report the number of shares represented at the meeting and entitled to vote on such question, shall conduct and accept the votes, and, when the voting is completed shall ascertain and report the number of shares voted respectively for and against the question. Reports of the judges shall be in writing and subscribed and delivered by them to the Secretary of the Corporation. The judges need not be stockholders of the Corporation, and any officer of the Corporation may be a judge on any question other than a vote for or against a proposal in which he or she shall have a material interest. ARTICLE III BOARD OF DIRECTORS Section 3.01 General Powers. The property, business and affairs of the Corporation shall be managed by the Board. Section 3.02 Number. The authorized number of directors of the Corporation shall be six and such authorized number shall not be changed except by a Bylaw or amendment thereof duly adopted by the stockholders in accordance with the Certificate of Incorporation or by the Board amending this Section 3.02. Section 3.03 Election of Directors. The directors shall be elected by the stockholders of the Corporation, and at each election the persons receiving the greatest number of votes, up to the number of directors then to be elected, shall be the persons then elected. The election of directors is subject to any provisions contained in the Certificate of Incorporation relating thereto, including any provisions for a classified board and for cumulative voting. Section 3.04 Notice of Stockholder Nominees. Only persons who are nominated in accordance with the procedures set forth in the Bylaws shall be eligible for election as directors. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders (a) by or at the direction of the Board of Directors or (b) by any stockholder of the Corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Section 3.04. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal office of the Corporation not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 40 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or 5 such public disclosure was made. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re- election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including without limitation such person's written consent to be named in the proxy statement as a nominee and to serve as a director if elected); and (b) as to the stockholder proposing such nomination (i) the name and address, as they appear on the books of the Corporation, of such stockholder, and (ii) the class and number of shares of the Corporation which are beneficially owned by such stockholder. At the request of the Board of Directors any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in the Bylaws. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the Bylaws, and if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded. Section 3.05 Mandatory Retirement. Each director of the Corporation serving at age 78 shall retire from the Board at the end of the calendar year in which his or her 78th birthday occurs. For purposes of this Section, "end of the calendar year" shall include the period ending with the seventh day of January next following. Section 3.06 Resignations. Any director of the Corporation may resign at any time by giving written notice to the Board or to the Secretary of the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time be not specified, it shall take effect immediately upon its receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 3.07 Vacancies. Except as otherwise provided in the Certificate of Incorporation, any vacancy in the Board, whether because of death, resignation, disqualification, an increase in the number of directors, or any other cause, may be filled by vote of the majority of the remaining directors, although less than a quorum. Each director so chosen to fill a vacancy shall hold office until his or her successor shall have been elected and shall qualify or until he or she shall resign or shall have been removed. Section 3.08 Place of Meeting, etc. The Board may hold any of its meetings at such place or places within or without the State of Delaware as the Board may from time to time by resolution designate or as shall be designated by the person or persons calling the meeting or in the notice or a waiver of notice of any such meeting. Directors may participate in any regular or special meeting of the Board by means of conference telephone or similar communications 6 equipment pursuant to which all persons participating in the meeting of the Board can hear each other, and such participation shall constitute presence in person at such meeting. Section 3.09 First Meeting. The Board shall meet as soon as practicable after each annual election of directors and notice of such first meeting shall not be required. Section 3.10 Regular Meetings. Regular meetings of the Board may be held at such times as the Board shall from time to time by resolution determine. If any day fixed for a meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting shall be held at the same hour and place on the next succeeding business day not a legal holiday. Except as provided by law, notice of regular meetings need not be given. Section 3.11 Special Meetings. Special meetings of the Board may be called at any time by the Chairman of the Board or the President or by any two directors, to be held at the principal office of the Corporation, or at such other place or places, within or without the State of Delaware, as the person or persons calling the meeting may designate. Notice of all special meetings of the Board shall be given to each director by two days' service of the same by telegram, by letter, or personally. Such notice may be waived by any director and any meeting shall be a legal meeting without notice having been given if all the directors shall be present thereat or if those not present shall, either before or after the meeting, sign a written waiver of notice of, or a consent to, such meeting or shall after the meeting sign the approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or be made a part of the minutes of the meeting. Section 3.12 Quorum and Manner of Acting. Except as otherwise provided in the Bylaws or by law, the presence of a majority of the authorized number of directors shall be required to constitute a quorum for the transaction of business at any meeting of the Board, and all matters shall be decided at any such meeting, a quorum being present, by the affirmative votes of a majority of the directors present. In the absence of a quorum, a majority of directors present at any meeting may adjourn the same from time to time until a quorum shall be present. Notice of any adjourned meeting need not be given. The directors shall act only as a Board, and the individual directors shall have no power as such. Section 3.13 Action by Consent. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or such committee. Section 3.14 Compensation. No stated salary need be paid directors, as such, for their services, but, by resolution of the Board, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or 7 special meeting of the Board or an annual directors' fee may be paid; provided that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefore. Members of special or standing committees may be allowed like compensation for attending committee meetings. Section 3.15 Committees. The Board may, by resolution passed by the Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Except as otherwise provided in the Board resolution designating a committee, the presence of a majority of the authorized number of members of such committee shall be required to constitute a quorum for the transaction of business at any meeting of such committee. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have any power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of the dissolution, or amending the Bylaws of the Corporation; and unless the resolution of the Board expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Any such committee shall keep written minutes of its meetings and report the same to the Board at the next regular meeting of the Board. Section 3.16 Officers of the Board. The Board shall have a Chairman of the Board and may, at the discretion of the Board, have a Vice Chairman and other officers. The Chairman of the Board and the Vice Chairman shall be appointed from time to time by the Board, unless such positions are elected offices of the Corporation, currently filled, and shall have such powers and duties as shall be designated by the Board. 8 ARTICLE IV OFFICERS Section 4.01 Officers. The officers of the Corporation shall be a Chairman of the Board, a Chief Executive Officer, a Secretary, a Treasurer and such other officers as may be appointed by the Board as the business of the Corporation may require. Officers shall have such powers and duties as are permitted or required by law or as may be specified by or in accordance with resolutions of the Board. Any number of offices may be held by the same person. Unless the Board shall otherwise determine, the Chairman of the Board shall be the Chief Executive Officer of the Corporation. In the absence of any contrary determination by the Board, the Chief Executive Officer shall, subject to the power and authority of the Board, have general supervision, direction and control of the officers, employees, business and affairs of the Corporation. Section 4.02 Election and Term. The officers of the Corporation shall be elected annually by the Board. The Board may at any time and from time to time elect such additional officers as the business of the Corporation may require. Each officer shall hold his or her office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Section 4.03 Removal and Resignation. Any officer may be removed, either with or without cause, by a majority of the directors at the time in office, at any regular or special meeting of the Board. Any officer may resign at any time by giving notice to the Board. Such resignation shall take effect at the time specified in such notice or, in the absence of such specification, at the date of the receipt by the Board of such notice. Unless otherwise specified in such notice, the acceptance of such resignation shall not be necessary to make it effective. Section 4.04 Vacancies. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, shall be filled in the manner prescribed in these Bylaws for the regular appointment to such office. ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC. Section 5.01 Execution of Contracts. The Board, except as in the Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name and on behalf of the Corporation, and such authority may be general or confined to specific instances; and unless so authorized by the Board or by the Bylaws, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount. 9 Section 5.02 Checks, Drafts, etc. All checks, drafts or other orders for payment of money, notes or other evidence of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board. Each such person shall give such bond, if any, as the Board may require. Section 5.03 Deposit. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select, or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. For the purpose of deposit and for the purpose of collection for the account of the Corporation, the Chief Executive Officer, the President or the Treasurer (or any other officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation who shall from time to time be determined by the Board) may endorse, assign and deliver checks, drafts and other orders for the payment of money which are payable to the order of the Corporation. Section 5.04 General and Special Bank Accounts. The Board may from time to time authorize the opening and keeping of general and special bank accounts with such banks, trust companies or other depositories as the Board may select or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. The Board may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of the Bylaws, as it may deem expedient. ARTICLE VI SHARES AND THEIR TRANSFER Section 6.01 Certificates for Stock. Every owner of stock of the Corporation shall be entitled to have a certificate or certificates, to be in such form as the Board shall prescribe, certifying the number and class of shares of the stock of the Corporation owned by him or her. The certificates representing shares of such stock shall be numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the President and by the Secretary. Any or all of the signatures on the certificates may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon any such certificate shall thereafter have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the Corporation with the same effect as though the 10 person who signed such certificate, or whose facsimile signature shall have been placed thereupon, were such officer, transfer agent or registrar at the date of issue. A record shall be kept of the respective names of the persons, firms or corporations owning the stock represented by such certificates, the number and class of shares represented by such certificates, respectively, and the respective dates thereof, and in case of cancellation the respective dates of cancellation. Every certificate surrendered to the Corporation for exchange or transfer shall be cancelled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so cancelled, except in cases provided for in Section 6.04 of the Bylaws. Section 6.02 Transfers of Stock. Transfers of shares of stock of the Corporation shall be made only on the books of the Corporation by the registered holder thereof, or by his or her attorney thereunto authorized by power of attorney duly executed and filed with the Secretary, or with a transfer clerk or a transfer agent appointed as provided in Section 6.03 of the Bylaws, and upon surrender of the certificate or certificates for such shares properly endorsed and the payment of all taxes thereon. The person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation. Whenever any transfer of shares shall be made for collateral security, and not absolutely, such fact shall be stated expressly in the entry of transfer if, when the certificate or certificates shall be presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so. Section 6.03 Regulations. The Board may make such rules and regulations as it may deem expedient, not inconsistent with the Bylaws, concerning the issue, transfer and registration of certificates for shares of the stock of the Corporation. It may appoint, or authorize any officer or officers to appoint, one or more transfer clerks or one or more transfer agents and one or more registrars, and may require all certificates for stock to bear the signature or signatures of any of them. Section 6.04 Lost, Stolen, Destroyed, And Mutilated Certificates. In any case of loss, theft, destruction, or mutilation of any certificate of stock, another may be issued in its place upon proof of such loss, theft, destruction, or mutilation and upon the giving of a bond of indemnity to the Corporation in such form and in such sum as the Board may direct; provided, however, that a new certificate may be issued without requiring any bond when, in the judgment of the Board, it is proper so to do. Section 6.05 Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any other change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more 11 than 60 days prior to any other action. If, in any case involving the determination of stockholders for any purpose other than notice of or voting at a meeting of stockholders, the Board shall not fix such a record date, the record date for determining stockholders for such purpose shall be the close of business on the day on which the Board shall adopt the resolution relating thereto. A determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided, however, that the Board may fix a new record date for the adjourned meeting. ARTICLE VII MISCELLANEOUS Section 7.01 Seal. The Board shall provide a corporate seal, which shall be in the form of a circle and shall bear the name of the Corporation and words and figures showing that the Corporation was incorporated in the State of Delaware and the year of incorporation. Section 7.02 Waiver of Notices. Whenever notice is required to be given by the Bylaws or the Certificate of Incorporation or by law, the person entitled to said notice may waive such notice in writing, either before or after the time stated therein, and such waiver shall be deemed equivalent to notice. Section 7.03 Fiscal Year. The fiscal year of the Corporation shall end on the 31st day of October of each year. Section 7.04 Amendments. The Bylaws, or any of them, may be rescinded, altered, amended or repealed, and new Bylaws may be made, (i) by the Board, by vote of a majority of the number of directors then in office as directors, acting at any meeting of the Board, or (ii) by the vote of the holders of not less than 80% of the total voting power of all outstanding shares of voting stock of the Corporation, at any annual meeting of stockholders, without previous notice, or at any special meeting of stockholders, provided that notice of such proposed amendment, modification, repeal or adoption is given in the notice of special meeting. Any Bylaws made or altered by the stockholders may be altered or repealed by the Board or may be altered or repealed by the stockholders. 12 EX-10.1 4 0004.txt EXHIBIT 10.1 EXHIBIT 10.1 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 SECTION 1 PURPOSE OF PLAN The purpose of this "Massey Energy Company 1999 Executive Performance Incentive Plan" as amended and restated effective November 30, 2000 ("Plan") of Massey Energy Company, a Delaware corporation, is to enable the Company, as defined in Section 2.2(a)(ii) hereof, to attract, retain and motivate its officers, management and other key personnel, and to further align the interests of such persons with those of the shareholders of the Company, by providing for or increasing their proprietary interest in the Company. SECTION 2 ADMINISTRATION OF THE PLAN 2.1 Composition of Committee. The Plan shall be administered by the ------------------------ Compensation Committee of the Board of Directors, and/or by the Board of Directors or another committee of the Board of Directors of the Company, as appointed from time to time by the Board of Directors (any such administrative body, the "Committee"). The Board of Directors shall fill vacancies on, and from time to time may remove or add members to, the Committee. The Committee shall act pursuant to a majority vote or unanimous written consent. Notwithstanding the foregoing, with respect to any Award that is not intended to satisfy the conditions of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") or Section 162(m)(4)(C) of the Internal Revenue Code of 1986, as amended (the "Code"), the Committee may appoint one or more separate committees (any such committee, a "Subcommittee") composed of one or more directors of the Company (who may but need not be members of the Committee) and may delegate to any such Subcommittee(s) the authority to grant Awards, as defined in Section 5.1 hereof, under the Plan to Employees, to determine all terms of such Awards, and/or to administer the Plan or any aspect of it. Any action by any such Subcommittee within the scope of such delegation shall be deemed for all purposes to have been taken by the Committee. The Committee may designate the Secretary of the Company or other Company employees to assist the Committee in the administration of the Plan, and may grant authority to such persons to execute agreements evidencing Awards made under this Plan or other documents entered into under this Plan on behalf of the Committee or the Company. 2.2 Powers of the Committee. Subject to the express provisions of this ----------------------- Plan, the Committee shall be authorized and empowered to do all things necessary or desirable in connection with the administration of this Plan with respect to the Awards over which such Committee has authority, including, without limitation, the following: (a) to prescribe, amend and rescind rules and regulations relating to this Plan and to define terms not otherwise defined herein; provided that, unless the Committee shall specify otherwise, for purposes of this Plan (i) the term "fair market value" shall mean, as of any date, the average of the highest price and the lowest price per share at which the Shares (as defined in Section 3.1 hereof) are sold in the regular way on the New York Stock Exchange or, if no Shares traded on the New York Stock Exchange on the date in question, then for the next 1 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 preceding date for which Shares traded on the New York Stock Exchange; and (ii) the term "Company" shall mean Massey Energy Company and its subsidiaries and affiliates, unless the context otherwise requires. (b) to determine which persons are Eligible Employees (as defined in Section 4 hereof), to which of such Eligible Employees, if any, Awards shall be granted hereunder, to make Awards under the Plan and to determine the terms of such Awards and the timing of any such Awards; (c) to determine the number of Shares subject to Awards and the exercise or purchase price of such Shares; (d) to establish and verify the extent of satisfaction of any performance goals applicable to Awards; (e) to prescribe and amend the terms of the agreements or other documents evidencing Awards made under this Plan (which need not be identical); (f) to determine whether, and the extent to which, adjustments are required pursuant to Section 11 hereof; (g) to interpret and construe this Plan, any rules and regulations under the Plan and the terms and conditions of any Award granted hereunder, and to make exceptions to any such provisions in good faith and for the benefit of the Company; and (h) to make all other determinations deemed necessary or advisable for the administration of the Plan. 2.3 Determinations of the Committee. All decisions, determinations and ------------------------------- interpretations by the Committee or the Board regarding the Plan shall be final and binding on all Eligible Employees and Participants, as defined in Section 4 hereof. The Committee or the Board, as applicable, shall consider such factors as it deems relevant, in its sole and absolute discretion, to making such decisions, determinations and interpretations including, without limitation, the recommendations or advice of any officer of the Company or Eligible Employee and such attorneys, consultants and accountants as it may select. SECTION 3 STOCK SUBJECT TO PLAN 3.1 Aggregate Limits. Subject to adjustment as provided in Section 11, at ---------------- any time, the aggregate number of shares of the Company's common stock, $0.625 par value ("Shares"), issued pursuant to all Awards (including all ISOs (as defined in Section 5.1 hereof)) granted under this Plan shall not exceed 3,700,000; provided that no more than 1,000,000 of such Shares may be issued pursuant to all Restricted Stock Awards, Incentive Awards, and Stock Units (other than Stock Units issued upon exercise of Options) granted under the Plan. The Shares subject to 2 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 the Plan may be either Shares reacquired by the Company, including Shares purchased in the open market, or authorized but unissued Shares. 3.2 Code Section 162(m) Limits. The aggregate number of Shares subject to -------------------------- Options granted under this Plan during any calendar year to any one Eligible Employee shall not exceed 500,000. The aggregate number of Shares issued or issuable under any Restricted Stock Awards, Incentive Awards or Stock Unit Awards (other than Stock Units issued or issuable upon exercise of Options) granted under this Plan during any calendar year to any one Eligible Employee shall not exceed 75,000. Notwithstanding anything to the contrary in the Plan, the foregoing limitations shall be subject to adjustment under Section 11 only to the extent that such adjustment will not affect the status of any Award intended to qualify as "performance based compensation" under Code Section 162(m). 3.3 Issuance of Shares. For purposes of Section 3.1, the aggregate number ------------------ of Shares issued under this Plan at any time shall equal only the number of Shares actually issued upon exercise or settlement of an Award and not returned to the Company upon cancellation, expiration or forfeiture of an Award or delivered (either actually or by attestation) in payment or satisfaction of the purchase price, exercise price or tax obligation of an Award. SECTION 4 PERSONS ELIGIBLE UNDER PLAN Any person who is an (i) employee and who also is an officer, key employee or Lead Member, (ii) prospective employee who is to be an officer, key employee or Lead Member, (iii) consultant, or (iv) advisor of the Company (an "Eligible Employee") shall be eligible to be considered for the grant of Awards hereunder. For purposes of this Plan, the Chairman of the Board's status as an Employee shall be determined by the Board. For purposes of the administration of Awards, the term "Eligible Employee" shall also include a former Eligible Employee or any person (including any estate) who is a beneficiary of a former Eligible Employee. A "Participant" is any Eligible Employee to whom an Award has been made and any person (including any estate) to whom an Award has been assigned or transferred pursuant to Section 10.1. SECTION 5 PLAN AWARDS 5.1 Award Types. The Committee, on behalf of the Company, is authorized ----------- under this Plan to enter into certain types of arrangements with Eligible Employees and to confer certain benefits on them. The following such arrangements or benefits are authorized under the Plan if their terms and conditions are not inconsistent with the provisions of the Plan: Stock Options, Restricted Stock, Incentive Awards and Stock Units. Such arrangements and benefits are sometimes referred to herein as "Awards." The authorized types of arrangements and benefits for which Awards may be granted are defined as follows: Stock Option Awards: A Stock Option is a right granted under Section 6 to purchase a number of 3 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 Shares at such exercise price, at such times, and on such other terms and conditions as are specified in or determined pursuant to the document(s) evidencing the Award (the "Option Agreement"). Options intended to qualify as Incentive Stock Options ("ISOs") pursuant to Code Section 422 and Options which are not intended to qualify as ISOs ("Non-qualified Options") may be granted under Section 6 as the Committee in its sole discretion shall determine. Restricted Stock Awards: A Restricted Stock is an award of Shares made under Section 7, the grant, issuance, retention and/or vesting of which is subject to such performance and other conditions as are expressed in the document(s) evidencing the Award (the "Restricted Stock Agreement"). Incentive Awards: An Incentive Award is a bonus opportunity awarded under Section 8 pursuant to which a Participant may become entitled to receive an amount (which may be payable in cash, Shares or other property) based on satisfaction of such performance criteria as are specified in the document(s) evidencing the Award (the "Incentive Bonus Agreement"). Stock Unit Awards: A Stock Unit Award is an award of a right to receive the fair market value of one share of Common Stock made under Section 9, the grant, issuance, retention and/or vesting of which is subject to such performance and other conditions as are expressed in the document(s) evidencing the Award (the "Stock Unit Agreement"). 5.2 Grants of Awards. An Award may consist of one such arrangement or ---------------- benefit or two or more of them in tandem or in the alternative. SECTION 6 STOCK OPTION AWARDS The Committee may grant an Option or provide for the grant of an Option, either from time-to-time in the discretion of the Committee or automatically upon the occurrence of specified events, including, without limitation, the achievement of performance goals, the satisfaction of an event or condition within the control of the recipient of the Award, within the control of others or not within any person's control. 6.1 Option Agreement. Each Option Agreement shall contain provisions ---------------- regarding (a) the number of Shares which may be issued upon exercise of the Option, (b) the purchase price of the Shares and the means of payment for the Shares, (c) the term of the Option, (d) such terms and conditions of exercisability as may be determined from time to time by the Committee, (e) restrictions on the transfer of the Option and forfeiture provisions, and (f) such further terms and conditions, in each case not inconsistent with the Plan as may be determined from time to time by the Committee. Option Agreements evidencing ISOs shall contain such terms and conditions as may be necessary to comply with the applicable provisions of Section 422 of the Code. 6.2 Option Price. The purchase price per Share of the Shares subject to ------------ each Option granted under the Plan shall equal or exceed 100% of the fair market value of such Stock on the 4 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 date the Option is granted, except that (i) the Committee may specifically provide that the exercise price of an Option may be higher or lower in the case of an Option granted to employees of a company acquired by the Company in assumption and substitution of options held by such employees at the time such company is acquired, and (ii) in the event an Eligible Employee is required to pay or forego the receipt of any cash amount in consideration of receipt of an Option, the exercise price plus such cash amount shall equal or exceed 100% of the fair market value of such Stock on the date the Option is granted. 6.3 Option Term. The "Term" of each Option granted under the Plan, ----------- including any ISOs, shall not exceed ten (10) years from the date of its grant. 6.4 Option Vesting. Options granted under the Plan shall be exercisable -------------- at such time and in such installments during the period prior to the expiration of the Option's Term as determined by the Committee in its sole discretion. The Committee shall have the right to make the timing of the ability to exercise any Option granted under the Plan subject to such performance requirements as deemed appropriate by the Committee. At any time after the grant of an Option the Committee may, in its sole discretion, reduce or eliminate any restrictions surrounding any Participant's right to exercise all or part of the Option, except that no Option shall first become exercisable within one (1) year from its date of grant, other than upon death, disability, a Change of Control (as defined in Section 12.2 hereof) or upon satisfaction of such performance requirements as deemed appropriate by the Committee. 6.5 Option Exercise. --------------- (a) Partial Exercise. An exercisable Option may be exercised in whole or in part. However, an Option shall not be exercisable with respect to fractional Shares and the Committee may require, by the terms of the Option Agreement, a partial exercise to include a minimum number of Shares. (b) Manner of Exercise. All or a portion of an exercisable Option shall be deemed exercised upon delivery to the representative of the Company designated for such purpose by the Committee all of the following: (i) notice of exercise in such form as the Committee authorizes specifying the number of Shares to be purchased by the Participant, (ii) payment or provision for payment of the exercise price for such number of Shares, (iii) such representations and documents as the Committee, in its sole discretion, deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act of 1933, as amended, and any other federal, state or foreign securities laws or regulations, (iv) in the event that the Option shall be exercised pursuant to Section 10.1 by any person or persons other than the Eligible Employee, appropriate proof of the right of such person or persons to exercise the Option, and (v)such representations and documents as the Committee, in its sole discretion, deems necessary or advisable to provide for the tax withholding pursuant to Section 13. Unless provided otherwise by the Committee, no Participant shall have any right as a shareholder with respect to any Shares purchased pursuant to any Option until the registration of Shares in the name of such person, and no adjustment shall be made for dividends (ordinary or extraordinary, 5 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such Shares are so registered. (c) Payment of Exercise Price. To the extent authorized by the Committee, the exercise price of an Option may be paid in the form of one of more of the following, either through the terms of the Option Agreement or at the time of exercise of an Option: (i) cash or certified or cashiers' check, (ii) shares of capital stock of the Company that have been held by the Participant for such period of time as the Committee may specify, (iii) other property deemed acceptable by the Committee, (iv) a reduction in the number of Shares or other property otherwise issuable pursuant to such Option, (v) a promissory note of or other commitment to pay by the Participant or of a third party, the terms and conditions of which shall be determined by the Committee, or (vi) any combination of (i) through (v). SECTION 7 RESTRICTED STOCK AWARDS Restricted Stock consists of an award of Shares, the grant, issuance, retention and/or vesting of which shall be subject to such performance conditions and to such further terms and conditions as the Committee deems appropriate. 7.1 Restricted Stock Award. Each Restricted Stock Award shall reflect, to ---------------------- the extent applicable (a) the number of Shares subject to such Award or a formula for determining such, (b) the time or times at which Shares shall be granted or issued and/or become retainable or vested, and the conditions or restrictions on such Shares, (c) the performance criteria and level of achievement versus these criteria which shall determine the number of Shares granted, issued, retainable and/or vested, (d) the period as to which performance shall be measured for determining achievement of performance, (e) forfeiture provisions, and (f) such further terms and conditions, in each case not inconsistent with the Plan as may be determined from time to time by the Committee. 7.2 Restrictions and Performance Criteria. The grant, issuance, retention ------------------------------------- and/or vesting of each Restricted Stock Award may be subject to such performance criteria and level of achievement versus these criteria as the Committee shall determine, which criteria may be based on financial performance, personal performance evaluations and/or completion of service by the Participant; provided, however, that no Restricted Stock Award shall first vest within one year from its date of grant, other than upon death, disability, a Change of Control (as defined in Section 12.2 hereof) or upon satisfaction of such performance requirements as deemed appropriate by the Committee. Notwithstanding anything to the contrary herein, the performance criteria for any Restricted Stock Award that is intended by the Committee to satisfy the requirements for "performance-based compensation" under Code Section 162(m) shall be a measure based on one or more Qualifying Performance Criteria (as defined in Section 10.2 hereof) selected by the Committee. 7.3 Timing and Form of Award. The Committee shall determine the timing of ------------------------ award of any Restricted Stock Award. The Committee may provide for or, subject to such terms and 6 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 conditions as the Committee may specify, may permit a Participant to elect for the award or vesting of any Restricted Stock to be deferred to a specified date or event. The Committee may provide for a Participant to have the option for his or her Restricted Stock, or such portion thereof as the Committee may specify, to be granted in whole or in part in Stock Units. 7.4 Discretionary Adjustments. Notwithstanding satisfaction of any ------------------------- completion of service or performance goals, the number of Shares granted, issued, retainable and/or vested under a Restricted Stock Award on account of either financial performance or personal performance evaluations may be reduced by the Committee on the basis of such further considerations as the Committee in its sole discretion shall determine. SECTION 8 INCENTIVE AWARDS Each Incentive Award will confer upon the Eligible Employee the opportunity to earn a future payment tied to the level of achievement with respect to one or more performance criteria established for a performance period of not less than one year. 8.1 Incentive Award. Each Incentive Award shall contain provisions --------------- regarding (a) the target and maximum amount payable to the Participant as an Incentive Award, (b) the performance criteria and level of achievement versus these criteria which shall determine the amount of such payment, (c) the period as to which performance shall be measured for establishing the amount of any payment, (d) the timing of any payment earned by virtue of performance, (e) restrictions on the alienation or transfer of the Incentive Award prior to actual payment, (f) forfeiture provisions, and (g) such further terms and conditions, in each case not inconsistent with the Plan as may be determined from time to time by the Committee. In establishing the provisions of Incentive Awards, the Committee may refer to categories of such Awards as parts of "Programs" or "Plans", which names will not affect the applicability of this Plan. The maximum amount payable as an Incentive Award may be a multiple of the target amount payable, but the maximum amount payable pursuant to that portion of an Incentive Award granted under this Plan for any fiscal year to any Participant that is intended to satisfy the requirements for "performance based compensation" under Code Section 162(m) shall not exceed three million dollars ($3,000,000). 8.2 Performance Criteria. The Committee shall establish the performance -------------------- criteria and level of achievement versus these criteria which shall determine the target and the minimum and maximum amount payable under an Incentive Award, which criteria may be based on financial performance and/or personal performance evaluations. The Committee may specify the percentage of the target Incentive Award that is intended to satisfy the requirements for "performance-based compensation" under Code Section 162(m). Notwithstanding anything to the contrary herein, the performance criteria for any portion of an Incentive Award that is intended by the Committee to satisfy the requirements for "performance- based compensation,' under Code Section 162(m) shall be a measure based on one or more Qualifying Performance Criteria (as defined in Section 10.2 hereof) selected by the Committee and specified at the time required under Code Section 162(m). 7 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 8.3 Timing and Form of Payment. The Committee shall determine the timing -------------------------- of payment of any Incentive Award. The Committee may provide for or, subject to such terms and conditions as the Committee may specify, may permit a Participant to elect for the payment of any Incentive Award to be deferred to a specified date or event. The Committee may specify the form of payment of Incentive Awards, which may be cash, shares or other property, or may provide for a Participant to have the option for his or her Incentive Award, or such portion thereof as the Committee may specify, to be paid in whole or in part in Shares or Stock Units. 8.4 Discretionary Adjustments. Notwithstanding satisfaction of any ------------------------- performance goals, the amount paid under an Incentive Award on account of either financial performance or personal performance evaluations may be reduced by the Committee on the basis of such further considerations as the Committee in its sole discretion shall determine. SECTION 9 STOCK UNITS 9.1 Stock Units. A "Stock Unit" is a bookkeeping entry representing an ----------- amount equivalent to the fair market value of one share of Common Stock, also sometimes referred to as a "restricted unit" or "shadow stock". Stock Units represent an unfunded and unsecured obligation of the Company, except as otherwise provided for by the Committee. 9.2 Stock Unit Awards. Each Stock Unit Award shall reflect, to the extent ----------------- applicable (a) the number of Stock Units subject to such Award or a formula for determining such, (b) the time or times at which Stock Units shall be granted or issued and/or become retainable or vested, and the conditions or restrictions on such Stock Units, (c) the performance criteria and level of achievement versus these criteria which shall determine the number of Stock Units granted, issued, retainable and/or vested, (d) the period as to which performance shall be measured for determining achievement of performance, (e) forfeiture provisions, and (f) such further terms and conditions, in each case not inconsistent with the Plan as may be determined from time to time by the Committee. Stock Units may also be issued upon exercise of Options, may be granted in payment and satisfaction of Incentive Awards and may be issued in lieu of Restricted Stock or any other Award that the Committee elects to be paid in the form of Stock Units. 9.3 Performance Criteria. The grant, issuance, retention and or vesting -------------------- of each Stock Unit may be subject to such performance criteria and level of achievement versus these criteria as the Committee shall determine, which criteria may be based on financial performance, personal performance evaluations and/or completion of service by the Participant; provided, however, that no Stock Unit shall first vest within one (1) year from its date of grant, other than upon death, disability, a Change of Control (as defined in Section 12.2 hereof) or upon satisfaction of such performance requirements as deemed appropriate by the Committee. Notwithstanding anything to the contrary herein, the performance criteria for any Stock Unit that is intended by the Committee to satisfy the requirements for "performance-based compensation" under Code Section 162(m) shall be a measure based on one or more Qualifying Performance Criteria (as defined in Section 10.2 hereof) selected by the Committee and specified at the time the Stock Unit is granted. 8 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 9.4 Timing and Form of Award. The Committee shall determine the timing of ------------------------ award of any Stock Unit. The Committee may provide for or, subject to such terms and conditions as the Committee may specify, may permit a Participant to elect for the award or vesting of any Stock Unit to be deferred to a specified date or event. The Committee may provide for a Participant to have the option for his or her Stock Unit, or such portion thereof as the Committee may specify, to be granted in whole or in part in Shares. 9.5 Settlement of Stock Units. The Committee may provide for Stock Units ------------------------- to be settled in cash or Shares (at the election of the Company or the Participant, as specified by the Committee) and to be made at such other times as it determines appropriate or as it permits a Participant to choose. The amount of cash or Shares, or other settlement medium, to be so distributed may be increased by an interest factor or by dividend equivalents, as the case may be. which may be valued as if reinvested in Shares. Until a Stock Unit is settled, the number of Shares represented by a Stock Unit shall be subject to adjustment pursuant to Section 11. 9.6 Discretionary Adjustments. Notwithstanding satisfaction of any ------------------------- completion of service or performance goals, the number of Stock Units granted, issued, retainable and/or vested under a Stock Unit Award on account of either financial performance or personal performance evaluations may be reduced by the Committee on the basis of such further considerations as the Committee in its sole discretion shall determine. SECTION 10 OTHER PROVISIONS APPLICABLE TO AWARDS 10.1 Transferability. Unless the agreement evidencing an Award (or an --------------- amendment thereto authorized by the Committee) expressly states that it is transferable as provided hereunder, no Award granted under the Plan, nor any interest in such Award, may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner, other than by will or the laws of descent and distribution, prior to the vesting or lapse of any and all restrictions applicable to any Shares issued under an Award. The Committee may in its sole discretion grant an Award or amend an outstanding Award to provide that the Award is transferable or assignable to a member or members of the Eligible Employee's "immediate family," as such term is defined under Exchange Act Rule 16a-1(e), or to a trust for the benefit solely of a member or members of the Eligible Employee's immediate family, or to a partnership or other entity whose only owners are members of the Eligible Employee's family, provided that following any such transfer or assignment the Award will remain subject to substantially the same terms applicable to the Award while held by the Eligible Employee, as modified as the Committee in its sole discretion shall determine appropriate, and the Participant shall execute an agreement agreeing to be bound by such terms. 