DEFM14A 1 ddefm14a.htm DEFINITIVE PROXY STATEMENT Definitive Proxy Statement
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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):

 

x 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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LOGO   LOGO

MERGER PROPOSAL — YOUR VOTE IS VERY IMPORTANT

Alpha Natural Resources, Inc., which is referred to as Alpha, Mountain Merger Sub, Inc., a wholly owned subsidiary of Alpha and which is referred to as Mountain Merger Sub, and Massey Energy Company, which is referred to as Massey, have entered into an agreement and plan of merger pursuant to which Mountain Merger Sub will merge with and into Massey, which will be the surviving corporation of the merger and a wholly owned subsidiary of Alpha. Upon successful completion of the merger, each issued and outstanding share of common stock, par value $0.625 per share, of Massey, other than any shares owned by Alpha, Massey or any of their respective subsidiaries, will be converted into the right to receive 1.025 shares of Alpha common stock, par value $0.01 per share, and $10.00 in cash. Immediately following the merger, Alpha’s stockholders will own approximately 54% of Alpha common stock, and Massey’s stockholders will own approximately 46% of Alpha common stock, based on the number of shares of Alpha and Massey common stock outstanding as of January 28, 2011. Common stock of Alpha is listed on the New York Stock Exchange under the symbol “ANR.” Common stock of Massey is listed on the New York Stock Exchange under the symbol “MEE.” Upon completion of the merger, Alpha expects to delist the Massey common stock.

We intend that the merger qualify as a reorganization for U.S. federal income tax purposes. Accordingly, any gain realized by Massey stockholders on the exchange of their Massey common stock for Alpha common stock should be taxable only to the extent of the cash consideration received. Any gain realized with respect to cash received in lieu of fractional shares of Alpha common stock, however, will be fully taxable.

We are each holding a special meeting of stockholders in order to obtain the stockholder approvals necessary to consummate the merger. At our respective special meetings, Massey will ask its stockholders to adopt the merger agreement, and Alpha will ask its stockholders to amend the Alpha certificate of incorporation to increase the number of shares of authorized Alpha common stock and to approve the issuance of shares of Alpha common stock pursuant to the merger agreement. Approval of each of these proposals is a condition to the consummation of the merger. The obligations of Alpha, Mountain Merger Sub and Massey to complete the merger are also subject to the satisfaction or waiver of several other conditions to the merger set forth in the merger agreement and described in this joint proxy statement/prospectus. More information about Alpha, Mountain Merger Sub, Massey and the proposed merger is contained in this joint proxy statement/prospectus. We urge you to read this joint proxy statement/prospectus, and the documents incorporated by reference into this joint proxy statement/prospectus, carefully and in their entirety. In particular, we urge you to read carefully “Risk Factors” beginning on page 41.

After careful consideration, the boards of directors of Alpha and Massey have approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger and have determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, their respective companies and stockholders. In connection with the merger, the Alpha board of directors has approved and declared advisable the amendment to the Alpha certificate of incorporation to increase the number of shares of authorized Alpha common stock and the issuance of shares of Alpha common stock pursuant to the merger agreement, and the Massey board of directors has approved and declared advisable the adoption of the merger agreement by the Massey stockholders. Accordingly, the Alpha board of directors recommends that the Alpha stockholders vote FOR the amendment to the Alpha certificate of incorporation, FOR the issuance of shares of Alpha common stock pursuant to the merger agreement, and FOR the adjournment of the Alpha special meeting under certain circumstances, and the Massey board of directors recommends that the Massey stockholders vote FOR the adoption of the merger agreement and FOR the adjournment of the Massey special meeting under certain circumstances.


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We are very excited about the opportunities the proposed merger brings to both Alpha stockholders and Massey stockholders, and we thank you for your consideration and continued support.

 

LOGO    LOGO
Kevin S. Crutchfield    Baxter F. Phillips, Jr.
Chief Executive Officer    Chief Executive Officer & President
Alpha Natural Resources, Inc.    Massey Energy Company

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.

This joint proxy statement/prospectus is dated April 29, 2011, and is first being mailed to Alpha stockholders and Massey stockholders on or about April 29, 2011.


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REFERENCES TO ADDITIONAL INFORMATION

As used in this joint proxy statement/prospectus, “Alpha” refers to Alpha Natural Resources, Inc. and its consolidated subsidiaries, “Mountain Merger Sub” refers to Mountain Merger Sub, Inc. and “Massey” refers to Massey Energy Company and its consolidated subsidiaries. This joint proxy statement/prospectus incorporates important business and financial information about Alpha and Massey from documents that each company has filed with the Securities and Exchange Commission, which we refer to as the SEC, but which have not been included in or delivered with this joint proxy statement/prospectus. For a list of documents incorporated by reference into this joint proxy statement/prospectus and how you may obtain them, see “Where You Can Find More Information” beginning on page 190.

This information is available to you without charge upon your written or oral request. You can also obtain the documents incorporated by reference into this joint proxy statement/prospectus by accessing the SEC’s website maintained at http://www.sec.gov.

In addition, Alpha’s filings with the SEC are available to the public on Alpha’s website, http://www.alphanr.com, and Massey’s filings with the SEC are available to the public on Massey’s website, http://www.masseyenergyco.com. Information contained on Alpha’s website, Massey’s website or the website of any other person is not incorporated by reference into this joint proxy statement/prospectus, and you should not consider information contained on those websites as part of this joint proxy statement/prospectus.

Alpha will provide you with copies of such information that relates to Alpha, without charge, if you request them in writing or by telephone from:

Alpha Natural Resources, Inc.

One Alpha Place, P.O. Box 2345

Abingdon, Virginia 24212

Attention: Investor Relations

Tel.: (276) 619-4410

Massey will provide you with copies of such information that relates to Massey, without charge, if you request them in writing or by telephone from:

Massey Energy Company

P.O. Box 26765

Richmond, Virginia 23261

Attention: Investor Relations

Tel.: (804) 788-1800

If you would like to request documents, please do so by May 24, 2011, in order to receive them before the special meetings.

Alpha has supplied, and is responsible for, all information contained in or incorporated by reference in this joint proxy statement/prospectus relating to Alpha and Mountain Merger Sub, and Massey has supplied, and is responsible for, all information contained in or incorporated by reference in this joint proxy statement/prospectus relating to Massey. No one has been authorized to give you any other information, and neither Alpha nor Massey takes responsibility for any information that others may give you. This joint proxy statement/prospectus is dated as of April 29, 2011. You should not assume that the information contained in or incorporated by reference in this joint proxy statement/prospectus is accurate as of any other date. Neither Alpha’s nor Massey’s mailing of this joint proxy statement/prospectus will create any implication to the contrary. This joint proxy statement/prospectus does not constitute an offer to sell any securities, a solicitation of an offer to buy any securities, or the solicitation of a proxy, in any jurisdiction in which such offer or solicitation would be unlawful.


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LOGO

ALPHA NATURAL RESOURCES, INC.

One Alpha Place, P.O. Box 2345

Abingdon, Virginia 24212

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON JUNE 1, 2011

To our fellow Stockholders of Alpha Natural Resources, Inc.:

We will hold a special meeting of stockholders at the MeadowView Marriott Conference Resort and Convention Center, located at 1901 Meadowview Parkway, Kingsport, Tennessee 37660, on June 1, 2011, at 9:30 a.m., EDT, unless postponed or adjourned to a later date. This special meeting will be held for the following purposes:

1. to approve the amendment to the certificate of incorporation of Alpha Natural Resources, Inc., a copy of which is attached as Annex B to the joint proxy statement/prospectus accompanying this notice and pursuant to which Alpha will be authorized to issue up to 400,000,000 shares of common stock, par value $0.01 per share;

2. to approve the issuance of shares of Alpha common stock, par value $0.01 per share, to stockholders of Massey Energy Company pursuant to the merger agreement, a copy of which is attached as Annex A to the joint proxy statement/ prospectus accompanying this notice; and

3. to approve adjournments of the Alpha special meeting, if necessary or appropriate, including to permit further solicitation of proxies if there are not sufficient votes at the time of the Alpha special meeting to approve one or both of the proposals described above.

These items of business are described in the accompanying joint proxy statement/prospectus. Only Alpha stockholders of record at the close of business on April 27, 2011 are entitled to notice of the Alpha special meeting and to vote at the Alpha special meeting and any adjournments or postponements of the Alpha special meeting.

Our board of directors has approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, and has determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, us and our stockholders. Our board of directors has approved and declared advisable the amendment to the certificate of incorporation and the issuance of shares of Alpha common stock pursuant to the merger agreement. Our board of directors recommends that you vote FOR the amendment to the certificate of incorporation, FOR the issuance of shares of common stock pursuant to the merger agreement and FOR the adjournment of the Alpha special meeting under certain circumstances.

In deciding to approve the merger and to amend the certificate of incorporation to allow for the issuance of shares of Alpha common stock pursuant to the merger agreement, our board of directors considered a number of factors, including those listed beginning on page 84.

Your vote is very important. Whether or not you plan to attend the Alpha special meeting in person, please complete, sign and date the enclosed proxy card(s) as soon as possible and return it in the postage-paid envelope provided, or vote your shares by telephone or over the Internet as described in the accompanying joint proxy statement/prospectus. Submitting a proxy or voting by telephone or Internet now will not prevent you from being able to vote at the Alpha special meeting by attending in person and casting a vote. However, if you do not return or submit your proxy or vote your shares by telephone or over the Internet or vote in person at the Alpha special meeting, the effect will be the same as a vote against the proposal to amend the certificate of incorporation, but it will have no effect in determining the outcome of the proposal to issue shares of Alpha common stock pursuant to the merger agreement.

By order of the board of directors,

 

LOGO

Mr. Vaughn R. Groves

Executive Vice President, Secretary and

General Counsel

Please vote your shares promptly. You can find instructions for voting on the enclosed proxy card.

If you have questions, contact:

Alpha Natural Resources, Inc.

One Alpha Place, P.O. Box 2345

Abingdon, Virginia 24212

Attention: Investor Relations

Tel.: (276) 619-4410

or

D.F. King & Co., Inc.

48 Wall Street, 22nd Floor

New York, New York 10005

Banks and Brokers call collect: (212) 269-5550

All others call toll-free: (800) 659-5550

YOUR VOTE IS VERY IMPORTANT.

Please complete, date, sign and return your proxy card(s), or vote your shares by telephone or over the Internet at your earliest convenience so that your shares are represented at the Alpha special meeting.

 

 

April 29, 2011

Abingdon, Virginia


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LOGO

MASSEY ENERGY COMPANY

P.O. Box 26765

Richmond, Virginia 23261

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON JUNE 1, 2011

To our fellow Stockholders of Massey Energy Company:

The special meeting of stockholders of Massey Energy Company will be held at the MeadowView Marriott Conference Resort and Convention Center, located at 1901 Meadowview Parkway, Kingsport, Tennessee 37660, on June 1, 2011, at 9:30 a.m., EDT, unless postponed or adjourned to a later date. The special meeting will be held for the following purposes:

1. to adopt the Agreement and Plan of Merger, dated as of January 28, 2011, between Alpha Natural Resources, Inc., Mountain Merger Sub, Inc., a wholly owned subsidiary of Alpha Natural Resources, Inc., and us, pursuant to which Mountain Merger Sub, Inc. will merge with and into us; and

2. to approve adjournments of the Massey special meeting, if necessary or appropriate, including to permit further solicitation of proxies if there are not sufficient votes at the time of the Massey special meeting to adopt the merger agreement.

These items of business are described in the accompanying joint proxy statement/prospectus. Only Massey stockholders of record at the close of business on April 27, 2011 are entitled to notice of the Massey special meeting and to vote at the Massey special meeting and any adjournments or postponements of the Massey special meeting.

Our board of directors has approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, and has determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, us and our stockholders. Our board of directors recommends that you vote FOR the adoption of the merger agreement and FOR the adjournment of the Massey special meeting under certain circumstances.

In deciding to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger, our board of directors considered a number of factors, including those listed beginning on page 87.

Under Delaware law, holders of record of Massey common stock who do not vote in favor of adoption of the merger agreement have the right to seek appraisal of the fair value of their shares of stock if the merger is completed, but only if you strictly comply with the procedures prescribed by Delaware law. To exercise your appraisal rights, you must strictly follow the procedures prescribed by Delaware law, including, among other things, submitting a written demand for appraisal to Massey before the vote is taken on the adoption of the merger agreement, and you must not vote in favor of adoption of the merger agreement. These procedures are summarized in the accompanying joint proxy statement/prospectus in the section entitled “The Merger — Rights of Appraisal for Massey Stockholders” beginning on page 131, and the text of the applicable provisions of Delaware law as in effect with respect to this transaction is included as Annex E to the accompanying joint proxy statement/prospectus.

Your vote is very important. Whether or not you plan to attend the Massey special meeting in person, please complete, sign and date the enclosed proxy card(s) as soon as possible and return it in the postage-paid envelope provided, or vote your shares by telephone or over the Internet as described in the accompanying joint proxy statement/prospectus. Submitting a proxy or voting by telephone or Internet now will not prevent you from being able to vote at the Massey special meeting by attending in person and casting a vote. However, if you do not return or submit your proxy or vote your shares by telephone or over the Internet or vote in person at the Massey special meeting, the effect will be the same as a vote against the proposal to adopt the merger agreement.

By order of the board of directors,

LOGO

Mr. Richard R. Grinnan

Vice President and Corporate Secretary

Please vote your shares promptly. You can find instructions for voting on the enclosed proxy card.

If you have questions, contact:

Massey Energy Company

P.O. Box 26765

Richmond, Virginia 23261

Attention: Investor Relations

Tel.: (804) 788-1800

or

Innisfree M&A Inc.

501 Madison Avenue

New York, NY 10022

Stockholders may call toll-free: (877) 687-1875

Banks and Brokers call collect: (212) 750-5833

YOUR VOTE IS VERY IMPORTANT.

Please complete, date, sign and return your proxy card(s) or vote your shares by telephone or over the Internet at your earliest convenience so that your shares are represented at the Massey special meeting.

 

 

April 29, 2011

Richmond, Virginia


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TABLE OF CONTENTS

 

     Page  

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETINGS AND THE MERGER

     1   

The Merger

     1   

Procedures

     5   

SUMMARY

     8   

Information About Alpha

     8   

Information About Mountain Merger Sub

     8   

Information About Massey

     8   

The Merger

     9   

Financing Related to the Merger

     10   

Alpha’s Reasons for the Merger

     10   

Massey’s Reasons for the Merger

     10   

Recommendations of the Boards of Directors to Alpha’s Stockholders and Massey’s Stockholders

     11   

Opinions of Financial Advisors

     11   

Effect of the Merger on Massey’s Long-Term Incentive Compensation Awards

     12   

Record Date; Outstanding Shares; Shares Entitled to Vote; Vote Required

     13   

Stock Ownership of Directors and Executive Officers

     14   

Interests of Alpha Directors and Executive Officers in the Merger

     14   

Interests of Massey Directors and Executive Officers in the Merger

     15   

Listing of Alpha Common Stock and Delisting of Massey Common Stock

     16   

Rights of Appraisal for Massey Stockholders

     16   

Conditions to Completion of the Merger

     17   

Regulatory Approvals Required for the Merger

     20   

Termination of the Merger Agreement

     20   

Termination Fees

     22   

Litigation Related to the Merger

     25   

Material United States Federal Income Tax Consequences

     25   

Accounting Treatment

     25   

Risk Factors

     26   

Comparison of Rights of Stockholders

     26   

FINANCIAL SUMMARY

     27   

Alpha Market Price Data and Dividends

     27   

Massey Market Price Data and Dividends

     28   

Selected Historical Consolidated Financial Data of Alpha

     29   

Selected Historical Consolidated Financial Data of Massey

     33   

Selected Unaudited Pro Forma Condensed Combined Consolidated Financial Information

     37   

COMPARATIVE PER SHARE INFORMATION

     39   

COMPARATIVE MARKET VALUE INFORMATION

     40   

RISK FACTORS

     41   

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

     51   

THE ALPHA SPECIAL MEETING

     54   

Overview

     54   

Date, Time and Place of the Alpha Special Meeting

     54   

Purposes of the Alpha Special Meeting

     54   

Record Date; Outstanding Shares; Shares Entitled to Vote

     54   

Quorum and Vote Required

     54   

Stock Ownership and Voting by Alpha’s Directors and Executive Officers

     56   

 

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(continued)

 

     Page  

How to Vote

     56   

Revoking Your Proxy

     58   

Other Voting Matters

     58   

Proxy Solicitations

     58   

Other Business

     59   

Assistance

     59   

THE MASSEY SPECIAL MEETING

     60   

Overview

     60   

Date, Time and Place of the Massey Special Meeting

     60   

Purposes of the Massey Special Meeting

     60   

Record Date; Outstanding Shares; Shares Entitled to Vote

     60   

Quorum and Vote Required

     60   

Stock Ownership and Voting by Massey’s Directors and Executive Officers

     61   

How to Vote

     62   

Revoking Your Proxy

     63   

Other Voting Matters

     63   

Proxy Solicitations

     64   

Other Business

     64   

Assistance

     64   

THE MERGER

     65   

Overview

     65   

Background of the Merger

     65   

Alpha’s Reasons for the Merger and Recommendation of Alpha’s Board of Directors

     84   

Massey’s Reasons for the Merger and Recommendation of Massey’s Board of Directors

     87   

Opinion of Alpha’s Financial Advisor

     92   

Opinion of Massey’s Financial Advisor

     101   

Massey Unaudited Prospective Financial Information

     110   

Alpha Unaudited Prospective Financial Information

    
112
  

Stock Ownership of Directors and Executive Officers of Alpha and Massey

     114   

Merger Consideration

     114   

Interests of Alpha Directors and Executive Officers in the Merger

     115   

Interests of Massey Directors and Executive Officers in the Merger

     115   

Regulatory Approvals Required for the Merger

     124   

Litigation Related to the Merger

     125   

Dividend Policy

     129   

Financing Relating to the Merger

     129   

Listing of Alpha Common Stock and Delisting of Massey Common Stock

     131   

Rights of Appraisal for Massey Stockholders

     131   

Accounting Treatment

     134   

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

     135   

U.S. Federal Income Tax Consequences to U.S. Holders of Massey Common Stock

     136   

U.S. Federal Income Tax Consequences to Alpha, Massey and Mountain Merger Sub

     137   

THE MERGER AGREEMENT

     138   

The Merger; Closing

     138   

Merger Consideration

     139   

Fractional Shares

     139   

 

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(continued)

 

     Page  

Exchange Procedures

     139   

Exchange of Shares

     140   

Lost Stock Certificates

     140   

Termination of Exchange Fund

     140   

Effect of the Merger on Massey’s Long-Term Incentive Compensation Awards

     141   

Representations and Warranties

     143   

Covenants and Agreements

     145   

Conditions to Completion of the Merger

     155   

Termination of the Merger Agreement

     158   

Termination Fees

     160   

Specific Performance

     162   

Amendments, Extensions and Waivers

     163   

INFORMATION ABOUT ALPHA

     164   

INFORMATION ABOUT MASSEY

     165   

COMPARISON OF RIGHTS OF STOCKHOLDERS

     166   

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL INFORMATION

     173   

SUPPLEMENTAL PRO FORMA COMBINED RESERVE AND PRODUCTION DATA

     181   

LEGAL MATTERS

     183   

EXPERTS

     184   

SUBMISSION OF FUTURE STOCKHOLDER PROPOSALS

     185   

Alpha

     185   

Massey

     186   

Householding

     188   

WHERE YOU CAN FIND MORE INFORMATION

     190   

Alpha SEC Filings

     190   

Massey SEC Filings

     191   

ANNEX A — AGREEMENT AND PLAN OF MERGER

     A-1   

ANNEX B — AMENDMENT TO ALPHA CERTIFICATE OF INCORPORATION

     B-1   

ANNEX C — MORGAN STANLEY & CO. INCORPORATED FAIRNESS OPINION

     C-1   

ANNEX D — PERELLA WEINBERG PARTNERS LP FAIRNESS OPINION

     D-1   

ANNEX E — DGCL SECTION 262

     E-1   

 

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETINGS AND THE MERGER

The following questions and answers briefly address some commonly asked questions about the special meetings and the merger. They may not include all the information that is important to you. Alpha, Mountain Merger Sub and Massey urge you to read carefully this entire joint proxy statement/prospectus, including the annexes and the other documents to which we have referred you. We have included page references in certain parts of this section to direct you to a more detailed description of each topic presented elsewhere in this joint proxy statement/prospectus.

The Merger

 

Q: Why am I receiving this joint proxy statement/prospectus?

 

A: The boards of directors of each of Alpha, Mountain Merger Sub and Massey have approved the merger of Mountain Merger Sub with and into Massey pursuant to the terms of a merger agreement that is described in this joint proxy statement/prospectus. A copy of the merger agreement is attached to this joint proxy statement/prospectus as Annex A. See “The Merger Agreement — The Merger; Closing” beginning on page 138.

Pursuant to the terms of the merger agreement, upon the consummation of the merger, each Massey stockholder will receive, in exchange for each share of Massey common stock, 1.025 shares of Alpha common stock and $10.00 in cash, which we refer to as the merger consideration.

In order to complete the transactions contemplated by the merger agreement, including the merger, Massey stockholders must adopt the merger agreement, Alpha stockholders must approve the amendment of the Alpha certificate of incorporation to increase the number of shares of authorized Alpha common stock and approve the issuance of shares of Alpha common stock pursuant to the merger agreement, and all other conditions to the merger set forth in the merger agreement must be satisfied or waived. Alpha and Massey will hold separate special meetings of their respective stockholders to vote on these requisite approvals. This joint proxy statement/prospectus contains important information, which you should read carefully, about the merger agreement, the transactions contemplated by the merger agreement, including the merger and the issuance by Alpha of shares of Alpha common stock pursuant to the merger agreement, and the respective special meetings of the stockholders of Alpha and the stockholders of Massey.

The enclosed proxy materials allow you to grant a proxy or vote your shares by telephone or Internet without attending your respective company’s special meeting in person.

Your vote is very important. We encourage you to submit your proxy or vote your shares by telephone or Internet as soon as possible.

 

Q: What is the proposed transaction for which I am being asked to vote?

 

A: Alpha and Massey stockholders are being asked to vote on two distinct issues. Massey stockholders are being asked to adopt the merger agreement. The Alpha stockholders are not required to and are not being asked to adopt the merger agreement to consummate the merger. Alpha stockholders are being asked to approve an amendment to the Alpha certificate of incorporation to increase the number of authorized shares of Alpha common stock to 400,000,000 shares of Alpha common stock and to approve the issuance of shares of Alpha common stock pursuant to the merger agreement. A copy of the merger agreement is attached to this joint proxy statement/prospectus as Annex A, and a copy of the proposed amendment to the Alpha certificate of incorporation is attached to this joint proxy statement/prospectus as Annex B.

The approval by the Alpha stockholders of the amendment to the Alpha certificate of incorporation and the issuance of shares of Alpha common stock pursuant to the merger agreement and the adoption of the merger agreement by the Massey stockholders are conditions to the obligations of the parties to the merger agreement to complete the merger. See “The Merger Agreement — Conditions to Completion of the Merger” beginning on page 155 and “Summary — Conditions to Completion of the Merger” beginning on page 17.

 

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Q: Why are Alpha and Massey proposing the merger?

 

A: The boards of directors of each of Alpha and Massey believe that the merger will provide substantial strategic and financial benefits to the stockholders of their respective companies. After the merger is consummated, Alpha will continue as a leading U.S. producer of coal and will have one of the world’s largest and highest quality metallurgical coal reserve bases, a responsible balance sheet and significantly enhanced scale. To review the reasons for the merger in greater detail, see “The Merger — Alpha’s Reasons for the Merger and Recommendation of Alpha’s Board of Directors” beginning on page 84 and “The Merger — Massey’s Reasons for the Merger and Recommendation of Massey’s Board of Directors” beginning on page 87.

 

Q: What are the positions of the Alpha board of directors and the Massey board of directors regarding the merger and the related proposals which are being put to a vote of their respective stockholders?

 

A: Both boards of directors have approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, and determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, their respective companies and stockholders. The Alpha board of directors recommends that the Alpha stockholders vote FOR the proposal to amend the certificate of incorporation, FOR the proposal to issue shares of Alpha common stock pursuant to the merger agreement and FOR the proposal to adjourn the Alpha special meeting under certain circumstances. The Massey board of directors recommends that the Massey stockholders vote FOR the proposal to adopt the merger agreement at the Massey special meeting and FOR the proposal to adjourn the Massey special meeting under certain circumstances. The Alpha stockholders are not required to and are not being asked to adopt the merger agreement to consummate the merger. See “The Merger — Alpha’s Reasons for the Merger and Recommendation of Alpha’s Board of Directors” beginning on page 84, “The Merger — Massey’s Reasons for the Merger and Recommendation of Massey’s Board of Directors” beginning on page 87, “Summary — The Merger — Alpha’s Reasons for the Merger” on page 10 and “Summary — The Merger — Massey’s Reasons for the Merger” beginning on page 10.

 

Q: What vote is required to approve each proposal on the agenda for the Alpha special meeting?

 

A: The approval of the amendment to the Alpha certificate of incorporation requires the affirmative vote of a majority of the outstanding shares of Alpha common stock entitled to vote. If you are an Alpha stockholder and you fail to vote or abstain from voting, that will have the same effect as a vote AGAINST the amendment to the certificate of incorporation.

The approval of the issuance of shares of Alpha common stock pursuant to the merger agreement requires the affirmative vote of a majority of shares present in person or represented by proxy at the stockholders meeting and entitled to vote, assuming a quorum is present. If you are an Alpha stockholder and you abstain from voting, that will have the same effect as a vote AGAINST the issuance of shares of Alpha common stock pursuant to the merger agreement. If you are an Alpha stockholder and you fail to vote, that will have no effect on the proposal to issue shares of Alpha common stock pursuant to the merger agreement.

To approve any adjournment of the Alpha special meeting, if necessary or appropriate, to permit further solicitation of proxies if there are not sufficient votes at the time of the Alpha special meeting to approve the proposal to amend the certificate of incorporation and/or the proposal to approve the issuance of shares of Alpha common stock pursuant to the merger agreement, the affirmative vote of a majority of the shares of Alpha common stock present in person or represented by proxy at the Alpha special meeting and entitled to vote is required, regardless of whether a quorum is present. Abstentions will have the same effect as a vote AGAINST the proposal to adjourn the Alpha special meeting, while broker non-votes and shares not in attendance at the Alpha special meeting will have no effect on the outcome of any vote to adjourn the Alpha special meeting. See “The Alpha Special Meeting — Quorum and Vote Required” beginning on page 54.

 

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Q: What vote is required to approve each proposal on the agenda for the Massey special meeting?

 

A: The adoption of the merger agreement requires the affirmative vote of a majority of the outstanding shares of Massey common stock entitled to vote. If you are a Massey stockholder and you fail to vote or abstain from voting, that will have the same effect as a vote AGAINST the adoption of the merger agreement.

To approve any adjournment of the Massey special meeting, if necessary or appropriate to permit further solicitation of proxies if there are not sufficient votes at the time of the Massey special meeting to approve the proposal to adopt the merger agreement, the affirmative vote of a majority of the shares of Massey common stock present in person or represented by proxy at the Massey special meeting and entitled to vote is required regardless of whether a quorum is present. Abstentions will have the same effect as a vote AGAINST the proposal to adjourn the Massey special meeting, while broker non-votes and shares not in attendance at the Massey special meeting will have no effect on the outcome of any vote to adjourn the Massey special meeting.

Alpha, through one of its wholly owned subsidiaries, owns 1,000 shares of Massey common stock. Alpha intends to vote these shares in favor of the adoption of the merger agreement and in favor of the adjournment proposal.

See “The Massey Special Meeting — Quorum and Vote Required” beginning on page 60.

 

Q: What will happen in the merger?

 

A: In the merger, Mountain Merger Sub, a wholly owned subsidiary of Alpha, will merge with and into Massey, which will be the surviving corporation of the merger and a wholly owned subsidiary of Alpha. See “The Merger Agreement — The Merger; Closing” beginning on page 138.

 

Q: Will the merger affect the board of directors or officers of Alpha after the merger?

 

A: No. The current board of directors and officers of Alpha will continue to serve as the board of directors and officers of Alpha after the merger is complete.
Q: What will Massey stockholders receive in the merger?

 

A: For Massey stockholders, each share of Massey common stock, other than any shares owned by Alpha, Massey or any of their respective subsidiaries, will, upon completion of the merger, be converted into the right to receive 1.025 shares of Alpha common stock and $10.00 in cash. Alpha will not issue fractional shares as a result of the merger and instead will pay stockholders of Massey cash in lieu of fractional shares of Alpha common stock that Massey stockholders would otherwise be entitled to receive.

 

Q: Do Massey stockholders have appraisal rights?

 

A: Under the General Corporation Law of the State of Delaware, referred to as the DGCL, holders of Massey common stock who do not vote for the adoption of the merger agreement have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery if the merger is completed, but only if they comply with all requirements of Delaware law, which are summarized in this document and attached as Annex E. This appraisal amount could be more than, the same as, or less than the amount a Massey stockholder would be entitled to receive under the merger agreement. Any holder of Massey common stock intending to exercise appraisal rights, among other things, must submit a written demand for appraisal to Massey prior to the vote on the adoption of the merger agreement and must not vote or otherwise submit a proxy in favor of adoption of the merger agreement. Failure to follow exactly the procedures specified under Delaware law will result in the loss of appraisal rights. Because of the complexity of Delaware law relating to appraisal rights, if you are considering exercising your appraisal rights, Massey encourages you to seek the advice of your own legal counsel. These procedures are summarized in this joint proxy statement/prospectus in the section titled “The Merger — Rights of Appraisal for Massey Stockholders” beginning on page 131.

 

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Q: When do you expect to complete the merger?

 

A: If the amendment to the Alpha certificate of incorporation and the issuance of shares of Alpha common stock pursuant to the merger agreement are approved at the Alpha special meeting and the merger agreement is adopted at the Massey special meeting, we expect to complete the merger as soon as possible after the satisfaction of the other conditions to the merger. We currently anticipate that, if the necessary approvals of Alpha’s stockholders and Massey’s stockholders are obtained, the merger will be completed promptly following the Alpha special meeting and the Massey special meeting, subject to the expiration of a 20-business-day period used to market the notes portion of the transaction financing. See “The Merger Agreement — The Merger; Closing” beginning on page 138.

 

Q: What are the material U.S. federal income tax consequences of the merger to U.S. holders of Massey common stock ?

 

A: Massey and Alpha intend for the merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which we refer to as the Code. If the merger qualifies as a reorganization, the U.S. federal income tax consequences to Massey stockholders generally will be as follows: Massey stockholders will recognize gain only to the extent of the cash consideration that they receive, and will not recognize any loss. Any gain realized with respect to cash received in lieu of fractional shares of Alpha common stock, however, will be fully taxable.

 

     Tax matters are complicated, and the tax consequences of the merger to each Massey stockholder will depend on each stockholder’s circumstances. Massey stockholders are urged to read carefully the discussion in the section titled “Material United States Federal Income Tax Consequences” beginning on page 135 and to consult their own tax advisors for a full understanding of the tax consequences of their participation in the merger.

 

Q: Should Massey stockholders send in stock certificates now?

 

A: NO, MASSEY STOCKHOLDERS SHOULD NOT SEND STOCK CERTIFICATE(S) WITH THE PROXY CARD(S). If the merger is completed, Alpha will send Massey stockholders written instructions for sending in their stock certificates or, in the case of book-entry shares, for surrendering their book-entry shares. See “The Massey Special Meeting — Proxy Solicitations” on page 64, and “The Merger Agreement — Exchange of Shares” on page 140.

 

Q: Who can answer my questions about the merger?

 

A: If you have any questions about the merger or your special meeting, need assistance in voting your shares, or need additional copies of this joint proxy statement/prospectus or the enclosed proxy card(s), you should contact:

If you are an Alpha stockholder:

D.F. King & Co., Inc.

48 Wall Street, 22nd Floor

New York, New York 10005

Banks and Brokers call collect: (212) 269-5550

All others call toll-free: (800) 659-5550

If you are a Massey stockholder:

Innisfree M&A, Inc.

501 Madison Avenue

New York, New York 10022

Stockholders may call toll-free: (877) 687-1875

Banks and Brokers call collect: (212) 750-5833

 

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Procedures

 

Q: When and where are the special meetings?

 

A: The Alpha special meeting will be held at the MeadowView Marriott Conference Resort and Convention Center, located at 1901 Meadowview Parkway, Kingsport, Tennessee 37660, on June 1, 2011, at 9:30 a.m., EDT.

 

     The Massey special meeting will be held at the MeadowView Marriott Conference Resort and Convention Center, located at 1901 Meadowview Parkway, Kingsport, Tennessee 37660, on June 1, 2011, at 9:30 a.m., EDT.

 

Q: Who is eligible to vote at the Alpha and the Massey special meetings?

 

A: Owners of Alpha common stock are eligible to vote at the Alpha special meeting if they are stockholders of record at the close of business on April 27, 2011. See “The Alpha Special Meeting — Record Date; Outstanding Shares; Shares Entitled to Vote” on page 54.

Owners of Massey common stock are eligible to vote at the Massey special meeting if they are stockholders of record at the close of business on April 27, 2011. See “The Massey Special Meeting — Record Date; Outstanding Shares; Shares Entitled to Vote” on page 60.

 

Q: What should I do now?

 

A: You should read this joint proxy statement/prospectus carefully, including the annexes, and return your completed, signed and dated proxy card(s) by mail in the enclosed postage-paid envelope or submit your voting instructions by telephone or over the Internet as soon as possible so that your shares will be represented and voted at your special meeting. A number of banks and brokerage firms participate in a program that also permits stockholders whose shares are held in “street name” to direct their vote by telephone or over the Internet. This option, if available, will be reflected in the voting instructions from the bank or brokerage firm that accompany this joint proxy statement/prospectus. If your shares are held in an account at a bank or brokerage firm that participates in such a program, you may direct the vote of these shares by telephone or over the Internet by following the voting instructions enclosed with the proxy form from the bank or brokerage firm. See “The Alpha Special Meeting — How to Vote” beginning on page 56 and “The Massey Special Meeting — How to Vote” beginning on page 62.

 

Q: If I am going to attend my special meeting, should I return my proxy card(s)?

 

A: Yes. Returning your completed, signed and dated proxy card(s) or voting by telephone or over the Internet ensures that your shares will be represented and voted at your special meeting. See “The Alpha Special Meeting — How to Vote” beginning on page 56, and “The Massey Special Meeting — How to Vote” beginning on page 62.

 

Q: How will my proxy be voted?

 

A: If you complete, sign and date your proxy card(s) or vote by telephone or over the Internet, your shares will be voted in accordance with your instructions. If you sign and date your proxy card(s) but do not indicate how you want to vote at your special meeting:

 

   

for Alpha stockholders, your shares will be voted FOR the amendment to the certificate of incorporation, FOR the issuance of Alpha common stock pursuant to the merger agreement and FOR the adjournment of the Alpha special meeting under certain circumstances; and

 

   

for Massey stockholders, your shares will be voted FOR the adoption of the merger agreement and FOR the adjournment of the Massey special meeting under certain circumstances.

