DEF 14A 1 def14a041309.htm DEFINITIVE PROXY STATEMENT def14a041309.htm


 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A
 
 
Proxy Statement Pursuant to Section 14(a) of the Securities
 
Exchange Act of 1934
 
 
Filed by the Registrant x
Filed by a Party other than the Registrant ¨
 
Check the appropriate box:
 
¨
Preliminary Proxy Statement
¨
Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x
Definitive Proxy Statement
¨
Definitive Additional Materials
¨
Soliciting Material Pursuant to § 240.14a-12
    
 
MASSEY ENERGY COMPANY

(Name of Registrant as Specified In Its Charter)
 
 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
 
 
Payment of Filing Fee (Check the appropriate box):
 
Fee not required.
 
¨
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
 
(1)
Title of each class of securities to which transaction applies:
 
 

(2)
Aggregate number of securities to which transaction applies:
  
 

(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
 

(4)
Proposed maximum aggregate value of transaction:
 
 

(5)
Total fee paid:
 
 

¨
Fee paid previously with preliminary materials.
 
 

¨
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.  Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
(1)
Amount Previously Paid:
 
 

(2)
Form, Schedule or Registration Statement No.:
 
 

(3)
Filing Party:
 
 

(4)
Date Filed:
 
 

 
 

 
 

 


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MASSEY ENERGY COMPANY
4 North 4th Street
Richmond, Virginia 23219
 
April 13, 2009
 
Dear Stockholder:
 
You are cordially invited to attend the 2009 Annual Meeting of Stockholders of Massey Energy Company, which will be held on Tuesday, May 19, 2009, at 9:00 a.m. Eastern Daylight Time at The Jefferson Hotel, 101 West Franklin Street, Richmond, Virginia 23220. Directions to the Jefferson Hotel are included for your convenience on the back page of this booklet.
 
Information about the Annual Meeting and the various matters on which the stockholders will act is included in the Notice of Annual Meeting and Proxy Statement that follow. Also included is a proxy card and postage-paid return envelope.
 
The Board of Directors recommends that you complete and return the accompanying proxy card in the enclosed envelope, or vote electronically through the Internet or by telephone, to be sure that your shares will be represented and voted at the Annual Meeting. The enclosed proxy card contains instructions on voting electronically through the Internet or by telephone or, if your shares are registered in the name of a bank, broker or other nominee, the bank, broker or other nominee will provide instructions on how to vote.
 
 
Sincerely,
 
                                                  DLB
DON L. BLANKENSHIP
Chairman and Chief Executive Officer


 
 

 
 
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MASSEY ENERGY COMPANY
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
 
To Be Held May 19, 2009
 
The 2009 Annual Meeting of Stockholders of Massey Energy Company will be held at The Jefferson Hotel, 101 West Franklin Street, Richmond, Virginia 23220, on Tuesday, May 19, 2009, at 9:00 a.m. Eastern Daylight Time, for the following purposes:
 
1.  
To vote on four Class I directors nominated by Massey’s Governance and Nominating Committee to hold office for three years as set forth in this Proxy Statement, until their respective successors are elected and qualified, or until their earlier resignation or removal.
 
2.  
To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2009.
 
3.  
To (i) amend the Massey Energy Company 2006 Stock and Incentive Compensation Plan (as amended, the 2006 Plan) to (a) increase the number of shares of Massey Common Stock authorized for issuance under the 2006 Plan by 1,550,000 shares, (b) limit the maximum number of shares available for awards granted in any form provided for under the 2006 Plan other than options or stock appreciation rights to no more than 75% of the total number of issuable shares and (c) revise Section 4.3 of the 2006 Plan to provide that shares of Common Stock subject to an option or stock appreciation right award under the 2006 Plan may not again be made available for issuance under the 2006 Plan under the circumstances set forth in Section 4.3 of the 2006 Plan and to (ii) amend the 2006 Plan to update, clarify and re-approve the qualifying performance criteria contained in the 2006 Plan.
 
4.  
To act on a stockholder proposal regarding an environmental progress report, if properly presented at the Annual Meeting.
 
5.  
To act on a stockholder proposal regarding a carbon dioxide emissions report, if properly presented at the Annual Meeting.
 
6.  
To act on a stockholder proposal regarding expedited disclosure of voting results, if properly presented at the Annual Meeting.
 
7.  
To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
 
The Board of Directors has fixed March 20, 2009, as the record date for determining the stockholders entitled to receive notice of and to vote at the Annual Meeting.
 
WE CORDIALLY INVITE STOCKHOLDERS TO ATTEND THE ANNUAL MEETING IN PERSON.
 
PLEASE CAST YOUR VOTE ELECTRONICALLY THROUGH THE INTERNET OR BY TELEPHONE, OR COMPLETE, DATE AND SIGN THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED PRE-PAID ENVELOPE.
 
 
By Order of the Board of Directors,
 
                                                  RRG
 
RICHARD R. GRINNAN
 
Vice President and Corporate Secretary
 
April 13, 2009
 
Richmond, Virginia
 

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MASSEY ENERGY COMPANY
PROXY STATEMENT
 
April 13, 2009
 
This Proxy Statement is furnished in connection with the solicitation by the Board of Directors of Massey Energy Company, 4 North 4th Street, Richmond, Virginia 23219 (Massey), of your proxy for use at the Annual Meeting of Stockholders of Massey’s common stock, $0.625 par value per share (the Common Stock), to be held May 19, 2009, and at any adjournments or postponements thereof (the Annual Meeting). This Proxy Statement and the accompanying proxy card are being mailed to all stockholders on or about April 13, 2009.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

1.  What am I voting on?

You will be voting on each of the following items of business:
·  
The election of four Class I directors nominated by Massey’s Governance and Nominating Committee to hold office for three years as set forth in this Proxy Statement, until their respective successors are elected and qualified, or until their earlier resignation or removal;
·  
The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2009;
·  
The amendment of the Massey Energy Company 2006 Stock and Incentive Compensation Plan (as amended, the 2006 Plan) (i) for purposes of (a) increasing the number of shares of Massey Common Stock authorized for issuance under the 2006 Plan by 1,550,000 shares, (b) limiting the maximum number of shares available for awards granted in any form provided for under the 2006 Plan other than options or stock appreciation rights to no more than 75% of the total number of issuable shares and (c) revising Section 4.3 of the 2006 Plan to provide that shares of Common Stock subject to an option or stock appreciation right award under the 2006 Plan may not again be made available for issuance under the 2006 Plan under the circumstances set forth in Section 4.3 of the 2006 Plan and (ii) for the purpose of amending the 2006 Plan to update, clarify and re-approve the qualifying performance criteria contained in the 2006 Plan.
·  
The stockholder proposal regarding an environmental progress report, if properly presented at the Annual Meeting;
·  
The stockholder proposal regarding a carbon dioxide emissions report, if properly presented at the Annual Meeting; and
·  
The stockholder proposal regarding expedited disclosure of voting results, if properly presented at the Annual Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE FOUR CLASS I DIRECTOR NOMINEES, FOR THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP, FOR THE PROPOSAL TO AMEND THE 2006 PLAN, AGAINST THE STOCKHOLDER PROPOSAL REGARDING AN ENVIRONMENTAL PROGRESS REPORT, AGAINST THE STOCKHOLDER PROPOSAL REGARDING A CARBON DIOXIDE EMISSIONS REPORT, AND AGAINST THE STOCKHOLDER PROPOSAL REGARDING EXPEDITED DISCLOSURE OF VOTING RESULTS.

You may also be asked to vote on any other business that may properly come before the Annual Meeting or any postponements or adjournments thereof.

2.  Who is entitled to vote?

All stockholders who owned Common Stock at the close of business on March 20, 2009, the record date fixed by the Board of Directors, are entitled to vote at the Annual Meeting. On the record date, we had outstanding 85,484,539 shares of Common Stock.

Stockholders have one vote for each share on all business of the Annual Meeting, except that, without any conditions precedent, stockholders have cumulative voting rights with respect to the election of the four Class I directors.
 
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Cumulative voting rights entitle a stockholder to cast as many votes as is equal to the number of directors to be elected (four in our case) multiplied by the number of shares of Common Stock owned by the stockholder. Each stockholder may distribute his or her votes among all, some, or one of the nominees as such stockholder sees fit.
 
3.  How many votes must be present to hold the Annual Meeting?

The presence of the holders of a majority of the outstanding shares of Common Stock as of the record date entitled to vote at the Annual Meeting, present in person or represented by proxy, is necessary to constitute a quorum for the transaction of business at the Annual Meeting. In determining the presence of a quorum, abstentions are counted as present and entitled to vote and broker non-votes (as defined below) are not counted, if they are not otherwise represented at the Annual Meeting.

4.  How do I vote before the Annual Meeting?

Registered stockholders (that is, stockholders of record who hold shares of Common Stock in certificated or book-entry form (as opposed to through a bank, broker, or other nominee)) or employees who hold Common Stock through the Coal Company Salary Deferral and Profit Sharing Plan (our 401(k) Plan) may vote in person at the Annual Meeting or by proxy. Registered stockholders and employees who own Common Stock through our 401(k) Plan have three ways to vote by proxy:
·  
By mail - Complete, properly sign, date and mail the enclosed proxy card.
·  
By Internet - Connect to the Internet at http://www.eproxy.com/mee and follow the instructions included on the enclosed proxy card.
·  
By telephone - Call 1-800-560-1965 and follow the instructions included on the enclosed proxy card.

Stockholders who hold Common Stock through banks, brokers or other nominees (street name stockholders) who wish to vote at the meeting should be provided a voting instruction card from the institution that holds their shares. If this has not occurred, contact the institution that holds your shares. Street name stockholders may also be eligible to vote their shares electronically, by following the instructions on the voting instruction card provided by the bank, broker or other nominee that holds the shares, using either the toll-free telephone number or the Internet address provided on the voting instruction card, or instead may complete, date and sign the voting instruction card provided by the institution that holds their shares.

The deadline for voting electronically through the Internet or by telephone is 12:00 p.m., Central Daylight Time, on May 18, 2009. The deadline for voting shares of Common Stock held in our 401(k) Plan electronically through the Internet or by telephone is 4:59 p.m. Central Daylight Time, on May 15, 2009.

5.  How will my shares be voted if I sign, date and return my proxy card or voting instruction card, but do not provide complete voting instructions with respect to each proposal?

Unless otherwise directed in the accompanying proxy card, the persons named as proxies therein will vote all properly executed, returned, and not revoked proxy cards (1) FOR the election of the four Class I director nominees listed thereon, (2) FOR the proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2009, (3) FOR the proposal to (i) amend the 2006 Plan to (a) increase the number of shares of Massey Common Stock authorized for issuance under the 2006 Plan by 1,550,000 shares, (b) limit the maximum number of shares available for awards granted in any form provided for under the 2006 Plan other than options or stock appreciation rights to no more than 75% of the total number of issuable shares and (c) revise Section 4.3 of the 2006 Plan to provide that shares of Common Stock subject to an option or stock appreciation right award under the 2006 Plan may not again be made available for issuance under the 2006 Plan under the circumstances set forth in Section 4.3 of the 2006 Plan and to (ii) amend the 2006 Plan to update, clarify and re-approve the qualifying performance criteria contained in the 2006 Plan, (4) AGAINST the stockholder proposal regarding an environmental progress report, (5) AGAINST the stockholder proposal regarding a carbon dioxide emissions report, and (6) AGAINST the stockholder proposal regarding expedited disclosure of voting results, with the following two exceptions:

·  
Shares held in our 401(k) Plan for which no direction is provided on a properly executed, returned and not revoked proxy card will be voted proportionately in the same manner as those shares held in our 401(k) Plan for which timely and valid voting instructions are received with respect to such proposals, and
·  
Shares held in our 401(k) Plan for which timely and valid voting instructions are not received will be considered to have been designated to be voted by the trustee proportionately in the same manner as those shares held in our 401(k) Plan for which timely and valid voting instructions are received.

As to any other business that may properly come before the Annual Meeting, the persons named in the accompanying proxy card will vote the shares represented by the proxy in the manner as the Board of Directors may recommend, or otherwise in the proxy holders’ discretion. The Board of Directors does not presently know of any other such business.

 
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6.  How will my shares be voted if I do not return my proxy card or otherwise vote electronically through the Internet or by telephone?

If you are a registered stockholder and you do not return your proxy card or otherwise vote electronically through the Internet or by telephone, your shares will not be voted, unless you attend the Annual Meeting to vote in person.

If you are a street name stockholder and you do not return your voting instruction card, your bank, broker or other nominee may vote your shares (1) FOR the election of the four Class I director nominees named in this Proxy Statement and (2) FOR the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm because these proposals are considered “routine” matters as described by the rules of the New York Stock Exchange (NYSE).

Under the rules of the NYSE, your bank, broker or other nominee may vote your shares in its discretion on “routine” matters. The rules of the NYSE also provide, however, that when a proposal is not a “routine” matter and your bank, broker or other nominee has not received your voting instructions with respect to such proposal, your bank, broker or other nominee cannot vote your shares on that proposal. When a bank, broker or other nominee does not cast a vote for a routine or a non-routine matter, it is called a “broker non-vote.” Therefore, under the NYSE rules, your bank, broker or other nominee cannot vote your shares with respect to the approval of the proposal to amend the 2006 Plan or the three stockholder proposals without your voting instructions because these proposals are not considered “routine.”

7.  What if I change my mind after I vote?

Stockholders may revoke any proxy, whether cast by proxy card, electronically through the Internet, or by telephone by voting again by proxy card, Internet, or telephone (the latest vote cast by any of these three mediums is the vote that will be counted). In addition, the powers of the persons named as proxies will be suspended with respect to any stockholder who attends the meeting in person and requests to revoke any previously given proxy. Attendance at the meeting will not by itself revoke a previously granted proxy.

If you are a street name stockholder, you must follow the instructions found on the voting instruction card provided by the bank, broker or other nominee, or contact your bank, broker or other nominee, in order to revoke your previously given proxy.

8.  How many votes are needed to approve each of the proposals?

The four nominees for Class I directors receiving the highest number of votes at the Annual Meeting will be elected. You may vote “for” or “withhold” with respect to the election of any or all of the nominees. With respect to votes cast FOR the election of all of the four Class I directors, absent specific instructions with respect to cumulative voting, the persons named as proxies in the accompanying proxy card will have full discretionary authority to vote the shares represented by any properly executed, returned and not revoked proxy card cumulatively among all or less than all of the four nominees (other than any nominees from whom authority has been withheld) in the manner as the Board of Directors shall recommend, or otherwise in the proxies’ discretion. Abstentions and broker non-votes will not count either in favor of, or against, election of a Class I director nominee.

The ratification of the appointment of Ernst & Young LLP requires the affirmative vote of the majority of shares represented in person or by proxy at the Annual Meeting and which are entitled to vote.  Abstentions will have the effect of a vote AGAINST the ratification of the appointment of Ernst & Young LLP and broker non-votes will not count either in favor of or against the ratification of the appointment of Ernst & Young LLP.

The proposal to (i) amend the 2006 Plan to (a) increase the number of shares of Massey Common Stock authorized for issuance under the 2006 Plan by 1,550,000 shares, (b) limit the maximum number of shares available for awards granted in any form provided for under the 2006 Plan other than options or stock appreciation rights to no more than 75% of the total number of issuable shares and (c) revise Section 4.3 of the 2006 Plan to provide that shares of Common Stock subject to an option or stock appreciation right award under the 2006 Plan may not again be made available for issuance under the 2006 Plan under the circumstances set forth in Section 4.3 of the 2006 Plan and to (ii) amend the 2006 Plan to update, clarify and re-approve the qualifying performance criteria contained in the 2006 Plan requires the affirmative vote of the majority of shares represented in person or by proxy at the Annual Meeting and entitled to vote. In addition, under applicable NYSE listing standards, the total votes cast on the proposal must represent more than 50% of all shares of Common Stock outstanding on the record date. Stockholders may direct that their votes be cast for or against the proposal to amend the 2006 Plan, or stockholders may abstain from such proposal. Assuming that the total number of votes cast on the proposal to amend the 2006 Plan represents more than 50% of all shares of Common Stock outstanding on the record date, abstentions will have the effect of a vote AGAINST the proposal to amend the 2006 Plan and broker non-votes will not count either in favor of or against the proposal to amend the 2006 Plan.

 
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In order to be adopted, the approval of each stockholder proposal must be approved separately by the affirmative vote of the majority of shares represented in person or by proxy at the Annual Meeting and which are entitled to vote. Stockholders may direct that their votes be cast for or against the stockholder proposals, or stockholders may abstain from the stockholder proposals.  Abstentions will have the effect of a vote AGAINST the stockholder proposals and broker non-votes will not count either in favor of or against the stockholder proposals.

9.  What is householding and how does it affect me?

We have adopted a procedure approved by the Securities and Exchange Commission (SEC) called “householding.” Institutions that hold shares in street name for two or more beneficial owners with the same address are permitted to deliver a single proxy statement and annual report to that address. Any such beneficial owner can request a separate copy of the proxy statement or annual report by writing us at Investor Relations, Massey Energy Company, P.O. Box 26765, Richmond, Virginia 23261 or by telephoning 1-866-814-6512.

Beneficial owners with the same address who receive more than one proxy statement and annual report may request delivery of a single proxy statement and annual report by contacting our Investor Relations department as described above.

10.  Who can attend the Annual Meeting?

The Annual Meeting is open to all holders of Common Stock as of the record date, March 20, 2009. Stockholders who plan to attend the Annual Meeting may be asked to present valid picture identification, such as a driver’s license or passport. Stockholders are entitled to bring one guest to accompany them to the Annual Meeting. Only stockholders and their guests will be admitted. If you are a street name stockholder, you must bring a copy of a statement from a bank, broker or other nominee indicating your ownership of Common Stock. If you are an authorized proxy of a stockholder or if you want to vote in person the shares that you hold in street name, you must present the proper documentation, which you must obtain from your bank, broker or other nominee that holds your shares in street name. Cameras, recording devices, and other electronic devices will not be permitted at the Annual Meeting.

11.  Who pays the cost of proxy solicitation?

We pay the expense of the solicitation. Some officers and regular employees may solicit proxies personally and by telephone, facsimile, courier service, mail, email, Internet, press release or advertisement (including on television, radio, newspapers or other publications of general distribution). These individuals will receive no additional compensation for their services.

12.  Who will count the votes?

Representatives from Wells Fargo Shareowner Services, our registrar and transfer agent, will tabulate the votes and act as inspectors of election at the Annual Meeting.