10.2 Qualifying Performance Criteria. For purposes of this Plan, the term ------------------------------- "Qualifying Performance Criteria" shall mean any one or more of the following performance criteria, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit, subsidiary or business segment, either individually, alternatively or in any combination, and measured either annually or cumulatively over a period of years, on an absolute 9 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 basis or relative to a pre-established target, to previous years' results or to a designated comparison group, in each case as specified by the Committee in the Award: (a) cash flow, (b) earnings (including gross margin, earnings before interest and taxes ("EBIT"), earnings before taxes ("EBT"), and net earnings), (c) earnings per share, (d) growth in earnings or earnings per share, (e) stock price, (f) return on equity or average stockholders' equity, (g) total stockholder return, (h) return on capital, (i) return on assets or net assets, (j) return on investment, (k) revenue, (1) income or net income, (m) operating income or net operating income, (n) operating profit or net operating profit, (o) operating margin, (p) return on operating revenue, (q) market share, (r) contract awards or backlog, (s) overhead or other expense reduction, (t) growth in stockholder value relative to the two-year moving average of the S&P 500 Index, (u) growth in stockholder value relative to the two-year moving average of the Dow Jones Heavy Construction Index, (v) credit rating, (w) strategic plan development and implementation, (x) succession plan development and implementation, (y) retention of executive talent, (z) improvement in workforce diversity, (aa) return on average stockholders' equity relative to the Ten Year Treasury Yield (as hereinafter defined), (bb) improvement in safety records, (cc) capital resource management plan development and implementation, (dd) improved internal financial controls plan development and implementation, (ee) corporate tax savings, (ff) corporate cost of capital reduction, (gg) investor relations program development and implementation, (hh) corporate relations program development and implementation, (ii) executive performance plan development and implementation, and (jj) tax provision rate for financial statement purposes. The Committee may appropriately adjust any evaluation of performance under a Qualifying Performance Criteria to exclude any of the following events that occurs during a performance period: (i) asset write- downs, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, (iv) accruals for reorganization and restructuring programs, and (v) any extraordinary non-recurring items as described in Accounting Principles Board Opinion No. 30 and/or in management's discussion and analysis of financial condition and results of operations appearing in the Company's annual report to stockholders for the applicable year. The term "Ten Year Treasury Yield" shall mean, for any fiscal period, the daily average percent per annum yield for U.S. Government Securities--10 year Treasury constant maturities, as published in the Federal Reserve statistical release or any successor publication. Prior to the payment of any compensation under an Award intended to qualify as "performance-based compensation" under Code Section 162(m) the Committee shall certify the extent to which any Qualifying Performance Criteria and any other material terms under such Award have been satisfied (other than in cases where such relate solely to the increase in the value of the Company's Common Stock). 10.3 Dividends. Unless otherwise provided by the Committee, no adjustment --------- shall be made in Shares issuable under Awards on account of cash dividends which may be paid or other rights which may be issued to the holders of Shares prior to their issuance under any Award. The Committee shall specify whether dividends or dividend equivalent amounts shall be paid to any Participant with respect to the Shares subject to any Award that have not vested or been issued or that are subject to any restrictions or conditions on the record date for dividends. 10 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 10.4 Agreements Evidencing Awards. The Committee shall, subject to ---------------------------- applicable law, determine the date an Award is deemed to be granted, which for purposes of this Plan shall not be affected by the fact that an Award is contingent on subsequent stockholder approval of the Plan. The Committee or, except to the extent prohibited under applicable law, its delegate(s) may establish the terms of agreements evidencing Awards under this Plan and may, but need not, require as a condition to any such agreement's effectiveness that such agreement be executed by the Participant and that such Participant agree to such further terms and conditions as specified in such agreement. The grant of an Award under this Plan shall not confer any rights upon the Participant holding such Award other than such terms, and subject to such conditions, as are specified in this Plan as being applicable to such type of Award (or to all Awards) or as are expressly set forth in the Agreement evidencing such Award. 10.5 Tandem Stock or Cash Rights. Either at the time an Award is granted --------------------------- or by subsequent action, the Committee may, but need not, provide that an Award shall contain as a term thereof, a right, either in tandem with the other rights under the Award or as an alternative thereto, of the Participant to receive, without payment to the Company, a number of Shares, cash or a combination thereof, the amount of which is determined by reference to the value of the Award; provided, however, that the number of such rights granted under any Award shall not exceed the per Eligible Employee share limitation for such Award as set forth in Section 3.2. 10.6 Financing. The Committee may in its discretion provide financing to --------- a Participant in a principal amount sufficient to pay the purchase price of any Award and/or to pay the amount of taxes required by law to be withheld with respect to any Award. Any such loan shall be subject to all applicable legal requirements and restrictions pertinent thereto, including Regulation G promulgated by the Federal Reserve Board. The grant of an Award shall in no way obligate the Company or the Committee to provide any financing whatsoever in connection therewith. SECTION 11 CHANGES IN CAPITAL STRUCTURE If the outstanding securities of the class then subject to this Plan are increased, decreased or exchanged for or converted into cash, property or a different number or kind of shares or securities, or if cash, property or shares or securities are distributed in respect of such outstanding securities, in either case as a result of a reorganization, merger, consolidation, recapitalization, restructuring, reclassification, dividend (other than a regular, quarterly cash dividend) or other distribution, stock split, reverse stock split, spin-off or the like, or if substantially all of the property and assets of the Company are sold, then, unless the terms of such transaction shall provide otherwise, the Committee may make appropriate and proportionate adjustments in (i) the number and type of shares or other securities or cash or other property that may be acquired pursuant to Awards theretofore granted under this Plan and the exercise or settlement price of such Awards, provided, however, that any such adjustment shall be made in such a manner that will not affect the status of any Award intended to qualify as an ISO under Code Section 422 or as "performance based compensation" under Code Section 162(m), and (ii) the maximum 11 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 number and type of shares or other securities that may be issued pursuant to such Awards thereafter granted under this Plan. SECTION 12 CHANGE OF CONTROL 12.1 Effect of Change of Control. The Committee may through the terms of --------------------------- the Award or otherwise provide that any or all of the following shall occur, either immediately upon the Change of Control or a Change of Control Transaction, or upon termination of the Eligible Employee's employment within twenty-four (24) months following a Change of Control or a Change of Control Transaction: (a) in the case of an Option, the Participant's ability to exercise any portion of the Option not previously exercisable, (b) in the case of an Incentive Award, the right to receive a payment equal to the target amount payable or, if greater, a payment based on performance through a date determined by the Committee prior to the Change of Control, and (c) in the case of Shares issued in payment of any Incentive Award, and/or in the case of Restricted Stock or Stock Units, the lapse and expiration of any conditions to the grant, issuance, retention, vesting or transferability of, or any other restrictions applicable to, such Award. The Committee also may, through the terms of the Award or otherwise, provide for an absolute or conditional exercise, payment or lapse of conditions or restrictions on an Award which shall only be effective if, upon the announcement of a Change of Control Transaction, no provision is made in such Change of Control Transaction for the exercise, payment or lapse of conditions or restrictions on the Award, or other procedure whereby the Participant may realize the full benefit of the Award. 12.2 Definitions. Unless the Committee or the Board shall provide ----------- otherwise, "Change of Control" shall mean an occurrence of any of the following events (a) a third person, including a "group" as defined in Section 13(d)(3) of the Exchange Act, acquires shares of the Company having twenty-five percent or more of the total number of votes that may be cast for the election of directors of the Company, (b) as the result of any cash tender or exchange offer, merger or other business combination, or any combination of the foregoing transactions (a "Transaction"), the persons who were directors of the Company before the Transaction shall cease to constitute a majority of the Board of the Company or any successor to the Company; or (c) such other events as the Committee or the Board from time to time may specify. "Change of Control Transaction" shall include any tender offer, offer, exchange offer, solicitation, merger, consolidation, reorganization or other transaction which is intended to or reasonably expected to result in a Change of Control. SECTION 13 TAXES 13.1 Withholding Requirements. The Committee may make such provisions or ------------------------ impose such conditions as it may deem appropriate for the withholding or payment by the Employee or Participant, as appropriate, of any taxes which it determines are required in connection with any 12 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 Awards granted under this Plan, and a Participant's rights in any Award are subject to satisfaction of such conditions. 13.2 Payment of Withholding Taxes. Notwithstanding the terms of Section ---------------------------- 13.1 hereof, the Committee may provide in the agreement evidencing an Award or otherwise that all or any portion of the taxes required to be withheld by the Company or, if permitted by the Committee, desired to be paid by the Participant, in connection with the exercise of a Non-qualified Option or the exercise, vesting, settlement or transfer of any other Award shall be paid or, at the election of the Participant, may be paid by the Company withholding shares of the Company's capital stock otherwise issuable or subject to such Award, or by the Participant delivering previously owned shares of the Company's capital stock, in each case having a fair market value equal to the amount required or elected to be withheld or paid. Any such elections are subject to such conditions or procedures as may be established by the Committee and may be subject to disapproval by the Committee. SECTION 14 AMENDMENTS OR TERMINATION The Board may amend, alter or discontinue the Plan or any agreement evidencing an Award made under the Plan, but no such amendment shall, without the approval of the shareholders of the Company: (a) materially increase the maximum number of shares of Common Stock for which Awards may be granted under the Plan; (b) reduce the price at which Options may be granted below the price provided for in Section 6.2; (c) reduce the exercise price of outstanding Options; (d) after the date of a Change of Control, impair the rights of any Award holder, without such holder's consent, under any Award granted prior to the date of any Change of Control; (e) extend the term of the Plan; or (f) change the class of persons eligible to be Participants. SECTION 15 COMPLIANCE WITH OTHER LAWS AND REGULATIONS The Plan, the grant and exercise of Awards thereunder, and the obligation of the Company to sell, issue or deliver Shares under such Awards, shall be subject to all applicable federal, state and foreign laws, rules and regulations and to such approvals by any governmental or regulatory agency as may be required. The Company shall not be required to register in a 13 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 Participant's name or deliver any Shares prior to the completion of any registration or qualification of such Shares under any federal, state or foreign law or any ruling or regulation of any government body which the Committee shall, in its sole discretion, determine to be necessary or advisable. This Plan is intended to constitute an unfunded arrangement for a select group of management or other key employees. No Option shall be exercisable unless a registration statement with respect to the Option is effective or the Contrary has determined that such registration is unnecessary. Unless the Awards and Shares covered by this Plan have been registered under the Securities Act of 1933, as amended, or the Company has determined that such registration is unnecessary, each person receiving an Award and/or Shares pursuant to any Award may be required by the Company to give a representation in writing that such person is acquiring such Shares for his or her own account for investment and not with a view to, or for sale in connection with, the distribution of any party thereof. SECTION 16 OPTION GRANTS BY SUBSIDIARIES In the case of a grant of an Option to any Eligible Employee employed by a subsidiary or affiliate, such grant may, if the Committee so directs, be implemented by the Company issuing any subject Shares to the subsidiary or affiliate, for such lawful consideration as the Committee may determine, upon the condition or understanding that the subsidiary or affiliate will transfer the Shares to the optionholder in accordance with the terms of the Option specified by the Committee pursuant to the provisions of the Plan. Notwithstanding any other provision hereof, such Option may be issued by and in the name of the subsidiary or affiliate and shall be deemed granted on such date as the Committee shall determine. SECTION 17 NO RIGHT TO COMPANY EMPLOYMENT Nothing in this Plan or as a result of any Award granted pursuant to this Plan shall confer on any individual any right to continue in the employ of the Company or interfere in any way with the right of the Company to terminate an individual's employment at any time. The Award agreements may contain such provisions as the Committee may approve with reference to the effect of approved leaves of absence. SECTION 18 EFFECTIVENESS AND EXPIRATION OF PLAN The Plan was originally effective in December 1998, the date the Board adopted the Plan. The Plan was approved by the shareholders of Fluor Corporation on March 9, 1999. The effective date of this amended and restated plan is November 30, 2000. No Stock Option Award, Restricted Stock Award or Incentive Award shall be granted pursuant to the Plan more than ten (10) years after the original effective date of the Plan. 14 MASSEY ENERGY COMPANY 1999 EXECUTIVE PERFORMANCE INCENTIVE PLAN As Amended and Restated Effective November 30, 2000 SECTION 19 NON-EXCLUSIVITY OF THE PLAN Neither the adoption of the Plan by the Board nor the submission of the Plan to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board or the Committee to adopt such other incentive arrangements as it or they may deem desirable, including without limitation, the granting of restricted stock or stock options otherwise than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases. SECTION 20 GOVERNING LAW This Plan and any agreements hereunder shall be interpreted and construed in accordance with the laws of the State of Delaware and applicable federal law. The Committee may provide that any dispute as to any Award shall be presented and determined in such forum as the Committee may specify, including through binding arbitration. Any reference in this Plan or in the agreement evidencing any Award to a provision of law or to a rule or regulation shall be deemed to include any successor law, rule or regulation of similar effect or applicability. 15 EX-10.2 5 0005.txt EXHIBIT 10.2 EXHIBIT 10.2 MASSEY EXECUTIVE DEFERRED COMPENSATION PROGRAM (Amended and Restated as of November 30, 2000) FLUOR EXECUTIVE DEFERRED COMPENSATION PROGRAM (Amended and Restated as of May 1, 1997) THIS INSTRUMENT, was originally executed and made effective as of May 1, 1997 by FLUOR CORPORATION, a Delaware corporation, evidences an amendment and restatement of the terms of the Fluor Executive Deferred Compensation Program (formerly known as the Fluor Corporation and Subsidiaries Executive Deferred Compensation Program) adopted for the benefit of certain key employees of Fluor Corporation and its subsidiaries. WITNESSETH: WHEREAS, Fluor Corporation heretofore maintained three separate deferred compensation programs for its key employees, this Plan which covered deferrals of incentive compensation, the Fluor Corporation and Subsidiaries Executive Deferred Salary Program (the "Deferred Salary Program") which covered the deferral of salary and other related amounts and the Fluor Excess Benefit Plan ("Excess Benefit Plan") which provided deferrals to compensate for benefits which would otherwise be lost to highly compensated employees as a result of the contribution and benefit limitations imposed by ERISA; and WHEREAS, Fluor Corporation, effective as of May 1, 1995, combined all of the three foregoing unfunded deferred compensation programs for its key employees into a single program by (a) combining the Deferred Salary Program (including, without limitation, the excess 401(k) accounts previously maintained as a part of this program) with and into 1 this Plan thereby merging all the accounts previously maintained under that Deferred Salary Program with and into this Plan and (b) by transferring the key employee accruals previously maintained under the Excess Benefit Plan from the Excess Benefit Plan into this Plan; and WHEREAS, Fluor Corporation amended and restated the terms and conditions of the Plan as the Fluor Executive Deferred Compensation Program (formerly known as the Fluor Corporation and Subsidiaries Executive Deferred Compensation Program) effective as of May 1, 1997; NOW, THEREFORE, the Company hereby declares the current terms and conditions of the Massey Executive Deferred Compensation Program as amended and restated effective November 30, 2000, as follows: ARTICLE I THE PLAN 1.01. NAME. This Plan shall be known as the "Massey Executive Deferred Compensation Program". 1.02. PURPOSE. This Plan is adopted for the purpose of providing eligible executive employees with a means to satisfy future financial needs and also for the purpose of providing such employees with retirement and other benefits which, because of various contribution and benefit accrual limitations, cannot be provided for them under the tax qualified retirement, profit sharing and savings plans in which such employee is a participant. The Company intends that the Plan constitute an 2 unfunded "top hat" plan maintained for the purpose of providing deferred compensation to a select group of management or highly compensated employees under applicable provisions of ERISA. 1.03. PLAN ADMINISTRATION. The Plan shall be administered by the Committee in accordance with the following: (a) The Committee, on behalf of the Participants and their Beneficiaries, shall enforce the Plan in accordance with its terms, shall be charged with the general administration of the Plan, and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following: (i) To determine all questions relating to the eligibility of employees to participate; (ii) To construe and interpret the terms and provisions of this Plan; (iii) To compute and certify to the amount and kind of benefits payable to Participants or their Beneficiaries; (iv) To maintain all records that may be necessary for the administration of the Plan; (v) To provide for the disclosure of all information and the filing or provision of all reports and statements to Participants, Beneficiaries or governmental agencies as the Committee may determine or as shall be required by law; 3 (vi) To make and publish such rules for the regulation of the Plan and procedures for the administration of the Plan as are not inconsistent with the terms hereof; and (vii) To appoint a plan administrator or any other agent, and to delegate to such person such powers and duties in connection with the administration of the Plan as the Committee may from time to time prescribe. (b) The Committee shall have full discretion to make factual determinations as may be necessary and to construe and interpret the terms and provisions of this Plan, which interpretation or construction shall be final and binding on all parties, including but not limited to the Company and any Participant or Beneficiary. The Committee shall administer such terms and provisions in a uniform manner and in full accordance with any and all laws applicable to the Plan. (c) To enable the Committee to perform its functions, the Company shall supply full and timely information to the Committee on all Plan matters relating to the Participants, their death or other cause of termination, and such other pertinent facts as the Committee may require. 4 ARTICLE II DEFINITIONS 2.01. DEFINITIONS. Accrual Accounts - shall mean a Participant's Excess Benefit Accrual ---------------- Account and Pre-Effective Date Excess Benefit Accrual Accounts, if any. Beneficiary - The beneficiary designated by the Participant under the ----------- Fluor Employees' Retirement Plan or, if no such designation has been made, then as designated on a form provided by the Participant's corporate employer, or, in the absence of any designation, the personal representative of the Participant's estate. Board - shall mean the Board of Directors of Massey Energy Company. ----- Change of Control - "Change of Control" of the Company shall be deemed ----------------- to have occurred if, (i) a third person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, acquires shares of the Company having twenty-five percent or more of the total number of votes that may be cast for the election of directors of the Company; or (ii) as the result of any cash tender or exchange offer, merger or other business combination or any combination of the foregoing transactions (a "Transaction"), the persons who were directors of the Company before the Transaction shall cease to constitute a majority of the Board of the Company or any successor to the Company. Code - shall mean the Internal Revenue Code of 1986, as amended. ---- 5 Committee - shall mean the Compensation Committee of the Company. --------- Company - shall mean Massey Energy Company. ------- Crediting Options - shall mean the crediting options shown on Schedule A, ----------------- as modified from time to time. Crediting Rate - shall mean for each Crediting Option, an amount equal to -------------- the rate, expressed as a percent, of gain or loss on the assets of such Crediting Option during a month as determined in accordance with Schedule A. Deferral Account - shall mean collectively, a Participant's Deferred ---------------- Incentive Award Account, Deferred Salary Account, Pre-Effective Date Deferral Account, the Pre-Effective Date Deferred Salary Accounts and the Pre-1986 Deferral Accounts. Deferred Incentive Award Account - shall have the meaning set forth in -------------------------------- Section 6.1 hereof. Deferred Salary Account - shall have the meaning set forth in Section 6.1 ----------------------- hereof. Effective Date - shall mean May 1, 1995 (the original effective date of -------------- the Plan). Eligible Employee - shall mean any employee of the Company or its ----------------- subsidiaries who (a) is eligible to participate in the Retirement Plan or has been specifically designated as eligible for participation in this Plan by the Committee and (b) is a member of the Executive Management Team. 6 ERISA - shall mean the Employee Retirement Income Security Act of 1974, ----- as amended. Excess Benefit Accrual Account - shall have the meaning set forth in ------------------------------ Section 6.2 hereof. Excess 401(k) Account - shall mean the accounts maintained pursuant to --------------------- the Prior Plan to compensate for lost benefits under the Savings Plan that were attributable to the annual contribution limitations of section 401 (k) of the Code. Executive Management Team - shall mean those employees who have been ------------------------- determined to have been eligible to participate in the Fluor Corporation and Subsidiaries Executive Incentive Compensation Program or in other similar management incentive compensation programs of the Company or any of its subsidiaries. Fiscal Year - shall mean the twelve month period ending on October 31 of ----------- each year. Incentive Award - shall mean awards made pursuant to the terms of the --------------- Fluor Corporation and Subsidiaries Executive Incentive Compensation Program, the Fluor Special Executive Incentive Plan, the Directors' Achievement Award Program and any other incentive compensation program for management and other highly compensated employees which the Committee determines to be eligible for participation in this Plan. Normal Retirement Age - shall mean 65 years of age. --------------------- 7 Participant - shall mean any Eligible Employee who has one or more ----------- Deferral Accounts and/or one or more Accrual Accounts under this Plan. Plan - shall mean the Fluor Executive Deferred Compensation Program the ---- terms of which are set forth herein. Pre-1986 Deferral Account - shall have the meaning set forth in Section ------------------------- 6.1 hereof. Pre-Effective Date Deferral Account - shall have the meaning set forth in ----------------------------------- Section 6.1 hereof. Pre-Effective Date Deferred Salary Account - shall have the meaning set ------------------------------------------ forth in Section 6.1 hereof. Pre-Effective Date Excess Benefit Accrual Account - shall have the ------------------------------------------------- meaning set forth in Section 6.2 hereof. Prior Plan - shall mean the Fluor Corporation and Subsidiaries Executive ---------- Deferred Salary Program. Retirement Plan - shall mean the Fluor Corporation Employees' Retirement --------------- Plan. Salary - shall mean the base salary regularly paid to an employee ------ including the employee's deferrals under Sections 401(k) and 125 of the Code. Savings Plan - shall mean the Fluor Corporation Salaried Employees' ------------ Savings Investment Plan. 8 Termination of Service - Termination of the full-time employee/employer ---------------------- relationship between a Participant and Fluor Corporation or any of its subsidiaries by reason of retirement, death, resignation, involuntary termination, permanent total disability or change in status to a part- time employee, as these terms are defined for purposes of the Retirement Plan. ARTICLE III PARTICIPATION 3.01. SALARY DEFERRALS. Any Eligible Employee who is a member of the Executive Management Team will, for the period of such membership, be entitled to defer all or a portion of Salary pursuant to the provisions of Section 4.2(a) hereof for so long as he remains an Eligible Employee. If an Eligible Employee is removed as a member of the Executive Management Team, such Eligible Employee will, notwithstanding such removal, remain eligible to defer salary through the end of the calendar year in which such removal occurred. 3.02. INCENTIVE AWARD DEFERRALS. Any Eligible Employee who earns an Incentive Award which becomes payable after the Effective Date will be entitled to defer such Incentive Award or portion thereof pursuant to the provisions of Section 4.2(b) hereof. 3.03. EXISTING ACCOUNTS. All undistributed account balances in the Prior Plan as of the Effective Date are hereby transferred to and made a pan of this Plan. The Prior Plan is hereby merged into this Plan as of the Effective Date and all benefits 9 previously payable under the Prior Plan shall be paid solely from this Plan. Any such account balances will be subject to Adjustment pursuant to the terms of Section 7.1 hereof and, subject to the deferral period or periods previously elected by the Employee, will be maintained, determined and distributed in accordance with the terms hereof. All undistributed account balances of Eligible Employees under the Fluor Excess Benefit Plan as of the Effective Date are hereby transferred to and made a part of this Plan and such account balances will be subject to Adjustment pursuant to the terms of Section 7.1 hereof. On and after the Effective Date all benefits previously payable to Eligible Employees under the Fluor Excess Benefit Plan shall be paid solely under this Plan. 3.04. EXCESS BENEFIT ACCRUALS. As of the last day of each calendar year each Eligible Employee shall be entitled to receive an Excess Benefit Accrual if and to the extent earned in accordance with the provisions of Section 5.1 hereof. ARTICLE IV DEFERRALS 4.01. AMOUNTS SUBJECT TO DEFERRAL. Subject to the effect of any previously authorized or required deductions, reductions or income or employment tax withholdings applicable to such compensation, an Eligible Employee may elect to defer all or any portion of his Salary or any Incentive Award. 4.02. TIMING AND MECHANICS OF ELECTION. 10 (a) Salary - The amount of Salary to be deferred for future payroll ------ periods must be specified by the Eligible Employee in writing to his corporate employer as a fixed percentage of Salary. Such deferral election shall be effective with the first payroll period beginning after receipt of the election by the Company and will continue in effect (excluding the two payroll periods where no reductions or deductions are taken) until a subsequent election or termination of the election is received by the Company, which change or termination shall also be effective as of the first payroll period beginning after receipt of such election or termination. The deferral percentage so specified may not be changed, terminated or re-initiated more often than once every six months. (b) Incentive Awards - The amount of any Incentive Award to be deferred ----------------- must be specified by the Eligible Employee in writing to his corporate employer no later than the end of the fiscal period(s) for which performance is measured in determining the amount of the Incentive Award. The amount to be deferred may be specified either as a fixed dollar amount or as a percentage of the Incentive Award. Such amount or percentage, once specified, is irrevocable as to such Incentive Award. 4.03. DEFERRAL PERIODS. Unless otherwise specified by the Eligible Employee at the time of his deferral election, payment of such amounts shall be deferred until such Eligible Employee's Termination of Service. The Eligible Employee may specify a deferral period which may not extend beyond the date upon which such Eligible Employee reaches age 70 1/2. If a specific deferral period has been selected, the deferral period shall end upon the earlier to occur of (a) the Eligible 11 Employee's Termination of Service or (b) expiration of the specified deferral period. ARTICLE V OTHER ACCRUALS 5.01. EXCESS BENEFIT ACCRUALS. As of each December 31 the Company shall credit the Excess Benefit Accrual Account of each Eligible Employee with an amount equal to the excess of the amount of company contributions which would have been allocated to such Eligible Employee's account under the Retirement Plan for the calendar year but for the limitations imposed by Sections 401 and 415 of the Code over the actual amount of company contributions allocated to his accounts under such plans for the calendar year. At the end of each calendar month, the Company shall credit the Excess Benefit Accrual Account of each Eligible Employee with an amount equal to the excess of (a) the amount of Company contributions which would have been made to the account of such Eligible Employee for such month under Section 5.1 and Article IV of the Savings Plan, but for the limitations imposed by Sections 401 and 415 of the Code over (b) the actual amount of Company contributions allocated to his accounts for such month pursuant to such Article VI; provided however, that such amounts will be so credited only if such Eligible Employee elects, prior to beginning of any such month to defer an additional portion of his Salary which is equal to the amount by which the amounts contributed on behalf of such Eligible Employee pursuant to Section 5.1 of the Savings Plan for such month were 12 reduced by reason of the limitations imposed by Sections 401 and 415 of the Code. 5.02. COMPENSATING ACCRUALS. Each Eligible Employee who elects to defer all or a portion of his Salary pursuant to Section 4.2(a) hereof will also be credited with additional accruals to his Deferred Salary Account to compensate for reductions in Company Retirement Plan and Savings Plan contributions that result from such Salary deferral. Such accruals shall be calculated as follows: (a) As of the end of each calendar year there shall be credited to the account of each Eligible Employee, an additional amount that is equal to the amount by which Company contributions to such Eligible Employee's accounts in the Retirement Plan were reduced by reason of Salary deferrals made under this Plan. (b) At the end of each calendar month there shall be credited to the account of each Eligible Employee an additional amount that is equal to the amount by which Company contributions made under Article VI of the Savings Plan for such month to the account of such Eligible Employee are reduced by reason of Salary deferrals made under this Plan. ARTICLE VI MAINTENANCE OF ACCOUNTS 6.01. DEFERRAL ACCOUNTS. The Company shall maintain one or more of the following separate deferral accounts, as applicable, for Eligible Employees: (1) a Deferred Incentive Award Account to which shall be credited all amounts of 13 Incentive Awards which have been deferred by such Eligible Employee pursuant to the provisions of Section 4.2(b) hereof; (2) a Pre-Effective Date Deferral Account which shall include all undistributed amounts relating to Incentive Awards as to which a deferral election had been made prior to the Effective Date, but not including deferred amounts of Incentive Awards for Fiscal Years ending on or before October 31, 1985; and (3) a Pre-1986 Deferral Account which shall include all undistributed amounts relating to Incentive Awards for Fiscal Years ending on or before October 31, 1985; (4) a Pre-Effective Date Deferred Salary Account to which shall be credited the balance as of the Effective Date of the amount standing to the credit of such Eligible Employee under the Prior Plan, reduced by the amount attributable to the Excess 401(k) Account maintained under such Prior Plan; and (5) a Deferred Salary Account to which shall be credited all amounts of Salary deferred on and after the Effective Date and all amounts credited such Eligible Employee pursuant to Section 5.2 hereof. 6.02. EXCESS BENEFIT ACCRUAL ACCOUNTS. The Company shall maintain the following separate accrual accounts, as applicable, for Eligible Employees: (1) a Pre-Effective Date Excess Benefit Accrual Account to which shall be credited as of the Effective Date all amounts then standing to the credit of such Eligible Employees in the Fluor Excess Benefit Plan, and in the Excess 401(k) Account of the Prior Plan; and (2) an Excess Benefit Accrual Account to which shall be credited all amounts accruing for the benefit of such Eligible Employee pursuant, to Section 5.1 hereof. 14 6.03. ADJUSTMENTS. Each account of a Participant established pursuant to Sections 6.1 and 6.2 hereof shall be adjusted monthly to reflect any gains and/or losses thereon (the "Adjustment") in accordance with the provisions of Section 7.1 hereof. ARTICLE VII CREDITING OPTIONS 7.01. CREDITING OPTIONS. The Company has selected the crediting options described in Schedule A any of which may be changed, modified or deleted, or additional investment options may be added, from time to time by the Committee (the "Crediting Options"), provided however, that (a) the Five Year T-Bill Option will remain available for Pro-Effective Date Deferral Accounts, Pre-Effective Date Deferred Salary Accounts and Pre-Effective Date Excess Benefit Accrual Accounts and, until the end of the 1995 fiscal year, for Salary Deferrals put into place prior to the Effective Date; and (b) the Fluor Average Interest Factor option shall always remain available for Pre-1986 Deferral Accounts. At the time that an Eligible Employee first becomes a Participant, the Participant shall allocate deferrals among the Crediting Options that will be used as a measure of the investment performance of the contents of each of his Deferral and Accrual Accounts on a form provided by the Committee. In making this designation, the Participant may specify that all or any 10% multiple of each of his Deferral and Accrual Accounts be deemed to be invested in one or more of the Crediting Options. Each Participant will be able to reallocate the Crediting Options for each of his Deferral and Accrual Accounts once every six months in 10% multiples on 15 a form provided by the Committee. Said reallocation will be effective as of the first day of the month following the month in which the form is received by the Committee. Until a Participant delivers a new Crediting Options form to the Committee, his prior Crediting Options shall control. If a Participant fails to select a Crediting Option for deferrals or accruals made after the Effective Date he shall be deemed to have elected the Money Market Option. The Company shall use the Participant's Crediting Option designations as the basis for calculating the Adjustment component of each Deferral and Accrual Account. If a Participant changes his or her Crediting Option designations, then such change shall supersede the previous designation effective the first business day of the month following the month the change is made. The Company shall begin crediting the Participant's Deferral Accounts with the amount deferred by the Participant on the last day of the month in which the Salary or Incentive Award would have otherwise been paid. The monthly Adjustment shall be determined as follows: As of the last day of each month in which any amount remains credited to any Deferral Account or Accrual Account of a Participant, each portion of such accounts deemed invested in a particular crediting either be credited or debited with an amount equal to that determined by multiplying the balance of such portion of such account as of the last day of the preceding month by the Return Rate for that month for the applicable Investment Option. As to the applicable amount distributed, the Company shall cease crediting or debiting Adjustments to the Participant's Deferral and/or Accrual Accounts on the last day of the month of 16 the applicable distribution event set forth in Articles VIII and IX (the "Valuation Date"). Allocation of investment selections shall be made among the Crediting Options. A Participant shall have absolutely no ownership interest in any Crediting Option. The Company shall be the sole owner of (if any) funds invested in any such Investment Option, as well as all amounts accounted for in the Deferral and Accrual Accounts, all of which shall at all times be subject to the claims of the Company's creditors. A Participant shall be entitled to payment of an amount equal to the amount in each of his Deferral and Accrual Accounts in accordance with Articles VIII and IX hereof. ARTICLE VIII ACCOUNT DISTRIBUTIONS 8.01. NO DEFERRAL PERIOD SPECIFIED. With respect to any Accrual Account and those portions of any Deferral Account (including, any Adjustments related thereto) as to which no specific deferral period has been selected by the Participant at the time of deferral: (a) The lump sum payment or the first installment will be paid on or before December 31 of the year of termination; provided however, that the Company may in its sole discretion elect to defer payment thereof until January of the succeeding year. 17 (b) In the event of installment payments, the second installment will be paid in January following the year in which the first installment was paid and all remaining installments will be paid annually in January. (c) Payment in cash in one lump sum or in annual installments will be at the sole discretion of the Participant's corporate employer. The number of installment payments will not exceed twenty. (d) In the event of the death of a Participant prior to commencement of any payments hereunder, payments will be made to his Beneficiary in accordance with the foregoing provisions. In the event of the death of a Participant after commencement of benefit payments in installments but prior to payment of his entire entitlement, payment may be made to his Beneficiary in one lump sum or by continuation of installments at the discretion of the Participant's corporate employer. If a Participant has received his entitlement under one or more, but less than all of his deferral actions, and dies prior to commencement of payments under one or more unpaid deferral elections, he shall be considered to have died prior to the commencement of any payments hereunder. In the event installments continue to the Beneficiary, they will continue to be subject to Adjustment pursuant to Section 7.1 hereof. 8.02. SPECIFIED DEFERRAL PERIOD. With respect to those portions of any Deferral Account (including any Adjustments related thereto) as to which a specified deferral period has been selected by a Participant at the time of deferral: 18 (a) Entitlement to payment will occur upon the earlier of the (i) Participant's Termination of Service or (ii) upon expiration of the specific deferral period. (b) All payments will be made in a lump sum in cash unless, (i) in the cases where entitlement to payment arises upon expiration of the deferral period, the Participant designates at the time of deferral that the deferred amount be paid in a specified number (not to exceed twenty) of annual installments or, (ii) in cases where entitlement to payment arises upon Termination of Service, the Company in its sole discretion elects to make payments of the deferred amount in a specified number (not to exceed twenty) of annual installments. (c) The lump sum payment or the first installment payment will be paid on or before December 31 of the year of entitlement; provided however, that the Company may in its sole discretion elect to defer payment thereof until January of the succeeding year. (d) If a Participant's entitlement is paid in installments, the second installment payment will be paid during January of the year following the year in which the first installment was paid and all remaining installments will be paid annually in the month of January. (e) In the event of the death of a Participant prior to commencement of any payments hereunder, payments will be made to his Beneficiary in accordance with the foregoing provisions. In the event of the death of a Participant after commencement of benefit payments in installments but prior to payment of his entire entitlement, payment may be made to his Beneficiary in one lump sum or 19 by continuation of installments at the discretion of the Participant's corporate employer. In the event installments continue to the Beneficiary, they will continue to be subject to Adjustment under Section 7.1 hereof. ARTICLE IX OTHER DISTRIBUTION EVENTS 9.01. CHANGE OF CONTROL. Notwithstanding any other Section hereof, if a Participant's employment with the Company or its subsidiaries terminates for any reason other than death, within the two-year period beginning on the date that a Change of Control of the Company occurs, then the Company shall pay to the Participant within the first fifteen (15) days of the month following such termination a lump sum distribution of all of his Deferral Accounts and Accrual Accounts. If the Participant dies after termination of employment but before payment of any amount under this Section, then such amount shall be paid to the Beneficiary within the first fifteen (15) days of the month following the Participant's death. 9.02. UNFORESEEABLE EMERGENCY. (a) A distribution of a portion of a Participant's Deferral Accounts and Accrual Accounts because of an Unforeseeable Emergency will be permitted only to the extent required by the Participant to satisfy the emergency need. Whether an Unforeseeable Emergency has occurred will be determined solely by the Committee. Distributions in the event of an Unforeseeable Emergency may be 20 made by and with the approval of the Committee upon written request by a Participant. (b) An "Unforeseeable Emergency" is defined as a severe financial hardship to the Participant caused by sudden and unexpected illness or accident of the Participant or of a dependent of the Participant (as defined in Code Section 152(a)), loss of the Participant's property due to casualty, or other extraordinary and unforeseeable circumstances caused by a result of events beyond the Participant's control. The circumstances that will constitute an unforeseeable emergency will depend upon the facts of each case, but, in any event, any distribution under this Section shall not exceed the amount required by the Participant to resolve the hardship after (i) reimbursement or compensation through insurance or otherwise, (ii) obtaining liquidation of the Participant's assets, to the extent such liquidation would not itself cause a severe financial hardship, or (iii) suspension of deferrals under the Plan. 9.03. WITHDRAWALS. A Participant may elect by filing with the Company a form specified by the Committee, to receive an amount equal to ninety percent of his Deferral Accounts and Accrual Accounts at any time prior to his Termination of Service. If a Participant makes an election described in this Section 9.3 the balance of the Participant's Deferral Accounts not distributed to the Participant shall be forfeited to the Company; the amount to which he is entitled under this Section 9.3 shall be distributed to the Participant in a single lump sum as soon as administratively practical following such election; the Participant shall be prohibited from participating in deferral portions of the Plan for the balance of the 21 Fiscal Year in which this distribution is made and the following Fiscal Year; any elections previously made pursuant to Section 4.2 of this Plan shall cease to be effective. ARTICLE X MISCELLANEOUS PROVISIONS 10.01. PARTICIPANT RIGHTS IN THE UNFUNDED PLAN. Any liability of the Company to any Participant with respect to any benefit shall be based solely upon the contractual obligations created by the Plan; no such obligation shall be deemed to be secured by any pledge or any encumbrance on any property of the Company. The Company's obligations under this agreement shall be an unfunded and unsecured promise to pay. No Participant or his designated beneficiaries shall have any rights under the Plan other than those of a creditor of the Company. Assets segregated or identified by the Company for the purpose of paying benefits pursuant to the Plan remain general corporate assets subject to the claims of the Company's creditors. 10.02. NON-ASSIGNABILITY. Neither the Participant nor his Beneficiary shall have any power or right to transfer, assign, anticipate, hypothecate or otherwise encumber any part or all of the amounts payable hereunder, which are expressly declared to be unassignable and non-transferable. Any such attempted assignment or transfer shall be void and the Company shall thereupon have no further liability to such Participant or such Beneficiary hereunder. No amount payable hereunder shall, prior to actual payment thereof, be subject to seizure by any creditor of any 22 Participant or Beneficiary for the payment of debt, judgment or other obligation, by a proceeding at law or in equity, nor transferable by operation of law in the event of the bankruptcy, insolvency or death of the Participant, his designated Beneficiary or any other beneficiary hereunder. 10.03. TERMINATION OR AMENDMENT OF PLAN. The Company retains the right, at any time and in its sole discretion, to amend or terminate the Plan, in whole or in part. Any amendment of the Plan shall be approved by the Board, shall be in writing, and shall be communicated to the Participants. Notwithstanding the above, the Committee shall have the authority to change the requirements of eligibility or to modify the Crediting Options hereunder. No amendment of the Plan shall materially impair or curtail the Company's contractual obligations arising from deferral elections previously made or for benefits accrued prior to such amendment. Notwithstanding any other provision herein to the contrary, in the event of Plan termination, payment of Deferral and Accrual Accounts shall occur not later than the last business day of the month following the month in which the termination is made effective. 10.04. CONTINUATION OF EMPLOYMENT. This Plan shall not be deemed to constitute a contract of employment between the Company and a Participant. Nothing in the Plan or in any instrument executed pursuant to the Plan will confer upon any Participant any right to continue in the employ of the Company or any Subsidiary or affect the right of the Company or any Subsidiary to terminate the employment of any Participant at any time with or without cause. 23 10.05. RESPONSIBILITY FOR LEGAL EFFECT. Neither the Committee nor the Company makes any representations or warranties, express or implied, or assumes any responsibility concerning the legal, tax or other implications or effects of this Plan. 10.06. WITHHOLDING. The Company shall withhold from or offset against any payment or accrual made under the Plan any taxes the Company determines it is required to withhold by applicable federal, state or local laws. 10.07. OTHER COMPENSATION PLANS. The adoption of the Plan shall not affect any other incentive or other compensation plans in effect for the Company or any subsidiary, nor shall the Plan preclude the Company from establishing any other forms of incentive or other compensation for employees of the Company or any subsidiary. 10.08. PLAN BINDING ON SUCCESSORS. The Plan shall be binding upon the successors and assigns of the Company. 10.09. SINGULAR, PLURAL; GENDER. Wherever appropriate in this Plan, nouns in the singular shall include the plural, and the masculine pronoun shall include the feminine gender. 10.10. CONTROLLING LAW. The Plan shall be governed by and construed in accordance with the internal law, without regard to conflict of law principles, of the Commonwealth of Virginia to the extent not pre-empted by the laws of the United States of America. 24 FLUOR EXECUTIVE DEFERRED COMPENSATION PLAN SCHEDULE A CREDITING OPTIONS