 

Q. Can I change my vote after I mail my proxy card(s) or vote by telephone or over the Internet?

 

A: Yes. If you are a stockholder of record of Alpha common stock or of Massey common stock (that is, you hold your shares in your own name and not through a bank, broker or other nominee) as of the close of business on the record date for the special meetings, you can change your vote by:

 

   

sending a written notice to the corporate secretary of the company in which you hold shares that is received prior to your special meeting and states that you revoke your proxy;

 

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signing, dating and delivering a new valid proxy card(s) bearing a later date that is received prior to your special meeting;

 

   

voting again by telephone or over the Internet by 11:59 p.m., EDT, on May 31, 2011; or

 

   

attending your special meeting and voting in person, although your attendance alone will not revoke your proxy.

If your shares are held in a “street name” account, you must contact your broker, bank or other nominee to change your vote.

 

Q: What if my bank, broker or other nominee holds my shares in “street name”?

 

A: If a bank, broker or other nominee holds your shares for your benefit but not in your own name, your shares are in “street name.” In that case, your bank, broker or other nominee will send you a voting instruction form to use in voting your shares. The availability of telephone and Internet voting depends on the voting procedures of your bank, broker or other nominee. Please follow the instructions on the voting instruction form they send you. If your shares are held in the name of your bank, broker or other nominee and you wish to vote in person at your special meeting, you must contact your bank, broker or other nominee and request a document called a “legal proxy.” You must bring this legal proxy to your respective special meeting in order to vote in person.

 

Q: What if I don’t provide my bank, broker or other nominee with instructions on how to vote?

 

A: Generally, a bank, broker or other nominee may vote the shares that it holds for you only in accordance with your instructions. However, if your bank, broker or other nominee has not received your instructions, your bank, broker or other nominee has the discretion to vote on certain matters that are considered routine. A “broker non-vote” occurs if your bank, broker or other nominee cannot vote on a particular matter because your bank, broker or other nominee has not received instructions from you and because the proposal is not routine. Each of the matters being presented to stockholders for a vote at the special meetings of Alpha and Massey is not considered a routine matter. Therefore, your bank, broker or other nominee will not be permitted to vote at the special meeting without instruction from you as the beneficial owner of the shares of Alpha or Massey common stock.

In the case of Massey stockholders, a broker non-vote will have the same effect as a vote AGAINST adoption of the merger agreement, but a broker non-vote will have no effect on the adjournment proposal.

In the case of Alpha stockholders, a broker non-vote will have the same effect as a vote AGAINST the proposal to amend the certificate of incorporation, but will have no effect on the proposal to issue shares of Alpha common stock pursuant to the merger agreement or on the adjournment proposal.

Broker non-votes will not be counted for purposes of determining whether a quorum is present at the special meetings.

 

Q: What if I abstain from voting?

 

A: Your abstention from voting will have the following effect:

If you are an Alpha stockholder:

Abstentions will be counted in determining whether a quorum is present at the Alpha special meeting. With respect to the proposal to approve the amendment of the certificate of incorporation, abstentions will have the same effect as a vote AGAINST the proposal to amend the certificate of incorporation. With respect to the proposal to approve the issuance of shares of Alpha common stock pursuant to the merger agreement, abstentions will have the same effect as a vote AGAINST the proposal to issue shares of Alpha common stock pursuant to the merger agreement. With respect to the proposal to adjourn the Alpha special meeting, if necessary or appropriate, to solicit further proxies in connection with the proposal to approve the amendment of the certificate of incorporation and/or the proposal to approve the issuance of shares of Alpha common stock pursuant to the merger agreement, abstentions will have the same effect as a vote AGAINST the proposal to adjourn the Alpha special meeting.

 

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If you are a Massey stockholder:

Abstentions will be counted in determining whether a quorum is present at the Massey special meeting. With respect to the proposal to adopt the merger agreement, abstentions will have the same effect as a vote AGAINST the proposal to adopt the merger agreement. With respect to the proposal to adjourn the Massey special meeting, if necessary or appropriate, to solicit further proxies in connection with the merger agreement adoption proposal, abstentions will have the same effect as a vote AGAINST the proposal to adjourn the Massey special meeting.

 

Q: What does it mean if I receive multiple proxy cards?

 

A: Your shares may be registered in more than one account, such as brokerage accounts and 401(k) accounts. It is important that you complete, sign, date and return each proxy card or voting instruction form you receive or vote using the telephone or the Internet as described in the instructions included with your proxy card(s) or voting instruction form(s).

 

Q: How are shares held in the Massey Salary Deferral and Profit Sharing Plan voted?

 

A: Shares held in the Massey Salary Deferral and Profit Sharing Plan, which we refer to as the Massey 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 the Massey 401(k) Plan for which timely and valid voting instructions are received. Shares held in the Massey 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 the Massey 401(k) Plan for which timely and valid voting instructions are received. The deadline for voting shares of Massey common stock held in the Massey 401(k) Plan electronically through the Internet or by telephone is 11:59 p.m., EDT, on May 30, 2011.

 

Q: Where can I find more information about Alpha and Massey?

 

A: You can find more information about Alpha and Massey from various sources described under “Where You Can Find More Information” beginning on page 190.

 

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SUMMARY

This summary highlights selected information from this joint proxy statement/prospectus and might not contain all of the information that is important to you. You should read carefully this entire joint proxy statement/prospectus, including the Annexes, and the other documents to which this joint proxy statement/prospectus refers to understand fully the merger and the related transactions. In addition, Alpha and Massey incorporate by reference into this joint proxy statement/prospectus important business and financial information about Alpha and Massey. See “Where You Can Find More Information” beginning on page 190. Most items in this summary include a page reference directing you to a more complete description of those items.

Information About Alpha

Alpha is one of America’s premier coal suppliers, operating approximately 66 mines and 13 coal preparation plants in Northern and Central Appalachia and the Powder River Basin, with approximately 6,500 employees. Alpha produces, processes and sells thermal coal and metallurgical or steel coal. Alpha also sells coal produced by others, the majority of which Alpha processes and/or blends with coal produced from its mines prior to resale, providing Alpha with a higher overall margin for the blended product than if Alpha had sold the coals separately. As of December 31, 2010, Alpha owned or leased approximately 2.3 billion tons of proven and probable coal reserves. During 2010, Alpha sold a total of 84.8 million tons of steam and metallurgical coal and generated coal revenues of $3.5 billion and income from continuing operations of $97.2 million. Alpha’s coal sales from continuing operations during 2010 consisted of 82.6 million tons of produced and processed coal, including 0.8 million tons purchased from third parties and processed at its processing plants or loading facilities prior to resale, and 2.2 million tons of purchased coal that it resold without processing. Alpha’s sales of steam coal in 2010 accounted for approximately 86% of its annual coal sales volume, and its 2010 sales of metallurgical coal, which generally sells at a premium over steam coal, accounted for approximately 14% of its annual coal sales volume. Alpha’s sales of steam coal during 2010 were made primarily to large utilities and industrial customers throughout the United States, and its sales of metallurgical coal were made primarily to steel companies in the Northeastern and Midwestern regions of the United States and in several countries in Europe, Asia and South America. Approximately 34% of Alpha’s total revenues from continuing operations in 2010 were derived from sales, including freight and handling revenues, made outside the United States, primarily in Brazil, Italy, India, Turkey and Ukraine. Alpha’s principal executive offices are located at One Alpha Place, Abingdon, Virginia 24210, and its telephone number is (276)  619-4410.

Information About Mountain Merger Sub

Mountain Merger Sub, Inc., a wholly owned subsidiary of Alpha, is a Delaware corporation that was formed on January 24, 2011, for the purpose of effecting the merger. In the merger, Mountain Merger Sub will be merged with and into Massey, with Massey surviving as a wholly owned subsidiary of Alpha.

Information About Massey

A.T. Massey Coal Company, Inc., which we refer to as A.T. Massey, was originally incorporated in Richmond, Virginia in 1920 as a coal brokering business. In the late 1940s, A.T. Massey expanded its business to include coal mining and processing. In 1974, St. Joe Minerals acquired a majority interest in A.T. Massey. In 1981, St. Joe Minerals was acquired by Fluor Corporation. A.T. Massey was wholly owned by Fluor Corporation from 1987 until November 30, 2000. On November 30, 2000, Massey completed a reverse spin-off which separated Fluor Corporation into two entities: the “new” Fluor Corporation and Fluor Corporation which retained Massey’s coal-related businesses and was subsequently renamed Massey Energy Company. Massey has been a separate, publicly traded company since December 1, 2000.

Massey is one of the largest coal producers in the United States and the largest coal company in Central Appalachia, Massey’s primary region of operation, in terms of tons produced in 2010 and total coal reserves currently controlled.

 

 

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Massey produces, processes and sells bituminous coal of various steam and metallurgical grades, primarily of a low sulfur content, through Massey’s 25 processing and shipping centers, many of which receive coal from multiple mines. At January 31, 2011, Massey operated 84 mines, including 66 underground mines (one of which employs both room and pillar and longwall mining) and 18 surface mines (with 12 highwall miners in operation) in West Virginia, Kentucky and Virginia. The number of mines that Massey operates may vary from time to time depending on a number of factors, including the existing demand for and price of coal, exhaustion of economically recoverable reserves and availability of experienced labor.

Customers for Massey’s steam coal product include primarily electric power utility companies which use Massey’s coal as fuel for their steam-powered generators. Customers for Massey’s metallurgical coal include primarily steel producers which use Massey’s coal to produce coke, which is in turn used as a raw material in the steel manufacturing process.

The principal executive office of Massey is located at 4 North 4th Street, Richmond, Virginia 23219, and its telephone number is (804) 788-1800.

The Merger

Upon the terms and subject to the conditions of the merger agreement, and in accordance with Delaware law, at the effective time of the merger, Mountain Merger Sub will merge with and into Massey. The separate corporate existence of Mountain Merger Sub will cease, and Massey will continue as the surviving corporation of the merger and a wholly owned subsidiary of Alpha.

We encourage you to read the merger agreement, which governs the merger and is attached as Annex A to this joint proxy statement/prospectus, because it sets forth the terms of the merger.

Merger Consideration (beginning on page 114)

If you are a Massey stockholder, each share of Massey common stock that you hold immediately prior to the merger will be converted into the right to receive 1.025 shares of Alpha common stock and $10.00 in cash, upon completion of the merger of Mountain Merger Sub with and into Massey.

Alpha will not issue any fractional shares as a result of the merger. Instead, it will pay to each Massey stockholder an amount of cash (calculated to the nearest one-tenth of a cent), without interest, equal to the product of (1) the fractional share interest (after aggregating all shares of Alpha common stock that would otherwise be received by such holder of Massey common stock) that a holder of Massey common stock would otherwise receive, and (2) the average of the volume weighted average closing price per share of Alpha common stock on the NYSE (as reported by the Wall Street Journal, or other authoritative source) for the five trading days ending on the last trading day immediately prior to the effective date of the merger, weighted by the total volume of trading in Alpha common stock on each such trading day.

The Number of Shares of Alpha Common Stock to Be Issued in the Merger Is Fixed, and Therefore the Value of the Merger Consideration Will Fluctuate with Market Prices (page 115)

The number of shares of Alpha common stock and cash to be issued in the merger for each share of Massey common stock is fixed (except in the event of any stock dividend, subdivision, recapitalization, split, reverse split, combination or exchange of shares or similar event with respect to Alpha common stock or Massey common stock) and will not be adjusted for changes in the market price of either Alpha common stock or Massey common stock. Accordingly, any change in the price of Alpha common stock prior to the merger will affect the market value of the merger consideration that Massey stockholders will receive as a result of the merger.

 

 

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You should obtain current stock price quotations for Alpha common stock and Massey common stock. Alpha common stock and Massey common stock are listed on the NYSE under the symbols “ANR” and “MEE,” respectively. The following table shows the closing prices for Alpha common stock and Massey common stock and the implied per share value in the merger to Massey stockholders for January 28, 2011, the last full trading day prior to the public announcement of the merger and on April 27, 2011, the last practicable full trading day prior to the filing of this joint proxy statement/prospectus with the SEC:

 

     Alpha Common Stock      Massey Common Stock      Implied Value of One
Share of Massey
Common Stock
 

January 27, 2011

   $ 57.88       $ 57.23       $ 69.33   

April 27, 2011

     55.96         65.88         67.36   

Upon completion of the merger, Alpha’s legacy stockholders will own approximately 54% of Alpha’s outstanding common stock and former Massey stockholders will own approximately 46% of Alpha’s outstanding common stock, based on the number of shares of Alpha and Massey common stock issued and outstanding as of January 28, 2011.

Financing Relating to the Merger (beginning on page 129)

Alpha has received a financing commitment from Morgan Stanley Senior Funding, Inc. and Citigroup Global Markets Inc., subject to customary conditions, for a proposed new $600 million term A loan facility, $1 billion revolving credit facility and a $1.7 billion bridge facility. The newly committed financing, in addition to existing cash balances, will be used to fund the cash portion of the merger consideration (inclusive of payments due to holders of Massey equity awards) and refinance certain of Alpha and Massey’s existing debt. Massey will cooperate with Alpha’s efforts to secure the financing and Alpha will reimburse Massey for the expenses it incurs in performing those efforts.

Alpha may be required to pay a termination fee of $360 million upon termination of the merger agreement by Massey if the 20-business-day marketing period has ended and all other conditions of Alpha and Mountain Merger Sub under the merger agreement have been satisfied (other than those conditions that by their nature are to be satisfied at the closing) and Alpha and Mountain Merger Sub have failed to complete the closing by the date required under the merger agreement as a result of a breach by the lenders of their obligations to make available to Alpha and Mountain Merger Sub the full amount of the financing commitment for the merger.

For a full description of financing relating to the merger, see “The Merger — Financing Relating to the Merger,” beginning on page 129.

Alpha’s Reasons for the Merger (beginning on page 84)

In evaluating the merger, the Alpha board of directors consulted with Alpha’s management, as well as Alpha’s legal and financial advisors and, in reaching its decision to approve the merger agreement and the transactions contemplated thereby and to recommend that Alpha stockholders approve the amendment to the certificate of incorporation and the issuance of shares of Alpha common stock pursuant to the merger agreement, reviewed a significant amount of information and considered a number of factors, including those listed in “The Merger — Alpha’s Reasons for the Merger and Recommendation of Alpha’s Board of Directors” beginning on page 84.

Massey’s Reasons for the Merger (beginning on page 87)

In the course of reaching its decision to approve the merger and related transactions and to recommend that Massey stockholders adopt the merger agreement, the Massey board of directors consulted with members of

 

 

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Massey’s management, a committee of the board of directors of Massey tasked with evaluating strategic alternatives and Massey’s legal and financial advisors, reviewed a significant amount of information and considered a number of factors, including those listed in “The Merger — Massey’s Reasons for the Merger and Recommendation of Massey’s Board of Directors” beginning on page 87.

Recommendations of the Boards of Directors to Alpha’s Stockholders and Massey’s Stockholders (beginning on page 84 for Alpha’s Stockholders and page 87 for Massey’s Stockholders)

Alpha Stockholders. The Alpha board of directors has approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, and has determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, Alpha and its stockholders. In order to consummate the merger, Alpha stockholders must approve the amendment to the Alpha certificate of incorporation to increase the number of shares of authorized Alpha common stock and approve the issuance of shares of Alpha common stock to the stockholders of Massey pursuant to the merger agreement.

The Alpha board of directors has resolved to recommend that Alpha stockholders vote FOR the amendment to the Alpha certificate of incorporation and FOR the issuance of shares of Alpha common stock pursuant to the merger agreement.

Massey Stockholders. The Massey board of directors has approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, and has determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, Massey and its stockholders. The Massey board of directors has resolved to recommend that Massey stockholders vote FOR the adoption of the merger agreement.

Opinions of Financial Advisors (beginning on page 92 for Alpha’s financial advisor and on page 101 for Massey’s financial advisor)

Opinion of Alpha’s Financial Advisor. In connection with the merger, the Alpha board of directors considered the opinion of Alpha’s financial advisor, Morgan Stanley & Co. Incorporated, which we refer to as Morgan Stanley, which opinion was rendered orally on January 28, 2011, and subsequently confirmed in writing, to the effect that, as of such date and based on and subject to the assumptions, procedures, factors, qualifications and limitations set forth in the opinion, the merger consideration to be paid by Alpha pursuant to the merger agreement was fair from a financial point of view to Alpha. The full text of Morgan Stanley’s written opinion, which is attached to this joint proxy statement/prospectus as Annex C, sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken. Morgan Stanley’s opinion was provided to Alpha’s board of directors in connection with its evaluation of the fairness of the merger consideration from a financial point of view to Alpha. It does not address any other aspect of the merger and does not constitute a recommendation to any stockholder of Alpha or stockholder of Massey as to how such stockholder should vote or act on any matters relating to the proposed merger.

Opinion of Massey’s Financial Advisor. In connection with the merger, Massey’s financial advisor, Perella Weinberg Partners LP, which we refer to as Perella Weinberg, delivered its opinion to the board of directors of Massey that, as of January 28, 2011, and based upon and subject to the various assumptions, qualifications and limitations set forth in its opinion, the per-share merger consideration, consisting of $10.00 in cash, without interest, and 1.025 fully paid and nonassessable shares of Alpha common stock to be received by the holders of shares of Massey common stock, other than holders of certain excluded shares, was fair, from a financial point of view, to the holders entitled to receive such merger consideration.

The full text of Perella Weinberg’s written opinion, which describes the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken, is attached to this joint

 

 

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proxy statement/prospectus as Annex D. You should read the opinion carefully and in its entirety. Perella Weinberg’s opinion was provided to the board of directors of Massey in connection with their evaluation of the consideration provided for in the merger. Perella Weinberg’s opinion did not address any other aspects or implications of the merger or the underlying business decision of Massey to effect the merger or the relative merits of the merger as compared with any other strategic alternative which may be available to Massey. Perella Weinberg’s opinion is not intended to be and does not constitute a recommendation to any holder of shares of Massey common stock as to how such holder should vote or otherwise act on any matters with respect to the proposed merger.

Effect of the Merger on Massey’s Long-Term Incentive Compensation Awards (beginning on page 141)

Stock Options. At the effective time of the merger, Massey stock options granted on or prior to January 27, 2011 and outstanding immediately prior to the effective time of the merger will vest and become exercisable. Such vested Massey stock options, along with Massey stock options granted after January 27, 2011 and outstanding immediately prior to the effective time of the merger, whether or not vested, will be assumed by Alpha and converted into stock options to purchase shares of Alpha common stock on the same terms and conditions as are applicable to the stock options to purchase shares of Massey common stock, except that the number of shares of Alpha common stock subject to such converted stock options and the exercise price per share of such converted stock options will be adjusted based on the average prices per share of Massey common stock and Alpha common stock on each of the last five consecutive trading days prior to the effective time of the merger.

Restricted Stock. At the effective time of the merger, restricted shares of Massey common stock granted on or prior to January 27, 2011 and outstanding immediately prior to the effective time of the merger will vest and be converted into the right to receive the merger consideration. Each award of restricted shares of Massey common stock granted after January 27, 2011 and outstanding immediately prior to the effective time of the merger, whether or not vested, will be assumed by Alpha and converted into an award in respect of Alpha common stock having the same terms and conditions as were applicable immediately prior to the effective time of the merger, except that the number of shares of Alpha common stock underlying such converted restricted stock award (rounded up to the nearest whole share) will be adjusted based on the average prices per share of Massey common stock and Alpha common stock on each of the last five consecutive trading days prior to the effective time of the merger.

Restricted Stock Units. At the effective time of the merger, Massey restricted stock unit awards not subject to performance-based vesting granted on or prior to January 27, 2011 and outstanding immediately prior to the effective time of the merger will be cancelled, and the holder will have the right to receive a cash payment based on the merger consideration, the average price per share of Alpha common stock on each of the last five consecutive trading days prior to the effective time of the merger and the number of shares of Massey common stock subject to the Massey restricted stock unit award immediately prior to the effective time of the merger. Massey restricted stock unit awards subject to performance-based vesting that were granted on or prior to January 27, 2011 and outstanding immediately prior to the effective time of the merger will be cancelled, and the holder will have the right to receive a cash payment based on the merger consideration, the average price per share of Alpha common stock on each of the last five consecutive trading days prior to the effective time of the merger and the number of shares of Massey common stock subject to the Massey restricted stock unit award immediately prior to the effective time of the merger (assuming vesting at the effective time based on the attainment of target performance levels).

At the effective time, Massey restricted stock unit awards granted after January 27, 2011 and outstanding immediately prior to the effective time of the merger, whether or not vested and whether or not subject to performance-based vesting, will be assumed by Alpha and automatically converted into a restricted stock unit award in respect of Alpha common stock on the same terms and conditions as were applicable immediately prior to the effective time of the merger, except that the number of shares of Alpha common stock underlying each

 

 

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such converted restricted stock unit award (rounded up to the nearest whole share) will be adjusted based on the average prices per share of Massey common stock and Alpha common stock on each of the last five consecutive trading days prior to the effective time of the merger and, to the extent applicable, the performance goals for the converted awards may be adjusted by Alpha, in good faith, as necessary and appropriate to reflect the effects of the merger.

Director Fee Units. At the effective time of the merger, Massey director fee units (which are attributable to the deferral of directors’ fees and cash dividends paid on such deferrals) granted on or prior to January 27, 2011 and outstanding immediately prior to the effective time of the merger will be canceled, and the holder will have the right to receive a cash payment based on the merger consideration, the average price per share of Alpha common stock on each of the last five consecutive trading days prior to the effective time of the merger and the number of shares of Massey common stock subject to the Massey director fee unit immediately prior to the effective time of the merger. If the Massey director fee unit is not otherwise payable to the director at the effective time, the value of the merger consideration will be credited with earnings under the Massey Deferred Directors’ Fees Program until paid pursuant to that program. Massey director fee units granted after January 27, 2011 and outstanding immediately prior to the effective time of the merger will be assumed by Alpha and automatically converted into awards in respect of Alpha common stock on the same terms and conditions as were applicable immediately prior to the effective time of the merger, except that the number of whole shares of Alpha common stock underlying each such converted director fee unit (rounded up to the nearest whole share) will be adjusted based on the average prices per share of Massey common stock and Alpha common stock on each of the last five consecutive trading days prior to the effective time of the merger.

Cash Incentive Awards. At the effective time of the merger, cash incentive awards (which are not denominated in or valued by reference to Massey common stock) granted prior to January 27, 2011 and with respect to which the applicable performance period is incomplete as of immediately prior to the effective time of the merger will be assumed by Alpha on the same terms and conditions as were applicable immediately prior to the effective time of the merger, except that the performance goals applicable to such cash incentive awards will be deemed to have been attained, as of the effective time of the merger, at maximum performance levels. Cash incentive awards (which are not denominated in or valued by reference to Massey common stock) granted on or after January 27, 2011 and with respect to which the applicable performance period is incomplete as of immediately prior to the effective time of the merger will be assumed by Alpha on the same terms and conditions as were applicable immediately prior to the effective time of the merger, except that the performance goals applicable to such cash incentive awards may be adjusted by Alpha, in good faith, as necessary and appropriate to reflect the effects of the merger, and the attainment of such performance goals will be based on actual performance throughout the performance period. All service based vesting requirements underlying cash incentive awards will remain in effect.

For a full description of the treatment of Massey’s long-term incentive compensation awards, see “The Merger Agreement — Effect of the Merger on Massey’s Long-Term Incentive Compensation Awards” beginning on page 141.

Record Date; Outstanding Shares; Shares Entitled to Vote; Vote Required (page 54 for Alpha and page 60 for Massey)

Alpha Stockholders. The record date for the special meeting of Alpha stockholders is April 27, 2011. This means that you must be a stockholder of record of Alpha common stock at the close of business on April 27, 2011, in order to vote at the Alpha special meeting. You are entitled to one vote for each share of Alpha common stock you own. At the close of business on April 27, 2011, there were 120,867,566 shares of Alpha common stock (excluding 3,992,696 shares of treasury stock) outstanding and entitled to vote at the Alpha special meeting. The approval of the amendment to the Alpha certificate of incorporation requires the affirmative vote of

 

 

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a majority of the outstanding shares of Alpha common stock entitled to vote. The approval of the issuance of shares of Alpha common stock pursuant to the merger agreement requires the affirmative vote of a majority of shares present in person or represented by proxy at the Alpha special meeting and entitled to vote, assuming a quorum is present. The adjournment of the Alpha special meeting, if necessary or appropriate, including to permit further solicitation of proxies if there are not sufficient votes at the time of the Alpha special meeting to approve the proposal to amend the certificate of incorporation and/or the proposal to approve the issuance of shares of Alpha common stock pursuant to the merger agreement requires the affirmative vote of a majority of the shares of Alpha common stock present in person or represented by proxy at the Alpha special meeting and entitled to vote, regardless of whether a quorum is present. Please note that pursuant to section 2.09 of Alpha’s bylaws, the chairman is authorized to adjourn the Alpha special meeting if less than a quorum is present.

Massey Stockholders. The record date for the special meeting of Massey stockholders is April 27, 2011. This means that you must be a stockholder of record of Massey common stock at the close of business on April 27, 2011, in order to vote at the Massey special meeting. You are entitled to one vote for each share of Massey common stock you own. At the close business on April 27, 2011, there were 103,101,921 shares of Massey common stock (excluding 861,439 shares of treasury stock) outstanding and entitled to vote at the Massey special meeting. The adoption of the merger agreement requires the affirmative vote of a majority of the outstanding shares of Massey common stock entitled to vote. The adjournment of the Massey special meeting, if necessary or appropriate, including to permit further solicitation of proxies if there are not sufficient votes at the time of the Massey special meeting to approve the proposal to adopt the merger agreement requires the affirmative vote of a majority of the shares of Massey common stock present in person or represented by proxy at the Massey special meeting and entitled to vote, regardless of whether a quorum is present. Please note that pursuant to section 2.04(c) of Massey’s bylaws, the chairman is authorized to adjourn the Massey special meeting.

Stock Ownership and Voting by Alpha’s and Massey’s Directors and Executive Officers (page 56 for Alpha and beginning on page 61 for Massey)

Alpha. At the close of business on April 27, 2011, the record date for the Alpha special meeting, Alpha’s directors and executive officers had the right to vote approximately 882,199 shares of the then-outstanding Alpha common stock at the Alpha special meeting, collectively representing approximately 0.7% of Alpha common stock outstanding and entitled to vote at the Alpha special meeting.

Massey. At the close of business on April 27, 2011, the record date for the Massey special meeting, Massey’s directors and executive officers had the right to vote approximately 569,969 shares of the then-outstanding Massey common stock at the Massey special meeting, collectively representing approximately 0.6% of Massey common stock outstanding and entitled to vote at the Massey special meeting. In addition, a subsidiary of Alpha owns 1,000 shares of common stock of Massey and Michael Quillen, chairman of the board of directors of Alpha, owns 200 shares of common stock of Massey, collectively representing less than one one-hundredth of one percent of Massey common stock outstanding and entitled to vote at the Massey special meeting.

Interests of Alpha Directors and Executive Officers in the Merger (on page 115)

Some of Alpha’s executive officers and members of its board of directors, in their capacities as such, may have financial interests in the merger that may be different from, or in addition to, their interests as stockholders and the interests of stockholders of Alpha generally.

Michael Quillen, chairman of the board of directors of Alpha, owns 200 shares of common stock of Massey. Mr. Quillen acquired the 200 Massey shares in connection with the November 2000 reverse spin-off of Massey from the Fluor Corporation. At the Alpha board meeting held on January 28, 2011, where the Alpha board, among other actions, approved and declared advisable the merger agreement, the Alpha board confirmed that Mr. Quillen need not recuse himself from the vote on the merger with Massey.

 

 

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The members of Alpha’s board of directors were aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in recommending that Alpha stockholders vote for the proposals to amend the certificate of incorporation and issue shares of Alpha common stock pursuant to the merger agreement.

Interests of Massey Directors and Executive Officers in the Merger (beginning on page 115)

Massey’s executive officers and members of its board of directors, in their capacities as such, have financial interests in the merger that may be different from, or in addition to, their interests as stockholders and the interests of stockholders of Massey generally. The members of Massey’s board of directors were aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in recommending to the Massey stockholders that the merger agreement be adopted.

Michael Snelling, Massey’s vice president of surface operations, owns 1,000 shares of Alpha common stock. Mr. Snelling acquired the 1,000 Alpha shares on June 9, 2008. Steve Sears, Massey’s vice president of sales, owns 2,000 shares of Alpha common stock. Mr. Sears acquired the 2,000 Alpha shares on October 12, 2008. Mark Clemens, Massey’s senior vice president of group operations, owns 1,000 shares of Alpha common stock. Mr. Clemens acquired the 1,000 Alpha shares on May 18, 2010. Mr. Snelling, Mr. Sears and Mr. Clemens were each unaware of any discussions regarding a possible business combination between Alpha and Massey at the time they purchased their shares of Alpha common stock.

Massey is obligated under existing employment and change in control severance agreements with the executive officers of Massey, which will be assumed by Alpha, to make cash severance payments and provide other benefits (in addition to the payments that would otherwise be received by the executive officers in respect of outstanding long-term incentive compensation awards) ranging from $248,521 to $8,232,536 (plus $302.20 per month in retiree medical benefits) in the event that, during the two years following the completion of the merger, these executive officers experience a termination of employment by Alpha or Massey without “cause” or by the executive officer on account of a “constructive termination associated with a change in control.” The foregoing amounts are based on certain assumptions described under “The Merger — Interests of Massey’s Directors and Executive Officers in the Merger” beginning on page 115.

In addition, benefits provided to executive officers under Massey’s supplemental pension plan will become vested in the event that, during the two years following the completion of the merger, these executive officers experience a termination of employment by Alpha or Massey without “cause,” and some of these executive officers will be entitled to enhanced benefits under the supplemental pension plan on account of any such termination or a termination by the executive officer on account of a “constructive termination associated with a change in control.” Under the terms of Massey’s deferred compensation plan, the account balances of executive officers will be distributed on or about January 31 of the year following the year of an executive officer’s termination of employment for any reason within two years following a change in control (subject to a six month delay in payment for certain specified employees under applicable tax laws).

Additionally, as detailed above under “Effect of the Merger on Massey’s Long-Term Incentive Compensation Awards,” stock options, restricted stock, restricted stock units and other performance-based awards granted on or prior to January 27, 2011 and held by each director and executive officer of Massey will automatically vest upon completion of the merger. Certain performance targets will be deemed satisfied at target and maximum levels under outstanding performance awards granted on or prior to January 27, 2011 and held by Massey’s executive officers.

In connection with Massey’s review of its strategic alternatives, Massey’s board of directors formed a strategic alternatives review committee to consider and assess Massey’s strategic alternatives, including the proposed merger. The non-employee members of the strategic alternatives review committee were compensated $2,000 per meeting that they attended.

 

 

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Although there are no current arrangements obligating any of Massey’s directors or executive officers to continue to serve as executive officers or directors of the surviving company upon completion of the merger, Alpha expects to enter into a consulting agreement with Mr. Phillips after the effective time of the merger, and is currently engaging in discussions with certain other Massey executive officers regarding opportunities to serve as employees of the surviving company or one of its subsidiaries, on an at-will basis, upon completion of the merger.

Under the merger agreement, Alpha has agreed to leave in place and not to modify those provisions granting rights to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the effective time of the merger and related rights to the advancement of expenses in favor of any current or former director, officer, employee or agent of Massey contained in the organizational documents of Massey and its subsidiaries and certain related indemnification agreements.

In addition, Alpha has agreed to indemnify and hold harmless, for six years following the consummation of the merger, each current or former director or officer of Massey or any of its subsidiaries, to the fullest extent Massey would have been permitted to do so by law prior to the merger, from any losses, claims, damages, liabilities, costs, expenses, judgments, fines and amounts paid in settlement of or in connection with any threatened or actual claim, action, suit, proceeding or investigation arising out of, or pertaining to such person’s service as a director or officer.

Alpha has also agreed to cause the surviving corporation to obtain a prepaid six-year tail policy to the current directors’ and officers’ liability insurance policies on terms no less favorable than those provided by Massey’s existing insurance coverage, provided that Alpha is not required to pay an aggregate premium in excess of 200% of the current annual premium paid by Massey.

Current and former Massey directors and officers are defendants in the pending derivative actions brought by the derivative plaintiffs. In accordance with the advice of Cravath, Massey’s outside legal counsel, the Massey board of directors assumed that the derivative claims would survive the closing of the merger, although the plaintiffs in the pending cases would lose their standing to bring those claims and might have to make a demand on Alpha to pursue the claims. However, if the derivative claims are not pursued following the closing of the merger, the Massey directors and officers that are defendants in the pending derivative actions would have an interest in the merger in addition to those set forth above. Since the Massey board of directors assumed that the derivative claims would survive the merger, the Massey board of directors did not consider this potential interest in evaluating and negotiating the merger agreement and the merger, and in recommending to the Massey stockholders that the merger agreement be adopted.

Listing of Alpha Common Stock and Delisting of Massey Common Stock (page 131)

It is a condition to the merger that the shares of common stock to be issued by Alpha pursuant to the merger agreement be authorized for listing on the NYSE subject to official notice of issuance. The shares of common stock to be issued by Alpha pursuant to the merger agreement will trade under the symbol “ANR” and will be fully fungible with the Alpha common stock currently trading under that symbol.

Shares of Massey common stock are currently traded on the NYSE under the symbol “MEE.” If the merger is completed, Massey common stock will no longer be listed on the NYSE and will be deregistered under the Exchange Act, and Massey will no longer file periodic reports with the SEC.

Rights of Appraisal for Massey Stockholders (beginning on page 131)

Under Section 262 of the DGCL, holders of Massey common stock may have the right to obtain an appraisal of the value of their shares of Massey common stock in connection with the merger. To perfect appraisal rights, a

 

 

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Massey stockholder must not vote for the adoption of the merger agreement and must strictly comply with all of the procedures required under Delaware law, including submitting a written demand for appraisal to Massey prior to the special meeting. Failure to strictly comply with Section 262 of the DGCL by a Massey stockholder may result in termination or waiver of that stockholder’s appraisal rights. Because of the complexity of Delaware law relating to appraisal rights, if any Massey stockholder is considering exercising his, her or its appraisal rights, Alpha and Massey encourage such Massey stockholder to seek the advice of his, her or its own legal counsel. A summary of the requirements under Delaware law to exercise appraisal rights is included in this joint proxy statement/prospectus under the heading “The Massey Special Meeting—How to Vote” and the text of Section 262 of the DGCL as in effect with respect to this transaction is included as Annex E to this joint proxy statement/prospectus. See “The Merger—Rights of Appraisal for Massey Stockholders” beginning on page 131.

Conditions to Completion of the Merger (beginning on page 155)

The obligations of each of Alpha and Massey to complete the merger are subject to the satisfaction or waiver on or prior to the closing date of the merger of the following conditions:

 

   

the adoption of the merger agreement by the Massey stockholders at the Massey special meeting;

 

   

the approval by the Alpha stockholders of the amendment to the Alpha certificate of incorporation increasing the number of shares of authorized Alpha common stock and the approval by the Alpha stockholders of the issuance of shares of Alpha common stock pursuant to the merger agreement;

 

   

the absence of any temporary restraining order, preliminary or permanent injunction or other judgment, order or restraint issued by any court or governmental entity of competent jurisdiction enjoining or otherwise prohibiting the merger;

 

   

the approval for listing on the NYSE, subject to official notice of issuance, of the shares of Alpha common stock to be issued in the merger; and

 

   

the effectiveness of the registration statement on Form S-4 of which this joint proxy statement/prospectus forms a part and absence of any stop order by the SEC or proceedings of the SEC seeking a stop order and Alpha’s receipt of all state securities or “blue sky” authorizations necessary for the stock issuance.