13.  Could other matters be decided in the Annual Meeting?

The Board of Directors is not aware of any matters that may come before the Annual Meeting other than matters disclosed in this Proxy Statement. However, if other matters do properly come before the Annual Meeting, it is the intention of the persons named on the proxy card to vote in the manner the Board of Directors recommend, or otherwise in the proxy holders’ discretion.

14.  How do I make a stockholder proposal for the 2010 annual meeting?

Any proposal of a stockholder intended to be presented at our 2010 annual meeting of stockholders for inclusion in our 2010 proxy statement and form of proxy/voting instruction card for that meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the Exchange Act), must be received by us no later than December 4, 2009.

Our Restated Bylaws provide that a stockholder entitled to vote for the election of directors may nominate persons for election to the Board of Directors by delivering written notice to our Corporate Secretary at our principal executive offices at P.O. Box 26765, Richmond, Virginia 23261. Such notice must be delivered to or mailed and received not less than 90 days nor more than 120 days prior to the first anniversary of the Annual Meeting, or May 19, 2010; provided, however, in the event that the date of the 2010 annual meeting is advanced by more than 30 days, or delayed by more than 90 days, from the first anniversary date of the Annual Meeting, written notice must be delivered not earlier than the 120th day prior to the 2010 annual meeting and not later than the close of business on the later of the 90th day prior to the annual meeting or the 10th day following the day on which the date of the 2010 annual meeting is first publicly announced by Massey. We anticipate holding the 2010 annual meeting of stockholders on May 18, 2010.

 
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The stockholder’s notice must include, as to each person whom the stockholder proposes to nominate for 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 pursuant to Regulation 14A under the Exchange Act and Rule 14a-11 of the Exchange Act;
·  
such person’s written consent to being named in the proxy statement as a nominee and to serving as such a director if elected; and
·  
an executed copy of Massey’s director agreement and questionnaire (a copy of which can be obtained by contacting Massey’s Corporate Secretary at the address above), along with all information required in connection with that agreement and the questionnaire;
 
In order for a stockholder to bring any other business before a stockholder meeting, timely notice must be received by us within the time limits described in the first or second paragraph of this question 14, depending upon whether such proposal is intended to be included in our 2010 proxy statement. The stockholder’s notice must contain as to each matter:
 
·  
a brief description of the business desired to be brought before the meeting;
·  
the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend our Bylaws, the language of the proposed amendment); and
·  
the reasons for conducting such business at the meeting.
 
In addition, whether nominating a person for election as a director or proposing any other business, the stockholder notice must also include the following:
 
·  
the name and address of such stockholder, as it appears on our books;
·  
the name and address of any beneficial owner of our Common Stock on whose behalf the stockholder is putting forward any nominee for director or other proposal;
·  
representations that:
§  
the stockholder is a holder of record of Common Stock and is entitled to vote at the stockholder meeting;
§  
that the stockholder intends to appear in person or by proxy at the meeting to put forward the stockholder’s nominee for election as a director and/or any other proposal put forward by that stockholder; and
§  
the stockholder and each of its affiliates and any other person (and their affiliates) with a beneficial ownership interest in Common Stock that may be acting together or in concert with the stockholder with respect to Massey has complied with the beneficial ownership disclosure obligations in the Restated Bylaws.
·  
the name of each individual, firm, corporation, limited liability company, partnership, trust or other entity with whom the stockholder, any beneficial owner of Common Stock and any stockholder director nominee, and their respective affiliates and associates, and each other person with whom any of them is acting in concert with respect to Massey has any agreement, arrangement or understanding (whether written or oral) for the purpose of acquiring, holding, voting or disposing of any Common Stock or to cooperate in obtaining, changing or influencing the control of Massey, along with a description of each such agreement, arrangement or understanding (whether written or oral) (a Covered Person);
·  
a list of the class and number of shares of Common Stock that are beneficially owned or owned of record by any Covered Person, together with documentary evidence of such record or beneficial ownership of Common Stock;
·  
a list of (A) all of the derivative securities (as defined under Rule 16a-1 under the Exchange Act) and other derivatives or similar agreements or arrangements with an exercise or conversion privilege or a periodic or settlement payment or payments or mechanism at a price or in an amount or amounts related to any security of Massey or with a value derived or calculated in whole or in part from the value of any security of Massey, in each case, directly or indirectly owned of record or beneficially owned by any Covered Person and (B) each other direct or indirect opportunity of any Covered Person to profit or share in any profit derived from any increase or decrease in the value of any of Massey’s securities, in each case, regardless of whether (x) that interest conveys any voting rights in such security to such Covered Person, (y) that interest is required to be, or is capable of being, settled through delivery of such security or (z) that Covered Person may have entered into other transactions that hedge the economic effect of such interest (any such interest described in this bullet point being a Derivative Interest);
·  
a description of each agreement, arrangement or understanding (whether written or oral) with the effect or intent of increasing or decreasing the voting power of, or that contemplates any person voting together with, any

 
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Covered Person with respect to any Common Stock or other voting security of Massey, the stockholder’s director nominee, or other proposal (Voting Arrangements);
·  
details of all other material interests of each Covered Person in such nomination or proposal or Massey’s capital stock (including any rights to dividends or performance related fees based on any increase or decrease in the value of such capital stock or Derivative Interests) (collectively, Other Interests);
·  
a description of all economic terms of all such Derivative Interests, Voting Arrangements and Other Interests and copies of all agreements and other documents (including but not limited to master agreements, confirmations and all ancillary documents and the names and details of the counterparties to, and brokers involved in, all such transactions) relating to each such Derivative Interest, Voting Arrangement and Other Interests;
·  
a list of all transactions by each Covered Person involving any Common Stock or other voting securities of Massey or any Derivative Interests, Voting Arrangements or Other Interests within 6 months prior to the date of the notice;
·  
a representation whether any Covered Person intends or is part of a group which intends (a) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of Massey’s outstanding capital stock required to approve or adopt the proposal or elect any director nominated by the stockholder and/or (b) otherwise to solicit or participate in the solicitation of proxies from Massey’s stockholders in support of such nomination or proposal; and
·  
all other information that, as of the date of delivery of such notice, would be required to be provided to Massey under the Restated Bylaws by any Covered Person, regardless of whether such Covered Person has previously provided such information to Massey.
 
The requirements found in our Restated Bylaws are separate from and in addition to the requirements of the SEC that a stockholder must meet in order to have a proposal included in our proxy statement pursuant to Rule 14a-8 under the Exchange Act.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON MAY 19, 2009.

Our Proxy Statement and Annual Report are available on our Internet site at www.masseyenergyco.com, Investors, Proxy Online. For additional information regarding access to our SEC filings, please see “Certain Matters Relating to Proxy Materials and Annual Reports” on page 88 of this Proxy Statement.
 

 
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ELECTION OF DIRECTORS
 
Proposal 1

Our Restated Certificate of Incorporation and Restated Bylaws provide for a “classified” Board of Directors. Our Restated Bylaws provide for ten directors, four serving as Class I directors, three serving as Class II directors, and three serving as Class III directors. The Governance and Nominating Committee has recommended to the Board of Directors, and the Board of Directors has nominated four Class I directors for election at the Annual Meeting to serve three-year terms expiring at the annual meeting in 2012, once their respective successors are elected and qualified, or until their earlier resignation or removal. Each of the four nominees for Class I directors listed below presently serves as a Class I director. Each of the nominees has consented to serve if elected. We know of no reason why the nominees would not be available for election or, if elected, would not be able to serve. If any of the nominees should become unavailable to serve as a director, full discretion is reserved to the persons named as proxies to vote for such other persons as may be properly nominated, or the Board of Directors may reduce the number of directors to be elected at the annual meeting.

Biographical Information on the Class I Director Nominees

The following biographical information is furnished with respect to each of our nominees for election at the Annual Meeting as Class I directors.

JAMES B. CRAWFORD, age 66

Mr. Crawford has been a director since February 7, 2005. He is Chairman of the Governance and Nominating Committee and is a member of the Audit, Compensation, Executive, and Safety, Environmental and Public Policy Committees.

Mr. Crawford has been a consultant for Evan Energy Investments, LC, a Richmond, Virginia based company with coal interests in China and Venezuela, since February 2004. Since December 2005, he has served as Chairman of InterAmerican Coal Holding S.A., a diversified energy company with coal, port and shipping investments in Venezuela, Columbia, and Cyprus. Mr. Crawford previously served as Chairman and Chief Executive Officer of James River Coal Company from its founding in 1988 until March 2003. Mr. Crawford also is Chair Emeritus and a member of the Board of Trustees of Colby College and Chairman of the Board of Directors of the Boys and Girls Club of Metro Richmond Foundation.

E. GORDON GEE, age 65

Mr. Gee has been a director since November 30, 2000. He is Chairman of the Safety, Environmental and Public Policy Committee and is a member of the Audit, Executive, and Governance and Nominating Committees.

Mr. Gee returned to The Ohio State University as its President in 2007, a position he held from 1990 to 1998. He previously served as the Chancellor of Vanderbilt University from 2000 to 2007 and the President of Brown University from 1998 to 2000. Mr. Gee also serves as a director of the following publicly traded companies: Gaylord Entertainment Company, a specialty lodging and entertainment company, and Hasbro, Inc., a children and family leisure time entertainment company. He previously served on numerous other publicly traded and private company boards.

LADY JUDGE, age 62

Lady Judge has been a director since February 19, 2008. She is a member of the Finance, Governance and Nominating, and Safety, Environmental, and Public Policy Committees.

Lady Judge was appointed to the Board of the United Kingdom Atomic Energy Authority in September 2002 and became its chair in July 2004. She served as Deputy Chairman of the Financial Reporting Council, the regulatory authority for accounting and corporate governance in the United Kingdom, from 2004 until 2007. From 2000 until 2005, Lady Judge was Founder and Executive Chairman of Private Equity Investor plc, a fund of funds listed on the London Stock Exchange investing in United States venture capital limited partnerships. A United States trained lawyer, Lady Judge has had a career in international banking and financial regulation during which she held several positions that included Director at News International Ltd, Board Director at Samuel Montagu & Co. and a Commissioner of the United States Securities and Exchange Commission. She currently serves on the board of directors of the following publicly traded companies: Bakaert nv, an advanced metal transformation and advanced materials and coatings company, Friends Provident plc, a financial services group, Magna International Inc., a leading global supplier of technology advanced automotive components, Nationwide Accident Repair Services plc, an automotive crash repair and accident administration services company, Planet Payment, Inc., a multi-currency payment processor, Portmeiron Group plc, a marketing and manufacturing company for homeware items, Private Equity Investor plc, an investment company, and Robert Walters plc, a professional recruitment
 
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consultant company. Lady Judge is also Chairman of the Governing Body of the School of Oriental & African Studies at London University, a Public Member of the International Ethics Standards Board for Accountants, and a Member of the Trilateral Commission.
 
STANLEY C. SUBOLESKI, age 67
Mr. Suboleski has been a director since May 13, 2008. He is a member of the Finance and Safety, Environmental and Public Policy Committees.

Mr. Suboleski served as a Commissioner of the Federal Mine Safety and Health Review Commission from June 2003 until his term expired in August 2006. Since that time he has provided mining engineering consulting services, including certain consulting services to us. From December 2001 through May 2003, Mr. Suboleski served as our Executive Vice President and Interim Chief Operating Officer. Following his retirement in December 1997 as Vice President, Operations – Strategy for A.T. Massey Coal Company, Inc. and President of United Coal Company, both Massey subsidiaries , he served as a Professor and as the Department Head of Mining and Minerals Engineering at Virginia Tech from August 2000 to August 2001. Mr. Suboleski received his B.S. and PhD degrees in Mining Engineering from Penn State and his M.S. degree in Mining Engineering from Virginia Tech.

The Board of Directors recommends that you vote FOR each of our Class I director nominees.

Biographical Information on the Directors Not Up For Election

The following biographical information is furnished with respect to each of the directors whose terms will continue after the Annual Meeting.

Class II Directors—Term expires in 2010:

RICHARD M. GABRYS, age 67

Mr. Gabrys has been a director since May 22, 2007. He is Chairman of the Finance Committee and is a member of the Executive, Governance and Nominating, and Safety, Environmental, and Public Policy Committees.

Mr. Gabrys retired as Vice Chairman of Deloitte & Touche LLP in May 2004. Mr. Gabrys served for 42 years with Deloitte & Touche in public accounting serving a variety of publicly held companies, with a focus on automotive manufacturing companies, energy companies, financial services institutions and health care entities. He completed his tenure as Interim Dean of the School of Business Administration of Wayne State University in August 2007. Mr. Gabrys serves as a director of the following publicly traded companies: CMS Energy Company, an integrated energy company, La-Z-Boy Incorporated, a residential furniture producer, and TriMas Corporation, a manufacturer of high-quality trailer products, recreational accessories, packaging systems, energy products and industrial specialty products. Mr. Gabrys also serves on the boards of the following tax-exempt entities: The Detroit Institute of Arts, the Karmanos Cancer Institute, Alliance for Safer Streets in Detroit (Crime Stoppers), Detroit Regional Chamber, Ave Maria University and Renaissance Venture Capital Fund.

DAN R. MOORE, age 68

Mr. Moore has been a director since January 22, 2002. He is Chairman of the Audit Committee and a member of the Compensation, Executive, Finance, Governance and Nominating, and Safety, Environmental and Public Policy Committees.

Mr. Moore has been the Chairman of Moore Group, Inc., which owns multiple automobile dealerships in West Virginia and Kentucky, since 1999. He previously served as Chairman, President and Chief Executive Officer of the former Matewan BancShares, a multi-bank holding company, from 1981 to 1999, which he joined as a loan officer in 1963. Mr. Moore also serves as a director and Chairman of the West Virginia University Foundation. He also serves as a member of the Branch Bank and Trust Company Board of Directors and as a member of the West Virginia Housing Fund Board of Directors.

BAXTER F. PHILLIPS, JR., age 62

Mr. Phillips has been a director since May 22, 2007. He is a member of the Finance and Safety, Environmental and Public Policy Committees.

Mr. Phillips has been our President since November 2008. He previously served as Executive Vice President and Chief Administrative Officer from November 2004 to November 2008, as Senior Vice President and Chief Financial Officer from September 2003 to November 2004, and as Vice President and Treasurer from October 2000 to August 2003. Mr. Phillips joined us in 1981 and has also served in the roles of Corporate Treasurer, Manager of Export Sales and Corporate
 
8

 
 
Human Resources Manager, among others. Prior to joining us, he held various investment and banking positions, including management of fixed income for the Virginia Retirement System, Group Head in the corporate banking division of the former American Security Bank in Washington, D.C. and Cash Management Officer at the former United Virginia Bankshares, Inc. in Richmond, Virginia. He holds a bachelors of science in business management and a masters degree in business administration from Virginia Commonwealth University.
 
Class III Directors—Term expires in 2011:

DON L. BLANKENSHIP, age 59

Mr. Blankenship has been a director since 1996. He is Chairman of the Executive Committee.

Mr. Blankenship has been our Chairman of the Board of Directors and Chief Executive Officer since November, 2000 and also held the position of President from November 2000 until November 2008. He has been the Chairman of the Board of Directors and Chief Executive Officer of A.T. Massey Coal Company, Inc., our wholly owned and sole, direct operating subsidiary, since 1992, and also held the position of its President from 1992 until November 2008. Mr. Blankenship also serves as a director of the Center for Energy and Economic Development, the National Mining Association and the U.S. Chamber of Commerce.

ROBERT H. FOGLESONG, age 63

General Foglesong, U.S. Air Force (retired), has been a director since February 21, 2006. He is Chairman of the Compensation Committee and is a member of the Audit, Executive, Governance and Nominating, and Safety, Environmental and Public Policy Committees.

General Foglesong was President of Mississippi State University from April  2006 to March 2008. Since February 1, 2006 he has been President and Executive Director of the Appalachian Leadership and Education Foundation, a Charleston, West Virginia based non-profit organization focused on identifying and supporting the next generation of leaders in Appalachia. After reaching the rank of four star general, he retired from the U.S. Air Force on February 1, 2006, following 33 years of U.S. military service in over 130 countries. He is a director of Michael Baker Corporation, an engineering and energy management firm, CDEX, Inc., a company specializing in chemical detection technologies, and a member of numerous professional organizations, including the Council on Foreign Relations. General Foglesong also was appointed in 2006 by the President of the United States to Co-Chair the U.S. – Russia Joint Commission on POWs/MIAs.

BOBBY R. INMAN, age 77

Admiral Inman, U.S. Navy (retired), has been a director since 1985. He is a member of the Compensation, Executive, and Governance and Nominating Committees and an ex officio member of the Audit, Finance and Safety, Environmental and Public Policy Committees. He serves as the Lead Independent Director.

Admiral Inman has been a tenured professor at the LBJ School of Public Affairs at the University of Texas in Austin since August 2001, holding the Lyndon Johnson Centennial Chair in National Policy. He served as Interim Dean from January 2005 until December 2005, and adjunct professor at the University of Texas from 1987 until August 2004. Admiral Inman previously served as Director of the National Security Agency and Deputy Director of the Central Intelligence Agency. He is a managing director of Gefinor Ventures, Inc., an early stage venture capital firm, and has over 20 years experience in venture capital investments. Admiral Inman previously served on numerous NYSE publicly traded company and other boards.

Directors’ Compensation

The non-employee directors who served during the full calendar year 2008 were each paid an annual retainer fee of $44,000 or, in the case of the Chairman of the Audit Committee, $59,000, and the Chairs of the other Board Committees, $49,000. The Lead Independent Director received an additional $30,000 annual retainer for his service during 2008. Retainer fees are paid in quarterly installments on or about January 1, April 1, July 1 and October 1. During 2008, non-employee directors also earned meeting fees of $3,000 for each Audit Committee meeting attended and $2,000 for each Board of Directors or other Board Committee meeting attended. Meeting fees are paid shortly after each meeting is held. We also reimburse directors for the expenses they incur in attending meetings of the Board of Directors or Board Committees. Directors who are also salaried employees receive no additional cash compensation for their services as directors.

Non-employee directors are permitted to defer receipt of directors’ fees until their retirement or other termination of status as a director. At the election of the director, deferred amounts either accrue interest at rates fixed from time to time by the committee that administers the Massey Energy Company Deferred Directors’ Fee Program or are valued as if having been invested in Common Stock. During 2008, three directors chose to defer all or a portion of their directors’ fees.