--------------------------------------------------------------------------------------------- Fluor Average Interest Global Global 5-Year T-Bill* Interest Factor* Money Market Income Plus Diversified Diversified Plus - -------------------------------------------------------------------------------------------------------------------------------- ACCRUAL ACCOUNTS: - -------------------------------------------------------------------------------------------------------------------------------- 1 Pre-Effective Date Excess X ___ X X X X Benefit Accrual Account - -------------------------------------------------------------------------------------------------------------------------------- - Excess Benefit Plan & Excess 401(k) Plan balances as of 5/1/95 - -------------------------------------------------------------------------------------------------------------------------------- 2 Excess Benefit Accrual ___ ___ X X X X Account - -------------------------------------------------------------------------------------------------------------------------------- - Excess Benefit Plan & Excess 401(k) Plan deferrals as of 5/1/95 - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- DEFERRAL ACCOUNTS: - -------------------------------------------------------------------------------------------------------------------------------- 1 Pre-1986 Deferral Account ___ X X X X X - -------------------------------------------------------------------------------------------------------------------------------- - 5/1/95 balance of Pre-1986 Deferred Incentive awards - -------------------------------------------------------------------------------------------------------------------------------- 2 Pre-Effective Date Deferral X ___ X X X X Account - -------------------------------------------------------------------------------------------------------------------------------- - 5/1/95 balance of Deferred Incentive awards since 1986 - -------------------------------------------------------------------------------------------------------------------------------- 3 Pre-Effective Date Deferred X ___ X X X X Salary Account - -------------------------------------------------------------------------------------------------------------------------------- - Deferred Salary Plan account balance as of 5/1/95 - -------------------------------------------------------------------------------------------------------------------------------- 4 Deferred Salary Account ___ ___ X X X X - -------------------------------------------------------------------------------------------------------------------------------- - Deferred Salary Plan deferrals from 5/1/95 - -------------------------------------------------------------------------------------------------------------------------------- 5 Deferred Incentive Award ___ ___ X X X X Account - -------------------------------------------------------------------------------------------------------------------------------- - Deferred Incentive Plan awards from 5/1/95 - --------------------------------------------------------------------------------------------------------------------------------
X = Available crediting options * The 5-Year T-Bill and Fluor Average Interest Factor crediting options are only available for balances as of May 1, 1995. These options are not available for deferrals/accruals made after May 1, 1995. 25 The Money Market, Interest Income Plus, Global Diversified and Global Diversified Plus options represent the investment funds available under the Retirement Plan as of May 1, 1995, but are subject to change from time to time. 26 EX-10.3 6 0006.txt EXHIBIT 10.3 EXHIBIT 10.3 MASSEY ENERGY COMPANY EXECUTIVE PHYSICAL PROGRAM Eligibility: - Massey Energy Company 16(b) officers; select senior managers of Massey Energy Company and its subsidiaries Description of Coverage: - Eligible participants are required to undergo executive physicals every other year if under age 50 and annually beginning at age 50. Executive physicals include patient history, physical examination, and various screening procedures, with allowable cost not to exceed $1,200. EX-10.4 7 0007.txt EXHIBIT 10.4 EXHIBIT 10.4 MASSEY ENERGY COMPANY DIRECTORS' LIFE INSURANCE SUMMARY Eligibility: - Massey Energy Company Board of Directors Description of Coverage: - $75,000 term life insurance Current Carrier: - CIGNA Group Life Insurance (Non-employee directors) - First Colony Life Insurance (Employee directors) EX-10.5 8 0008.txt EXHIBIT 10.5 EXHIBIT 10.5 MASSEY ENERGY COMPANY EXECUTIVE LIFE INSURANCE PROGRAM SUMMARY Eligibility: - Don L. Blankenship - Bennett K. Hatfield - H. Drexel Short Amount of Coverage: - Don L. Blankenship $ 4,000,000 - Bennett K. Hatfield $ 1,500,000 - H. Drexel Short $ 1,000,000 EX-10.6 9 0009.txt EXHIBIT 10.6 EXHIBIT 10.6 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 ARTICLE I DEFINITIONS Sec. 1.1 DEFINITIONS ----------- As used herein, the following terms shall have the meanings hereinafter set forth unless the context clearly indicates to the contrary: (a) "Award" shall mean an award of Restricted Stock pursuant to the provisions of Article VI hereof. (b) "Awardee" shall mean an Eligible Employee to whom Restricted Stock has been awarded hereunder. (c) "Board" shall mean the Board of Directors of the Company. (d) "Change of Control" of the Company shall be deemed to have occurred if, (i) a third person, including a `group' as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, acquires shares of the Company having twenty-five percent or more of the total number of votes that may be cast for the election of directors of the Company; or (ii) as the result of any cash tender or exchange offer, merger or other business combination, or any combination of the foregoing transactions (a "Transaction"), the persons who were directors of the Company before the Transaction shall cease to constitute a majority of the Board of the Company or any successor to the Company. (e) "Code" shall mean the Internal Revenue Code of 1986, as amended. (f) "Committee" shall mean the Compensation Committee of the Board. (g) "Company" shall mean Massey Energy Company. (h) "Eligible Employee" shall mean an employee who is an officer of the Company or any Subsidiary or who is a member of the Executive Management Team of the Company and its Subsidiaries. (i) "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. (j) "Executive Management Team" shall mean those employees who were determined to be eligible to participate in the Fluor Corporation and Subsidiaries Executive Incentive Compensation Program or in other similar management incentive compensation programs of any Subsidiary. (k) "Fair Market Value" shall mean the average of the highest price and the lowest price per share at which the Stock is sold in the regular way on the New York 1 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 Stock Exchange on the day an Option is granted hereunder or, in the absence of any reported sales on such day, the first preceding day on which there were such sales. (l) "Grantee" shall mean an Eligible Employee to whom Rights have been granted hereunder. (m) "Incentive Stock Option" shall mean an incentive stock option, as defined under Section 422 of the Code and the regulations thereunder to purchase Stock. (n) "Nonqualified Stock Option" shall mean a stock option other than an Incentive Stock Option to purchase Stock. (o) "Option" shall mean an option to purchase Stock granted pursuant to the provisions of Article V hereof and refers to both Incentive Stock Options and Nonqualified Stock Options. (p) "Optionee" shall mean an Eligible Employee to whom an Option has been granted hereunder. (q) "Plan" shall mean the Massey Energy Company 1988 Executive Stock Plan, the current terms of which are set forth herein. The Plan is an amendment and restatement of the 1988 Fluor Executive Stock Plan. (r) "Prior Plans" shall mean the 1971 Fluor Stock Option Plan, the 1977 Fluor Executive Stock Plan, the 1981 Fluor Executive Stock Plan and the 1982 Fluor Executive Stock Option Plan. (s) "Restricted Stock" shall mean Stock that may be awarded to an Eligible Employee by the Committee pursuant to Article VI hereof, which is nontransferable and subject to a substantial risk of forfeiture until specific conditions are met. Conditions may be based on continuing employment or achievement of preestablished performance objectives. (t) "Return on Average Shareholders' Equity" shall mean, for any fiscal year, the percentage amount reported as "Return on Average Shareholders Equity" in the "Highlights" section of the Company's Annual Report to Stockholders for such fiscal year. (u) "Restricted Stock Agreement" shall mean the agreement between the Company and the Awardee with respect to Restricted Stock awarded hereunder. (v) "Rights" shall mean Stock Appreciation Rights granted as provided herein. 2 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 (w) "Stock" shall mean the Common Stock of the Company or, in the event that the outstanding shares of Stock are hereafter changed into or exchanged for shares of a different stock or securities of the Company or some other corporation, such other stock or securities. (x) "Stock Appreciation Right" or "Right" shall mean a right granted pursuant to Article VIII hereof to receive a number of shares of Stock or, in the discretion of the Committee, an amount of cash or a combination of shares and cash, based on the increase in the Fair Market Value of the shares subject to the Right. (y) "Stock Appreciation Rights Agreement" shall mean the agreement between the Company and the Grantee evidencing the grant of Rights as provided herein. (z) "Stock Option Agreement" shall mean the agreement between the Company and the Optionee under which the Optionee may purchase Stock hereunder. (aa) "Stock Payment" shall mean a payment in shares of Stock to replace all or any portion of the compensation (other than base salary) that would otherwise become payable to any Eligible Employee of the Company. (bb) "Subsidiary" shall mean any corporation, the majority of the outstanding capital stock of which is owned, directly or indirectly, by the Company or any partnership or joint venture in which either the Company or such a corporation is at least a twenty percent (20%) equity participant. (cc) "Ten Year Treasury Yield" shall mean, for any fiscal period, the daily average percent per annum yield for U. S. Government Securities - 10 year Treasury constant maturities, as published in the Federal Reserve statistical release or any successor publication. ARTICLE II GENERAL Sec. 2.1 NAME ---- This Plan shall be known as the "Massey Energy Company 1988 Executive Stock Plan." Sec. 2.2 PURPOSE ------- The purpose of the Plan is to advance the interests of the Company and its stockholders by affording to Eligible Employees of the Company and its Subsidiaries an opportunity to acquire or increase their proprietary interest in the Company by the grant to such employees of Options, Awards or Rights under the terms set forth herein. By thus encouraging such employees to become owners of Company shares and by granting such employees with a form of cash incentive compensation which is measured by the increase in market value of Company shares, the Company seeks to motivate, retain and attract those highly competent individuals 3 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 upon whose judgment, initiative, leadership and continued efforts the success of the Company in large measure depends. Sec. 2.3 EFFECTIVE DATE -------------- The Plan was effective in 1988, upon its approval by the holders of a majority of the shares of Stock of the Fluor Corporation as of the date of the 1988 annual meeting of the shareholders of Fluor Corporation. The effective date of this amended and restated Plan is November 30, 2000. Sec. 2.4 LIMITATIONS ----------- Subject to adjustment pursuant to the provisions of Section 11.1 hereof, the aggregate number of shares of Stock which may either be issued as Awards, subject to Options or issued pursuant to the exercise of Options, or reflected in grants of Stock Appreciation Rights shall not exceed the sum of (a) 5,500,000 plus (b) that number of shares represented by options, awards or rights under Prior Plans which expire or are otherwise terminated at any time after the original effective date of this Plan. Any such shares may be either authorized and unissued shares or shares issued and thereafter acquired by the Company. No Eligible Employee may receive more than fifteen percent (15%) of the aggregate number of shares of Stock which may be issued as Awards, subject to Options or issued pursuant to the exercise of Options or reflected in grants of Stock Appreciation Rights. Sec. 2.5 OPTIONS, AWARDS AND RIGHTS GRANTED UNDER PLAN --------------------------------------------- Shares of Stock with respect to which an Option granted hereunder shall have been exercised, and shares of Stock received pursuant to a Restricted Stock Agreement executed hereunder with respect to which the restrictions provided for in Section 6.3 hereof shall have lapsed and shares of Stock reflected in a Stock Appreciation Right, to the extent that such Right has become exercisable, shall not again be available for Option, Award or Rights grant hereunder. If Options or Rights granted hereunder shall expire or terminate for any reason without being wholly exercised, or if Restricted Stock is acquired by the Company pursuant to the provisions of paragraph (c) of Section 6.3 hereof, new Options, Awards or Rights may be granted hereunder covering the number of shares to which such Option or Rights expiration or termination or Restricted Stock acquisition relates. ARTICLE III PARTICIPANTS Sec. 3.1 ELIGIBILITY ----------- Any Eligible Employee shall be eligible to participate in the Plan; provided, however, that no member of the Committee shall be eligible to participate. The Committee may grant Options, Awards or Rights to any Eligible Employee in accordance with such determinations as the Committee from time to time in its sole discretion shall make. 4 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 ARTICLE IV ADMINISTRATION Sec. 4.1 DUTIES AND POWERS OF COMMITTEE ------------------------------ The Plan shall be administered by the Committee. Subject to the express provisions of the Plan, the Committee shall have sole discretion and authority to determine from among Eligible Employees those to whom and the time or times at which Options, Rights or Awards may be granted, the number of shares of Stock to be subject to each Option or Award, the number of Rights to be awarded and the period for the exercise of such Option or Rights which need not be the same for each grant hereunder. Subject to the express provisions of the Plan, the Committee shall also have complete authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, to determine the details and provisions of each Stock Option Agreement, Stock Appreciation Rights Agreement and Restricted Stock Agreement, and to make all other determinations necessary or advisable in the administration of the Plan. Sec. 4.2 MAJORITY RULE ------------- A majority of the members of the Committee shall constitute a quorum, and any action taken by a majority present at a meeting at which a quorum is present or any action taken without a meeting evidenced by a writing executed by a majority of the whole Committee shall constitute the action of the Committee. Sec. 4.3 COMPANY ASSISTANCE ------------------ The Company shall supply full and timely information to the Committee on all matters relating to eligible employees, their employment, death, retirement, disability or other termination of employment, and such other pertinent facts as the Committee may require. The Company shall furnish the Committee with such clerical and other assistance as is necessary in the performance of its duties. ARTICLE V OPTIONS Sec. 5.1 OPTION GRANT AND AGREEMENT -------------------------- Each Option granted hereunder shall be evidenced by minutes of a meeting or the written consent of the Committee and by a written Stock Option Agreement dated as of the date of grant and executed by the Company and the Optionee, which Agreement shall set forth such terms and conditions as may be determined by the Committee consistent with the Plan. 5 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 Sec. 5.2 PARTICIPATION LIMITATION ------------------------ The Committee shall not grant an Incentive Stock Option to any employee for such number of shares of Stock that, immediately after the grant, the total number of shares of Stock owned or subject to Options exercisable by and/or Awards outstanding in the hands of such employee (or by such persons whose shares such employee is considered as owning pursuant to the provisions of the second succeeding sentence) exceed ten percent of the total combined voting power of all classes of stock of the Company. This restriction does not apply if, at the time such Incentive Stock Option is granted, the Incentive Stock Option purchase price is at least 110% of the Fair Market Value on the date of grant and the Incentive Stock option by its terms is not exercisable after the expiration of five (5) years from the date of grant. For purposes of this Section 5.2, an employee shall be considered as owning the stock owned, directly or indirectly, by or for his brothers and sisters (whether by the whole or half blood), spouse, ancestors and lineal descendants; and the stock owned, directly or indirectly, by or for a corporation, partnership, estate or trust shall be considered as being owned proportionately by or for its shareholders, partners or beneficiaries. Sec. 5.3 OPTION PRICE ------------ The purchase price of Stock under each option will be determined by the Committee but may not be less than the Fair Market Value on the date of grant. Sec. 5.4 OPTION PERIOD ------------- Each option granted hereunder must be granted within ten years from the effective date of the Plan. The period for the exercise of each option shall be determined by the Committee, but in no instance shall such period exceed ten years from the date of grant of the Option. Sec. 5.5 OPTION EXERCISE --------------- (a) Options granted hereunder may not be exercised unless and until the Optionee shall have been or remained in the employ of the Company or its Subsidiaries for one year from and after the date such Option was granted, except as otherwise provided in Section 5.7 hereof. (b) Options may be exercised with respect to whole shares only, for such shares of Stock and within the period permitted for the exercise thereof as determined by the Committee, and shall be exercised by written notice of intent to exercise the Option with respect to a specified number of shares delivered to the Company at its principal office in the State of Delaware, and payment in full to the Company at said office of the amount of the Option price for the number of shares of Stock with respect to which the Option is then being exercised. The purchase price may be paid by the assignment and delivery to the Company of shares of Stock or a combination of cash and shares of Stock equal in value to the exercise price. Any shares assigned and delivered to the Company in payment or partial payment of the purchase price will be valued at their Fair Market Value on the exercise date. 6 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 (c) The Fair Market Value of the Stock at the date of grant for which any employee may exercise Incentive Stock Options in any calendar year under the Plan (or any other stock option plan of the Company adopted after December 31, 1986) may not exceed $100,000. Sec. 5.6 NONTRANSFERABILITY OF OPTION ---------------------------- No Option shall be transferred by an Optionee otherwise than by a will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Code or Title I of ERISA. During the lifetime of an Optionee, the Option shall be exercisable only by him. Sec. 5.7 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT -------------------------------------------------- (a) If, prior to a date one year from the date on which an Option shall have been granted, the Optionee's employment with the Company or its Subsidiaries shall be terminated by the Company or Subsidiary with or without cause, or by the act of the Optionee, the Optionee's right to exercise such Option shall terminate and all rights thereunder shall cease; provided, however, that if the Optionee shall die, retire or become permanently and totally disabled, as determined in accordance with applicable Company personnel policies, or if the Optionee's employment with the Company or its Subsidiaries shall be terminated within two years after a Change of Control of the Company and such termination occurs prior to a date one year from the date on which an Option shall have been granted, such Option shall become exercisable in full on the date of such death, retirement, disability or termination of employment. (b) If, on or after one year from the date on which an Option shall have been granted, an Optionee's employment with the Company or its Subsidiaries shall be terminated for any reason other than death, retirement or permanent total disability, or within two years following a Change of Control of the Company, the Optionee shall have the right, during the period ending three months after such termination, to exercise such Option to the extent that it was exercisable at the date of such termination and shall not have been exercised, subject, however, to the provisions of Section 5.4 hereof. (c) Upon termination of an Optionee's employment with the Company or its Subsidiaries by reason of retirement or permanent total disability, as determined in accordance with applicable Company personnel policies, or within two years following a Change of Control of the Company, such Optionee shall have the right, during the period ending three years after such termination, to exercise his Option in full, without regard to any installment exercise provisions, to the extent that it shall not have been exercised, subject, however, to the provisions of Section 5.4 hereof. 7 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 (d) If an Optionee shall die (i) while in the employ of the Company or its Subsidiaries, or (ii) within three months after termination of employment where such termination did not occur either by reason of retirement or permanent total disability or "within two years following a Change of Control of the Company, or (iii) within three years after termination of employment where such termination occurred either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, the executor or administrator of the estate of the decedent or the person or persons to whom an Option granted hereunder shall have been validly transferred by the executor or the administrator pursuant to a will or the laws of descent and distribution shall have the right, during the period ending three years after the date of the Optionee's death, to exercise the Optionee's Option (A) in full, without regard to any installment exercise provisions, to the extent that it shall not have been exercised, if the Optionee shall have died while in the employ of the Company or its Subsidiaries or within three years after termination of employment where such termination occurred either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, or (B), to the extent that it was exercisable at the date of the Optionee's death and shall not have been exercised, if the Optionee shall have died within three months after termination of employment where such termination did not occur by reason of either retirement or permanent total disability or within two years following a Change of Control of the Company, subject, however, to the provisions of Section 5.4 hereof. (e) No transfer of an Option by the Optionee by a will or by the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and an authenticated copy of the will and/or such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions of such Option. (f) The foregoing notwithstanding, the Committee may elect, in its sole discretion, to make grants of Options which have provisions regarding the effect of death or other termination of employment which are different than those set forth in paragraphs (a) through (d) of this Section 5.7, provided that such provisions do not materially increase the benefits that would otherwise accrue to an Optionee under paragraphs (a) through (d) of Section 5.7. Sec. 5.8 RIGHTS AS STOCKHOLDER --------------------- An Optionee or a transferee of an Option shall have no rights as a stockholder with respect to any shares subject to such Option prior to the purchase of such shares by exercise of such Option as provided herein. 8 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 ARTICLE VI AWARDS Sec. 6.1 AWARD GRANT AND RESTRICTED STOCK AGREEMENT ------------------------------------------ The Committee may grant Awards of Restricted Stock to Awardees. No Awards may be made during any fiscal year unless, for the preceding fiscal year, Return on Average Shareholders' Equity exceeded the Ten Year Treasury Yield by more than three percentage points. Each Award granted hereunder must be granted within ten years from the effective date of the Plan and shall be evidenced by minutes of a meeting or the written consent of the Committee. The Committee shall from time to time establish various Award grade levels which shall set forth the maximum number of shares which may be awarded annually to each Eligible Employee in each grade level. The Committee shall have the sole discretion and authority to make an Award to an Eligible Employee of less than the maximum number of shares applicable to his assigned grade level or to make no Award at all to any such Eligible Employee. In no event shall the total number of shares of Restricted Stock awarded to an Eligible Employee in any fiscal year exceed 15,000. The Awardee shall be entitled to receive the Stock subject to such Award only if the Company and the Awardee, within 30 days after the date of the Award, enter into a written Restricted Stock Agreement dated as of the date of the Award, which Agreement shall set forth such terms and conditions as may be determined by the Committee consistent with the Plan. Sec. 6.2 CONSIDERATION FOR ISSUANCE -------------------------- No shares of Restricted Stock shall be issued to an Awardee hereunder unless and until the Committee shall have determined that consideration has been received by the Company, in the form of labor performed for or services actually rendered to the Company by the Awardee, having a fair value of not less than the then fair market value of a like number of shares of Stock subject to all of the herein provided conditions and restrictions applicable to Restricted Stock, but in no event less than the par value of such shares. Sec. 6.3 RESTRICTIONS ON SALE OR OTHER TRANSFER -------------------------------------- Each share of Stock received pursuant to each Restricted Stock Agreement shall be subject to acquisition by Fluor Corporation, and may not be sold or otherwise transferred except pursuant to the following provisions: (a) The shares of Stock represented by the Restricted Stock Agreement shall be held in book entry form with the Company's transfer agent until the restrictions lapse in accordance with the conditions established by the Committee pursuant to Section 6.4 hereof, or until the shares of stock are forfeited pursuant to paragraph (c) of this Section 6.3. Notwithstanding the foregoing, the Awardee may request that, prior to the lapse of the restrictions or forfeiture of the shares, certificates evidencing such shares be issued in his name and delivered to him, and each such certificate shall bear the following legend: 9 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 "The shares of Massey Energy Company common stock evidenced by this certificate are subject to acquisition by Massey Energy Company, and such shares may not be sold or otherwise transferred except pursuant to the provisions of the Restricted Stock Agreement by and between Massey Energy Company and the registered owner of such shares." (b) No such shares may be sold, transferred or otherwise alienated or hypothecated so long as such shares are subject to the restriction provided for in this Section 6.3. (c) Unless the Committee in its discretion determines otherwise, upon an Awardee's termination of employment for any reason, all of the Awardee's Restricted Stock remaining subject to restriction shall be acquired by the Company effective as of the date of such termination of employment. Upon the occurrence or non-occurrence of such other events as shall be determined by the Committee and specified in the Awardee's Restricted Stock Agreement relating to any such Restricted Stock, all of such Restricted Stock remaining subject to restriction shall be acquired by the Company upon the occurrence or non- occurrence of such event. Sec. 6.4 LAPSE OF RESTRICTIONS --------------------- The restrictions imposed upon Restricted Stock under Section 6.3 above will lapse in accordance with such conditions as are determined by the Committee and set forth in the Restricted Stock Agreement. Sec. 6.5 RIGHTS AS STOCKHOLDER --------------------- Subject to the provisions of Section 6.3 hereof, upon the issuance to the Awardee of Restricted Stock hereunder, the Awardee shall have all the rights of a stockholder with respect to such Stock, including the right to vote the shares and receive all dividends and other distributions paid or made with respect thereto. ARTICLE VII STOCK CERTIFICATES Sec. 7.1 STOCK CERTIFICATES ------------------ The Company shall not be required to issue or deliver any certificate for shares of Stock purchased upon the exercise of any Option granted hereunder or any portion thereof, or received as Restricted Stock pursuant to a Restricted Stock Agreement executed hereunder, prior to fulfillment of all of the following conditions: (a) the admission of such shares to listing on all stock exchanges on which the Stock is then listed; 10 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 (b) the completion of any registration or other qualification of such shares under any federal or state law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, which the Committee shall in its sole discretion deem necessary or advisable; (c) the obtaining of any approval or other clearance from any federal or state governmental agency which the Committee shall in its sole discretion determine to be necessary or advisable; and (d) the lapse of such reasonable period of time following the exercise of the Option or the execution of the Restricted Stock Agreement as the Committee from time to time may establish for reasons of administrative convenience. ARTICLE VIII GRANT AND EXERCISE OF RIGHTS Sec. 8.1 RIGHTS GRANTS AND AGREEMENTS ---------------------------- The Committee may approve the grant of Rights related or unrelated to Options, subject to the following terms and conditions: (a) A Stock Appreciation Right may be granted: (i) at any time if unrelated to an Option; (ii) only at the time of grant if related to an Option. (b) A Stock Appreciation Right grant in connection with an Option will entitle the holder of the related Option, upon exercise of the Stock Appreciation Right, to surrender such Option, or any portion thereof to the extent unexercised, with respect to the number of shares as to which such Stock Appreciation Right is exercised, and to receive payment of an amount computed pursuant to Sec. 8.1(d). Such Option will, to the extent surrendered, then cease to be exercisable. (c) Subject to Section 8.1(g), a Stock Appreciation Right granted in connection with an Option hereunder will be exercisable at such time or times, and only to the extent that a related Option is exercisable, and will not be transferable except to the extent that such related Option may be transferable. (d) Upon the exercise of a Stock Appreciation Right related to an Option, the holder will be entitled to receive payment of an amount determined by multiplying: (i) The difference obtained by subtracting the purchase price of a share of Stock specified in the related Option from the Fair Market Value of a share of Stock on the date of exercise of such Stock Appreciation Right, by 11 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 (ii) The number of shares as to which such Stock Appreciation Right has been exercised. (e) The Committee may grant Stock Appreciation Rights unrelated to Options. Section 8.l(d) shall be used to determine the amount payable at exercise under such Stock Appreciation Right except that, in lieu of the price specified in the related option, the initial share value specified in the award, which may not be less than the Fair Market Value on the date of the award, shall be used. (f) Payment of the amount determined under Section 8.1(d) or (e) may be made solely in whole shares of Stock in a number determined at their Fair Market Value on the date of exercise of the Stock Appreciation Right or, alternatively, at the sole discretion of the Committee, solely in cash or in a combination of cash and shares as the Committee deems advisable. If the Committee decides to make full payment in shares of Stock, and the amount payable results in a fractional share, payment for the fractional share will be made in cash. Notwithstanding the foregoing, payment of the amount determined under Section 8.1(d) or (e) shall be made solely in cash if the Awardee is an "officer" of the Company for purposes of Section 16(b) of the Securities Exchange Act of 1934 (the "Exchange Act"). (g) The Committee may, at the time a Stock Appreciation Right is granted, impose such conditions on the exercise of the Stock Appreciation Right as may be required to satisfy the requirements of Rule 16b-3 of the Exchange Act (or any other comparable provisions in effect at the time or times in question). Without limiting the generality of the foregoing, the Committee may determine that a Stock Appreciation Right may be exercised only during the period beginning on the third business day and ending on the twelfth business day following the publication of the Company's quarterly and annual summarized financial data. (h) The date of the grant shall be the date of such Committee action. Each grant shall be evidenced by minutes of a meeting or the written consent of the Committee and by a written Stock Appreciation Rights Agreement dated as of the date of the grant and executed by the Grantee and the Company, which Agreement shall set forth such terms and conditions as may be determined by the Committee consistent with the Plan. Sec. 8.2 RIGHTS PERIOD ------------- The period for the exercise of each Right granted hereunder shall be determined by the Committee, but in no instance shall such period exceed ten years from the date of grant. 12 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 Sec. 8.3 RIGHTS EXERCISE --------------- (a) Rights granted hereunder may not be exercised unless and until the Grantee shall have been or remained in the employ of the Company or its Subsidiaries for one year from and after the date of grant of such Rights, except as otherwise provided in Section 8.5 hereof. (b) Rights granted hereunder may be exercised with respect to whole Rights only, in such number as determined by the Committee, and shall be exercised by written notice of intent to exercise with respect to a specified number of Rights delivered to the Company at its principal office in the State of Delaware. Sec. 8.4 NONTRANSFERABILITY OF RIGHTS ---------------------------- No Rights granted hereunder shall be transferred by a Grantee otherwise than by a will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Code or Title I of ERISA. During the lifetime of a Grantee, such Rights shall be exercisable only by him. Sec. 8.5 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT -------------------------------------------------- (a) If, prior to a date one year from the date on which Rights shall have been granted, the Grantee's employment with the Company or its Subsidiaries shall be terminated by the Company or Subsidiary with or without cause, or by the act of the Grantee, the Grantee's right to exercise such Rights shall terminate and all rights thereunder shall cease; provided, however, that if the Grantee shall die, retire, or become permanently and totally disabled, as determined in accordance with applicable Company personnel policies, or if the Grantee's employment with the Company or its Subsidiaries shall be terminated within two years after a Change of Control of the Company and such termination occurs prior to a date one year from the date on which such Rights shall have been granted, such Rights shall become exercisable in full on the date of such death or disability. (b) If, on or after one year from the date on which Rights shall have been granted, a Grantee's employment with the Company or its Subsidiaries shall be terminated for any reason other than death, retirement or permanent total disability, or within two years following a Change of Control of the Company, the Grantee shall have the right, during the period ending three months after such termination, to exercise such Rights to the extent that they were exercisable at the date of such termination and shall not have been exercised, subject, however, to the provisions of Section 8.2 hereof. (c) Upon termination of a Grantee's employment with the Company or its Subsidiaries by reason of retirement or permanent total disability, as determined in accordance with applicable Company personnel policies, or within two years following a Change of Control of the Company, such Grantee shall have the right, 13 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 during the period ending three years after such termination, to exercise his Rights in full, without regard to any installment exercise provisions, to the extent that they shall not have been exercised, subject, however, to the provisions of Section 8.2 hereof. (d) If a Grantee shall die (i) while in the employ of the Company or its Subsidiaries, or (ii) within three months after termination of employment where such termination did not occur either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, or (iii) within three years after termination of employment where such termination occurred either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, the executor or administrator of the estate of the decedent or the person or persons to whom Rights granted hereunder shall have been validly transferred by the executor or the administrator pursuant to a will or the laws of descent and distribution shall have the right, during the period ending three years after the date of the Grantee's death, to exercise the Grantee's Rights (A) in full, without regard to any installment exercise provisions, to the extent that they shall not have been exercised, if the Grantee shall have died while in the employ of the Company or its Subsidiaries or within three years after termination of employment where such termination occurred either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, or (B) to the extent that they were exercisable at the date of the Grantee's death and shall not have been exercised, if the Grantee shall have died within three months after termination of employment where such termination did not occur by reason of either retirement or permanent total disability or within two years following a Change of Control of the Company, subject, however, to the provisions of Section 8.2 hereof. (e) No transfer of Rights by a Grantee by a will or by the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and an authenticated copy of the will and/or such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions of such Rights. (f) The foregoing notwithstanding, the Committee may elect, in its sole discretion, to make grants of Rights which have provisions regarding the effect of death or other termination of employment which are different than those set forth in paragraphs (a) through (d) of this Section 8.5, provided that such provisions do not materially increase the benefits that would otherwise accrue to a Grantee under paragraphs (a) through (d) of Section 8.5. 14 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 Sec. 8.6 NO RIGHTS AS STOCKHOLDER ------------------------ Nothing herein contained shall be deemed to give any Grantee any rights as a stockholder of the Company. ARTICLE IX STOCK PAYMENT Sec. 9.1 STOCK PAYMENT ------------- The Committee may approve payments of Stock to any Eligible Employee for all or any portion of the compensation (other than base salary) that would otherwise become payable to such Eligible Employee in cash. ARTICLE X TERMINATION, AMENDMENT AND MODIFICATION OF PLAN Sec. 10.1 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN ----------------------------------------------- The Board may at any time, upon recommendation of the Committee, terminate, and may at any time and from time to time and in any respect amend or modify, the Plan, provided, however, that no such action of the Board without approval of the stockholders of the Company may: (a) increase the total number of shares of Stock subject to the Plan except as contemplated in Section 11.1 hereof; (b) materially increase the benefits accruing to participants under the Plan; (c) withdraw the administration of the Plan from the Committee; or (d) permit any person while a member of the Committee to be eligible to receive an Option, Right or Restricted Stock under the Plan; and provided further, that no termination, amendment or modification of the Plan shall in any manner affect any Stock Option Agreement, Restricted Stock Agreement or Stock Appreciation Rights Agreement theretofore executed pursuant to the Plan without the consent of such Optionee, Awardee or Grantee. 