The obligation of Alpha to effect the merger is further subject to satisfaction or waiver by Alpha of the following conditions:

 

   

the representations and warranties of Massey set forth in the merger agreement regarding the following matters must be true and correct in all material respects both as of the date of the merger agreement and as of the closing date of the merger, as if made at and as of the closing date of the merger, except to the extent any such representation and warranty was expressly made as of an earlier date (in which case such representation or warranty must have been true as of such earlier date):

 

   

solely with respect to Massey, due organization, good standing and the requisite corporate power and authority to carry on Massey’s business;

 

   

the corporate power and authority to enter into the merger agreement and the approval of the merger agreement and the recommendation by Massey’s board of directors that Massey’s stockholders adopt the merger agreement;

 

   

the vote required by Massey’s stockholders to adopt the merger agreement;

 

   

inapplicability of certain takeover laws;

 

   

no brokers’ or finders’ fees; and

 

   

the receipt of an opinion from Massey’s financial advisor;

 

 

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the representations and warranties of Massey set forth in the merger agreement relating to the capital structure of Massey must be true and correct in all but de minimis respects both as of the date of the merger agreement and as of the closing date of the merger, as if made at and as of the closing date of the merger, except to the extent any such representation and warranty was expressly made as of an earlier date (in which case such representation or warranty must have been true as of such earlier date);

 

   

the representations and warranties of Massey set forth in the merger agreement relating to the absence of a material adverse effect on Massey since December 31, 2009 through the date of the merger agreement must be true and correct in all respects both as of the date of the merger agreement and as of the closing date of the merger as if made at and as of the closing date of the merger, except to the extent any such representation and warranty was expressly made as of an earlier date (in which case such representation or warranty must have been true as of such earlier date);

 

   

all other representations and warranties of Massey set forth in the merger agreement must be true and correct (without giving effect to any materiality or material adverse effect qualifications contained in them) both as of the date of the merger agreement and as of the closing date of the merger, as if made at and as of the closing date of the merger, except to the extent any such representation and warranty was expressly made as of an earlier date (in which case such representation or warranty must have been true as of such earlier date), except where the failure of such representations and warranties to be true and correct is not reasonably likely to have, individually or in the aggregate, a material adverse effect on Massey;

 

   

Massey must have performed in all material respects all obligations required to be performed by it under the merger agreement at or prior to the closing;

 

   

the absence of a material adverse effect on Massey since the date of the merger agreement;

 

   

Massey must have furnished Alpha with a certificate signed on its behalf by its chief executive officer or chief financial officer certifying as to the truth and correctness, with the applicable qualifications, if any, of the representations and warranties described above, the performance by Massey in all material respects of all obligations required to be performed by it under the merger agreement at or prior to the closing and the absence of a material adverse effect on Massey since the date of the merger agreement;

 

   

Alpha must have received from Cleary Gottlieb, its counsel, an opinion, in a form and substance reasonably satisfactory to Alpha, dated as of the date the Form S-4 is filed and as of the closing date of the merger, to the effect that the merger will be treated as a reorganization within the meaning of Section 368(a) of the Code; and

 

   

the expiration or early termination of any waiting periods applicable to the consummation of the merger under the Hart-Scott-Rodino Act, which we refer to as the HSR Act, or under any other applicable antitrust law without the imposition of a condition that would have a material adverse effect on Alpha and its subsidiaries, taken as a whole, or Massey and its subsidiaries, taken as a whole.

The obligation of Massey to effect the merger is further subject to satisfaction or waiver by Massey of the following conditions:

 

   

the representations and warranties of Alpha and Mountain Merger Sub set forth in the merger agreement regarding the following matters must be true and correct in all material respects both as of the date of the merger agreement and as of the closing date of the merger, as if made at and as of the closing date of the merger, except to the extent any such representation and warranty was expressly made as of an earlier date (in which case such representation or warranty must have been true as of such earlier date):

 

   

solely with respect to Alpha, due organization, good standing and the requisite corporate power and authority to carry on Alpha’s business;

 

 

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the corporate power and authority to enter into the merger agreement and the approval of the merger agreement and the recommendation by Alpha’s board of directors that Alpha stockholders approve the amendment to the Alpha certificate of incorporation and the issuance of shares of Alpha common stock pursuant to the merger agreement;

 

   

the vote required by Alpha’s stockholders to approve the amendment to the Alpha certificate of incorporation and the issuance of shares of Alpha common stock pursuant to the merger agreement;

 

   

inapplicability of certain takeover laws;

 

   

no brokers’ or finders’ fees; and

 

   

the availability of the financing commitment for the merger;

 

   

the representations and warranties of Alpha and Mountain Merger Sub set forth in the merger agreement relating to the capital structure of Alpha must be true and correct in all but de minimis respects both as of the date of the merger agreement and as of the closing date of the merger, as if made at and as of the closing date of the merger, except to the extent any such representation and warranty was expressly made as of an earlier date (in which case such representation or warranty must have been true as of such earlier date);

 

   

the representations and warranties of Alpha and Mountain Merger Sub set forth in the merger agreement relating to the absence of a material adverse effect on Alpha since December 31, 2009 through the date of the merger agreement must be true and correct in all respects both as of the date of the merger agreement and as of the closing date of the merger as if made at and as of the closing date of the merger, except to the extent any such representation and warranty was expressly made as of an earlier date (in which case such representation or warranty must have been true as of such earlier date);

 

   

all other representations and warranties of Alpha and Mountain Merger Sub set forth in the merger agreement must be true and correct (without giving effect to any materiality or material adverse effect qualifications contained in them) both as of the date of the merger agreement and as of the closing date of the merger, as if made at and as of the closing date of the merger, except to the extent any such representation and warranty was expressly made as of an earlier date (in which case such representation or warranty must have been true as of such earlier date), except where the failure of such representations and warranties to be true and correct is not reasonably likely to have, individually or in the aggregate, a material adverse effect on Alpha;

 

   

Alpha and Mountain Merger Sub must have performed in all material respects all obligations required to be performed by them under the merger agreement at or prior to the closing;

 

   

the absence of a material adverse effect on Alpha since the date of the merger agreement;

 

   

Alpha must have furnished Massey with a certificate signed on its behalf by its chief executive officer or chief financial officer certifying as to the truth and correctness, with the applicable qualifications, if any, of the representations and warranties described above, the performance by Alpha and Mountain Merger Sub in all material respects of all obligations required to be performed by them under the merger agreement at or prior to the closing and the absence of a material adverse effect on Alpha since the date of the merger agreement;

 

   

Massey must have received from Cravath, its counsel, an opinion, in a form and substance reasonably satisfactory to Massey, dated as of the date the Form S-4 is filed and as of closing date of the merger, to the effect that the merger will be treated as a reorganization within the meaning of Section 368(a) of the Code; and

 

   

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condition that would have a material adverse effect on Alpha and its subsidiaries, taken as a whole, or Massey and its subsidiaries, taken as a whole.

Alpha and/or Massey may agree to waive, in whole or in part, one or more of the conditions to its obligations to complete the merger, to the extent permitted by applicable laws. Alpha’s or Massey’s board of directors, as the case may be, will evaluate the materiality of any such waiver and its effect on Massey and/or Alpha stockholders in light of the facts and circumstances at the time to determine whether amendment of this joint proxy statement/prospectus and resolicitation of proxies is required or warranted. In some instances, if Alpha’s or Massey’s board of directors, as the case may be, determines that such a waiver or its effect on Massey and/or Alpha stockholders is not sufficiently material to warrant resolicitation of stockholders, Alpha or Massey, as the case may be, has the discretion to complete the merger without seeking further stockholder approval. However, the waiver of any one or a combination of conditions or the effect of any such waiver on Massey and/or Alpha stockholders may be deemed by the Alpha or Massey board of directors to be sufficiently material to require or warrant supplemental disclosure to stockholders. Any determination as to resoliciting stockholder approval or amending this joint proxy statement/prospectus as a result of a waiver will be made by the board of directors of Alpha and/or Massey at the time of such waiver based on the facts and circumstances as they exist at such time.

Regulatory Approvals Required for the Merger (page 124)

The completion of the merger is subject to compliance with the HSR Act. The notifications required under the HSR Act were filed on March 2, 2011. The 30-day waiting period required under the HSR Act expired at 11:59 p.m., EDT, on April 1, 2011.

The completion of the merger is also subject to compliance with applicable foreign antitrust laws. Notifications were required under the antitrust laws of Germany and Turkey. Clearance was obtained in Germany on March 9, 2011 and in Turkey on March  10, 2011.

Termination of the Merger Agreement (beginning on page 158)

At any time before the effective time of the merger, whether or not the Alpha stockholders have approved the amendment to the Alpha certificate of incorporation increasing the number of authorized shares of Alpha common stock and the issuance of shares of Alpha common stock pursuant to the merger agreement and the Massey stockholders have adopted the merger agreement, the merger agreement may be terminated:

 

   

by mutual written consent of Alpha and Massey;

 

   

by either Alpha or Massey if:

 

   

the parties fail to consummate the merger on or before the outside date of January 27, 2012, unless the failure to perform or comply in all material respects with its obligations under the merger agreement by the party seeking the termination was the principal cause of the failure to consummate the merger by the outside date; provided that if all conditions to the closing have been satisfied other than the approval of the transaction by Alpha’s stockholders at the Alpha special meeting and by Massey’s stockholders at the Massey special meeting as a result of the fact that the expiration or early termination of any applicable waiting periods under the HSR Act has not occurred, Alpha may, subject to Massey’s consent, not to be unreasonably withheld, extend the outside date from January 27, 2012 to April 30, 2012 by written notice to Massey during the five business days preceding January 27, 2012;

 

   

any court of competent jurisdiction or other governmental entity has issued an order, decree or ruling enjoining or otherwise prohibiting any of the transactions contemplated by the merger

 

 

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agreement, and such order, decree, or ruling has become final and non-appealable, provided that the party seeking the termination of the merger agreement has used reasonable best efforts to contest, resist or remove such order, decree or ruling;

 

   

the Alpha special meeting has been convened, the stockholders of Alpha have voted, and the Alpha stockholders have not approved the amendment to the certificate of incorporation to increase the number of shares of authorized Alpha common stock or have not approved the issuance of shares of Alpha common stock pursuant to the merger agreement; or

 

   

the Massey special meeting has been convened, the stockholders of Massey have voted, and the adoption of the merger agreement by the Massey stockholders was not obtained;

 

   

by Alpha if:

 

   

Massey breaches its representations, warranties or covenants set forth in the merger agreement, which breach would result in a failure of certain of the conditions to the completion of the merger being satisfied and such breach is not reasonably capable of being cured by the outside date or which Massey is not using its reasonable best efforts to cure, except under limited circumstances;

 

   

prior to the receipt of its stockholders’ approval of the proposal to amend the certificate of incorporation to increase the number of shares of authorized Alpha common stock or the proposal to issue shares of Alpha common stock pursuant to the merger agreement, (1) Alpha receives an unsolicited written acquisition proposal, not in violation of its non-solicitation obligations, after the date of the merger agreement, which the Alpha board of directors concludes in good faith (after consultation with outside counsel and a financial advisor of nationally recognized reputation) constitutes a superior proposal, (2) Alpha provides Massey with five business days’ written notice that it intends to take such action, specifying, among other things, the material terms of the superior proposal, (3) Alpha’s board of directors determines in good faith that the failure to take such action would be inconsistent with its fiduciary duties to Alpha stockholders under applicable law, (4) Alpha thereafter satisfies its obligations to negotiate with Massey in good faith to make adjustments to the terms and conditions of the merger agreement so that the acquisition proposal no longer constitutes a superior proposal, and (5) Alpha, concurrently with the termination of the merger agreement, enters into an acquisition agreement for such superior proposal, provided that Alpha pays a $252 million termination fee to Massey;

 

   

prior to the receipt of the Massey stockholders’ approval of the proposal to adopt the merger agreement, (1) in the event that Massey fails to include its board recommendation in the joint proxy statement/prospectus, (2) during the 10 business days after Massey’s board of directors has effected a change of board recommendation, or (3) in the event that a tender offer or exchange offer that would, if consummated, constitute an acquisition proposal with respect to Massey is commenced by a third party, and Massey does not make a recommendation that its stockholders reject such tender or exchange offer within ten business days after such offer is first made; or

 

   

Massey commits a willful and material breach of its non-solicitation obligations or obligations to recommend that Massey stockholders vote in favor of the adoption of the merger agreement;

 

   

by Massey if:

 

   

Alpha breaches its representations, warranties or covenants set forth in the merger agreement, which breach would result in a failure of certain of the conditions to the completion of the merger being satisfied and such breach is not reasonably capable of being cured by the earlier of the outside date or which Alpha is not using its reasonable best efforts to cure, except under limited circumstances;

 

   

prior to the receipt of its stockholders’ approval of the proposal to adopt the merger agreement, (1) Massey receives an unsolicited written acquisition proposal, not in violation of its

 

 

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non-solicitation obligations, after the date of the merger agreement, which the Massey board of directors concludes in good faith (after consultation with outside counsel and a financial advisor of nationally recognized reputation) constitutes a superior proposal, (2) Massey provides Alpha with five business days’ written notice that it intends to take such action, specifying, among other things, the material terms of the superior proposal, (3) Massey’s board of directors determines in good faith that the failure to take such action would be inconsistent with its fiduciary duties to Massey stockholders under applicable law, (4) Massey thereafter satisfies its obligations to negotiate with Alpha in good faith to make adjustments to the terms and conditions of the merger agreement so that the acquisition proposal no longer constitutes a superior proposal, and (5) Massey, concurrently with the termination of the merger agreement, enters into an acquisition agreement for such superior proposal; provided that Massey pays a $251 million termination fee to Alpha;

 

   

prior to the receipt of the Alpha stockholders’ approval of the proposal to adopt the merger agreement, (1) in the event that Alpha fails to include its board recommendation in the joint proxy statement/prospectus, (2) during the 10 business days after Alpha’s board of directors has effected a change of board recommendation, or (3) in the event that a tender offer or exchange offer that would, if consummated, constitute an acquisition proposal with respect to Alpha is commenced by a third party, and Alpha does not make a recommendation that its stockholders reject such tender or exchange offer within ten business days after such offer is first made;

 

   

Alpha commits a willful and material breach of its non-solicitation obligations or obligations to recommend that Alpha stockholders vote in favor of the adoption of the merger agreement; or

 

   

the 20-business-day marketing period has ended and all other conditions of Alpha have been satisfied (other than those conditions that by their nature are to be satisfied at the closing) and Alpha and Mountain Merger Sub have failed to complete the closing by the date required under the merger agreement as a result of a breach by the lenders of their obligations to make available to Alpha and Mountain Merger Sub the full amount of the financing commitment for the merger.

Termination Fees (beginning on page 160)

A termination fee would be payable by Massey in the following circumstances:

 

   

A termination fee of $251 million upon termination by Massey if prior to the receipt of its stockholders’ approval of the proposal to adopt the merger agreement, (1) Massey receives an unsolicited written acquisition proposal, not in violation of its non-solicitation obligations, after the date of the merger agreement, which the Massey board of directors concludes in good faith (after consultation with outside counsel and a financial advisor of nationally recognized reputation) constitutes a superior proposal, (2) Massey provides Alpha with five business days’ written notice that it intends to take such action, specifying, among other things, the material terms of the superior proposal, (3) Massey’s board of directors determines in good faith that the failure to take such action would be inconsistent with its fiduciary duties to Massey stockholders under applicable law, (4) Massey thereafter satisfies its obligations to negotiate with Alpha in good faith to make adjustments to the terms and conditions of the merger agreement so that the acquisition proposal no longer constitutes a superior proposal, and (5) Massey, concurrently with the termination of the merger agreement, enters into an acquisition agreement for such superior proposal.

 

   

A termination fee of $251 million upon termination by Alpha prior to the receipt of the Massey stockholders’ approval of the proposal to adopt the merger agreement, (1) in the event that Massey fails to include its board recommendation in the joint proxy statement/prospectus, (2) during the 10 business days after Massey’s board of directors has effected a change of board recommendation, or (3) in the event that a tender offer or exchange offer that would, if consummated, constitute an acquisition

 

 

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proposal with respect to Massey is commenced by a third party, and Massey does not make a recommendation that its stockholders reject such tender or exchange offer within ten business days after such offer is first made.

 

   

A termination fee of $251 million upon termination by Alpha if Massey commits a willful and material breach of its non-solicitation obligations or obligations to recommend that Massey stockholders vote in favor of the adoption of the merger agreement.

 

   

A termination fee of $251 million, if:

 

   

a competing acquisition proposal had been announced or made to Massey or Massey’s stockholders after the signing of the merger agreement and prior to the Massey special meeting;

 

   

after such competing acquisition proposal had been announced or made, the merger agreement is terminated (1) if the Massey stockholders have not yet approved the merger, by Alpha or Massey due to the failure of the merger to be completed before the outside date unless the failure to perform or comply in all material respects with its obligations under the merger agreement by the party seeking the termination was the principal cause of or resulted in the failure to consummate the merger by the outside date, (2) by Alpha or Massey due to the failure of the Massey stockholders to adopt the merger agreement at the Massey special meeting or any adjournment thereof, or (3) by Alpha, due to a breach by Massey of its representations, warranties or obligations under the merger agreement, which breach (to the extent such breach does not relate solely to a breach of any representation or warranty in the merger agreement) would result in a failure of certain of the conditions to the completion of the merger being satisfied and such breach is not reasonably capable of being cured by the outside date or which Massey is not using its reasonable best efforts to cure, except under limited circumstances; and

 

   

within 12 months after such termination, Massey or any of its subsidiaries either consummates a competing acquisition proposal, enters into a definitive agreement for a competing acquisition proposal or Massey’s board of directors recommends a competing acquisition proposal, in each case, involving at least 50% of the assets, business or equity of Massey and its subsidiaries, in which event such fee would be payable on or shortly after the first such event to occur.

A termination fee would be payable by Alpha and Mountain Merger Sub, jointly and severally, in the following circumstances:

 

   

A termination fee of $252 million upon termination by Alpha if prior to the receipt of its stockholders’ approval of the proposal to amend the certificate of incorporation to increase the number of shares of authorized Alpha common stock or the proposal to issue shares of Alpha common stock pursuant to the merger agreement, (1) Alpha receives an unsolicited written acquisition proposal, not in violation of its non-solicitation obligations, after the date of the merger agreement, which the Alpha board of directors concludes in good faith (after consultation with outside counsel and a financial advisor of nationally recognized reputation) constitutes a superior proposal, (2) Alpha provides Massey with five business days’ written notice that it intends to take such action, specifying, among other things, the material terms of the superior proposal, (3) Alpha’s board of directors determines in good faith that the failure to take such action would be inconsistent with its fiduciary duties to Alpha stockholders under applicable law, (4) Alpha thereafter satisfies its obligations to negotiate with Massey in good faith to make adjustments to the terms and conditions of the merger agreement so that the acquisition proposal no longer constitutes a superior proposal, and (5) Alpha, concurrently with the termination of the merger agreement, enters into an acquisition agreement for such superior proposal.

 

   

A termination fee of $252 million upon termination by Massey prior to the receipt of the Alpha stockholders’ approval of the proposal to amend the certificate of incorporation to increase the number of shares of authorized Alpha common stock or the proposal to issue shares of Alpha common stock

 

 

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pursuant to the merger agreement, (1) in the event that Alpha fails to include its board recommendation in the joint proxy statement/prospectus, (2) during the 10 business days after Alpha’s board of directors has effected a change of board recommendation, or (3) in the event that a tender offer or exchange offer that would, if consummated, constitute an acquisition proposal with respect to Alpha is commenced by a third party, and Alpha does not make a recommendation that its stockholders reject such tender or exchange offer within ten business days after such offer is first made.

 

   

A termination fee of $252 million upon termination by Massey if Alpha commits a willful and material breach of its non-solicitation obligations or obligations to recommend that Alpha stockholders vote in favor of the adoption of the merger agreement.

 

   

A termination fee of $252 million, if:

 

   

a competing acquisition proposal had been announced or made to Alpha or Alpha’s stockholders after the signing of the merger agreement and prior to the Alpha special meeting;

 

   

after such competing acquisition proposal had been announced or made, the merger agreement is terminated (1) if the Alpha stockholders have not yet approved the amendment to Alpha’s certificate of incorporation and the issuance of Alpha common stock pursuant to the merger agreement, by Alpha or Massey due to the failure of the merger to be completed before the outside date unless the failure to perform or comply in all material respects with its obligations under the merger agreement by the party seeking the termination was the principal cause of or resulted in the failure to consummate the merger by the outside date, (2) by Alpha or Massey due to the failure of the Alpha stockholders to approve the proposal to amend the certificate of incorporation to increase the number of shares of authorized Alpha common stock or approve the proposal to issue shares of Alpha common stock pursuant to the merger agreement at the Alpha special meeting or any adjournment thereof, or (3) due to a breach by Alpha of its representations, warranties or obligations under the merger agreement, which breach (to the extent such breach does not relate solely to a breach of any representation or warranty in the merger agreement) would result in a failure of certain of the conditions to the completion of the merger being satisfied and such breach is not reasonably capable of being cured by the outside date or which Alpha is not using its reasonable best efforts to cure, except under limited circumstances; and

 

   

within 12 months after such termination, Alpha or any of its subsidiaries either consummates a competing acquisition proposal, enters into a definitive agreement for a competing acquisition proposal or Alpha’s board of directors recommends a competing acquisition proposal, in each case, involving at least 50% of the assets, business or equity of Alpha and its subsidiaries, in which event such fee would be payable on or shortly after the first such event to occur.

 

   

A termination fee of $360 million upon termination by Massey if the 20-business-day marketing period has ended and all other conditions of Alpha and Mountain Merger Sub have been satisfied (other than those conditions that by their nature are to be satisfied at the closing) and Alpha and Mountain Merger Sub have failed to complete the closing by the date required under the merger agreement as a result of a breach by the lenders of their obligations to make available to Alpha and Mountain Merger Sub the full amount of the financing commitment for the merger.

 

   

A termination fee of $72 million upon termination by Alpha or Massey if, in the absence of a competing proposal for Alpha, the Alpha special meeting has been convened, the stockholders of Alpha have voted and the Alpha stockholders’ approval of the proposal to amend the certificate of incorporation to increase the number of shares of authorized Alpha common stock or the proposal to issue shares of Alpha common stock pursuant to the merger agreement was not obtained.

In general, each of Alpha and Massey will bear its own expenses in connection with the merger agreement and the related transactions.

 

 

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Litigation Related to the Merger (beginning on page 125)

Since the merger was announced by Alpha and Massey on January 29, 2011, Massey, the members of Massey’s board of directors, whom we refer to in this joint proxy statement/prospectus as the Individual Defendants, Alpha and Mountain Merger Sub, Inc., which we collectively refer to in this joint proxy statement/prospectus as the Alpha Parties, have been named as defendants in lawsuits brought by and on behalf of Massey stockholders challenging the proposed transaction. These lawsuits seek, among other things, to enjoin the consummation of the merger. The Alpha Parties believe that the claims asserted against them in these lawsuits are without merit and plan to vigorously defend against them. Massey and the Individual Defendants also believe that the claims asserted against them in these lawsuits are without merit and plan to vigorously defend against them.

Material United States Federal Income Tax Consequences (beginning on page 135)

The obligations of Massey and Alpha to consummate the merger are conditioned on the receipt of opinions of their respective tax counsel, Cravath, Swaine & Moore LLP (as to Massey) and Cleary Gottlieb Steen & Hamilton LLP (as to Alpha), each dated as of the date this proxy statement/prospectus is filed with the SEC and as of the closing date of the merger, to the effect that the merger will be treated for U.S. federal income tax purposes as a “reorganization” within the meaning of Section 368(a) of the Code. Assuming the merger qualifies as a reorganization, the U.S. federal income tax consequences to Massey stockholders generally will be as follows: Massey stockholders will recognize gain only to the extent of the cash consideration that they receive, and will not recognize any loss. Any gain realized with respect to cash received in lieu of fractional shares of Alpha common stock, however, will be fully taxable.

The opinions regarding the merger will not address any state, local or foreign tax consequences of the merger. The opinions will be based on certain assumptions and representations as to factual matters from Alpha and Massey, as well as certain covenants and undertakings by Alpha and Massey. If any of the assumptions, representations, covenants or undertakings were incorrect, incomplete, inaccurate, or were violated in any material respect, the validity of the conclusions reached by counsel in their opinions would be jeopardized and the tax consequences of the merger could differ from those described in this joint proxy statement/prospectus. Neither Alpha nor Massey is currently aware of any facts or circumstances that would cause the assumptions, representations, covenants or undertakings to be incorrect, incomplete, inaccurate or violated in any material respect.

An opinion of counsel represents counsel’s best legal judgment but is not binding on the Internal Revenue Service, or the IRS, or any court, so there can be no certainty that the IRS will not challenge the conclusions reflected in the opinion or that a court would not sustain such a challenge.

Tax matters are complicated, and the tax consequences of the merger to each Massey stockholder will depend on each stockholder’s circumstances. Massey stockholders are urged to read carefully the discussion in the section titled “Material United States Federal Income Tax Consequences” beginning on page 135 and to consult their own tax advisors for a full understanding of the tax consequences of their participation in the merger.

Accounting Treatment (page 134)

The merger will be accounted for as a business combination using the “acquisition” method of accounting with Alpha as the accounting acquiror. Alpha and Massey expect that, upon completion of the merger, former Massey stockholders will receive approximately 46% of the outstanding common stock of Alpha in respect of their Massey shares and Alpha stockholders will hold approximately 54% of the outstanding common stock of Alpha.

 

 

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Risk Factors (beginning on page 41)

In deciding how to vote your Alpha or Massey shares, you should read carefully this entire joint proxy statement/prospectus, including the documents incorporated by reference herein and the Annexes hereto, and especially consider the factors discussed in the section titled “Risk Factors” beginning on page 41.

Comparison of Rights of Stockholders (beginning on page 166)

As a result of the merger, the holders of Massey common stock will become holders of Alpha common stock and their rights will be governed by the DGCL and by Alpha’s certificate of incorporation and bylaws. Following the merger, Massey stockholders may have different rights as stockholders of Alpha than they had as stockholders of Massey. For a summary of the material differences between the rights of Alpha stockholders and Massey stockholders, see “Comparison of Rights of Stockholders” beginning on page 166.

 

 

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FINANCIAL SUMMARY

Alpha Market Price Data and Dividends

Alpha common stock is traded on the NYSE under the symbol “ANR.” The following table shows the high and low sales prices during the period indicated for Alpha common stock on the NYSE. For current price information, you are urged to consult publicly available sources.

 

     Price Range of
Common Stock
     Dividends  

Fiscal Year Ended

   High      Low      Paid  

December 31, 2009:

        

First Quarter

   $ 23.74       $ 14.52           

Second Quarter

     32.99         15.95           

Third Quarter

     39.97         21.86           

Fourth Quarter

     46.52         32.62           

December 31, 2010:

        

First Quarter

     53.93         38.70           

Second Quarter

     55.70         32.00           

Third Quarter

     44.39         32.46           

Fourth Quarter

     61.07         41.06           

December 31, 2011:

        

First Quarter

     68.05         49.58           

Second Quarter (through April 27, 2011)

     61.66         52.76           

The closing sales prices of Alpha common stock on the NYSE on January 28, 2011, and April 27, 2011, were $57.88 and $55.96, respectively. January 28, 2011 was the last full trading day prior to the public announcement of the merger. April 27, 2011 was the last practicable full trading day prior to the filing of this joint proxy statement/prospectus with the SEC.

The Alpha board of directors has the power to determine the amount and frequency of the payment of dividends. Decisions regarding whether to pay dividends and the amount of any dividends are based on compliance with the DGCL, compliance with agreements governing Alpha’s indebtedness, earnings, cash requirements, results of operations, cash flows and financial condition and other factors that the board of directors considers important. Alpha does not currently pay dividends. While Alpha anticipates that if the merger were not consummated it would continue not to pay dividends, it cannot assure that will be the case. Under the merger agreement, until the effective time of the merger, Alpha is not permitted to declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock.

 

 

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Massey Market Price Data and Dividends

Massey common stock is traded on the NYSE under the symbol “MEE.” The following table shows the high and low sales prices during the period indicated for Massey common stock on the NYSE. For current price information, you are urged to consult publicly available sources.

 

     Price Range of
Common Stock
     Dividends  

Fiscal Year Ended

   High      Low      Paid  

December 31, 2009:

        

First Quarter

   $ 18.69       $ 9.62       $ 0.06   

Second Quarter

     26.46         9.80         0.06   

Third Quarter

     33.51         15.85         0.06   

Fourth Quarter

     44.40         25.52         0.06   

December 31, 2010:

        

First Quarter

     54.66         37.41         0.06   

Second Quarter

     54.80         27.18         0.06   

Third Quarter

     34.60         25.85         0.06   

Fourth Quarter

     54.00         30.72         0.06   

December 31, 2011:

        

First Quarter

     69.19         51.75         0.06   

Second Quarter (through April 27, 2011)

     71.19         62.15           

The closing sales prices of Massey common stock on the NYSE on January 28, 2011, and April 27, 2011, were $57.23 and $65.88, respectively. January 28, 2011 was the last full trading day prior to the public announcement of the merger. April 27, 2011 was the last practicable full trading day prior to the filing of this joint proxy statement/prospectus with the SEC.

The Massey board of directors has the power to determine the amount and frequency of the payment of dividends. Decisions regarding whether to pay dividends and the amount of any dividends are based on compliance with the DGCL, compliance with agreements governing Massey’s indebtedness, earnings, cash requirements, results of operations, cash flows and financial condition and other factors that the board of directors considers important. While Massey anticipates that if the merger were not consummated it would maintain dividends at the current level for the foreseeable future, it cannot assure that it will continue to pay dividends at this level, or at all. Under the merger agreement, until the effective time of the merger, Massey is not permitted to declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other than quarterly cash dividends with respect to Massey common stock not in excess of $0.06 per share per quarter.

 

 

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Selected Historical Consolidated Financial Data of Alpha

The following table presents selected historical financial and other data for Alpha. The selected financial data as of December 31, 2010, 2009, 2008, 2007 and 2006, and for the years then ended have been derived from the audited consolidated financial statements and related notes thereto of Alpha and its subsidiaries.

Detailed historical financial information included in the audited consolidated balance sheets as of December 31, 2010 and 2009, and the related consolidated statements of operations, stockholders’ equity and comprehensive income and cash flows for each of the years in the three year period ended December 31, 2010, are included in Alpha’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and incorporated by reference in this joint proxy statement/prospectus. You should read the following selected financial data together with Alpha’s historical consolidated financial statements, including the related notes, and the other information contained or incorporated by reference in this joint proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 190.

On July 31, 2009, Alpha Natural Resources, Inc. and Foundation Coal Holdings, Inc., which we refer to as Foundation, merged, and Foundation continued as the surviving legal corporation of the merger and was renamed Alpha Natural Resources, Inc. We refer to Alpha Natural Resources, Inc. before the merger with Foundation as Old Alpha and we refer to Alpha Natural Resources, Inc. after the merger with Foundation as Alpha. For financial accounting purposes, the merger of Old Alpha and Foundation was treated as a “reverse acquisition,” and Old Alpha was treated as the accounting acquiror. Accordingly, Old Alpha’s financial statements became the financial statements of Alpha, and Alpha’s periodic filings subsequent to the merger reflect Old Alpha’s historical financial condition and results of operations shown for comparative purposes. Old Alpha’s financial position as of December 31, 2008, 2007 and 2006 and its results of operations for the years ended December 31, 2008, 2007 and 2006 do not include financial results for Foundation. For the year ended December 31, 2009, Foundation’s financial results are included for the five month period from August 1, 2009 through December 31, 2009.

The results of operations for the historical periods included in the following table are not necessarily indicative of the results to be expected for future periods.

 

 

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    Alpha Natural Resources, Inc. and Subsidiaries
Years Ended December 31,
 
    2010     2009     2008     2007     2006  
    (In thousands)  

Statements of Operations Data:

         

Revenues:

         

Coal revenues

  $ 3,497,847      $ 2,210,629      $ 2,140,367      $ 1,558,665      $ 1,608,170   

Freight and handling revenues

    332,559        189,874        279,853        205,086        188,366   

Other revenues(1)

    86,750        95,004        48,533        42,403        37,889   
                                       

Total revenues

    3,917,156        2,495,507        2,468,753        1,806,154        1,834,425   
                                       

Costs and expenses:

         

Cost of coal sales (exclusive of items shown separately below)

    2,566,825        1,616,905        1,627,960        1,284,840        1,269,910   

Gain on sale of coal reserves

    —          —          (12,936     —          —     

Freight and handling costs

    332,559        189,874        279,853        205,086        188,366   

Other expenses

    65,498        21,016        91,461        22,725        23,011   

Depreciation, depletion and amortization

    370,895        252,395        164,969        153,987        135,878   

Amortization of acquired coal supply agreements, net

    226,793        127,608        —          —          —     

Selling, general, and administrative expenses (exclusive of depreciation and amortization shown separately above)

    180,975        170,414        71,923        58,485        67,952   
                                       

Total costs and expenses

    3,743,545        2,378,212        2,223,230        1,725,123        1,685,117   
                                       

Income from operations

    173,611        117,295        245,523        81,031        149,308   
                                       

Other income (expense):

         

Interest expense

    (73,463     (82,825     (39,812     (40,366     (41,774

Interest income

    3,458        1,769        7,351        2,266        839   

Loss on early extinguishment of debt

    (1,349     (5,641     (14,702     —          —     

Gain on termination of Cliffs’ merger, net

    —          —          56,315        —          —     

Miscellaneous (expense) income, net

    (821     3,186        (3,834     (93     522   
                                       

Total other (expense) income, net

    (72,175     (83,511     5,318        (38,193     (40,413
                                       

Income from continuing operations before income taxes

    101,436        33,784        250,841        42,838        108,895   

Income tax (expense) benefit

    (4,218     33,023        (52,242     (9,965     21,705   
                                       

Income from continuing operations(2)

    97,218        66,807        198,599        32,873        130,600   
                                       

 

 

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     Alpha Natural Resources, Inc. and Subsidiaries
Years Ended December 31,
 
     2010     2009     2008     2007     2006  

Earnings Per Share Data:

          

Basic earnings (loss) per common share:

          

Income from continuing operations attributable to Alpha Natural Resources, Inc.

   $ 0.81      $ 0.74      $ 2.90      $ 0.51      $ 2.04   

Loss from discontinued operations attributable to Alpha Natural Resources, Inc.

     (0.01     (0.10     (0.48     (0.08     (0.04
                                        

Net income per basic share attributable to Alpha Natural Resources, Inc.

   $ 0.80      $ 0.64      $ 2.42      $ 0.43      $ 2.00   
                                        

Diluted earnings (loss) per common share:

          

Income from continuing operations attributable to Alpha Natural Resources, Inc.

   $ 0.80      $ 0.73      $ 2.83      $ 0.51      $ 2.04   

Loss from discontinued operations attributable to Alpha Natural Resources, Inc.

     (0.01     (0.10     (0.47     (0.08     (0.04
                                        

Net income per diluted share attributable to Alpha Natural Resources, Inc.