 
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    All equity awards made to non-employee directors after June 27, 2006 have been granted pursuant to the 2006 Plan.  For 2008, under the 2006 Plan, directors who were not our employees or employees of our subsidiaries were eligible to receive, when they became directors, a one time grant of that number of shares of restricted Common Stock equal to the value of $110,000 based on the closing stock price on the date of grant, or in the event that the market is closed on such date, the next preceding trading day, and that number of restricted units equal to the value of $74,000 of Common Stock based on the closing price on the date of grant, or in the event that the market is closed on such date, the next preceding trading day, which are payable in cash upon the vesting of the shares of restricted Common Stock to assist in satisfying related income tax liabilities upon the lapse of restrictions on the shares of restricted Common Stock. These awards were made on a date determined by the Compensation Committee following director appointment. For 2008, under the 2006 Plan, non-employee directors were also awarded an annual grant of that number of shares of restricted Common Stock equal to $80,000 based on the closing price on the date of grant, or in the event that the market is closed on such date, the next preceding trading day, which grants were made at the first regularly scheduled Board of Directors meeting of the year. The restrictions on the initial grants of restricted stock and restricted units and the annual grant of restricted stock lapse in one-third increments each year upon the anniversary of the date of grant, or lapse in full upon the occurrence of any of the following: (i) the applicable director retires  from service on the Board of Directors upon express approval by the Board of Directors or the Compensation Committee that administers the 2006 Plan; (ii) the applicable director dies or becomes permanently disabled, or (iii) the director’s service terminates within two years after a change of control occurs other than on account of a voluntary resignation from service on the Board of Directors. The first regularly scheduled Board of Directors meeting of calendar year 2008 took place on February 18th, at which time each non-employee director serving at such time was awarded 2,009 shares of Common Stock. The market value of 2,009 shares of Common Stock on the grant date was $80,000 based on the closing trading prices of Common Stock on February 15, 2008, the date immediately prior to the date of grant because the NYSE was closed on the date of grant. This valuation does not take into account the diminution in value attributable to the restrictions on such stock under the 2006 Plan.

In November 2008, the Compensation Committee conducted its annual review of the compensation payable to the non-employee directors and recommended to the Governance and Nominating Committee certain changes to the compensation payable to non-employee directors. The Governance and Nominating Committee made the following recommendations to the Board of Directors which approved the changes to the compensation applicable to non-employee directors effective January 1, 2009. Effective January 1, 2009, non-employee directors may choose to receive their annual equity grant in any proportion of restricted stock and/or stock options, as elected in the sole discretion of the director. Previously, the annual grant was given in the form of restricted stock only. In addition, non-employee directors are entitled to an annual physical, at the election of the director. Finally, we will make available, at the election of the director, secondary supplemental health insurance. All other aspects of non-employee director compensation remained unchanged.

The following table presents information relating to total compensation of our non-employee directors for the fiscal year ended December 31, 2008.

NON-EMPLOYEE DIRECTOR COMPENSATION(a)
 
 
Name
  Fees Earned or Paid in Cash(b)     Stock Awards(c)     All Other Compensation(d)     Total  
 James B. Crawford   $ 118,000     $ 106,096     $ 2,256     $ 226,352  
 Robert H. Foglesong     115,500       77,213       1,950     $ 194,663  
 Richard M. Gabrys     93,000       113,545       1,707     $ 208,252  
 E. Gordon Gee     106,000       108,620       4,641     $ 219,261  
 Bobby R. Inman     127,500       108,620       5,399     $ 241,519  
 Lady Judge(e)     76,000       67,756       1,102     $ 144,858  
 Dan R. Moore     140,000       108,620       3,587     $ 252,207  
 Stanley C. Suboleski(f)     51,000       68,046       542     $ 119,588  
___________________

(a)
Messrs. Blankenship and Phillips do not appear in this table because they are Massey employees and therefore are not entitled to additional compensation for their services as directors.
(b)
Amounts shown represent director fees (i.e. retainer and meeting fees) earned during fiscal year 2008 and include any amounts deferred at the election of the director.
(c)
Amounts shown represent the dollar amounts of the expense recognized in 2008 for financial statement reporting purposes in accordance with Statement of Financial Accounting Standards No. 123R, “Share-Based Payments” (SFAS 123(R)) (excluding estimates for forfeitures related to service-based vesting conditions) for restricted stock and restricted unit awards to non-

 
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employee directors, and, accordingly, include amounts from awards granted in and prior to 2008. These amounts reflect our accounting expense for these awards, and do not correspond to the actual value that will be recognized by each of the non-employee directors. The assumptions used in the calculation of these award amounts are included in Note 12 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated by reference into this Proxy Statement. The table below provides (i) the actual cash value of restricted units that vested and were paid in cash during 2008 and (ii) the aggregate number of restricted stock awards outstanding as of December 31, 2008 for each of the non-employee directors.

Name
 
Cash Value of Restricted Units That Vested and Were Paid During 2008
   
Aggregate Number of Restricted Stock Awards Outstanding at December 31, 2008
 
James B. Crawford
  $ 18,843       8,209  
Robert H. Foglesong
    18,843       6,992  
Richard M. Gabrys
    58,578       5,675  
E. Gordon Gee
    -       17,538  
Bobby R. Inman
    -       20,452  
Lady Judge
    -       4,598  
Dan R. Moore
    -       13,482  
Stanley C. Suboleski
    -       2,836  
___________________

 
(d)
Amounts shown represent dividends paid on restricted stock and life insurance premiums allocated to each director.
 
(e)
Lady Judge was appointed to the Board of Directors on February 19, 2008.
 
(f)
Mr. Suboleski was appointed to the Board of Directors on May 13, 2008.

During 2008, we made the following grants of restricted stock and restricted units to each non-employee director:

NON-EMPLOYEE DIRECTOR GRANTS IN 2008
 
 
Grant Date
Type of Grant
 
Shares Granted
   
Units Granted
   
Grant Date Value (a)
 
James B. Crawford
2/18/2008
Annual
    2,009           $ 79,998  
Robert H. Foglesong
2/18/2008
Annual
    2,009             79,998  
Richard M. Gabrys
2/18/2008
Annual
    2,009             79,998  
E. Gordon Gee
2/18/2008
Annual
    2,009             79,998  
Bobby R. Inman
2/18/2008
Annual
    2,009             79,998  
Lady Judge
2/19/2008
Initial
    2,662       1,790       184,001  
 
2/19/2008
Annual
    1,936               80,015  
Dan R. Moore
2/18/2008
Annual
    2,009               79,998  
Stanley C. Suboleski
5/13/2008
   Initial
    1,835       1,234       183,987  
 
5/13/2008
Annual
    1,001
(b)
            60,010  
___________________

 
(a)
The amounts shown represent the sum of the number of shares and units multiplied by the closing stock price on the date of grant, or in the event that the market was closed on such date, the next preceding trading day.
 
(b)
This amount represents three quarters of the annual grant since Mr. Suboleski was not on the Board of Directors during the first quarter of 2008.


 
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Director Independence

The Governance and Nominating Committee undertook its annual review of director independence in February 2009. During this review, the Governance and Nominating Committee considered transactions and relationships between each director or any member of his or her immediate family and Massey and our subsidiaries and affiliates, including those reported under “Certain Relationships and Related Transactions” on page 69. The committee also examined transactions and relationships between directors or their affiliates and members of our senior management or their affiliates. The purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent under the general independence standards in the listing standards of the NYSE, the exchange on which the Common Stock is listed, and the independence standards set forth in our Corporate Governance Guidelines, which can be found on our website. See “Availability of Restated Certificate of Incorporation, Restated Bylaws, Corporate Governance Guidelines, Code of Ethics, Committee Charters, SEC Filings and Other Materials” on page 88.

As set forth in our Corporate Governance Guidelines, we have adopted the following definition of independence: a director will be considered independent if he/she (a) is free of any relationship that would preclude a finding of independence under the NYSE Corporate Governance Standards as may be in effect from time to time, and (b) does not have any material relationship (either as director or as a partner, stockholder or officer of an organization) with us or any of our affiliates. In evaluating any such relationship, the Board of Directors takes into consideration whether disclosure of the relationship would be required by the proxy rules of the Exchange Act. If disclosure of the relationship is required, the Board of Directors must make a determination that the relationship is not material as a prerequisite to finding that the director is independent. Compliance with the definition of independence is reviewed annually by the Governance and Nominating Committee.

As a result of its review and based on the recommendation of the Governance and Nominating Committee, the Board of Directors affirmatively determined that James B. Crawford, Robert H. Foglesong, Richard M. Gabrys, E. Gordon Gee, Lady Judge, Bobby R. Inman, Dan R. Moore and Stanley C. Suboleski are independent under the general independence tests in the listing standards of the NYSE and the independence standards set forth in our Corporate Governance Guidelines. Don L. Blankenship is not independent because of his employment as our Chief Executive Officer. Baxter F. Phillips, Jr. is not independent because of his employment as our President.

Committees of the Board of Directors

The standing committees of the Board of Directors consist of an Audit Committee, Compensation Committee, Executive Committee, Finance Committee, Governance and Nominating Committee, and Safety, Environmental and Public Policy Committee. All of the information regarding the meetings of these committees refers to meetings that took place during 2008. The written charters under which each of these committees operates can be found on our website. See “Availability of Restated Certificate of Incorporation, Restated Bylaws, Corporate Governance Guidelines, Code of Ethics, Committee Charters, SEC Filings and Other Materials” on page 88.

Audit Committee

The principal duties of the Audit Committee are to:

 
(a)
provide assistance to the Board of Directors in fulfilling its oversight responsibility to the stockholders, potential stockholders and investment community relating to:
 
·  
our accounting, reporting and financial practices, including the integrity of our financial statements;
·  
our compliance with legal and regulatory requirements;
·  
the independent registered public accounting firm’s qualifications and independence; and
·  
the performance of our internal audit function and independent registered public accounting firm; and

 
(b)
prepare the report that SEC rules require to be included in our annual proxy statement.
 
 
The Audit Committee’s responsibilities include:
 
 
(a)
direct responsibility for the appointment, compensation, retention (or termination) and oversight of the independent registered public accounting firm engaged by us for the purpose of preparing or issuing audit reports and related work;
 
(b)
approving the audit and non-audit services to be performed by the independent registered public accounting firm and the fees related to such work;
 
(c)
reviewing with our financial management, internal audit management and independent registered public accounting firm matters relating to internal accounting controls, the internal audit program, our accounting

 
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practices and procedures and other matters relating to our financial condition and the financial condition of our subsidiaries;
 
(d)
reviewing the work of the independent registered public accounting firm that falls outside the scope of their audit engagement for the purpose of determining the independence of the independent registered public accounting firm; and
 
(e)
reporting to the Board of Directors periodically any conclusions or recommendations the committee may have with respect to such matters.

The members of the Audit Committee are Dan R. Moore (Chairman), James B. Crawford, Robert H. Foglesong and E. Gordon Gee. The Board of Directors has determined that each of the members of the Audit Committee is “independent” under the enhanced independence standards for audit committee members in the Exchange Act, and rules thereunder, as incorporated into the listing standards of the NYSE, and the independence standards set forth in our Corporate Governance Guidelines. Based on the recommendation of the Governance and Nominating Committee, the Board of Directors has also determined that each of the members of the Audit Committee has the requisite financial knowledge to serve as members of the Audit Committee and that Messrs. Crawford and Moore are each an “audit committee financial expert” under the rules promulgated by the SEC under the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act). No member of the Audit Committee simultaneously serves on the audit committees of more than two other publicly registered companies. The Audit Committee’s meetings include, executive sessions with management and, whenever it is deemed appropriate, executive sessions with our independent registered public accounting firm and with our internal auditors, in each case without the presence of management. During fiscal 2008, the Audit Committee held nine meetings.
 
Compensation Committee
 
The principal duties of the Compensation Committee are to:
 
 
(a)
review corporate organizational structures;
(b)
maintain an ongoing review of senior management succession planning;
 
(c)
keep informed about any life threatening or disabling illness of any officer and recommend to the Board of Directors any steps that should be taken with respect to such illness;
 
(d)
review and approve corporate goals and objectives relevant to the Chief Executive Officer’s compensation, evaluate the Chief Executive Officer’s performance in light of those goals and objectives and set the Chief Executive Officer’s compensation level based on this evaluation;
 
(e)
monitor performance of our officers and group executive officers;
 
(f)
make recommendations concerning compensation plans;
 
(g)
recommend officer title changes;
 
(h)
recommend the election of and salaries for officers and group executive officers, including salary, bonus and incentive awards, and determine and approve incentive awards for other executives and managers;
 
(i)
review Board of Directors compensation and propose any changes to the Governance and Nominating Committee;
 
(j)
function as the committee that administers our long-term incentive programs;
 
(k)
conduct an evaluation of the committee’s performance and review the adequacy of its charter and recommend any changes to the Board of Directors;
 
(l)
obtain advice and assistance from outside advisors as the committee deems appropriate;
 
(m)
review and discuss with management the Compensation Discussion and Analysis included in our proxy statement; and
 
(n)
prepare the annual report on executive compensation to be included in our proxy statement, as required by the Exchange Act.

The members of the Compensation Committee are Robert H. Foglesong (Chairman), James B. Crawford, Bobby R. Inman and Dan R. Moore. The Board of Directors has determined that each of the members of the Compensation Committee is “independent” under the general independence tests in the listing standards of the NYSE and the independence standards set forth in our Corporate Governance Guidelines. The Compensation Committee held five meetings during 2008. For a discussion of our executive compensation program, see the “Compensation Discussion and Analysis” and “Compensation Committee Report on Executive Compensation” beginning on pages 20 and 40, respectively.
 
Compensation Committee Interlocks and Insider Participation
 
No member of the Compensation Committee was at any time an officer or employee of us, or is related to any other member of the Compensation Committee, any other member of the Board of Directors or any executive officer of us.

 
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Executive Committee
 
The Executive Committee exercises all of the power and authority of the Board of Directors in the management of our business and affairs to the extent permitted by Delaware law and the Executive Committee charter. The members of the Executive Committee are Don L. Blankenship (Chairman), James B. Crawford, Robert H. Foglesong, Richard M. Gabrys, E. Gordon Gee, Bobby R. Inman and Dan R. Moore. The Executive Committee held one meeting in 2008.
 
Finance Committee
 
The Finance Committee provides assistance to the Board of Directors that relate to the management of our financial affairs. The principal duties of the Finance Committee are to:
 
 
(a)
review and evaluate our financial policies and investment strategy;
 
(b)
review and evaluate management's plans to manage our exposure to financial risk;
 
(c)
recommend dividend actions to the Board of Directors;
 
(d)
recommend stock issuance or stock repurchase actions to the Board of Directors;
 
(e)
monitor our investment committee's management of the pension fund and other post-retirement benefit obligations; and
 
(f)
review annual strategic financial plans, including financial measures relating to incentive plans.

 
The Finance Committee’s responsibilities include:
 
 
(a)
review our financial policies, including capitalization, liquidity, credit ratings and financial risk management;
 
(b)
review our financing plans, including financial transactions, credit capacity, guarantees and credit facilities;
 
(c)
approve capital spending and approve operating plan and capital expenditure projects in excess of $20 million;
 
(d)
review and evaluate existing and potential investments, including the financial soundness of potential mergers, acquisitions and dispositions.
 
(e)
review and discuss with management our most significant financial risks, methods of risk assessment, risk mitigation strategies and the overall effectiveness of our guidelines, policies and systems with respect to risk assessment and management, including policies and procedures for derivative transactions and insurance coverage;
 
(f)
review and discuss with management our bonding and related collateral requirements;
 
(g)
review our investor relations activities;
 
(h)
review and make recommendations concerning dividend policy and dividends to be declared by the Board of Directors;
 
(i)
review and make recommendations to the Board of Directors concerning stock issuance and stock repurchases;
 
(j)
review the strategy, the investment policies, the performance and the adequacy of funding for our pension and other post-retirement obligations that are managed by the investment committee; and
 
(k)
discuss with our General Counsel legal matters that may have a material impact on subject financial transactions.

The members of the Finance Committee are Richard M. Gabrys (Chairman), Lady Judge (since February 2008), Dan R. Moore, Baxter F. Phillips, Jr. and Stanley C. Suboleski (since May 2008). The Finance Committee held five meetings during 2008.
 
Governance and Nominating Committee
 
The primary responsibilities of the Governance and Nominating Committee are to oversee and monitor our corporate governance policies and procedures and to regularly report the results of its activities to the Board of Directors. The principal duties of the Governance and Nominating Committee are to:
 
 
(a)
seek out, evaluate and recommend to the Board of Directors qualified nominees for election as directors;
 
(b)
seek to ensure the independence and quality of the Board of Directors;
 
(c)
develop and recommend to the Board of Directors our Corporate Governance Guidelines and codes of conduct and ethics applicable to us;
 
(d)
oversee the annual evaluation of the Board of Directors; and
 
(e)
consider other matters, including the size and composition of the Board of Directors and committees, directorship practices and other issues of corporate governance.

 
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The members of the Governance and Nominating Committee are James B. Crawford (Chair),  Robert H. Foglesong, Richard M. Gabrys, E. Gordon Gee, Bobby R. Inman, Lady Judge (since February 2008), and Dan R. Moore. The Board of Directors has determined that each of the members of the Governance and Nominating Committee is “independent” under the general independence tests in the listing standards of the NYSE and the independence standards set forth in our Corporate Governance Guidelines. During 2008, the Governance and Nominating Committee held four meetings.
 
Nominating Procedures. The Governance and Nominating Committee considers candidates for Board of Directors membership suggested by its committee members and other Board of Directors members, as well as management and stockholders. The committee may also retain a third-party executive search firm to identify candidates upon request of the committee from time to time. A stockholder who wishes to recommend a prospective nominee for the Board of Directors should notify our Corporate Secretary in writing with whatever supporting material the stockholder considers appropriate and in accordance with the provisions and information requirements set forth in our Restated Bylaws relating to stockholder nominations. See “How do I make a stockholder proposal for the 2010 annual meeting?” on page 4. Stockholder nominees whose nominations comply with these procedures will be evaluated in the same manner as the committee’s nominees.
 
Lady Judge and Messrs. Crawford, Gee and Suboleski were each recommended by the Governance and Nominating Committee for nomination for election at the Annual Meeting to serve a three-year term until their respective successors are elected and qualified, or until their earlier resignation or removal.
 
Once the Governance and Nominating Committee has identified a prospective nominee, the committee then evaluates the prospective nominee against the standards and qualifications set out in the Governance and Nominating Committee Charter and our Corporate Governance Guidelines, including:
 
 
(a)
the ability of the prospective nominee to represent the interests of our stockholders;
 
(b)
the prospective nominee’s standards of integrity, commitment and independence of thought and judgment;
 
(c)
the prospective nominee’s ability to dedicate sufficient time, energy and attention to the diligent performance of his or her duties, including the prospective nominee’s service on other public company boards;
 
(d)
the extent to which the prospective nominee contributes to the range of talent, skill and expertise appropriate for the Board of Directors; and
 
(e)
the extent to which the prospective nominee helps the Board of Directors reflect the diversity of our stockholders, employees and communities.