15 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 ARTICLE XI MISCELLANEOUS Sec. 11.1 ADJUSTMENT PROVISIONS --------------------- (a) Subject to Section 11.l(b) below, if the outstanding shares of Stock of the Company are increased, decreased, or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed with respect to such shares of Stock or other securities, through merger, consolidation, sale of all or substantially all of the property of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other distribution with respect to such shares of Stock or other securities, an appropriate and proportionate adjustment may be made in (i) the maximum number and kind of shares provided in Section 2.4, (ii) the number and kind of shares or other securities subject to the outstanding Options, Awards and Grants, and (iii) the price for each share or other unit of any other securities subject to outstanding Options or Grants without change in the aggregate purchase price or value as to which such Options or Grants remain exercisable. (b) Adjustments under Section 11.1(a) will be made by the Committee, whose determination as to what adjustments will be made and the extent thereof will be final, binding, and conclusive. No fractional interests will be issued under the Plan resulting from any such adjustments. Sec. 11.2 CONTINUATION OF EMPLOYMENT -------------------------- Nothing in the Plan or in any instrument executed pursuant to the Plan will confer upon any Eligible Employee any right to continue in the employ of the Company or any Subsidiary or affect the right of the Company or any Subsidiary to terminate the employment of any Eligible Employee at any time with or without cause. Sec. 11.3 COMPLIANCE WITH GOVERNMENT REGULATIONS -------------------------------------- No shares of Stock will be issued hereunder unless and until all applicable requirements imposed by federal and state securities and other laws, rules, and regulations and by any regulatory agencies having jurisdiction and by any stock exchanges upon which the Stock may be listed have been fully met. As a condition precedent to the issuance of shares of Stock pursuant hereto, the Company may require the employee to take any reasonable action to comply with such requirements. 16 MASSEY ENERGY COMPANY 1988 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 Sec. 11.4 PRIVILEGES OF STOCK OWNERSHIP ----------------------------- No employee and no beneficiary or other person claiming under or through such employee will have any right, title, or interest in or to any shares of Stock allocated or reserved under the Plan or subject to any Option, Right or Award except as to such shares of Stock, if any, that have been issued to such employee. Sec. 11.5 WITHHOLDING ----------- The Company may make such provisions as it deems appropriate to withhold any taxes the Company determines it is required to withhold in connection with any Option, Award or Right. The Company may require the employee to satisfy any relevant tax requirements before authorizing any issuance of Stock to the employee. Such settlement may be made in cash or Stock. Sec. 11.6 NONTRANSFERABILITY ------------------ An Option, Award or Right may be exercised during the life of the employee solely by the employee or the employee's duly appointed guardian or personal representative. No Option, Award or Right and no other right under the Plan, contingent or otherwise, will be assignable or subject to any encumbrance, pledge, or charge of any nature. Sec. 11.7 OTHER COMPENSATION PLANS ------------------------ The adoption of the Plan shall not affect any other stock option or incentive or other compensation plans in effect for the Company or any Subsidiary, nor shall the Plan preclude the Company from establishing any other forms of incentive or other compensation for employees of the Company or any Subsidiary. Sec. 11.8 PLAN BINDING ON SUCCESSORS -------------------------- The Plan shall be binding upon the successors and assigns of the Company. Sec. 11.9 SINGULAR, PLURAL; GENDER ------------------------ Whenever used herein, nouns in the singular shall include the plural, and the masculine pronoun shall include the feminine gender. Sec. 11.10 HEADINGS, ETC., NO PART OF PLAN ------------------------------- Headings of Articles and Sections hereof are inserted for convenience and reference; they constitute no part of the Plan. 17 EX-10.7 10 0010.txt EXHIBIT 10.7 EXHIBIT 10.7 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 ARTICLE 1 DEFINITIONS Sec. 1.10 DEFINITIONS As used herein, the following terms shall have the meanings hereafter set forth unless the context clearly indicates to the contrary: (a) "Board" shall mean the Board of Directors of the Company. (b) "Change of Control" of the Company shall be deemed to have occurred if, (i) a third person, including a "group" as defined in Section 13(d)(3) of the Exchange Act, acquires shares of the Company having twenty-five percent or more of the total number of votes that may be cast for the election of directors of the Company; or (ii) as the result of any cash tender or exchange offer, merger or other business combination, or any combination of the foregoing transactions, (a "Transaction"), the persons who were directors of the Company before the Transaction shall cease to constitute a majority of the Board of the Company or any successor to the Company. (c) "Change of Control Compensation Agreement" or "Agreement" shall each mean any agreement between the Executive and the Company which sets forth the terms and conditions governing the Executive's participation in the Plan. (d) "Committee" shall mean the Compensation Committee of the Board. (e) "Company" shall mean Massey Energy Company. (f) "Exchange Act" shall mean the Securities Exchange Act of 1934. (g) "Executive" shall mean any key management employee of the Company or one of its Subsidiaries who has been selected by the Committee for participation under the Plan and who has executed a Change of Control Compensation Agreement. (h) "Plan" shall mean the Massey Energy Company Change of Control Compensation Plan, the terms of which are set forth herein. (i) "Subsidiary" shall mean any corporation, the majority of the outstanding capital stock of which is owned, directly or indirectly, by the Company. ARTICLE II THE PLAN Sec. 2.10 NAME 1 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 This Plan shall be known as the "Massey Energy Company Change of Control Compensation Plan." Sec. 2.20 PURPOSE The Board has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication of certain key management employees and be able to rely on the advice and counsel of such employees, notwithstanding the possibility, threat, or occurrence of a Change of Control of the Company. In the case of any such proposals, key management employees, in addition to their regular duties, may be called upon to assist in the assessment of such proposals, to advise management and the Board as to whether such proposals would be in the best interest of the Company and its stockholders and to take such other actions as the Board might determine to be appropriate. The Board believes it is imperative to diminish the inevitable distraction of such employees by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control, to encourage the employee's full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the employee with compensation arrangements upon a Change of Control which provide the employee with individual financial security. In order to accomplish these objectives, the Board has caused the Company to adopt this Plan. Sec. 2.30 EFFECTIVE DATE The Plan was originally effective as of __________________. The effective date of this amended and restated Plan is November 30, 2000. ARTICLE III PARTICIPATION Sec. 3.10 ELIGIBILITY Any officer or other key management employee of the Company or its Subsidiaries shall be eligible to participate in the Plan; provided, however, that no member of the Committee shall be eligible to participate. Sec. 3.20 PARTICIPATION The Committee shall have sole discretion and authority to determine from among eligible employees those who shall be offered participation in the Plan as well as the terms and conditions upon which such participation may be offered. ARTICLE IV EXECUTION OF AGREEMENT Sec. 4.10 EXECUTION OF AGREEMENT 2 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 Participation in the Plan by an Executive shall be evidenced by an executed Change of Control Compensation Agreement. Each Agreement executed hereunder shall be authorized by minutes of a meeting or the written consent of the Committee and shall set forth such terms and conditions as may be determined by the Committee consistent with the Plan. ARTICLE V CONTINUED SERVICES Sec. 5.10 CONTINUED SERVICES Each Agreement shall provide that in the event a third person begins a tender or exchange offer, circulates a proxy to stockholders, or takes other steps to effect a Change of Control of the Company, the Executive shall covenant that he will not voluntarily leave the employ of the Company and will render the services contemplated in Sec. 2.2 hereof until such third person has abandoned or terminated his or its efforts to effect the Change of Control or until a Change of Control has occurred. ARTICLE VI TERMINATION OF EMPLOYMENT Sec. 6.10 TERMINATION OF EMPLOYMENT Each Agreement shall provide for the Executive to receive designated benefits not to exceed those set forth in Secs. 6.2, 6.3 and 6.4 hereof in certain situations where his employment with the Company (including its Subsidiaries) has terminated other than as a consequence of death or permanent total disability and within two years after a Change of Control of the Company. Under the terms of each Agreement the receipt of any such benefits may or may not be limited to situations where the Change of Control was contested by the Company. Each Agreement shall also provide for a conclusive presumption that any involuntary termination of the Executive within said period was not for any willful breach of duty by the Executive in the course of his employment or for habitual neglect of his duty or continued incapacity to perform it. The Committee has sole and absolute discretion to provide in each Agreement the specific circumstances upon which the termination, whether voluntary, with good reason, involuntary or otherwise, shall give rise to the payment of benefits hereunder. Sec. 6.20 LUMP SUM CASH PAYMENTS Subject to Sec. 6.5 herein, the Company will pay to the Executive as compensation for services rendered to the Company a lump sum amount (subject to any applicable payroll or other taxes required to be withheld) which shall be determined by calculating the sum of the monthly amounts set forth in paragraphs (a), (b) and (c) below, for the number of months that shall not exceed the lesser of: (i) thirty-six months, or 3 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 (ii) the number of whole or partial calendar months between the Executive's last day of employment and the end of the calendar year in which the Executive would reach age 65, and by then adjusting that sum, if necessary, in order to comply with Sec. 6.5 herein. (a) Monthly Salary Amount. For months one through twelve, an amount equal --------------------- to the monthly base salary payable to the Executive by the Company as of the date of the Executive's termination; for months thirteen through twenty-four, if applicable, 1.1 times the above monthly base salary; and for months twenty-five through thirty-six, if applicable, 1.2 times the above monthly base salary. (b) Monthly Bonus Amount. For months one through twelve, an amount equal -------------------- to the greater of (1) one-twelfth of the Executive's projected award under the executive incentive compensation plan (to be stated as a percentage of the salary factor) computed in accordance with Company policy on the basis of Company and individual performance rating of 8, or (2) one-twelfth of the Executive's award under the executive incentive compensation plan for the last preceding full fiscal year; for months thirteen through twenty- four, if applicable, the monthly amount for months one through twelve multiplied by 1.1; for months twenty-five through thirty-six, if applicable, the monthly amount for months one through twelve multiplied by 1.2. (c) Monthly Fringe Benefit Amount. Twenty-nine percent of the amount ----------------------------- calculated pursuant to paragraph (a) above of this Sec. 6.2, in lieu of certain benefits and perquisites provided to the Executive. 4 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 Sec. 6.30 CONTINUING APPLICATION OF EXISTING COMPANY RETIREMENT RULES AND POLICIES Each Agreement shall provide that the determination as to whether an Executive's termination of employment constitutes a "retirement" under Company (or Subsidiary) rules and policies shall be determined with reference to the rules and personnel policies in effect immediately prior to the Change of Control, and, in the case where such Executive's termination qualifies as a retirement under such rules and personnel policies, then the personnel policy benefits to which the Executive shall be entitled as a result of such retirement shall be no less than those determined in accordance with the rules and personnel policies in effect immediately prior to the Change of Control. Sec. 6.40 OTHER BENEFIT PLANS Nothing in this Plan or any Agreement shall prevent or limit the Executive's continuing or future participation in any pension, savings, investment, retirement, profit sharing, restricted stock, stock option or stock appreciation rights plan or other benefit, bonus, incentive or other plans, programs, agreements, policies or practices of the Company or any of its Subsidiaries for which the Executive may qualify. Any terminating distributions and/or vested rights under such plans, programs, agreements, policies or practices shall be governed by the terms of those respective plans, subject to the provisions of Sec. 6.5 herein. Sec. 6.5 CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY Each Agreement shall be governed by the following provisions: (a) For purposes of this Sec. 6.5, (i) "Payment" shall mean any payment or distribution in the nature of compensation to or for the benefit of Executive (whether paid or payable pursuant to this Plan or otherwise, but determined without regard to any reductions required by this Sec. 6.5); (ii) "Net After Tax Receipts" shall mean the Present Value of a Payment net of all taxes imposed on Executive with respect thereto under Sections 1 and 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), determined by applying the highest marginal rate under Section I of the Code which applied to the Executive's taxable income for the immediately preceding taxable year; (iii) "Present Value" shall mean such value determined in accordance with Section 280G(d)(4) of the Code; and (iv) "Reduced Amount" shall mean the smallest aggregate amount of Payments, or portions of Payments, which (a) is less than the sum of all Payments and (b) results in aggregate Net After Tax Receipts which are equal to or greater than the Net After Tax Receipts which would result if the aggregate Payments were any other amount less than the sum of all Payments. (b) Anything in this Plan to the contrary notwithstanding, in the event a public accounting firm is engaged by the Company (the "Accounting Firm") shall determine that receipt of all Payments would subject Executive to tax under Section 4999 of the Code, it shall determine whether some amount of Payments would meet the definition of a 5 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 Reduced Amount. If the Accounting Firm determines that there is a Reduced Amount, the aggregate Payments shall be reduced to such Reduced Amount. In the event that the Accounting Firm is serving as accountant or auditor for the person or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. (c) If the Accounting Firm determines that aggregate Payments should be reduced to the Reduced Amount, the Company shall promptly give Executive notice to that effect and a copy of the detailed calculation thereof, and the Executive may then elect which and how much of the Payments shall be eliminated or reduced (as long as after such election the present value of the aggregate Payments equals the Reduced Amount), and shall advise the Company in writing of such election within ten days of his receipt of notice. If no such election is made by the Executive within such ten-day period, the Company may elect which of such Payments shall be eliminated or reduced (as long as after such election the present value of(Pounds) the aggregate Payments equals the Reduced Amount) and shall notify the Executive promptly of such election. All determinations made by the Accounting Firm under this Sec. 6.5 shall be binding upon the Company and Executive and shall be made within fifteen business days of the date of termination. As promptly as practicable following such determination, the Company shall pay to or distribute to or for the benefit of Executive such Payments as are then due to Executive and shall promptly pay to or distribute to or for the benefit of Executive in the future such Payments as become due to Executive. (d) While it is the intention of the Company and the Executive to reduce the amounts payable or distributable to Executive hereunder only if the aggregate Net After Tax Receipts to Executive would thereby be increased, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Company to or for the benefit of Executive pursuant to this Plan which should not have been so paid or distributed ("Overpayment") or that additional amounts which will have not been paid or distributed by the Company to or for the benefit of Executive pursuant to this Plan could have been so paid or distributed ("Underpayment"), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the Accounting Firm, based either upon the assertion of a deficiency by the Internal Revenue Service against the Company or Executive which the Accounting Firm believes has a high probability of success determines that an Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the benefit of Executive shall be treated for all purposes as a loan to Executive which Executive shall repay to the Company together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code; provided, however, that no such loan shall be deemed to have been made and no amount shall be payable by Executive to the Company if and to the extent such deemed loan and payment would not either reduce the amount on which the 6 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 Executive is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Accounting Firm, based upon controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code. ARTICLE VII GENERAL PROVISIONS Sec. 7.10 CONTINUING OBLIGATIONS Each Agreement shall provide that the Executive shall retain in confidence, both during and after his employment with the Company, any confidential information known to him concerning the Company and its business and clients so long as such information is not publicly disclosed, other than by acts of the Executive or his representatives in violation of the Agreement. Sec. 7.20 INDEMNIFICATION Each Agreement shall provide that if litigation is brought by either party to enforce or interpret any provision contained in the Agreement, the Company will undertake to indemnify the Executive for his reasonable attorneys' fees and expenses incurred in such litigation regardless of the outcome thereof, and will agree to pay prejudgment interest on any money judgment obtained by the Executive, calculated at the prime interest rate in effect at Security Pacific National Bank from time to time from the date that payment(s) to him should have been made under the Agreement. Sec. 7.30 PAYMENT OBLIGATIONS ABSOLUTE Each Agreement shall provide that the Company's obligation to pay the Executive the compensation and to make the arrangements provided thereunder shall be absolute and unconditional and shall not be affected by any circumstances, including without limitation, any setoff, counterclaim, recoupment, defense, claim or other right which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of the applicable Agreement. All amounts payable by the Company shall be paid without notice or demand. Except as expressly provided herein and under each Agreement, the Company will waive all rights which it may now have or may hereafter have conferred upon it, by statute or otherwise, to terminate, cancel or rescind the Agreement in whole or in part. Each and every payment made by the Company shall be final, and the Company will not seek to recover all or any part of such payment from the Executive or from whosoever may be entitled thereto, for any reason whatsoever. Sec. 7.40 SUCCESSORS 7 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 Each Agreement shall be binding upon and inure to the benefit of the Company and its successors or assigns, but is personal to the Executive and neither the Agreement nor any rights arising thereunder may be assigned or pledged by the Executive, other than by will or the laws of descent or distribution. Sec. 7.50 SEVERABILITY Any provision in an Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability, without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Sec. 7.60 CONTROLLING LAW The Plan and each Agreement shall in all respects be governed by and construed in accordance with the laws of the State of Delaware, excluding its conflicts of laws principles. Sec. 7.70 TERMINATION Each Agreement shall be subject to unilateral termination by the Company if the Committee determines that the Executive is no longer a key management employee to be included within the Plan and so notifies the Executive; except ------ that, such determination may not be made, and if made shall have no effect, if a - ---- Change of Control shall have occurred or during any period of time when the Company has knowledge that any third person has taken steps reasonably calculated to effect a Change in Control until, in the opinion of the Committee, the third person has abandoned or terminated his or its efforts to effect a Change of Control. Any decision by the Committee that the third person has abandoned or terminated his or its efforts to effect a Change of Control shall be conclusive and binding on the Executive. Sec. 7.80 TERM OF AGREEMENT The duration of each Agreement shall be for a period of five years or as otherwise determined by the Committee. Each Agreement, however, shall provide for automatic extensions for successive additional one year periods beyond its initial termination date unless at least 30 days prior to the expiration of any such period, the Committee shall have given written notice that it does not wish to extend the Agreement; and provided further, that each Agreement shall continue in effect beyond the then current term if a Change of Control shall have occurred during such term. Sec. 7.90 CONTINUATION OF EMPLOYMENT Each Agreement shall provide that nothing in the Plan or in any instrument executed pursuant to the Plan, including, without limitation, any Agreement, will confer upon any employee any right to continue in the employ of the Company or any Subsidiary or affect the 8 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 right of the Company or any Subsidiary to terminate the employment of any employee at any time with or without cause. Sec. 7.100 HEADINGS NOT PART OF AGREEMENT Each Agreement shall provide that the headings used therein are for convenience and reference only and shall have no force or effect. ARTICLE VIII TERMINATION, AMENDMENT AND MODIFICATION OF PLAN 8.10 TERMINATION OF PRIOR PLAN AND AGREEMENTS This Plan shall amend the Second Amendment to Fluor Supplemental Executive Severance Plan effective as of April 1, 1984 (the "Second Amendment") and the execution of an Agreement shall terminate any Executive Severance Agreement entered into by the same parties under the Second Amendment. Sec. 8.20 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN The Board may at any time terminate, and may at any time and from time to time amend or modify the Plan; provided however, that no termination, amendment or modification of the Plan shall in any manner affect any Agreement theretofore executed pursuant to the Plan without the consent of the Executive except as otherwise provided in Sec. 7.7 hereof. ARTICLE IX MISCELLANEOUS Sec. 9.10 PLAN BINDING ON SUCCESSORS The Plan shall be binding upon the successors and assigns of the Company. Sec. 9.20 SINGULAR, PLURAL; GENDER Whenever used herein, nouns in the singular shall include the plural, and the masculine pronoun shall include the feminine gender. 9.30 HEADINGS NOT PART OF PLAN. Article and Section headings used herein are inserted for convenience and reference only and shall have no force or effect. 9 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 CHANGE OF CONTROL COMPENSATION AGREEMENT ---------------------------------------- THIS CHANGE OF CONTROL COMPENSATION AGREEMENT ("Agreement"), executed as of ____________________________, by and between Massey Energy Company , a Delaware corporation (the "Company"), and ____________________________ (the "Executive"), evidences the award by the Organization and Compensation Committee of the Board of Directors of the Company of the benefits set forth herein pursuant to the Massey Energy Company Change of Control Compensation Plan (the "Plan") as amended and restated effective November 30, 2000, receipt of a copy of which Plan the Executive hereby acknowledges. Terms with initial letters capitalized not defined in this Agreement shall have the same meanings as set forth in the Plan. 1. Agreement to Render Services. In the event a third person begins a ---------------------------- tender or exchange offer, circulates a proxy to stockholders, or takes other steps to effect a Change of Control (as hereinafter defined) of the Company, the Executive agrees that he will not voluntarily leave the employ of the Company, and will render the services contemplated in Sec. 2.2 of the Plan, until such third person has abandoned or terminated his or its efforts to effect a Change of Control or until a Change of Control has occurred. 2. Award of Benefits. [INSERT FOR CATEGORY I: In the event the ----------------- Executive's employment with the Company or its Subsidiaries terminates either voluntarily or involuntarily for any reason other than death or permanent total disability and where such termination occurs within two years after a Change of Control of the Company, the Executive shall be paid an aggregate sum in the amount specified in paragraph 3 hereof.] [INSERT FOR CATEGORY II: In the event the Executive's employment with the Company or its Subsidiaries terminates either (a) voluntarily or involuntarily for any reason other than death or permanent total disability and where such termination occurs within two years after a Contested Change of Control (as hereinafter defined) of the Company, or (b) voluntarily for good reason (as hereinafter defined) or involuntarily for any reason other than death or permanent total disability and where such termination occurs within two years after an Uncontested Change of Control (as hereinafter defined) of the Company, the Executive shall be paid an aggregate sum in the amount specified in paragraph 3 hereof. For purposes of this paragraph, "good reason" shall mean (i) the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities in effect immediately prior to the Change of Control, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, other than an isolated, insubstantial and inadvertent 10 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; (ii) any failure by the Company to continue the Executive's employment upon the terms and conditions as existed immediately prior to the Change of Control, including but not limited to compensation level, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; or (iii) the Company requiring the Executive to be based at any office or location other than the office or location that the Executive was based at immediately prior to the Change of Control, except for travel reasonably required in the performance of the Executive's responsibilities. For purposes of this definition, any good faith determination of "good reason" made by the Executive shall be conclusive.] [INSERT FOR CATEGORY III: In the event the Executive's employment with the Company or its Subsidiaries terminates either voluntarily or involuntarily for any reason other than death or permanent total disability and where such termination occurs within two years after a Contested Change of Control (as hereinafter defined) of the Company, the Executive shall be paid an aggregate sum in the amount specified in paragraph 3 hereof.] 3. Payment of Benefits. Subject to paragraph 6 herein, the Company will ------------------- pay to the Executive as compensation for services rendered to the Company a lump sum amount (subject to any applicable payroll or other taxes required to be withheld) which shall be determined by calculating the sum of the monthly amounts set forth in subparagraphs (a), (b) and (c) of this paragraph, for the number of months that shall not exceed the lesser of (i) [CATEGORY I: thirty-six months, or] [CATEGORIES II and III: twenty-four months, or] (ii) the number of months (and any fraction thereof) between the Executive's last day of employment and the end of the calendar year in which the Executive would reach age 65, and by then adjusting that sum, if necessary, in order to comply with paragraph 6 herein. (a) Monthly Salary Amount. [CATEGORY I: For months one through twelve, an --------------------- amount equal to the monthly base salary payable to the Executive by the Company as of the date of the Executive's termination; for months thirteen through twenty-four, if applicable, 1.1 times the above monthly base salary; and for months twenty-five through thirty-six, if applicable, 1.2 times the above monthly base salary.] 11 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 [CATEGORIES II and III: For months one through twelve, an amount equal to the monthly base salary payable to the Executive by the Company as of the date of the Executive's termination; and for months thirteen through twenty-four, if applicable, 1.1 times the above monthly base salary.] (b) Monthly Bonus Amount. [CATEGORY I: For months one through twelve, an -------------------- amount equal to the greater of (i) one-twelfth of the Executive's projected award under the Executive Incentive Compensation Plan (to be stated as a percentage of the salary factor) computed in accordance with Company policy on the basis of Company and individual performance rating of 8, or (2) one- twelfth of the Executive's award under the Executive Incentive Compensation Plan for the last preceding full fiscal year; for months thirteen through twenty-four, if applicable, the monthly amount for months one through twelve multiplied by 1.1; for months twenty-five through thirty-six, if applicable, the monthly amount for months one through twelve multiplied by 1.2.] [FOR CATEGORIES II AND III: For months one through twelve, an amount equal to the greater of (1) one-twelfth of the Executive's projected award under the Executive Incentive Compensation Plan (to be stated as a percentage of the salary factor) computed in accordance with Company policy on the basis of Company and individual performance rating of 8, or (2) one- twelfth of the Executive's award under the Executive Incentive Compensation Plan for the last preceding full fiscal year; and for months thirteen through twenty-four, if applicable, the monthly amount for months one through twelve multiplied by 1.1.] (c) Monthly Fringe Benefit Amount. Twenty-nine percent of the amount ----------------------------- calculated pursuant to subparagraph (a) of this paragraph, in lieu of certain benefits and perquisites provided to the Executive. 4. Continuing Application of Existing Company Retirement Rules and --------------------------------------------------------------- Policies. The determination as to whether the Executive's termination of - -------- employment constitutes a "retirement" under Company (or Subsidiary) rules and policies shall be determined with reference to the rules and personnel policies in effect immediately prior to the Change of Control, and, in the case where such Executive's termination qualifies as a retirement under such rules and personnel policies, then the personnel policy benefits to which the Executive shall be entitled as a result of such retirement shall be no less than those determined in accordance with the rules and personnel policies in effect immediately prior to the Change of Control. 5. Other Benefit Plans. The Executive's continuing or future ------------------- participation in any pension, savings, investment, retirement, profit sharing, restricted stock, stock option or stock appreciation rights plan or other benefit, bonus, incentive or other plans, programs, agreements, policies or practices of the Company or any of its Subsidiaries for which the Executive may qualify, shall not be prevented or limited. Any terminating distributions and/or vested rights under such plans, programs, agreements, policies or practices shall be governed by the terms of those respective plans, subject to the provisions of paragraph 6 herein. 12 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 6. Certain Reduction of Payments by the Company. -------------------------------------------- (a) For purposes of this paragraph 6, (i) "Payment" shall mean any payment or distribution in the nature of compensation to or for the benefit of Executive (whether paid or payable pursuant to this Agreement or otherwise, but determined without regard to any reductions required by this paragraph 6); (ii) "Net After Tax Receipts" shall mean the Present Value of a Payment net of all taxes imposed on Executive with respect thereto under Sections I and 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), determined by applying the highest marginal rate under Section 1 of the Code which applied to the Executive's taxable income for the immediately preceding taxable year; (iii) "Present Value" shall mean such value determined in accordance with Section 280G(d)(4) of the Code; and (iv) "Reduced Amount" shall mean the smallest aggregate amount of Payments, or portions of Payments, which (a) is less than the sum of all Payments and (b) results in aggregate Net After Tax Receipts which are equal to or greater than the Net After Tax Receipts which would result if the aggregate Payments were any other amount less than the sum of all Payments. (b) Anything in this Agreement to the contrary notwithstanding, in the event Ernst & Young (the "Accounting Firm") shall determine that receipt of all Payments would subject Executive to tax under Section 4999 of the Code, it shall determine whether some amount of Payments would meet the definition of a Reduced Amount. If the Accounting Firm determines that there is a Reduced Amount, the aggregate Payments shall be reduced to such Reduced Amount. In the event that the Accounting Firm is serving as accountant or auditor for the person or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. (c) If the Accounting Firm determines that aggregate Payments should be reduced to the Reduced Amount, the Company shall promptly give Executive notice to that effect and a copy of the detailed calculation thereof, and the Executive may then elect which and how much of the Payments shall be eliminated or reduced (as long as after such election the present value of the aggregate Payments equals the Reduced Amount), and shall advise the Company in writing of such election within ten days of his receipt of notice. If no such election is made by the Executive within such ten-day period, the Company may elect which of such Payments shall be eliminated or reduced (as long as after such election the present value of the aggregate Payments equals the Reduced Amount) and shall notify the Executive promptly of such election. All determinations made by the Accounting Firm under this paragraph 6 shall be binding upon the Company and Executive and shall be made within fifteen business days of the date of termination. As promptly as practicable following such determination, the Company shall pay to or distribute to or for the benefit of Executive such Payments as are then due to Executive 13 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 and shall promptly pay to or distribute to or for the benefit of Executive in the future such Payments as become due to Executive. (d) While it is the intention of the Company and the Executive to reduce the amounts payable or distributable to Executive hereunder only if the aggregate Net After Tax Receipts to Executive would thereby be increased, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Company to or for the benefit of Executive pursuant to this Agreement which should not have been so paid or distributed ("Overpayment") or that additional amounts which will have not been paid or distributed by the Company to or for the benefit of Executive pursuant to this Agreement could have been so paid or distributed ("Underpayment"), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the Accounting Firm, based either upon the assertion of a deficiency by the Internal Revenue Service against the Company or Executive which the Accounting Firm believes has a high probability of success determines that an Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the benefit of Executive shall be treated for all purposes as a loan to Executive which Executive shall repay to the Company together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code; provided, however, that no such loan shall be deemed to have been made and no amount shall be payable by Executive to the Company if and to the extent such deemed loan and payment would not either reduce the amount on which the Executive is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Accounting Firm, based upon controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code. 7. Continuing Obligations. The Executive shall retain in confidence, ---------------------- both during and after his employment with the Company, any confidential information known to him concerning the Company and its business and clients so long as such information is not publicly disclosed, other than by acts of the Executive or his representatives in violation of this Agreement. 8. Definition of Change of Control. For purposes of this Agreement, a ------------------------------- "Change of Control" shall be deemed to have taken place if either (i) a third person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, acquires shares of the Company having twenty-five percent or more of the total number of votes that may be cast for the election of directors of the Company; or (ii) as the result of any cash tender or exchange offer, merger or other business combination, or any combination of the foregoing transactions, (a 14 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 "Transaction"), the persons who were directors of the Company before the Transaction shall cease to constitute a majority of the Board of Directors of the Company or any successor to the Company. [FOR CATEGORY II ONLY, ADD THE FOLLOWING: For purposes of this Agreement, a --- "Contested Change of Control" shall be deemed to have taken place if at no time prior to the happening of the events described in either (i) or (ii) of this paragraph, did the Board of Directors of the Company take action either specifically approving such share acquisition or specifically recommending acceptance or approval of such cash tender or exchange offer, merger or other business combination, and an "Uncontested Change of Control" shall be deemed to have taken place if at a time prior to the happening of the events described in either (i) or (ii) of this paragraph, the Board of Directors of the Company did take action that either specifically approved such share acquisition or specifically recommended acceptance or approval of such cash tender or exchange offer, merger or other business combination.] [FOR CATEGORY III ONLY, ADD THE FOLLOWING: For purposes of this Agreement, --- a "Contested-Change of Control" shall be deemed to have taken place if at no time prior to the happening of the events described in either (i) of (ii) of this paragraph, did the Board of Directors of the Company take action either specifically approving such share acquisition or specifically recommending acceptance or approval of such cash tender or exchange offer, merger or other business combination.] 9. Indemnification. If litigation is brought by either party to enforce --------------- or interpret any provision contained herein, the Company hereby indemnifies the Executive for his reasonable attorneys' fees and expenses incurred in such litigation regardless of the outcome thereof, and hereby agrees to pay prejudgment interest on any money judgment obtained by the Executive, calculated at the prime interest rate in effect at Security Pacific National Bank from time to time from the date that payment(s) to him should have been made under this Agreement. 10. Payment Obligations Absolute. The Company's obligation to pay the ---------------------------- Executive the compensation and to make the arrangements provided herein shall be absolute and unconditional and shall not be affected by any circumstances, including without limitation, any setoff, counterclaim, recoupment, defense, claim or other right which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement. It is expressly agreed by the Company and the Executive that it will be conclusively presumed that any involuntary termination of the Executive within the two year period specified in paragraph 2 hereof shall not have been for any willful breach of duty by the Executive in the course of his employment or for habitual neglect of his duty or continued incapacity to perform it. All amounts payable by the Company hereunder shall be paid without notice or demand. Except as expressly provided herein, the Company waives all rights which it may now have or may hereafter have conferred upon it, by statute or otherwise, to terminate, cancel or rescind this Agreement in whole or in part. Each and every payment made hereunder by the Company shall be final, and the Company shall not seek to 15 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 recover all or any part of such payment from the Executive or from whosoever may be entitled thereto, for any reason whatsoever. 11. Successors. This Agreement shall be binding upon and inure to the ---------- benefit of the Company and its successors or assigns, but is personal to the Executive and neither this Agreement nor any rights arising hereunder may be assigned or pledged by the Executive, other than by will or the laws of descent or distribution. 12. Severability. Any provision in this Agreement which is prohibited ------------ or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability, without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 13. Controlling Law. This Agreement shall in all respects be governed --------------- by, and construed in accordance with the laws of the State of Delaware, excluding its conflicts of laws principles. 14. Termination. This Agreement shall terminate if, in accordance with ----------- the Plan, the Committee determines that the Executive is no longer a key management employee to be included within the Plan and so notifies the Executive; except that, such determination shall not be made, and if made shall ----------- have no effect, if a Change of Control shall have occurred or during any period of time when the Company has knowledge that any third person has taken steps reasonably calculated to effect a Change of Control until, in the opinion of the Committee, the third person has abandoned or terminated his or its efforts to effect a Change of Control. Any decision by the Committee that the third person has abandoned or terminated his or its efforts to effect a Change of Control shall be conclusive and binding on the Executive. 15. Term of Agreement. This Agreement shall commence on the date first ----------------- hereinabove written and shall continue in effect until __________________; provided, however, that commencing on __________________, and each __________________ thereafter, the term of this Agreement shall automatically be extended for one additional year unless at least 30 days prior to such date, the Company shall have given written notice that it does not wish to extend this Agreement; and provided further, that this Agreement shall continue in effect beyond the term provided herein if a Change of Control shall have occurred during such term. 16. Continuation of Employment. Nothing in the Plan or in any -------------------------- instrument executed pursuant to the Plan, including without limitation, this Agreement, will confer upon any employee any right to continue in the employ of the Company or any Subsidiary or affect the right of the Company or any Subsidiary to terminate the employment of any employee at any time with or without cause. 17. Prior Agreements. The parties hereby agree that the execution of ---------------- this Agreement shall supersede, cancel and terminate any Executive Severance Agreement entered into by the 16 MASSEY ENERGY COMPANY CHANGE OF CONTROL COMPENSATION PLAN As Amended and Restated Effective November 30, 2000 parties under the First Amendment to Fluor Supplemental Executive Severance Plan effective as of April 1, 1984. 18. Headings Not Part of Agreement. The headings used herein are for ------------------------------ convenience and reference only and shall have no force or effect. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first hereinabove written. MASSEY ENERGY COMPANY By __________________________ By __________________________ Executive 17 EX-10.8 11 0011.txt EXHIBIT 10.8 EXHIBIT 10.8 MASSEY ENERGY COMPANY 1982 SHADOW STOCK PLAN As Amended and Restated Effective November 30, 2000 MASSEY ENERGY COMPANY 1982 SHADOW STOCK PLAN As Amended and Restated Effective November 30, 2000 TABLE OF CONTENTS ARTICLE I DEFINITIONS....................................................................... 3 Sec. 1.1. DEFINITIONS....................................................................... 3 ARTICLE II THE PLAN......................................................................... 4 Sec. 2.1. NAME.............................................................................. 4 Sec. 2.2. PURPOSE........................................................................... 4 Sec. 2.3. EFFECTIVE DATE AND DURATION....................................................... 4 ARTICLE III PARTICIPANTS.................................................................... 4 Sec. 3.1. ELIGIBILITY....................................................................... 4 ARTICLE IV ADMINISTRATION................................................................... 5 Sec. 4.1. DUTIES AND POWERS OF COMMITTEE.................................................... 5 Sec. 4.2. MAJORITY RULE..................................................................... 5 Sec. 4.3. COMPANY ASSISTANCE................................................................ 5 ARTICLE V UNITS SUBJECT TO PLAN............................................................. 5 Sec. 5.1. LIMITATIONS....................................................................... 5 Sec. 5.2. ANTIDILUTION...................................................................... 5 ARTICLE VI GRANT AND EXERCISE OF UNITS...................................................... 6 Sec. 6.1. GRANT OF UNITS.................................................................... 6 Sec. 6.2. EXERCISE PERIOD................................................................... 6 Sec. 6.3. EXERCISE OF UNITS................................................................. 6 Sec. 6.4. PAYMENT FOR UNITS EXERCISED....................................................... 7 Sec. 6.5. NON-TRANSFERABILITY OF UNITS...................................................... 7 Sec. 6.6. EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT................................ 7 Sec. 6.7. NO RIGHTS AS SHAREHOLDER.......................................................... 8 ARTICLE VII TERMINATION, AMENDMENT AND MODIFICATION OF PLAN................................. 9 Sec. 7.1. TERMINATION, AMENDMENT AND MODIFICATION OF PLAN................................... 9 ARTICLE VIII MISCELLANEOUS.................................................................. 9 Sec. 8.1. EMPLOYMENT........................................................................ 9 Sec. 8.2. OTHER COMPENSATION PLANS.......................................................... 9 Sec. 8.3. PLAN BINDING ON SUCCESSORS........................................................ 9 Sec. 8.4. SINGULAR, PLURAL; GENDER.......................................................... 9 Sec. 8.5. HEADINGS, ETC., NO PART OF PLAN................................................... 9