   $ 0.79      $ 0.63      $ 2.36      $ 0.43      $ 2.00   
                                        

 

     Alpha Natural Resources, Inc. and Subsidiaries
Years Ended December 31,
 
     2010     2009     2008     2007     2006  
     (In thousands)  

Balance sheet data (at period end):

          

Cash and cash equivalents

   $ 554,772      $ 465,869      $ 676,190      $ 54,365      $ 33,256   

Working capital

     928,691        592,403        729,829        157,147        116,464   

Total assets(3)

     5,179,283        5,120,343        1,709,838        1,210,914        1,145,793   

Notes payable and long-term debt, including current portion, net(4)

     754,151        790,253        451,315        446,913        445,651   

Stockholders’ equity(5)

     2,656,036        2,591,289        795,692        380,836        344,049   

Statement of cash flows data:

          

Net cash provided by (used in):

          

Operating activities

   $ 693,601      $ 356,220      $ 458,043      $ 225,741      $ 210,081   

Investing activities

     (508,497     (281,810     (77,625     (165,203     (160,046

Financing activities

     (96,201     (284,731     241,407        (39,429     (56,401

Capital expenditures

     (308,864     (187,093     (137,751     (126,381     (131,943

EBITDA from continuing operations is calculated as follows (unaudited):

 

     Years Ended December 31,  
     2010     2009     2008     2007     2006  
     (In thousands)  

Income from continuing operations

   $ 97,218      $ 66,807      $ 198,599      $ 32,873      $ 130,600   

Interest expense

     73,463        82,825        39,812        40,366        41,774   

Interest income

     (3,458     (1,769     (7,351     (2,266     (839

Income tax expense (benefit)

     4,218        (33,023     52,242        9,965        (21,705

Depreciation, depletion, and amortization

     370,895        252,395        164,969        153,987        135,878   

Amortization of acquired coal supply agreements, net

     226,793        127,608        —          —          —     
                                        

EBITDA from continuing operations(6)

   $ 769,129      $ 494,843      $ 448,271      $ 234,925      $ 285,708   
                                        

 

 

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(1) Other revenues for 2009 include $18.1 million for the modification of a coal supply agreement.

 

(2) Income from continuing operations for 2009 includes the following significant amounts from the merger with Foundation: Total revenues-$716.8 million; Cost of coal sales-$467.5 million; Depreciation, depletion and amortization-$101.4 million; Amortization of acquired coal supply agreements-$127.6 million; Selling, general and administrative expenses-$34.7 million; and Interest expense-$21.4 million. See Note 19 to the consolidated financial statements included in Alpha’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

 

(3) Total assets as of December 31, 2009 included the addition of the following significant assets acquired in the merger with Foundation: $1.8 billion of owned and leased mineral rights, $716.7 million of property and equipment, $529.5 million of coal supply agreements and $361.9 million of goodwill. See Note 19 to the consolidated financial statements included in Alpha’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

 

(4) Long-term debt, including current portion and debt discount as of December 31, 2009 includes $595.8 million, net of debt discount, assumed in the merger with Foundation. See Note 19 to the consolidated financial statements included in Alpha’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

 

(5) Stockholders’ equity as of December 31, 2009, includes approximately $1.7 billion related to the issuance of common shares and other equity consideration for the acquisition of Foundation. See Note 19 to the consolidated financial statements included in Alpha’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

 

(6) EBITDA from continuing operations is defined as income from continuing operations attributable to Alpha plus interest expense, income tax expense (benefit), depreciation, depletion and amortization, less interest income. EBITDA from continuing operations is a non-GAAP measure used by management to measure operating performance, and management also believes it is a useful indicator of our ability to meet debt service and capital expenditure requirements. Because EBITDA from continuing operations is not calculated identically by all companies, Alpha’s calculation may not be comparable to similarly titled measures of other companies.

 

 

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Selected Historical Consolidated Financial Data of Massey

The following table presents selected historical financial and other data for Massey. The selected financial data as of December 31, 2010, 2009, 2008, 2007 and 2006, and for the years then ended have been derived from the audited consolidated financial statements and related notes thereto of Massey and its subsidiaries.

Detailed historical financial information included in the audited consolidated balance sheets as of December 31, 2010 and 2009, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the years in the three year period ended December 31, 2010, are included in Massey’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and incorporated by reference in this joint proxy statement/prospectus. You should read the following selected financial data together with Massey’s historical consolidated financial statements, including the related notes, and the other information contained or incorporated by reference in this joint proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 190.

On April 19, 2010, Massey completed the acquisition of Cumberland Resources Corporation and certain affiliated entities, which we refer to as Cumberland, for a purchase price of $644.7 million in cash and 6,519,034 shares of Massey’s common stock. Prior to the acquisition, Cumberland was one of the largest privately held coal producers in the United States. The Cumberland operations include primarily underground coal mines in Southwestern Virginia and Eastern Kentucky. As a result of the acquisition, Massey obtained an estimated 415 million tons of contiguous coal reserves. Massey also obtained a preparation plant in Kentucky served by the CSX railroad and a preparation plant in Virginia served by the Norfolk Southern railroad. Massey did not incur or assume any third-party debt as a result of the Cumberland acquisition. Massey’s financial position as of December 31, 2009, 2008 and 2007 and its results of operations for the years ended December 31, 2009, 2008, 2007, and 2006 do not include financial results for Cumberland. For the year ended December 31, 2010, Cumberland’s financial results are included for the period from April 19, 2010 through December 31, 2010.

The results of operations for the historical periods included in the following table are not necessarily indicative of the results to be expected for future periods.

 

 

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     Massey Energy Company and Subsidiaries  
     Years Ended December 31,  
     2010     2009     2008     2007     2006  
     (In thousands, except per share amounts)  

Statement of Operations Data:

          

Revenues:

          

Produced coal revenue

   $ 2,609,659      $ 2,318,489      $ 2,559,929      $ 2,054,413      $ 1,902,259   

Freight and handling revenue

     252,409        218,203        306,397        167,641        156,531   

Purchased coal revenue

     91,566        62,721        30,684        108,191        70,636   

Other revenue

     85,340        91,746        92,779        83,278        90,428   
                                        

Total revenues(1)

     3,038,974        2,691,159        2,989,789        2,413,523        2,219,854   

Costs and expenses:

          

Cost of produced coal revenue

     2,332,851        1,850,058        1,910,953        1,641,774        1,599,092   

Freight and handling costs

     252,409        218,203        306,397        167,641        156,531   

Cost of purchased coal revenue

     86,127        57,108        28,517        95,241        62,613   

Depreciation, depletion and amortization, applicable to:

          

Cost of produced coal revenue

     363,748        268,317        253,737        242,755        227,279   

Selling, general and administrative

     41,814        1,860        3,590        3,280        3,259   

Selling, general and administrative

     113,340        97,381        77,015        75,845        53,834   

Other expense

     8,072        8,705        3,207        7,308        6,240   

Litigation charge(2)

     —          —          250,061        —          —     

Loss on financing transactions

     —          189        5,006        —          —     

(Gain) loss on derivative instruments

     (21,078     (37,638     22,552        —          —     
                                        

Total costs and expenses

     3,177,283        2,464,183        2,861,035        2,233,844        2,108,848   
                                        

(Loss) Income before interest and taxes:

     (138,309     226,976        128,754        179,679        111,006   

Interest income

     2,293        12,583        23,576        23,969        20,094   

Interest expense

     (102,243     (102,294     (96,866     (74,145     (86,076

Gain (loss) on short-term investment

     4,662        —          (6,537     —          —     
                                        

(Loss) Income before taxes

     (233,597     137,265        48,927        129,503        45,024   

Income tax benefit (expense)

     67,010        (32,832     (1,098     (35,405     (3,408
                                        

(Loss) Income before cumulative effect of accounting change

     (166,587     104,433        47,829        94,098        41,616   

Cumulative effect of accounting change(3)

     —          —          —          —          (639
                                        

Net (loss) income

   $ (166,587   $ 104,433      $ 47,829      $ 94,098      $ 40,977   
                                        

Earnings Per Share Data:

          

Basic earnings (loss) per share:

          

Income before cumulative effect of accounting change

   $ (1.71   $ 1.23      $ 0.58      $ 1.17      $ 0.51   

Cumulative effect of Accounting change

   $ —        $ —        $ —        $ —        $ (0.01
                                        

Net (loss) income per basic share

   $ (1.71   $ 1.23      $ 0.58      $ 1.17      $ 0.50   
                                        

Diluted earnings (loss) per share:

          

Income before cumulative effect of accounting change

   $ (1.71   $ 1.22      $ 0.58      $ 1.17      $ 0.51   

Cumulative effect of Accounting change

   $ —        $ —        $ —        $ —        $ (0.01
                                        

Net (loss) income per diluted share

   $ (1.71   $ 1.22      $ 0.58      $ 1.17      $ 0.50   
                                        

Shares used to calculate net (loss) income per share:

          

Basic

     97,545        84,992        81,816        80,123        80,847   
                                        

Diluted

     97,545        85,598        82,895        80,654        81,386   
                                        

 

 

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     Massey Energy Company and Subsidiaries
Years Ended December 31,
 
     2010     2009     2008     2007     2006  
     (In thousands)  

Consolidated Balance Sheet Data (at period end):

          

Cash and Cash Equivalents

   $ 327,179      $ 665,762      $ 606,997      $ 365,220      $ 239,245   

Working capital

     453,999        869,630        731,343        519,532        445,191   

Total assets

     4,610,982        3,799,671        3,672,378        2,860,671        2,740,696   

Short-term and long-term debt(4)

     1,316,179        1,319,086        1,312,157        1,104,547        1,104,907   

Stockholders’ equity(5)

     1,780,462        1,256,283        1,126,612        784,004        697,291   

Statement of Cash Flows Data:

          

Net cash provided (utilized) by:

          

Operating activities

   $ 267,909      $ 288,909      $ 385,081      $ 395,998      $ 214,503   

Investing activities(6)

     (1,029,195     (211,628     (776,491     (242,343     (246,665

Financing activities

     422,703        (18,516     633,187        (27,680     (48,011

Capital expenditures

     (434,855     (274,552     (736,529     (270,461     (298,132

EBITDA from continuing operations is calculated as follows (unaudited):

 

     Massey Energy Company and Subsidiaries
Years Ended December 31,
 
     2010     2009      2008      2007      2006  
     (In thousands)  

Net (loss) income

   $ (166,587   $ 104,433       $ 47,829       $ 94,098       $ 40,977   

Cumulative effect of accounting change, net of tax

     —          —           —           —           (639

Income tax benefit (expense)

     (67,010     32,832         1,098         35,405         3,408   

Net interest expense and gain (loss) on short-term investment

     95,288        89,711         79,827         50,176         65,982   

Depreciation, depletion and amortization, applicable to:

             

Cost of produced coal revenue

     363,748        268,317         253,737         242,755         227,279   

Selling, general and administrative

     41,814        1,860         3,590         3,280         3,259   
                                           

EBITDA(7)

   $ 267,253      $ 497,153       $ 386,081       $ 425,714       $ 341,544   
                                           

 

(1) Total revenues for 2010 include $438.2 million related to the operations acquired in the Cumberland acquisition.

 

(2) Litigation charge represents compensatory and punitive damages (plus pre-judgment interest) associated with the verdicts against Massey’s Central West Virginia Energy Company, that awarded damages in favor of Wheeling-Pittsburgh and Mountain State Carbon, LLC. Massey paid a total amount of $267.4 million, which represented the entire judgment, including all applicable interest payments.

 

(3) Prior to 2006, Massey accounted for stock-based compensation using the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. On January 1, 2006, Massey adopted Accounting Standards Codification Topic 718 (formerly Statement of Financial Accounting Standards No. 123R), “Share-Based Payments” using the modified-prospective method. A cumulative effect of a change in accounting principle of $0.6 million loss (net of $0.4 million tax) was recognized to reflect a change to the fair value method for those liability awards previously accounted for using the intrinsic value method and to reflect the impact of estimated forfeitures.

 

 

 

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(4) Short-term and long-term debt includes the discounts associated with Massey’s 6.875% convertible senior notes due 2013 and 3.25% convertible senior notes due 2015. See Note 10 to the consolidated financial statements included in Massey’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and incorporated by reference in this joint proxy statement/prospectus.

 

(5) Stockholders’ equity as of December 31, 2010, includes approximately $289.5 million related to the issuance of Massey common stock and other equity consideration for the acquisition of Cumberland. See Note 3 to the consolidated financial statements included in Massey’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and incorporated by reference in this joint proxy statement/prospectus.

 

(6) Cash utilized for investing for the year ended December 31, 2010 includes $644.7 million associated with the acquisition of Cumberland.

 

(7) EBITDA is defined as (Loss) Income before interest and taxes before deducting depreciation, depletion, and amortization. Although EBITDA is not a measure of performance calculated in accordance with GAAP, we believe it is a measure useful to an investor in evaluating Massey, because it is widely used in the coal industry as a measure to evaluate a company’s operating performance before debt expense and as a measure of its cash flow. EBITDA does not purport to represent operating income, net income or cash generated by operating activities, and should not be considered in isolation or as a substitute for measures of performance calculated in accordance with GAAP. In addition, because EBITDA is not calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies.

 

 

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Selected Unaudited Pro Forma Condensed Combined Consolidated Financial Information

The following selected unaudited pro forma condensed combined consolidated financial information is based on the historical consolidated financial information of Alpha and Massey incorporated by reference into this joint proxy statement/prospectus and has been prepared to reflect the proposed merger of Mountain Merger Sub with and into Massey. The data in the selected unaudited pro forma condensed combined consolidated balance sheet as of December 31, 2010 assume the proposed merger of Mountain Merger Sub with and into Massey was completed on that date. The data in the selected unaudited pro forma condensed combined consolidated statement of operations for the year ended December 31, 2010 assume the proposed merger was completed on January 1, 2010. The data in the selected unaudited pro forma condensed combined consolidated statement of operations for the year ended December 31, 2010 also include the pro forma effects of the acquisition by Massey of Cumberland, on April 19, 2010, and assume that the acquisition by Massey of Cumberland was completed on January 1, 2010.

The selected unaudited pro forma condensed combined consolidated financial information should be read in conjunction with the “Unaudited Pro Forma Condensed Combined Consolidated Financial Information,” including the notes thereto, beginning on page 173 and the historical consolidated financial statements and related notes thereto of Alpha and Massey, which are incorporated by reference from their respective Annual Reports on Form 10-K for the fiscal year ended December 31, 2010, and the historical combined financial statements and related notes thereto of the Cumberland Resource Group, which are incorporated by reference from Massey’s Current Report on Form 8-K dated March 22, 2010. See “Where You Can Find More Information” beginning on page 190.

The selected unaudited pro forma condensed combined consolidated financial information has been prepared for illustrative purposes only and is not necessarily indicative of the consolidated financial position or results of operations of Alpha had (i) the proposed merger of Mountain Merger Sub with and into Massey occurred on December 31, 2010 and/or (ii) the proposed merger of Mountain Merger Sub with and into Massey or the acquisition by Massey of Cumberland occurred on January 1, 2010. The pro forma adjustments related to the acquisition by Massey of Cumberland are based on the final purchase price allocation.

The proposed merger of Mountain Merger Sub with and into Massey will be accounted for under the acquisition method of accounting under U.S. GAAP whereby the total purchase price is allocated to the assets acquired and liabilities assumed based on their respective fair values determined on the acquisition date. The purchase price will be determined on the basis of the fair value of common shares of Alpha on the date the transaction is consummated plus the fair value of any other consideration transferred. The estimated purchase price for this selected unaudited pro forma condensed combined consolidated financial information was based on the closing price of Alpha common stock on March 14, 2011. At this time, Alpha has not performed detailed valuation analyses to determine the fair values of Massey’s assets and liabilities; and accordingly, the selected unaudited pro forma condensed combined consolidated financial information includes a preliminary allocation of the purchase price based on assumptions and estimates which, while considered reasonable under the circumstances, are subject to changes, which may be material. Additionally, Alpha has not yet performed the due diligence necessary to identify items that could significantly impact the purchase price allocation or the assumptions and adjustments made in preparation of this selected unaudited pro forma condensed combined consolidated financial information. Upon completion of detailed valuation analyses, there may be additional increases or decreases to the recorded book values of Massey’s assets and liabilities, including, but not limited to, mineral reserves, property, plant and equipment, coal supply agreements and other intangible assets that will give rise to future amounts of depletion, depreciation and amortization expenses or credits that are not reflected in the information contained in this selected unaudited pro forma condensed combined consolidated financial information. Accordingly, once the necessary due diligence has been performed, the final purchase price has been determined and the purchase price allocation has been completed, actual results may differ materially from

 

 

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the information presented in this selected unaudited pro forma condensed combined consolidated financial information. Additionally, this selected unaudited pro forma condensed combined consolidated statement of operations does not reflect the cost of any integration activities or benefits from the merger and synergies that may be derived from any integration activities, both of which may have a material effect on the results of operations in periods following the completion of the merger.

 

     Year Ended
December 31,
2010
 
     (In thousands,
except per
share data)
 

Pro Forma Condensed Combined Consolidated Income Statement Data:

  

Total Revenues

   $ 7,169,373   

Loss from operations

   $ (97,518

Loss from Continuing Operations

   $ (137,638

Loss Per Common Share – Basic

   $ (0.61

Loss Per Common Share – Diluted

   $
(0.61

     As of
December 31,
2010
 
     (In thousands)  

Pro Forma Condensed Combined Consolidated Balance Sheet Data:

  

Total Assets

   $ 16,626,561   

Total Liabilities

   $ 8,332,867   

Total Stockholders’ Equity

   $ 8,293,694   

 

 

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COMPARATIVE PER SHARE INFORMATION

The following tables set forth for the periods presented certain per share data separately for Alpha and Massey on a historical basis, on an unaudited pro forma combined basis per share of Alpha common stock and on an unaudited pro forma combined basis per equivalent share of Massey common stock. The following unaudited pro forma condensed combined consolidated financial data should be read in conjunction with the historical consolidated financial statements and notes thereto of Alpha, which are incorporated by reference in this joint proxy statement/prospectus, and Massey, which are incorporated by reference in this joint proxy statement/prospectus, and the other information contained or incorporated by reference in this joint proxy statement/prospectus. See “Unaudited Pro Forma Condensed Combined Consolidated Financial Information” beginning on page 173 and “Where You Can Find More Information” beginning on page 190.

The unaudited pro forma combined data per equivalent share of Massey common stock has been calculated on the basis of the unaudited pro forma combined per share Alpha common stock amounts, multiplied by the exchange ratio of 1.025. The exchange ratio represents the number of shares of Alpha common stock that each Massey stockholder would receive, in addition to the $10.00 per share cash component of the merger consideration, upon the completion of the merger. The unaudited pro forma combined data per equivalent share of Massey common stock data shows how each share of Massey common stock would have participated in the income from continuing operations and book value of Alpha if the companies had been consolidated for accounting and financial reporting purposes as of and for the year ended December 31, 2010. These amounts, however, are not intended to reflect future per share levels of income from continuing operations and book value of Alpha following consummation of the merger.

The unaudited pro forma combined per share information is based on the historical financial statements of Alpha and Massey and on publicly available information and certain assumptions and adjustments as discussed in “Unaudited Pro Forma Condensed Combined Consolidated Financial Information” beginning on page 173, including assumptions relating to the allocation of the consideration paid for the assets and liabilities of Massey based on preliminary estimates of their fair value. This unaudited pro forma combined per share information is provided for illustrative purposes only and is not necessarily indicative of what the operating results or financial position of Alpha or Massey would have been had the merger and related transactions been completed at the beginning of the periods or on the dates indicated, nor is it necessarily indicative of any future operating results or financial position. Alpha and Massey may have performed differently had they been combined during the periods presented. The following should be read in connection with the “Unaudited Pro Forma Condensed Combined Consolidated Financial Information” beginning on page 173, and other information included in or incorporated by reference into this joint proxy statement/prospectus.

 

    Alpha
Historical per
Share Data
    Massey
Historical per
Share Data
    Alpha Pro
Forma
Combined per
Share Data
    Massey Pro
Forma
Combined per
Share Data
 

As of or for the Year Ended December 31, 2010:

       

Income (loss) from continuing operations per common share:

       

Basic

  $ 0.81      $ (1.71   $ (0.61   $ (0.63

Diluted(1)

  $ 0.80      $ (1.71   $ (0.61   $ (0.63

Cash dividends declared per common share

  $ —        $ 0.24      $ —        $ —     

Book value of stockholder’s equity per common share

  $ 21.37      $ 17.52      $ 36.72      $ 37.64   

 

(1) In accordance with GAAP, the effect of certain Alpha and Massey securities that could be converted into common stock under certain circumstances was excluded from the calculation of the diluted income (loss) per common share, as such inclusion would result in antidilution.

 

 

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COMPARATIVE MARKET VALUE INFORMATION

The following table presents:

 

   

the closing prices per share and aggregate market value of Alpha common stock and Massey common stock, in each case based on the last reported sales prices as reported by the NYSE Composite Transactions Tape, on January 28, 2011, the last trading day prior to the public announcement of the proposed merger, and April 27, 2011, the last practicable full trading day for which this information could be calculated prior to the date of this joint proxy statement/prospectus; and

 

   

the equivalent price per share and equivalent market value of shares of Massey common stock, reflecting the fluctuating value of Alpha common stock that Massey stockholders would receive for each share of Massey common stock, in addition to the cash component of the merger consideration, if the merger were completed on either January 28, 2011 or April 27, 2011. The equivalent price per share of Massey common stock is equal to the closing price of a share of Alpha common stock on the applicable date multiplied by 1.025 plus $10.00 in cash.

 

     Alpha
Historical
     Massey
Historical
     Massey
Equivalent
 

January 28, 2011

        

Closing price per common share

   $ 57.88       $ 57.23       $ 69.33   

Market value of common stock (in billions)(1)

   $ 7.0       $ 5.9       $ 7.1   

April 27, 2011

        

Closing price per common share

   $ 55.96       $ 65.88       $ 67.36   

Market value of common stock (in billions)(2)

   $ 6.8       $ 6.8       $ 6.9   

 

(1) Based on 120,491,453 shares of Alpha common stock and 102,514,750 shares of Massey common stock outstanding as of January 28, 2011 (excluding outstanding shares held in treasury).
(2) Based on 120,867,566 shares of Alpha common stock and 103,101,921 shares of Massey common stock outstanding as of April 27, 2011 (excluding outstanding shares held in treasury).

 

 

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RISK FACTORS

In deciding whether to vote for the proposals discussed in this joint proxy statement/prospectus, we urge you to consider carefully all of the information included or incorporated by reference in this joint proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 190. You should also read and consider the risks associated with each of the businesses of Alpha and Massey, because these risks will also affect Alpha after consummation of the merger. The risks associated with the business of Alpha can be found in the Alpha Annual Report on Form 10-K for the year ended December 31, 2010, which is incorporated by reference in this joint proxy statement/prospectus. The risks associated with the business of Massey can be found in the Massey Annual Report on Form 10-K for the year ended December 31, 2010, which is incorporated by reference in this joint proxy statement/prospectus.

Upon completion of the merger, Massey stockholders will receive, in addition to the $10.00 per share cash portion of the merger consideration, 1.025 shares of Alpha common stock for each share of Massey common stock, which will expose Massey stockholders to the risk of market fluctuations in the price of Alpha common stock.

Upon completion of the merger, Massey stockholders will receive 1.025 shares of Alpha common stock and $10.00 in cash for each share of Massey common stock. The per share merger consideration will not be adjusted prior to completion of the merger for changes in the market price of either Alpha common stock or Massey common stock or for share repurchases or issuances of common stock by Alpha or Massey. Such market price fluctuations or changes in the number of outstanding shares of Alpha or Massey common stock may affect the value that Massey stockholders will receive upon completion of the merger. Stock price changes may result from a variety of factors, many of which are out of Alpha’s and Massey’s control, including general market and economic conditions, changes in businesses, operations and prospects and regulatory considerations, and risks discussed in this section of this joint proxy statement/prospectus. Neither Alpha nor Massey is permitted to terminate the merger agreement or resolicit the vote of their respective stockholders solely because of changes in the market price of either of their common stock.

The prices of Alpha common stock and Massey common stock at the completion of the merger may vary from their respective prices on the date the merger agreement was executed, on the date of this document and on the date of the special meetings. As a result, the value represented by the exchange ratio will also vary. For example, based on the range of sales prices of Alpha common stock during the period from January 28, 2011, the last trading day before public announcement of the merger, through April 27, 2011, the exchange ratio plus the $10 per Massey share cash consideration represented a value ranging from a high of $73.20 to a low of $60.82 for each share of Massey common stock. Because the date that the merger becomes effective will be later than the date of the special meetings, at the time of Massey’s special meeting, Massey stockholders will not know the exact market value of the Alpha common stock that they will receive upon completion of the merger.

Alpha may fail to realize revenue growth and the cost savings estimated as a result of the merger.

The success of the merger will depend, in part, on Alpha’s ability to realize the anticipated synergies, business opportunities and growth prospects from combining the businesses of Alpha and Massey. Alpha may never realize these anticipated synergies, business opportunities and growth prospects. Integrating operations will be complex and will require significant efforts and expenditures on the part of both Alpha and Massey. Employees might leave or be terminated because of the merger. Management of Alpha might have its attention diverted while trying to integrate operations and corporate and administrative infrastructures. Alpha might experience increased competition that limits its ability to expand its business, and it might not be able to capitalize on expected business opportunities, including retaining current customers. Alpha’s management may be unable to manage successfully Alpha’s exposure to pending and potential litigation. Alpha may be required by regulators to undertake certain remedial measures upon the closing of the merger, and Alpha’s management may not be able to implement those and other remedial measures successfully. Alpha may experience difficulties integrating Massey’s system of financial reporting. Alpha will be permitted to exclude the operations of Massey

 

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from its management certification and auditor attestation regarding the effectiveness of its internal control over financial reporting as of December 31, 2011, such that its first certification of the effectiveness of its internal control over financial reporting will be as of December 31, 2012. Alpha may experience difficulties in applying its Running Right safety program at legacy Massey mines and facilities after consummation of the merger. Moreover, assumptions underlying estimates of expected cost savings as a result of the merger may be inaccurate, and general industry and business conditions might deteriorate. If any of these factors limit Alpha’s ability to integrate the operations of Alpha and Massey successfully or on a timely basis, the expectations of future results of operations, including certain cost savings and synergies expected to result from the merger, might not be met.

Alpha’s success will also depend on the integration into its operations of Cumberland, which Massey acquired on April 19, 2010. At the time of the merger, Massey’s integration of Cumberland’s operations will still be ongoing. Alpha may fail to realize the benefits of Massey’s acquisition of Cumberland. In particular, prior to its acquisition by Massey, Cumberland was a private company and was not required to comply with many requirements applicable to U.S. public companies, including the documentation and assessment of the effectiveness of its internal control over financial reporting. Establishing, testing and maintaining an effective system of internal control over financial reporting will require significant resources and time commitments on the part of Alpha’s management and finance and accounting staff, may require additional staffing and infrastructure investments, could increase Alpha’s legal, insurance and financial compliance costs and may divert the attention of management. In addition, Alpha’s actual operating costs may exceed the operating costs set forth in “Selected Unaudited Pro Forma Condensed Combined Consolidated Financial Information.” Moreover, if Alpha discovers aspects of Cumberland’s internal control over financial reporting that require improvement, Alpha cannot be certain that its remedial measures will be effective. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could adversely affect Alpha’s financial and operating results, investor’s confidence or increase Alpha’s risk of material weaknesses in internal control over financial reporting.

In addition, Alpha and Massey have operated and, until the completion of the merger, will continue to operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures and policies, any of which could adversely affect Alpha’s ability to maintain relationships with clients, employees or other third parties or Alpha’s ability to achieve the anticipated benefits of the merger or could reduce Alpha’s earnings.

Massey and Massey’s directors and officers are named parties to a number of lawsuits, including various lawsuits relating to the explosion at the Upper Big Branch mine and safety conditions at Massey mines, one of Massey’s employees has been indicted by a grand jury and federal criminal charges have been filed against one of Massey’s former employees, and further lawsuits may be filed against Massey and charges may also be brought against Massey and certain other of Massey’s directors, officers and employees by the U.S. Attorney’s Office.

A number of legal actions are pending in Delaware state court and West Virginia state and federal courts relating to safety conditions at Massey’s mines, the April 2010 explosion at the Upper Big Branch mine, which we refer to as the UBB explosion, and other related matters, including accusations of securities fraud. These include derivative actions against current and former Massey directors and officers and actions brought by certain of the families of the twenty-nine miners that died in the UBB explosion. Massey and its officers, directors and employees may be subject to future claims, including additional claims from families of the twenty-nine miners that died in the UBB explosion. In addition, the U.S. Attorney’s Office and the federal Mine Safety and Health Administration, in conjunction with the State of West Virginia, are currently investigating the UBB explosion. On February 28, 2011, Massey’s head of security at the UBB mine was charged with obstruction of justice and making false statements in connection with the U.S. Attorney’s investigation. On March 22, 2011, federal criminal charges were filed against a former Massey employee who worked at UBB until August 2009 in connection with falsifying his foreman’s license and making false statements in connection with the U.S. Attorney’s investigation.

 

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The outcomes of these pending and potential cases, claims, and investigations are uncertain. Depending on the outcome, these actions could have adverse financial effects or cause reputational harm to Alpha. Alpha may not resolve these actions favorably or may not be successful in implementing remedial safety measures that may be imposed as a result of some of these actions and/or investigations. Also, under the merger agreement, Alpha has agreed to leave in place and not to modify those provisions granting rights to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the effective time of the merger and related rights to the advancement of expenses in favor of any current or former director, officer, employee or agent of Massey contained in the organizational documents of Massey and its subsidiaries and certain related indemnification agreements.

In addition, plaintiffs in the pending derivative actions against current and former Massey directors and officers, which we refer to as the derivative plaintiffs, and other plaintiffs who have filed suit challenging the merger have asserted that, if the merger is completed, the derivative plaintiffs may lose standing to assert those claims.

Following the merger, Alpha will have significantly less cash on hand.

Following an assumed completion of the merger on December 31, 2010, after repayment of certain indebtedness of Alpha and Massey, as described in Note 3(d) to the “Unaudited Pro Forma Condensed Combined Consolidated Financial Information,” beginning on page 179, and all other pro forma adjustments relating to the merger, Alpha would have had, on a pro forma basis as of December 31, 2010, approximately $596.2 million in cash and cash equivalents. In addition, Alpha would have had, on a pro forma basis as of December 31, 2010, approximately $2,864.5 million in indebtedness excluding debt premium in the amount of $6.4 million, including $2.7 million relating to short term obligations under capital leases, $7.8 million of other short-term borrowings and access to $1,152.0 million in unused capacity under a revolving credit facility and accounts receivable securitization facility, after giving effect to $148.5 million in issued letters of credit. If the actual amount of cash and cash equivalents that Alpha has on hand following the merger is less than expected, this could adversely affect Alpha’s ability to grow and to perform. See “The Merger — Financing Relating to the Merger” beginning on page 129.

The market price of Alpha common stock after the merger might be affected by factors different from, or in addition to, those currently affecting the respective market prices of Alpha and Massey common stock.

The businesses of Alpha and Massey differ and, accordingly, the results of operations of Alpha and the market price of Alpha common stock after the merger may be affected by factors different from, or in addition to, those currently affecting the independent results of operations of each of Alpha and Massey. For a discussion of the businesses of Alpha and Massey and of factors to consider in connection with those businesses, see the documents incorporated by reference into this document and referred to under “Where You Can Find More Information” beginning on page 190.

Alpha may not pay dividends in the foreseeable future, and current Massey stockholders may have to rely on increases in the trading price of Alpha common stock for returns on their investment following the merger.

Massey stockholders have historically received quarterly dividends from Massey, while Alpha stockholders have not historically received any regularly paid dividends. The payment of dividends by Alpha after the merger will be subject to the determination of Alpha’s board of directors. Decisions regarding whether to pay dividends and the amount of any dividends to be paid will be based on the judgment of Alpha’s board of directors, compliance with the DGCL, compliance with agreements governing Alpha’s indebtedness, earnings, cash requirements, results of operations, cash flows and financial condition and other factors that the Alpha board of directors may consider to be important. As such, Alpha may not pay any regular dividends in the foreseeable future, in which case former Massey stockholders who become stockholders of Alpha would no longer be able to rely on receiving regular dividend payments, and they (and other Alpha stockholders) would have to rely on increases in the trading price of Alpha common stock, if any, for any returns on their investment.

 

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Until the effective date of the merger or the termination of the merger agreement in accordance with its terms, Alpha and Massey are prohibited from entering into certain business combination transactions.

During the period that the merger agreement is in effect, except as permitted by certain limited exceptions in the merger agreement or required by their fiduciary duties and subject to the other requirements of the merger agreement, the Alpha board of directors may not withdraw or adversely modify its recommendation of approval by the Alpha stockholders of the amendment to the Alpha certificate of incorporation and the issuance of shares of Alpha common stock pursuant to the merger agreement and the Massey board of directors may not withdraw or adversely modify its recommendation of approval by the Massey stockholders of the merger. In addition, during such time, neither board may recommend an acquisition proposal other than the merger or negotiate or authorize negotiations with a third party regarding an acquisition proposal other than the merger, except as permitted by certain limited exceptions in the merger agreement or required by their fiduciary duties and subject to the other requirements of the merger agreement. The foregoing prohibitions could have the effect of delaying other strategic transactions and may, in some cases, make it impossible to pursue other strategic transactions that are available only for a limited time.

Alpha and Massey must obtain required approvals and governmental and regulatory consents to complete the merger, which, if delayed, not granted or granted with unacceptable conditions, may jeopardize or delay the merger, result in additional expenditures of money and resources and/or reduce the anticipated benefits of the merger.

The merger is subject to customary closing conditions. These closing conditions include, among others, the receipt of required approvals of the respective stockholders of Alpha and Massey at their respective special meetings, the receipt of requisite governmental approvals and the expiration or termination of all waiting periods under applicable antitrust laws, including the applicable waiting periods under the HSR Act and foreign antitrust laws. Following expiration of the 30-day waiting period required under the HSR Act and clearance by German and Turkish antitrust authorities, all antitrust closing conditions have been satisfied.

The governmental agencies from which the parties will seek these approvals have broad discretion in administering the governing regulations. No assurance can be given that the required stockholder approvals will be obtained or that the required closing conditions will be satisfied, and, if all required consents and approvals are obtained and the closing conditions are satisfied, no assurance can be given as to the terms, conditions and timing of the approvals. Alpha and Massey will also be obligated to pay certain transaction-related fees and expenses in connection with the merger, whether or not the merger is completed. Please see the section entitled “The Merger Agreement — Conditions to Completion of the Merger,” beginning on page 155, for a discussion of the conditions to consummation of the merger and the section entitled “The Merger—Regulatory Approvals Required for the Merger,” on page 124, for a description of the antitrust approvals necessary to consummate the merger.

Massey stockholders will become stockholders in Alpha upon receipt of shares of Alpha common stock, which may change certain stockholder rights and privileges they hold as stockholders of Massey.

Massey stockholders will receive Alpha common stock as part of the consideration in connection with the merger. Although both companies are incorporated under Delaware law, there are a number of differences between the rights of a stockholder of Massey and the rights of a stockholder of Alpha. We urge Massey stockholders to review the discussion in the section of this joint proxy statement/prospectus entitled “Comparison of Rights of Stockholders,” beginning on page 166.

The consummation of the merger will constitute a change of control under Massey’s existing indebtedness and may permit counterparties to other agreements to terminate those agreements.