The Governance and Nominating Committee also considers such other relevant factors as it deems appropriate, including the current composition of the Board of Directors, the balance of management and independent directors, the need for Audit Committee expertise and the evaluations of other prospective nominees. After completing this evaluation, the Governance and Nominating Committee makes a recommendation to the full Board of Directors as to the persons who should be nominated by the Board of Directors, and the Board of Directors determines the nominees after considering the recommendation and report of the Governance and Nominating Committee. There is no difference in the manner by which the Governance and Nominating Committee evaluates prospective nominees for director based upon the source from which the individual was first identified.
 
Safety, Environmental and Public Policy Committee
 
The principal duties of the Safety, Environmental and Public Policy Committee are to:
 
 
(a)
review and make recommendations regarding our policies, programs, position and strategies in relation to safety, environmental and public policy issues deemed significant by the committee or which may be referred to the committee by the Board of Directors or by management;
 
(b)
review and make recommendations regarding safety, environmental, political, and social trends and issues as they may affect our operations and the operations of our subsidiaries;
 
(c)
review and make recommendations in respect of our general policy regarding support of business, charitable, educational and political organizations; and
 
(d)
review and make recommendations in respect of our safety, environmental and public policies and practices.


 
15

 
 
The Safety, Environmental and Public Policy Committee’s responsibilities include:
 
(a)  
making a report to the Board of Directors on a quarterly basis regarding our compliance with worker safety and environmental compliance rules and regulations;
(b)  
developing goals for implementing enhancements to the process utilized to monitor, count and report environmental incidents and complaints;
(c)  
determining the specific content and organization of our environmental compliance reports to the Board of Directors to reasonably inform the Board of Directors regarding our compliance with all applicable environmental laws and regulations, and any other applicable authority regarding environmental compliance;
(d)  
developing goals for implementing enhancements to the process utilized to monitor, count and report mine safety incidents and complaints and near misses with high potential for injury;
(e)  
determining the specific content and organization of its mine safety reports to the Board of Directors to reasonably inform the Board of Directors regarding our compliance with all applicable mine safety laws and regulations;
(f)  
reviewing our safety training programs annually and recommending enhancements as appropriate;
(g)  
reviewing our environmental compliance training programs annually and recommending enhancements as appropriate;
(h)  
reporting to the Board of Directors annually on the key objectives and progress in our safety training programs and environmental compliance training programs;
(i)  
recommending that the Board of Directors adopt quantitative goals, based on current technologies, for reducing environmental violations and mine safety incidents and near misses with a high potential for injury in connection with our operations;
(j)  
selecting and retaining one or more independent auditing firms, at least once every two years, to conduct a comprehensive review and assessment of our operations as they relate to worker safety and environmental compliance and preparing and submitting to the Safety, Environmental and Public Policy Committee a report and recommendations;
(k)  
reporting the findings of the auditing firm review and assessment to the Board of Directors;
(l)  
having the authority to retain independent, outside consultants to assist the Safety, Environmental and Public Policy Committee with regard to the Safety, Environmental and Public Policy Committee’s duties in connection with our compliance with environmental, worker, and mine safety laws, rules and regulations; provided that, before retaining any such consultant, the Safety, Environmental and Public Policy Committee will make a determination that the consultant is capable of exercising independent judgment; and
(m)  
consulting with the Vice President for Best Environmental Practices, the Vice President for Best Safety Practices (or comparable positions) and the General Counsel regarding their duty and authority to create, implement and oversee a system by which corporate employees, suppliers, customers and advisor professionals can, on a confidential basis and without fear or reprisal, provide information concerning possible illegal or unethical conduct regarding our compliance with safety and environmental issues.

The members of the Safety, Environmental and Public Policy Committee are E. Gordon Gee (Chairman), James B. Crawford, Robert H. Foglesong, Richard M. Gabrys, Lady Judge (since February 2008),  Dan R. Moore, Baxter F. Phillips, Jr. and Stanley C. Suboleski (since May 2008). The Board of Directors has determined that the majority of the members of the Safety, Environmental and Public Policy Committee are “independent” under the general independence tests in the listing standards of the NYSE and the independence standards set forth in our Corporate Governance Guidelines, and the additional criteria set forth in the Safety, Environmental and Public Policy Committee’s charter. Effective June 30, 2008, the Board of Directors adopted a policy that members of the Safety, Environmental and Public Policy Committee shall not serve more than five consecutive one-year terms, subject to the ability of the Governance and Nominating Committee, with the approval of a majority of the independent directors, to make an exception based upon a determination after due consideration of the Safety, Environmental and Public Policy Committee member’s meritorious service that it would be in the best interest of our stockholders for the Safety, Environmental and Public Policy Committee member to serve more than five consecutive five year terms. In addition, the Board of Directors adopted a policy, effective June 30, 2008, that the Chair of the Safety, Environmental and Public Policy Committee may not be a director who received 25% or more withheld votes in each of the last two elections, as long as there is another director on the Safety, Environmental and Public Policy Committee who did not get more than 25% withheld votes in each of the last two elections, subject to the ability of the Governance and Nominating Committee, with the approval of the majority of the independent directors, to make an exception based upon a determination after due consideration of the director's meritorious service that it would be in the interest of our stockholders for the Chair of the Safety, Environmental and Public Policy Committee to be a director who received 25% or more withheld votes in each of the last two elections. The Safety, Environmental and Public Policy Committee held five meetings during 2008.
 
 
16

 

Board of Directors and Committee Meetings Attendance
 
During 2008, the Board of Directors held seven meetings. The independent directors met in executive session without the Chief Executive Officer or any other member of management in connection with each of the regularly scheduled quarterly Board of Directors meetings. During 2008, each incumbent director attended at least 75% of the aggregate of all Board of Directors meetings and meetings of Board committees on which such director served. All of the directors who were directors at the time of the 2008 annual meeting of stockholders attended the 2008 annual meeting of stockholders in May 2008. Under our Corporate Governance Guidelines, each director is expected to dedicate sufficient time, energy and attention to ensure the diligent performance of his or her duties, including attendance at meetings of our stockholders and the meetings of the Board of Directors and committees of which he or she is a member.
 
Lead Director
 
The Board of Directors appoints an independent member to be the Lead Director. The Lead Director’s primary responsibility is to ensure that the Board of Directors operates independently of management and that directors and stockholders have an independent leadership contact. The Lead Director presides over the meetings of the non-management directors that occur prior to each regularly scheduled meeting of the Board of Directors. On May 22, 2007, the Board of Directors appointed Admiral Inman as the Lead Director for a two-year term. Stockholders and other interested persons may contact the Lead Director in the manner described under “Communications with the Board of Directors” below.
 
Communications with the Board of Directors

Stockholders and other parties interested in communicating directly with the Lead Director or with the non-management directors as a group may do so by writing to Lead Director, c/o Corporate Secretary, Massey Energy Company, P.O. Box 26765, Richmond, Virginia 23261. Our Corporate Secretary reviews all such correspondence and regularly forwards to the Board of Directors a summary of all such correspondence and copies of all correspondence that, in the opinion of the Corporate Secretary, deal with the functions of the Board of Directors or committees thereof or that the Corporate Secretary otherwise determines requires their attention. Directors may at any time review a log of all correspondence we receive that is addressed to members of the Board of Directors and request copies of any such correspondence. Concerns relating to accounting, auditing, ethics or internal control matters can also be communicated confidentially and generally anonymously (i) by calling the Massey Energy Hotline toll free at 1-888-424-2417; (ii) by mail addressed to: Board of Directors-Audit Committee, c/o Corporate Secretary, Massey Energy Company P.O. Box 26765, Richmond, Virginia 23261; (iii) by mail addressed to: Ethics Hotline, Ref:  Massey Energy, PMB 3767, 13950 Vallantyne Corporate Place, Suite 300, Charlotte, North Carolina 28277; or (iv) by e-mail addressed to: massey.hotline@masseyenergyco.com (may not be received anonymously, depending upon how it is sent).

Code of Ethics

We have an Ethics Commitment Agreement, which is applicable to and signed annually by our salaried employees, including the principal executive officer, the principal financial officer and the principal accounting officer. We have a separate Code of Ethics for Senior Financial Officers, which contains provisions specifically applicable to our senior financial officers, including the principal executive officer, the principal financial officer and the principal accounting officer, and a Code of Business Conduct and Ethics for Directors that all directors are expected to sign annually. The Ethics Commitment Agreement, the Code of Ethics for Senior Financial Officers and the Code of Business Conduct and Ethics for Directors are available on our website. See “Availability of Restated Certificate of Incorporation, Restated Bylaws, Corporate Governance Guidelines, Codes of Ethics, Committee Charters SEC Filings and Other Materials” on page 88. We intend to post amendments to or waivers from these ethics agreements (to the extent applicable to our directors, principal executive officer, principal financial officer or principal accounting officer) on our website at www.masseyenergyco.com: Investors, Corporate Governance, Code of Conduct.


 
17

 
Stock Ownership of Directors and Executive Officers

The following information is furnished with respect to our current directors and each of our nominees for director, our named executive officers and all our current directors and executive officers as a group, as to ownership of shares of Common Stock as of March 20, 2009, except as otherwise noted. Our named executive officers include our Chief Executive Officer, our Chief Financial Officer and our three other most highly compensated executive officers. Each named executive officer or his or her family members had sole voting and investment power with respect to such shares, except as otherwise noted.


       
Amount and Nature of Beneficial Ownership
 
Title of Class
 
Name of Beneficial Owner
 
Shares Beneficially Owned
   
Shares for which Beneficial Ownership can be Acquired within 60 Days (a)
   
Total Beneficial Ownership
   
Percent of Class (b)
 
Massey Energy
 
Class I Directors
                       
Common Stock,
 
James B. Crawford
    28,051       -       28,051       *  
$0.625 Par Value
 
E. Gordon Gee
    28,191       -       28,191       *  
   
Lady Judge
    10,528       -       10,528       *  
   
Stanley C. Suboleski
    8,766       -       8,766       *  
                                     
   
Class II Directors
                               
   
Richard M. Gabrys
    13,439       -       13,439       *  
   
Dan R. Moore
    20,359       -       20,359       *  
   
Baxter F. Phillips, Jr. (c)(d)
    105,813       91,916       197,729       *  
                                     
   
Class III Directors
                               
   
Don L. Blankenship (d)
    296,935       158,333       455,268       *  
   
Robert H. Foglesong
    16,023       -       16,023       *  
   
Bobby R. Inman
    33,105       -       33,105       *  
                                     
   
Officers
                               
   
J. Christopher Adkins
    55,666       97,440       153,106       *  
   
Michael K. Snelling
    21,669       29,363       51,032       *  
   
Eric B. Tolbert
    22,123       22,031       44,154       *  
                                     
   
Directors and executive officers as
                               
   
a group (22 persons) (e)
    794,307       532,722       1,327,029       1.55%  
___________________

(a) 
Represents shares of Common Stock that may be acquired through the exercise of options within 60 days of March 20, 2009.
(b)
Calculated based on shares of Common Stock beneficially owned as of March 20, 2009 plus shares deemed outstanding for which beneficial ownership can be acquired within 60 days by that individual or group divided by our shares of Common Stock outstanding as of March 20, 2009, which were 85,484,539. An asterisk (*) indicates that ownership is less than one percent of class.
(c)
Mr. Phillips owns 79,926 shares directly and is the indirect beneficial owner of 16,976 shares through Massey’s Coal Salary Deferral and Profit Sharing Program as of March 16, 2009 and 8,911 shares that are held by his wife.
(d)
Messrs. Blankenship and Phillips are also named executive officers.
(e)
Executive officers included in this number are our current executive officers who file statements pursuant to Section 16 of the Exchange Act.
 

 
18

 
Stock Ownership of Certain Beneficial Owners
 
Management knows of no person, except as set forth below, who is the beneficial owner of more than 5% of our voting shares. The table sets forth information known to us as of the most recent date, based on filings with the SEC on Schedule 13D or Schedule 13G (unless otherwise indicated), with percentage of ownership calculated using the number of outstanding shares of Common Stock on the dates noted below.

Name and Address of Beneficial Owners
 
Shares
Beneficially Owned
   
Percent of Class (a)
 
 
BlackRock, Inc.
40 East 52nd Street
New York, NY 10022
    9,883,386
(b)
    11.56 %
 
State Street Bank and Trust Company
State Street Financial Center
One Lincoln Street
Boston, MA 02111
    5,407,227
(c)
    6.33 %
 
Vanguard Group, Inc.
100 Vanguard Blvd.
Malvern, PA 19355
    4,532,164
(d)
    5.30 %
 
Barclays Global Investors, N.A.
45 Fremont Street
San Francisco, CA 94105
    4,285,172
(e)
    5.01 %
___________________                    
(a)
All percentages are based on 85,484,539 shares of Common Stock outstanding as of March 20, 2009.
(b)
Based solely on Schedule 13G/A filed by BlackRock, Inc. with the SEC on February 10, 2009 that indicates BlackRock, Inc. is the beneficial owner of 9,883,386 shares, and has shared voting power over 9,883,386 shares and shared dispositive power over 9,883,386 shares.
(c)
Based solely on Schedule 13G filed by State Street Bank and Trust Company with the SEC on February 13, 2009 that indicates State Street Bank and Trust Company is the beneficial owner of 5,407,227 shares, and has sole voting power over 5,407,227 shares and shared dispositive power over 5,407,227 shares.
(d)
Based solely on Schedule 13G filed by The Vanguard Group, Inc. with the SEC on February 13, 2009 that indicates The Vanguard Group, Inc. is the beneficial owner of 4,532,164 shares, and has the sole voting power over 93,232 shares.
(e)
Based solely on Schedule 13G filed jointly by (i) Barclays Global Investors, NA, (ii) Barclays Global Fund Advisors, (iii) Barclays Global Investors, LTD, (iv) Barclays Global Investors Japan Limited, (v) Barclays Global Investors Canada Limited, (vi) Barclays Global Investors Australia Limited and (vii) Barclays Global Investors (Deutschland) AG (collectively referred to as Barclays Global) with the SEC on February 5, 2009 that indicates Barclays Global is the beneficial owner of 4,285,172 shares, and has sole voting power over 4,285,172 shares and sole dispositive power of 4,285,172 shares.

Section 16(a) Beneficial Ownership Reporting Compliance

Based upon a review of the forms required by Section 16 of the Exchange Act that have been filed during and with respect to our most recently completed fiscal year, we are not aware of any executive officer, director or beneficial owner of more than 10% of our stock that failed to file on a timely basis any Forms 3, 4 or 5, except Mr. Clemens who filed one Form 4 late due to an administrative oversight that reported the acquisition of restricted stock and units , Mr. Moore who filed one Form 4 late due to an administrative oversight that reported the acquisition of phantom stock units representing the value of meeting fees earned and deferred pursuant to the Massey Energy Company Deferred Directors’ Fees Program and Mr. Poma who filed one Form 4 late due to an administrative oversight that reported the sale of stock.


 
19

 
COMPENSATION DISCUSSION AND ANALYSIS
General Philosophy

We compensate our named executive officers in a manner that is meant to attract and retain highly qualified and gifted individuals and to appropriately incentivize and motivate the named executive officers to achieve continuous improvements in company-wide performance for the benefit of our stockholders. We accomplish this through the use of various forms of compensation, the basic components of which are: (i) base salary; (ii) annual cash bonus; (iii) long-term performance-based and service-based cash and equity incentive awards; and (iv) retirement benefits. In certain circumstances, additional incentives and benefits are provided to our named executive officers, and may include perquisites, retention awards, change in control and severance benefits, and supplemental life insurance. Our named executive officers include our Chief Executive Officer, our Chief Financial Officer and our three other most highly compensated executive officers which includes our President, Chief Operating Officer and Vice President of Surface Operations. We have written employment arrangements with all of our named executive officers, other than Mr. Tolbert. We believe that by maintaining employment agreements with certain of our named executive officers we enhance our ability to attract and retain the most highly qualified individuals in an extremely competitive environment and further incentivize and motivate them to perform in the best interests of Massey and our stockholders. Our process for determining compensation for our named executive officers involves:
 
·  
assessing the value of the individual and the significance of his contribution to the organization,,
 
·  
weighing the risk such individual may be lured away to or by a competitor and the difficulty of replacing such individual,
 
·  
taking into consideration an individual’s experience,
 
·  
reviewing the various components of an individual’s current targeted overall compensation, and
 
·  
comparing the various components of targeted overall compensation with other individuals within Massey.
 
Other considerations that we take into account when setting compensation are our historic and projected performance, our performance compared to our competitors, actual and projected payouts of incentive pay, industry outlook, and general market conditions.
 
Outside Independent Compensation Consultant

Periodically, the Compensation Committee retains an outside independent compensation consultant to provide information and advice concerning compensation. The Compensation Committee most recently retained the outside independent consulting firm of Pearl Meyer & Partners (PM&P) in 2008 as part of its review of compensation for setting 2009 targeted overall compensation. The Compensation Committee had also retained PM&P in 2006 as part of its review of compensation for setting 2007 targeted overall compensation. In 2007, the Compensation Committee returned to the analysis performed in 2006 for setting 2008 targeted overall compensation. The Compensation Committee has retained PM&P to assess our compensation programs and to learn about developments and best practices in executive compensation matters. From time to time, PM&P also provides consulting advice to us outside the scope of executive compensation.

The Compensation Committee considered the surveys prepared by PM&P as part of their analysis to aid in the determination of competitive levels of compensation for each of our named executive officers. These surveys included companies that are both larger and smaller than Massey and companies in the coal mining business, including some of the companies in the S&P 600 SmallCap Index and the Bloomberg US Coal Index. The Compensation Committee also utilized executive compensation information compiled from the latest proxy statements of other coal mining and other natural resource mining companies with whom we specifically compared ourselves. The comparator group with which we generally compare ourselves is comprised of the following companies (the Comparator Group):
 
AK Steel Holding Corporation
Allegheny Technologies Incorporated
Alpha Natural Resources, Inc.
AmeriGas Partners, L.P.
Arch Coal, Inc.
Carpenter Technology Corporation
Cliffs Natural Resources Inc.
Commercial Metals Company
CONSOL Energy Inc.
El Paso Corporation
Energy Transfer Partners, LP
Foundation Coal Holdings, Inc.
Freeport-McMoran Copper & Gold Inc.
International Coal Group, Inc.
Nucor Corporation
Overseas Shipholding Group, Inc.
Patriot Coal Corporation
Peabody Energy Corporation
Quanex Corporation
Schnitzer Steel Industries, Inc.
Steel Dynamics, Inc.