MASSEY ENERGY COMPANY 1982 SHADOW STOCK PLAN As Amended and Restated Effective November 30, 2000 ARTICLE I DEFINITIONS Sec. 1.1. DEFINITIONS ----------- As used herein, the following terms shall have the meanings hereinafter set forth unless the context clearly indicates to the contrary: (a) "Board" shall mean the Board of Directors of the Company. (b) "Change of Control" "Change of Control" of the Company shall be deemed to have occurred if, (i) a third person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, acquires shares of the Company having twenty-five percent or more of the total number of votes that may be cast for the election of directors of the Company, or (ii) as the result of any cash tender or exchange offer, merger or other business combination, or any combination of the foregoing transactions (a "Transaction"), the persons who were directors of the Company before the Transaction shall cease to constitute a majority of the Board of the Company or any successor to the Company. (c) "Committee" shall mean the Compensation Committee of the Board. (d) "Company" shall mean Massey Energy Company. (e) "Fair Market Value" shall mean the average of the highest price and the lowest price per share at which the Stock is sold in the regular way on the New York Stock Exchange on the day such value is to be determined hereunder or, in the absence of any reported sales on such day, the first preceding day on which there were such sales. (f) "Grantee" shall mean an employee to whom Units have been granted hereunder. (g) "Plan" shall mean the Massey Energy Company 1982 Shadow Stock Plan, the terms of which are set forth herein which is an amendment and restatement of the 1982 Fluor Shadow Stock Plan. (h) "Stock" shall mean the common stock of the Company or, in the event that the outstanding shares of Stock are hereafter changed into or exchanged for shares of a different stock or securities of the Company or some other corporation, such other stock or securities. (i) "Subsidiary" shall mean any corporation, the majority of the outstanding capital stock of which is owned, directly or indirectly, by the Company. 3 MASSEY ENERGY COMPANY 1982 SHADOW STOCK PLAN As Amended and Restated Effective November 30, 2000 (j) "Units" shall mean Shadow Stock Units granted as provided herein. ARTICLE II THE PLAN Sec. 2.1. NAME ---- This Plan shall be known as the "Massey Energy Company 1982 Shadow Stock Plan". Sec. 2.2. PURPOSE ------- The purpose of the Plan is to advance the interests of the Company and its shareholders by providing individuals who were participants in the Fluor Corporation and Subsidiaries Executive Incentive Compensation Plan and other eligible key management employees who can directly and significantly influence the profits of the Company and therefore the market value of its Stock a form of cash incentive compensation which is measured by the performance of the Stock. Sec. 2.3. EFFECTIVE DATE AND DURATION --------------------------- The Plan was originally effective as of October 31, 1982, upon its adoption by the Board. The effective date of this amended and restated Plan is November 30, 2000. The Units awarded hereunder must be awarded within twenty years from the original effective date of the Plan. Prior to the effective date of this amended and restated plan, no further grants are being made under the Plan. ARTICLE III PARTICIPANTS Sec. 3.1. ELIGIBILITY ----------- Any individual who was a participant in the Fluor Corporation and Subsidiaries Executive Incentive Compensation Plan or other key management employee of the Company or its Subsidiaries shall be eligible to participate in the Plan; provided, however, that no member of the Committee shall be eligible to participate. 4 MASSEY ENERGY COMPANY 1982 SHADOW STOCK PLAN As Amended and Restated Effective November 30, 2000 ARTICLE IV ADMINISTRATION Sec. 4.1. DUTIES AND POWERS OF COMMITTEE ------------------------------ The Plan shall be administered by the Committee. Subject to the express provisions of the Plan, the Committee shall have sole discretion and authority to determine from among eligible employees those to whom and the time or times at which Units may be granted, the number of Units to be granted and the period for the exercise of such Units which need not be the same for each grant hereunder. Subject to the express provisions of the Plan, the Committee shall also have complete authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, and to make all other determinations necessary or advisable in the administration of the Plan. Sec. 4.2. MAJORITY RULE ------------- A majority of the members of the Committee shall constitute a quorum, and any action taken by a majority present at a meeting at which a quorum is present or any action taken without a meeting evidenced by a writing executed by a majority of the whole Committee shall constitute the action of the Committee. Sec. 4.3. COMPANY ASSISTANCE ------------------ The Company shall supply full and timely information to the Committee on all matters relating to eligible employees, their employment, death, retirement, disability or other termination of employment, and such other pertinent facts as the Committee may require. The Company shall furnish the Committee with such clerical and other assistance as is necessary in the performance of its duties. ARTICLE V UNITS SUBJECT TO PLAN Sec. 5.1. LIMITATIONS ----------- Subject to adjustment pursuant to the provisions of Section 5.2 hereof, the number of unexercised Units granted pursuant to Section 6.1(b) hereunder shall not exceed 1,000,000. Sec. 5.2. ANTIDILUTION ------------ In the event that the outstanding shares of Stock hereafter are changed into or exchanged for a different number or kind of shares or other securities of the Company or of another corporation by reason of merger, consolidation, other reorganization, recapitalization, reclassification, combination of shares, stock splitup or stock dividend, 5 MASSEY ENERGY COMPANY 1982 SHADOW STOCK PLAN As Amended and Restated Effective November 30, 2000 (a) the aggregate number of unexercised Units which may be granted under Section 6.1(b) shall be adjusted appropriately; (b) outstanding Units granted hereunder, both as to number and value, shall be adjusted appropriately; and (b) where dissolution or liquidation of the Company or any merger or combination in which the Company is not a surviving corporation is involved, each outstanding Unit granted hereunder shall terminate, but the Grantee shall have the right, immediately prior to such dissolution, liquidation, merger or combination, to exercise his Units in full to the extent that such Units shall not have been exercised. The foregoing adjustments and the manner of application of the foregoing provisions shall be determined solely by the Committee, and any such adjustment may provide for the elimination of fractional Units. ARTICLE VI GRANT AND EXERCISE OF UNITS Sec. 6.1. GRANT OF UNITS -------------- (a) Units may be granted as a consequence of Incentive Compensation awards made in the form of Shadow Stock Units pursuant to the Fluor Corporation and Subsidiaries Executive Incentive Compensation Plan. Each such grant shall be evidenced by minutes of a meeting or the written consent of the Board. The Grantee shall be promptly notified of such grant by a written communication which shall set forth the number of Units so granted. For purposes of the Plan, the date of such Board action shall be deemed to be the date of grant. (b) Units may also be separately granted by the Committee and the grant of any such Units shall be evidenced by minutes of a meeting or the written consent of the Committee and by a written Agreement dated as of the date of grant and executed by the Company and the Grantee which Agreement shall set forth such terms and conditions as may be determined by the Committee consistent with the Plan. Sec. 6.2. EXERCISE PERIOD --------------- The period for exercise of each Unit granted hereunder shall be determined by the Committee, but in no instance shall such period exceed ten years from the date of grant. At the end of said period, any unexercised Units shall be deemed to have been exercised in accordance with Section 6.3. Sec. 6.3. EXERCISE OF UNITS ----------------- 6 MASSEY ENERGY COMPANY 1982 SHADOW STOCK PLAN As Amended and Restated Effective November 30, 2000 Units granted hereunder shall be exercised by written notice of intent to with respect to a specified number of Units (at least 50 or the entire remaining balance of the grant, whichever is less) delivered to the Company at its principal office in the State of Delaware. In the case of Grantees working outside the United States, such exercise shall be subject to the approval and consent of the Compensation Committee of the Board. Sec. 6.4. PAYMENT FOR UNITS EXERCISED --------------------------- Within 30 days after Units have been exercised in accordance with Section 6.3 hereof, the Company shall pay to the Grantee in cash an amount equal to the Fair Market Value of the Stock on the date such Units are exercised multiplied by the number of Units exercised, less all applicable federal and state withholding or other employment taxes applicable to the taxable income of such Grantee resulting from such exercise. In the event of the death of such Grantee before payment is made hereunder, such payment shall be made to the executor or administrator of such Grantee's estate. The foregoing notwithstanding, if any Units granted pursuant to Section 6.1(a) hereof are exercised within the period ending with the calendar month immediately following the month in which the grant was made or if any Units granted pursuant to Section 6.1(b) hereof are exercised during the calendar month in which such Units first became exercisable, then the Fair Market Value of the Stock of the Company shall be determined by reference to its Fair Market Value on the date of such grant. Notwithstanding the provisions of Section 6.3 hereof and the foregoing provisions of this Section 6.4, the Committee may in its discretion determine that all or a portion of any Units granted pursuant to Section 6.1(b) shall automatically exercised and paid as soon as they become exercisable and that the value of such Units shall be determined as of the date such Units were awarded by the Committee. Sec. 6.5. NON-TRANSFERABILITY OF UNITS ---------------------------- No Units granted hereunder shall be transferred by a Grantee otherwise than by will or the laws of descent and distribution. During the lifetime of a Grantee, such Units shall be exercisable only by him. Sec. 6.6. EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT -------------------------------------------------- (a) If, prior to the date on which any Unit becomes exercisable, the Grantee's employment with the Company or its Subsidiaries shall be terminated by the Company or Subsidiary with or without cause, or by the act of the Grantee, the Grantee's rights to exercise such Units shall terminate and all rights thereunder shall cease; provided, however, that if the Grantee shall die, retire or become permanently and totally disabled, as determined in accordance with applicable Company personnel policies, or if the Grantee's employment with the Company or its Subsidiaries shall be terminated within two years after a Change of Control of the Company 7 MASSEY ENERGY COMPANY 1982 SHADOW STOCK PLAN As Amended and Restated Effective November 30, 2000 and such termination occurs prior to a date on which a Unit shall have become exercisable, such Unit shall become exercisable in full on the date of such death, retirement, disability or termination of employment. (b) If a Grantee's employment with the Company or its Subsidiaries shall be terminated for any reason other than death, retirement or permanent total disability, the Grantee shall have the right, during the period ending three months after such termination, to exercise such Units to the extent that they were exercisable at the date of such termination and shall not have been exercised, subject, however, to the provisions of Section 6.2 hereof. (c) Upon termination of a Grantee's employment with the Company or its Subsidiaries by reason of retirement or permanent total disability, as determined in accordance with applicable Company personnel policies, such Grantee shall have the right, during the period ending three years after such termination, to exercise his Units in full to the extent that they shall not have been exercised, subject, however, to the provisions of Section 6.2 hereof. (d) If a Grantee shall die while in the employ of the Company or its Subsidiaries, or within three months after termination of such employment for any reason other than retirement or permanent total disability, or within three years after termination of such employment by reason of retirement or permanent total disability, the executor or administrator of the estate of the decedent or the person or persons to whom Units granted hereunder shall have been validly transferred by the executor or the administrator pursuant to will or the laws of descent and distribution shall have the right, during the period ending three years after the date of the Grantee's death, to exercise the Grantee's Units (i) in full to the extent that they shall not have been exercised, if the Grantee shall have died while in the employ of the Company or its Subsidiaries or within three years after termination of such employment by reason of retirement or permanent total disability, or (ii) to the extent that they were exercisable at the date of the Grantee's death and shall not have been exercised, if the Grantee shall have died within three months after termination of such employment for any reason other than retirement or permanent total disability, subject, however, to the provisions of Section 6.2 hereof. (e) No transfer of Units by a Grantee by will or by the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and an authenticated copy of the will and/or such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions of such Units. Sec. 6.7. NO RIGHTS AS SHAREHOLDER ------------------------ 8 MASSEY ENERGY COMPANY 1982 SHADOW STOCK PLAN As Amended and Restated Effective November 30, 2000 Nothing herein contained shall be deemed to give any Grantee any rights as a shareholder of the Company. ARTICLE VII TERMINATION, AMENDMENT AND MODIFICATION OF PLAN Sec. 7.1. TERMINATION, AMENDMENT AND MODIFICATION OF PLAN ----------------------------------------------- The Board may at any time, upon recommendation of the Committee, terminate, and may at any time and from time to time and in any respect amend or modify, the Plan; provided, however, that no termination, amendment or modification of the Plan shall in any manner affect any Units theretofore granted under the Plan without the consent of the Grantee. ARTICLE VIII MISCELLANEOUS Sec. 8.1. EMPLOYMENT ---------- Nothing in the Plan or in any Units granted hereunder shall confer upon any employee the right to continue in the employ of the Company or any Subsidiary. Sec. 8.2. OTHER COMPENSATION PLANS ------------------------ Except as set forth in the Fluor Corporation and Subsidiaries Executive Incentive Compensation Plan, the adoption of the Plan shall not affect any stock option or incentive or other compensation plans in effect for the Company or any Subsidiary, nor shall the Plan preclude the Company from establishing any other forms of incentive or other compensation for employees of the Company or any Subsidiary. Sec. 8.3. PLAN BINDING ON SUCCESSORS -------------------------- The Plan shall be binding upon the successors and assigns of the Company. Sec. 8.4. SINGULAR, PLURAL; GENDER ------------------------ Whenever used herein, nouns in the singular shall include the plural, and the masculine pronoun shall include the feminine gender. Sec. 8.5. HEADINGS, ETC., NO PART OF PLAN ------------------------------- Headings of Articles and Sections hereof are inserted for convenience and reference; they constitute no part of the Plan. 9 EX-10.9 12 0012.txt EXHIBIT 10.9 EXHIBIT 10.9 MASSEY ENERGY COMPANY 1997 MASSEY ENERGY COMPANY STOCK APPRECIATION RIGHTS PLAN As amended and restated, effective November 30, 2000 ARTICLE I DEFINITIONS Sec. 1.1 DEFINITIONS As used herein, the following terms shall have the meanings hereinafter set forth unless the context clearly indicates to the contrary: (a) "Change of Control" of the Company shall be deemed to have occurred if, (i) a third person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, acquires shares of the Company having twenty five percent or more of the total number of votes that may be cast for the election of directors of the Company; or (ii) as the result of any cash tender or exchange offer, merger or other business combination, or any combination of the foregoing transactions (a "Transaction"), the persons who were directors of the Company before the Transaction shall cease to constitute a majority of the Board of the Company or any successor to the Company. (b) "Board" shall mean the Board of Directors of the Company. (c) "Committee" shall mean the Compensation Committee of the Board. (d) "Company" shall mean Massey Energy Company. (e) "Fair Market Value" shall mean the average of the highest price and the lowest price per share at which the Stock is sold in the regular way on the New York Stock Exchange on the day such value is to be determined hereunder or, in the absence of any reported sales on such day, the first preceding day on which there were such sales. (f) "Grantee" shall mean an employee to whom Rights have been granted hereunder. (g) "Plan" shall mean the 1997 Massey Energy Company Stock Appreciation Rights Plan as amended and restated, effective November 30, 2000, the terms of which are set forth herein. (h) "Rights" shall mean Stock Appreciation Rights granted as provided herein. (i) "Stock" shall mean the common stock of the Company or, in the event that the outstanding shares of Stock are hereafter changed into or exchanged for shares of a different stock or securities of the Company or some other corporation, such other stock or securities. (j) "Stock Appreciation Rights Agreement" shall mean the agreement between the Company and the Grantee evidencing the grant of Rights as provided herein. (k) "Subsidiary" shall mean any corporation, the majority of the outstanding capital stock of which is owned, directly or indirectly, by the Company. ARTICLE II THE PLAN Sec. 2.1 NAME This plan shall be known as the "1997 Massey Energy Company Stock Appreciation Rights Plan". The Plan has been amended and restated, effective November 30, 2000. Sec. 2.2 PURPOSE The purpose of the Plan is to advance the interests of the Company and its shareholders by providing eligible key management employees who can directly and significantly influence the profits of the Company and therefore the market value of its Stock a form of cash incentive compensation which is measured by the desired increase in the market value of the Stock. Sec. 2.3 EFFECTIVE DATE AND DURATION The Plan shall become effective upon its adoption by the Board. The Rights granted hereunder must be granted within ten years from the effective date of the Plan. ARTICLE III PARTICIPANTS Sec. 3.1 ELIGIBILITY Any officer or other key management employee of the Company or its Subsidiaries shall be eligible to participate in the Plan; provided, however, that no member of the Committee shall be eligible to participate. The Committee may grant Rights to any eligible employee in accordance with such determinations as the Committee from time to time in its sole discretion shall make. ARTICLE IV ADMINISTRATION Sec. 4.1 DUTIES AND POWERS OF COMMITTEE The Plan shall be administered by the Committee. Subject to the express provisions of the Plan, the Committee shall have sole discretion and authority to determine from among eligible employees those to whom and the time or times at which Rights may be granted, the number of Rights to be granted and the period for the exercise of such Rights which need not be the same for each grant hereunder. Subject to the express provisions of the Plan, the Committee shall also have complete authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, to determine the details and provisions of each Stock Appreciation Rights Agreement and to make all other determinations necessary or advisable in the administration of the Plan. 2 Sec. 4.2 MAJORITY RULE A majority of the members of the Committee shall constitute a quorum, and any action taken by a majority present at a meeting at which a quorum is present or any action taken without a meeting evidenced by a writing executed by a majority of the whole Committee shall constitute the action of the Committee. Sec. 4.3 COMPANY ASSISTANCE The Company shall supply full and timely information to the Committee on all matters relating to eligible employees, their employment, death, retirement, disability or other termination of employment, and such other pertinent facts as the Committee may require. The Company shall furnish the Committee with such clerical and other assistance as is necessary in the performance of its duties. ARTICLE V RIGHTS SUBJECT TO PLAN Sec. 5.1 LIMITATIONS Subject to adjustment pursuant to the provisions of Section 5.2 hereof, the number of Rights which may be granted hereunder shall not exceed 2,000,000. Rights granted hereunder which have been exercised as provided in Section 6.4 hereof shall not again be available for grant hereunder. If Rights granted hereunder shall expire, terminate or be canceled for any reason prior to being wholly exercised, new grants may be made hereunder with respect to the number of Rights to which such expiration, termination or cancellation relates. Sec. 5.2 ANTIDILUTION In the event that the outstanding shares of Stock hereafter are changed into or exchanged for a different number or kind of shares or other securities of the Company or of another corporation by reason of merger, consolidation, other reorganization, recapitalization, reclassification, combination of shares, stock splitup or stock dividend, (a) the aggregate number of Rights which may be granted hereunder shall be adjusted appropriately; (b) outstanding Rights granted hereunder, both as to number and value, shall be adjusted appropriately; and (c) where dissolution or liquidation of the Company or any merger or combination in which the Company is not a surviving corporation is involved, each outstanding Right granted hereunder shall terminate, but the Grantee shall have the right, immediately prior to such dissolution, liquidation, merger or combination, to exercise his Rights in full, without regard to any installment exercise provisions, to the extent that such Rights shall not have been exercised. 3 The foregoing adjustments and the manner of application of the foregoing provisions shall be determined solely by the Committee, and any such adjustment may provide for the elimination of fractional Rights. ARTICLE VI GRANT AND EXERCISE OF RIGHTS Sec. 6.1 RIGHTS GRANTS AND AGREEMENTS Rights shall be granted by the Committee and the date of the grant shall be the date of such Committee action. Each grant shall be evidenced by minutes of a meeting or the written consent of the Committee and by a written Stock Appreciation Rights Agreement dated as of the date of the grant and executed by the Grantee and the Company, which Agreement shall set forth such terms and conditions as may be determined by the Committee consistent with the Plan. Sec. 6.2 RIGHTS VALUE The value of each Right granted hereunder shall be determined by the Committee, but said value shall not be less than the Fair Market Value of the Stock on the date said Right is granted. Sec. 6.3 RIGHTS PERIOD The period for the exercise of each Right granted hereunder shall be determined by the Committee, but in no instance shall such period exceed ten years from the date of grant. Sec. 6.4 RIGHTS EXERCISE (a) Rights granted hereunder may not be exercised unless and until the Grantee shall have been or remained in the employ of the Company or its Subsidiaries for one year from and after the date of grant of such Rights, except as otherwise provided in Section 6.7 hereof. (b) Rights granted hereunder may be exercised with respect to whole Rights only, in such number and within the periods permitted for the exercise thereof as determined by the Committee, and shall be exercised by written notice of intent to exercise with respect to a specified number of Rights delivered to the Company at its principal office in the State of California. Sec. 6.5 PAYMENT FOR RIGHTS EXERCISED Within 30 days after Rights have been exercised in accordance with Section 6.4 hereof, the Company shall pay to the Grantee in cash an amount equal to (i) the amount, if any, by which the Fair Market Value of the Stock on the date such Rights are exercised exceeds the value of each such Right established in accordance with Section 6.2 hereof multiplied by (ii) the number of Rights exercised, less all applicable federal and state withholding or other employment taxes applicable to the taxable income of such Grantee resulting from such exercise. In the event of the death of such Grantee before payment is made hereunder, such payment shall be made to the executor or administrator of such Grantee's estate. 4 Sec. 6.6 NONTRANSFERABILITY OF RIGHTS No Rights granted hereunder shall be transferred by a Grantee otherwise than by will or the laws of descent and distribution. During the lifetime of a Grantee, such Rights shall be exercisable only by him. Sec. 6.7 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT (a) If, prior to a date one year from the date on which Rights shall have been granted, the Grantee's employment with the Company or its Subsidiaries shall be terminated by the Company or Subsidiary with or without cause, or by the act of the Grantee, the Grantee's right to exercise such Rights shall terminate and all rights thereunder shall cease; provided, however, that if the Grantee shall die, retire or become permanently and totally disabled, as determined in accordance with applicable Company personnel policies, or if the Grantee's employment with the Company or its Subsidiaries shall be terminated within two years after a Change of Control of the Company and such termination occurs prior to a date one year from the date on which Rights shall have been granted, such Rights shall become exercisable in full on the date of such death, retirement, disability or termination of employment. (b) if, on or after one year from the date on which Rights shall have been granted, a Grantee's employment with the Company or its Subsidiaries shall be terminated for any reason other than death, retirement or permanent total disability, or within two years following a Change of Control of the Company, the Grantee shall have the right, during the period ending three months after such termination, to exercise such Rights to the extent that they were exercisable at the date of such termination and shall not have been exercised, subject, however, to the provisions of Section 6.3 hereof. (c) Upon termination of a Grantee's employment with the Company or its Subsidiaries by reason of retirement or permanent total disability; as determined in accordance with applicable Company personnel policies, or within two years following a Change of Control of the Company, such Grantee shall have the right, during the period ending three years after such termination, to exercise his Rights in full, without regard to any installment exercise provisions, to the extent that they shall not have been exercised, subject, however, to the provisions of Section 6.3 hereof. (d) If a Grantee shall die (i) while in the employ of the Company or its Subsidiaries, or (ii) within three months after termination of employment where such termination did not occur either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, or (iii) within three years after termination of employment where such termination occurred either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, the executor or administrator of the estate of the decedent or the person or persons to whom 5 Rights granted 'hereunder shall have been validly transferred by the executor or the administrator pursuant to will or the laws of descent and distribution shall have the right, during the period ending three years after the date of the Grantee's death, to exercise the Grantee's Rights (A) in full, without regard to any installment exercise provisions, to the extent that they shall not have been exercised, if the Grantee shall have died while in the employ of the Company or its Subsidiaries or within three years after termination of employment where such termination occurred either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, or (B) to the extent that they were exercisable at the date of the Grantee's death and shall not have been exercised, if the Grantee shall have died within three months after termination of employment where such termination did not occur by reason of either retirement or permanent total disability or within two years following a Change of Control of the Company, subject, however, to the provisions of Section 6.3 hereof. (e) No transfer of Rights by a Grantee by will or by the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and an authenticated copy of the will and/or such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions of such Rights. (f) The foregoing notwithstanding, the Committee may elect, in its sole discretion, to make grants of Rights which have provisions regarding the effect of death or other termination of employment which are different than those set forth in paragraphs (a) through (d) of this Section 6.7, provided that such provisions do not materially increase the benefits that would otherwise accrue to a Grantee under paragraphs (a) through (d) of this Section 6.7. Sec. 6.8 NO RIGHTS AS SHAREHOLDER Nothing herein contained shall be deemed to give any Grantee any rights as a shareholder of the Company. ARTICLE VII TERMINATION, AMENDMENT AND MODIFICATION OF PLAN Sec. 7.1 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN The Board may at any time, upon recommendation of the Committee, terminate, and may at any time and from time to time and in any respect amend or modify, the Plan; provided, however, that no termination, amendment or modification of the Plan shall in any manner affect any Rights theretofore granted under the Plan without the consent of the Grantee. ARTICLE VIII MISCELLANEOUS 6 Sec. 8.1 EMPLOYMENT Nothing in the Plan or in any Rights granted hereunder or in any Stock Appreciation Rights Agreement relating thereto shall confer upon any employee the right to continue in the employ of the Company or any Subsidiary. Sec. 8.2 OTHER COMPENSATION PLANS The adoption of the Plan shall not affect any stock option or incentive or other compensation plans in effect for the Company or any Subsidiary, nor shall the Plan preclude the Company from establishing any other forms of incentive or other compensation for employees of the Company or any Subsidiary. Sec. 8.3 PLAN BINDING ON SUCCESSORS The Plan shall be binding upon the successors and assigns of the Company. Sec. 8.4 SINGULAR, PLURAL; GENDER Whenever used herein, nouns in the singular shall include the plural, and the masculine pronoun shall include the feminine gender. Sec. 8.5 HEADINGS, ETC., NO PART OF PLAN Headings of Articles and Sections hereof are inserted for convenience and reference; they constitute no part of the Plan. 7 EX-10.10 13 0013.txt EXHIBIT 10.10 Exhibit 10.10 A.T. MASSEY COAL COMPANY, INC. SUPPLEMENTAL BENEFIT PLAN Effective January 1, 1995 A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 TABLE OF CONTENTS -----------------
Page ---- INTRODUCTION.......................................................... 1 ARTICLE I DEFINITIONS........................................ 2 1.01. Actuarial Equivalent................................... 2 1.02. Affiliate.............................................. 2 1.03. Beneficiary............................................ 2 1.04. Board.................................................. 2 1.05. Code................................................... 2 1.06. Committee.............................................. 2 1.07. Company................................................ 2 1.08. Credited Service....................................... 2 1.09. Disability or Disabled................................. 2 1.10. Eligible Employee...................................... 2 1.11. Participant............................................ 2 1.12. Pension Plan........................................... 3 1.13. Plan................................................... 3 1.14. Qualified Preretirement Survivor Annuity............... 3 1.15. Retirement and Retire.................................. 3 1.16. Surviving Spouse or Spouse............................. 3 ARTICLE II PARTICIPATION...................................... 4 ARTICLE III BENEFITS........................................... 5 3.01. Amount of Benefit...................................... 5 3.02. Timing and Form of Payment............................. 5 3.03. Disability............................................. 6 3.04. Death Benefits......................................... 6 ARTICLE IV GUARANTEES......................................... 7 ARTICLE V TERMINATION OF EMPLOYMENT.......................... 8 5.01. Termination of Employment.............................. 8 5.02. Vesting................................................ 8 5.03. Reemployment........................................... 8
-i- A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 ARTICLE VI TERMINATION, AMENDMENT OR MODIFICATION OF PLAN...... 9 6.01. Amendment or Termination................................ 9 6.02. Notice Requirement...................................... 9 6.03. Limitation on Amendment, Termination, etc............... 9 6.04. Effect of Plan Termination.............................. 9 ARTICLE VII OTHER BENEFITS AND AGREEMENTS....................... 10 ARTICLE VIII RESTRICTIONS ON TRANSFER OF BENEFITS................ 11 ARTICLE IX ADMINISTRATION OF THE PLAN.......................... 12 9.01. The Committee........................................... 12 9.02. Indemnification of the Committee........................ 12 9.03. Powers of the Committee................................. 12 9.04. Information............................................. 12 9.05. Claims Procedure........................................ 12 ARTICLE X MISCELLANEOUS....................................... 13 10.01. Binding Nature.......................................... 13 10.02. Governing Law........................................... 13 10.03. Use of Masculine and Feminine; Singular and Plural...... 13 10.04. No Guarantee of Employment.............................. 13 ARTICLE XI ADOPTION............................................ 14
-ii- A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 INTRODUCTION ------------ The Board of Director of A.T. Massey Coal Company, Inc. has adopted the Supplemental Benefit Plan effective January 1, 1995. The Board determined that the adoption of the Plan would assist it in attracting and retaining those employees whose judgment, abilities and experience will contribute to its continued progress. The purpose of the Plan is to provide a benefit for those employees whose benefits under the Company's Pension Plan are limited by the application of sections 415 and 401(a)(17) of the Code and who are selected by the Committee to participate in the Plan. The Plan is intended to be unfunded and maintained primarily for the purpose of providing deferred compensation for a "select group of management or highly compensated employees" (as such phrase is used in the Employee Retirement Income Security Act of 1974). The Plan must be administered and construed in a manner that is consistent with that intent. -1- A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 ARTICLE I DEFINITIONS ----------- The following phrases or terms have the indicated meanings: 1.01. Actuarial Equivalent means a benefit of equivalent value based on the -------------------- factors and assumptions employed in determining actuarial equivalencies to the normal form of benefit under the Pension Plan. 1.02. Affiliate means (i) any entity that is a member of a controlled group of --------- corporations as defined in Code Section 1563(a), determined without regard to Code sections 1563(a)(4) and 1563(e)(3)(c), of which the Company is a member according to Code section 414(b); (ii) an unincorporated trade or business that is under common control with the Company as determined according to Code section 414(c); or (iii) a member of an affiliated service group of which the Company is a member according to Code section 414(m). 1.03. Beneficiary means the person, persons, entity, entities or the estate of a ----------- Participant, which in accordance with the provisions of the Pension Plan, is entitled to receive benefits under the Pension Plan on account of the Participant's death. 1.04. Board means the Board of Directors of A.T. Massey Coal Company, Inc. ----- 1.05. Code means the Internal Revenue Code of 1986, as amended. ---- 1.06. Committee means the Executive Benefit Committee appointed by the Board --------- which shall, in accordance with the provisions of Article IX hereof, be responsible for the management and administration of the Plan. 1.07. Company means A.T. Massey Coal Company, Inc. ------- 1.08. Credited Service means a participant's years of credited service as ---------------- defined in section 1.16 of the Pension Plan. 1.09. Disability or Disabled shall have the same meanings such terms have under ---------- -------- the Pension Plan. 1.10. Eligible Employee means an individual who (i) is employed by the Company ----------------- or an Affiliate; (ii) is a member of management or is a highly compensated employee; and (iii) whose Pension Plan benefits are limited by Code sections 415 or 401(a)(17) or both. 1.11. Participant means an Eligible Employee who is designated by the Committee ----------- to participate in the Plan in accordance with Article II. An individual shall remain a Participant -2- A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 only so long as the individual remains an Eligible Employee and his designation as a Participant has not been revoked or rescinded. 1.12. Pension Plan means the Coal Company Employees' Pension Plan. ------------ 1.13. Plan means the A.T. Massey Coal Company, Inc. Supplemental Benefit Plan. ---- 1.14. Qualified Preretirement Survivor Annuity means the monthly benefit payable ---------------------------------------- to the Surviving Spouse, if any, on the death of a Participant prior to the first day of the first month for which a benefit is payable under the Plan and in the form described in the Pension Plan. 1.15. Retirement and Retire mean severance from employment with the Company or ---------- ------ an Affiliate on or after becoming eligible for early, normal or delayed retirement under the Pension Plan; except as provided in Article V of the Plan. 1.16. Surviving Spouse or Spouse means the person to whom the Participant was ---------------- ------ legally married on his Retirement or death, if earlier. -3- A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 ARTICLE II PARTICIPATION ------------- An Eligible Employee who is designated to participate in the Plan by the Committee shall become a Participant in the Plan as of the date specified by the Committee. A Participant shall continue to participate until such date as the Committee may declare he is no longer a Participant or until the date that he is no longer an Eligible Employee. -4- A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 ARTICLE III BENEFITS -------- 3.01. Amount of Benefit ----------------- A Participant shall be entitled upon Retirement to a monthly Retirement benefit payable as an annuity for the Participant's lifetime to the Participant or his Beneficiary and which is equal to Actuarial Equivalent (determined as a straight life annuity) of the difference between (a) and (b) below where: (a) equals the Pension benefit that would have been payable to the Participant under the Pension Plan, but for the limits set forth in Code section 401(a)(17) and 415, if applicable, and (b) equals the benefit that the Participant is entitled to receive under the Pension Plan. 3.02. Timing and Form of Payment -------------------------- (a) The payment of any benefit under this Article shall begin at the time designated by the Committee (but in no event prior to the date on which the Participant is first eligible to receive an actual payment of a retirement benefit under the Pension Plan and not later than the latest date by which payments must have commenced under the Pension Plan). (b) The benefit payable under this Article shall be computed and paid in the manner designated by the Committee from time to time. (c) If the Committee has not designated the date as of which retirement benefits are scheduled to begin under the Plan, then unless the Committee acts to determine a different manner of payment the committee shall be deemed to have made a designation that the Plan's benefit payments shall begin at the same time as retirement benefits from the Pension Plan are scheduled to commence and shall be payable to the Participant or the Beneficiary designated pursuant to the Pension Plan for the same period and in the same form as the Participant's retirement under the Pension Plan. (d) Benefits not payable in the normal form of benefit described in the Pension Plan or commencing prior to what would have been the Participant's normal retirement date under the Pension Plan, must be the Actuarial Equivalent of the normal form of benefit and reduced to reflect early commencement based on the factors and assumptions employed under the Pension Plan. Benefits payable upon postponed retirement will be increased on an Actuarially Equivalent basis, using the factors employed under the Pension Plan. -5- A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 3.03. Disability ---------- If a Participant becomes Disabled prior to his Retirement and during his employment with the Company or an Affiliate, he shall be entitled to receive a benefit calculated and paid in the same manner as set forth in Plan sections 3.01 and 3.02 based on the years of Credited Service earned by the Participant as of the date he becomes Disabled. Such benefit shall be payable at what would have been the Participant's normal retirement date under the Pension Plan or as of the date the Participant is first eligible for retirement under the Pension Plan, if earlier. 3.04. Death Benefits -------------- (a) If a Participant dies prior to Retirement, and if he has attained a vested or nonforfeitable interest in his Pension Plan benefit, the Participant's Surviving Spouse will be entitled to receive a Qualified Preretirement Survivor Annuity commencing on what would have been the Participant's earliest retirement age under the Pension Plan. The amount of the Qualified Preretirement Survivor Annuity will be calculated as set forth in Plan section 3.01 and 3.02 and based on the years of Credited Service earned by the Participant as of his death. (b) If a Participant dies after benefit payments begin under the Plan, benefits will be paid in accordance with the form of payment elected by the Participant under the terms of the Pension Plan. -6- A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 ARTICLE IV GUARANTEES ---------- The Company has only a contractual obligation to pay the benefits described in Article III. All benefits are to be satisfied solely out of the general corporate assets of the Company which shall remain subject to the claims of its creditors. No assets of the Company will be segregated or committed to the satisfaction of its obligations to any Participant or Beneficiary under this Plan. -7- A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 ARTICLE V TERMINATION OF EMPLOYMENT ------------------------- 5.01. Termination of Employment ------------------------- Except as provided in section 5.02 below, a Participant who ceases to be an Eligible Employee or whose employment with the Company and its Affiliates is terminated either with or without cause, for reasons other than death, Retirement or Disability shall immediately cease to be a Participant under this Plan and shall forfeit all rights under this Plan. Further, except as provided in section 5.02 below, in no event shall an individual who was a Participant but is not a Participant at the time of such individual's death, Retirement or Disability, be entitled to any benefit under the Plan. A Participant on authorized leave of absence from the Company shall not be deemed to have terminated employment or lost his status as an Eligible Employee for the duration of such leave of absence. 5.02. Vesting ------- A Participant's right to a benefit under this Plan shall be fully vested and nonforfeitable after the completion of five years of Credited Service. 