The merger will constitute a change of control under Massey’s existing credit agreement and instruments governing Massey’s 6.875% senior notes due 2013, which we refer to as the 6.875% senior notes, and 3.25% convertible senior notes due 2015, which we refer to as the 3.25% convertible notes. As of December 31, 2010,

 

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there were $77.2 million of letters of credit issued and there were no outstanding borrowings under Massey’s existing credit agreement. As of December 31, 2010, there was approximately $757.5 million and $546.3 million aggregate principal amount outstanding under Massey’s 6.875% senior notes and 3.25% convertible notes, respectively. Such a change in control will cause the indebtedness under Massey’s credit agreement to become immediately due and payable. Under instruments governing Massey’s 6.875% senior notes, if a change in control occurs, holders of these notes may require Massey to buy back the notes for a price equal to 101% of the notes’ principal amount, plus any interest which has accrued and remains unpaid as of the repurchase date. The 6.875% senior notes are also redeemable at a price equal to 101.719% of the notes’ principal amount through December 14, 2011, and thereafter at a price equal to 100% of the notes’ principal amount, in each case, plus any interest which has accrued and remains unpaid on the redemption date. Under the instruments governing Massey’s 3.25% convertible notes, if a change of control occurs, holders of such series of Massey’s 3.25% convertible notes may require Massey to repurchase the notes for a price equal to 100% of the notes’ principal amount, plus any interest that has accrued and remains unpaid as of the repurchase date, or make payments to holders who elect to convert the notes into an amount up to 100% of the notes’ principal amount payable in cash and the excess of such amount payable at the election of Massey or Alpha in cash or a combination of cash and stock based on the trading prices of Massey or Alpha stock. If less than 90% of the consideration paid to Massey stockholders is common stock of Alpha, and if notice of conversion is given on or after the date the merger is consummated, holders may also be entitled to a make-whole conversion premium. In such event the amount up to 100% of the notes’ principal amount will be payable in cash and the excess of such amount will be payable at the election of Alpha in cash or a combination of cash and stock.

Alpha intends to redeem the outstanding principal amount of non-converted 2.25% convertible notes, which are redeemable at a price equal to 100% of the notes’ principal amount plus any interest which has accrued and remains unpaid on the redemption date. In addition, Alpha intends to repurchase some or all of the outstanding principal amount of Massey’s 6.875% senior notes. As a result of both the merger and the notice of redemption, the holders of the 2.25% convertible notes will be entitled to convert their notes into Massey common stock. As of December 31, 2010, there was approximately $9.65 million in aggregate principal amount of Massey’s 2.25% convertible notes outstanding.

Alpha may not be able to refinance Massey’s existing debt or have sufficient funds available for any repurchases that could be required by a change of control or the planned redemption of Massey’s 2.25% convertible notes, either of which may have an adverse effect on the value of Alpha’s common stock.

In addition, certain of Massey’s leases, surety bond indemnity agreements and other agreements permit a counterparty to terminate the agreement because consummation of the merger would cause a default or violate an anti-assignment, change of control or similar clause. If this happens, Alpha may have to seek to replace any such agreement with a new agreement. Alpha cannot assure Alpha and Massey stockholders that it will be able to replace a terminated agreement on comparable terms or at all. Depending on the importance of a terminated agreement to Massey’s business, failure to replace that agreement on similar terms or at all may increase the costs to Alpha of operating Massey’s business or prevent Alpha from operating part of Massey’s business following completion of the merger.

The market for Alpha common stock may be adversely affected by the issuance of shares pursuant to the proposals before Alpha stockholders.

If the merger is consummated, Alpha will issue an estimated 105.7 million shares of Alpha common stock to Massey stockholders, based on the number of shares of Massey common stock outstanding on April 27, 2011. The increase in the number of outstanding shares of Alpha common stock may lead to sales of such stock or the perception that such sales may occur, either of which may adversely affect the market for, and the market price of, Alpha common stock.

 

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The issuance of shares of Alpha common stock to Massey stockholders in the merger will substantially reduce the percentage ownership interest of current Alpha stockholders.

If the merger is consummated, Alpha will issue an estimated 105.7 million shares of Alpha common stock to Massey stockholders, based on the number of shares of Massey common stock outstanding on April 27, 2011. Based on the number of shares of Alpha and Massey common stock outstanding on January 28, 2011, legacy Alpha stockholders will own, in the aggregate, approximately 54% of the shares of Alpha common stock outstanding immediately after the merger, and former Massey stockholders will own, in the aggregate, approximately 46% of shares of Alpha common stock outstanding immediately after the merger. The issuance of shares of Alpha common stock to Massey stockholders in the merger will cause a significant reduction in the relative percentage interest of current Alpha stockholders in earnings, voting, liquidation value and book and market value of Alpha. As a result of these reduced ownership percentages, both Alpha and Massey stockholders will have less influence on the management and policies of Alpha following the merger than they now have with respect to their respective companies. If Alpha and Massey are unable to realize the benefits currently anticipated from the merger, Alpha and Massey stockholders will experience dilution of their ownership interest without receiving any commensurate benefit.

Alpha’s anticipated level of indebtedness could impact its operations and liquidity, and could, during the period in which debt is outstanding, have important consequences to holders of its common stock.

Alpha must incur additional indebtedness to acquire the shares of Massey common stock and to refinance Massey’s debt. Alpha expects, but cannot guarantee, that it will be able to make all required principal and interest payments when due.

Alpha’s anticipated level of indebtedness could, among other things:

 

   

cause Alpha to use a portion of its cash flow from operations for debt service rather than for its operations;

 

   

cause Alpha to be less able to take advantage of significant business opportunities, such as acquisition opportunities, and to react to changes in market or industry conditions;

 

   

cause Alpha to be more vulnerable to general adverse economic and industry conditions;

 

   

cause Alpha to be disadvantaged compared to competitors with less leverage;

 

   

result in a downgrade in the rating of Alpha’s indebtedness, which could increase the cost of further borrowings; and

 

   

subject Alpha to interest rate risk, because some of its borrowings will be at variable rates of interest.

Alpha’s indebtedness following consummation of the merger is expected to be higher than its current indebtedness and higher than the sum of Alpha’s and Massey’s current indebtedness. Alpha’s total long-term indebtedness as of December 31, 2010 was approximately $754.2 million. Massey’s long-term indebtedness as of December 31, 2010 was approximately $1,316.2 million. Assuming consummation of the merger on December 31, 2010, Alpha’s pro forma total indebtedness as of that date would have been approximately $2,870.9 million, as described in the section of this joint proxy statement/prospectus entitled “Financial Summary—Selected Unaudited Pro Forma Condensed Combined Consolidated Financial Information,” beginning on page 37. Based upon current levels of operations and anticipated growth and past experience in paying down past acquisitions, Alpha expects, but cannot guarantee, that it will be able to generate sufficient cash flow to make all of the principal and interest payments under this indebtedness when such payments are due. Alpha’s anticipated indebtedness could impact its operations and liquidity and could, during the period in which debt is outstanding, have important consequences to holders of its common stock.

If Alpha is unable to comply with restrictions in the proposed financing package, the indebtedness thereunder could be accelerated.

The credit facilities, loan agreements and potential bonds contemplated by the commitment letter received by Alpha will impose restrictions on Alpha and require certain payments of principal and interest over time. A failure to comply with these restrictions or to make these payments could lead to an event of default that could

 

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result in an acceleration of the indebtedness. Alpha cannot make any assurances that its future operating results will be sufficient to ensure compliance with the covenants in its agreements or to remedy any such default. In the event of an acceleration of this indebtedness, Alpha may not have or be able to obtain sufficient funds to make any accelerated payments. Please see the section of this joint proxy statement/prospectus entitled “The Merger — Financing Relating to the Merger,” beginning on page 129, for more information about the financing package envisaged by the commitment letter received by Alpha and the restrictions contained therein and payments required thereby.

Alpha’s actual financial position and results of operations may differ materially from the unaudited pro forma financial data included herein.

The unaudited pro forma financial data included herein are presented for illustrative purposes only and are not necessarily indicative of what Alpha’s actual financial position or results of operations would have been had the merger and the acquisition of Cumberland by Massey been completed on the dates indicated. These data reflect adjustments, which are based upon preliminary estimates, to allocate the purchase price to Massey’s net assets. The purchase price allocation reflected in this document is preliminary, and final allocation of the purchase price will be based upon the actual purchase price and the fair value of the assets and liabilities of Massey as of the date of the completion of the merger. In addition, subsequent to the closing date of the merger, there may be further refinements of the purchase price allocation as additional information becomes available. Accordingly, the final purchase accounting adjustments might differ materially from the pro forma adjustments reflected herein. See “Financial Summary—Selected Unaudited Pro Forma Condensed Combined Consolidated Financial Information,” beginning on page 37, for more information.

The unaudited prospective financial information of Alpha and Massey included in this joint proxy statement/prospectus involves risks, uncertainties and assumptions, many of which are beyond the control of Alpha and Massey. As a result, it may not prove to be accurate and is not necessarily indicative of current values or future performance.

The unaudited prospective financial information of Alpha and Massey contained in “The Merger — Opinion of Alpha’s Financial Advisor,” “The Merger — Massey Unaudited Prospective Financial Information” and “The Merger — Alpha Unaudited Prospective Financial Information,” and referred to in “The Merger — Opinion of Massey’s Financial Advisor,” involves risks, uncertainties and assumptions and is not a guarantee of future performance. The future financial results of Alpha and Massey and, if the merger is completed, the combined company, may materially differ from those expressed in the unaudited prospective financial information due to factors that are beyond Alpha’s and Massey’s ability to control or predict. Neither Alpha nor Massey can provide any assurance that Alpha or Massey’s unaudited prospective financial information will be realized or that Alpha’s or Massey’s future financial results will not materially vary from the applicable unaudited prospective financial information. The unaudited prospective financial information covers multiple years, and the information by its nature becomes subject to greater uncertainty with each successive year. The unaudited prospective financial information does not reflect Alpha’s or Massey’s current estimates and does not take into account any circumstances or events occurring after the date it was prepared.

More specifically, the unaudited prospective financial information:

 

   

necessarily makes numerous assumptions, many of which are beyond the control of Alpha or Massey and may not prove to be accurate;

 

   

does not necessarily reflect revised prospects for Alpha’s or Massey’s respective businesses, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated at the time the unaudited prospective financial information was prepared;

 

   

is not necessarily indicative of current values or future performance, which may be significantly more favorable or less favorable than is reflected in the unaudited prospective financial information; and

 

   

should not be regarded as a representation that the unaudited prospective financial information will be achieved.

 

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The unaudited prospective financial information was not prepared with a view toward public disclosure or compliance with published guidelines of the SEC or the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information or GAAP and does not reflect the effect of any proposed or other changes in GAAP that may be made in the future.

Whether or not the merger is completed, the announcement and pendency of the merger could cause disruptions in the businesses of Alpha and Massey, which could have an adverse effect on each of their respective businesses and financial results.

Whether or not the merger is completed, the announcement and pendency of the merger could cause disruptions in the businesses of Alpha and Massey. Specifically:

 

   

current and prospective employees of Alpha and of Massey might experience uncertainty about their future roles with Alpha following completion of the merger, which might adversely affect Alpha’s ability to retain key managers and other employees; and

 

   

the attention of Alpha’s and Massey’s management might be directed toward the completion of the merger.

In addition, Alpha and Massey have each diverted significant management resources in an effort to complete the merger and are each subject to restrictions contained in the merger agreement on the conduct of each of their respective businesses. If the merger is not completed, Alpha and Massey will have incurred significant costs, including the diversion of management resources, for which they will have received little or no benefit. Further, Massey may be required to pay to Alpha a termination fee of $251 million and Alpha may be required to pay Massey a termination fee of between $72 million and $360 million if the merger agreement is terminated, depending on the specific circumstances of the termination. For a detailed description of the circumstances in which such termination fees will be paid, see “The Merger Agreement—Termination Fees,” beginning on page 160.

Alpha and/or Massey may waive one or more of the conditions to the merger without resoliciting stockholder approval for the merger.

Alpha and/or Massey may agree to waive, in whole or in part, one or more of the conditions to its obligations to complete the merger, to the extent permitted by applicable laws. Alpha’s or Massey’s board of directors, as the case may be, will evaluate the materiality of any such waiver and its effect on Massey and/or Alpha stockholders in light of the facts and circumstances at the time to determine whether amendment of this joint proxy statement/prospectus and resolicitation of proxies is required or warranted. In some instances, if Alpha’s or Massey’s board of directors, as the case may be, determines that such a waiver or its effect on Massey and/or Alpha stockholders is not sufficiently material to warrant resolicitation of stockholders, Alpha or Massey, as the case may be, has the discretion to complete the merger without seeking further stockholder approval. However, the waiver of any one or a combination of conditions or the effect of any such waiver on Massey and/or Alpha stockholders may be deemed by the Alpha or Massey board of directors to be sufficiently material to require or warrant supplemental disclosure to stockholders. Any determination as to resoliciting stockholder approval or amending this joint proxy statement/prospectus as a result of a waiver will be made by the board of directors of Alpha and/or Massey at the time of such waiver based on the facts and circumstances as they exist at such time.

Some of Alpha’s and Massey’s officers and directors may have interests in the merger that are different from, or in addition to, the interests of Alpha and Massey stockholders.

When considering the recommendation of the Alpha and Massey boards of directors with respect to the merger, Alpha stockholders should be aware that some directors and executive officers of Alpha may have interests in the merger that may be different from, or in addition to, their interests as stockholders and the interests of stockholders of Alpha generally. In addition, Massey stockholders should be aware that the directors and executive officers of Massey have interests in the merger that may be different from, or in addition to, their

 

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interests as stockholders and the interests of stockholders of Massey generally. These interests include, among others, potential payments under employment agreements and change in control severance agreements, rights to acceleration of vesting and exercisability of options, and acceleration of vesting of restricted stock, restricted stock units and restricted cash units as a result of the merger and rights to ongoing indemnification and insurance coverage by Alpha for acts or omissions occurring prior to the merger.

Current and former Massey directors and officers are defendants in the pending derivative actions brought by the derivative plaintiffs. In accordance with the advice of Cravath, Massey’s outside legal counsel, the Massey board of directors assumed that the derivative claims would survive the closing of the merger, although the plaintiffs in the pending cases would lose their standing to bring those claims and might have to make a demand on the Alpha board of directors to pursue the claims. However, if the derivative claims are not pursued following the closing of the merger, the Massey directors and officers that are defendants in the pending derivative actions would have an interest in the merger in addition to those set forth above. Since the Massey board of directors assumed that the derivative claims would survive the merger, the Massey board of directors did not consider this potential interest in evaluating and negotiating the merger agreement and the merger, and in recommending to the Massey stockholders that the merger agreement be adopted. For more information, see “The Merger — Interests of Alpha Directors and Executive Officers in the Merger” on page 115 and “The Merger — Interests of Massey Directors and Executive Officers in the Merger” beginning on page 115.

As a result of these interests, these directors and executive officers of Alpha or Massey, as the case may be, might be more likely to support and to vote in favor of the proposals described in their joint proxy statement/prospectus than if they did not have these interests. Each of Alpha’s and Massey’s stockholders should consider whether these interests might have influenced these directors and executive officers to support or recommend adoption of the merger agreement. At the close of business on April 27, 2011, Alpha directors and executive officers were entitled to vote approximately 0.7% of the then-outstanding shares of Alpha common stock. As of the close of business on April 27, 2011, Massey directors and executive officers were entitled to vote approximately 0.6% of the then-outstanding shares of Massey common stock. See “The Merger — Stock Ownership of Directors and Executive Officers of Alpha and Massey,” on page 114.

Uncertainties underlie Alpha’s expectation that, relative to Alpha on a stand-alone basis, the merger will be accretive to Alpha’s earnings per share after consummation of the merger, and excluding the impacts of acquisition accounting, for fiscal year 2012.

We believe that relative to Alpha on a stand-alone basis, and excluding impacts of acquisition accounting, the merger will be accretive to Alpha’s earnings per share, when calculated for fiscal year 2012. However, we cannot assure you that the merger will be accretive to Alpha’s earnings per share by 2012 or at all. In addition to the uncertainties that underlie any financial forecast, Alpha will account for the merger as an acquisition under Accounting Standards Codification Topic 805, “Business Combinations,” or “ASC 805” (formerly Statement of Financial Accounting Standards No. 141(R)). The total cost of the merger will be allocated to the underlying identifiable net tangible and intangible assets based on their respective estimated fair values. Until the acquisition price is known, Alpha can only estimate the allocation of this acquisition price to the net assets acquired and the effect of this allocation on future results. That estimate could materially change.

Multiple lawsuits have been filed against Massey, certain of Massey’s current and former directors and officers, Alpha and Mountain Merger Sub challenging the merger, and an adverse judgment in such lawsuits may prevent the merger from becoming effective or from becoming effective within the expected timeframe.

Massey, certain of Massey’s current and former directors and officers, Alpha and Mountain Merger Sub are named as defendants in multiple class action lawsuits brought by purported Massey stockholders challenging the proposed merger, seeking, among other things, to enjoin the defendants from consummating the merger on the agreed-upon terms.

 

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One of the conditions to the closing of the merger is that no temporary restraining order, preliminary or permanent injunction or other judgment, order or restraint issued by any federal or state court of competent jurisdiction or governmental entity shall be in effect enjoining or otherwise prohibiting the consummation of the merger. As such, if the plaintiffs are successful in obtaining an injunction prohibiting the defendants from consummating the merger on the agreed upon terms, then such injunction may prevent the merger from becoming effective, or from becoming effective within the expected timeframe. See “The Merger — Litigation Related to the Merger” beginning on page 125, for more information about the class action lawsuits related to the merger that have been filed.

The outcome of the pending derivative actions against current and former Massey directors and officers is uncertain; recovery, if any, following the effective time of the merger will benefit all Alpha stockholders and not only those Alpha stockholders who had been Massey stockholders; and it will not be known at the time of the Massey and Alpha special meetings whether the underlying derivative claims will be pursued against current and former Massey directors and officers following the effective time of the merger or whether or not those claims have substantial value.

Although the underlying derivative claims against current and former Massey directors and officers would survive the closing of the merger, the Massey board of directors has been advised (and for purposes of voting on the merger stockholders should assume) that the plaintiffs in those pending cases would lose their standing to continue their suits on those claims. If the derivative claims are not resolved prior to the effective time of the merger, Alpha expects that the Alpha board of directors will consider whether to pursue these derivative claims. If, after the effective time of the merger, the Alpha board of directors determines not to pursue the derivative claims, current Massey stockholders who become Alpha stockholders may make a demand on the Alpha board of directors to pursue the underlying derivative claims or demonstrate to a court the futility of making a demand on the Alpha board. Whether any such demand will result in Alpha pursuing such claims, or if not, whether stockholders would thereafter be able to pursue (and would choose to pursue) such claims themselves, is not known. Thus, if the derivative claims against current and former Massey directors and officers are not resolved prior to the effective time of the merger, it is possible that the value of such claims, if any, will be lost, despite the assertion by the plaintiffs that such claims have substantial value.

Moreover, while recovery, if any, on the derivative claims obtained in the absence of the merger would benefit only Massey and, indirectly as a result, its stockholders, if the derivative claims are successfully pursued following the effective time of the merger, any recovery from them will benefit Alpha, and Massey stockholders will only own 46% of Alpha as a result of the merger.

If the merger does not qualify as a reorganization under Section 368(a) of the Code, the stockholders of Massey may be required to pay substantial U.S. federal income taxes.

As a condition to the completion of the merger, each of Cleary Gottlieb Steen & Hamilton LLP, tax counsel to Alpha, and Cravath, Swaine & Moore LLP, tax counsel to Massey, will have delivered an opinion, dated as of the date this joint proxy statement/prospectus is filed with the SEC and as of the closing date of the merger, that the merger will be treated for U.S. federal income tax purposes as a “reorganization” within the meaning of Section 368(a) of the Code. These opinions will be based on certain assumptions and representations as to factual matters from Alpha and Massey, as well as certain covenants and undertakings by Alpha and Massey. If any of the assumptions, representations, covenants or undertakings is incorrect, incomplete, inaccurate or is violated in any material respect, the validity of the conclusions reached by counsel in their opinions would be jeopardized. Additionally, an opinion of counsel represents counsel’s best legal judgment but is not binding on the IRS or any court, so there can be no certainty that the IRS will not challenge the conclusions reflected in the opinions or that a court will not sustain such a challenge. If the IRS or a court determines that the merger should not be treated as a “reorganization,” a holder of Massey common stock would recognize taxable gain or loss upon the exchange of Massey common stock for Alpha common stock pursuant to the merger. See “Material United States Federal Income Tax Consequences” beginning on page 135.

 

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This joint proxy statement/prospectus, including the information and other documents incorporated by reference into this joint proxy statement/prospectus, contains or incorporates by reference or may contain or may incorporate by reference “forward-looking statements” that have been made pursuant to the provisions of, and in reliance on the safe harbor under, the Private Securities Litigation Reform Act of 1995. These statements, which involve risks and uncertainties, relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable and may also relate to future prospects, developments and business strategies. Words such as “assume,” “anticipate,” “believe,” “continued,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “objective,” “plan,” “position,” “potential,” “predict,” “project,” “seek,” “should,” “strategy,” “target,” “will” and similar terms and phrases, including references to assumptions, are used to identify forward-looking statements. These forward-looking statements are made based on expectations and beliefs concerning future events affecting Alpha and Massey and are subject to uncertainties and factors relating to their respective operations and business environment, all of which are difficult to predict and many of which are beyond their control, that could cause their actual results to differ materially from those matters expressed in or implied by these forward-looking statements.

The forward-looking statements involve certain risks and uncertainties. The ability of either Alpha or Massey to predict results or actual effects of its plans and strategies is inherently uncertain. Accordingly, actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Some of the factors that may cause actual results or earnings to differ materially from those contemplated by the forward-looking statements include, but are not limited to, those discussed under “Risk Factors” and those discussed in the filings of each of Alpha and Massey that are incorporated herein by reference, including the following:

 

   

the timing of the completion of the merger;

 

   

uncertainty of the expected financial performance of Alpha following completion of the proposed transaction, which may differ significantly from the pro forma financial data contained in this joint proxy statement/prospectus;

 

   

the failure of Alpha or Massey stockholders to approve the transaction;

 

   

changes in both companies’ businesses during the period between now and the completion of the merger might have adverse impacts on Alpha following the merger;

 

   

the ability to obtain regulatory approvals of the transaction on the proposed terms and schedule;

 

   

worldwide market demand for coal, electricity and steel;

 

   

global economic, capital market or political conditions, including a prolonged economic recession in the markets in which Alpha and Massey operate;

 

   

decline in coal prices;

 

   

Alpha and Massey’s liquidity, results of operations and financial condition;

 

   

regulatory and court decisions;

 

   

competition in coal markets;

 

   

changes in environmental laws and regulations, including those directly affecting Alpha’s and Massey’s coal mining and production, and those affecting Alpha’s and Massey’s customers’ coal usage, including potential carbon or greenhouse gas related legislation;

 

   

changes in safety and health laws and regulations and the ability to comply with such changes;

 

   

availability of skilled employees and other employee workforce factors, such as labor relations;

 

   

the inability of Alpha’s and Massey’s third-party coal suppliers to make timely deliveries and the refusal by Alpha’s and Massey’s customers to receive coal under agreed contract terms;

 

   

the inability to collect payments from customers if their creditworthiness declines;

 

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potential instability and volatility in worldwide financial markets;

 

   

future legislation and changes in regulations, governmental policies or taxes or changes in interpretation thereof;

 

   

inherent risks of coal mining beyond Alpha’s or Massey’s control;

 

   

disruption in coal supplies;

 

   

the geological characteristics of the Powder River Basin, Central and Northern Appalachian coal reserves;

 

   

Alpha’s and Massey’s production capabilities and costs;

 

   

Alpha’s ability to integrate successfully operations that Alpha may acquire or develop in the future, including those of Massey, or the risk that any such integration could be more difficult, time-consuming or costly than expected;

 

   

Alpha’s and Massey’s plans and objectives for future operations and expansion or consolidation;

 

   

uncertainty of the expected financial performance of Alpha following completion of the merger with Massey;

 

   

Alpha’s ability to achieve the cost savings and synergies contemplated by the merger within the expected time frame;

 

   

disruption from the merger making it more difficult to maintain relationships with customers, employees or suppliers;

 

   

the calculations of, and factors that may impact the calculations of, the acquisition price in connection with the merger and the allocation of such acquisition price to the net assets acquired in accordance with applicable accounting rules and methodologies;

 

   

the outcome of pending or potential litigation or governmental investigations, including the UBB explosion;

 

   

Alpha’s and Massey’s relationships with, and other conditions affecting, Alpha’s and Massey’s customers;

 

   

reductions or increases in customer coal inventories and the timing of those changes;

 

   

changes in and renewal or acquisition of new long-term coal supply arrangements;

 

   

railroad, barge, truck and other transportation availability, performance and costs;

 

   

availability of mining and processing equipment and parts;

 

   

disruptions in delivery or changes in pricing from third party vendors of goods and services that are necessary for Alpha’s and Massey’s operations, such as diesel fuel, steel products, explosives and tires;

 

   

Alpha’s and Massey’s assumptions concerning economically recoverable coal reserve estimates;

 

   

Alpha’s and Massey’s ability to obtain, maintain or renew any necessary permits or rights, and Alpha’s and Massey’s ability to mine properties due to defects in title on leasehold interests;

 

   

Alpha’s and Massey’s ability to negotiate new UMWA wage agreements on terms acceptable to Alpha and Massey;

 

   

changes in postretirement benefit obligations, pension obligations and federal and state black lung obligations;

 

   

increased costs and obligations potentially arising from the Patient Protection and Affordable Care Act;

 

   

fair value of derivative instruments not accounted for as hedges that are being marked to market;

 

   

indemnification of certain obligations not being met;

 

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continued funding of the road construction business, related costs, and profitability estimates;

 

   

Alpha’s substantial indebtedness following the consummation of the merger and potential additional future indebtedness;

 

   

Alpha’s and Massey’s work force could become increasingly unionized in the future and Alpha’s and Massey’s unionized or union-free hourly work force could strike;

 

   

certain provisions in Alpha’s and Massey’s long-term supply contracts may reduce the protection these contracts provide Alpha and Massey during adverse economic conditions or may result in economic penalties upon Alpha’s and Massey’s failure to meet specifications;

 

   

Alpha’s and Massey’s ability to collect payments from Alpha’s and Massey’s customers;

 

   

significant or rapid increases in commodity prices;

 

   

Alpha’s and Massey’s ability to obtain or renew surety bonds on acceptable terms or maintain self bonding status;

 

   

reclamation and mine closure obligations;

 

   

terrorist attacks and threats, and escalation of military activity in response to such attacks;

 

   

inflationary pressures on supplies and labor; and

 

   

weather conditions or catastrophic weather-related damage.

Because these forward-looking statements are subject to assumptions and uncertainties, actual results might differ materially from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this joint proxy statement/prospectus or the date of any document incorporated by reference in this joint proxy statement/prospectus.

All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this joint proxy statement/prospectus and attributable to Alpha or Massey or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable law or regulation, Alpha and Massey undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this joint proxy statement/prospectus or to reflect the occurrence of unanticipated events.

 

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THE ALPHA SPECIAL MEETING

Overview

This joint proxy statement/prospectus is being provided to Alpha stockholders as part of a solicitation of proxies by the Alpha board of directors for use at the special meeting of Alpha stockholders and at any adjournments or postponements thereof. This joint proxy statement/prospectus is first being furnished to stockholders of Alpha on or about April 29, 2011. In addition, this joint proxy statement/prospectus constitutes a prospectus for Alpha in connection with the issuance by Alpha of its common stock pursuant to the merger agreement. This joint proxy statement/prospectus provides Alpha stockholders with information they need to know to vote or instruct their vote to be cast at the special meeting of Alpha stockholders.

Date, Time and Place of the Alpha Special Meeting

The special meeting of Alpha stockholders will be held at the MeadowView Marriott Conference Resort and Convention Center, located at 1901 Meadowview Parkway, Kingsport, Tennessee 37660, on June 1, 2011, at 9:30 a.m., EDT.

Purposes of the Alpha Special Meeting

At the Alpha special meeting, Alpha’s stockholders will be asked:

 

   

to approve the amendment to Alpha’s certificate of incorporation, a copy of which is attached as Annex B to this joint proxy statement/prospectus and pursuant to which Alpha will be authorized to issue up to 400,000,000 shares of common stock, par value $0.01 per share;

 

   

to approve the issuance of shares of Alpha common stock, par value $0.01 per share, to Massey stockholders pursuant to the merger agreement; and

 

   

to approve adjournments of the Alpha special meeting if necessary or appropriate, including to permit further solicitation of proxies if there are not sufficient votes at the time of the Alpha special meeting to approve one or both of the proposals described above.

Record Date; Outstanding Shares; Shares Entitled to Vote

The record date for the special meeting of Alpha stockholders is April 27, 2011. This means that you must be a stockholder of record of Alpha common stock at the close of business on April 27, 2011, in order to vote at the Alpha special meeting. You are entitled to one vote for each share of Alpha common stock you own. At the close of business on the record date, there were 120,867,566 shares of Alpha common stock outstanding and entitled to vote, held by approximately 2,093 holders of record.

A complete list of Alpha stockholders entitled to vote at the Alpha special meeting will be available for inspection at the principal place of business of Alpha during regular business hours for a period of no less than ten days before the Alpha special meeting and at the place of the Alpha special meeting during the meeting.

Quorum and Vote Required

A quorum of stockholders is necessary to hold a valid special meeting of Alpha. The required quorum for the transaction of business at the Alpha special meeting is a majority of the issued and outstanding shares of Alpha common stock entitled to vote at the Alpha special meeting, whether present in person or represented by proxy. Any abstentions will be counted as present and entitled to vote in determining whether a quorum is present at the Alpha special meeting. Your bank, broker or other nominee will not be permitted to vote at the Alpha special meeting without specific instructions as to how to vote from you as the beneficial owner of the shares of Alpha common stock. A broker non-vote (as defined below) will have the same effect as a vote AGAINST the proposal to amend the certificate of incorporation, but will have no effect on the proposal to issue shares of Alpha common stock pursuant to the merger agreement or the adjournment proposal. Broker non-votes will not be counted for purposes of determining whether a quorum is present at the Alpha special meeting.

 

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The approval of the amendment to the Alpha certificate of incorporation requires the affirmative vote of a majority of the outstanding shares of Alpha common stock entitled to vote. The required vote of Alpha stockholders on the amendment to the Alpha certificate of incorporation is based upon the number of outstanding shares of Alpha common stock, and not the number of shares that are actually voted. Accordingly, if you are an Alpha stockholder and you fail to submit a proxy card or vote in person at the Alpha special meeting or abstain from voting, or if you hold your shares in “street name” through a bank, broker or other nominee and fail to give voting instructions to such bank, broker or other nominee, which we refer to as a broker non-vote, that will have the same effect as a vote AGAINST the amendment to the certificate of incorporation.

The approval of the issuance of shares of Alpha common stock pursuant to the merger agreement requires the affirmative vote of a majority of shares of Alpha common stock present in person or represented by proxy at the stockholders meeting and entitled to vote, assuming a quorum is present. Abstentions will have the same effect as a vote AGAINST the proposal to issue shares of Alpha common stock pursuant to the merger agreement, while broker non-votes and shares not in attendance at the Alpha special meeting will have no effect on the outcome of the proposal to approve the issuance of shares of Alpha common stock pursuant to the merger agreement.

To approve any adjournment of the Alpha special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Alpha special meeting to approve the proposal to approve the amendment to the certificate of incorporation and/or the proposal to approve the issuance of shares of Alpha common stock pursuant to the merger agreement, the affirmative vote of a majority of the shares of Alpha common stock present in person or represented by proxy at the Alpha special meeting and entitled to vote is required, regardless of whether a quorum is present. Abstentions will have the same effect as a vote AGAINST the proposal to adjourn the Alpha special meeting, while broker non-votes and shares not in attendance at the Alpha special meeting will have no effect on the outcome of any vote to adjourn the Alpha special meeting.

 

ITEM 1 APPROVAL OF THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION

As discussed elsewhere in this joint proxy statement/prospectus, Alpha stockholders are considering and voting on a proposal to approve an amendment to the Alpha certificate of incorporation, pursuant to which Alpha will be authorized to issue up to 400,000,000 shares of common stock, par value $0.01 per share. This increase in the authorized stock of Alpha is necessary in order for Alpha to issue the stock portion of the merger consideration to the stockholders of Massey pursuant to the merger agreement. Alpha intends to file this amendment promptly following the Alpha special meeting if this proposal passes, regardless of whether the effective time occurs. You should read carefully this joint proxy statement/prospectus in its entirety for more detailed information concerning the proposed amendment to the Alpha certificate of incorporation and the transactions contemplated by the merger agreement, including the merger. In particular, you are directed to the proposed amendment to the certificate of incorporation, which is attached as Annex B to this proxy statement, and the merger agreement, which is attached as Annex A to this joint proxy statement/prospectus.

After careful consideration, the Alpha board of directors has approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger and has determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, Alpha and the stockholders of Alpha, respectively. Accordingly, the Alpha board of directors recommends that Alpha stockholders vote FOR the approval of the amendment to the certificate of incorporation, and your properly signed and dated proxy will be so voted unless you specify otherwise.

 

ITEM 2 APPROVAL OF THE ISSUANCE OF SHARES OF ALPHA COMMON STOCK PURSUANT TO THE MERGER AGREEMENT

As discussed elsewhere in this joint proxy statement/prospectus, Alpha stockholders are considering and voting on a proposal to approve the issuance of shares of Alpha common stock to the stockholders of Massey pursuant to the merger agreement. The shares of common stock to be issued will be, upon issuance, in excess of

 

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twenty percent of the number of shares of Alpha common stock currently outstanding and will have, upon issuance, voting power in excess of twenty percent of the voting power of Alpha common stock currently outstanding and as a result, pursuant to Section 312.03(c) of the New York Stock Exchange Listed Company Manual, Alpha is required to receive stockholder approval of the issuance.

You should read carefully this joint proxy statement/prospectus in its entirety for more detailed information concerning the proposed common stock issuance and the transactions contemplated by the merger agreement, including the merger. In particular, you are directed to the merger agreement, which is attached as Annex A to this joint proxy statement/prospectus.

After careful consideration, the Alpha board of directors has approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger and has determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, Alpha and the stockholders of Alpha, respectively. Accordingly, the Alpha board of directors recommends that Alpha stockholders vote FOR the issuance of shares of Alpha common stock pursuant to the merger agreement, and your properly signed and dated proxy will be so voted unless you specify otherwise.

 

ITEM 3 APPROVAL OF THE ADJOURNMENT OF THE ALPHA SPECIAL MEETING, IF NECESSARY OR APPROPRIATE, INCLUDING TO PERMIT FURTHER SOLICITATION OF PROXIES IF THERE ARE NOT SUFFICIENT VOTES AT THE TIME OF THE ALPHA SPECIAL MEETING TO APPROVE ONE OR BOTH OF THE PROPOSALS DESCRIBED ABOVE

Alpha stockholders may be asked to vote on a proposal to adjourn the Alpha special meeting if necessary or appropriate, including to permit further solicitation of proxies if there are not sufficient votes at the time of the Alpha special meeting to approve the amendment to the certificate of incorporation and/or the issuance of shares of Alpha common stock pursuant to the merger agreement.