 
20

 
The companies that made up the Comparator Group were selected because they:
 
·  
are engaged in the same or similar industry as Massey, the business of mining,
 
·  
have comparable market capitalization, revenues, assets, number of employees, geographic presence and complexity,
 
·  
draw executive talent from similar labor markets, and
 
·  
are publicly traded.
 
The Compensation Committee takes into consideration variations or distinctions of each member of the Comparator Group as compared to us (such as market capitalization or size), but does not do so in a formulaic manner (e.g. by assigning specific weights or values to each member of the Comparator Group).
 
Components of Targeted Overall Compensation

The two main components of our targeted overall compensation for our named executive officers are fixed pay and incentive pay. Fixed pay consists of base salary. Incentive pay consists of compensation that may be earned if certain performance objectives and/or service requirements are met, typically over the course of one to three years, and includes the annual cash bonus and the long-term performance-based and service-based incentive awards. The individual components of fixed pay and incentive pay taken together comprise a named executive officer’s “targeted” overall compensation. Dependent upon whether annual and long-term performance objectives are met or exceeded, a named executive officer’s actual compensation may be below or above such named executive officer’s targeted overall compensation.

The purpose of fixed pay is to provide our named executive officers with a level of financial security and benefits that reflects the executive’s job function, accomplishments, years of experience, and contributions. The purpose of incentive pay is to provide our named executive officers with incentives to excel at their individual job functions and areas of expertise in a manner that contributes to our overall performance, and to further align the financial interests of our named executive officers with those of our stockholders.
 
The Compensation Committee takes into consideration amounts paid to similarly situated officers in its Comparator Group, but it does not attempt to maintain a certain target percentile within a comparator group or otherwise solely rely on such data to determine executive compensation. Instead, the Compensation Committee places more emphasis on the specific contributions of the named executive officers and whether such contributions are being fairly and adequately rewarded in a manner that will continue to incentivize and retain such individuals in the competitive environment in which we find ourselves at any point in time. The Compensation Committee does not adhere to rigid formulas or necessarily react to short-term changes in business performance in determining the amount and mix of compensation elements. The Compensation Committee incorporates flexibility into its compensation programs and in the assessment process to respond to and adjust for the evolving business environment.
 
The Compensation Committee strives to achieve an appropriate mix between base salary, annual cash bonus awards and long-term cash and equity incentive awards in order to appropriately and adequately motivate and retain the named executive officers and to meet our objectives. There is not a rigid formula that is applied to each of the named executive officers with respect to the apportionment of various components of compensation. Depending on any unique arrangements that have been made with a named executive officer (e.g. those that have employment agreements) and based upon the participation level that the Compensation Committee has placed a named executive officer in for the annual cash bonus awards or long-term cash and equity incentive awards, the proportion of base salary, annual cash bonus awards and long-term cash and equity incentive awards will vary. As a general matter, the mix of compensation elements is designed both to reward recent results and to motivate long-term performance through a combination of base salary, annual cash bonus awards and long-term cash and equity incentive awards.
 
Frequently, the Compensation Committee has been faced with circumstances in which our employees are offered compensation packages to work elsewhere that are more lucrative than what they are currently being offered by us. When these situations arise, the Compensation Committee must assess whether an effort to retain the employee is warranted, and if so, what additional incentives the Compensation Committee believes to be appropriate.
 
The percentage of targeted overall compensation that is attributable to fixed pay and the major components of incentive pay (i.e., the annual cash bonus award and the long-term performance-based and service-based incentive awards) varies by each named executive officer and is based in part upon the assessments the Compensation Committee makes with respect to the following questions:
 

 
21

 
·  
What is reasonable fixed pay for a particular position?
 
·  
What is appropriate fixed pay for a particular individual?
 
·  
What is paid in fixed pay to the other named executive officers?
 
·  
What is a reasonable “level” in the Annual Incentive and Long-Term Incentive Programs (as described below) to place a particular position?
 
·  
What is an appropriate “level” in the Annual Incentive Program and Long-Term Incentive Program for a particular individual to be placed?
 
·  
What “level” in the Annual Incentive Program and Long-Term Incentive Program are the other named executive officers placed?
 
By asking the question “What is reasonable fixed pay for a particular position,” the Compensation Committee considers what companies in the Comparator Group pay for a particular position and what duties and responsibilities a particular position entails with us as compared to a similar position at a Comparator Group company. By asking the question “What is appropriate fixed pay for a particular individual,” the Compensation Committee takes into account the particular accomplishments and expected contributions of a named executive officer as well as his or her relevant talents, abilities, and experience and marketability. By asking the question “What is paid in fixed pay to the other named executive officers,” the Compensation Committee assesses the named executives’ pay in relation to one another, as another means to help make a reasonable determination of the appropriate amount of total compensation. The remaining questions are meant to address these same matters, but related to the “level” of placement of a named executive officer into the Annual Incentive and Long-Term Incentive Programs. Though weights are not assigned to any of these questions, they provide a framework which the Compensation Committee uses to assess the appropriateness of fixed pay and incentive pay awarded each of the named executive officers.
 
As a general matter, in allocating compensation among fixed pay and incentive pay, we believe that the compensation of our senior-most levels of management – the levels of management having the greatest ability to directly influence our performance – should be more heavily weighted on incentive pay, while lower levels of management with less of an ability to directly influence our performance, should receive a greater portion of their compensation in fixed pay. As detailed below, based on its review, the Compensation Committee believes total compensation for our Chief Executive Officer and each other named executive officer is reasonable.
 
2008 Targeted Overall Compensation Process

In November 2007, at the request of the Compensation Committee, management prepared its 2008 base salary, 2008 Annual Incentive Program, and 2008 Long-Term Incentive Program recommendations for the Compensation Committee to consider, which covered all of our named executive officers with the exception of Mr. Blankenship. We are party to a 2008-2009 Letter Agreement with Mr. Blankenship (amended and restated effective as of January 1, 2009) (described below under “2008-2009 Letter Agreement with Don L. Blankenship” and on pages 36 and 42 of this Proxy Statement) that includes an annual cash bonus award (referred to as an incentive bonus award), long-term incentive awards, and sets his monthly base salary. Management prepared its recommendations in accordance with the guidelines described above in the sections entitled “General Philosophy” and “Components of Targeted Overall Compensation.” Management’s recommendations to the Compensation Committee took into consideration a named executive officer’s:

·  
job function and responsibilities,
 
·  
performance and contribution to us,
 
·  
years of experience,
 
·  
current salary,
 
·  
current participation level in the Annual Incentive and Long-Term Incentive Programs, and
 
·  
base salaries and participation level in the Annual Incentive and Long-Term Incentive Programs of the other named executive officers.
 
These items are used to help inform management and the Compensation Committee on how to set recommended amounts and levels of fixed pay and incentive pay (the annual cash bonus award and the long-term performance-based and service based incentive awards) for named executive officers in the following manner. An individual’s job function and related responsibilities are reviewed and assessed based upon breadth and depth of responsibility (number of direct reports, areas of oversight, work load). Performance and contribution is evaluated based on proficiency and efficiency, accomplishment of objectives and positive results. The Compensation Committee considers years of experience only insofar
22

as the years of experience is a proxy for the accumulation of practical knowledge and expertise that cannot be easily obtained or replaced. An individual’s current participation level in the Annual Incentive and Long-Term Incentive Programs is reviewed as a starting place to evaluate whether one’s recent performance warrants continuation in such level or a recommendation to be placed in another level (up or down). A comparison of base salaries and participation level in the Annual Incentive and Long-Term Incentive Programs of the other named executive officers provides one more means to help make a reasonable determination of what level such individual should be placed in going forward. Though weights are not assigned to any of these items, they provide a framework that management uses to determine the appropriateness of fixed pay and incentive pay awarded each of the named executive officers.
 
Management’s recommendations included a list of proposed participants for each program, the level in which each named executive officer would participate, the monetary values assigned to each level of participation if performance was achieved, the criteria selected to measure performance, the basis for the selection of such criteria, and the threshold, target, and maximum levels of performance selected for such criteria and the basis for such selection. Management also provided the Compensation Committee with the projected costs of the programs assuming targeted performance was achieved and provided a comparison of the costs of the proposed 2008 programs to the 2007 programs. The Compensation Committee reviewed and discussed the recommendations with management prior to approval of the programs, making adjustments as they deemed necessary or appropriate.
 
For those named executive officers with employment agreements, the 2008 targeted overall compensation was arrived at through a series of discussions and negotiations between each individual and the Compensation Committee. All of the named executive officers, with the exception of Mr. Tolbert, had one or more employment agreements in place during 2008: the 2008-2009 Letter Agreement for Mr. Blankenship, the Employment and Change in Control Agreement effective November 1, 2005 for Mr. Phillips expiring on November 1, 2008 and replaced by the Employment and Change in Control Agreement effective November 1, 2008, (described below under “Employment and Change in Control Agreements with Baxter F. Phillips, Jr.” on pages 37 and on page 45 of this Proxy Statement), the Retention and Employment Agreement effective November 13, 2007 for Mr. Adkins (amended and restated effective as of January 1, 2009) (described below under “Retention and Employment Agreement with John Christopher Adkins” on pages 38 and 45 of this Proxy Statement), and the Employment Agreement effective May 25, 2006 for Mr. Snelling (amended and restated effective as of January 1, 2009) (described below under “Employment Agreement with Michael K. Snelling” on pages 39 and 47 of this Proxy Statement).
 
Clawback Policy

On February 19, 2008, the Board of Directors adopted a Clawback Policy. The Clawback Policy provides that the Board of Directors will, to the extent permitted by governing law, require reimbursement of any bonus paid to an executive officer (as such officers are designated by the Board of Directors on an annual basis) where the payment was predicated upon the achievement of certain financial results that are subsequently the subject of a restatement of our financial statements filed with the SEC, where in the Board of Directors’ view, the executive officer engaged in intentional misconduct that caused or partially caused the need for the restatement, and a lower payment would have been made to the executive officer based upon the restated financial results. In each such instance, the Board of Directors will seek to recover the entire bonus of the individual executive officer for the relevant period, plus a reasonable rate of interest.
 
Section 162(m) Deductibility

Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code), generally limits the corporate tax deduction for compensation paid to our named executive officers to $1 million, unless certain requirements are met. We intend to maximize the corporate tax deduction. However, while our incentive compensation programs are designed to facilitate compliance with Section 162(m), the Compensation Committee believes that we must attract and retain qualified executives and that, in some instances, the Compensation Committee may need the flexibility to offer compensation that exceeds the Section 162(m) threshold for deductibility. The Compensation Committee has approved the compensation of certain of our named executive officers recognizing that a portion of that compensation will not be deductible.
 

 
23

 
Compensation Components

Base Salary.

As discussed above, we want to provide our named executive officers with a basic level of financial security in the form of base salary that reflects their professional status, accomplishments, years of experience, and contributions to us. As of January 1, 2008, the base salaries of our named executive officers were as follows:
 
Name
 
Base Salary Amount effective January 1, 2008
         
Don L. Blankenship
   
$   1,000,000
 
         
Baxter F. Phillips, Jr.
   
 588,000
 
         
J. Christopher Adkins
   
 378,000
 
         
Michael K. Snelling
   
 332,000
 
         
Eric B. Tolbert
   
 228,800
 
 
The Compensation Committee’s practice generally is to adjust base salaries where appropriate in November of each year for the following year. As described above, the 2008 base salaries for our named executive officers were evaluated as part of an annual assessment conducted by management at the request of the Compensation Committee. Management’s recommendations provided the starting point for the Compensation Committee’s analysis. The Compensation Committee determined 2008 base salaries in accordance with the factors described above. While each of these factors was considered, a specific value was not assigned to any factor. Additionally, a subjective element is used in establishing each named executive officer’s base salary to the extent such duties may be unique and to recognize the demonstrated capabilities of the individual. On July 7, 2008, Mr. Tolbert received a cost of living increase in his base salary of three percent. Upon being named our President, Mr. Phillips salary was adjusted to $650,000 in accordance with the terms of his Employment and Change in Control Agreement effective November 1, 2008. Mr. Blankenship’s base salary has been not been increased since January 1, 2002.

Annual Incentive Program.

The Compensation Committee provides our named executive officers with an opportunity to earn additional cash compensation in the form of a cash bonus award based on individual and company-wide performance over a one-year time horizon. We believe these annual cash bonus awards provide our named executive officers with an incentive to excel at their individual job function and area of expertise in a manner that contributes to overall company-wide performance, and to further align the financial interests of our named executive officers with those of our stockholders.
 
Approximately 100 employees, including all of our named executive officers, with the exception of Mr. Blankenship, participated in our 2008 Annual Incentive Program. Mr. Blankenship’s annual cash bonus award was negotiated as part of the 2008-2009 Letter Agreement. Each participant in the Annual Incentive Program is placed in one of several participation levels, with each level corresponding to a certain targeted cash bonus range. At the request of the Compensation Committee, management conducts an annual review of the participation level of all participants to determine the appropriate annual cash bonus amount to be paid participants in each level of the Annual Incentive Program. A participant may earn from zero up to two times such participant’s targeted annual cash bonus, based on the levels of performance for the selected performance criteria. The selected performance criteria include company-wide performance goals, and for certain participants, including all of our named executive officers, specific performance goals related to their job function. In addition, a specified portion of the annual cash bonus is based on the discretion of the Compensation Committee.
 
For each performance component of the annual cash bonus, the compensation earned by a participant if the threshold level of performance is met is equal to one half of a participant’s targeted annual cash bonus for that portion of his annual cash bonus attributed to such performance component. The compensation earned if the maximum level of company-wide performance is met or exceeded is equal to two times the participant’s targeted annual cash bonus attributed to such performance component. If actual performance falls between the threshold and target levels of performance or between the target and maximum levels of performance, the annual cash bonus earned by a participant for each performance component of the annual cash bonus is prorated between the levels in proportion to the amount of additional performance achieved between the levels. In this manner, a participant is incentivized to exceed a targeted level of performance and is not
 
24

 
disincentivized if it becomes apparent during the year that a targeted level of performance can no longer be met, but the threshold level is still achievable.
 
The achievement of the company-wide performance component and the specific performance component of a participant’s annual cash bonus are confirmed by our Chief Financial Officer and the Chairman of the Compensation Committee and approved by the Compensation Committee. The Compensation Committee may take into account extraordinary, unusual or infrequently occurring events and transactions to adjust the performance goals used to determine whether or not the company-wide performance component and the specific performance components are met. For example, the Compensation Committee may take into account effects of items that were not foreseen or contemplated when the performance goals were set, such as mergers, corporate restructurings, stock splits, or other exceptional, one-time or non-recurring events by backing out the impact of such events on the performance goals being measured. The Compensation Committee selects the specific and the company-wide performance criteria for incentive pay from a list of criteria contained in our stockholder-approved equity plans from which the awards are made. The actual targets for each criteria are set by the Compensation Committee, taking into consideration Massey’s expected performance based upon its plan and recommendations from management. It is the intent of the Compensation Committee that the specific and company-wide performance components of the annual bonus awards to our named executive officers qualify for performance-based compensation for Section 162(m) purposes.
 
The performance criteria selected for the company-wide performance component of our 2008 Annual Incentive Program was cumulative earnings before interest and taxes (EBIT). We believe EBIT is an appropriate and effective measure of annual company-wide performance because it measures earnings without including the amount of interest or taxes that we pay on a yearly basis which are, for the most part, determined by the financial markets or federal and state governments, but does take into account amounts depreciated and amortized by us each year which are, for the most part, a result of decisions made by our named executive officers.
 
The 2008 EBIT levels for the performance period, applicable to all of our named executive officers were as follows:
 
 
  
Threshold Level
  
Target Level
  
Maximum Level
  
2008 Actual, as adjusted
EBIT
  
 
$140MM
  
 
$190MM
  
 
$230MM
  
 
$383MM
 
The threshold level of EBIT performance was set based on a level of performance that was believed to be achievable. The target level of EBIT performance was set based on a level of performance that was believed to be aggressive, but obtainable. The maximum level of EBIT performance was set based on a level of performance that was believed to be realizable upon the actualization of exceptional performance. In determining the annual cash bonus for 2008, the Committee has the discretion to take into account any extraordinary, unusual or infrequently occurring events and transactions in determining whether or not or to what degree the company-wide and specific performance components were met. In accordance with this authority, the Compensation Committee considered it appropriate to adjust EBIT to take into account the charges to earnings in satisfaction of the final judgment entered in the Wheeling-Pittsburgh litigation against us in the amount of $250 million and paid out on December 4, 2008, as more fully described in Note 18 to the Notes to Consolidated Financial Statements in our Form 10-K filed with the SEC on March 2, 2009.
 
As mentioned above, a portion of the participant’s cash bonus is left to the discretion of the Compensation Committee. Management makes recommendations to the Compensation Committee either not to pay any discretionary portion of targeted cash bonus or to pay an amount within a range from zero to two times that portion of targeted cash bonus attributable to the discretion of the Compensation Committee for a particular individual based on an assessment of individual performance, as our financial circumstances permit.
 
Annual incentive bonuses, if earned, are typically paid on or around February 28th of each year. In order to receive the award, a participant must be employed on the date the bonus is paid.
 
The Compensation Committee identified certain specific performance goals for Messrs. Phillips, Adkins, Snelling, and Tolbert that it believed appropriately reflected areas over which such officers were responsible and positioned to directly influence outcome. For each specific performance measure, each threshold amount was set based on a level of performance believed to be achievable, each target amount was set on a level of performance believed to be aggressive, but obtainable, and each maximum amount was set based on performance that was believed to be realizable upon the actualization of exceptional performance.
 
The specific performance measures set for Mr. Blankenship’s incentive bonus award were determined by the Compensation Committee in negotiations with Mr. Blankenship as set forth in the 2008-2009 Letter Agreement. The Compensation Committee believed the specific performance measures appropriately reflected areas over which Mr. Blankenship was responsible and positioned to directly influence outcome. For each specific performance measure, each threshold amount was set based on a level of performance believed to be achievable, each target amount was set on a level of

 
25

 
performance believed to be aggressive, but obtainable, and each maximum amount was set based on performance that was believed to be realizable upon the actualization of exceptional performance. The various percentages or weights assigned to each component of Mr. Blankenship’s incentive bonus award were based on what the Compensation Committee believed to be the relative importance of such component as compared to the other measures.
 