5.03. Reemployment ------------ A Participant who ceases to be an employee of the Company and who is subsequently reemployed by the Company shall not accrue any additional benefits on account of such later service for periods in which he is not a Participant. -8- A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 ARTICLE VI TERMINATION, AMENDMENT OR MODIFICATION OF PLAN ---------------------------------------------- 6.01. Amendment or Termination ------------------------ Except as otherwise specifically provided, the Company reserves the right to terminate, amend or modify this Plan, wholly or partially, at any time and from time to time. Such right to terminate, amend or modify the Plan shall be exercised by the Board. 6.02. Notice Requirement ------------------ (a) Plan section 6.01 notwithstanding, no action to terminate the Plan shall be taken except upon written notice to each Participant to be affected thereby, which notice shall be given not less than thirty (30) days prior to such action. (b) Any notice which shall be or may be given under the Plan shall be in writing and shall be mailed by United States mail, postage prepaid. If notice is to be given to the Company such notice shall be addressed to it at 4 North Fourth Street, Richmond, Virginia 23219; addressed to the attention of the Senior Vice President and General Counsel. If notice is to be given to a Participant, such notice shall be addressed to the Participant's last known address. 6.03. Limitation on Amendment, Termination, etc. ------------------------------------------ The rights of the Company set forth in Plan section 6.01 are subject to the condition that the Board or its delegate shall take no action to terminate the Plan or decrease the benefit that has commenced prior to the effective date of the amendment or termination or would become payable if the Participant terminated for any reason (other than for cause) including death, on such effective date. 6.04. Effect of Plan Termination -------------------------- Except as provided in Plan sections 6.01 and 6.03 and in the following sentence, upon the termination of this Plan by the Board, the Plan shall no longer be of any further force or effect, and neither the Company, any Affiliate nor any Participant shall have any further obligation or right under this Plan. Likewise, the rights of any individual who was a Participant and whose designation as a Participant is revoked or rescinded by the Committee shall cease upon such action except with respect to benefits that have accrued for such individual as of the date of revocation or rescission, provided that such individual has satisfied the requirement of Plan section 5.02 at the time of revocation or rescission. -9- A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 ARTICLE VII OTHER BENEFITS AND AGREEMENTS ----------------------------- The benefits provided for a Participant and his Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program of the Company for its employees, and, except as may otherwise be expressly provided for, the Plan shall supplement and shall not supersede, modify or amend any other plan or program of the Company in which a Participant is participating. -10- A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 ARTICLE VIII RESTRICTIONS ON TRANSFER OF BENEFITS ------------------------------------ No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to such benefit. If any Participant or Beneficiary under the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right to a benefit hereunder, then such right or benefit, in the discretion of the Committee, shall cease and terminate, and, in such event, the Committee may hold or apply the same or any part thereof for the benefit of such Participant or Beneficiary, his or her spouse, children, or other dependents, or any of them, in such manner and in such portion as the Committee may deem proper. -11- A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 ARTICLE IX ADMINISTRATION OF THE PLAN -------------------------- 9.01. The Committee ------------- The Plan shall be administered by the Committee. Subject to the provisions of the Plan, the Committee may adopt such rules and regulations as may be necessary to carry out the purposes hereof. The Committee's interpretation and construction of any provision of the Plan shall be final and conclusive. 9.02. Indemnification of the Committee -------------------------------- The Company shall indemnify and save harmless each member of the Committee against any and all expenses and liabilities arising out of membership on the Committee, excepting only expenses and liabilities arising out of a member's own willful misconduct. Expenses against which a member of the Committee shall be indemnified hereunder shall include without limitation, the amount of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted, or a proceeding brought or settlement thereof. The foregoing right of indemnification shall be in addition to any other rights to which any such member may be entitled. 9.03. Powers of the Committee ----------------------- In addition to the powers hereinabove specified, the Committee shall have the power to compute and certify the amount and kind of benefits from time to time payable to Participants and their Beneficiaries under the Plan, to authorize all disbursements for such purposes, and to determine whether a Participant is entitled to a benefit under the Plan. 9.04. Information ----------- To enable the Committee to perform its functions, the Company shall supply full and timely information to the Committee on all matters relating to the compensation of all Participants, their retirement, death or other cause for termination of employment, and such other pertinent facts as the Committee may require. 9.05. Claims Procedure ---------------- The benefit claims review procedure set forth in the Pension Plan, as amended from time to time, is incorporated herein by reference and made applicable to the Plan. -12- A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 ARTICLE X MISCELLANEOUS 10.01. Binding Nature -------------- The Plan shall be binding upon the Company, any participating Affiliates and its successors and assigns; subject to the powers set forth in Article VI, and upon a Participant, his or her Beneficiary, and either of their assigns, heirs, executors and administrators. 10.02. Governing Law ------------- To the extent not preempted by federal law, the Plan shall be governed and construed under the laws of the Commonwealth of Virginia (including its choice of law rules, except to the extent those rules would require the application of the law of a state other than Virginia) as in effect at the time of their adoption and execution, respectively. 10.03. Use of Masculine and Feminine; Singular and Plural -------------------------------------------------- Masculine pronouns wherever used shall include feminine pronouns and the use of the singular shall include the plural. 10.04. No Guarantee of Employment -------------------------- The Plan does not in any way limit the right of the Company or an Affiliate at any time and for any reason to terminate the Participant's employment or such Participant's status as an Eligible Employee. In no event shall the Plan, by its terms or by implication, constitute an employment contract of any nature whatsoever between the Company or an Affiliate and a Participant. -13- A.T. Massey Coal Company, Inc. Supplemental Benefit Plan Effective January 1, 1995 ARTICLE XI ADOPTION -------- The Company has adopted this Plan pursuant action taken by the Board. As evidence of its adoption of the Plan, A.T. Massey Coal Company, Inc. has caused this document to be signed by its Senior V.P. and General Counsel, ------------------------------- this 13/th/ day of September, 1995, effective January 1, 1995. ------ --------- A.T. MASSEY COAL COMPANY, INC. By: /s/ James L. Gardner ----------------------------------------- Senior Vice President and General Counsel -14- EXHIBIT I PARTICIPANTS IN THE A.T. MASSEY COAL COMPANY, INC. SUPPLEMENTAL BENEFIT PLAN EXHIBIT I ADDITIONAL PARTICIPANTS IN THE A.T. MASSEY COAL COMPANY, INC. SUPPLEMENTAL BENEFIT PLAN EXHIBIT 1 ADDITIONAL PARTICIPANTS IN THE A.T. MASSEY COAL COMPANY, INC. SUPPLEMENTAL BENEFIT PLAN EX-10.11 14 0014.txt EXHIBIT 10.11 Exhibit 10.11 A.T. MASSEY COAL COMPANY, INC. EXECUTIVE DEFERRED COMPENSATION PLAN Effective August 1, 1995 A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 TABLE OF CONTENTS -----------------
Page ---- INTRODUCTION.................................................................................1 ARTICLE I DEFINITIONS 1.01. Affiliates.....................................................................2 1.02. Beneficiary....................................................................2 1.03. Board..........................................................................2 1.04. Bonus Award....................................................................2 1.05. Change of Control..............................................................2 1.06. Code...........................................................................2 1.07. Committee......................................................................2 1.08. Company........................................................................2 1.09. Deferred Account...............................................................2 1.10. Deferred Benefit...............................................................3 1.11. Election Date..................................................................3 1.12. Election Form..................................................................3 1.13. Eligible Employee..............................................................3 1.14. Excess Benefit.................................................................3 1.15. Excess Benefit Account.........................................................3 1.16. Incentive Award................................................................3 1.17. Investment Options.............................................................3 1.18. Participant....................................................................3 1.19. Plan...........................................................................3 1.20. Profit Sharing Plan............................................................3 1.21. Salary.........................................................................3 1.22. Terminate, Terminating, or Termination.........................................4 ARTICLE II PARTICIPATION 2.01. Excess Benefits................................................................5 2.02. Salary Deferrals...............................................................5 2.03. Incentive Award Deferrals......................................................5 2.04. Bonus Award Deferrals..........................................................5 ARTICLE III EXCESS BENEFITS 3.01. Applicability..................................................................6 3.02. Amount of Benefit..............................................................6 ARTICLE IV DEFERRAL ELECTIONS
-i- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 4.01. Amounts Subject to Deferral....................................................7 4.02. Elections......................................................................7 4.03. Deferral Periods...............................................................7 ARTICLE V BENEFITS 5.01. Accounts.......................................................................9 5.02. Distributions..................................................................9 ARTICLE VI INVESTMENT OPTIONS 6.01. Investment Options............................................................11 6.02. Election of Investment Options................................................11 6.03. Method of Crediting Interest Adjustments......................................11 ARTICLE VII OTHER DISTRIBUTION EVENTS 7.01. Change of Control.............................................................12 7.02. Unforeseeable Emergency.......................................................12 7.03. Withdrawals...................................................................12 ARTICLE VIII PARTICIPANT RIGHTS IN THE UNFUNDED PLAN ARTICLE IX TERMINATION OF EMPLOYMENT 9.01. Termination of Employment.....................................................15 9.02. Vesting.......................................................................15 9.03. Reemployment..................................................................15 ARTICLE X TERMINATION, AMENDMENT OR MODIFICATION OF PLAN 10.01. Amendment or Termination.....................................................16 10.02. Notice Requirement...........................................................16 10.03. Limitation on Amendment, Termination, etc....................................16 10.04. Effect of Plan Termination...................................................16 ARTICLE XI OTHER BENEFITS AND AGREEMENTS ARTICLE XII RESTRICTIONS ON TRANSFER OF BENEFITS ARTICLE XIII
-ii- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ADMINISTRATION OF THE PLAN 13.01. The Committee................................................................19 13.02. Indemnification of the Committee.............................................19 13.03. Powers of the Committee......................................................19 13.04. Information..................................................................19 ARTICLE XIV MISCELLANEOUS 14.01. Binding Nature...............................................................20 14.02. Governing Law................................................................20 14.03. Use of Masculine and Feminine; Singular and Plural...........................20 14.04. No Guarantee of Employment...................................................20 ARTICLE XV ADOPTION EXHIBIT I...................................................................................22 PLAN INVESTMENT OPTIONS.....................................................................22
-iii- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 INTRODUCTION ------------ The Board of Directors of A.T. Massey Coal Company, Inc. has adopted the Executive Deferred Compensation Plan effective August 1, 1995. The Board determined that the adoption of the Plan would assist it in attracting and retaining those employees whose judgment, abilities and experience will contribute to its continued progress. The purpose of the Plan is to permit eligible employees to defer a portion of their salary, bonus and incentive awards and to provide a benefit for these Employees whose benefits under the Company's Profit Sharing Plan are limited by the application of section 401 of the Code. Eligible Employees are selected by the Committee to participate in the Plan. The Plan is intended to be unfunded and maintained primarily for the purpose of providing deferred compensation for a "select group of management or highly compensated employees" (as such phrase is used in the Employee Retirement Income Security Act of 1974). The Plan must be administered and construed in a manner that is consistent with that intent. -1- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ARTICLE I DEFINITIONS ----------- The following phrases or terms have the indicated meanings: 1.01. Affiliate means (i) any entity that is a member of a controlled group of --------- corporations as defined in Code section 1563(a), determined without regard to Code sections 1563(a)(4) and 1563(e)(3)(c), of which the Company is a member according to Code section 414(b); (ii) an unincorporated trade or business that is under common control with the Company as determined according to Code section 414(c); (iii) a member of an affiliated service group of which the Company is a member according to Code section 414(m); or (iv) any entity required to be aggregated according to Code section 414(o). 1.02. Beneficiary means the person, persons, entity, entities or the estate of ----------- a Participant, who is designated by the Participant on a form provided by the Company to receive benefits on account of the Participant's death, or in the absence of any designation, the personal representative of the Participant's estate. 1.03. Board means the Board of Directors of A.T. Massey Coal Company, Inc. ----- 1.04. Bonus Award shall mean any bonus, pay adjustment, or other similar ----------- payment from the Company. 1.05. Change of Control shall be deemed to have occurred if, (i) a third ----------------- person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, acquires shares of Fluor Corporation having 25% or more of the total number of votes that may be cast for the election of directors of Fluor Corporation; or (ii) as the result of any cash tender or exchange offer, merger or other business combination or any combination of the foregoing transactions (a "Transaction"), the persons who were directors of Fluor Corporation or the Company before the Transaction shall cease to constitute a majority of the Board of Directors of the Company or Fluor Corporation or any successor to the Company or Fluor Corporation. 1.06. Code means the Internal Revenue Code of 1986, as amended. ---- 1.07. Committee means the Executive Benefit Committee appointed by the Board --------- which shall, in accordance with the provisions of Article XII hereof, be responsible for the management and administration of the Plan. 1.08. Company means A.T. Massey Coal Company, Inc. ------- 1.09. Deferred Account means a bookkeeping record established for each ---------------- Participant who elects to receive a Deferred Benefit. A Deferred Account shall be established only for purposes of measuring a Deferred Benefit and not to segregate assets or to identify assets that may be used -2- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 to satisfy a Deferred Benefit. A Deferred Account shall be credited with that amount of a Participant's Salary, Bonus Award or Incentive Award deferred as a Deferred Benefit according to a Participant's Election Form. A Deferred Account also shall be credited periodically with interest under Plan Article VI. 1.10. Deferred Benefit means the benefit available to an Eligible Employee who ---------------- has executed a valid Election Form to defer his Salary, Bonus Award or Incentive Award. 1.11. Election Date means the date by which an Eligible Employee must submit a ------------- valid Election Form. An Eligible Employee's Election Date shall be a date that is fifteen days prior to the payroll period for which his Salary will be reduced or, for a Bonus Award or Incentive Award deferred, the date specified in Plan Section 4.02. 1.12. Election Form means the form that a Participant uses to elect to receive ------------- a Deferred Benefit pursuant to Plan section 4.01. A Participant's distribution election, investment election and Beneficiary designation are part of the Participant's Election Form. 1.13. Eligible Employee means an individual who (i) is employed by the Company ----------------- or an Affiliate; and (ii) is a member of management or is a highly compensated employee. 1.14. Excess Benefit means the benefit available to an Eligible Employee -------------- pursuant to Plan section 3.02. 1.15. Excess Benefit Account means the bookkeeping record established for each ---------------------- Participant who is entitled to receive an Excess Benefit. An Excess Benefit Account shall be established only for purposes of measuring an Excess Benefit and not to segregate or to identify assets that may be used to satisfy an Excess Benefit. An Excess Benefit Account also shall be credited periodically with interest under Plan Article VI. 1.16. Incentive Award means any cash award made pursuant to the terms of the --------------- Fluor Special Executive Incentive Plan. 1.17. Investment Options shall mean the investment options shown on Exhibit I. ------------------ 1.18. Participant means an Eligible Employee who satisfies the requirements for ----------- participation set forth in Article II. An individual shall remain a Participant only so long as the individual remains an Eligible Employee and he continues to satisfy such requirements. 1.19. Plan means the A.T. Massey Coal Company, Inc. Executive Deferred ---- Compensation Plan. 1.20. Profit Sharing Plan means the Coal Company Salary Deferral and Profit ------------------- Sharing Plan. 1.21. Salary means a Participant's base salary and does not include ------ commissions, bonuses or other irregular payments from the Company. -3- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 1.22. Terminate, Terminating, or Termination with respect to a Participant, -------------------------------------- mean the cessation of his employment with the Company on account of death, disability, severance or any other reason. -4- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ARTICLE II PARTICIPATION ------------- 2.01. Excess Benefits --------------- The Committee shall designate the Eligible Employees who are entitled to accrue Excess Benefits under the Plan and shall determine the date such Eligible Employees may begin participation. A Participant shall continue to participate until such date as the Committee may declare he is no longer a Participant entitled to accrue Excess Benefits or until the date that he is no longer an Eligible Employee. 2.02. Salary Deferrals ---------------- The Committee shall select the Eligible Employees who are entitled to defer all or a portion of their Salary pursuant to the provisions of Plan section 4.02(a). 2.03. Incentive Award Deferrals ------------------------- Any Eligible Employee who earns an Incentive Award which becomes payable after the Effective Date will be entitled to defer such Incentive Award or portion thereof pursuant to the provisions of Plan section 4.02(b). 2.04. Bonus Award Deferrals --------------------- The Committee shall select the Eligible Employees who are entitled to defer all or a portion of their Bonus Award pursuant to the provisions of Plan section 4.02(c). -5- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ARTICLE III EXCESS BENEFITS --------------- 3.01. Applicability ------------- This Article III applies only to those Participants who are eligible for an Excess Benefit pursuant to Plan section 2.01. 3.02. Amount of Benefit ----------------- As of each December 31, the Company shall credit the Excess Benefit Account of each Eligible Employee with an amount equal to the sum of: (a) the excess of the amount of Company matching contributions which would have been made to the account of such Eligible Employee for such calendar year under the Profit Sharing Plan, if such Eligible Employee had received a matching Company contribution at the percentage rate applicable to non-highly compensated participants, over the actual amount of Company matching contributions allocated to his accounts for such calendar year; plus (b) the amount of Company matching contributions which would have been made to the account of such Eligible Employee for such calendar year under the Profit Sharing Plan, but for the limitations imposed by Code sections 401(a)(17) and 415, if the Employee had contributed to the Profit Sharing Plan the amounts deferred under Article IV of this Plan and received a Company matching contribution at the percentage rate applicable to non-highly compensated participants; provided, however, that in no event shall any Company matching contribution apply to amounts deferred, in excess of ten percent of the Eligible Employee's total cash compensation (Salary, Bonus Awards and Incentive Awards combined), minus amounts contributed by the Eligible Employee under the Profit Sharing Plan. Interest shall accrue on a Participant's Excess Benefit Account in accordance with Article VI. -6- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ARTICLE IV DEFERRAL ELECTIONS ------------------ 4.01. Amounts Subject to Deferral --------------------------- Subject to the effect of any previously authorized or required deductions, reductions or income or employment tax withholdings applicable to such compensation, an Eligible Employee may elect to defer all or any portion of his Salary, any Incentive Award or any Bonus Award. 4.02. Elections --------- (a) Salary Deferrals. The amount of Salary to be deferred for future ---------------- payroll periods must be specified by the Eligible Employee on an Election Form to his corporate employer as a fixed percentage of Salary. A deferral election shall be effective with the first payroll period beginning after receipt of the properly completed Election Form by the Company and will continue in effect until a subsequent election or termination of the election is received by the Company. Any change or revocation in any Eligible Employee's deferral election shall be effective as of the first payroll period beginning after receipt of such election or revocation. A deferral election may not be changed, revoked or re-initiated for at least six months after the date of his most recent deferral election, change or revocation. (b) Incentive Awards Deferrals. The amount of any Incentive Award to be -------------------------- deferred must be specified by the Eligible Employee in writing on an Election Form to his corporate employer no later than the end of the Company's fiscal year for which performance is measured in determining the amount of the Incentive Award. The amount to be deferred may be a fixed dollar amount or a percentage of the Incentive Award. Such amount or percentage, once specified, is irrevocable as to such Incentive Award. (c) Bonus Award Deferrals. The amount of any Bonus Award to be deferred --------------------- must be specified by the Eligible Employee in writing on an Election Form to his corporate employer no later than the beginning of the payroll period during which such Bonus Award would otherwise become payable; provided, however, that such Election Form must be completed prior to the date on which a Bonus Award is declared. The amount to be deferred may be a fixed dollar amount or a percentage of the Bonus Award. Such amount or percentage, once specified, is irrevocable as to such Bonus Award. 4.03. Deferral Periods ---------------- Unless otherwise specified by the Eligible Employee at the time of deferral election, payment of such amounts shall be deferred until such Eligible Employee's Termination. The Eligible Employee may specify a deferral period which may not extend beyond the date upon which such Eligible Employee reaches age 70 1/2. If a specific deferral period has been selected, -7- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 the deferral period shall end upon the earlier to occur of (i) the Eligible Employee's Termination or (ii) expiration of the specified deferral period. -8- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ARTICLE V BENEFITS -------- 5.01. Accounts -------- (a) Deferred Benefit Account. Deferred Benefits shall be credited to a ------------------------ Deferred Account as of the last day of the payroll period in which the deferred Salary would have been paid and with respect to any Bonus or Incentive Award, as of the date such award is payable to the Eligible Employee. Interest shall accrue monthly on the balance in a Deferred Account as described in Article VI. (b) Excess Benefit Account. Excess Benefits shall be credited to an ---------------------- Excess Benefit Account as of the time specified in Article III. Interest shall accrue monthly on the balance in a Excess Benefit Account as described in Article VI. 5.02. Distributions ------------- (a) All Deferred Benefits and Excess Benefits, less withholding for applicable income and employment taxes, shall be paid in cash on the date specified in the Participant's Election Form. (b) Deferred Benefits and Excess Benefits shall be paid in a lump sum unless the Participant's Election Form specifies annual installment payments over a period of up to twenty years. Installment payments will be made in approximately equal amounts during each year of the installment period. For a Deferred Benefit or an Excess Benefit payable in installments, interest under Article VI shall continue to accrue on the unpaid balance of a Deferred Account or Excess Benefit Account, as applicable. Unless otherwise specified in a Participant's Election Form, any lump sum payment shall be paid or installment payments shall begin January 31, of the year after the Participant's Termination. (c) Notwithstanding any other provision of this Plan or a Participant's Election Form, the Committee in its sole discretion may postpone the distribution of all or part of a Deferred Benefit or Excess Benefit to the extent that the payment would not be deductible under Code section 162(m). A Deferred Benefit of Excess Benefit distribution that is postponed pursuant to the preceding sentence shall be paid as soon as it is possible to do so within the deduction limitations of Code section 162(m). (d) A Participant or Beneficiary may not assign Deferred Benefits or Excess Benefits. Only one Beneficiary designation form may be effective at any one time to designate one or more Beneficiaries for all of his Deferred Benefits or Excess Benefits under the Plan. Such designations are revocable. Each Beneficiary shall receive his portion of the Participant's -9- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 Deferred Account and the Participant's Excess Benefit Account, as applicable, on January 31 of the year following the Participant's death. The Committee may insist that multiple Beneficiaries agree upon a single distribution method. -10- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ARTICLE VI INVESTMENT OPTIONS ------------------ 6.01. Investment Options ------------------ The Company has selected the Investment Options described in Exhibit I any of which may be changed, modified or deleted, or additional investment options may be added, from time to time by the Committee. 6.02. Election of Investment Options ------------------------------ (a) At the time that an Eligible Employee first becomes a Participant, the Participant shall allocate deferrals among the Investment Options. Such Investment Options will be used as a measure of the investment performance of his Deferred Account and his Excess Benefit Account, if applicable. A Participant may specify that all or any 10% multiple of his Deferred Account and his Excess Benefit Account, if applicable, be deemed to be invested in one or more of the Investment Options. (b) A Participant may reallocate the Investment Options for his Deferred Account and his Excess Benefit Account once every six months in 10% multiples. Any reallocation will be effective as of the first day of the month following the month in which an appropriately completed form is received by the Committee. Until a Participant delivers a new Investment Option form to the Committee, his prior Investment Options shall control. If a Participant fails to select an Investment Option for his Deferred Account and his Excess Benefit Account, he shall be deemed to have elected the Treasury Bill Option. 6.03. Method of Crediting Interest Adjustments ---------------------------------------- Interest will be credited to a Participant's Deferred Account and his Excess Benefit Account as follows: As of the last day of each month in which any amount remains credited to the Deferred Account or the Excess Benefit Account of a Participant, each portion of such accounts deemed invested in a particular Investment Option shall either be credited or debited with an amount equal to that determined by multiplying the balance of such portion of such account as of the last day of the preceding month by the return rate for that month for the applicable Investment Option. As to the applicable amount distributed, the Company shall ~ crediting or debiting adjustments to the Participant's Deferred Account or his Excess Benefit Account on the last day of the month of the date of distribution. -11- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ARTICLE VII OTHER DISTRIBUTION EVENTS ------------------------- 7.01. Change of Control ----------------- Notwithstanding any other provision of this Plan, if a Participant's employment with the Company or its subsidiaries Terminates for any reason other than death, within the two-year period beginning on the date that a Change of Control occurs, then the Company shall pay to the Participant within the first 15 days of the month following such termination a lump sum distribution of his Deferred Account and his Excess Benefit Account. If the Participant dies after Termination but before payment of any amount under this Plan section, then such amount shall be paid to the Beneficiary within the first 15 days of the month following the Participant's death. 7.02. Unforeseeable Emergency ----------------------- (a) A distribution of a portion of a Participant's Deferred Account or Excess Benefit Account because of an Unforeseeable Emergency will be permitted only to the extent required by the Participant to satisfy the emergency need. Whether an Unforeseeable Emergency has occurred will be determined solely by the Committee. Distributions in the event of a Unforeseeable Emergency may be made by and with the approval of the Committee upon written request by a Participant. (b) An "Unforeseeable Emergency" is defined as a severe financial hardship to the Participant caused by sudden or unexpected illness or accident of the Participant or of a dependent of the Participant (as defined in Code section 152(a)), a loss of the Participant's property due to casualty, or other extraordinary and unforeseeable circumstances caused by a result of events beyond the Participant's control. The circumstances that will constitute an Unforeseeable Emergency will depend upon the facts of each case, but, in any event, any distribution under this Plan section shall not exceed the amount required by the Participant to satisfy the Unforeseeable Emergency after (i) reimbursement or compensation through insurance or otherwise, (ii) liquidation of the Participant's assets, to the extent such liquidation would not itself cause a severe financial hardship, or (iii) suspension of deferrals under the Plan. 7.03. Withdrawals ----------- A Participant may elect by filing with the Company a form specified by the Committee, to receive an amount equal to 90% of his Deferred Account or Excess Benefit Account at any time prior to his Termination. The amount of any withdrawal shall be distributed to the Participant in a single lump sum as soon as administratively practical following such election. If a Participant makes an election described in this Plan section, the balance of the Participant's Deferred Account or Excess Benefit Account not distributed to the Participant shall be forfeited to the Company. In addition, the Participant shall be prohibited from making a Salary deferral -12- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 for the balance of the year in which this distribution is made and for the following year. Any elections previously made pursuant to Plan section 4.01 shall cease to be effective. -13- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ARTICLE VIII PARTICIPANT RIGHTS IN THE UNFUNDED PLAN --------------------------------------- The Company has only a contractual obligation to pay the benefits described in Article III and V. All benefits are to be satisfied solely out of the general corporate assets of the Company which shall remain subject to the claims of its creditors. No assets of the Company will be segregated or committed to the satisfaction of its obligations to any Participant or Beneficiary under this Plan. -14- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ARTICLE IX TERMINATION OF EMPLOYMENT ------------------------- 9.01. Termination of Employment ------------------------- Except as provided in Plan section 9.02, a Participant who ceases to be an Eligible Employee or whose employment with the Company and its Affiliates is terminated either with or without cause for reasons other than death or retirement, shall immediately cease to be a Participant under this Plan and shall forfeit all rights under this Plan. Further, except as provided in Plan section 9.02, in no event shall an individual who was a Participant but is not a Participant at the time of such individual's death or retirement, have any rights under the Plan. A Participant on authorized leave of absence from the Company shall not be deemed to have terminated employment or lost his status as an Eligible Employee for the duration of such leave of absence. 9.02. Vesting ------- A Participant's right to amounts credited to his Deferred Account and his Excess Benefit Account are always fully vested and nonforfeitable. 9.03. Reemployment ------------ A Participant who ceases to be an employee of the Company and who is subsequently reemployed by the Company shall not accrue any additional benefits on account of such later service for periods in which he is not a Participant. -15- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ARTICLE X TERMINATION, AMENDMENT OR MODIFICATION OF PLAN ---------------------------------------------- 10.01. Amendment or Termination ------------------------ Except as otherwise specifically provided, the Company reserves the right to terminate, amend or modify this Plan, wholly or partially, at any time and from time to time. Such right to terminate, amend or modify the Plan shall be exercised by the Board. 10.02. Notice Requirement ------------------ (a) Plan section 10.01 notwithstanding, no action to terminate the Plan shall be taken except upon written notice to each Participant to be affected thereby, which notice shall be given not less than 30 days prior to such action. (b) Any notice which shall be or may be given under the Plan shall be in writing and shall be mailed by United States mail, postage prepaid. If notice is to be given to the Company such notice shall be addressed to it at 4 North Fourth Street, Richmond, Virginia 23219; addressed to the attention of the Senior Vice President and General Counsel If notice is to be given to a Participant, such notice shall be addressed to the Participant's last known address. 10.03. Limitation on Amendment, Termination, etc. ------------------------------------------ The rights of the Company set forth in Plan section 10.01 are subject to the condition that the Board or its delegate shall take no action to amend or terminate the Plan if such amendment or termination would decrease the benefit that has commenced prior to the effective date of the amendment or termination or would become payable if the Participant terminated for any reason (other than for cause) including death, on such effective date. 10.04. Effect of Plan Termination -------------------------- Except as provided in Plan sections 10.01 and 10.03 and in the following sentence, upon the termination of this Plan by the Board, the Plan shall no longer be of any further force or effect, and neither the Company, any Affiliate nor any Participant shall have any further obligation or right under this Plan. Likewise, the rights of any individual who was a Participant and whose designation as a Participant is revoked or rescinded by the Committee shall cease upon such action except with respect to benefits that have accrued for such individual as of the date of revocation or rescission. -16- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ARTICLE XI OTHER BENEFITS AND AGREEMENTS ----------------------------- The benefits provided for a Participant and his Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program of the Company for its employees, and, except as may otherwise be expressly provided for, the Plan shall supplement and shall not supersede, modify or amend any other plan or program of the Company in which a Participant is participating. -17- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ARTICLE XII RESTRICTIONS ON TRANSFER OF BENEFITS ------------------------------------ No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to such benefit. If any Participant or Beneficiary under the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right to a benefit hereunder, then such right or benefit, in the discretion of the Committee, shall cease and terminate, and, in such event, the Committee may hold or apply the same or any part thereof for the benefit of such Participant or Beneficiary, his or her spouse, children, or other dependents, or any of them, in such manner and in such portion as the Committee may deem proper. -18- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ARTICLE XIII ADMINISTRATION OF THE PLAN -------------------------- 13.01. The Committee ------------- The Plan shall be administered by the Committee. Subject to the provisions of the Plan, the Committee may adopt such rules and regulations as may be necessary to carry out the purposes hereof. The Committee's interpretation and construction of any provision of the Plan shall be final and conclusive. 13.02. Indemnification of the Committee -------------------------------- The Company shall indemnify and save harmless each member of the Committee against any and all expenses and liabilities arising out of membership on the Committee, excepting only expenses and liabilities arising out of a member's own willful misconduct. Expenses against which a member of the Committee shall be indemnified hereunder shall include without limitation, the amount of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted, or a proceeding brought or settlement thereof. The foregoing right of indemnification shall be in addition to any other rights to which any such member may be entitled. 13.03. Powers of the Committee ----------------------- In addition to the powers hereinabove specified, the Committee shall have the power to compute and certify the amount and kind of benefits from time to time payable to Participants and their Beneficiaries under the Plan, to authorize all disbursements for such purposes, and to determine whether a Participant is entitled to a benefit under the Plan. 13.04. Information ----------- To enable the Committee to perform its functions, the Company shall supply full and timely information to the Committee on all matters relating to the compensation of all Participants, their retirement, death or other cause for termination of employment, and such other pertinent facts as the Committee may require. -19- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ARTICLE XIV MISCELLANEOUS ------------- 14.01. Binding Nature -------------- The Plan shall be binding upon the Company, any participating Affiliates and its successors and assigns, subject to the provisions set forth in Article X, and upon a Participant, his or her Beneficiary, and either of their assigns, heirs, executors and administrators. 14.02. Governing Law. ------------- To the extent not preempted by federal law, the Plan shall be governed and construed under the laws of the Commonwealth of Virginia (including its choice of law rules, except to the extent those rules would require the application of the law of a state other than Virginia) as in effect at the time of their adoption and execution, respectively. 14.03. Use of Masculine and Feminine; Singular and Plural -------------------------------------------------- Masculine pronouns wherever used shall include feminine pronouns and the use of the singular shall include the plural. 14.04. No Guarantee of Employment -------------------------- The Plan does not in any way limit the right of the Company or an Affiliate at any time and for any reason to terminate the Participant's employment or such Participant's status as an Eligible Employee. In no event shall the Plan, by its terms or by implication, constitute an employment contract of any nature whatsoever between the Company or an Affiliate and a Participant. -20- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 ARTICLE XV ADOPTION -------- The Company has adopted this Plan pursuant to action taken by the Board. As evidence of its adoption of the Plan, A.T. Massey Coal Company, Inc. has caused this document to be signed by its Senior Vice President, this 10/th/ day of August, 1995, effective August 1, 1995. A.T. MASSEY COAL COMPANY, INC. By: ____________________________ -21- A.T. MASSEY COAL COMPANY, INC. EXECUTIVE DEFERRED COMPENSATION PLAN Effective August 1, 1995 EXHIBIT I --------- PLAN INVESTMENT OPTIONS The following summarizes the investment characteristics of the Plan investment options.
Nature of Primary Investment Investments Objective Money Market Fund . Short maturity U.S. This fund seeks to provide Treasuries participants with stability of . Certificates of Deposit principal, current income and (CDs) liquidity. . Other money market securities--i.e., commercial paper, time deposits, bankers' acceptances, etc. Interest Income Plus . Government Bonds (U.S. and This fund is designed to Fund Non-U.S.) provide moderate income with . Corporate Bonds (U.S. and modest volatility over a long Non-U.S.) time horizon through . Bank and Insurance investment in Company Contracts short-intermediate term bonds . Asset-Backed Investments of predominantly U.S. issuers. The investments held within this fund's portfolio will typically have maturities ranging from 1-5 years. Global Diversified . U.S. and Non-U.S. Equity and This fund is designed to Fund Fixed Income provide capital growth and securities--common, income through investment in a convertible, and preferred portfolio of global stocks and bonds (may include diversified assets. The fund Fluor Stock) seeks to achieve its goal with
-22- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995
Nature of Primary Investment Investments Objective . Real Estate a moderate amount of price . Private Equity/Venture fluctuation. Capital . Short-term reserves--cash investments Global Diversified . U.S. and Non-U.S. Equity The objective of this fund is Plus Fund and Fixed Income to provide aggressive capital securities--common, growth and income through convertible, and preferred investment in a portfolio of stocks and bonds (may include global diversified assets. Fluor Stock) While the asset classes this . Real Estate fund invests in are the same . Private Equity/Venture as those included in the Capital Global Diversified Fund, as . Short-term reserves--cash described earlier, this fund investments seeks to achieve even higher returns by allowing heavier concentrations in any one type of investment-leading to greater potential short-term price fluctuations (or volatility). In addition, to provide additional long-term income, this fund also at times will attempt to take advantage of differentials in the short-term markets by making opportunistic investment decisions. Both long and/or short positions may be held among the various asset classes.