The Alpha board of directors recommends that Alpha stockholders vote FOR the proposal to adjourn the Alpha special meeting under certain circumstances, and your properly signed and dated proxy will be so voted unless you specify otherwise.

Please note that pursuant to section 2.09 of Alpha’s bylaws, the chairman is authorized to adjourn the Alpha special meeting if less than a quorum is present.

Stock Ownership and Voting by Alpha’s Directors and Executive Officers

At the close of business on April 27, 2011, the record date for the Alpha special meeting, Alpha’s directors and executive officers had the right to vote approximately 882,199 shares of the then-outstanding Alpha common stock at the Alpha special meeting, collectively representing approximately 0.7% of the Alpha common stock outstanding and entitled to vote on that date. We currently expect that Alpha’s directors and executive officers will vote their shares FOR approval of the amendment to the Alpha certificate of incorporation and FOR the proposal to issue shares of Alpha common stock pursuant to the merger agreement, although none of them has entered into any agreement requiring them to do so.

How to Vote

You may vote your shares of Alpha common stock in person at the Alpha special meeting or by proxy. Alpha recommends that you submit your proxy even if you plan to attend the Alpha special meeting. If you submit your proxy, you may change your vote if you attend and vote at the Alpha special meeting; however, mere attendance at the Alpha special meeting will have no effect on your vote.

Owners of record (that is, stockholders of record who hold shares of Alpha common stock in certificated or book-entry form (as opposed to through a bank, broker or other nominee)), as of the close of business on the record date, may vote in person at the Alpha special meeting or by proxy. This means that you may use the

 

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enclosed proxy card(s) to tell the persons named as proxies how to vote your shares. If you properly complete, sign and date your proxy card(s) or submit your voting instructions by telephone or over the Internet, your shares will be voted in accordance with your instructions. The named proxies will vote all shares at the Alpha special meeting for which proxies have been properly submitted (whether by mail, telephone or over the Internet) and not revoked. Owners of record have three ways to vote by proxy:

 

   

Internet: You can vote over the Internet at the Web address shown on your proxy card(s). You will be prompted to enter your Control Number from your proxy card. This number will identify you as a stockholder of record. Follow the simple instructions that will be given to you to record your vote. If you vote over the Internet, do not return your proxy card(s).

 

   

Telephone: You can vote by telephone by calling the toll-free number on your proxy card(s). You will be prompted to enter your Control Number from your proxy card. This number will identify you as a stockholder of record. Follow the simple instructions that will be given to you to record your vote. If you vote by telephone, do not return your proxy card(s).

 

   

Mail: You can vote by mail by simply signing, dating and mailing your proxy card(s) in the postage-paid envelope included with this joint proxy statement/prospectus.

If you sign and return your proxy card(s) but do not mark your card(s) to tell the proxies how to vote your shares on each proposal, your shares will be voted as recommended by the Alpha board of directors.

The deadline for voting electronically through the Internet or by telephone is 11:59 p.m., EDT, on May 31, 2011.

Alpha stockholders who hold shares of Alpha common stock in a stock brokerage account or through a bank, broker or other nominee (“street name” stockholders) who wish to vote at the Alpha special meeting should be provided a voting instruction card by the institution that holds their shares. If this has not occurred, contact the institution that holds your shares. A number of banks and brokerage firms participate in a program that also permits stockholders whose shares are held in “street name” to direct their vote by telephone or over the Internet. If your shares are held in an account at a bank or brokerage firm that participates in such a program, you may direct the vote of these shares by telephone or over the Internet by following the voting instructions enclosed with the proxy form from the bank or brokerage firm. The Internet and telephone proxy procedures are designed to authenticate stockholders’ identities, to allow stockholders to give their proxy voting instructions and to confirm that those instructions have been properly recorded. Votes directed by telephone or over the Internet through such a program must be received by 11:59 p.m., EDT, on May 31, 2011. Directing the voting of your shares will not affect your right to vote in person if you decide to attend the Alpha special meeting; however, you must first obtain a signed and properly executed legal proxy from your bank, broker or other nominee to vote your shares held in “street name” at the Alpha special meeting. Requesting a legal proxy prior to the deadline described above will automatically cancel any voting directions you have previously given by telephone or over the Internet with respect to your shares.

With respect to the proposals relating to the amendment to the Alpha certificate of incorporation, the issuance of shares of Alpha common stock pursuant to the merger agreement and the adjournment of the Alpha special meeting, if necessary or appropriate, to solicit further proxies in connection with one or both of the proposals described above, if you do not instruct your bank, broker or other nominee how to vote your shares, your bank, broker or other nominee will not be authorized to vote, and a broker non-vote will occur. A broker non-vote will have the same effect as a vote AGAINST the proposal to amend the certificate of incorporation, but will have no effect on the proposals to issue shares of Alpha common stock pursuant to the merger agreement or to adjourn the Alpha special meeting.

If you abstain from voting with respect to the proposal to amend the certificate of incorporation, the proposal to issue shares of Alpha common stock pursuant to the merger agreement, or the proposal to adjourn the Alpha special meeting, if necessary or appropriate, to solicit further proxies in connection with one or both of the proposals described above, your abstention will have the same effect as a vote AGAINST such proposal.

 

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Revoking Your Proxy

If you are the owner of record as of the close of business on the record date, you can revoke your proxy at any time before its exercise by:

 

   

sending a written notice to Alpha, at One Alpha Place, P.O. Box 2345, Abingdon, Virginia 24212, attention: Corporate Secretary, bearing a date later than the date of the proxy, that is received prior to the Alpha special meeting and states that you revoke your proxy;

 

   

submitting your voting instructions again by telephone or over the Internet;

 

   

signing another valid proxy card(s) bearing a later date and mailing it so that it is received by Alpha prior to the Alpha special meeting; or

 

   

attending the Alpha special meeting and voting in person, although attendance at the Alpha special meeting will not, by itself, revoke a proxy.

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

Other Voting Matters

Voting in Person

If you plan to attend the Alpha special meeting and wish to vote in person, Alpha will give you a ballot at the special meeting. However, if your shares are held in “street name,” you must first obtain from your bank, broker or other nominee a legal proxy authorizing you to vote the shares in person, which you must bring with you to the Alpha special meeting.

Electronic Access to Proxy Materials

This joint proxy statement/prospectus is available on Alpha’s Internet site at http://www.alphanr.com.

People with Disabilities

Alpha can provide you with reasonable assistance to help you to participate in the Alpha special meeting if you tell Alpha about your disability and how you plan to attend. Please write to Alpha, at One Alpha Place, P.O. Box 2345, Abingdon, Virginia 24212, attention: Corporate Secretary, or call at (276) 619-4410, at least two weeks before the Alpha special meeting.

Proxy Solicitations

Alpha is soliciting proxies for the Alpha special meeting from Alpha stockholders. Alpha will bear the entire cost of soliciting proxies from Alpha stockholders. In addition to this mailing, Alpha’s directors, officers and employees (who will not receive any additional compensation for their services) 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). D.F. King & Co., Inc., which we refer to as D.F. King, has been engaged to aid in the distribution and solicitation of proxies. Alpha will pay D.F. King a fee estimated not to exceed $50,000 and reimburse its out-of-pocket expenses for such items as mailing, copying, phone calls, faxes and other related matters and will indemnify D.F. King against any losses arising out of D.F. King’s proxy soliciting services on behalf of Alpha. Alpha and its proxy solicitors will also request that banks, brokerage houses and other custodians, nominees and fiduciaries send proxy materials to the beneficial owners of Alpha common stock and will, if requested, reimburse them for their reasonable out-of-pocket expenses in doing so.

 

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Alpha stockholders should not submit any stock certificates with their proxy cards.

Alpha stockholders will not need to send in their share certificates or surrender their book-entry shares.

Other Business

Alpha is not aware of any other business to be acted upon at the Alpha special meeting. If, however, other matters are properly brought before the Alpha special meeting, your proxies will have discretion to vote or act on those matters according to their best judgment and they intend to vote the shares as the Alpha board of directors may recommend.

Assistance

If you need assistance in completing your proxy card or have questions regarding Alpha’s special meeting, please contact D.F. King & Co., Inc., 48 Wall Street, 22nd Floor, New York, New York 10005, banks and brokers call collect: (212) 269-5550, all others call toll-free: (800) 659-5550.

 

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THE MASSEY SPECIAL MEETING

Overview

This joint proxy statement/prospectus is being provided to Massey stockholders as part of a solicitation of proxies by the Massey board of directors for use at the special meeting of Massey stockholders and at any adjournments or postponements thereof. This joint proxy statement/prospectus is first being furnished to stockholders of Massey on or about April 29, 2011. In addition, this joint proxy statement/prospectus constitutes a prospectus for Alpha in connection with the issuance by Alpha of its common stock pursuant to the merger agreement. This joint proxy statement/prospectus provides Massey stockholders with information they need to know to vote or instruct their vote to be cast at the special meeting of Massey stockholders.

Date, Time and Place of the Massey Special Meeting

The special meeting of Massey stockholders will be held at the MeadowView Marriott Conference Resort and Convention Center, located at 1901 Meadowview Parkway, Kingsport, Tennessee 37660, on June 1, 2011, at 9:30 a.m., EDT.

Purposes of the Massey Special Meeting

At the Massey special meeting, Massey stockholders will be asked:

 

   

to adopt the merger agreement; and

 

   

to approve adjournments of the Massey special meeting if necessary or appropriate, including to permit further solicitation of proxies if there are not sufficient votes at the time of the Massey special meeting to adopt the merger agreement.

Record Date; Outstanding Shares; Shares Entitled to Vote

The record date for the special meeting of Massey stockholders is April 27, 2011. This means that you must be a stockholder of record of Massey common stock at the close of business on April 27, 2011, in order to vote at the Massey special meeting. You are entitled to one vote for each share of Massey common stock you own. At the close of business on the record date, there were 103,101,921 shares of Massey common stock outstanding and entitled to vote, held by approximately 5,882 holders of record.

A complete list of Massey stockholders entitled to vote at the Massey special meeting will be available for inspection at the principal place of business of Massey during regular business hours for a period of no less than ten days before the Massey special meeting and at the place of the Massey special meeting during the meeting.

Quorum and Vote Required

A quorum of stockholders is necessary to hold a valid special meeting of Massey. The required quorum for the transaction of business at the Massey special meeting is a majority of the issued and outstanding shares of Massey common stock entitled to vote at the Massey special meeting, whether present in person or represented by proxy. Any abstentions will be counted as present and entitled to vote in determining whether a quorum is present at the Massey special meeting. Your bank, broker or other nominee will not be permitted to vote on the adoption of the merger agreement without a specific instruction as to how to vote from you as the beneficial owner of the shares of Massey common stock. Broker non-votes will not be counted for purposes of determining whether a quorum is present at the Massey special meeting.

Adoption of the merger agreement requires the affirmative vote of a majority of the outstanding shares of Massey common stock entitled to vote. The required vote of Massey stockholders on the merger agreement is based upon the number of outstanding shares of Massey common stock, and not the number of shares that are

 

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actually voted. Accordingly, if you are a Massey stockholder and you fail to submit a proxy card or vote in person at the Massey special meeting or abstain from voting, or if you hold your shares in “street name” through a bank, broker or other nominee and fail to give voting instructions to such bank, broker or other nominee (a broker non-vote), that will have the same effect as a vote AGAINST the adoption of the merger agreement.

To approve any adjournment of the Massey special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Massey special meeting to approve the proposal to adopt the merger agreement, the affirmative vote of a majority of the shares of Massey common stock present in person or represented by proxy at the Massey special meeting and entitled to vote is required regardless of whether a quorum is present. Abstentions will have the same effect as a vote AGAINST the proposal to adjourn the Massey special meeting, while broker non-votes and shares not in attendance at the Massey special meeting will have no effect on the outcome of any vote to adjourn the Massey special meeting.

Alpha, through one of its wholly owned subsidiaries, owns 1,000 shares of Massey common stock. Alpha intends to vote these shares in favor of the adoption of the merger agreement and in favor of the adjournment proposal.

 

ITEM 1 ADOPTION OF THE MERGER AGREEMENT

As discussed elsewhere in this joint proxy statement/prospectus, Massey stockholders are considering and voting on a proposal to adopt the merger agreement. You should read carefully this joint proxy statement/prospectus in its entirety for more detailed information concerning the transactions contemplated by the merger agreement, including the merger. In particular, you are directed to the merger agreement, which is attached as Annex A to this joint proxy statement/prospectus.

After careful consideration, the Massey board of directors has approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger and has determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, Massey and the stockholders of Massey, respectively. Accordingly, the Massey board of directors recommends that Massey stockholders vote FOR the adoption of the merger agreement and your properly signed and dated proxy will be so voted unless you specify otherwise.

 

ITEM 2 APPROVAL OF THE ADJOURNMENT OF THE MASSEY SPECIAL MEETING, IF NECESSARY OR APPROPRIATE, INCLUDING TO PERMIT FURTHER SOLICITATION OF PROXIES IF THERE ARE NOT SUFFICIENT VOTES AT THE TIME OF THE MASSEY SPECIAL MEETING TO APPROVE THE PROPOSAL TO ADOPT THE MERGER AGREEMENT

Massey stockholders may be asked to vote on a proposal to adjourn the Massey special meeting if necessary or appropriate, including to permit further solicitation of proxies if there are not sufficient votes at the time of the Massey special meeting to approve the proposal to adopt the merger agreement.

The Massey board of directors recommends that Massey stockholders vote FOR the proposal to adjourn the Massey special meeting under certain circumstances, and your properly signed and dated proxy will be so voted unless you specify otherwise.

Please note that pursuant to section 2.04(c) of Massey’s bylaws, the chairman is authorized to adjourn the Massey special meeting.

Stock Ownership and Voting by Massey’s Directors and Executive Officers

At the close of business on April 27, 2011, the record date for the Massey special meeting, Massey’s directors and executive officers had the right to vote approximately 569,969 shares of the then-outstanding Massey voting stock at the Massey special meeting, collectively representing approximately 0.6% of the Massey

 

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common stock outstanding and entitled to vote on that date. We currently expect that Massey’s directors and executive officers will vote their shares FOR adoption of the merger agreement, although none of them has entered into any agreement requiring them to do so.

In addition, a subsidiary of Alpha owns 1,000 shares of common stock of Massey and Michael Quillen, chairman of the board of directors of Alpha, owns 200 shares of common stock of Massey, collectively representing less than one one-hundredth of one percent of the Massey common stock outstanding and entitled to vote at the Massey special meeting.

How to Vote

You may vote your shares of Massey common stock in person at the Massey special meeting or by proxy. Massey recommends that you submit your proxy even if you plan to attend the Massey special meeting. If you submit your proxy, you may change your vote if you attend and vote at the Massey special meeting; however, mere attendance at the Massey special meeting will have no effect on your vote.

Owners of record (that is, stockholders of record who hold shares of Massey common stock in certificated or book-entry form (as opposed to through a bank, broker or other nominee)) or employees who hold interests in Massey common stock through the Massey 401(k) Plan as of the close of business on the record date, may vote in person at the Massey special meeting or by proxy. This means that you may use the enclosed proxy card(s) to tell the persons named as proxies how to vote your shares. If you properly complete, sign and date your proxy card(s) or submit your voting instructions by telephone or over the Internet, your shares will be voted in accordance with your instructions. The named proxies will vote all shares at the Massey special meeting for which proxies have been properly submitted (whether by mail, telephone or over the Internet) and not revoked. Owners of record and employees who own interests in Massey common stock through the Massey 401(k) Plan have three ways to vote by proxy:

 

   

Internet: You can vote over the Internet at the Web address shown on your proxy card(s). You will be prompted to enter your Control Number from your proxy card. This number will identify you as a stockholder of record. Follow the simple instructions that will be given to you to record your vote. If you vote over the Internet, do not return your proxy card(s).

 

   

Telephone: You can vote by telephone by calling the toll-free number on your proxy card(s). You will be prompted to enter your Control Number from your proxy card. This number will identify you as a stockholder of record. Follow the simple instructions that will be given to you to record your vote. If you vote by telephone, do not return your proxy card(s).

 

   

Mail: You can vote by mail by simply signing, dating and mailing your proxy card(s) in the postage-paid envelope included with this joint proxy statement/prospectus.

If you sign and return your proxy card(s) but do not mark your card(s) to tell the proxies how to vote your shares on each proposal, your shares will be voted as recommended by the Massey board of directors, with the following two exceptions:

 

   

Shares held in the Massey 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 the Massey 401(k) Plan for which timely and valid voting instructions are received with respect to such proposals, and

 

   

Shares held in the Massey 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 the Massey 401(k) Plan for which timely and valid voting instructions are received.

The deadline for voting electronically through the Internet or by telephone is 11:59 p.m., EDT, on May 31, 2011. The deadline for voting shares of Massey common stock held in the Massey 401(k) Plan electronically through the Internet or by telephone is 11:59 p.m., EDT, on May 30, 2011.

 

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Massey stockholders who hold shares of Massey common stock in a stock brokerage account or through a bank, broker or other nominee (“street name” stockholders) who wish to vote at the Massey special meeting should be provided a voting instruction card by the institution that holds their shares. If this has not occurred, contact the institution that holds your shares. A number of banks and brokerage firms participate in a program that also permits “street name” stockholders to direct their vote by telephone or over the Internet. If your shares are held in an account at a bank or brokerage firm that participates in such a program, you may direct the vote of these shares by telephone or over the Internet by following the voting instructions enclosed with the proxy form from the bank or brokerage firm. The Internet and telephone proxy procedures are designed to authenticate stockholders’ identities, to allow stockholders to give their proxy voting instructions and to confirm that those instructions have been properly recorded. Votes directed by telephone or over the Internet through such a program must be received by 11:59 p.m., EDT, on May 31, 2011. Directing the voting of your shares will not affect your right to vote in person if you decide to attend the Massey special meeting; however, you must first obtain a signed and properly executed legal proxy from your bank, broker or other nominee to vote your shares held in “street name” at the Massey special meeting. Requesting a legal proxy prior to the deadline described above will automatically cancel any voting directions you have previously given by telephone or over the Internet with respect to your shares.

With respect to the proposals relating to the adoption of the merger agreement and the adjournment of the Massey special meeting, if necessary or appropriate, to solicit further proxies to approve the proposal to adopt the merger agreement, if you do not instruct your bank, broker or other nominee how to vote your shares, your bank, broker or other nominee will not be authorized to vote, and a broker non-vote will occur. A broker non-vote will have the same effect as a vote AGAINST the proposal to adopt the merger agreement, but will have no effect on the proposal to adjourn the Massey special meeting.

If you abstain from voting with respect to the proposal to adopt the merger agreement or the proposal to adjourn the Massey special meeting, if necessary or appropriate, to solicit further proxies to approve the proposal to adopt the merger agreement, your abstention will have the same effect as a vote AGAINST such proposal.

Revoking Your Proxy

If you are the owner of record as of the close of business on the record date, you can revoke your proxy at any time before its exercise by:

 

   

sending a written notice to Massey, at Massey Energy Company, P.O. Box 26765, Richmond, Virginia 23261, Attention: Investor Relations, bearing a date later than the date of the proxy that is received prior to the Massey special meeting and states that you revoke your proxy;

 

   

submitting your voting instructions again by telephone or over the Internet;

 

   

signing another valid proxy card(s) bearing a later date and mailing it so that it is received prior to the Massey special meeting; or

 

   

attending the Massey special meeting and voting in person, although attendance at the Massey special meeting will not, by itself, revoke a proxy.

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

Other Voting Matters

Voting in Person

If you plan to attend the Massey special meeting and wish to vote in person, Massey will give you a ballot at the special meeting. However, if your shares are held in “street name,” you must first obtain from your bank, broker or other nominee a legal proxy authorizing you to vote the shares in person, which you must bring with you to the Massey special meeting.

 

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Electronic Access to Proxy Materials

This joint proxy statement/prospectus is available on Massey’s Internet site at http://www.masseyenergyco.com.

People with Disabilities

Massey can provide you with reasonable assistance to help you to participate in the Massey special meeting if you tell Massey about your disability and how you plan to attend. Please write to Massey, at Massey Energy Company, P.O. Box 26765, Richmond, Virginia 23261, Attention: Investor Relations, or call at (804) 788-1800, at least two weeks before the Massey special meeting.

Proxy Solicitations

Massey is soliciting proxies for the Massey special meeting from Massey stockholders. Massey will bear the entire cost of soliciting proxies from Massey stockholders. In addition to this mailing, Massey’s directors, officers and employees (who will not receive any additional compensation for their services) 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). Innisfree M&A Inc., which we refer to as Innisfree, has been engaged to aid in the distribution and solicitation of proxies. Massey will pay Innisfree approximately $35,000 for its services and reimburse its out-of-pocket expenses for such items as mailing, copying, phone calls, faxes and other related matters and will indemnify Innisfree against any losses arising out of Innisfree’s proxy soliciting services on behalf of Massey. Massey and its proxy solicitors will also request that banks, brokerage houses and other custodians, nominees and fiduciaries send proxy materials to the beneficial owners of Massey common stock and will, if requested, reimburse them for their reasonable out-of-pocket expenses in doing so.

Massey stockholders should not submit any stock certificates with their proxy cards.

Massey stockholders will not need to send in their share certificates or surrender their book-entry shares. A transmittal form with instructions for the surrender of certificates representing shares of common stock or book-entry shares of common stock, as applicable, will be mailed to Massey stockholders assuming the merger is completed.

Other Business

Massey is not aware of any other business to be acted upon at the Massey special meeting. If, however, other matters are properly brought before the Massey special meeting, your proxies will have discretion to vote or act on those matters according to their best judgment and they intend to vote the shares as the Massey board of directors may recommend.

Assistance

If you need assistance in completing your proxy card or have questions regarding Massey’s special meeting, please contact Innisfree M&A Inc., 501 Madison Avenue, New York, NY 10022, stockholders may call toll-free: (877) 687-1875, banks and brokers call collect: (212) 750-5833.

 

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THE MERGER

Overview

The Alpha board of directors and the Massey board of directors have each approved the merger agreement. Pursuant to the merger agreement, Mountain Merger Sub, a wholly owned subsidiary of Alpha, will merge with and into Massey, with Massey continuing as the surviving corporation and a wholly owned subsidiary of Alpha. Under certain limited circumstances, in order to qualify the merger as a reorganization under Section 368(a) of the Code, Alpha and Massey will reverse the direction of the merger so that Mountain Merger Sub will continue as the surviving entity and, at Alpha’s election, be converted from a Delaware corporation to a Delaware limited liability company.

Upon the consummation of the merger, each share of Massey common stock issued and outstanding before the merger, other than any shares owned by Alpha, Massey or any of their respective subsidiaries, will be converted into the right to receive 1.025 shares of Alpha common stock and $10.00 in cash. No fractional shares will be issued, and in lieu of any such fractional shares cash will be paid instead. The number of shares of Alpha common stock and cash to be issued in the merger for each Massey common share is fixed (except in the event of any stock dividend, subdivision, recapitalization, split, reverse split, combination or exchange of shares or similar event with respect to Alpha common stock or Massey common stock) and will not be adjusted for changes in the market price of either Alpha common stock or Massey common stock. Shares of Massey common stock issued and outstanding before the merger will be cancelled upon completion of the merger.

Background of the Merger

Each of Massey’s and Alpha’s board of directors has from time to time separately engaged with the senior management of, and advisors to, their respective companies to review and consider various strategic opportunities, and has considered ways to enhance their respective performance and prospects in light of competitive and other relevant developments. Among other things, Massey’s board of directors, together with Massey’s senior management and advisors, reviewed and considered various strategic opportunities available to Massey, including whether the continued execution of Massey’s strategy as a stand-alone company or the potential acquisition of, sale of Massey to, or combination of Massey with, a third party offered the best avenue to maximize stockholder value. During the course of this process, each of Alpha and Massey has noted a move toward increasing consolidation in the coal industry and each believes that this trend will continue.

From the second half of 2006 through the first half of 2007, Massey conducted a strategic review process in which it considered potential transactions with numerous counterparties, including Alpha. Alpha and Massey had ongoing discussions throughout this period regarding a potential business combination. In connection with this process, on January 12, 2007, Alpha and Massey executed a customary confidentiality agreement that contained a reciprocal two-year standstill provision, which expired on January 12, 2009. However, Alpha and Massey were unable to agree on the terms of a potential deal and ceased discussions.

From time to time during 2007 to 2009, representatives of Massey and Alpha spoke by telephone and in person, but did not discuss a potential business combination between the two companies.

Thereafter, each of Alpha and Massey sought to grow their businesses through other acquisitions. On May 12, 2009, Alpha entered into a merger agreement with Foundation Coal Holdings, Inc. to merge the two companies in a $2.0 billion stock-for-stock transaction, which created, at that time, the third-largest coal producer in the United States.

On July 16, 2009, Foundation, which had previously executed a merger agreement with Alpha as described above, completed an asset exchange with various subsidiaries of Massey. In the transaction which was designed to optimize the reserve bases of both companies, Foundation created a contiguous reserve in the Harts Creek/Atenville area through the acquisition of approximately 19 million tons of coal, increasing its total coal reserve

 

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block to more than 120 million tons. In exchange, Foundation conveyed to Massey approximately 23 million tons of coal reserves and the operating assets of the Laurel Creek Mining Complex in Central Appalachia, including a coal processing plant, a permitted impoundment, permitted surface reserves, three idled underground mines, and related mining equipment.

The merger of Alpha and Foundation was completed on July 31, 2009.

On March 16, 2010, Massey entered into an agreement to purchase Cumberland, then one of the largest privately held coal producers in the United States, and its affiliated companies, which we refer to herein collectively as Cumberland, for $960 million in cash and Massey stock.

On March 24, 2010, Don Blankenship, then Chief Executive Officer and Chairman of the Board of Directors of Massey, spoke to a principal stockholder of Company A to discuss a potential acquisition of Company A by Massey at a meeting arranged by a financial advisor to Massey.

On April 5, 2010, an explosion occurred at the Upper Big Branch mine of Massey’s performance resource group, resulting in the deaths of 29 miners and seriously injuring two others. In the time period immediately following the UBB explosion, the Massey board of directors and senior management’s time and attention were largely focused on dealing with the aftermath of the UBB explosion. On April 5, 2010, Massey’s stock price was $54.69. On April 6, 2010, Massey’s stock price was $48.45. On May 6, 2010, Massey’s stock price was $33.47.

In the days following the UBB explosion, Michael Quillen, Chairman of the Board of Directors of Alpha, and Kevin Crutchfield, Alpha’s Chief Executive Officer, each spoke with Mr. Blankenship numerous times by telephone to express Alpha’s concern for the UBB miners, their families and the entire Massey team regarding the UBB explosion and to offer Alpha’s assistance. Alpha, along with other nearby coal companies, provided rescue teams, at Massey’s expense, to aid in the rescue effort at the UBB mine.

On April 19, 2010, Massey completed its acquisition of Cumberland.

On April 23, 2010, the Alpha board of directors met to discuss the possibility of pursuing a business combination with Massey in light of the strong strategic merit. At this meeting, the Alpha board of directors also received a presentation from Morgan Stanley & Co. Incorporated, which we refer to herein as Morgan Stanley, on certain financial information of Alpha and Massey in respect of a potential business combination between Alpha and Massey and possible financing considerations. The Alpha board of directors also discussed the possibility and potential process for submitting a proposal directly to Massey stockholders. After considering the recommendation of Alpha’s senior management, the Alpha directors then authorized Mr. Quillen and Mr. Crutchfield to arrange a private conversation with Mr. Blankenship regarding the possibility of a transaction.

On April 26, 2010, Mr. Quillen met with Mr. Blankenship and expressed Alpha’s sympathy to the UBB miners, their families and the entire Massey family. Mr. Quillen and Mr. Blankenship discussed a variety of matters, including the coal industry generally and the UBB explosion. During the meeting, Mr. Quillen conveyed Alpha’s view that a combination between Massey and Alpha would be beneficial to both companies and their stockholders, customers, employees and local communities. Mr. Quillen presented the strategic logic of a potential business combination and stated that such a combination would be an opportunity to form a premier leader in the coal industry from several perspectives. Mr. Blankenship informed Mr. Quillen that it was Mr. Blankenship’s view that a potential business combination with Alpha was not in the best interests of Massey’s stockholders at the time due to the depressed market value of Massey stock immediately following the UBB explosion, but also indicated that he would convey Alpha’s interest to Massey’s board of directors. Shortly thereafter, Mr. Blankenship held a call with Admiral Bobby Inman, lead independent director of Massey, and Dan Moore, a director of Massey, to update them about the meeting he had with Mr. Quillen. Mr. Blankenship stated his opinion that a potential business combination with Alpha was not in the best interests of Massey’s stockholders at the time due to the depressed market value of Massey stock immediately following the UBB

 

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explosion, which did not adequately reflect Massey’s reserve base, and the fact that the board of directors and management’s focus continued to be on the UBB explosion and the integration of Cumberland. Adm. Inman and Mr. Moore expressed their agreement.

On May 3, 2010, the board of directors of Massey participated in a teleconference to receive an update from Mr. Blankenship on a variety of matters, primarily regarding the UBB explosion, but also including the recent meeting held with Mr. Quillen. In addition to all of the members of the Massey board of directors, also present were Richard Grinnan, Massey’s Corporate Secretary, and Shane Harvey, Massey’s General Counsel. After discussion, the board of directors of Massey concluded that a potential business combination with Alpha would not be in the best interests of Massey’s stockholders at the time, noting Massey’s depressed market value and the fact that management’s time and attention were appropriately focused on the UBB explosion and the recent acquisition of Cumberland. The board of directors of Massey directed management not to pursue discussions with Alpha regarding a potential business combination at this time, believing it not to be in the best interests of Massey stockholders. Mr. Blankenship then spoke with Mr. Quillen by telephone and informed him of the decision of the Massey board of directors.

As a result of the explosion at the UBB mine, investigations were initiated by MSHA, the Federal Bureau of Investigation, the West Virginia Office of Miners’ Health, Safety and Training and an independent body led by former MSHA director J. Davitt MacAteer at the direction of West Virginia Governor Manchin. The four investigations are ongoing.

In addition to the investigations, five families have filed wrongful death suits against Massey. Massey has also made a settlement offer of $3 million to each deceased miner’s family; seven of the families have signed agreements to settle their claims, and four of those settlements have been approved by West Virginia courts. Massey stockholders have filed several derivative lawsuits, alleging, among other things, breach of fiduciary duties in the alleged failure to comply with safety standards and related obligations, and two federal class action lawsuits, alleging, among other things, securities fraud in the dissemination of materially misleading statements and the concealment of material adverse facts regarding Massey’s safety record, business, operations and management. For more information regarding the various litigation matters and investigations, please see “Legal Proceedings” in the Form 10-K filed by Massey on March 1, 2011 for the year ended December 31, 2010, which is incorporated herein by reference, and “—Litigation Related to the Merger” beginning on page 125.

Subsequently, on May 4, 2010, given the uncertainty surrounding the various litigation matters and investigations related to the UBB explosion, management of Alpha determined to indefinitely suspend efforts to pursue a potential business combination with Massey.

On June 17, 2010, Mr. Blankenship and Baxter Phillips, then President and a Director of Massey, met with executives of Company B regarding opportunities to do business together. At the meeting, executives from Company B proposed exploring a potential transaction in which Company B would acquire an equity interest in some or all of the operations and/or reserves of Massey. Mr. Blankenship indicated that he would raise the proposal with Massey’s board of directors. After discussions with various directors of Massey, Mr. Blankenship called an executive of Company B on June 29, 2010, and indicated that Massey would be willing to explore the potential transaction. On July 21, Mr. Blankenship and Mr. Phillips met with executives from Company B to discuss the potential transaction.

On July 19, 2010, the Alpha board of directors met by telephone and discussed the latest developments with respect to Massey and the current status of the investigations into the UBB explosion. The Alpha board of directors also received a presentation by Alpha’s management regarding an update on the relative share price performance of Alpha and Massey and on certain financial information of Alpha and Massey in respect of a potential transaction between Alpha and Massey. The Alpha board agreed the appropriate next step would be delivery of a private, non-binding communication to the Massey board of directors suggesting that the parties explore a potential business combination.

 

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On August 2, 2010, after roughly three months had elapsed since the parties’ last discussion and the immediate aftermath of the UBB explosion was behind Massey, Mr. Crutchfield telephoned Mr. Blankenship to renew talks regarding a possible transaction and to arrange a meeting on August 5 to discuss a transaction in further detail.

On August 5, 2010, Mr. Crutchfield spoke with Mr. Blankenship to propose an all-stock transaction that would deliver a 20% premium to Massey stockholders at then-current prices. Mr. Blankenship reiterated his view that a transaction with Alpha was not in the best interests of Massey’s stockholders at the time due to the depressed trading prices of Massey common stock following the UBB explosion. Mr. Crutchfield disputed Mr. Blankenship’s concern about Massey’s stock price and indicated that, given the similarity of macroeconomic and industry-specific factors impacting both businesses and notwithstanding the UBB explosion, there was a high degree of correlation in the trading prices of Massey’s and Alpha’s common stock and that, to the extent circumstances led to a recovery of the trading prices of Massey common stock, this would likely result in a correlative increase in the trading price of Alpha’s common stock, thus resulting in an increase in the value of Alpha’s offer for Massey.

On August 11, 2010, Alpha sent Massey a non-binding proposal, which confirmed in writing Alpha’s interest in pursuing a potential all-stock business combination that would deliver to Massey stockholders a premium of 20% over Massey’s then-current stock price of $30.99. The proposal emphasized the substantial synergies inherent in a combination of the two companies. Based on the closing price of Massey common stock on that date, the Alpha proposal represented a value of approximately $37.19 per share of Massey common stock.

On August 13, 2010, on behalf of the Massey board of directors, Mr. Blankenship responded in writing to Alpha’s August 11 letter by indicating that the Massey board of directors would discuss the Alpha proposal at its upcoming scheduled quarterly board and committee meetings.

From August 15 to August 17, 2010, the board of directors of Massey held its third quarter board and committee meetings. At the board of directors meeting, in addition to the members of the Massey board of directors, also present were Mr. Grinnan, Mr. Harvey, representatives from UBS Securities LLC, which we refer to herein as UBS, Massey’s financial advisors, and a representative from Troutman Sanders LLP, which we refer to herein as Troutman Sanders, Massey’s legal advisors. The board of directors of Massey discussed the letter from Alpha, the possibility of an unsolicited public offer from Alpha and a potential acquisition of Company A. The board of directors of Massey also discussed the preliminary expression of interest from Company B relating to potentially purchasing certain assets of Massey. The board of directors of Massey affirmed its interest in exploring strategic opportunities that are in the best interests of Massey stockholders and directed management to do so. The board of directors of Massey concluded that the proposal put forward by Alpha provided insufficient value to Massey’s stockholders and directed management to inform Alpha accordingly.

On August 16, 2010, a wholly owned subsidiary of Alpha purchased 1,000 shares of Massey common stock.

On August 23, 2010, on behalf of the Massey board of directors, Mr. Blankenship sent a letter to Mr. Crutchfield, informing him that the board of directors was unanimously of the view that the premium for Massey stockholders referenced in Alpha’s August 11, 2010 non-binding proposal was not sufficient, but that further exploration of a potential business combination may be warranted. Mr. Blankenship noted that the board of directors of Massey would consider “other factors” in addition to price when determining whether or not a potential business combination was in the best interests of Massey stockholders. Mr. Blankenship included in his correspondence with Alpha a draft confidentiality and standstill agreement that was substantially identical to the confidentiality and standstill agreement signed by Alpha and Massey in January 2007 (which had expired).