The discretionary component of the annual cash bonus is meant to give the Compensation Committee the ability to recognize and affirm the value and contributions of an award recipient apart from company-wide or specific performance measures. This provides the Compensation Committee with a useful mechanism to convey its approval of a recipient’s individual performance. The Compensation Committee does not apply a set formula in determining the discretionary amount awarded to a named executive officer based on individual performance, but takes into consideration a variety of factors, including, (i) contributions made to our on-going and future success, (ii) duties and responsibilities undertaken and acted upon, and (iii) management and leadership provided. In addition, the degree to which the company-wide or specific performance goals of the annual cash bonus award were met is given consideration, insofar as the Compensation Committee makes a determination that factors outside the control of the recipient favorably or unfavorably impacted whether the goals were met, and if so, to what degree (e.g. labor availability, transportation availability, market demand, market prices).
 
Upon review of each of Messrs. Phillips’, Adkins’, Snelling’s, and Tolbert’s individual performance, the Compensation Committee made the determination that each had made significant contributions to our on-going and future success, carried out the duties and responsibilities of their respective offices in an exemplary manner, and provided strong management and leadership to those under them. The Compensation Committee did not explicitly identify particular factors in making these determinations for each of these individuals, but instead based its assessment on their general knowledge and business judgment. In addition to the foregoing assessment, the Compensation Committee made the determination that Messrs. Phillips and Adkins should receive 100% of the maximum discretionary component of their 2008 annual cash bonus award, and Mr. Snelling should receive 24% of the maximum discretionary component of his 2008 annual cash bonus award to (i) affirm the job each was doing, (ii) recognize that factors outside their control unfavorably impacted the individual’s ability to meet the company-wide and specific performance goals, and (iii) retain them in an extremely competitive environment. The variations in the determinations that were made were based upon the degree to which the Committee believed room for improvement existed. The Compensation Committee did not award a discretionary bonus to Mr. Tolbert.

As noted above, in determining the annual cash bonus for 2008, the Committee took into account an extraordinary, unusual and infrequently occurring event in determining whether or not the company-wide and specific performance components were met.

Annual Cash Bonus Awards for Mr. Blankenship
 
The threshold, targeted and maximum annual bonus award amounts and actual payout amounts for Mr. Blankenship for fiscal year 2008 were as follows:

 
  
Threshold Bonus
  
Targeted Bonus
  
Maximum Bonus
  
Actual 2008 Payout
Don L. Blankenship
  
$450,000
  
$900,000
  
$2,250,000
  
$1,225,440

Under the 2008-2009 Letter Agreement, Mr. Blankenship potentially could have received an annual cash bonus award (referred to as his incentive bonus award) with a target amount of $900,000 if all target performance measures were met. The threshold level of performance for all components would pay out one half of the target amount and the maximum level of performance for all components would pay out 2.5 times the target amount.

The 2008 incentive bonus award for Mr. Blankenship was based 75% on business performance criteria and 25% on strategic objective criteria.

The Compensation Committee established seven business performance criteria that comprised the 75% business performance criteria portion of the incentive bonus award for Mr. Blankenship:  (i) EBIT, (ii) produced tons, (iii) productivity of continuous miners in terms of feet per shift, (iv) productivity of longwall operations in terms of feet of retreat per longwall per day, (v) surface mining productivity in terms of tons per manhour, (vi) environmental violation reductions, and (vii) non-fatal days lost (calculated as the number of employee work-related accidents times 200,000 hours, divided by the total employee hours worked). The specific business performance criteria followed by the percentage of the overall incentive bonus award it constituted are contained in the table below:

 

 
26

 
 
                   
Longwall Miner
 
Surface
       
               
Continuous
 
Productivity
 
Mining
 
Environmental
   
               
Miner
 
(Feet of
 
Productivity
 
Violations
 
NFDL Rate (a)
           
Produced
 
Productivity
 
Retreat/
 
(Tons/
 
(Percent
 
(Percent
       
EBIT
 
Tons
 
(Feet/Shift)
 
Longwall Day)
 
Manhour)
 
Reduction)
 
Reducton)
Name
     
(20%)
 
(20%)
 
(5%)
 
(5%)
 
(5%)
 
(10%)
 
(10%)
                                 
Don L. Blankenship
 
Threshold
 
$190 MM
 
40 MM
 
247
 
22.0
 
5.08
 
2%
 
0%
                                 
   
Target
 
200 MM
 
41 MM
 
250
 
26.0
 
5.13
 
8%
 
1%
                                 
   
Maximum
 
230 MM
 
42 MM
 
259
 
31.0
 
5.18
 
10%
 
2%
___________________
(a)
Non-fatal days lost (NFDL) is calculated as the number of employee work-related accidents times 200,000 hours, divided by the total employee hours worked.

The actual results achieved for Mr. Blankenship’s business performance criteria were:  (i) $383 million for EBIT, as adjusted, (ii) 40.97 million for produced tons, (iii) 215 for productivity of continuous miners in terms of feet per shift, (iv) 21.6 for productivity of longwall operations in terms of feet of retreat per longwall per day, (v) a 4.68 ton per manhour increase for surface mining productivity, (vii) 14.06% environmental violation reductions and (vii) 1.94 (a 5.6% reduction) for non-fatal days lost. The business performance criteria for EBIT, environmental reductions and non-fatal days lost reductions exceeded the maximum amounts. The produced tons criteria was slightly below the target. The productivity of continuous miners in terms of feet per shift, the productivity of longwall operations in terms of feet of retreat per longwall per day, and the surface mine productivity in terms of tons per manhour threshold amounts were not met.

The Compensation Committee also established the following three strategic objective criteria that comprised the 25% strategic objective criteria portion of the incentive bonus award for Mr. Blankenship: (i) successorship, (ii) retention, and (iii) diversity in membership. The specific strategic objective criteria followed by the percentage of the overall incentive bonus award it constituted are contained in the table below:


               
Diversity in
               
Membership
Name
     
Successorship
 
Retention
 
SG&A
Other
(5%)
 
(15%)
 
(5%)
                   
Don L. Blankenship
 
Threshold
 
 Identify 2 Successors
 
Voluntary Quits 16%
 
41%
1.00%
                   
   
Target
 
 Identify 2 Successors
 
Voluntary Quits 14%
 
45%
1.50%
       
 and have a Plan
         
                   
   
Maximum
 
 Identify 3 Successors
 
Voluntary Quits 12%
 
48%
2.25%
       
 and have a Plan
         
 
The actual results achieved for Mr. Blankenship’s strategic objective criteria were (i) identify three successors and have a plan, (ii) voluntary quits at 17.2% for retention, and (iii) 40% and 1.8% for diversity in membership for selling, general and administrative (SG&A) and Other employees, respectively. The strategic objective criterion for diversity in membership for Other employees was between the target and maximum amount. The strategic objective criterion for successorship was at the maximum amount, and the strategic objective criteria for voluntary quits and diversity in membership for SG&A did not meet the threshold amounts.

Based upon the actual results of the business performance criteria and the strategic objective criteria, the Compensation Committee awarded Mr. Blankenship $1,225,440 for his 2008 incentive bonus award.

 
27

 
Annual Cash Bonus Award for Mr. Phillips

The threshold, targeted and maximum annual bonus award amounts and actual payout amounts for Mr. Phillips for fiscal year 2008 were as follows:

 
  
Threshold Bonus
  
Targeted Bonus
  
Maximum Bonus
  
Actual 2008 Payout
Baxter F. Phillips, Jr.
  
$162,500
  
$325,000
  
$650,000
  
$568,750

The 2008 annual cash bonus award for Mr. Phillips was based 50% on specific performance measurements, 25% on our EBIT for fiscal year 2008 and 25% on the discretion of the Compensation Committee.

The Compensation Committee established two specific performance measures for Mr. Phillips:  (i) average per ton realization and (ii) general and administrative cost reduction per ton (excluding stock price effects). The specific performance measurements applicable to Mr. Phillips’ annual cash bonus awards are contained in the table below. Each of Mr. Phillips’ specific performance measurements constituted one half of the specific performance component of his targeted annual cash bonus award.

            General and
          Average Per Ton     Administrative Cost
Name
     
Realization
 
Reduction Per Ton
(50%)
 
(50%)
             
Baxter F. Phillips, Jr.
 
Threshold
 
 $53.15
 
0%
             
   
Target
 
54.15
 
1%
       
 
   
   
Maximum
 
55.00
 
2%
       
 
   
 
The actual results achieved for Mr. Phillips’ specific performance measurements were (i) $62.49 for average per ton realization and (ii) 1% reduction in general and administrative costs per ton (excluding stock price effects). The average per ton realization exceeded the maximum amount and the general and administrative cost reduction met the target amount.
 
The actual level of EBIT achieved for fiscal year 2008 was $383 million, as adjusted, which exceeded the maximum amount.
 
The Compensation Committee, upon management’s recommendation, awarded Mr. Phillips 100% of the maximum discretionary amount of the target cash bonus based upon Mr. Phillips’ individual performance in 2008.

Annual Cash Bonus Award for Mr. Adkins

The threshold, targeted and maximum annual bonus award amounts and actual payout amounts for Mr. Adkins for fiscal year 2008 were as follows:

 
  
Threshold Bonus
  
Targeted Bonus
  
Maximum Bonus
  
Actual 2008 Payout
J. Christopher Adkins
  
 
$162,500
  
 
$325,000
  
 
$650,000
  
 
$455,000

The 2008 annual cash bonus award for Mr. Adkins was based 50% on specific performance measurements, 25% on our EBIT for fiscal year 2008 and 25% on the discretion of the Compensation Committee.
 
The Compensation Committee established five specific performance measures for Mr. Adkins: (i) non-fatal days lost (calculated as the number of employee work-related accidents times 200,000 hours, divided by the total employee hours worked) percentage reduction from 2007, (ii) number of underground unit shifts, (iii) management of cash cost per ton, (iv) productivity of continuous miners in terms of feet per shift, and (v) productivity of longwall operations in terms of feet of retreat per longwall per day. The specific performance measurements applicable to Mr. Adkins’ annual cash bonus awards are contained in the table below. Each of Mr. Adkins’ specific performance measurements constituted one fifth of the specific performance component of his targeted annual cash bonus award.
 
28

                       
Longwall Miner
       
NFDL Rate (a)
 
Number of
 
Management
 
Continuous Miner
 
 Productivity
       
(Percent
 
Underground
 
of Cash Cost
 
Productivity
 
(Feet of Retreat/
Name
     
Reduction)
 
Unit Shifts
 
Per Ton
 
(Feet/Shift)
 
Longwall Day)
(20%)
 
(20%)
 
(20%)
 
(20%)
 
(20%)
                         
J. Christopher Adkins
 
Threshold
 
0%
 
25,584
 
$44.44
 
247
 
22.0
                         
   
Target
 
1%
 
26,084
 
$43.44
 
250
 
26.0
                         
   
Maximum
 
2%
 
26,584
 
$42.94
 
259
 
31.0
___________________
(a)
Non-fatal days lost (NFDL) is calculated as the number of employee work-related accidents times 200,000 hours, divided by the total employee hours worked.
 
The actual results achieved for Mr. Adkins’ specific performance measurements were (i) 5.36% reduction from 2007 for non-fatal days lost, (ii) 30,141 for number of underground unit shifts, (iii) $48.53 for cash cost per ton, (iv) 215 feet per shift for productivity of continuous miners, and (v) 21.59 feet of retreat per longwall per day for productivity of longwall operations. The specific performance measure for non-fatal days lost and number of underground shifts exceeded the maximum amounts. The specific performance measures for management of cash cost per ton, productivity of continuous miners in terms of feet per shift, and productivity for longwall operations in terms of feet of retreat per longwall per day were not met.
 
The actual level of EBIT achieved for fiscal year 2008 was $383 million, as adjusted, which exceeded the maximum amount.
 
The Compensation Committee, upon management’s recommendation, awarded Mr. Adkins 100% of the maximum discretionary amount of the target cash bonus based upon Mr. Adkins’ individual performance in 2008.

Annual Cash Bonus Award for Mr. Snelling

The threshold, targeted and maximum annual bonus award amounts and actual payout amounts for Mr. Snelling for fiscal year 2008 were as follows:

 
  
Threshold Bonus
  
Targeted Bonus
  
Maximum Bonus
  
Actual 2008 Payout
Michael K. Snelling
  
$105,00
  
$210,000
  
$420,000
  
$287,500

The 2008 annual cash bonus award for Mr. Snelling was based 50% on specific performance measurements, 25% on our EBIT for fiscal year 2008 and 25% on the discretion of the Compensation Committee.

The Compensation Committee established four specific performance measures for Mr. Snelling: (i) non-fatal days lost (calculated as the number of employee work-related accidents times 200,000 hours, divided by the total employee hours worked) percentage reduction from 2007, (ii) surface tons released, (iii) surface mining productivity in terms of tons per manhour, and (iv) surface ratio. The specific performance measurement applicable to Mr. Snelling’s annual cash bonus awards are contained in the table below. Mr. Snelling’s non-fatal days lost, produced tons, surface miner productivity and surface ratio specific performance measurements each constituted twenty-five percent of the specific performance component of his targeted annual cash bonus award.
 
       
 NFDL Rate (a)
 
Produced Tons
 
Surface Mining
 
Surface
       
(Percent
 
(Surface tons
 
Productivity
 
Ratio
Name
     
Reduction)
 
Released)
 
(Tons/Manhour)
   
(25%)
 
(25%)
 
(25%)
 
(25%)
                     
Michael K. Snelling
 
Threshold
 
0%
 
17.9 MM
 
5.08
 
15.58
                     
   
Target
 
1%
 
18.8 MM
 
5.13
 
15.43
                     
   
Maximum
 
2%
 
19.3 MM
 
5.18
 
15.28
___________________
(a)
Non-fatal days lost (NFDL) is calculated as the number of employee work-related accidents times 200,000 hours, divided by the total employee hours worked.

 
29

 
    The actual results achieved for Mr. Snelling’s specific performance measurements were (i) 5.36% reduction from 2007 for non-fatal days lost, (ii) 19.31 million surface tons released, (iii) a 4.68 ton per manhour increase for surface mining productivity, and (iv) 15.13 surface ratio (yards of material removed: one ton of produced coal). The specific performance measures for non-fatal days lost, surface tons released, and surface ratio exceeded the maximum amounts. The specific performance measure for surface mine productivity in terms of tons per manhour did not meet the threshold amount.
    
    The actual level of EBIT achieved for fiscal year 2008 was $383 million, as adjusted, which exceeded the maximum amount.
 
    The Compensation Committee, upon management’s recommendation, awarded Mr. Snelling 24% of the maximum discretionary amount of the target cash bonus based upon Mr. Snelling’s individual performance in 2008.

Annual Cash Bonus Award for Mr. Tolbert
 
    The threshold, targeted and maximum annual bonus award amounts and actual payout amounts for Mr. Tolbert for fiscal year 2008 were as follows:

 
  
Threshold Bonus
  
Targeted Bonus
  
Maximum Bonus
  
Actual 2008 Payout
Eric B. Tolbert
  
$35,000
  
$70,000
  
$140,000
  
$105,000
 
    The 2008 annual cash bonus award for Mr. Tolbert was based 50% on specific performance measurements, 25% on our EBIT for fiscal year 2008 and 25% on the discretion of the Compensation Committee.
    
    The Compensation Committee established two specific performance measures for Mr. Tolbert: (i) earnings after tax, and (ii) management of liquidity. The specific performance measurements applicable to Mr. Tolbert’s annual cash bonus awards are contained in the table below. Each of Mr. Tolbert’s specific performance measurements constituted one half of the specific performance component of his targeted annual cash bonus award.
 
       
Earnings
   
       
After Tax
 
Liquidity
Name
     
(50%)
 
(50%)
             
Eric B. Tolbert
 
Threshold
 
$62.7 MM
 
$345 MM
             
   
Target
 
103.7 MM
 
385 MM
             
   
Maximum
 
136.5 MM
 
400 MM

    The actual results achieved for Mr. Tolbert’s specific performance measurements were (i) $244 million for earnings after tax and (ii) $722 million for management of liquidity (excluding the 2008 Wheeling-Pittsburgh legal payment described above). The specific performance measure for earnings after tax and management of liquidity exceeded the maximum amounts.
 
    The actual level of EBIT achieved for fiscal year 2008 was $383 million, as adjusted, which exceeded the maximum amount.
 
    Mr. Tolbert did not receive a discretionary cash bonus for 2008.


 
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Long-Term Incentive Program.

We believe it is important to provide our named executive officers with additional forms of compensation that are longer-term in nature to promote retention, to incentivize sustainable growth and long-term value creation, and to further align the interests of our named executive officers with those of our stockholders. Our long-term incentive program (the LTIP) is a means we use to achieve these ends.
 
At the request of the Compensation Committee, management recommends to the Compensation Committee a value of targeted compensation for each LTIP level. In addition, at the request of the Compensation Committee, management conducts an annual review of the participation level assigned to each of our named executive officers in the previous year’s LTIP, if applicable, and recommends that each named executive officer be placed in one of several levels, each corresponding to a certain level of targeted long-term compensation. This process is undertaken for each of our named executive officers with the exception of Mr. Blankenship whose long-term incentive compensation was negotiated as part of the 2008-2009 Letter Agreement.
 
The particular and distinct purpose of long-term incentive awards is to provide our named executive officers with additional forms of compensation that are longer term in nature to promote retention, to incentivize sustainable growth and long-term value creation, and to further align the interests of our named executive officers with those of our stockholders. The components of the LTIP awards consist of:
 
·  
a long-term cash incentive award,
 
·  
a restricted stock award,
 
·  
a restricted unit award, and
 
·  
a non-qualified stock option award.
 
The long-term cash incentive award is the cornerstone of the LTIP and is a component of every LTIP award. The long-term cash incentive award is designed similarly to the annual cash bonus award, except that it takes into account multi-year performance and requires that the named executive officer remain employed over this time-period. The Compensation Committee believes that a cash award is an appropriate component of the LTIP, providing incentive to earn additional cash if certain performance metrics are met. The restricted stock awards and restricted unit awards are utilized by the Compensation Committee because it believes that these awards further align a participant’s interests with that of our stockholders, incentivizing participants to improve stock price performance over a multi-year period. The restricted unit award is used to help offset the taxes payable by a participant on the restricted stock award that vests on the same date, so that the participant is not forced to sell the vested Common Stock in order to pay the taxes that are due upon vesting. The Compensation Committee believes that as a result, a participant is more likely to hold onto Common Stock, further aligning the participant’s interests with that of our other stockholders over the long term. The non-qualified stock option award is used to provide additional compensation when the price of Common Stock goes up over time. In this manner, a participant only benefits if the stock price increases from the date of the grant. The Compensation Committee believes that the non-qualified stock option awards also aligns a participant’s interest with the long-term interests of our stockholders but without providing value if there is no appreciation in the stock price.
 