-23- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 EXHIBIT I PARTICIPANTS IN THE A.T. MASSEY COAL COMPANY, INC. EXECUTIVE DEFERRED COMPENSATION PLAN -24- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 EXHIBIT I ADDITIONAL PARTICIPANTS IN THE A.T. MASSEY COAL COMPANY, INC. EXECUTIVE DEFERRED COMPENSATION PLAN -25- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 EXHIBIT I ADDITIONAL PARTICIPANTS IN THE A.T. MASSEY COAL COMPANY, INC. EXECUTIVE DEFERRED COMPENSATION PLAN -26- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 EXHIBIT I ADDITIONAL PARTICIPANTS IN THE A.T. MASSEY COAL COMPANY, INC. EXECUTIVE DEFERRED COMPENSATION PLAN -27- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 A.T. Massey Coal Company, Inc. Executive Deferred Compensation Plan Participants Participants Approved Participants Additional Approved As of January 1, 1998 As of November 11, 1998 Participants As of November 13, 1998 -28- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 -29- A.T. MASSEY COAL COMPANY, INC. Executive Deferred Compensation Plan Effective August 1, 1995 -30- EX-10.12 15 0015.txt EXHIBIT 10.12 EXHIBIT 10.12 MASSEY ENERGY COMPANY 1997 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 MASSEY ENERGY COMPANY 1997 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 ARTICLE I DEFINITIONS Section 1.1. DEFINITIONS ----------- The following terms shall have the meanings set forth herein unless the context clearly indicates to the contrary: (a) "Age for Board Retirement" shall mean the age for mandatory retirement of members of the Board as specified in the Bylaws of the Company, as applied to Eligible Directors on the date of such Eligible Director's retirement from the Board. (b) "Award" shall mean an award of Restricted Stock pursuant to the provisions of Article V hereof. (c) "Awardee" shall mean an Eligible Director to whom Restricted Stock has been awarded hereunder. (d) "Board" shall mean the Board of Directors of the Company. (e) "Change of Control" of the Company shall be deemed to have occurred if, (i) a third person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, acquires shares of the Company having twenty-five percent or more of the total number of votes that may be cast for the election of directors of the Company; or (ii) as the result of any cash tender or exchange offer, merger or other business combination, or any combination of the foregoing transactions (a "Transaction"), the persons who were directors of the Company before the Transaction shall cease to constitute a majority of the Board of the Company or any successor to the Company. (f) "Committee" shall mean members of the Board who are not eligible to participate in the Plan. (g) "Company" shall mean Massey Energy Company. (h) "Eligible Director" shall mean a director of the Company who is not an employee of the Company or any of its Subsidiaries. (i) "Plan" shall mean the 1997 Massey Energy Company Restricted Stock Plan for Non-Employee Directors as amended and restated effective November 30, 2000, the current terms of which are set forth herein. (j) "Plan Effective Date" shall mean the Plan's original effective date which was March 11, 1997. The effective date of this amended and restated Plan is November 30, 2000. 1 MASSEY ENERGY COMPANY 1997 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 (k) "Restricted Stock" shall mean Stock that may be awarded to an Eligible Director by the Committee pursuant to Article V hereof, which is nontransferable and subject to a substantial risk of forfeiture until specific conditions are met. (l) "Restricted Stock Agreement" shall mean the agreement between the Company and the Awardee with respect to Restricted Stock awarded hereunder. (m) "Stock" shall mean the Common Stock of the Company or, in the event that the outstanding shares of Stock are hereafter changed into or exchanged for shares of a different stock or securities of the Company or some other corporation, such other stock or securities. (n) "Subsidiary" shall mean any corporation, the majority of the outstanding capital stock of which is owned, directly, or indirectly, by the Company or any partnership or joint venture in which either the Company or such a corporation is at least a twenty percent (20%) equity participant. ARTICLE II GENERAL Section 2.1. NAME ---- This Plan shall be known as the "Massey Energy Company 1997 Restricted Stock Plan for Non-Employee Directors." Section 2.2. PURPOSE ------- The purpose of the Plan is to advance the interests of the Company and its stockholders by affording to Eligible Directors of the Company an opportunity to acquire or increase their proprietary interest in the Company by the grant to such directors of Awards under the terms set forth herein. By encouraging non- employee directors to become owners of Company shares, the Company seeks to increase their incentive for enhancing stockholder value and to motivate, retain and attract those highly competent individuals upon whose judgment, initiative, leadership and continued efforts the success of the Company in large measure depends. Section 2.3. EFFECTIVE DATE -------------- The Plan was effective on March 11, 1997 upon its approval by the holders of a majority of the shares of Stock of Fluor Corporation represented at an annual or special meeting of the stockholders of Fluor Corporation. The effective date of this amended and restated Plan is November 30, 2000. 2 MASSEY ENERGY COMPANY 1997 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 Section 2.4. LIMITATIONS ----------- Subject to adjustment pursuant to the provisions of Section 8.1 hereof, the aggregate number of shares of Stock which may be issued as Awards shall not exceed 60,000. Any such shares may be either authorized and unissued shares or shares issued and thereafter acquired by the Company. Section 2.5. AWARDS GRANTED UNDER PLAN ------------------------- Shares of Stock received pursuant to a Restricted Stock Agreement executed hereunder with respect to which the restrictions provided for in Section 5.3 hereof have lapsed shall not again be available for Award grant hereunder. If Restricted Stock is acquired by the Company pursuant to the provisions of paragraph (c) of Section 5.3 hereof, new Awards may be granted hereunder covering the number of shares to which such Restricted Stock acquisition relates. ARTICLE III PARTICIPANTS Section 3.1. ELIGIBILITY ----------- Any Eligible Director shall be eligible to participate in the Plan. ARTICLE IV ADMINISTRATION Section 4.1. DUTIES AND POWERS OF COMMITTEE ------------------------------ The Plan shall be administered by the Committee. Subject to the express provisions of the Plan, the Committee shall also have complete authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, to determine the details and provisions of each Restricted Stock Agreement, and to make all other determinations necessary or advisable in the administration of the Plan. Section 4.2. MAJORITY RULE ------------- A majority of the members of the Committee shall constitute a quorum, and any action taken by a majority present at a meeting at which a quorum is present or any action taken without a meeting evidenced by a writing executed by a majority of the whole Committee shall constitute the action of the Committee. 3 MASSEY ENERGY COMPANY 1997 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 Section 4.3. COMPANY ASSISTANCE ------------------ The Company shall supply full and timely information to the Committee on all matters relating to Eligible Directors, their death, retirement, disability or removal or resignation from the Board and such other pertinent facts as the Committee may require. The Company shall furnish the Committee with such clerical and other assistance as is necessary in the performance of its duties. ARTICLE V AWARDS Section 5.1. AWARD GRANT AND RESTRICTED STOCK AGREEMENT ------------------------------------------ The Committee shall grant to each Eligible Director who is a member of the Board during all or any portion of each calendar year during the term of the Plan (including the calendar year in which the Plan amended and restated Effective Date occurs) an Award of 500 shares of Restricted Stock, (as adjusted to reflect the distribution of Fluor Corporation from the Company) which grant shall be made in respect of any calendar year on the date of the first regularly scheduled meeting of the Board during such calendar year occurring concurrently with or after such Eligible Director's appointment to the Board. Each Award granted hereunder must be granted within ten years from the effective date of the Plan. The Awardee shall be entitled to receive the Stock subject to such Award only if the Company and the Awardee enter into a written Restricted Stock Agreement dated as of the date of the Award, which Agreement shall set forth such terms and conditions as may be determined by the Committee consistent with the Plan. Section 5.2. CONSIDERATION FOR ISSUANCE -------------------------- No shares of Restricted Stock shall be issued to an Awardee hereunder unless and until the Committee shall have determined that consideration has been received by the Company, in the form of labor performed for or services actually rendered to the Company by the Awardee, having a fair value of not less than the then fair market value of a like number of shares of Stock subject to all of the herein provided conditions and restrictions applicable to Restricted Stock, but in no event less than the par value of such shares. Section 5.3. RESTRICTIONS ON SALE OR OTHER TRANSFER -------------------------------------- Each share of Stock received pursuant to each Restricted Stock Agreement shall be subject to acquisition by Massey Energy Company, and may not be sold or otherwise transferred except pursuant to the following provisions: (a) The shares of Stock represented by the Restricted Stock Agreement shall be held in book entry form with the Company's transfer agent until the restrictions lapse in 4 MASSEY ENERGY COMPANY 1997 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 accordance with the conditions established by the Committee pursuant to Section 5.4 hereof, or until the shares of stock are forfeited pursuant to paragraph (c) of this Section 5.3. Notwithstanding the foregoing, the Awardee may request that, prior to the lapse of the restrictions or forfeiture of the shares, certificates evidencing such shares be issued in his name and delivered to him, and each such certificate shall bear the following legend: "The shares of Massey Energy Company common stock evidenced by this certificate are subject to acquisition by Massey Energy Company, and such shares may not be sold or otherwise transferred except pursuant to the provisions of the Restricted Stock Agreement by and between Massey Energy Company and the registered owner of such shares." (b) No such shares may be sold, transferred or otherwise alienated or hypothecated so long as such shares are subject to the restriction provided for in this Section 5.3. (c) All of the Awardee's Restricted Stock remaining subject to any restriction hereunder shall be forfeited to, and be acquired at no cost by, the Company in the event that the Committee determines that any of the following circumstances has occurred: (i) the Awardee has engaged in knowing and willful misconduct in connection with his or her service as a member of the Board; (ii) the Awardee, without the consent of the Committee, at any time during his or her period of service as a member of the Board, becomes a principal of, serves as a director of, or owns a material interest in, any business that directly or through a controlled subsidiary competes with the Company or any Subsidiary; or (iii) the Awardee does not stand for reelection to, or voluntarily quits or resigns from, the Board for any reason, except under circumstances that would cause such restrictions to lapse under Section 5.4. Section 5.4. LAPSE OF RESTRICTIONS --------------------- The restrictions imposed under Section 5.3 above upon Restricted Stock held by any Awardee will, as to any such Restricted Stock held by the Awardee for at least six months, lapse once the Awardee has completed five years of service on the Board or any of the following occurs: (a) the Awardee attains the Age for Board Retirement or obtains Board approval of early retirement in accordance with Section 5.5; (b) the Awardee dies or becomes permanently and totally disabled; or (c) any Change of Control occurs. 5 MASSEY ENERGY COMPANY 1997 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 In no event will the restrictions imposed under Section 5.3 lapse as to any shares of Restricted Stock awarded to any Awardee until the Awardee has held such shares for six months. Subject to the prior sentence, the Board may, in its sole and absolute discretion, cause the five-year restriction to lapse with respect to an Eligible Director who leaves the service of the Board. Section 5.5. EARLY RETIREMENT ---------------- An Eligible Director who leave the Board prior to the Age for Board Retirement, may, upon application to and in the sole discretion of the Committee, be granted early retirement status. Section 5.6. RIGHTS AS STOCKHOLDER --------------------- Subject to the provisions of Section 5.3 hereof, upon the issuance to the Awardee of Restricted Stock hereunder, the Awardee shall have all the rights of a stockholder with respect to such Stock, including the right to vote the shares and receive all dividends and other distributions paid or made with respect thereto. ARTICLE VI STOCK CERTIFICATES Section 6.1. STOCK CERTIFICATES ------------------ The Company shall not be required to issue or deliver any certificate for shares of Stock received as Restricted Stock pursuant to a Restricted Stock Agreement executed hereunder, prior to fulfillment of all of the following conditions: (a) the admission of such shares to listing on all stock exchanges on which the Stock is then listed; (b) the completion of any registration or other qualification of such shares under any federal or state law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, which the Committee shall in its sole discretion deem necessary or advisable; (c) the obtaining of any approval or other clearance from any federal or state governmental agency which the Committee shall in its sole discretion determine to be necessary or advisable; and (d) the lapse of such reasonable period of time following the execution of the Restricted Stock Agreement as the Committee from time to time may establish for reasons of administrative convenience. 6 MASSEY ENERGY COMPANY 1997 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 ARTICLE VII TERMINATION, AMENDMENT AND MODIFICATION OF PLAN Section 7.1. TERMINATION, AMENDMENT AND MODIFICATION OF PLAN ----------------------------------------------- The Committee may at any time terminate, and may at any time and from time to time and in any respect amend or modify, the Plan provided that, if under applicable laws or the rules of any securities exchange upon which the Company's common stock is listed, the consent of the Company's stockholders is required for such amendment or modification, such amendment or modification shall not be effective until the Company obtains such consent, and provided, further, that no termination, amendment or modification of the Plan shall in any manner affect any Restricted Stock Agreement theretofore executed pursuant to the Plan without the consent of the Awardee. ARTICLE VIII MISCELLANEOUS Section 8.1. ADJUSTMENT PROVISIONS --------------------- (a) Subject to Section 8.l(b) below, if the outstanding shares of Stock of the Company are increased, decreased, or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed with respect to such shares of Stock or other securities, through merger, consolidation, sale of all or substantially all of the property of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other distribution with respect to such shares of Stock or other securities, an appropriate and proportionate adjustment may be made in (i) the maximum number and kind of shares provided in Section 2.4 and (ii) the number and kind of shares or other securities subject to the outstanding Awards. (b) Adjustments under Section 8.l(a) will be made by the Committee, whose determination as to what adjustments will be made and the extent thereof will be final, binding, and conclusive. No fractional interests will be issued under the Plan resulting from any such adjustments. Section 8.2. CONTINUATION OF BOARD SERVICE ----------------------------- Nothing in the Plan or in any instrument executed pursuant to the Plan will confer upon any Eligible Director any right to continue to serve on the Board. Section 8.3. COMPLIANCE WITH GOVERNMENT REGULATIONS -------------------------------------- No shares of Stock will be issued hereunder unless and until all applicable requirements imposed by federal and state securities and other laws, rules, and regulations and by any 7 MASSEY ENERGY COMPANY 1997 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 regulatory agencies having jurisdiction and by any stock exchanges upon which the Stock may be listed have been fully met. As a condition precedent to the issuance of shares of Stock pursuant hereto, the Company may require the employee to take any reasonable action to comply with such requirements. Section 8.4. PRIVILEGES OF STOCK OWNERSHIP ----------------------------- No director and no beneficiary or other person claiming under or through such employee will have any right, title, or interest in or to any shares of Stock allocated or reserved under the Plan or subject to any Award except as to such shares of Stock, if any, that have been issued to such director. Section 8.5. WITHHOLDING ----------- The Company may make such provisions as it deems appropriate to withhold any taxes the Company determines it is required to withhold in connection with any Award. The Company may require the director to satisfy any relevant tax requirements before authorizing any issuance of Stock to the director. Such settlement may be made in cash or [previously acquired] Stock. Section 8.6. NONTRANSFERABILITY ------------------ An Award may be exercised during the life of the director solely by the director or the director's duly appointed guardian or personal representative. No Award and no other right under the Plan, contingent or otherwise, will be assignable or subject to any encumbrance, pledge, or charge of any nature. Section 8.7. OTHER COMPENSATION PLANS ------------------------ The adoption of the Plan shall not affect any other stock option or incentive or other compensation plans in effect for the Company or any Subsidiary, nor shall the Plan preclude the Company from establishing any other forms of incentive or other compensation for employees or directors of the Company or any Subsidiary. Section 8.8. PLAN BINDING ON SUCCESSORS -------------------------- The Plan shall be binding upon the successors and assigns of the Company. 8 MASSEY ENERGY COMPANY 1997 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 Section 8.9. SINGULAR, PLURAL; GENDER ------------------------ Whenever used herein, nouns in the singular shall include the plural, and the masculine pronoun shall include the feminine gender. Section 8.10. HEADINGS, ETC., NO PART OF PLAN ------------------------------- Headings of Articles and Sections hereof are inserted for convenience and reference; they constitute no part of the Plan. 9 EX-10.13 16 0016.txt EXHIBIT 10.13 EXHIBIT 10.13 MASSEY ENERGY COMPANY 1996 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 MASSEY ENERGY COMPANY 1996 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 ARTICLE I DEFINITIONS Sec. 1.1 DEFINITIONS ----------- As used herein, the following terms shall have the meanings hereinafter set forth unless the context clearly indicates to the contrary: (a) "Award" shall mean an award of Restricted Stock pursuant to the provisions of Article VI hereof. (b) "Awardee" shall mean an Eligible Employee to whom Restricted Stock has been awarded hereunder. (c) "Board" shall mean the Board of Directors of the Company. (d) "Change of Control" of the Company shall be deemed to have occurred if, (i) a third person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, acquires shares of the Company having twenty-five percent or more of the total number of votes that may be cast for the election of directors of the Company, or (ii) as the result of any cash tender or exchange offer, merger or other business combination, or any combination of the foregoing transactions (a "Transaction"), the persons who were directors of the Company before the Transaction shall cease to constitute a majority of the Board of the Company or any successor to the Company. (e) "Code" shall mean the Internal Revenue Code of 1986, as amended. (f) "Committee" shall mean the Compensation Committee of the Board. (g) "Company" shall mean Massey Energy Company. (h) "Eligible Employee" shall mean an employee who is an officer of the Company or any Subsidiary or who is a member of the Executive Management Team of the Company and its Subsidiaries. (i) "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. (j) "Executive Management Team" shall mean those employees who have been determined to be eligible to participate in the Fluor Corporation and Subsidiaries Executive Incentive Compensation Program or in other similar management incentive compensation programs of any Subsidiary. 1 MASSEY ENERGY COMPANY 1996 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 (k) "Fair Market Value" shall mean the average of the highest price and the lowest price per share at which the Stock is sold in the regular way on the New York Stock Exchange on the day an Option is granted hereunder or, in the absence of any reported sales on such day, the first preceding day on which there were such sales. (l) "Incentive Stock Option" shall mean an incentive stock option, as defined under Section 422 of the Code and the regulations thereunder, to purchase Stock. (m) "Nonqualified Stock Option" shall mean a stock option other than an Incentive Stock Option to purchase Stock. (n) "Option" shall mean an option to purchase Stock granted pursuant to the provisions of Article V hereof and refers to both Incentive Stock Options and Nonqualified Stock Options. (o) "Optionee" shall mean an Eligible Employee to whom an Option has been granted hereunder. (p) "Plan" shall mean the Massey Energy Company 1996 Executive Stock Plan, the current terms of which are set forth herein. (q) "Prior Plans" shall mean the 1971 Fluor Stock Option Plan, the 1977 Fluor Executive Stock Plan, the 1981 Fluor Executive Stock Plan, the 1982 Fluor Executive Stock Option Plan and the 1988 Fluor Executive Stock Plan. (r) "Restricted Stock" shall mean Stock that may be awarded to an Eligible Employee by the Committee pursuant to Article VI hereof, which is nontransferable and subject to a substantial risk of forfeiture until specific conditions are met. Conditions may be based on continuing employment or achievement of preestablished performance objectives. (s) "Return on Average Shareholders' Equity" shall mean, for any fiscal year, the percentage amount reported as "Return on Average Shareholders Equity" in the "Highlights" section of the Company's Annual Report to Stockholders for such fiscal year. (t) "Restricted Stock Agreement" shall mean the agreement between the Company and the Awardee with respect to Restricted Stock awarded hereunder. (u) "Stock" shall mean the Common Stock of the Company or, in the event that the outstanding shares of Stock are hereafter changed into or exchanged for shares of a different stock or securities of the Company or some other corporation, such other stock or securities. 2 MASSEY ENERGY COMPANY 1996 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 (v) "Stock Option Agreement" shall mean the agreement between the Company and the Optionee under which the Optionee may purchase Stock hereunder. (w) "Stock Payment" shall mean a payment in shares of Stock to replace all or any portion of the compensation (other than base salary) that would otherwise become payable to any Eligible Employee of the Company. (x) "Subsidiary" shall mean any corporation, the majority of the outstanding capital stock of which is owned, directly or indirectly, by the Company or any partnership or joint venture in which either the Company or such a corporation is at least a twenty percent (20%) equity participant. (y) "Ten Year Treasury Yield" shall mean, for any fiscal period, the daily average percent per annum yield for U. S. Government Securities - 10 year Treasury constant maturities, as published in the Federal Reserve statistical release or any successor publication. ARTICLE II GENERAL Sec. 2.1 NAME ---- This Plan shall be known as the "Massey Energy Company 1996 Executive Stock Plan." Sec. 2.2 PURPOSE ------- The purpose of the Plan is to advance the interests of the Company and its stockholders by affording to Eligible Employees of the Company and its Subsidiaries an opportunity to acquire or increase their proprietary interest in the Company by the grant to such employees of Options or Awards under the terms set forth herein. By thus encouraging such employees to become owners of Company shares, the Company seeks to motivate, retain and attract those highly competent individuals upon whose judgment, initiative, leadership and continued efforts the success of the Company in large measure depends. Sec. 2.3 EFFECTIVE DATE -------------- The Plan was originally effective March 2, 1996 upon its approval by the holders of a majority of the shares of Stock of the Company. The effective date of this amended and restated Plan is November 30, 2000. Sec. 2.4 LIMITATIONS ----------- Subject to adjustment pursuant to the provisions of Section 10.1 hereof, the aggregate number of shares of Stock which may either be issued as Awards, subject to Options or issued pursuant to the exercise of Options shall not exceed the sum of (a) 4,000,000 plus (b) that 3 MASSEY ENERGY COMPANY 1996 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 number of shares represented by options, awards or rights under Prior Plans which expire or are otherwise terminated at any time after the original effective date of this Plan. Any such shares may be either authorized and unissued shares or shares issued and thereafter acquired by the Company. Sec. 2.5 OPTIONS AND AWARDS GRANTED UNDER PLAN ------------------------------------- Shares of Stock with respect to which an Option granted hereunder shall have been exercised, and shares of Stock received pursuant to a Restricted Stock Agreement executed hereunder with respect to which the restrictions provided for in Section 6.3 hereof shall have lapsed, shall not again be available for Option or Award grant hereunder. If Options granted hereunder shall expire or terminate for any reason without being wholly exercised, or if Restricted Stock is acquired by the Company pursuant to the provisions of paragraph (c) of Section 6.3 hereof, new Options or Awards may be granted hereunder covering the number of shares to which such Option expiration or termination or Restricted Stock acquisition relates. ARTICLE III PARTICIPANTS Sec. 3.1 ELIGIBILITY ----------- Any Eligible Employee shall be eligible to participate in the Plan; provided, however, that no member of the Committee shall be eligible to participate while a member of the Committee. The Committee may grant Options or Awards to any Eligible Employee in accordance with such determinations as the Committee from time to time in its sole discretion shall make. ARTICLE IV ADMINISTRATION Sec. 4.1 DUTIES AND POWERS OF COMMITTEE ------------------------------ The Plan shall be administered by the Committee. Subject to the express provisions of the Plan, the Committee shall have sole discretion and authority to determine from among Eligible Employees those to whom and the time or times at which Options or Awards may be granted, the number of shares of Stock to be subject to each Option or Award and the period for the exercise of such Option which need not be the same for each grant hereunder. Subject to the express provisions of the Plan, the Committee shall also have complete authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, to determine the details and provisions of each Stock Option Agreement and Restricted Stock Agreement, and to make all other determinations necessary or advisable in the administration of the Plan. 4 MASSEY ENERGY COMPANY 1996 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 Sec. 4.2 MAJORITY RULE ------------- A majority of the members of the Committee shall constitute a quorum, and any action taken by a majority present at a meeting at which a quorum is present or any action taken without a meeting evidenced by a writing executed by a majority of the whole Committee shall constitute the action of the Committee. Sec. 4.3 COMPANY ASSISTANCE ------------------ The Company shall supply full and timely information to the Committee on all matters relating to eligible employees, their employment, death, retirement, disability or other termination of employment, and such other pertinent facts as the Committee may require. The Company shall furnish the Committee with such clerical and other assistance as is necessary in the performance of its duties. ARTICLE V OPTIONS Sec. 5.1 OPTION GRANT AND AGREEMENT -------------------------- Each Option granted hereunder shall be evidenced by minutes of a meeting or the written consent of the Committee and by a written Stock Option Agreement dated as of the date of grant and executed by the Company and the Optionee, which Agreement shall set forth such terms and conditions as may be determined by the Committee consistent with the Plan. In no event shall the total number of shares of Stock subject to Options granted hereunder to any Eligible Employee in any fiscal year exceed five percent (5%) of the total number of shares authorized to be issued under the Plan on the effective date of the Plan. Sec. 5.2 PARTICIPATION LIMITATION ------------------------ The Committee shall not grant an Incentive Stock Option to any employee for such number of shares of Stock that, immediately after the grant, the total number of shares of Stock owned or subject to Options exercisable by and/or Awards outstanding in the hands of such employee (or by such persons whose shares such employee is considered as owning pursuant to the provisions of the second succeeding sentence) exceed ten percent of the total combined voting power of all classes of stock of the Company. This restriction does not apply if, at the time such Incentive Stock Option is granted, the Incentive Stock Option purchase price is at least 110% of the Fair Market Value on the date of grant and the Incentive Stock Option by its terms is not exercisable after the expiration of five (5) years from the date of grant. For purposes of this Section 5.2, an employee shall be considered as owning the stock owned, directly or indirectly, by or for his brothers and sisters (whether by the whole or half blood), spouse, ancestors and lineal descendants; and the stock owned, directly or indirectly, by or for a corporation, partnership, estate or trust shall be considered as being owned proportionately by or for its shareholders, partners or beneficiaries. 5 MASSEY ENERGY COMPANY 1996 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 Sec. 5.3 OPTION PRICE ------------ The purchase price of Stock under each Option will be determined by the Committee but may not be less than the Fair Market Value on the date of grant. Sec. 5.4 OPTION PERIOD ------------- Each Option granted hereunder must be granted within ten years from the effective date of the Plan. The period for the exercise of each Option shall be determined by the Committee, but in no instance shall such period exceed ten years from the date of grant of the Option. Sec. 5.5 OPTION EXERCISE --------------- (a) Options granted hereunder may not be exercised unless and until the Optionee shall have been or remained in the employ of the Company or its Subsidiaries for one year from and after the date such Option was granted, except as otherwise provided in Section 5.7 hereof. (b) Options may be exercised with respect to whole shares only, for such shares of Stock and within the period permitted for the exercise thereof as determined by the Committee, and shall be exercised by written notice of intent to exercise the Option with respect to a specified number of shares delivered to the Company at its principal office in the State of Delaware, and payment in full to the Company at said office of the amount of the Option price for the number of shares of Stock with respect to which the Option is then being exercised. The purchase price may be paid by the assignment and delivery to the Company of shares of Stock or a combination of cash and shares of Stock equal in value to the exercise price. Any shares assigned and delivered to the Company in payment or partial payment of the purchase price will be valued at their Fair Market Value on the exercise date. (c) The Fair Market Value of the Stock at the date of grant for which any employee may exercise Incentive Stock Options in any calendar year under the Plan (or any other stock option plan of the Company adopted after December 31, 1986) may not exceed $100,000. Sec. 5.6 NONTRANSFERABILITY OF OPTION ---------------------------- No Option shall be transferred by an Optionee otherwise than in accordance with such rules as may be established by the Committee from time to time. During the lifetime of an Optionee, the Option shall be exercisable only in accordance with such rules as may be established by the Committee from time to time. 6 MASSEY ENERGY COMPANY 1996 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 Sec 5.7 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT -------------------------------------------------- (a) If, prior to a date one year from the date on which an Option shall have been granted, the Optionee's employment with the Company or its Subsidiaries shall be terminated by the Company or Subsidiary with or without cause, or by the act of the Optionee, the Optionee's right to exercise such Option shall terminate and all rights thereunder shall cease; provided, however, that if the Optionee shall die, retire or become permanently and totally disabled, as determined in accordance with applicable Company personnel policies, or if the Optionee's employment with the Company or its Subsidiaries shall be terminated within two years after a Change of Control of the Company and such termination occurs prior to a date one year from the date on which an Option shall have been granted, such Option shall become exercisable in full on the date of such death, retirement, disability or termination of employment. (b) If, on or after one year from the date on which an Option shall have been granted, an Optionee's employment with the Company or its Subsidiaries shall be terminated for any reason other than death, retirement or permanent total disability, or within two years following a Change of Control of the Company, the Optionee shall have the right, during the period ending three months after such termination, to exercise such Option to the extent that it was exercisable at the date of such termination and shall not have been exercised, subject, however, to the provisions of Section 5.4 hereof. (c) Upon termination of an Optionee's employment with the Company or its Subsidiaries by reason of retirement or permanent total disability, as determined in accordance with applicable Company personnel policies, or within two years following a Change of Control of the Company, such Optionee shall have the right, during the period ending three years after such termination, to exercise his Option in full, without regard to any installment exercise provisions, to the extent that it shall not have been exercised, subject, however, to the provisions of Section 5.4 hereof. (d) If an Optionee shall die (i) while in the employ of the Company or its Subsidiaries, or (ii) within three months after termination of employment where such termination did not occur either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, or (iii) within three years after termination of employment where such termination occurred either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, the executor or administrator of the estate of the decedent or the person or persons to whom an Option granted hereunder shall have been validly transferred by the executor or the administrator pursuant to a will or the laws of descent and distribution shall have the right, during the period ending three years after the date of the 7 MASSEY ENERGY COMPANY 1996 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 Optionee's death, to exercise the Optionee's Option (A) in full, without regard to any installment exercise provisions, to the extent that it shall not have been exercised, if the Optionee shall have died while in the employ of the Company or its Subsidiaries or within three years after termination of employment where such termination occurred either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, or (B), to the extent that it was exercisable at the date of the Optionee's death and shall not have been exercised, if the Optionee shall have died within three months after termination off employment where such termination did not occur by reason of either retirement or permanent total disability or within two years following a Change of Control of the Company, subject, however, to the provisions of Section 5.4 hereof. (e) No transfer of an Option by the Optionee by a will or by the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and an authenticated copy of the will and/or such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions of such Option. (f) The foregoing notwithstanding, the Committee may elect, in its sole discretion, to make grants of Options which have provisions regarding the effect of death or other termination of employment which are different than those set forth in paragraphs (a) through (d) of this Section 5.7, provided that such provisions do not materially increase the benefits that would otherwise accrue to an Optionee under paragraphs (a) through (d) of this Section 5.7. Sec. 5.8 RIGHTS AS STOCKHOLDER --------------------- An Optionee or a transferee of an Option shall have no rights as a stockholder with respect to any shares subject to such Option prior to the purchase of such shares by exercise of such Option as provided herein. ARTICLE VI AWARDS Sec. 6.1 AWARD GRANT AND RESTRICTED STOCK AGREEMENT ------------------------------------------ The Committee may grant Awards of Restricted Stock to Awardees. No Awards may be made during any fiscal year unless, for the preceding fiscal year, Return on Average Shareholders' Equity exceeded the Ten Year Treasury Yield by more than three percentage points. Each Award granted hereunder must be granted within ten years from the effective date of the Plan and shall be evidenced by minutes of a meeting or the written consent of the Committee. The Committee shall from time to time establish various Award grade levels which shall set forth the maximum number of shares which may be awarded annually to each Eligible 8 MASSEY ENERGY COMPANY 1996 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 Employee in each grade level. The Committee shall have the sole discretion and authority to make an Award to an Eligible Employee of less than the maximum number of shares applicable to his assigned grade level or to make no Award at all to any such Eligible Employee. In no event shall the total number of shares of Restricted Stock awarded to an Eligible Employee in any fiscal year exceed 15,000. The Awardee shall be entitled to receive the Stock subject to such Award only if the Company, and the Awardee, within 30 days after the date of the Award, enter into a written Restricted Stock Agreement dated as of the date of the Award, which Agreement shall set forth such terms and conditions as may be determined by the Committee consistent with the Plan. Sec. 6.2 CONSIDERATION FOR ISSUANCE -------------------------- No shares of Restricted Stock shall be issued to an Awardee hereunder unless and until the Committee shall have determined that consideration has been received by the Company, in the form of labor performed for or services actually rendered to the Company by the Awardee, having a fair value of not less than the then fair market value of a like number of shares of Stock subject to all of the herein provided conditions and restrictions applicable to Restricted Stock, but in no event less than the par value of such shares. Sec. 6.3 RESTRICTIONS ON SALE OR OTHER TRANSFER -------------------------------------- Each share of Stock received pursuant to each Restricted Stock Agreement shall be subject to acquisition by Fluor Corporation, and may not be sold or otherwise transferred except pursuant to the following provisions: (a) The shares of Stock represented by the Restricted Stock Agreement shall be held in book entry form with the Company's transfer agent until the restrictions lapse in accordance with the conditions established by the Committee pursuant to Section 6.4 hereof, or until the shares of stock are forfeited pursuant to paragraph (c) of this Section 6.3. Notwithstanding the foregoing, the Awardee may request that, prior to the lapse of the restrictions or forfeiture of the shares, certificates evidencing such shares be issued in his name and delivered to him, and each such certificate shall bear the following legend: "The shares of Massey Energy Company common stock evidenced by this certificate are subject to acquisition by Massey Energy Company, and such shares may not be sold or otherwise transferred except pursuant to the provisions of the Restricted Stock Agreement by and between Massey Energy Company and the registered owner of such shares." (b) No such shares may be sold, transferred or otherwise alienated or hypothecated so long as such shares are subject to the restriction provided for in this Section 6.3. 9 MASSEY ENERGY COMPANY 1996 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 (c) Unless the Committee in its discretion determines otherwise, upon an Awardee's termination of employment for any reason, all of the Awardee's Restricted Stock remaining subject to restriction shall be acquired by the Company effective as of the date of such termination of employment. Upon the occurrence or non-occurrence of such other events as shall be determined by the Committee and specified in the Awardee's Restricted Stock Agreement relating to any such Restricted Stock, all of such Restricted Stock remaining subject to restriction shall be acquired by the Company upon the occurrence or non-occurrence of such event. Sec. 6.4 LAPSE OF RESTRICTIONS --------------------- The restrictions imposed upon Restricted Stock under Section 6.3 above will lapse in accordance with such conditions as are determined by the Committee and set forth in the Restricted Stock Agreement. Sec. 6.5 RIGHTS AS STOCKHOLDER --------------------- Subject to the provisions of Section 6.3 hereof, upon the issuance to the Awardee of Restricted Stock hereunder, the Awardee shall have all the rights of a stockholder with respect to such Stock, including the right to vote the shares and receive all dividends and other distributions paid or made with respect thereto. ARTICLE VII STOCK CERTIFICATES Sec. 7.1 STOCK CERTIFICATES ------------------ The Company shall not be required to issue or deliver any certificate for shares of Stock purchased upon the exercise of any Option granted hereunder or any portion thereof, or received as Restricted Stock pursuant to a Restricted Stock Agreement executed hereunder, prior to fulfillment of all of the following conditions: (a) the admission of such shares to listing on all stock exchanges on which the Stock is then listed; (b) the completion of any registration or other qualification of such shares under any federal or state law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, which the Committee shall in its sole discretion deem necessary or advisable; (c) the obtaining of any approval or other clearance from any federal or state governmental agency which the Committee shall in its sole discretion determine to be necessary or advisable; and 10 MASSEY ENERGY COMPANY 1996 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 (d) the lapse of such reasonable period of time following the exercise of the Option or the execution of the Restricted Stock Agreement as the Committee from time to time may establish for reasons of administrative convenience. ARTICLE VIII STOCK PAYMENT Sec. 8.1 STOCK PAYMENT ------------- The Committee may approve payments of Stock to any Eligible Employee for all or any portion of the compensation (other than base salary) that would otherwise become payable to such Eligible Employee in cash. ARTICLE IX TERMINATION, AMENDMENT AND MODIFICATION OF PLAN Sec. 9.1 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN ----------------------------------------------- The Board may at any time, upon recommendation of the Committee, terminate, and may at any time and from time to time and in any respect amend or modify, the Plan, provided, however, that no such action of the Board without approval of the stockholders of the Company may: (a) increase the total number of shares of Stock subject to the Plan by more than 10%, except as contemplated in Section 10.1 hereof; (b) materially increase the benefits accruing to participants under the Plan; (c) withdraw the administration of the Plan from the Committee; or (d) permit any person while a member of the Committee to receive an Option or Restricted Stock under the Plan; and provided further, that no termination, amendment or modification of the Plan shall in any manner affect any Stock Option Agreement or Restricted Stock Agreement theretofore executed pursuant to the Plan without the consent of such Optionee or Awardee. 11 MASSEY ENERGY COMPANY 1996 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 ARTICLE X MISCELLANEOUS Sec. 10.1 ADJUSTMENT PROVISIONS --------------------- (a) Subject to Section 10.1(b) below, if the outstanding shares of Stock of the Company are increased, decreased, or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed with respect to such shares of Stock or other securities, through merger, consolidation, sale of all or substantially all of the property of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other distribution with respect to such shares of Stock or other securities, an appropriate and proportionate adjustment may be made in (i) the maximum number and kind of shares provided in Section 2.4, (ii) the number and kind of shares or other securities subject to the outstanding Options and Awards, and (iii) the price for each share or other unit of any other securities subject to outstanding Options without change in the aggregate purchase price or value as to which such Options remain exercisable. (b) Adjustments under Section 10.1(a) will be made by the Committee, whose determination as to what adjustments will be made and the extent thereof will be final, binding, and conclusive. No fractional interests will be issued under the Plan resulting from any such adjustments. Sec. 10.2 CONTINUATION OF EMPLOYMENT -------------------------- Nothing in the Plan or in any instrument executed pursuant to the Plan will confer upon any Eligible Employee any right to continue in the employ of the Company or any Subsidiary or affect the right of the Company or any Subsidiary to terminate the employment of any Eligible Employee at any time with or without cause. Sec. 10.3 COMPLIANCE WITH GOVERNMENT REGULATIONS -------------------------------------- No shares of Stock will be issued hereunder unless and until all applicable requirements imposed by federal and state securities and other laws, rules, and regulations and by any regulatory agencies having jurisdiction and by any stock exchanges upon which the Stock may be listed have been rally met. As a condition precedent to the issuance of shares of Stock pursuant hereto, the Company may require the employee to take any reasonable action to comply with such requirements. 12 MASSEY ENERGY COMPANY 1996 EXECUTIVE STOCK PLAN As Amended and Restated Effective November 30, 2000 Sec. 10.4 PRIVILEGES OF STOCK OWNERSHIP ----------------------------- No employee and no beneficiary or other person claiming under or through such employee will have any right, title, or interest in or to any shares of Stock allocated or reserved under the Plan or subject to any Option or Award except as to such shares of Stock, if any, that have been issued to such employee. Sec. 10.5 WITHHOLDING ----------- The Company may make such provisions as it deems appropriate to withhold any taxes the Company determines it is required to withhold in connection with any Option or Award. The Company may require the employee to satisfy any relevant tax requirements before authorizing any issuance of Stock to the employee. Such settlement may be made in cash or Stock. Sec. 10.6 NON-TRANSFERABILITY ------------------- No Option or Award and no other right under the Plan, contingent or otherwise, will be assignable or subject to any encumbrance, pledge, or charge of any nature, except in accordance with such rules as may be established by the Committee from time to time. Sec. 10.7 OTHER COMPENSATION PLANS ------------------------ The adoption of the Plan shall not affect any other stock option or incentive or other compensation plans in effect for the Company or any Subsidiary, nor shall the Plan preclude the Company from establishing any other forms of incentive or other compensation for employees of the Company or any Subsidiary. Sec. 10.8 PLAN BINDING ON SUCCESSORS -------------------------- The Plan shall be binding upon the successors and assigns of the Company. Sec. 10.9 SINGULAR, PLURAL; GENDER ------------------------ Whenever used herein, nouns in the singular shall include the plural, and the masculine pronoun shall include the feminine gender. Sec. 10.10 HEADINGS, ETC., NO PART OF PLAN ------------------------------- Headings of Articles and Sections hereof are inserted for convenience and reference; they constitute no part of the Plan. 13 EX-10.14 17 0017.txt EXHIBIT 10.14 EXHIBIT 10.14 MASSEY ENERGY COMPANY STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 MASSEY ENERGY COMPANY STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 TABLE OF CONTENTS