On August 25, 2010, Alpha responded in a letter to Mr. Blankenship indicating that Alpha understood the need to deliver a compelling value proposition to Massey’s stockholders and Alpha could potentially find ways to achieve additional value for Massey’s stockholders. Before proceeding, however, Alpha requested an explanation of the “other factors” that would influence the Massey board of directors’ decision so that Alpha could seek to address them.

 

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On August 27, 2010, on behalf of the Massey board of directors, Mr. Blankenship responded in a letter to Alpha by indicating that any potential business combination would be evaluated in accordance with the fiduciary duties of Massey’s board of directors and his previous reference to “other factors” conveyed the principle that any proposed business combination would be evaluated as a total package.

On August 27, 2010, Mr. Blankenship had a telephone conversation with an executive of Company A to discuss the assets of Company A and a potential acquisition of Company A by Massey.

On August 30, 2010, Mr. Crutchfield spoke with Mr. Blankenship by telephone and offered to meet with Mr. Blankenship and each of Alpha’s and Massey’s respective lead independent directors and financial advisors to discuss the parameters of a potential business combination, based solely on publicly available information. Mr. Blankenship asked whether Alpha would sign Massey’s proposed confidentiality and standstill agreement, to which Mr. Crutchfield responded that Alpha would prefer to use publicly available information as the basis for any discussions between the two parties and would prefer to defer further discussion of any confidentiality or standstill agreements until there was an indication that there might be an actionable transaction for the parties to pursue.

On September 7, 2010, on behalf of the Massey board of directors, Mr. Blankenship informed Mr. Crutchfield that Massey was unwilling to engage in discussions on the parameters of a potential business combination unless a confidentiality and standstill agreement was signed by the parties. In response, Mr. Crutchfield reiterated his view that Alpha and Massey should be able to have a constructive conversation based solely on publicly available information to discern whether there might be an actionable transaction for the parties to pursue.

On September 8, 2010, Mr. Blankenship met with an executive of Company A to discuss the assets of Company A and a potential acquisition of Company A by Massey.

On September 10, 2010, Mr. Blankenship had a telephone conversation with the principal stockholder of Company A to discuss a potential acquisition of Company A by Massey.

On September 13, 2010, Alpha sent a non-binding letter to Massey proposing, among other things, an all-stock combination of Alpha and Massey at an exchange ratio of 1.0 share of Alpha common stock for each share of Massey common stock, representing a premium of 26% to the implied exchange ratio as of that date. Based on the closing price of Alpha common stock on that date of $41.07, the proposal represented a price of approximately $41.07 per share of Massey common stock. The letter noted that Massey stockholders, as owners of approximately 45% of the combined company, would also participate significantly in the anticipated merger synergies. Alpha also noted in the letter that they remained unwilling to execute a confidentiality and standstill agreement absent an indication from Massey that there might be an actionable transaction for the parties to pursue.

On September 14, 2010, Mr. Blankenship, Adm. Inman, Mr. Phillips, Mr. Grinnan, and Mr. Harvey held a call with representatives of Cravath, Swaine & Moore LLP, which we refer to herein as Cravath, Massey’s legal advisors, to discuss the letter received from Alpha and how to appropriately respond.

On September 17, 2010, on behalf of the Massey board of directors, Mr. Blankenship sent Mr. Crutchfield a letter agreeing to a meeting with Alpha on September 28, 2010 without a confidentiality and standstill agreement in place as a courtesy to Alpha and to further inform the deliberations of the Massey board of directors by understanding more about Alpha’s proposal. The letter also noted that the timing for the proposed discussions had not been opportune due to the UBB explosion and that the value in Alpha’s non-binding proposal was far below what Massey’s board of directors considered to be worth pursuing.

On September 20, 2010, Massey engaged UBS as Massey’s financial advisor to address any potential immediate action by Alpha, including, in light of Massey’s upcoming special meeting of its stockholders (which

 

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is described below), the possibility of an unsolicited public offer from Alpha, and to advise Massey on any matters relating to their review of strategic alternatives including Massey’s response to acquisition or business combination proposals it may receive or other attempts to effect a change in control of Massey.

On September 22, 2010, the Massey board of directors participated in a special telephonic meeting to review Massey’s strategic alternatives. In addition to all of the members of the Massey board of directors, also present were Mr. Grinnan and representatives from UBS and Cravath. The representative from Cravath discussed with the directors their fiduciary duties in connection with any strategic transaction. Mr. Blankenship updated the Massey board of directors on his discussions regarding a potential acquisition of Company A. The board of directors of Massey discussed the details of such potential business combination, including Company A’s assets, possible synergies and considerations related to the valuation of their proposal, and whether it would be accretive to Massey’s stockholders. Mr. Blankenship updated the board of directors of Massey on the upcoming meeting with Alpha scheduled for September 28, 2010 to learn more about Alpha’s most recent offer of September 13, 2010. The board of directors of Massey discussed the details of a potential business combination with Alpha, Alpha’s September 13, 2010 offer and what type of a premium would be appropriate and competitive with other alternatives available to Massey, including the acquisition of another public company or a private company, the potential merger with a company other than Alpha or a joint venture focused on realizing the value of Massey’s reserves. The Massey board of directors also discussed continued operation on a stand-alone basis, either with a continued focus in central Appalachia or with an increased geographic footprint.

On September 28, 2010, representatives of Alpha and Massey met to discuss a potential business combination. Representing Alpha were Mr. Quillen, Mr. Crutchfield, Glenn Eisenberg, Alpha’s Lead Independent Director, Vaughn Groves, Executive Vice President, General Counsel and Secretary of Alpha, and a representative from Morgan Stanley, Alpha’s financial advisor. Representing Massey were Mr. Blankenship, Adm. Inman, Mr. Phillips and Mr. Grinnan. Alpha made a presentation to the Massey representatives explaining why a combination of the companies was a compelling strategic combination that would offer the opportunity for significant synergies and value creation for stockholders of both companies. Adm. Inman indicated that the board of directors of Massey would discuss the presentation by Alpha and noted that the Massey board of directors would continue to evaluate Alpha’s proposal and engage in discussions with respect to a potential business combination.

Subsequent to their September 28 meeting, Mr. Crutchfield and Adm. Inman spoke to each other by telephone on a number of occasions, with Adm. Inman providing Mr. Crutchfield with updates regarding the steps that the Massey board of directors and later the strategic alternatives review committee (described below) were taking to review the strategic alternatives available to Massey, including a possible business combination. During the course of these conversations, Mr. Crutchfield attempted to determine the likelihood that Massey’s review of strategic alternatives would result in a willingness by Massey’s board to negotiate a business combination with Alpha or whether Alpha should instead make an offer directly to Massey stockholders. Throughout the course of these conversations, Adm. Inman gave Mr. Crutchfield assurances that although Mr. Blankenship questioned whether the time was right to consider a business combination, the Massey board of directors was willing to consider a business combination with Alpha or another party at an appropriate price and other terms. In these conversations, Adm. Inman emphasized that the Massey board of directors and strategic alternatives review committee would need adequate time to review the strategic alternatives available to Massey. Although it was not a factor in the Massey board of directors’ evaluation of a potential business combination with Alpha, Adm. Inman also indicated that there were several key operators running Massey mines who were very talented and that Alpha would be well served to recognize their talent and consider appropriate positions for them at Alpha if a business combination were consummated.

On October 4, 2010, the Alpha board of directors held a special board meeting to discuss a potential transaction with Massey. In addition to the members of the Alpha board of directors, members of Alpha’s senior management team and representatives of Cleary Gottlieb Steen & Hamilton LLP, legal counsel to Alpha, which we refer to herein as Cleary Gottlieb, and representatives of Morgan Stanley were present. At this meeting, the

 

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Alpha board of directors discussed with Cleary Gottlieb the board’s fiduciary duties and other legal considerations in connection with a potential transaction with Massey. Representatives of Morgan Stanley then reviewed certain financial information of Alpha and Massey in respect of a potential transaction between Alpha and Massey. The Alpha board of directors also discussed the possibility and potential process for submitting a proposal directly to Massey stockholders. After discussion among the directors, senior management and Alpha’s advisors, the Alpha board of directors determined to continue efforts to negotiate a potential transaction with Massey.

Certain stockholders, many of which represented pension funds, had been in contact with Massey following the 2010 annual meeting of stockholders regarding proposals for corporate governance reforms supported by RiskMetrics. In response to the discussions with these stockholders, the Massey board of directors and the governance and nominating committee conducted a review of Massey’s corporate governance with a willingness to consider further alignment of Massey’s corporate governance policies with those of well known public companies and the recommendations of various corporate governance advisors. This review of Massey’s corporate governance was conducted independently of the strategic review process. In response to this review of Massey’s corporate governance, Massey implemented several corporate governance reforms and agreed to hold a special stockholder meeting on October 6, 2010. The corporate governance reforms adopted by the board of directors included (i) clarifying and increasing the responsibilities of the lead independent director, (ii) limiting the number of public company boards on which directors could serve, (iii) separating the safety, environmental and public policy committee into two committees, (iv) eliminating the tax excise gross-up from change in control agreements, (v) declassifying the board of directors, (vi) eliminating cumulative voting, (vii) eliminating the supermajority vote requirement for stockholders to approve bylaw amendments, (viii) removing the prohibition against stockholders requesting special meetings, (ix) eliminating the supermajority vote requirement for stockholder approval of business combinations with a greater than 5% stockholder and (x) increasing the number of authorized shares of common stock under Massey’s certificate of incorporation from 150,000,000 to 300,000,000. Items (v) through (x) required a stockholder vote at the special meeting called for this purpose. On October 6, 2010, at a special meeting of stockholders, the stockholders of Massey approved all such matters that required a stockholder vote, with the exception of the proposal to eliminate cumulative voting.

On October 12, 2010, the board of directors of Massey participated in a special telephonic meeting to discuss further the proposal from Alpha. In addition to all of the members of the Massey board of directors, also present were Mr. Grinnan and Mr. Harvey. Richard Gabrys, a director of Massey, informed the board of directors that UBS was currently evaluating a potential business combination between Massey and Alpha as well a potential acquisition of Company A by Massey. Mr. Gabrys opined that Alpha’s most recent bid, sent on September 13, 2010 and discussed by the board in detail at its September 22, 2010 meeting, was too low given the depression in Massey’s stock price subsequent to the UBB explosion and noted that Mr. Crutchfield had requested a meeting with Adm. Inman and himself. Mr. Blankenship updated the board of directors of Massey on continued discussions with Company A regarding a potential acquisition of Company A by Massey. Subsequently, the board of directors of Massey decided not to pursue a transaction with Company A primarily due to disagreements over valuation arising out of both the amount of premium to be paid for Company A and the recent appreciation in Company A’s stock.

Adm. Inman then called an executive session of the independent directors that constituted a continuation of the board meeting. In addition to all of the independent directors, constituting a quorum of the board, also present were Mr. Grinnan, Mr. Harvey and a representative from Cravath. The representative from Cravath discussed with the independent directors their fiduciary duties in connection with any potential business combination, potential board processes by which the board of directors of Massey could evaluate Massey’s strategic alternatives and the independent directors’ concerns regarding the risks relating to premature public disclosure. At a continuation of the Massey board meeting, at which a quorum was present, the independent directors of Massey, who constituted a majority of the Massey board of directors and of those directors present, unanimously resolved to establish a strategic alternatives review committee consisting of Adm. Inman, Mr. Gabrys and Mr. Phillips to facilitate the board’s review of Massey’s strategic opportunities and with the power to

 

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(i) establish, oversee and direct a process for the development, evaluation and negotiation of potential strategic transactions, (ii) make recommendations to the board of directors of Massey in respect of strategic transactions and (iii) engage its own advisors. Adm. Inman was selected to serve on the strategic alternatives review committee because of his knowledge and experience gained from his service on the board of directors of Massey since 1985 and his considerable experience in finance and investments. Additionally, he was the lead independent director at the time of his appointment to the strategic alternatives review committee and had previously served on a committee reviewing strategic alternatives from the fall of 2006 to the spring of 2007. Mr. Gabrys was selected to serve on the strategic alternatives review committee because of his knowledge and experience gained from working in public accounting for 42 years, his valuable financial expertise, especially in the areas of public reporting and mergers and acquisitions, and his chairmanship of the finance committee. Mr. Phillips was selected to serve on the strategic alternatives review committee because of his experience in various positions in senior leadership of Massey, his tenure with Massey, his extensive knowledge of Massey and its operations, his extensive experience in investments and banking and his previous service on a committee reviewing strategic alternatives from the fall of 2006 to the spring of 2007. The independent directors and Cravath discussed appropriate processes for evaluating Massey’s strategic alternatives. The independent directors of Massey stated that, if Massey chose to pursue a strategic transaction that would maximize stockholder value, management and Massey’s advisors would need to employ a process that would also maximize the certainty of closing (including with respect to requisite antitrust and stockholder approvals and the availability of financing), while minimizing the risks to Massey’s stockholders of premature public disclosure.

The strategic alternatives review committee held a telephonic meeting on October 14, 2010 to discuss strategic alternatives and the selection of an advisory firm that could assist the committee in assessing the strategic alternatives under consideration by the board of directors of Massey. Adm. Inman requested that Mr. Gabrys and Mr. Phillips conduct interviews with several advisory firms recommended by Cravath. As with non-employee members of other special committees of the board, the non-employee members of the strategic alternatives review committee were compensated $2,000 per meeting that they attended.

On October 18, 2010, the Wall Street Journal published an article stating that Massey was reviewing strategic alternatives.

During October 2010, there were discussions between Mr. Phillips and management of Company C to explore business opportunities, through one or more transactions, involving reserves in Central Appalachia. In the course of these discussions, Company C expressed its initial interest in pursuing a potential business combination with Massey.

During October 2010, following an initial expression of interest from Company C, there were several calls between Mr. Phillips and management of Company C regarding their interest in exploring a potential transaction between Massey and Company C.

During the third and fourth weeks of October 2010, several nationally recognized investment banking firms were interviewed and considered for the role of financial advisor. It was the opinion of the board of directors that it would be in the best interest of Massey’s stockholders for the board of directors of Massey to engage an independent third party financial advisor that had not previously done work for Massey. Each firm interviewed discussed its experience advising independent directors and handling merger and acquisition transactions, and responded to questions.

On October 20, 2010, a telephonic meeting of the public policy committee of the board of directors of Massey was held. In addition to a quorum of the members of the committee, which consisted of Adm. Inman, Robert Foglesong, a director of Massey, Mr. Gabrys, Mr. Moore, Stanley Suboleski, a director of Massey, and Mr. Blankenship, also present were Mr. Phillips, James Crawford, a director of Massey, Linda Welty, a director of Massey, Mr. Grinnan and Mr. Harvey. The members of the board discussed whether to acknowledge that Massey was conducting a broad review of its strategic options in connection with its annual strategic review

 

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process. Several members of the board expressed the view that Massey’s reserves were not fully valued at Massey’s current stock price.

On October 24, 2010, the strategic alternatives review committee met to discuss selection of an independent financial advisor. In addition to all of the members of such committee, also present was Mr. Grinnan. The strategic alternatives review committee narrowed down the selection of advisory firms to two with a preference for Perella Weinberg Partners LP, which we refer to herein as Perella Weinberg, subject to negotiating acceptable terms.

On October 26, 2010, Mr. Phillips, on behalf of the strategic alternatives review committee, and Perella Weinberg reached agreement upon the terms under which Perella Weinberg would be engaged as the strategic alternative review committee’s financial advisor.

On October 26, 2010, Massey issued its third quarter 2010 earnings press release. For third quarter 2010, Massey reported a net loss of $41.4 million. On October 27, 2010, Massey held its third quarter 2010 earnings conference call, in which Mr. Blankenship stated that Massey’s board of directors was currently evaluating strategic options and confirmed that Massey was considering takeover bids.

On October 27, 2010, the strategic alternatives review committee met to discuss Massey’s strategic alternatives. In addition to all of the members of the committee, also present were Mr. Grinnan and representatives from Perella Weinberg. Those present discussed the nature of Perella Weinberg’s engagement and various strategic alternatives, including, in addition to those currently under consideration, a capital reorganization of Massey. The strategic alternatives review committee decided to meet with Alpha on November 2, 2010.

On November 1, 2010, the board of directors of Massey formally engaged Perella Weinberg to assist the strategic alternatives review committee in its work, to act as financial advisor to the committee and to advise and report to the board of directors regarding Massey’s strategic alternatives.

On November 1, 2010, the strategic alternatives review committee met and asked Perella Weinberg to solicit from Alpha, Company B and Company C written proposals for a potential business combination that addressed all material terms, including price, certainty, timing, employee retention, financing and the strategic rationale for the combination. In addition to soliciting written proposals from Alpha, Company B and Company C, Perella Weinberg was advised that the strategic alternatives review committee was open to receiving and considering expressions of interest from any and all parties that contacted Perella Weinberg regarding a potential business combination with Massey. In that regard, Perella Weinberg was instructed to report any such expressions of interest to the strategic alternatives review committee. The strategic alternatives review committee asked Massey’s management, Cravath and Perella Weinberg to provide them with regular updates on the process. Throughout the remainder of the process, the strategic alternatives review committee oversaw key elements of the process, including due diligence review and negotiation of material terms, and reviewed prospective financial information prepared by Massey’s management that was also provided to Perella Weinberg.

On November 2, 2010, the strategic alternatives review committee, Mr. Grinnan and representatives of Perella Weinberg met with Alpha to discuss Alpha’s proposal. Representing Alpha were Mr. Crutchfield, Mr. Eisenberg, Mr. Groves and a representative from Morgan Stanley. Representing Massey were Adm. Inman, Mr. Phillips, Mr. Gabrys, Mr. Grinnan and representatives from Perella Weinberg. Alpha made a presentation explaining why a combination of the two companies was a compelling strategic combination that would create a global industry leader with over 1.5 billion tons of metallurgical coal reserves and a diversified portfolio of low-cost steam coal reserves, offer the opportunity for significant synergies and value creation for stockholders of both companies, provide a diversified platform for potential future growth and create a combined company with a market capitalization in excess of $10 billion and a net debt/EBITDA ratio of approximately 0.8x. At the end of

 

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the presentation, Alpha requested that Massey provide Alpha with a response to its proposal and proposed a detailed timeline for the parties to negotiate a business combination. Adm. Inman indicated that the board of directors of Massey was engaged in a process to review the strategic alternatives available to Massey, including the Alpha proposal and Massey’s continued operations as a stand-alone company, in a manner consistent with the directors’ fiduciary duties to Massey’s stockholders. After the meeting, the strategic alternatives review committee and Mr. Grinnan met with representatives of Perella Weinberg to discuss the path forward.

On November 4, 2010, the board of directors of Massey participated in a special telephonic meeting to discuss Massey’s strategic alternatives. In addition to all of the members of the Massey board of directors, also present were Mr. Grinnan and representatives from Cravath and Perella Weinberg. The board of directors of

Massey and representatives from Cravath discussed the fiduciary obligations of Massey’s management and directors in connection with Massey’s review of its strategic alternatives. Adm. Inman provided the board of directors of Massey with an update regarding the work of the strategic alternatives review committee, including discussions regarding the most recent meeting with Alpha, the process by which Massey was evaluating Alpha’s offer and overtures made by Company B and Company C. The board of directors of Massey discussed various matters related to the strategic alternatives available to Massey, including the impact of such overtures on the strategic review process. The board of directors of Massey also discussed with Cravath methods to minimize potential harm arising from disclosure of sensitive information to potential acquirors. The board of directors of Massey directed management and Massey’s advisors to continue exploring the strategic alternatives discussed.

On November 10, 2010, in response to expressions of interest from Company C, Mr. Phillips met with a representative of Company C to discuss a potential business combination between Company C and Massey.

On November 12, 2010, the strategic alternatives review committee held a telephonic meeting in which Mr. Grinnan and representatives from Perella Weinberg also participated to discuss process and action plans with respect to potential proposals.

On November 16, 2010, Mr. Phillips received an indication of interest letter from an executive of Company C indicating an interest in pursuing a strategic combination with Massey. On November 17, 2010, Mr. Phillips responded to such executive indicating that Company C’s expression of interest would be evaluated and Massey would get back to Company C.

On November 17, 2010, the Alpha board of directors met to discuss the latest developments with respect to a potential business combination with Massey. At this meeting, the Alpha board of directors discussed its pursuit of Massey and reviewed certain financial information of Alpha and Massey in respect of a potential transaction between Alpha and Massey. Representatives of Morgan Stanley reviewed certain financial information of Alpha and Massey in respect of a potential transaction between Alpha and Massey. The Alpha board of directors also discussed the possibility and potential process for submitting a proposal directly to Massey stockholders.

On November 18, 2010, the strategic alternatives review committee held a telephonic meeting in which Mr. Grinnan and representatives from Perella Weinberg also participated to review materials being prepared for Massey’s upcoming strategic planning meeting to be held at the November 21-23, 2010 fourth quarter board and committee meetings of Massey’s board of directors.

Also, on November 18, 2010, Mr. Crutchfield received a telephone call from Company B to inquire whether Alpha would be interested in exploring a joint acquisition offer for Massey.

From November 21 to November 23, 2010, the board of directors of Massey held its regularly scheduled fourth quarter board and committee meetings, which included its annual strategic planning meeting. At the strategic planning meeting, in addition to all of the members of the Massey board of directors, also present were Mr. Grinnan and representatives from Cravath and Perella Weinberg. The representative from Cravath discussed with directors and management their fiduciary duties in connection with any potential business combination.

 

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Mr. Blankenship then provided the board of directors, Mr. Grinnan and certain other members of senior management with an overview of Massey’s strategic five year plan. The board of directors of Massey discussed the plan as well as other strategic alternatives available to Massey. The Massey board of directors, Mr. Grinnan and a representative from Cravath heard a presentation from Perella Weinberg on strategic alternatives then being considered by the strategic alternatives review committee. The process of exploring and reviewing strategic alternatives was then discussed by the Massey board of directors. The current status of various strategic alternatives was also discussed. Although the board of directors of Massey continued to review potential business combinations, discussions with Company A had ended on or around October 12, 2010 because of a disagreement over valuation and no other acquisitions of a public company were considered. The board of directors of Massey had also reviewed certain privately held reserves within Massey’s geographical area of operation but viewed the reserves as overpriced or otherwise not of strategic value at that time and, therefore, did not pursue such opportunities. The board of directors of Massey also discussed a potential capital reorganization of Massey and determined that it would not create sufficient value for stockholders to warrant further consideration.

On November 22, 2010, in response to market speculation, Massey announced that its board of directors had formed the strategic alternatives review committee, directed the strategic alternatives review committee and the company’s management to engage in a formal review of strategic alternatives to enhance stockholder value and retained Cravath and Perella Weinberg to advise with respect to the strategic review.

On November 23, 2010, on behalf of the strategic alternatives review committee, Mr. Phillips spoke with representatives of Perella Weinberg by telephone to review next steps, which included reaching out to Company B and Company C, as well as Company D, which had recently contacted representatives of Perella Weinberg to express interest in a potential business combination with Massey. After contacting Company D, Perella Weinberg reported back to the strategic alternatives review committee that Company D was not interested in pursuing a transaction for the entire company.

Also on November 23, 2010, Mr. Crutchfield spoke by telephone with representatives of Company B regarding a potential investment by Company B in Alpha to facilitate an acquisition by Alpha of Massey. Company B suggested a possible transaction that might include a contribution of various assets of Company B and, potentially, cash to Alpha in exchange for Alpha common stock, together with execution of a long-term commercial agreement.

On November 26, 2010, Mr. Phillips spoke with a representative of Company B to discuss a potential offer from Company B regarding a business combination between Company B and Massey.

On November 29, 2010, Cravath circulated a draft confidentiality and standstill agreement to Alpha, Company B and Company C.

On November 30, 2010, Massey and Company C executed a confidentiality and standstill agreement. Also on November 30, 2010, representatives of Morgan Stanley and Perella Weinberg spoke by telephone about the confidentiality and standstill agreement. Morgan Stanley indicated to Perella Weinberg that Alpha remained unwilling to enter into a confidentiality and standstill agreement of any significant duration until there was an indication that there might be an actionable transaction for the parties to pursue.

During the last week of November, representatives of Perella Weinberg met with representatives of Company B, who continued to express an interest in pursuing a business combination with Massey. The Company B representatives indicated Company B was still considering whether to sign a confidentiality and standstill agreement.

On December 1, 2010, representatives of Morgan Stanley and Perella Weinberg spoke by telephone. Perella Weinberg informed Morgan Stanley that Massey would be receiving bids from interested parties participating in its formal process on December 10, 2010 and invited Alpha to also submit a bid on that date.

 

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Also on December 1, 2010, Mr. Phillips met with executives of Company C to further discuss a potential business combination. In addition, representatives of Massey management met with representatives of Company C regarding the due diligence process, noting that, in addition to receiving the best price for Massey’s stockholders, Massey’s board of directors was focused on deal certainty in any potential business combination.

Throughout December 2010, Cravath worked with the strategic alternatives review committee and management on an initial draft of the merger agreement. The strategic alternatives review committee focused, among other things, on deal certainty, including a termination fee to be paid by potential bidders in the event that their stockholders do not approve a potential business combination, the scope of the non-solicitation provision (and whether there would be a “go-shop” provision), a “fiduciary out” provision that allowed the board of directors of Massey sufficient ability to explore and accept a superior bid, changes in consideration value between signing and closing, potential governance arrangements and the symmetry of certain provisions.

During the summer and fall of 2010, Mr. Blankenship had informal discussions with certain members of Massey’s board of directors as he contemplated retiring, having served as Chairman of the Board and Chief Executive Officer of Massey for over a decade. During this same time frame, as Massey’s board of directors took into consideration the environment in which Massey found itself and as it reflected upon Massey’s future prospects as a stand alone company, the board of directors assessed whether Mr. Blankenship as Chairman of the Board and Chief Executive Officer provided the most viable option for Massey going forward. In connection with these discussions, Mr. Blankenship elected to submit his resignation to Massey’s board of directors.

On December 3, 2010, the board of directors participated in a special telephonic meeting to discuss the resignation and subsequent retirement of Mr. Blankenship and to discuss strategic alternatives. In addition to a quorum of the members of the board of directors of Massey, which consisted of Mr. Crawford, Mr. Foglesong, Mr. Gabrys, Mr. Holland, Adm. Inman, Mr. Moore, Mr. Phillips, Mr. Suboleski and Ms. Welty, also present were Mr. Grinnan, Mr. Harvey and representatives from Cravath. Adm. Inman conveyed to the rest of the board of directors of Massey that Mr. Blankenship had offered to tender his resignation as Chairman of the board of directors of Massey and as Massey’s Chief Executive Officer. The board of directors of Massey and representatives from Cravath discussed the terms of Mr. Blankenship’s retirement agreement, which had previously been discussed and approved for recommendation to the board of directors by the compensation committee, and it was unanimously approved. The board of directors of Massey accepted Mr. Blankenship’s resignation as Chairman of Massey’s board of directors and Massey’s Chief Executive Officer, effective immediately, though he remained an employee of Massey through December 31, 2010, at which point he retired. Mr. Phillips was appointed Chief Executive Officer of Massey effective immediately, and Adm. Inman was appointed Non-Executive Chairman of the board of directors of Massey effective immediately. Mr. Phillips provided the board of directors of Massey with an update regarding the work of the strategic alternatives review committee, including Mr. Phillips’ most recent meeting with Company C, the most recent meeting between representatives of Perella Weinberg and Company B and the status of negotiations with Alpha, Company B and Company C regarding confidentiality and standstill agreements.

Later on December 3, 2010, Mr. Crutchfield received a telephone call from Adm. Inman. Adm. Inman advised Mr. Crutchfield that Mr. Blankenship had resigned as Chief Executive Officer and Chairman of the board of directors of Massey, that Mr. Phillips had been promoted to Chief Executive Officer and that Adm. Inman had become the Non-Executive Chairman of the Board. Adm. Inman also stated that Perella Weinberg had advised the Massey board of directors that the valuation implied by the exchange ratio previously proposed by Alpha was below Perella Weinberg’s valuation of the company on a stand-alone basis. Adm. Inman also mentioned that the Massey board of directors would meet on December 20, 2010 to review the proposals that Massey received.

Also on December 3, 2010, Perella Weinberg e-mailed each of Alpha, Company B and Company C requesting initial proposals for a business combination with Massey and describing the process for submission of the proposals.

 

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On December 7, 2010, the strategic alternatives review committee held a telephonic meeting regarding the status of ongoing discussions with respect to strategic alternatives. In addition to all of the members of the strategic alternatives review committee, also present were Mr. Grinnan and representatives from Perella Weinberg. Perella Weinberg updated the committee on the status of discussions with potential counterparties. The strategic alternatives review committee instructed Perella Weinberg to continue to engage potential counterparties in discussions and to solicit additional proposals from these counterparties.

On December 10, 2010, Company C submitted its initial non-binding proposal. Company C proposed an acquisition of Massey that contemplated, among other things, a price of $70.00 per Massey share, to be paid approximately 31% in cash and 69% in Company C stock based on the Company C stock price on such date. Based on the December 10, 2010 closing price of Massey common stock of $51.98, Company C’s proposal represented a premium of 35%.

Also on December 10, 2010, in anticipation of submitting an offer to Massey, Mr. Crutchfield telephoned Mr. Phillips, and when he could not reach him, telephoned Adm. Inman to advise him of the submission that Alpha would be making. Adm. Inman advised Mr. Crutchfield that Massey had already received an offer from another party with a stated value materially above the valuation that Alpha had previously proposed. As he had done in prior conversations with Mr. Crutchfield, Adm. Inman again encouraged Mr. Crutchfield to remain in the sale process and gave Mr. Crutchfield assurances regarding the seriousness and legitimacy of the process being run by the Massey board and urged him to improve Alpha’s offer.

On December 11, 2010, Alpha submitted another non-binding proposal. Alpha proposed acquiring Massey for 1.05 shares of Alpha common stock and $5.00 in cash per share of Massey common stock and emphasized the substantial opportunities for synergies in a combination of the two companies. Based on the December 10, 2010 closing price of Alpha stock of $52.87, the Alpha proposal represented a bid of $60.51 per share of Massey common stock. Based on the December 10, 2010 closing price of Massey common stock of $51.98, the Alpha proposal represented a premium of 16%.

Also on December 11, 2010, Alpha and Company B executed a confidentiality and standstill agreement, which provided that Company B would not separately pursue a business combination transaction with Massey if Alpha and Company B were able to agree on the terms of a joint proposal to acquire Massey.

On December 14, 2010, the strategic alternatives review committee held a telephonic meeting to discuss the initial bids. In addition to all of the members of the strategic alternatives review committee, also present were Mr. Grinnan, representatives from Perella Weinberg and representatives from Cravath. The strategic alternatives review committee reviewed a presentation on the existing bids prepared by Perella Weinberg. The committee noted that it would brief the board of directors of Massey on the presentation and the bids at a full meeting of the board of directors of Massey scheduled for December 20, 2010. Those present discussed the terms of the bids, including price, certainty, timing, financing and the strategic rationale for the combination. Perella Weinberg and the strategic alternatives review committee considered Massey management’s assessment that realizable synergies from a combination with Alpha were likely to be greater than those from a combination with Company C. Massey’s management based this assessment on a review of its own internal estimates and information provided by both Alpha and Company C. Alpha’s estimate of synergies was more detailed and more consistent with the estimates of Massey’s management than Company C’s estimate. In particular, Company C estimated a larger reduction in selling, general and administrative expenses than Alpha and Massey’s management. Additionally, Massey’s management noted that a business combination with Alpha provided for more operational and purchasing synergies than a combination with Company C, including a greater ability to blend coal into higher priced products. The strategic alternatives review committee reiterated its focus on deal certainty, a “fiduciary out” provision for a superior bid, potential changes in consideration value between signing and closing and symmetry of certain provisions in the merger agreement. The strategic alternatives review committee also instructed management and Perella Weinberg to continue to evaluate the strategic rationale of the potential business combinations, the potential synergies with respect to such potential business combinations and Massey’s prospects as a stand-alone entity.

 

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On December 15, 2010, representatives of Perella Weinberg and Morgan Stanley spoke by telephone. Perella Weinberg reported on the decisions of the strategic alternatives review committee, including its planned timing, involving a meeting on December 20, 2010 and a three to four week process thereafter involving reciprocal due diligence, negotiation of a definitive merger agreement and submission of best and final bids by potential bidders. Morgan Stanley inquired as to whether Massey would be willing to forgo such an extended process if Alpha were prepared to sign a definitive merger agreement within five days. Perella Weinberg responded that Massey would not be willing to do so.

On December 16, 2010, the Alpha board of directors discussed the December 15 response from Massey.

On December 17, 2010, representatives of Alpha and Company B, together with their respective advisors, again met to discuss the basic terms of a possible investment in Alpha by Company B, to facilitate an acquisition by Alpha of Massey. After the December 17 call and into early January 2011, Alpha and Company B had additional discussions regarding such a transaction but it ultimately became clear that the parties could not reach agreement on the material terms of the transaction. On or about January 2, 2011, these discussions ceased without triggering the conditional prohibition under the parties’ confidentiality and standstill agreement that Company B not separately pursue a business combination transaction with Massey.

On December 20, 2010, the board of directors of Massey held a meeting to review Massey’s stand-alone plan and to discuss the recent proposals. In addition to all of the members of the Massey board of directors, also present were Mr. Grinnan, certain members of senior management, representatives from Perella Weinberg, representatives from Cravath and a consultant for Massey. The board of directors of Massey and representatives from Cravath discussed the fiduciary obligations of Massey’s management and directors in connection with strategic opportunities and the due diligence process. Representatives from Perella Weinberg made a presentation regarding the terms of the proposals from Alpha and Company C and advised that the financial terms of the proposals were worth exploring further. Those present discussed the terms of the bids, including price, certainty, timing, financing and the strategic rationale for the combination. It was noted by management of Massey that, although the stated value of Company C’s bid was higher than the stated value of Alpha’s bid, realizable synergies from a combination with Alpha were likely to be greater than those from a combination with Company C based on an analysis of coal production, coal reserves, operations and other business information. The board of directors of Massey had a discussion regarding certain key terms of a potential deal, including deal certainty, a “fiduciary out” provision for a superior bid, potential changes in consideration value between signing and closing and symmetry of certain provisions in the merger agreement. In response to a question from a director, Cravath advised the board of directors that it was unclear whether a business combination would affect any of Massey’s pending derivative claims and that the board should assume that the derivative claims would survive the proposed business combination. Cravath also advised the board of directors of Massey that it should not consider the pending derivative claims in any decision regarding any potential business combination. Members of senior management and Massey’s consultant made presentations on budget and forecasts for Massey performance as a stand-alone company. The board of directors of Massey decided that the proposals from both Alpha and Company C should be considered in comparison to Massey’s stand-alone prospects. The board of directors of Massey agreed that the proposals warranted further exploration and directed management and Massey’s financial advisors to continue discussions with respect to such proposals.

During the December 20, 2010 meeting of the board of directors of Massey, an initial non-binding proposal from Company B was received. Company B proposed acquiring Massey at a price of $55.00 to $60.00 per Massey share, with an unspecified mix of cash and stock.