With respect to the breakdown of the various components of the LTIP awards, for each of the named executive officers except Mr. Blankenship, whose 2008 LTIP was negotiated as part of the 2008-2009 Letter Agreement, the Compensation Committee assigned 25% of the total targeted 2008 LTIP award to the cash incentive award, 50% to the restricted stock and unit grant, and 25% to the non-qualified stock option grant. The Compensation Committee believed that based upon the function served by each component of the LTIP award as discussed above, this was an appropriate allocation of the total targeted 2008 LTIP award among the various components.
 
With the exception of significant promotions and new hires, LTIP awards are generally made at the quarterly Compensation Committee meeting occurring in November of each year. The 2008 LTIP awards were granted in November 2007. The LTIP awards are set in November each year to take into account the completion of management and the Board of Directors’ annual strategic review and update of our internal multi-year performance forecast. In addition, this timing enables the Compensation Committee to consider our company-wide performance and each of our named executive officer’s specific performance through the third quarter of the current year and our expectations for the next multi-year period. The LTIP awards are typically made in November, several weeks following the public release of our third-quarter earnings. In addition, the Compensation Committee’s schedule is determined several months in advance and the proximity of any awards to market events is coincidental.
 
The long-term cash incentive component of the LTIP award is a component of every LTIP participant level. The long-term cash incentive award requires a named executive officer to remain employed during the performance period,

 
31

 
typically three years. The features of the long-term cash incentive award are similar to the Annual Incentive Program, except that it is intended to reward performance over a multi-year period. A target level of company-wide performance is determined by the Compensation Committee after taking into account the recommendations of management. A named executive officer may earn a portion of targeted pay if at least a threshold level of company-wide performance is met and may earn more than targeted pay if company-wide performance exceeds a target level. In this manner, the Compensation Committee believes our named executive officers are incentivized to exceed a targeted level of company-wide performance and are not disincentivized if it becomes apparent during the measuring period that a targeted level of company-wide performance can no longer be met, but the threshold level is still achievable.
 
The performance period of the long-term cash incentive award component of the 2008 LTIP award covers fiscal years 2008 through 2010. The company-wide performance criteria selected for the long-term cash incentive component of the 2008 LTIP award applicable to our named executive officers is cumulative earnings before taxes, which we refer to as EBT. EBT is selected because it is a measurement that management uses to evaluate our ability and success at generating earnings. The threshold, target, and maximum levels of EBT performance that are set by the Compensation Committee are based on percentages of our internal multi-year budget forecast for the 2008-2010 performance period, which is material non-public information that is highly sensitive and not shared with the public.
 
As with the annual cash bonus awards, the LTIP awards follow our ‘pay for performance’ philosophy. The Compensation Committee believes that the LTIP program causes our executives to focus on overall, long-term generation of earnings that in turn is expected to strengthen financial performance and increase stockholder return.
 
In November 2007, the Compensation Committee set the threshold level of EBT performance based on a level of performance that was believed to be achievable, the target level of EBT performance based on a level of performance that was believed to be aggressive, but obtainable, and the maximum level of EBT performance based on a level of performance that was believed to be realizable upon the actualization of exceptional performance. The Compensation Committee recognizes that the likelihood of achievement of threshold, target or maximum levels of EBT performance is unpredictable and may differ from year to year, and believes that the payout should be appropriate for the performance achieved. A named executive officer will not receive the long-term cash incentive component of the 2008 LTIP award if the threshold level of EBT is not met; will receive one half of the targeted amount if the threshold level of EBT is met; and will receive two times the targeted amount if the maximum level of EBT is met. If actual performance falls between the threshold and target levels of EBT or between the target and maximum levels of EBT, the long-term cash bonus earned will be prorated between the levels in proportion to the amount of additional EBT achieved between the levels.
 
The earn-out of the long-term cash incentive component of the LTIP award for our named executive officers is confirmed by our Chief Financial Officer and the Chairman of the Compensation Committee and approved by the Compensation Committee. The Compensation Committee may take into account extraordinary, unusual or infrequently occurring events and transactions to adjust the performance goals used to determine if the company-wide performance component and the specific performance components are met. For example, the Compensation Committee may take into account effects of items that were not foreseen or contemplated when the performance goals were set, such as mergers, corporate restructurings, stock splits, litigation charges or other exceptional, one-time or non-recurring events by backing out the impact of such events on the performance goals being measured. The cash incentive component of the LTIP award, if earned, is typically paid on or around March 15th of the year following the relevant performance period. In order to receive the award, a named executive officer must be employed during the performance period, but not necessarily on the date we pay the cash incentive component of the LTIP award.
 
It is the intent of the Compensation Committee that the long-term cash incentive award component of the LTIP qualify for performance-based compensation treatment under Section 162(m) of the Code.
 
The long-term cash incentive component of the LTIP awards for all the named executive officers for the 2006-2008 period were based on the achievement of certain levels of EBT. The EBT Levels for the 2006-2008 performance period applicable to all of our named executive officers that were paid out in 2009 (the 2006 LTIP) were as follows:

 
  
Threshold Level
  
Target Level
  
Maximum Level
  
2006-2008 Actual, as adjusted
EBT
  
$312.7MM
  
$781.8MM
  
$1,250.8MM
  
$536.8MM

The level of EBT achieved by Massey during 2006-2008 of $536.8MM, as adjusted fell between the threshold and target levels. The named executed officers were provided a 2006 LTIP award that corresponded to the amount of EBT achieved over the threshold amount. In determining the long-term cash incentive component of the LTIP awards, the Compensation Committee has the discretion to take into account any extraordinary, unusual or infrequently occurring events and transactions in determining whether or not or to what degree the company-wide and specific performance components were met. In accordance with this authority, the Compensation Committee considered it appropriate to adjust EBT to take into account two items that were extraordinary and unusual and were not contemplated when the performance levels were set.
 
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The two items were the subsequent increase in interest expense incurred during 2006 through 2008 of approximately $51.9 million resulting from a corporate debt restructuring that took place in December 2005, as more fully described in Note 6 to the Notes to Consolidated Financial Statements in our Form 10-K filed with the SEC on March 1, 2007, and the satisfaction of the final judgment entered in the Wheeling-Pittsburgh litigation against us in the amount of $250 million and paid out on December 4, 2008, as more fully described in Note 18 to the Notes to Consolidated Financial Statements in our Form 10-K filed with the SEC on March 2, 2009. The 2006 LTIP amounts paid to the named executive officers for performance during 2006-2008 were as follows: Mr. Blankenship - $221,642, Mr. Phillips - $104,664, Mr. Adkins - $104,664, Mr. Snelling - $61,567, and Mr. Tolbert - $49,254.
 
The restricted stock and restricted unit components of the LTIP award are forms of equity-based compensation provided to certain LTIP participants, including our named executive officers. The restricted stock and restricted unit components of the LTIP award are service-based and typically vest in equal portions on an annual basis over a three- or four-year vesting period. The value of the restricted stock and restricted unit components of the LTIP award will correspond to increases or decreases in our stock price. We believe that these awards better align a participant’s interests with that of our stockholders, incentivizing participants to improve stock price performance.
 
As each portion of the restricted stock component of the LTIP award vests, the restrictions placed on the vested portion lapse and the Common Stock becomes freely tradable by the participant, subject to our trading window policy and state and federal securities laws. As each portion of the restricted unit component of the LTIP award vests, the participant receives a cash payment equal to the closing price value of an equal number of shares of Common Stock on the date of such vesting, or in the event that the stock market is closed on the date of such vesting, the closing price of Common Stock on the immediately preceding trading day. As previously indicated, the purpose of the restricted unit component of the LTIP award is to help offset the taxes payable by the participant on the restricted stock component of the LTIP award that vests on the same date, so that the participant is not forced to sell the vested Common Stock in order to pay the taxes that are due upon vesting. We believe that as a result, a participant is more likely to hold Common Stock, further aligning the participant’s interests with that of our other stockholders over the long-term.
 
Service-based restricted stock and restricted unit awards do not qualify for performance-based compensation treatment under Section 162(m) of the Code.
 
The non-qualified stock option component of the LTIP award is another form of equity-based compensation provided to certain LTIP participants, including our named executive officers. Prior to 2006, stock options provided companies with favorable accounting treatment as compared to restricted stock and restricted units. In 2006, the accounting treatment for stock options changed as a result of Statement of Financial Accounting Standards No. 123(R), making the accounting treatment of stock options no more attractive than the treatment of restricted stock and restricted units.  Nevertheless, we believe granting stock options to our named executive officers is beneficial because it places additional emphasis on the importance of improving stock price performance within a specific time horizon.
 
The non-qualified stock option component of the LTIP award is a service-based award that typically vests in equal portions on an annual basis over a three- or four-year period. After vesting, a participant must exercise his stock options within ten years from the grant date. The value of the stock option to a participant is the difference between the closing stock price on the date of grant and the market price on the date of exercise. In order for a participant to receive value from a stock option award, the market value of the underlying Common Stock must appreciate before the expiration of the stock options, otherwise the option is forfeited. Restricted stock and restricted units, on the other hand, retain value even if the stock price falls below the stock price on the date of grant.
 
Prior to Fall 2006, we set the grant-date price of the stock option component of the LTIP award based on the average of the high and low market price of our Common Stock on the grant date. We believe that average price valuation is common practice and offers no inherent pricing advantage to a named executive officer or us. Beginning in Fall 2006, however, we changed the method of setting the grant-date price of future stock option awards to be the closing market price of our Common Stock on the date of grant, or in the event the NYSE is closed on such date, the immediately preceding trading day.
 
Stock options granted at fair market value, as these are, automatically qualify for performance-based compensation treatment under Section 162(m) of the Code.
 
The proportion of value that any one component comprises of a participant’s LTIP award is dependent upon the level in which the participant is placed. In November 2007, the Compensation Committee awarded the 2008 LTIP awards to our named executive officers comprised of stock options (representing 25% of the total value of the awards), restricted stock and restricted units (representing 50% of the total value of the awards), and a target long-term cash incentive award (representing 25% of the total value of the awards). At the request of Mr. Phillips, the Compensation Committee awarded additional restricted stock and units to Mr. Phillips in lieu of a long-term cash award so that the value of his restricted stock and unit award constituted 75% of the value of his LTIP award and the value of his stock option award constituted 25%.
 
 
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Approximately 300 employees, including all of our named executive officers, participated in the 2008 LTIP. Although Mr. Blankenship is a participant in the LTIP, his LTIP awards are set by the Compensation Committee without recommendation from management. Consequently, the proportions that each component of Mr. Blankenship’s 2008 LTIP award make up of the targeted total value of his 2008 LTIP award are determined by the Compensation Committee and are reflected in the 2008-2009 Letter Agreement.
 
The total targeted 2008 LTIP amount for each of the named executive officers is as follows: Mr. Blankenship - $1,244,870, Mr. Phillips - $500,000, Mr. Adkins - $500,000, Mr. Snelling - $300,000, and Mr. Tolbert - $250,000. The value of Mr. Blankenship’s 2008 LTIP was negotiated as a part of the 2008-2009 Letter Agreement. The Compensation Committee determined the total targeted 2008 LTIP amount each of the named executive officers should receive based upon a variety of factors, including management responsibilities, past accomplishments, expected contributions, experience, expertise, tenure and marketability. In particular, the Compensation Committee considered the named executive officer’s 2008 performance as described under “Annual Incentive Program” above. The Compensation Committee also considered the expected contributions of these officers to the accomplishment of our short-term and long-term objectives which are reflected in the targets set for both the annual cash bonus awards and the long-term cash incentive award. In addition, in establishing the LTIP amounts for each of these named executive officers, the Compensation Committee also factored in the extremely competitive environment for executive talent in which Massey competes. Although the Compensation Committee considered all of the foregoing factors, it did not assign a particular weight to each factor. The Compensation Committee set the total targeted 2008 LTIP award amounts for each named executive officer based upon what it believed to be reasonable and appropriate in light of the foregoing assessment and as well as to ensure it was adequate to provide reasonable and appropriate incentives to motivate and retain the individual, and based upon the Compensation Committee’s knowledge and experience of the industry and Massey.
 
The aggregate targeted values of the various components of the 2008 LTIP awards made to our named executive officers are as follows:
Name
 
Total Targeted 2008 LTIP Award (a)
         
Don L. Blankenship
   
$  1,244,870
 
         
Baxter F. Phillips, Jr.
   
 500,000
 
         
J. Christopher Adkins
   
 500,000
 
         
Michael K. Snelling
   
 300,000
 
         
Eric B. Tolbert
   
 250,000
 
___________________
(a)
These amounts are based upon the target value of the long-term incentive cash award, the restricted stock and restricted unit value on the date of the grant and the Black-Scholes value of the stock options on the date of grant.
 
The various components of the 2008 LTIP awards made to our named executive officers are as follows:
 
   
2008 LTIP Grants
 
   
Cash
   
Restricted
   
Restricted
   
Stock and
   
Stock
   
Black-Sholes
 
   
Target
   
Stock
   
Units
   
Unit Value (a)
   
Options
   
Value (a)
 
   
($)
      (#)       (#)    
($)
      (#)    
($)
 
                                           
Don L. Blankenship
  $ 300,000       12,700       7,300     $ 604,800       50,000     $ 340,070  
                                                 
Baxter F. Phillips, Jr.(b)
    -       7,899       5,050       375,000       10,204       125,000  
                                                 
J. Christopher Adkins
    125,000       5,266       3,367       250,000       10,204       125,000  
                                                 
Michael K. Snelling
    75,000       3,160       2,020       150,000       6,122       75,000  
                                                 
Eric B. Tolbert
    62,500       2,633       1,683       125,000       5,102       62,500  
___________________
(a)
The stock and unit value are based on the value on the date of grant and the Black-Scholes value is based on the value of the stock options on the date of grant.
(b)
Mr. Phillips elected to receive the value of his cash target award in additional shares of restricted stock and units.
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One third of each grant of restricted stock, restricted units and stock options vests annually on the anniversary of the date of the grant. Pursuant to the 2008-2009 Letter Agreement, Mr. Blankenship’s options must be exercised in the first twenty days exercise is permissible pursuant to our trading window policy and applicable securities laws following their vesting, otherwise such options will be automatically forfeited.

Retention Awards

In Spring 2006, market conditions created an atmosphere of tremendous competition for our key operational officers. After a thorough review of this issue by the Compensation Committee, the Board of Directors approved the recommendation made by the Compensation Committee to provide additional compensation incentives to Messrs. Adkins, and Snelling. As a result, Messrs. Adkins, and Snelling each received retention cash awards of $150,000 payable on each of January 1, 2007, January 1, 2008 and January 1, 2009, so long as he has been continuously employed by us through such date. In addition, Messrs. Adkins, and Snelling were each granted 6,000 shares of restricted stock and 3,780 restricted units. One third of each grant to Mr. Adkins vested on May 16, 2007 and May 16, 2008, and the remaining third of each grant to Mr. Adkins will vest on May 16, 2009. One third of each grant to Mr. Snelling vested on May 25, 2007 and May 25, 2008, and the remaining third of each grant to Mr. Snelling will vest on May 25, 2009.

Deferred Compensation Program

In an effort to attract and retain those employees whose judgment, abilities and experience will contribute to our continued progress, we maintain two deferred compensation programs to permit eligible employees, including our named executive officers, to defer a portion of his or her salary, bonus and incentive awards, and to provide a benefit for such employees whose benefits under our 401(k) Plan are limited by the federal tax laws. Our program allows a named executive officer to defer all or a portion of his or her salary, bonus and/or incentive award, enabling him or her to defer paying income taxes on that money until such named executive officer receives a distribution from the program. The program also provides a benefit for participants whose 401(k) contributions and our matching contributions are limited due to annual maximum contribution amounts set by the federal tax laws. Matching contributions made by us under the program generally are made at the same deferral rate as those made to the 401(k) Plan, up to a combined 10% of total eligible compensation (including deferrals into the 401(k) Plan) and subject to the limits imposed by the Code. The program is described in further detail under “Nonqualified Deferred Compensation” on page 59 of this Proxy Statement.

Retirement Benefits

We maintain a defined benefit pension plan, known as the Massey Energy Retirement Plan (the MERP). Each of our named executive officers participates in the MERP. To the extent benefits payable at retirement exceed amounts that may be payable under applicable provisions of the Code, the benefits will be paid under our supplemental executive retirement plan (the SERP). The SERP is a form of a non-qualified pension plan that provides eligible individuals the difference between (i) the benefits they would actually accrue under the MERP but for the maximum benefit limitations and (ii) the limitation on compensation pursuant to the Code that may be recognized under the MERP. The SERP recognizes compensation including those amounts of deferred compensation credited under our deferred compensation programs. With respect to the timing and form of payment of benefits under the SERP, participants were required to make one of the following two elections (i) payments begin the later of age 55 or separation of service or (ii) payments begin the later of age 62 or separation of service. Additional details regarding the MERP and SERP are described in further detail under Retirement Benefits on page 58 of this Proxy Statement.
 
Supplemental Life Insurance Benefit

Fluor Corporation, our predecessor company, provided specified supplemental life insurance benefits to a select group of its management and highly paid executives through a supplemental benefit plan. The purpose of the supplemental life insurance plan is to provide certain named executive officers with a benefit in the form of life insurance and deferred compensation as part of their targeted overall compensation. Mr. Blankenship participates in this plan. This supplemental life insurance benefit for Mr. Blankenship is further described under “Agreements with Named Executive Officers – Supplemental Life Insurance Agreements” on page 48 of this Proxy Statement.

Change in Control and Severance Benefits

Our named executive officers are eligible for benefits and payments if there is a change in control and employment terminates or is constructively terminated or if employment terminates due to position elimination, as described under “Potential Payments Upon Termination or Change in Control” on page 60 of this Proxy Statement. The purpose of these change in control protections is to retain certain members of management in the face of uncertainty surrounding a potential or actual change in control, by providing a participant with an attractive benefit that would be due and payable to the participant

 
35

 
 
only in the event he continued to work during such uncertainty and subsequently found himself terminated or constructively terminated as a result of a change in control. While we do not believe that a change of control alone is sufficient to trigger a benefit, we do believe providing a participant with a benefit in the event he is terminated or constructively terminated as a result of a change in control is appropriate because it allows our senior management to focus on running our company to maximize stockholder value and mitigate the necessity for management’s attention to be diverted toward finding new employment in the event a change of control occurs. We believe that by providing this potential benefit, we are able to better retain and attract named executive officers and incentivize them to continue in their efforts to contribute to our overall performance in the face of uncertainty.
 