Page ---- ARTICLE I DEFINITIONS......................................................... 1 Section 1.1. DEFINITIONS................................................. 1 ARTICLE II GENERAL............................................................ 2 Section 2.1. NAME........................................................ 2 Section 2.2. PURPOSE..................................................... 2 Section 2.3. EFFECTIVE DATE.............................................. 3 Section 2.4. LIMITATIONS................................................. 3 Section 2.5. AWARDS GRANTED UNDER PLAN................................... 3 ARTICLE III PARTICIPANTS...................................................... 3 Section 3.1. ELIGIBILITY................................................. 3 ARTICLE IV ADMINISTRATION..................................................... 3 Section 4.2. DUTIES AND POWERS OF COMMITTEE.............................. 3 Section 4.3. MAJORITY RULE............................................... 3 Section 4.4. COMPANY ASSISTANCE.......................................... 4 ARTICLE V AWARDS.............................................................. 4 Section 5.1. AWARD GRANT AND RESTRICTED STOCK AGREEMENT.................. 4 Section 5.2. CONSIDERATION FOR ISSUANCE.................................. 4 Section 5.3. RESTRICTIONS ON SALE OR OTHER TRANSFER...................... 4 Section 5.4. LAPSE OF RESTRICTIONS....................................... 5 Section 5.5. RIGHTS AS STOCKHOLDER....................................... 5 ARTICLE VI RESTRICTED UNIT AWARDS............................................. 6 Section 6.1. RESTRICTED UNIT AWARD GRANT AND AGREEMENT................... 6 Section 6.2. AWARD TERMS AND CONDITIONS.................................. 6 Section 6.3. EFFECT OF RESIGNATION, REMOVAL, DEATH OR RETIREMENT......... 6 ARTICLE VII STOCK CERTIFICATES................................................ 7 Section 7.1. STOCK CERTIFICATES.......................................... 7 ARTICLE VIII TERMINATION, AMENDMENT AND MODIFICATION OF PLAN.................. 7 Section 8.1. TERMINATION, AMENDMENT AND MODIFICATION OF PLAN............. 7 ARTICLE IX MISCELLANEOUS...................................................... 8 Section 9.1. ADJUSTMENT PROVISIONS....................................... 8 Section 9.2. CONTINUATION OF BOARD SERVICE............................... 8
i MASSEY ENERGY COMPANY STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 Section 9.3. COMPLIANCE WITH GOVERNMENT REGULATIONS.................. 8 Section 9.4. PRIVILEGES OF STOCK OWNERSHIP........................... 8 Section 9.5. WITHHOLDING............................................. 9 Section 9.6. NONTRANSFERABILITY...................................... 9 Section 9.7. OTHER COMPENSATION PLANS................................ 9 Section 9.8. PLAN BINDING ON SUCCESSORS.............................. 9 Section 9.9. SINGULAR, PLURAL; GENDER................................ 9 Section 9.10. HEADINGS, ETC., NO PART OF PLAN......................... 9
ii MASSEY ENERGY COMPANY STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 ARTICLE I DEFINITIONS ----------- Section 1.1. DEFINITIONS ----------- The following terms shall have the meanings set forth herein unless the context clearly indicates to the contrary: (a) "Age for Board Retirement" shall mean the age for mandatory retirement of members of the Board as specified in the Bylaws of the Company, as applied to Eligible Directors on the date of such Eligible Directors' retirement from the Board. (b) "Award" shall mean an award of Restricted Stock pursuant to the provisions of Article V hereof. (c) "Awardee" shall mean an Eligible Director to whom Restricted Stock has been awarded hereunder. (d) "Board" shall mean the Board of Directors of the Company. (e) "Change of Control" Of the Company shall be deemed to have occurred if, (i) a third person, including a 'group' as defined in Section 13(d) (3) of the Securities Exchange Act of 1934, acquires shares of the Company having twenty-five percent or more of the total number of votes that may be cast for the election of directors of the Company; or (ii) as the result of any cash tender or exchange offer, merger or other business combination, or any combination of the foregoing transactions (a "Transaction"), the persons who were directors of the Company before the Transaction shall cease to constitute a majority of the Board of the Company or any successor to the Company. (f) "Committee" shall mean members of the Board who are not eligible to participate in the Plan. (g) "Company" shall mean Massey Energy Company. (h) "Eligible Director" shall mean a director of the Company who is not an employee of the Company or any of its Subsidiaries. (i) "Fair Market Value" shall mean the average of the highest price and the lowest price per share at which the Stock is sold in the regular way on the New York Stock Exchange on the day such value is to be determined hereunder or, in the absence of any reported sales on such day, the first preceding day on which there were such sales. 1 MASSEY ENERGY COMPANY STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 (j) "Plan" shall mean the Massey Energy Company Stock Plan for Non-Employee Directors as amended and restated, effective November 30, 2000, the current terms of which are set forth herein. (k) "Restricted Stock" shall mean Stock that may be awarded to an Eligible Director by the Committee pursuant to Article V hereof, which is nontransferable and subject to a substantial risk of forfeiture until specific conditions are met. (l) "Restricted Stock Agreement" and "Restricted Unit Agreement" shall mean the agreement between the Company and the Awardee with respect to Restricted Stock and Restricted Units, respectively, awarded hereunder. (m) "Restricted Unit Award" shall mean amounts awarded pursuant to Article VI hereof. (n) "Stock" shall mean the Common Stock of the Company or, in the event that the outstanding shares of Stock are hereafter changed into or exchanged for shares of a different stock or securities of the Company or some other corporation, such other stock or securities. (o) "Subsidiary" shall mean any corporation, the majority of the outstanding capital stock of which is owned, directly or indirectly, by the Company or any partnership or joint venture in which either the Company or such a corporation is at least a twenty percent (20%) equity participant. ARTICLE II GENERAL ------- Section 2.1. NAME ---- This Plan shall be known as the "Massey Energy Company Stock Plan for Non- Employee Directors." Section 2.2. PURPOSE ------- The purpose of the Plan is to advance the interests of the Company and its stockholders by affording to Eligible Directors of the Company an opportunity to acquire or increase their proprietary interest in the Company by the grant to such directors of Awards under the terms set forth herein. By encouraging non- employee directors to become owners of Company shares, the Company seeks to increase their incentive for enhancing shareholder value and to motivate, retain and attract those highly competent individuals upon whose judgment, initiative, leadership and continued efforts the success of the Company in large measure depends. 2 MASSEY ENERGY COMPANY STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 Section 2.3. EFFECTIVE DATE -------------- The Plan was adopted effective on March 14, 1995 upon its approval by the holders of a majority of the shares of Common Stock of Fluor Corporation. The effective date of this amendment and restatement of the Plan is November 30, 2000. Section 2.4. LIMITATIONS ----------- Subject to adjustment pursuant to the provisions of Section 9.1 hereof, the aggregate number of shares of Stock which may be issued as Awards shall not exceed 25,000. Any such shares may be either authorized and unissued shares or shares issued and thereafter acquired by the Company. Section 2.5. AWARDS GRANTED UNDER PLAN ------------------------- Shares of Stock received pursuant to a Restricted Stock Agreement executed hereunder with respect to which the restrictions provided for in Section 5.3 hereof have lapsed shall not again be available for Award grant hereunder. If Restricted Stock is acquired by the Company pursuant to the provisions of paragraph (c) of Section 5.3 hereof, new Awards may be granted hereunder covering the number of shares to which such Restricted Stock acquisition relates. ARTICLE III PARTICIPANTS Section 3.1. ELIGIBILITY ----------- Any Eligible Director shall be eligible to participate in the Plan. ARTICLE IV ADMINISTRATION Section 4.2. DUTIES AND POWERS OF COMMITTEE ------------------------------ The Plan shall be administered by the Committee. Subject to the express provisions of the Plan, the Committee shall also have complete authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, to determine the details and provisions of each Restricted Stock and Restricted Unit Agreement, and to make all other determinations necessary or advisable in the administration of the Plan. Section 4.3. MAJORITY RULE ------------- A majority of the members of the Committee shall constitute a quorum, and any action taken by a majority present at a meeting at which a quorum is present or any action taken without a meeting evidenced by a writing executed by a majority of the whole Committee shall constitute the action of the Committee. 3 MASSEY ENERGY COMPANY STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 Section 4.4. COMPANY ASSISTANCE ------------------ The Company shall supply full and timely information to the Committee on all matters relating to Eligible Directors, their death, retirement, removal or resignation from the Board and such other pertinent facts as the Committee may require. The Company shall furnish the Committee with such clerical and other assistance as is necessary in the performance of its duties. ARTICLE V AWARDS Section 5.1. AWARD GRANT AND RESTRICTED STOCK AGREEMENT ------------------------------------------ The Committee shall grant a one time Award of 1000 shares of Restricted Stock (adjusted to reflect the distribution in 2000 of Fluor Corporation from the Company) to Eligible Directors. Such Awards shall be made to each Eligible Director on a date determined by the Committee, in its sole discretion, following such appointment to the Board. Each Award granted hereunder must be granted within ten years from the effective date of the Plan. The Awardee shall be entitled to receive the Stock subject to such Award only if the Company and the Awardee enter into a written Restricted Stock Agreement dated as of the date of the Award, which Agreement shall set forth such terms and conditions as may be determined by the Committee consistent with the Plan. Section 5.2. CONSIDERATION FOR ISSUANCE -------------------------- No shares of Restricted Stock shall be issued to an Awardee hereunder unless and until the Committee shall have determined that consideration has been received by the Company, in the form of services actually rendered to the Company by the Awardee, having a fair value of not less than the then fair market value of a like number of shares of Stock subject to all of the herein provided conditions and restrictions applicable to Restricted Stock, but in no event less than the par value of such shares. Section 5.3. RESTRICTIONS ON SALE OR OTHER TRANSFER -------------------------------------- Each share of Stock received pursuant to each Restricted Stock Agreement shall be subject to acquisition by Massey Energy Company, and may not be sold or otherwise transferred except pursuant to the following provisions: (a) The shares of Stock represented by the Restricted Stock Agreement shall be held in book entry form with the Company's transfer agent until the restrictions lapse in accordance with the conditions established by the Committee pursuant to Section 5.4 hereof, or until the shares of stock are forfeited pursuant to paragraph (c) of this Section 5.3. Notwithstanding the foregoing, the Awardee may request that, prior to the lapse of the restrictions or forfeiture of the shares, certificates evidencing such shares be 4 MASSEY ENERGY COMPANY STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 issued in his name and delivered to him, and each such certificate shall bear the following legend: "The shares of Massey Energy Company common stock evidenced by this certificate are subject to acquisition by Massey Energy Company, and such shares may not be sold or otherwise transferred except pursuant to the provisions of the Restricted Stock Agreement by and between Massey Energy Company and the registered owner of such shares." (b) No such shares may be sold, transferred or otherwise alienated or hypothecated so long as such shares are subject to the restriction provided for in this Section 5.3. (c) Upon an Awardee's removal or resignation from the Board for any reason, all of the Awardee's Restricted Stock remaining subject to restriction shall be acquired by the Company effective as of the date of such removal or resignation. Upon the occurrence or non-occurrence of such other events as shall be determined by the Committee and specified in the Awardee's Restricted Stock Agreement relating to any such Restricted Stock, all of such Restricted Stock remaining subject to restriction shall be acquired by the Company upon the occurrence or non-occurrence of such event. Section 5.4. LAPSE OF RESTRICTIONS --------------------- The restrictions on 20% of each Award will lapse on March 14 next following the date of Award. Thereafter, the restrictions will lapse in four equal increments on the succeeding anniversary dates following the date of lapsing of restrictions on the first 20% of the shares. In the case of a Company Change of Control, death, attainment of the Age for Board Retirement or approved early retirement in accordance with Section 5.5 below, of an Awardee, all restrictions on all Restricted Stock held by the Awardee will lapse. Section 5.5. EARLY RETIREMENT ---------------- An Eligible Director who leave the Board prior to the Age for Board Retirement, may, upon application to and in the sole discretion of the Committee, be granted early retirement status. Section 5.6. RIGHTS AS STOCKHOLDER --------------------- Subject to the provisions of Section 5.3 hereof, upon the issuance to the Awardee of Restricted Stock hereunder, the Awardee shall have all the rights of a stockholder with respect to such Stock, including the right to vote the shares and receive all dividends and other distributions paid or made with respect thereto. 5 MASSEY ENERGY COMPANY STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 ARTICLE VI RESTRICTED UNIT AWARDS Section 6.1. RESTRICTED UNIT AWARD GRANT AND AGREEMENT ----------------------------------------- Each Restricted Unit Award granted hereunder shall be evidenced by minutes of a meeting or the written consent of the Committee and by a written Restricted Unit Agreement dated as of the date of grant and executed by the Company and the Awardee, which Agreement shall set forth such terms and conditions as may be determined by the Committee consistent with the Plan. A Restricted Unit Award may be made only in connection with an Award made hereunder. Section 6.2. AWARD TERMS AND CONDITIONS -------------------------- Each Restricted Unit Award shall have a value equal to the Fair Market Value on the date that such award, or portion thereof, becomes earned and payable. Each Restricted Unit Award shall become earned and payable in five equal increments on each of the five dates upon which a portion of the restrictions lapse on the underlying Award, or upon such other terms and conditions as may be determined by the Committee. The proceeds of each Restricted Unit Award shall be applied in payment of applicable federal and state withholding taxes arising from the lapse of restrictions on the related Restricted Stock and from such award (or portion thereof) becoming earned and payable, with the balance, if any, to be remitted to the Awardee. If the outstanding shares of Stock of the Company are increased, decreased, or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed with respect to such shares of Stock or other securities, through merger, consolidation, sale of all or substantially all of the property of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other distribution with respect to such shares of Stock or other securities, an appropriate and proportionate adjustment may be made in the number of Restricted Units subject to outstanding Restricted Stock Awards. Such adjustments will be made by the Committee, whose determination as to what adjustments will be made and the extent thereof will be final, binding, and conclusive. Section 6.3. EFFECT OF RESIGNATION, REMOVAL, DEATH OR RETIREMENT --------------------------------------------------- If, prior to the date on which the Restricted Units, or any portion thereof becomes earned and payable, the Awardee is removed or resigns from the Board for any reason, then the Awardee's rights with respect to that portion of the Restricted Units which have not been earned as of the date of such termination shall immediately terminate and all rights thereunder shall cease; provided, however, in the case of a Company Change of Control, death, attainment of the Age for Board Retirement, or approved early retirement in accordance with Section 5.5, the Restricted Units will become earned and payable on the date upon which all restrictions on the Award lapse. 6 MASSEY ENERGY COMPANY STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 ARTICLE VII STOCK CERTIFICATES Section 7.1. STOCK CERTIFICATES ------------------ The Company shall not be required to issue or deliver any certificate for shares of Stock received as Restricted Stock pursuant to a Restricted Stock Agreement executed hereunder, prior to fulfillment of all of the following conditions: (a) the admission of such shares to listing on all stock exchanges on which the Stock is then listed; (b) the completion of any registration or other qualification of such shares under any federal or state law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, which the Committee shall in its sole discretion deem necessary or advisable; (c) the obtaining of any approval or other clearance from any federal or state governmental agency which the Committee shall in its sole discretion determine to be necessary or advisable; and (d) the lapse of such reasonable period of time following the execution of the Restricted Stock Agreement as the Committee from time to time may establish for reasons of administrative convenience. ARTICLE VIII TERMINATION, AMENDMENT AND MODIFICATION OF PLAN Section 8.1. TERMINATION, AMENDMENT AND MODIFICATION OF PLAN ----------------------------------------------- The Committee may at any time terminate, and may at any time and from time to time and in any respect amend or modify, the Plan, provided, however, that no such action of the Committee without approval of the stockholders of the Company may: (a) increase the total number of shares of Stock subject to the Plan except as contemplated in Section 9.1 hereof; (b) materially increase the benefits accruing to participants under the Plan; (c) withdraw the administration of the Plan from the Committee; or (d) permit any person while a member of the Committee to be eligible to receive Restricted Stock under the Plan; and provided further, that no termination, amendment or modification of the Plan shall in any manner affect a Restricted Stock Agreement theretofore executed pursuant to the Plan without the consent of Awardee. 7 MASSEY ENERGY COMPANY STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 ARTICLE IX MISCELLANEOUS Section 9.1. ADJUSTMENT PROVISIONS --------------------- (a) Subject to Section 9.1(b) below, if the outstanding shares of Stock of the Company are increased, decreased, or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed with respect to such shares of Stock or other securities, through merger, consolidation, sale of all or substantially all of the property of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other distribution with respect to such shares of Stock or other securities, an appropriate and proportionate adjustment may be made in (i) the maximum number and kind of shares provided in Section 2.4 and (ii) the number and kind of shares or other securities subject to the outstanding Awards. (b) Adjustments under Section 9.1(a) will be made by the Committee, whose determination as to what adjustments will be made and the extent thereof will be final, binding, and conclusive. No fractional interests will be issued under the Plan resulting from any such adjustments. Section 9.2. CONTINUATION OF BOARD SERVICE ----------------------------- Nothing in the plan or in any instrument executed pursuant to the Plan will confer upon any Eligible Director any right to continue to serve on the Board. Section 9.3. COMPLIANCE WITH GOVERNMENT REGULATIONS -------------------------------------- No shares of Stock will be issued hereunder unless and until all applicable requirements imposed by federal and state securities and other laws, rules, and regulations and by any regulatory agencies having jurisdiction and by any stock exchanges upon which the Stock may be listed have been fully met. As a condition precedent to the issuance of shares of Stock pursuant hereto, the Company may require the director to take any reasonable action to comply with such requirements. Section 9.4. PRIVILEGES OF STOCK OWNERSHIP ----------------------------- No director and no beneficiary or other person claiming under or through such director will have any right, title, or interest in or to any shares of Stock allocated or reserved under the Plan or subject to any Award except as to such shares of Stock, if any, that have been issued to such director. Section 9.5. WITHHOLDING ----------- The Company may make such provisions as it deems appropriate to withhold any taxes the Company determines it is required to withhold in connection with any Award. The Company 8 MASSEY ENERGY COMPANY STOCK PLAN FOR NON-EMPLOYEE DIRECTORS As Amended and Restated Effective November 30, 2000 may require the director to satisfy any relevant tax requirements before authorizing any issuance of Stock to the director. Such settlement may be made in cash or Stock. Section 9.6. NONTRANSFERABILITY. ------------------ An Award may be exercised during the life of the director solely by the director or the director's duly appointed guardian or personal representative. No Award and no other right under the Plan, contingent or otherwise, will be assignable or subject to any encumbrance, pledge, or charge of any nature. Section 9.7. OTHER COMPENSATION PLANS ------------------------ The adoption of the Plan shall not affect any other stock option or incentive or other compensation plans in effect for the Company or any Subsidiary, nor shall the Plan preclude the Company from establishing any other forms of incentive or other compensation for employees or directors of the Company or any Subsidiary. Section 9.8. PLAN BINDING ON SUCCESSORS -------------------------- The Plan shall be binding upon the successors and assigns of the Company. Section 9.9. SINGULAR, PLURAL; GENDER ------------------------ Whenever used herein, nouns in the singular shall include the plural, and the masculine pronoun shall include the feminine gender. Section 9.10. HEADINGS, ETC., NO PART OF PLAN ------------------------------- Headings of Articles and Sections hereof are inserted for convenience and reference; they constitute no part of the Plan. 9 EX-10.15 18 0018.txt EXHIBIT 10.15 EXHIBIT 10.15 MASSEY ENERGY COMPANY DEFERRED DIRECTORS' FEES PROGRAM (Effective November 30, 2000) PURPOSE - ------- To provide non-employee directors of Massey Energy Company with a means of minimizing their current tax burden, while providing funds for expenses subsequent to retirement. ELIGIBILITY - ----------- Non-employee directors of Massey Energy Company entitled to directors' fees. LIMITATIONS - ----------- The amount of directors' fees for meetings in any calendar year to be deferred must be specified by the director in writing to Massey Energy Company no later than December 31 of the prior calendar year, either as a fixed dollar amount or as a percentage of (i) such fees or (ii) the retainer portion or (iii) the meeting portion of such fees. The amount or percentage so specified is irrevocable for that calendar year, and will be effective for all subsequent calendar years unless and until a new amount or percentage is similarly specified to be effective prospectively. The amount so deferred is an offset against, and in any event cannot exceed the amount of, the directors' fees, if any, for that calendar year otherwise payable to the director. ADJUSTMENT FACTOR - ----------------- Amounts deferred under this Program will be subject to an Adjustment Factor in accordance with the provisions of the Deferred Directors' Fees Program Financial Procedure, a copy of which is attached hereto and made a part hereof. PAYMENT - ------- Payment of amounts deferred under this Program will be made in accordance with the provisions of said Deferred Directors' Fees Program Financial Procedure. CLAIMS PROCEDURE - ---------------- A committee of the Board of Directors of Massey Energy Corporation (the "Committee") shall be designated to establish and maintain procedures for the filing of claims for benefits under this Program and for the review of the denial of any such claims and said Committee is hereby designated as the fiduciary of this Program to which appeals of claim denials shall be submitted for review. 2 EX-10.18 19 0019.txt EXHIBIT 10.18 EXHIBIT 10.18 December 18, 2000 James L. Gardner, Esquire P. O. Box 815 Louisville, Tennessee 37777 Re: Amendment to Consulting Agreement dated February 23, 2000 Dear Jim: The purpose of this letter is to confirm our agreement to modify that certain Agreement dated February 23, 2000 between yourself and A. T. Massey Coal Company, Inc. (the "Company") described herein. The term of the Agreement shall be extended through December 31, 2002. In addition, the period of time during which you shall be entitled to purchase family medical and dental insurance coverage pursuant to paragraph 2(iii) of the Agreement shall be extended for a further period of 24 calendar months in addition to the period of 36 calendar months initially set forth in such paragraph. All other terms and conditions of the Agreement shall remain as set forth therein. Kindly indicate your agreement of the foregoing by executing the duplicate originals of this letter in the space below and returning a fully signed duplicate original to us. A. T. MASSEY COAL COMPANY, INC. By: /s/ Don L. Blankenship ------------------------------ Don L. Blankenship Chairman, President & CEO ACCEPTED AND AGREED: By: /s/ James L. Gardner ----------------------------- James L. Gardner EX-10.19 20 0020.txt EXHIBIT 10.19 EXHIBIT 10.19 February 23, 2000 James L. Gardner, Esquire 2955 Little Dug Gap Lane Louisville, Tennessee 37777 Dear Jim: This will confirm the Agreement between James L. Gardner (the "Consultant") and A. T. Massey Coal Company, Inc. (the "Company"). 1. Scope of Services. The Consultant agrees to render advisory and consultation services to the Company as and when the Company may from time to time request. The Company authorizes Donald L. Blankenship, or his designee, or Roger L. Nicholson, to approve these assignments to the Consultant hereunder. Consultant shall generally be expected to work approximately one week per month out of the Company's offices in Richmond, Virginia, or such other location as the Company may request. In addition, Consultant agrees to make reasonable effort to respond to requests by the Company for additional services. In performing services under this Agreement, the Consultant shall operate as and have the status of an independent contractor and shall not act as or be an agent or employee of the Company. As an independent contractor, the Consultant will be solely responsible for determining the means, methods, time and place of performing the services subject to the Company's overall schedule requirements and maintaining contacts and communications necessary for the services, and the Company will receive only the results of the Consultant's performance of the foregoing services. The Company will furnish office space, secretarial and other office services as are required to carry out the assignments made hereunder. Consultant shall have the right to continue to use without charge the Compaq computer and related equipment and transmission line installed at Consultant's residence, but such equipment shall remain the property of the Company. The Company agrees to sell to Consultant the 2000 Lincoln LS used by the Consultant as his vehicle while employed by the Company for a purchase price of $24,000. Consultant agrees that his use of such vehicle as Page Two appropriate for travel to the Company's field offices in Charleston, West Virginia and similar locations shall be without charge to the Company except for gas. 2. Compensation. The Company shall compensate the Consultant for the actual days worked by the Consultant for services specifically approved by the Company as follows: (i) A minimum of $5,250 per calendar month, plus $175.00 per hour for each hour worked in excess of 30 hours during any calendar month. (ii) Reimbursement of actual, reasonable out-of-pocket expenses in accordance with the Company's reimbursement policies, including expenses for travel, accommodations and meals associated with working at the Company's offices or other requested locations apart from Consultant's Tennessee residence. (iii) As additional consideration for Consultant entering into this Agreement, Company agrees to provide family medical and dental insurance coverage to Consultant for a period of 36 calendar months (whether or not this Agreement is terminated during such period) on the same terms and conditions as such medical and dental coverage is extended to the Company's employees in return for the payment by Consultant of the monthly fee calculated by the Company for extended coverage under COBRA. 3. Invoicing. Following the end of each month, the Consultant will furnish the Company with an invoice covering the time devoted to the Company's service during such month. Consultant will provide such invoice within 10 days following the month being billed. The minimum monthly retainer will be paid by the 10th of such month, and the Company shall pay any additional sums due under such invoice within thirty (30) days of receipt. 4. Non-Competition. During the terms of this Agreement, the Consultant agrees that he will not in any manner directly or indirectly provide services, advice or other assistance to any firm or business which is similar to or competitive with the Page Three business of the Company or any of its affiliates without prior written approval. The Consultant agrees that any information which he obtains while performing services in his consulting capacity concerning the business or operations of the Company, its affiliates or third parties with whom it conducts business (including, but not as a limitation, financial and technical information) shall be used only to perform such services and shall not be disclosed to anyone outside the Company, except with the prior written authorization of the Company. The obligations of this paragraph shall survive any termination of this Agreement and do not apply to any information which has been publicly released or is in the public knowledge or literature. 5. Term. The term of this Agreement shall begin March 1, 2000, and shall continue through December 31, 2000. Prior to November 30, 2000, the Company and the Consultant will meet to discuss continuation or termination of this Agreement on December 31, 2000. 6. No Government Agency. The Consultant agrees that during the entire course of this Agreement, Consultant will not act as an agent, official or employee of any foreign government, or foreign political party, or a candidate for political office, and that the Consultant fees and expenses that will be paid to the Consultant under this Agreement will not be paid directly or indirectly to any such agent, official, employee, party or candidate. 7. Compliance with Law. The Consultant agrees to fully comply with the United States Foreign Corrupt Practices Act (Public Law 95-213, 95th Congress, December 19, 1977) and all other applicable State and United States Laws. The Consultant acknowledges that Fluor Corporation and its subsidiaries require their employees to fully comply with the laws of the United States. 8. Entire Agreement. This Agreement consists of this letter. This Agreement, as defined in this paragraph, sets forth the full and complete understanding of the parties as of the date above stated, and supersedes any and all agreements and representations made or dated prior hereto. This Agreement can only be amended by a writing Page Four signed by the duly authorized representatives of the parties. 9. Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of Virginia. Kindly indicate your agreement with the foregoing by executing the duplicate originals of this letter in the space below and returning a fully signed duplicate original to us. A. T. MASSEY COAL COMPANY, INC. /s/ Don l. Blankenship ------------------------------ By: Donald L. Blankenship Accepted and Agreed: /s/ James L. Gardner - -------------------------------- By: James L. Gardner Date SS# or Tax ID# ###-##-#### ----------- EX-10.23 21 0021.txt EXHIBIT 10.23 EXHIBIT 10.23 Exhibit I First Amendment to the A.T. Massey Coal Company, Inc. Executive Deferred Compensation Plan ------------------------------------ FIRST, Article III is amended, effective December 1, 1995, to add the citation "402(g)" between "401(a)(17)" and the word "and" in the first sentence of Plan section 3.02(b). SECOND, Article VI is amended, effective April 1, 1997, to replace the second sentence of Plan section 6.02(b) with "Any reallocation will be effective as of the first day of the calendar quarter following the date on which an appropriately completed election form is received by the Committee" and by replacing words "Treasury Bill" with the words "Money Market" in the fourth sentence of Plan section 6.02(b). THIRD, Exhibit I to the Plan is amended, effective April 1, 1997, to read "as shown on Attachment A attached hereto." Attachment A PLAN INVESTMENT OPTIONS Effective April 1, 1997, the following Investment Funds are available under the Plan: The Coal Company Money Market Fund is managed by Wachovia Asset Management. ---------------------------------- This fund is designed to preserve the capital investment, yield a safe return, and maintain liquidity. The fund invests primarily in short-term U.S. government Treasury Bills ("T-bills") with three-month, six-month, or one-year maturities. The T-bills are held to maturity at which time the capital investment is returned to Wachovia and reinvested. The amount of interest earned on T-bills is determined by prevailing short-term interest rates. The Coal Company Fixed Income Fund is managed by Wachovia Asset Management. ---------------------------------- This fund invests in intermediate-term securities of the U.S. government and its agencies, as well as in high-quality corporate bonds. Typically, securities in this fund have maturities in the three- to seven-year range with a maximum maturity of ten years. American Balanced Fund is managed by The American Funds Group. This fund ---------------------- is designed to invest for long-term growth and income and to protect the capital investment. This fund invests in stocks of companies with histories of good capital growth and above-average dividends, and in high-quality corporate bonds and government bonds. Fundamental Investors is managed by The American Funds Group. This fund --------------------- seeks long-term growth of capital and income by investing in stock of companies that have high-quality products and above-average potential for growth in sales, earnings, and dividends over the long term. AIM Constellation Fund is managed by AIM Advisors, Inc. This fund seeks ---------------------- capital appreciation by investing in common stocks, with an emphasis on small and medium-sized emerging growth companies. EX-21 22 0022.txt EXHIBIT 21 EXHIBIT 21 SUBSIDIARIES OF MASSEY ENERGY COMPANY JURISDICTION OF NAME INCORPORATION/FORMATION A. T. Massey Coal Company, Inc. Virginia (1) Elk Run Coal Company, Inc. West Virginia (2) Appalachian Capital Management Corp. West Virginia (2) Aracoma Coal Company, Inc. West Virginia (2) Black King Mine Development Co. West Virginia (2) Hazy Ridge Coal Company West Virginia (2) Independence Coal Company, Inc. West Virginia (2) Joboner Coal Company Kentucky (2) Kanawha Energy Company West Virginia (2) Marfork Coal Company, Inc. West Virginia (2) Marshall Venture Capital Corp. West Virginia (2) Massey Capital Management Corp. West Virginia (2) Massey New Era Capital Corp. (less than 100%) West Virginia (2) New Massey Capital Corp. (less than 100%) West Virginia (2) Preferred Management Capital Corp. (less than 100%) West Virginia (2) Rawl Sales Venture Capital Corp. West Virginia (2) Spartan Mining Company West Virginia (2) Sprouse Creek Venture Capital Corp. (less than 100%) West Virginia (2) Support Mining Company West Virginia (2) Thunder Mining Company West Virginia (1) Martin County Coal Corporation Kentucky (3) Foothills Coal Company West Virginia (3) Knox Creek Coal Corporation Virginia (3) Pilgrim Mining Company, Inc. Kentucky (3) Tennessee Consolidated Coal Company Tennessee (1) Sidney Coal Company, Inc. Kentucky (4) Delbarton Mining Company West Virginia (4) DRIH Corporation Delaware (4) Green Valley Coal Company West Virginia (4) Greyeagle Coal Company Kentucky (4) Logan County Mine Services, Inc. West Virginia (4) New Ridge Mining Company Kentucky (4) Nicholas Energy Company West Virginia (5) Alex Energy, Inc. West Virginia (5) Power Mountain Coal Company West Virginia (4) Peerless Eagle Coal Co. West Virginia (4) Road Fork Development Company, Inc. Kentucky (4) White Buck Coal Company West Virginia (1) Massey Coal Sales Company, Inc. Virginia (6) Boone East Development Co. West Virginia (6) Boone West Development Co. West Virginia (6) Central Penn Energy Company, Inc. Pennsylvania (6) Central West Virginia Energy Company West Virginia (6) Ceres Land Company West Virginia (6) Demeter Land Company West Virginia (6) Douglas Pocahontas Coal Corporation West Virginia (6) Haden Farms, Inc. Virginia (6) Lauren Land Company Kentucky (6) Massey Coal Export, Ltd. Barbados (6) Massey Coal Services, Inc. West Virginia (6) Massey Consulting Services, Inc. Virginia (6) New Market Land Company West Virginia (6) New River Energy Corporation West Virginia (6) Scarlet Land Company Pennsylvania (6) SC Coal Corporation Delaware (1) Long Fork Coal Company Kentucky (7) Bandmill Coal Corporation West Virginia (7) Bandytown Coal Company West Virginia (7) Big Bear Mining Company West Virginia (7) Cabinawa Mining Company West Virginia (7) Clear Fork Coal Company West Virginia (7) Dehue Coal Company West Virginia (7) Duchess Coal Company West Virginia (7) Duncan Fork Coal Company Pennsylvania (7) Eagle Energy, Inc. West Virginia (7) Highland Mining Company West Virginia (7) Hopkins Creek Coal Company Kentucky (7) Omar Mining Company West Virginia (7) Robinson-Phillips Coal Company West Virginia (7) Russell Fork Coal Company West Virginia (7) Shannon-Pocahontas Coal Corporation West Virginia (7) Stirrat Coal Company West Virginia (7) Stone Mining Company Kentucky (7) T.C.H. Coal Co. Kentucky (7) Town Creek Coal Company West Virginia (7) Trace Creek Mining Company West Virginia (7) Williams Mountain Coal Company West Virginia (7) Wyomac Coal Company, Inc. West Virginia (1) Rawl Sales & Processing Co. West Virginia (8) Barnabus Land Company West Virginia (8) Ben Creek Coal Company West Virginia (8) Capstan Mining Company Colorado (8) Feats Venture Capital Corp. West Virginia (8) Jacks Branch Coal Company West Virginia (8) Lick Branch Coal Company West Virginia (8) Lynn Branch Coal Company, Inc. West Virginia (8) Massey Coal Capital Corp. West Virginia (8) Massey New Era Capital Corp. (less than 100%) West Virginia (8) Menefee Land Company, Inc. Colorado (8) New Massey Capital Corp. (less than 100%) West Virginia (8) Peter Cave Mining Company Kentucky (8) Preferred Management Capital Corp. (less than 100%) West Virginia (8) Rawl Sales Venture Capital Corp. (less than 100%) West Virginia (8) Rockridge Coal Company West Virginia (8) Rum Creek Coal Sales, Inc. West Virginia (8) Sprouse Creek Venture Capital Corp. (less than 100%) West Virginia (8) St. Alban's Capital Management Corp. West Virginia (8) Sun Coal Company, Inc. Colorado (8) Sycamore Fuels, Inc. West Virginia (1) Performance Coal Company West Virginia (9) Continuity Venture Capital Corp. West Virginia (9) Goals Coal Company West Virginia (9) New River Capital Company West Virginia (9) SPM Capital Management Corp. West Virginia (1) Owned by A. T. Massey Coal Company, Inc. (2) Owned By Elk Run Coal Company, Inc. (3) Owned by Martin County Coal Corporation (4) Owned by Sidney Coal Company, Inc. (5) Owned by Nicholas Energy Company (6) Owned by Massey Coal Sales Company, Inc. (7) Owned by Long Fork Coal Company (8) Owned by Rawl Sales & Processing Co. (9) Owned by Performance Coal Company EX-23 23 0023.txt EXHIBIT 23 Exhibit 23 Consent of Independent Auditors We consent to the incorporation by reference in the following Registration Statements of Massey Energy Company and in the related prospectuses of our report dated January 11, 2001, with respect to the combined financial statements of Massey Energy Company included in this Annual Report (Form 10-K) for the year ended October 31, 2000:
Registration Statement Number Description ----------------------------- ----------- 333-71047 Form S-3, pertaining to the issuance of senior debt securities. 333-23809 Form S-8, pertaining to the 1997 Fluor Restricted Stock Plan for Non-Employee Directors. 333-37153 Form S-8, pertaining to the Fluor Executive Deferred Compensation Program. 333-18151 Form S-8, pertaining to the 1996 Fluor Executive Stock Plan. 33-58557 Form S-8, pertaining to the Fluor Corporation Stock Plan for Non-Employee Directors. 33-31440 Form S-8, pertaining to the 1988 Fluor Executive Stock Plan. 333-40372 Form S-8, pertaining to the 1999 Fluor Corporation Executive Performance Incentive Plan.
/s/ Ernst & Young LLP Richmond, Virginia January 25, 2001 EX-24 24 0024.txt EXHIBIT 24 EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of Massey Energy Company, a Delaware corporation ("Massey"), does hereby constitute and appoint Roger L. Nicholson, Bennett K. Hatfield and Jeffrey M. Jarosinski, and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him/her and in his/her name, place and stead, in any and all capacities, to sign an Annual Report on Form 10K and any and all amendments thereto (including post-effective amendments) to be filed by Massey with the Securities and Exchange Commission (the "Commission") for the purpose of filing the Form 10K for the fiscal year ended October 31, 2000, and to file such Form 10K and any and all such amendments and any and all exhibits thereto, and any and all information and documents in connection therewith, with the Commission, granting unto such attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming as his/her own act and deed all that such attorneys-in-fact and agents, and each of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his/her signature as of the 16/th/ day of January, 2001. /s/ Don L. Blankenship ---------------------------------- Name: Don L. Blankenship POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of Massey Energy Company, a Delaware corporation ("Massey"), does hereby constitute and appoint Roger L. Nicholson, Bennett K. Hatfield and Jeffrey M. Jarosinski, and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him/her and in his/her name, place and stead, in any and all capacities, to sign an Annual Report on Form 10K and any and all amendments thereto (including post-effective amendments) to be filed by Massey with the Securities and Exchange Commission (the "Commission") for the purpose of filing the Form 10K for the fiscal year ended October 31, 2000, and to file such Form 10K and any and all such amendments and any and all exhibits thereto, and any and all information and documents in connection therewith, with the Commission, granting unto such attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming as his/her own act and deed all that such attorneys-in-fact and agents, and each of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his/her signature as of the 23/rd/ day of January, 2001. /s/ James L. Gardner ------------------------------ Name: James L. Gardner POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of Massey Energy Company, a Delaware corporation ("Massey"), does hereby constitute and appoint Roger L. Nicholson, Bennett K. Hatfield and Jeffrey M. Jarosinski, and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him/her and in his/her name, place and stead, in any and all capacities, to sign an Annual Report on Form 10K and any and all amendments thereto (including post-effective amendments) to be filed by Massey with the Securities and Exchange Commission (the "Commission") for the purpose of filing the Form 10K for the fiscal year ended October 31, 2000, and to file such Form 10K and any and all such amendments and any and all exhibits thereto, and any and all information and documents in connection therewith, with the Commission, granting unto such attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming as his/her own act and deed all that such attorneys-in-fact and agents, and each of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his/her signature as of the 16/th/ day of January, 2001. /s/ E. Gordon Gee ------------------- Name: E. Gordon Gee POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of Massey Energy Company, a Delaware corporation ("Massey"), does hereby constitute and appoint Roger L. Nicholson, Bennett K. Hatfield and Jeffrey M. Jarosinski, and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him/her and in his/her name, place and stead, in any and all capacities, to sign an Annual Report on Form 10K and any and all amendments thereto (including post-effective amendments) to be filed by Massey with the Securities and Exchange Commission (the "Commission") for the purpose of filing the Form 10K for the fiscal year ended October 31, 2000, and to file such Form 10K and any and all such amendments and any and all exhibits thereto, and any and all information and documents in connection therewith, with the Commission, granting unto such attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming as his/her own act and deed all that such attorneys-in-fact and agents, and each of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his/her signature as of the 16/th/ day of January, 2001. /s/ Bobby R. Inman ------------------------ Name: Bobby R. Inman POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of Massey Energy Company, a Delaware corporation ("Massey"), does hereby constitute and appoint Roger L. Nicholson, Bennett K. Hatfield and Jeffrey M. Jarosinski, and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him/her and in his/her name, place and stead, in any and all capacities, to sign an Annual Report on Form 10K and any and all amendments thereto (including post-effective amendments) to be filed by Massey with the Securities and Exchange Commission (the "Commission") for the purpose of filing the Form 10K for the fiscal year ended October 31, 2000, and to file such Form 10K and any and all such amendments and any and all exhibits thereto, and any and all information and documents in connection therewith, with the Commission, granting unto such attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming as his/her own act and deed all that such attorneys-in-fact and agents, and each of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his/her signature as of the 16/th/ day of January, 2001. /s/ Martha R. Seger ----------------------------- Name: Martha R. Seger POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director of Massey Energy Company, a Delaware corporation ("Massey"), does hereby constitute and appoint Roger L. Nicholson, Bennett K. Hatfield and Jeffrey M. Jarosinski, and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him/her and in his/her name, place and stead, in any and all capacities, to sign an Annual Report on Form 10K and any and all amendments thereto (including post-effective amendments) to be filed by Massey with the Securities and Exchange Commission (the "Commission") for the purpose of filing the Form 10K for the fiscal year ended October 31, 2000, and to file such Form 10K and any and all such amendments and any and all exhibits thereto, and any and all information and documents in connection therewith, with the Commission, granting unto such attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming as his/her own act and deed all that such attorneys-in-fact and agents, and each of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his/her signature as of the 16th day of January, 2001. /s/ William R. Grant ----------------------- Name: William R. Grant -----END PRIVACY-ENHANCED MESSAGE-----