In addition, we believe that we should provide reasonable severance benefits to employees in the event their positions are eliminated. With respect to our named executive officers, these severance benefits should reflect the fact that it may be difficult for executives to find comparable employment within a short period of time. The terms of the severance agreements we have entered into with our named executive officers are further described under “Potential Payments Upon Termination or Change in Control” on page 60 of this Proxy Statement.

2008-2009 Letter Agreement with Don L. Blankenship

In November 2007, we entered into a two-year letter agreement with Mr. Blankenship to continue his employment through 2009 (the 2008-2009 Letter Agreement). The 2008-2009 Letter Agreement was revised in December, 2008 to ensure compliance with the requirements of Section 409A of the Code. The 2008-2009 Letter Agreement replaced the one-year letter agreement with Mr. Blankenship to continue his employment through 2007 (the 2007 Letter Agreement) (which replaced the previous one-year letter agreement with Mr. Blankenship to continue his employment through 2006). The terms of the 2008-2009 Letter Agreement are described under “Agreements with Named Executive Officers – 2008-2009 Letter Agreement with Don L. Blankenship” on page 42 of this Proxy Statement.

PM&P advised the Compensation Committee with respect to the terms of the 2007 Letter Agreement. At the request of the Compensation Committee, PM&P provided the Compensation Committee with a review of the actual total compensation of chief executive officers of several groups of companies. The groups consisted of: (i) the following comparator companies: Allegheny Technologies Incorporated, Alliance Resource Partners L.P., AmeriGas Partners, L.P., Arch Coal, Inc., Carpenter Technology Corporation, Cliffs Natural Resources Inc., CONSOL Energy Inc., Foundation Coal Holdings, Inc., Freeport-McMoran Copper & Gold Inc., Kaiser Aluminum Corporation, Nucor Corporation, Overseas Shipholding Group, Inc., Peabody Energy Corporation, and Quanex Corporation, (ii) approximately 133 publicly-held companies with similar revenues, and (iii) the top 200 publicly-held companies in the United States (based on revenues). In an effort to provide Mr. Blankenship with a target overall compensation that would incentivize him to continue serving us while at the same time to further align his compensation with company-wide performance, the Compensation Committee determined to tie a significant portion of his compensation package to various company-wide performance measures. The Compensation Committee used the structure of the 2007 Letter Agreement as the basis for negotiating the terms of the 2008-2009 Letter Agreement with Mr. Blankenship.
 
The Compensation Committee negotiated the material terms and conditions of the 2008-2009 Letter Agreement taking into account a variety of factors and considerations:

·  
the desire to retain Mr. Blankenship’s services based on his proven leadership,
 
·  
Mr. Blankenship’s past accomplishments at Massey,
 
·  
Mr. Blankenship’s vision and plan for our future prospects,
 
·  
Mr. Blankenship’s vast knowledge and understanding of coal mining in Central Appalachia,
 
·  
Mr. Blankenship’s wealth of experience,
 
·  
the competitive environment for Mr. Blankenship’s services,
 
·  
the past agreements Mr. Blankenship negotiated with our predecessor, and
 
·  
the Compensation Committee’s belief that Mr. Blankenship is uniquely qualified and positioned to successfully address the current challenges and opportunities facing us at the present time.
 
The Compensation Committee believes that these factors and others strongly favored retaining Mr. Blankenship’s services and would inure to the ultimate benefit of the stockholders.

PM&P estimated the value of the targeted overall compensation reflected in the 2007 Letter Agreement to be approximately $12.2 million, assuming a $25 share price and targeted levels of performance were achieved. PM&P advised

 
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the Compensation Committee that a significant amount of Mr. Blankenship’s 2007 compensation was at-risk because it was based upon future performance objectives.

Taking the foregoing and such other information as the Compensation Committee deemed appropriate into consideration, the Compensation Committee entered into the 2008-2009 Letter Agreement, believing the targeted overall compensation to be an adequate reflection of Mr. Blankenship’s value to us and to be significantly based upon achieving company-wide performance results.

The value Mr. Blankenship actualized under the terms of the 2008-2009 Agreement in light of Massey’s performance was the following:

Base Salary
   
Incentive Award
   
LTIP Value at Date of Grant (a)
   
Performance Based Stock Unit Award (b)
   
Performance Based Incentive Unit Award (c)
   
Additional Stock Option Award (d)
   
Retention Cash Award
   
Split Dollar Life Insurance Policy Premiums
 
                                             
$ 1,000,000     $ 1,225,440     $ 1,244,870     $ 2,058,585     $ 2,516,780     $ 1,360,280     $ 300,000     $ 13,500  
___________________
(a)  
This amount represents the grant date fair market value of the 2008 LTIP awards ($300,000 cash target award, 50,000 stock options, 12,700 restricted shares and 7,300 restricted units). The 50,000 stock options vest annually in one third increments and must be exercised in the first twenty days exercise is permissible pursuant to our trading window policy and applicable securities laws, otherwise they are forfeited.
(b)  
Of the 190,000 units awarded, 149,281 units were earned based upon meeting certain levels of performance as set forth pursuant to the 2008-2009 Letter Agreement. The value of this award was calculated by multiplying the number of units earned by the closing price Massey stock on December 31, 2008 which was $13.79.
(c)  
Of the 290,000 units awarded, 182,508 units were earned based upon meeting certain levels of performance as set forth pursuant to the 2008-2009 Letter Agreement. The value of this award was calculated by multiplying the number of units earned by the closing price of Massey stock on December 31, 2008 which was $13.79.
(d)  
The amount represents the grant date fair market value of the Additional Stock Option Award of 200,000 options. The 200,000 stock options vested on December 30, 2008 and must be exercised in the first twenty days exercise is permissible pursuant to our trading window policy and applicable securities laws, otherwise they are forfeited.
 
Special Successor Development and Retention Program

Mr. Blankenship also receives benefits under the Special Successor Development and Retention Program, an agreement entered into in October 1998 between Fluor Corporation and Mr. Blankenship. The Special Successor Development and Retention Program is described under “Agreements with Named Executive Officers – Special Successor Development and Retention Program with Don L. Blankenship” on page 44 of this Proxy Statement.

Employment and Change in Control Agreement with Baxter F. Phillips, Jr.

           In the Fall of 2005, Mr. Phillips received an attractive offer from a mining company with whom we compete. In an effort to retain Mr. Phillips’ knowledge, experience and expertise and in recognition of the fact that Mr. Phillips has made, and is expected to continue to make, major contributions to our short-term and long-term profitability, growth and financial strength, the Compensation Committee reviewed his current compensation package, consulted with PM&P, and negotiated a three year arrangement with Mr. Phillips referred to as the Retention and Change in Control Agreement. The Compensation Committee used the structure of the Retention and Change in Control Agreement as the basis for negotiating the terms of another three-year arrangement effective November 1, 2008, referred to as the Employment and Change in Control Agreement, the terms of which are described under “Agreements with Named Executive Officers – Employment and Change in Control Agreement with Baxter F. Phillips, Jr.” on page 45 of this Proxy Statement.

PM&P advised the Compensation Committee on the initial three-year compensation arrangement for Mr. Phillips. At the request of the Compensation Committee, PM&P provided the Compensation Committee with a review of the actual total compensation of the second-highest paid executive officers of a comparator group of companies that was comprised of AK Steel Holding Corporation, Allegheny Technologies Incorporated, Alliance Resource Partners L.P., Alpha Natural Resources, Inc., AmeriGas Partners, L.P., Arch Coal, Inc., Carpenter Technology Corporation, Cliffs Natural Resources Inc., Commercial Metals Company, CONSOL Energy Inc., Energy Transfer Partners, L.P., Foundation Coal Holdings, Inc., Freeport-McMoran Copper & Gold Inc., Overseas Shipholding Group, Inc., Peabody Energy Corporation, and Quanex Corporation. In an effort to provide Mr. Phillips with a target overall compensation that would incentivize him to continue serving us for the three-year period, while at the same time further aligning his compensation with company-wide
 
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performance, the Compensation Committee determined to tie a significant portion of his compensation package to various company-wide performance measures.

The reason why the comparator group used by PM&P and the Compensation Committee during the course of the Committee’s negotiations of the 2007 Letter Agreement with Mr. Blankenship was larger and broader in scope than the comparator group used by PM&P and the Compensation Committee during the course of the Committee’s negotiations of the Retention and Change in Control Agreement with Mr. Phillips was due to a variety of factors. The Compensation Committee considered that given Mr. Blankenship’s unique position at Massey and the extremely competitive market for someone with his skill set and experience (even across industries), it was appropriate to consider this broader comparison group to provide additional insight in connection with negotiating the 2007 Letter Agreement. Therefore, the Compensation Committee believed the market for its chief executive officer warranted a broader comparison group. The Compensation Committee believed that the comparison group used for Mr. Phillips’ position was appropriate.

The Compensation Committee negotiated the material terms and conditions of the Employment and Change in Control Agreement taking into account a variety of factors and considerations, including:

·  
the desire to retain Mr. Phillips’ services based on his proven leadership at Massey,
 
·  
Mr. Phillips’ past accomplishments at Massey,
 
·  
Mr. Phillips’ knowledge, experience and understanding of coal mining in Central Appalachia,
 
·  
the existence of a competing offer made to Mr. Phillips for alternative employment from one of our competitors, and
 
·  
the Compensation Committee’s belief that Mr. Phillips plays a critical role in helping management successfully address the current challenges and opportunities facing us at the present time.
 
The Compensation Committee believed that these factors and others strongly favored retaining Mr. Phillips’ services and would inure to the ultimate benefit of the stockholders.
 
PM&P estimated the value of the annual targeted overall compensation reflected in the Retention Employment and Change in Control Agreement to be approximately $1.7 million, assuming a $40 share price and targeted levels of performance were achieved. PM&P advised the Compensation Committee that a significant amount of Mr. Phillips’ 2007 compensation was at-risk because it was based upon future performance objectives.
 
Taking the foregoing and such other information as the Compensation Committee deemed appropriate into consideration, the Compensation Committee on behalf of Massey entered into the Retention Employment and Change in Control Agreement and at its conclusion, the Employment and Change in Control Agreement effective November 1, 2008, believing the targeted overall compensation to be an adequate reflection of Mr. Phillips’ value to us and to be significantly based upon achieving company-wide performance results.

Retention and Employment Agreement with J. Christopher Adkins
 
    Throughout 2007, our senior managers continued to be targets of aggressive recruiting by our competitors. In an effort to retain Mr. Adkins’ knowledge, experience and expertise and in recognition of the fact that Mr. Adkins has made, and is expected to continue to make, major contributions to our short-term and long-term profitability, growth and financial strength, the Compensation Committee reviewed his current compensation package, and negotiated a three-year arrangement with Mr. Adkins, the terms of which are described under “Agreements with Named Executive Officers – Retention and Employment Agreement with J. Christopher Adkins” on page 46 of this Proxy Statement. This agreement was revised in December, 2008 to ensure compliance with the requirements of Section 409A of the Code.
 
    The Compensation Committee negotiated the material terms and conditions of the Retention and Employment Agreement taking into account a variety of factors and considerations, including:

·  
the desire to retain Mr. Adkins’ services based on his proven leadership at Massey,
 
·  
Mr. Adkins’ past accomplishments at Massey,
 
·  
Mr. Adkins’ knowledge, experience and understanding of coal mining in Central Appalachia, and
 
·  
the Compensation Committee’s belief that Mr. Adkins plays a critical role in helping management successfully address the current challenges and opportunities facing us at the present time.
 
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    The Compensation Committee believed that these factors and others strongly favored retaining Mr. Adkins’ services and would inure to the ultimate benefit of the stockholders.
 
    Taking the foregoing and such other information as the Compensation Committee deemed appropriate into consideration, the Compensation Committee on behalf of Massey entered into the Retention and Employment Agreement, believing the targeted overall compensation to be an adequate reflection of Mr. Adkins’ value to us and to be significantly based upon achieving company-wide performance results.
 
Employment Agreement with Michael K. Snelling
 
    In May 2006, Mr. Snelling received an attractive offer from a mining company with whom we compete. In an effort to retain Mr. Snelling’s knowledge, experience and expertise and in recognition of the fact that Mr. Snelling has made, and is expected to continue to make, major contributions to our short-term and long-term profitability, growth and financial strength, the Compensation Committee reviewed his current compensation package, and negotiated a three-year arrangement with Mr. Snelling, the terms of which are described under “Agreements with Named Executive Officers – Employment Agreement with Michael K. Snelling” on page 47 of this Proxy Statement. This agreement was revised in December, 2008 to ensure compliance with the requirements of Section 409A of the Code.
 
    The Compensation Committee negotiated the material terms and conditions of Mr. Snelling’s Employment Agreement taking into account a variety of factors and considerations, including:

·  
the desire to retain Mr. Snelling’s services based on his proven leadership at Massey,
 
·  
Mr. Snelling’s past accomplishments at Massey,
 
·  
Mr. Snelling’s knowledge, experience and understanding of coal mining in Central Appalachia,
 
·  
the existence of a competing offer made to Mr. Snelling for alternative employment from one of our competitors, and
 
·  
the Compensation Committee’s belief that Mr. Snelling plays a critical role in helping management successfully address the current challenges and opportunities facing us at the present time.
 
    The Compensation Committee believed that these factors and others strongly favored retaining Mr. Snelling’s services and would inure to the ultimate benefit of the stockholders.
 
    Taking the foregoing and such other information as the Compensation Committee deemed appropriate into consideration, the Compensation Committee on behalf of Massey entered into Mr. Snelling’s Employment Agreement, believing the targeted overall compensation to be an adequate reflection of Mr. Snelling’s value to us and to be significantly based upon achieving company-wide performance results.

Perquisites
 
    We annually review any perquisites that our Chief Executive Officer and the other named executive officers may receive. In addition to the cash and equity compensation discussed above, we provide our Chief Executive Officer and the other named executives with the same benefit package available to all salaried employees. The package includes:

·  
Health and dental insurance (portion of costs);
 
·  
Basic life insurance;
 
·  
Long-term disability insurance; and
 
·  
Participation in Massey’s 401(k) plan, including company matching.
 
    We provide additional incentives and benefits in certain circumstances to some of our named executive officers that are described in the Summary Compensation Table on page 41 of this Proxy Statement. Such perquisites include company vehicles and in isolated instances, company housing.
 
39

 
Stock Ownership Guidelines
 
    On February 19, 2008, the Board of Directors adopted Stock Ownership Guidelines that apply to our Chief Executive Officer, our President, the Senior Vice President and Chief Operating Officer, the Senior Vice President – Group Operations, and Vice President – Surface Operations (the “Covered Executive Officers”). The minimum stock ownership guideline for our (i) Chief Executive Officer is five times his base salary, (ii) the President, the Senior Vice President and Chief Operating Officer, and the Senior Vice President – Group Operations is three times each of their respective base salaries, and (iii) Vice President – Surface Operations is two times his base salary.
 
    The guidelines were initially calculated for each Covered Executive Officer using such Covered Executive Officer’s annual base salary and the closing stock price per share of our Common Stock as of the later of (i) the date the guidelines were adopted or (ii) the date an executive became covered by the guidelines. The guidelines are adjusted for each Covered Executive Officer as of January 1 of each fiscal year using the Covered Executive Officer’s annual base salary then in effect and the closing stock price per share of our Common Stock on such date. The Governance and Nominating Committee may, from time to time, reevaluate and revise the guidelines to give effect to changes in our Common Stock or other factors it deems relevant.
 
    Covered Executive Officers are required to achieve the guideline within five years of becoming a Covered Executive Officer, or, in the case of persons who were deemed Covered Executive Officers at the time the guidelines were adopted, within five years of the date of adoption of the guidelines. Once achieved, ownership of the guideline amount must be maintained for as long as the Covered Executive Officer is subject to the guidelines.
 
    The Governance and Nominating Committee has the authority to review each Covered Executive Officer’s compliance (or progress towards compliance) with the guidelines from time to time and, in its sole discretion, to impose such conditions, restrictions or limitations on any Covered Executive Officer as the Governance and Nominating Committee determines to be necessary or appropriate in order to achieve the purposes of the guidelines.
 
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
 
    The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section of this Proxy Statement with management and, based on such review and discussion, recommended to the Board of Directors that it be included in this Proxy Statement.

Compensation Committee
                                                                                                                                                  
 March 24, 2009     James B. Crawford   Robert H. Foglesong    Bobby R. Inman  Dan R. Moore
 
    The Compensation Committee Report does not constitute solicitation material and shall not be deemed filed or incorporated by reference into any of our filings except to the extent that we specifically incorporate this report by reference therein.
 
40

 
COMPENSATION OF NAMED EXECUTIVE OFFICERS

Summary Compensation Table

The following table presents information with respect to the total compensation of our named executive officers for the year ended December 31, 2008.

SUMMARY COMPENSATION TABLE
 
       
Salary
   
Bonus
   
Stock Awards
   
Option Awards
   
Non-Equity Incentive Plan Compensation
   
Change in Pension Value and Nonqualified Deferred Compensation Earnings
   
All Other Compensation
   
Total
 
       
(a)
   
(b)
   
(c)
   
(c)
   
(d)
   
(e)
   
(f)
       
Name and Position
 
Year
 
($)
   
($)
   
($)
   
($)
   
($)
   
($)
   
($)
   
($)
 
D. L. Blankenship
 
2008
    1,000,000       300,000       446,164       2,309,562       6,022,447       691,415       457,129       11,226,717  
Chairman and CEO
 
2007
    1,000,000       300,000       838,129       2,035,146       5,257,576       111,794       386,480       9,929,125  
   
2006
    1,000,000       300,000       308,300       2,626,137       514,054       322,640       257,291       5,328,422  
                                                                     
B.F. Phillips, Jr.
 
2008
    598,798       762,500       342,989       1,351,822       510,914       1,392,718       71,691       5,031,432  
President
 
2007
    560,000       120,000       428,700       528,377       250,294       467,864       63,978       2,419,213  
   
2006
    550,000       125,000       297,725       481,492       83,417       549,789       49,649       2,137,072  
                                                                     
J.C. Adkins
 
2008
    378,015       312,500       282,780       244,431       397,165       98,471       32,864       1,746,226  
Senior VP and
 
2007
    360,000       270,000       401,941       234,696       266,771       4,363       234,067       1,771,838  
Chief Operating Officer
 
2006
    309,474       275,000       150,216       149,887       141,811       34,722       36,917       1,098,027  
                                                                     
M. K. Snelling (g)
 
2008
    332,013       175,000       248,746       137,793       324,067       6,346       30,884       1,254,849  
VP - Surface Mines
 
2007