Immediately following the December 20, 2010 meeting of the board of directors of Massey, Perella Weinberg contacted Morgan Stanley. Perella Weinberg informed Morgan Stanley that Alpha did not have the highest bid and would need to significantly improve its proposal in order to remain competitive in the process. Perella Weinberg also informed Company C’s financial advisors that Massey would begin a diligence process

 

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and they would need to move quickly. Perella Weinberg also informed Company B’s financial advisors that there was a process being run and that to be involved, they would need to execute a confidentiality and standstill agreement.

On December 20, 2010, Alpha provided a list to Massey regarding the due diligence that Alpha wished to perform on Massey, in order for Alpha to ascertain whether Massey would make due diligence information available to Alpha that would warrant Alpha entering into a confidentiality and standstill agreement with Massey.

On December 21, 2010, the strategic alternatives review committee held a special telephonic meeting to discuss how to approach reaching out to the bidders following the board meeting of the prior day and how to best proceed with respect to the due diligence investigation. In addition to all of the members of the strategic alternatives review committee, also present were Mr. Grinnan and representatives from Perella Weinberg and representatives from Cravath. The strategic alternatives review committee and representatives from Cravath discussed the fiduciary obligations of Massey’s management and directors in connection with strategic opportunities and the due diligence process. The strategic alternatives review committee directed Perella Weinberg to inform Alpha’s representatives that Alpha was not currently the lead bidder in the process and to continue discussions with potential bidders.

Also on December 21, 2010, Cleary Gottlieb circulated to Cravath an initial markup to the confidentiality and standstill agreement that contained a substantially shorter standstill period and which standstill would terminate earlier under certain circumstances. The proposed confidentiality and standstill agreement also required Massey to treat Alpha on the same terms as other potential acquirors. Cravath and Cleary Gottlieb engaged in negotiations regarding the confidentiality and standstill agreement.

On December 21, 2010, Company C provided a list to Massey regarding the due diligence that Company C wished to perform on Massey.

From December 23, 2010 through December 28, 2010, Cravath and counsel for Company B engaged in discussions regarding the confidentiality and standstill agreement. However, the confidentiality and standstill agreement was never signed, and Company B did not engage in due diligence.

On January 2, 2011, Perella Weinberg provided a list to Alpha regarding the due diligence that Massey wished to perform on Alpha.

On January 3, 2011, after receiving adequate indications from members of Massey’s senior management and representatives of Perella Weinberg and Cravath as to the seriousness and legitimacy of the Massey process and as to the prospects that there could be an actionable transaction for the parties to pursue, Alpha and Massey entered into a confidentiality agreement that contained a mutually acceptable standstill provision, which standstill would terminate earlier under certain circumstances. The confidentiality agreement also required Massey to treat Alpha on the same terms as other potential acquirors.

On January 3, 2011, Perella Weinberg provided a list to Company C regarding the due diligence that Massey wished to perform on Company C.

Following the delivery of their respective due diligence request lists, each of Massey, Alpha and Company C commenced their respective due diligence investigations, which generally consisted of, among other things, meetings between management and advisors of Alpha and Massey and Company C and Massey, inspections of certain operations of each company and the exchange of numerous documents and other information between the management and advisors of Alpha and Massey and Company C and Massey. Each party’s due diligence investigation continued throughout the period leading to the execution of the merger agreement. Throughout the due diligence investigation, Massey’s management team and advisors provided regular updates to Massey’s board of directors and the strategic alternatives review committee.

 

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On January 4, 2011, Company C made a presentation on their proposal to the strategic alternatives review committee, Mr. Grinnan, a consultant for Massey and Perella Weinberg.

On January 5, 2011, the strategic alternatives review committee met, along with Mr. Grinnan, representatives from Perella and a representative from Cravath. Adm. Inman indicated that he received a call from an executive from Company C, who indicated that Company C was prepared to pay a significant premium for Massey and was able to move at a rapid pace to complete due diligence and submit a best and final offer.

On January 6, 2011, Alpha and Company C each submitted lists to Massey regarding additional due diligence that they wished to perform on Massey.

On January 10, 2011, Cravath circulated an initial draft of a proposed merger agreement to both Alpha and Company C. In addition, Alpha management, accompanied by Morgan Stanley, made a presentation to the management of Massey, accompanied by Perella Weinberg, on Alpha and the strategic benefits of a combination of Alpha and Massey. Massey management in turn made a due diligence presentation to Alpha management and the parties discussed the process for further due diligence.

On January 11, 2011, Company B indicated to Perella Weinberg that it may be potentially interested in a potential business combination; however, it did not propose a price or follow up on this general indication of interest in continued discussions subsequent to that date.

On January 11, 2011, an executive of Company C sent Adm. Inman a letter stating that, due to scheduling conflicts, it would be difficult for Company C to meet Massey’s request for revised proposals by January 24, 2011.

On January 12, 2011, Mr. Phillips and Mr. Crutchfield met for dinner and discussed the potential transaction between Massey and Alpha. During the course of dinner, Mr. Phillips and Mr. Crutchfield discussed certain significant terms of the merger agreement, including provisions relating to deal certainty.

From January 11, 2010 to January 14, 2010, executives of Massey met with executives of Company C to discuss potential synergies of a potential business combination between Massey and Company C, including marketing and blending various types of coal, operational and transportation considerations and reductions in selling, general and administrative expenses. Massey’s management concluded that its own estimate of synergies was lower than Company C’s estimate.

During the second and third weeks of January 2011, Massey representatives met with representatives of Alpha to discuss sharing certain competitively sensitive information through a clean room process whereby only certain individuals and representatives would be given access to such materials. In furtherance of this, Cleary Gottlieb distributed a draft agreement outlining the parameters of this process on January 13, 2011 and, following negotiations and discussions between Cleary Gottlieb and Cravath, Alpha and Massey signed the clean room agreement on January 14, 2011. Thereafter the parties conducted due diligence of this information in accordance with the terms of the clean room agreement.

On January 13, 2011, Massey received an indication of interest from Company E regarding a potential transaction; however it was determined after further communication that Company E was not interested in pursuing a transaction for the entire company.

On January 14, 2011, the board of directors of Massey held a meeting to discuss the status of the strategic review process. In addition to all of the members of the Massey board of directors, also present were Mr. Grinnan, Mr. Harvey, several other members of Massey management, representatives from Perella Weinberg and representatives from Cravath. The board of directors of Massey and representatives from Cravath discussed the fiduciary obligations of Massey’s management and directors in connection with Massey’s strategic

 

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alternatives. Representatives of Perella Weinberg gave an informational presentation summarizing (i) certain publicly available information on the coal industry in general, (ii) stand-alone prospects for Massey, Alpha and Company C and (iii) the qualitative and quantitative merits of potential combinations of Massey with both Alpha and Company C, including an analysis of synergies. A discussion ensued regarding the quality of the assets of Alpha and Company C. Various members of the board of directors of Massey and representatives of Cravath and Perella Weinberg discussed the importance of deal certainty, including the ability of each entity to close a merger, and compared the relative risks of the existing proposals, including the ability and likelihood of each entity to operate the combined entity effectively, realize synergies and achieve their respective financial projections of cost savings. A discussion ensued regarding a comparison of the possible synergies with each of Alpha and Company C, and those present took note of management’s assessment that realizable synergies, based on their operations, products and reserves, from a combination with Alpha were likely to be greater than those from a combination with Company C. Those present discussed the potential terms of a potential business combination, including tax treatment, deal certainty, antitrust matters, form of consideration and risk of value fluctuations between signing and closing. The board of directors of Massey also discussed Company C’s request in their January 11, 2011 letter to extend the deadline for submission of a revised proposal and determined that delaying the process would not be in the best interests of Massey’s stockholders. The board of directors of Massey also discussed other strategic alternatives, including the possibility of placing certain reserves in a special purpose vehicle to be taken public in an effort to realize value and establish a baseline of value for the remaining reserves. The Massey board of directors, however, continued to focus on conventional strategic alternatives that had been analyzed throughout the strategic review process. Having received no additional contact from Company B, the board of directors focused its review of strategic alternatives on a potential business combination with Alpha and Company C or remaining a stand-alone entity, which included focusing on one or more joint ventures to realize value and establish a baseline of the remaining reserves. The board of directors of Massey directed management and Perella Weinberg to solicit best and final offers from Alpha and Company C by January 24, 2011 to compare to Massey’s stand-alone plan.

Subsequent to the meeting, Perella Weinberg discussed submission of best and final offers to Massey by January 24, 2011 with Alpha and Company C.

On January 14, 2011, Adm. Inman sent Company C a letter stating that Massey was working with multiple parties and unable to change the timetable for Company C and remained committed to working with Company C to explore a potential business combination on the proposed schedule.

On January 17, 2011, Cleary Gottlieb and counsel for Company C each circulated an initial markup of the proposed merger agreement. The markups included comments on, among other things, deal certainty, the “fiduciary out” provision, changes in consideration value between signing and closing, potential governance arrangements and the symmetry of certain provisions. In addition, Massey entered into joint defense agreements with each of Alpha and Company C. Also on January 17, 2011, Massey management made a due diligence presentation to Alpha.

At various times between January 17, 2011 and January 28, 2011, members of Massey management and members of the strategic alternatives review committee discussed the markups to the merger agreement with Cravath. Among other key terms, they focused on tax treatment, deal certainty, symmetry, form of consideration and governance.

At various times between January 17, 2011 and January 19, 2011, executives of Massey made site visits to the operations of Alpha and Company C in connection with their due diligence investigations.

On January 19, 2011, Cravath circulated revised markups of the proposed merger agreement to both Alpha and Company C.

On January 19 and January 20, 2011 Mr. Phillips and Mr. Crutchfield met to discuss various points raised by Alpha in its markup to the merger agreement. They discussed, among other things deal certainty, form of consideration, governance and the symmetry of certain provisions.

 

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On January 20, 2011, Cravath circulated a markup of the proposed merger agreement to Alpha, reflecting the discussion between Mr. Phillips and Mr. Crutchfield.

Also, on January 20, 2011, management of Massey made a presentation to executives of Company C as part of the due diligence process, regarding synergies arising from a potential business combination and other operational matters relating to a potential business combination.

In addition, on January 20, 2011, Alpha executed a written agreement regarding Morgan Stanley’s engagement to act as its financial advisor in connection with a potential Massey transaction.

On January 21, 2011, the board of directors of Alpha met to consider the proposed transaction with Massey. In addition to the members of the Alpha board of directors, also present were certain members of senior management of Alpha, representatives from Cleary Gottlieb and representatives from Morgan Stanley. Representatives of Alpha’s senior management reviewed with the board, the terms of the financing commitments currently being negotiated for the transaction, the terms of the proposed merger agreement with Massey and the results of the due diligence investigation of Massey to date. Representatives of Morgan Stanley discussed with the board of directors certain financial metrics relating to the proposed transaction, as well as valuation analysis. Representatives of Cleary Gottlieb reviewed with Alpha’s board of directors its fiduciary duties in relation to the potential transaction. The Alpha board of directors authorized management to continue negotiations with Massey.

On January 24, 2011, Alpha submitted a revised proposal. Alpha proposed 0.9707 shares of Alpha common stock and $10.00 in cash per share of Massey common stock and emphasized the substantial opportunities for synergies in a combination of the two companies. Based on the January 24, 2011 closing price of Alpha common stock of $56.66, the Alpha proposal represented a bid of $65.00 per share of Massey common stock. Based on the January 24, 2011 closing price of Massey common stock of $54.13, the Alpha proposal represented a premium of 20%. With its revised proposal, Alpha also submitted a revised markup to the proposed merger agreement.

On January 24, 2011, Company C submitted a revised markup to the proposed merger agreement but indicated it was still working on its revised best and final offer.

From January 25, 2011 through January 27, 2011 Alpha, Massey and their respective representatives continued to negotiate and circulated numerous drafts of the merger agreement and other transaction documents. During this period, representatives of Massey and Cravath reiterated to Alpha and Cleary Gottlieb the importance of transaction certainty and the payment of a termination fee to Massey in the event that the merger agreement is terminated because Alpha’s stockholder approval is not obtained, and the parties agreed to such termination fee.

Late on January 26, 2011, Company C submitted a revised proposal that it characterized as its “best and final” offer. Company C proposed, among other things, a price of $55.00, to be paid approximately 18% in cash and 82% in stock based on the Company C stock price on such date. On January 26, 2011, the closing price of Massey’s stock was $55.26.

On January 27, 2011, the board of directors of Massey met to consider the proposals. In addition to all of the members of the Massey board of directors, also present were Mr. Grinnan, certain members of senior management of Massey, representatives from Perella Weinberg and representatives from Cravath. Representatives of Cravath reviewed with Massey’s board of directors its fiduciary duties in relation to the potential business combinations. Management of Massey as well as representatives from Cravath presented the final results of their respective due diligence investigations with respect to Alpha and Company C. Representatives from Cravath made a presentation to the board of directors of Massey comparing the then current terms of the proposed merger agreements with Alpha and Company C. Representatives from Perella Weinberg

 

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discussed the economic terms of the proposals from Alpha and Company C. After extensive discussion, the board of directors of Massey concluded that Alpha’s proposal was superior to that of Company C and that any decision was between Alpha’s proposal and Massey’s prospects as a stand-alone company. The Massey board of directors based this conclusion on the fact that: (i) Company C’s bid was lower than Alpha’s, (ii) realizable synergies were likely to be greater with Alpha than with Company C and (iii) there was less certainty in Company C’s ability to close the transaction, operate the combined entity effectively, realize synergies and achieve their respective financial projections of cost savings. The board of directors of Massey did not request an additional bid from Company C because it had requested Company C’s best and final offer, that bid had been inferior to Alpha’s and the Massey board of directors believed that Company C would not be willing or able to submit a bid comparable to Alpha’s. Representatives of Perella Weinberg presented Perella Weinberg’s financial analysis of the Alpha proposal. Because the Massey board of directors determined that the latest proposal from Company C was inferior to the Alpha proposal, the primary focus of Perella Weinberg’s presentation was on the Alpha proposal. As part of its presentation, Perella Weinberg also presented analyses focusing on Massey as a stand-alone company. The board of directors discussed and considered the many factors that supported the stand-alone case, including, Massey’s vast reserve base, Massey’s current permitted reserves and development potential, Massey’s infrastructure and state of the art equipment, Massey’s unique position in Central Appalachia as a supplier to both domestic utilities and domestic and international metallurgical customers and Massey’s experienced and well -qualified management team. The board also discussed and considered the many risks of the stand-alone case, including the difficult regulatory environment Massey would likely continue to face as a stand-alone company and the challenges of executing Massey’s stand-alone plan. Adm. Inman then asked each director for his or her view on the potential business combination with Alpha in comparison to Massey’s prospects as a stand-alone entity. The board of directors raised many factors that supported Alpha’s offer, including synergies, the strategic nature of the transaction, the value to be received by holders of Massey common stock, the opportunity for Massey stockholders to participate in the growth and opportunities of the combined company, the advantages that the combined entity would have over Massey as a stand-alone company, the belief that the terms of the merger agreement, taken as a whole, provide a significant degree of closing certainty and the fact that Alpha will owe Massey a termination fee under specified circumstances. The board of directors also discussed and considered the risks of Alpha’s offer, including the fact that the merger might not be completed in a timely manner or at all, the risks and contingencies relating to the announcement and pendency of the merger, the risks and costs to Massey if the merger does not close timely or at all, the risk of diverting management focus, employee attention and resources from other strategic opportunities and from operational matters while working to complete the merger and the challenges of combining the businesses, operations and workforces of Massey and Alpha and realizing the anticipated cost savings and synergies. After each director stated his or her view with respect to the advantages and disadvantages of each of Alpha’s offer and Massey’s prospects as a stand-alone entity, extensive discussion ensued regarding the terms of a potential business combination with Alpha as well as Massey’s prospects as a stand-alone entity. The board of directors of Massey then authorized Adm. Inman to contact Alpha to negotiate a higher price for Massey and recessed.

Adm. Inman then called Mr. Crutchfield. Adm. Inman proposed to Mr. Crutchfield that Alpha raise its proposal to 1.05 shares of Alpha common stock and $10.00 in cash per share of Massey common stock. Mr. Crutchfield then thanked Adm. Inman for the call and indicated he would respond to him shortly.

After consultation with Mr. Quillen, Alpha’s senior management and Alpha’s financial and legal advisors at Morgan Stanley and Cleary Gottlieb, Mr. Crutchfield called Adm. Inman back and countered with a best and final proposal of 1.025 shares of Alpha common stock and $10.00 in cash per share of Massey common stock; provided that certain significant outstanding issues remaining in the most recent version of the merger agreement be resolved in Alpha’s favor. Based on the January 26, 2011 closing price of Alpha common stock of $57.88, the Alpha proposal represented a bid of $69.33 per share of Massey common stock. Based on the January 26, 2011 closing price of Massey common stock of $55.26, the Alpha proposal represented a premium of 25%.

The meeting of the Massey board of directors was then called back into session, at which point discussion ensued regarding Alpha’s increased offer. After careful consideration and subject to receipt of a customary

 

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fairness opinion from Perella Weinberg, the board of directors of Massey unanimously adopted resolutions (i) approving and declaring advisable the merger agreement, the merger and the other transactions contemplated by the merger agreement, (ii) declaring that it is in the best interests of Massey and Massey’s stockholders that Massey enter into the merger agreement and consummate the merger and the other transactions contemplated by the merger agreement on the terms and subject to the conditions set forth therein, (iii) directing that the adoption of the merger agreement be submitted to a vote at a duly held meeting of Massey’s stockholders and (iv) recommending that Massey’s stockholders adopt the merger agreement.

On January 28, 2011, the board of directors of Alpha met to consider the proposed transaction with Massey. In addition to the members of the Alpha board of directors (other than Joel Richards III, who was absent from the meeting for personal reasons), also present were certain members of senior management of Alpha, representatives from Cleary Gottlieb and representatives from Morgan Stanley. Representatives of Cleary Gottlieb reviewed with Alpha’s board of directors its fiduciary duties in relation to the potential transaction with Massey. Members of Alpha’s senior management, as well as representatives from Cleary Gottlieb presented the final results of their respective due diligence investigations with respect to Massey. Representatives of Morgan Stanley also presented Morgan Stanley’s financial analysis of the proposed transaction with Alpha. Mr. Groves made a presentation to the board of directors of Alpha comparing the then-current terms of the proposed merger agreement to the last draft of the merger agreement discussed with the Alpha board of directors. Representatives of Morgan Stanley then delivered their oral opinion to the Alpha board of directors, subsequently confirmed in writing, to the effect that, as of such date and based on and subject to the assumptions, procedures, factors, qualifications and limitations set forth in the opinion, the merger consideration to be paid by Alpha pursuant to the merger agreement was fair from a financial point of view to Alpha. After careful consideration, all of the Alpha directors present at the meeting (with Mr. Richards being absent due to personal reasons, but having previously and subsequently expressed his support for the merger) unanimously (i) approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, (ii) determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, Alpha and the stockholders of Alpha, respectively, approved an amendment to Alpha’s certificate of incorporation to increase its number of authorized shares of common stock and directed that the amendment to Alpha’s certificate of incorporation and the issuance of Alpha common stock in the merger be submitted to Alpha’s stockholders for approval and (iv) resolved to recommend that Alpha’s stockholders adopt the amendment to Alpha’s certificate of incorporation and approve the issuance of shares of Alpha common stock pursuant to the merger agreement.

On January 28, 2011, Perella Weinberg delivered its opinion in writing, addressed to the Massey board of directors, that, as of that date and based upon and subject to the various assumptions, qualifications and limitations set forth therein, the per share merger consideration, consisting of 1.025 fully paid and non-assessable shares of Alpha common stock and $10.00 in cash, without interest, to be received by the holders of shares of Massey common stock, other than holders of certain excluded shares, was fair, from a financial point of view, to the holders of Massey common stock entitled to receive such merger consideration.

On January 28, 2011, following the receipt of Perella Weinberg’s opinion and the approval of the proposed business combination by both the boards of directors of Massey and Alpha, Cravath, Cleary Gottlieb and members of management of each of Massey and Alpha finalized the documentation for the proposed business combination and, thereafter, the agreement and plan of merger and all other applicable documents were executed and delivered.

On January 29, 2011, Massey and Alpha publicly announced entry into the agreement and plan of merger via a joint press release.

Alpha’s Reasons for the Merger and Recommendation of Alpha’s Board of Directors

At the meeting of the Alpha board of directors on January 28, 2011, after careful consideration, including detailed discussions with Alpha’s management and its legal and financial advisors, all of the directors present at

 

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the meeting (with Joel Richards, III being absent due to personal reasons, but having previously and subsequently expressed his support for the merger) unanimously approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, and determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, Alpha and the stockholders of Alpha, and recommended that the Alpha stockholders vote FOR the approval of the amendment to the certificate of incorporation to increase to 400,000,000 the number of authorized shares of Alpha common stock and FOR the issuance of shares of Alpha common stock pursuant to the merger agreement.

In evaluating the merger, the Alpha board of directors consulted with Alpha’s management, as well as Alpha’s legal and financial advisors and, in reaching a conclusion to approve the merger and related transactions and to recommend that Alpha stockholders approve the amendment of the certificate of incorporation and approve the issuance of shares of Alpha common stock pursuant to the merger agreement, the Alpha board of directors reviewed a significant amount of information and considered a number of factors including:

 

   

its knowledge of Alpha’s business, operations, financial condition, earnings and prospects and of Massey’s business, operations, financial condition, earnings and prospects, taking into account the results of Alpha’s due diligence of Massey;

 

   

its knowledge of the current environment in the mining industry, including economic conditions, the potential for continued consolidation, current financial market conditions and the likely effects of these factors on Alpha’s and Massey’s potential growth, development, productivity and strategic options;

 

   

Alpha’s management’s expectation of annual revenue synergies and cost savings through administrative, sales and operating synergies in excess of $150 million within the second year of operations and management’s expectation of annual cost savings through capital expenditure efficiencies that are expected to exceed $50 million;

 

   

the strategic nature of the acquisition, which would create a company:

 

   

that would be a leading U.S. producer of coal, with approximately 150 mines and combined coal reserves of approximately 5 billion tons, including one of the world’s largest and highest quality metallurgical coal reserve bases;

 

   

well-equipped to respond to economic, regulatory, legislative and other developments affecting the combined company particularly and the coal industry generally and with the highest free cash flow generation of any pureplay U.S. coal company, a responsible balance sheet and significantly enhanced scale with a combined enterprise value of approximately $15 billion as of the time of announcement;

 

   

with increased geographic diversity by virtue of the operations, permitted reserves and available reserve positions in four major coal regions: Central Appalachia, Northern Appalachia, the Powder River Basin and the Illinois Basin; and

 

   

with the prospects for an expanded customer base and product offering to allow for new business relationships and transactions not available to either company on a stand-alone basis;

 

   

information concerning the financial conditions, results of operations, prospects and businesses of Alpha and Massey, including the respective companies’ reserves, production volumes, cash flows from operations, recent performance of common shares and the ratio of Alpha’s stock price to Massey’s stock price over various periods;

 

   

that the exchange ratio would enable Alpha stockholders to own approximately 54% of the outstanding common stock of Alpha following the merger, which would provide Alpha stockholders with greater investment diversification while giving them the opportunity to participate in any future earnings or growth of Alpha and future appreciation in the value of Alpha common stock following the merger should they determine to retain the Alpha common stock following completion of the merger;

 

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that a fixed exchange ratio avoids fluctuations in value caused by near-term market volatility;

 

   

the probability that regulatory approvals for the transaction could be obtained in a timely manner and without a material adverse effect on either party;

 

   

the provisions of the merger agreement that allow Alpha to engage in negotiations with, and provide information to, third parties, under certain circumstances in response to an unsolicited takeover proposal received prior to the Alpha stockholder approval that Alpha’s board of directors determines in good faith, after consultation with outside counsel and financial advisors, constitutes or would reasonably be expected to lead to a transaction that is more favorable to Alpha stockholders than the merger with Massey;

 

   

the provisions of the merger agreement that allow Alpha, under certain circumstances, to terminate the merger agreement prior to its stockholder approval of the merger agreement, in order to enter into an alternative transaction in response to an unsolicited takeover proposal that Alpha’s board of directors determines in good faith, after consultation with outside counsel and financial advisors, is more favorable to Alpha stockholders than the merger with Massey;

 

   

that, subject to certain exceptions, Massey is prohibited from taking certain actions that would be deemed to be a solicitation under the merger agreement, including solicitation, initiation, encouragement of any inquiries or the making of any proposals for certain types of business combination or acquisition of Massey (or entering into any agreements for such business combinations or acquisitions of Massey or any requirement to abandon, terminate or fail to consummate the merger);

 

   

that Massey must pay to Alpha a termination fee of $251 million if the merger agreement is terminated under circumstances specified in the merger agreement, as described in the section entitled “The Merger Agreement — Termination Fees” beginning on page 160;

 

   

the probability that the conditions to completion of the merger would be satisfied prior to the outside date of January 27, 2012;

 

   

the premiums paid by the acquiring entities in comparable mixed cash-and-stock transactions in the recent past; and

 

   

Morgan Stanley’s opinion, dated January 28, 2011, to Alpha’s board as to the fairness from a financial point of view to Alpha, as of the date of the opinion, of the merger consideration to be paid by Alpha pursuant to the merger agreement and the related financial analyses, in each case as more fully described below in “— Opinion of Alpha’s Financial Advisor” beginning on page 92.

The Alpha board of directors also considered the potential adverse impact of other factors weighing negatively against the proposed transaction, including, without limitation, the following:

 

   

the risks and contingencies relating to the announcement and pendency of the merger and the risks and costs to Alpha if the merger does not close timely or does not close at all, including the impact on Alpha’s relationships with employees and with third parties;

 

   

the potential dilution to Alpha stockholders;

 

   

the risk of diverting management focus, employee attention and resources from other strategic opportunities and from operational matters while working to complete the merger and implement merger integration efforts;

 

   

the challenges of combining the businesses, operations and workforces of Massey and Alpha and realizing the anticipated cost savings and operating synergies;

 

   

the outcomes of pending and potential litigation and governmental investigations involving Massey, particularly with regard to the UBB explosion;

 

   

the risk that the parties may incur significant costs and delays resulting from seeking governmental consents and approvals necessary for completion of the merger;

 

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the terms and conditions of the merger agreement, including:

 

   

the restrictions on Alpha’s ability to solicit or participate in discussions or negotiations regarding alternative business combination transactions, subject to specified exceptions;

 

   

the requirement that Alpha provide Massey with an opportunity to propose revisions to the merger agreement prior to being able to terminate the merger agreement to accept a superior proposal;

 

   

that Alpha must pay to Massey a termination fee between $72 million and $360 million if the merger agreement is terminated under circumstances specified in the merger agreement, as described in the section entitled “The Merger Agreement — Termination Fees” beginning on page 160;

 

   

the requirement that Alpha generally conduct its business only in the ordinary course and that Alpha is subject to a variety of other restrictions on the conduct of its business prior to the completion of the merger, any of which may delay or prevent Alpha from pursuing business opportunities that may arise or may delay or preclude Alpha from taking actions that would be advisable if it were to remain an independent company; and

 

   

that, under certain circumstances and subject to certain conditions more fully described in the section entitled “The Merger Agreement — Covenants and Agreements — No Solicitation” beginning on page 147, Massey may furnish information to, and conduct negotiations with, a third party in connection with an unsolicited proposal for a business combination or acquisition of Massey that is likely to lead to a superior proposal and the Massey board of directors can terminate the merger agreement in order to accept a superior proposal or, under certain circumstances, change its recommendation prior to Alpha stockholders’ approval of the merger agreement; and

 

   

the fact that Alpha may incur indebtedness of up to approximately $3.3 billion in connection with the merger, which debt may adversely impact Alpha’s operations following the merger; and

 

   

the risks described in the section entitled “Risk Factors” beginning on page 41.

The Alpha board of directors concluded that the anticipated benefits of the merger would outweigh the preceding considerations.

In addition, the Alpha board of directors was aware of and considered the interests that some of Alpha’s directors and executive officers may have in the transactions contemplated by the merger agreement that may be different from, or in addition to, their interests as stockholders and the interests of Alpha stockholders generally, as described in “— Interests of Alpha Directors and Executive Officers in the Merger” on page 115.

The reasons set forth above are not intended to be exhaustive, but include material facts considered by the Alpha board of directors in approving the merger agreement. In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the Alpha board of directors did not find it useful to and did not attempt to quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination to approve the merger and the merger agreement and to make its recommendations to Alpha stockholders. In addition, individual members of the Alpha board of directors may have given differing weights to different factors. The Alpha board of directors carefully considered all of the factors described above as a whole.

Massey’s Reasons for the Merger and Recommendation of Massey’s Board of Directors

The Massey board of directors and the strategic alternatives review committee believe that the merger agreement and the transactions contemplated thereby, including the merger, are advisable and in the best interests of Massey and its stockholders. Accordingly, the Massey board of directors has approved the merger agreement and the transactions contemplated thereby, and unanimously recommends that Massey stockholders vote FOR adoption of the merger agreement and the transactions contemplated thereby, including the merger.

 

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As described above under “— Background of the Merger,” beginning on page 65, the Massey board of directors, prior to and in reaching its decision at its meeting on January 27, 2011 to approve the merger agreement and the transactions contemplated thereby, consulted with Massey’s management and Massey’s financial and legal advisors and considered a variety of factors weighing positively in favor of the merger, including, but not limited to, the following:

 

   

its knowledge of Massey’s business, operations, financial condition, earnings and prospects and of Alpha’s business, operations, financial condition, earnings and prospects, taking into account the results of Massey’s due diligence of Alpha;

 

   

its knowledge of the current environment in the mining industry, including economic conditions, the potential for continued consolidation, current financial market conditions and the likely effects of these factors on Alpha’s and Massey’s potential growth, development, productivity and strategic options;

 

   

synergies which are expected to exceed an annual run-rate of $150 million within the second year of operations;

 

   

the strategic nature of the acquisition, which would create a company:

 

   

that would be a leading U.S. producer of coal, with approximately 150 mines and combined coal reserves of approximately 5 billion tons, including one of the world’s largest and highest quality metallurgical coal reserve bases;

 

   

well-equipped to respond to economic, regulatory, legislative and other developments affecting the combined company particularly and the coal industry generally, and with the highest free cash flow generation of any pureplay U.S. coal company, a responsible balance sheet and significantly enhanced scale with a combined enterprise value of approximately $15 billion;

 

   

with increased geographic diversity by virtue of the operations, permitted reserves and available reserve positions in four major coal regions: Central Appalachia, Northern Appalachia, the Powder River Basin and the Illinois Basin; and

 

   

with the prospects for an expanded customer base and product offering to allow for new business relationships and transactions not available to either company on a stand-alone basis;

 

   

information concerning the financial conditions, results of operations, prospects and businesses of Massey and Alpha, including the respective companies’ reserves, production volumes, cash flows from operations, recent performance of common shares and the ratio of Alpha’s stock price to Massey’s stock price over various periods;

 

   

the value to be received by holders of Massey common stock in the merger, including the fact that, based on the closing price of Massey common stock and Alpha common stock on January 26, 2011 (the last trading day before the board of directors of Massey resolved to enter into the merger agreement), the merger consideration to be received by Massey’s stockholders represented a premium of approximately 25% over the closing price of Massey common stock on January 26, 2011, 28% over the average closing price of Massey common stock for the 30 trading days ending January 26, 2011 and 95% over the unaffected closing price of Massey common stock on October 18, 2010, the day the Wall Street Journal first reported that Massey was reviewing strategic alternatives;

 

   

the fact that the approximately 15% cash / 85% stock split in the merger consideration to be paid to Massey’s stockholders affords Massey stockholders both the opportunity to participate in the growth and opportunities of the combined company through the stock component and to receive some cash for the value of their shares through the cash component;

 

   

that the exchange ratio would enable Massey stockholders to own approximately 46% of the outstanding common stock of Alpha following the merger, which would provide Massey stockholders

 

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with greater investment diversification while giving them the opportunity to participate in any future earnings or growth of Alpha and future appreciation in the value of Alpha common stock following the merger should they determine to retain the Alpha common stock received in the merger;

 

   

because the stock portion of the merger consideration is a fixed number of shares of Alpha common stock per share of Massey common stock, the opportunity for the Massey stockholders to benefit from any increase in the trading price of Alpha common stock between the announcement of the merger and the completion of the merger;

 

   

the provisions of the merger agreement that allow Massey to engage in negotiations with, and provide information to, third parties, under certain circumstances in response to an unsolicited takeover proposal received prior to Massey stockholder approval of the merger agreement that Massey’s board of directors determines in good faith, after consultation with outside counsel and financial advisors, constitutes or would reasonably be expected to lead to a transaction that is more favorable to Massey stockholders than the merger;

 

   

the provisions of the merger agreement that allow Massey, under certain circumstances, to terminate the merger agreement prior to its stockholder approval of the merger agreement, in order to enter into an alternative transaction in response to an unsolicited takeover proposal that Massey’s board of directors determines in good faith, after consultation with outside counsel and financial advisors, is more favorable to Massey stockholders than the merger;

 

   

that, subject to certain exceptions, Alpha is prohibited from taking certain actions that would be deemed to be a solicitation under the merger agreement, including solicitation, initiation, encouragement of any inquiries or the making of any proposals for certain types of business combination or acquisition of Alpha (or entering into any agreements for such business combinations or acquisitions of Alpha or any requirement to abandon, terminate or fail to consummate the merger);

 

   

the advantages that the combined entity will have over Massey as a stand-alone company, especially in the current uncertain economic environment;

 

   

the likelihood that Massey will continue to face a difficult regulatory environment as a stand-alone company;

 

   

the Massey board of directors’ analysis of other strategic alternatives for Massey, including continued growth as an independent company and the potential to acquire, be acquired or combine with other third parties;

 

   

the fact that on October 18, 2010, the media reported that Massey was considering takeover bids, that on October 26, 2010, Don Blankenship made a public statement during an analyst call confirming that Massey was considering takeover bids and that on November 22, 2010, Massey issued a press release announcing it was reviewing strategic alternatives, each of which gave potential acquirors an opportunity to approach Massey to propose a possible acquisition;

 

   

the fact that the strategic alternatives review committee contacted or communicated, directly or through advisors, with numerous potential purchasers in addition to Alpha to determine whether they would be interested in potentially acquiring Massey and that no other potential purchaser was prepared to make an offer to acquire Massey on terms, including with respect to price, as favorable to Massey and its stockholders as those offered by Alpha;

 

   

the belief that the terms of the merger agreement, taken as a whole, provide a significant degree of certainty that the merger will be completed, including the facts that (i) the conditions required to be satisfied prior to completion of the merger, such as the receipt of both Massey’s and Alpha’s stockholder approvals and antitrust clearance, are expected to be fulfilled, (ii) there are limited conditions to be met for Alpha to obtain financing to fund the cash portion of the merger consideration and Alpha’s obligations to use significant efforts to obtain the proceeds of the financing on the terms and conditions described in the commitment letter received by Alpha from Morgan Stanley and

 

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Citigroup and (iii) there are limited circumstances in which the Alpha Board of Directors may terminate the merger agreement or change or modify its recommendation that its stockholders approve the issuance of Alpha common stock in connection with the merger;

 

   

the fact that upon the termination of the merger agreement under specified circumstances, including, in certain instances, a change in the recommendation of the Alpha Board of Directors, Alpha will owe Massey a cash termination fee of $252 million; upon the termination of the merger agreement due to Alpha’s failure to obtain the required stockholder approval at the Alpha stockholders’ meeting, Alpha will owe Massey a cash termination fee of $72 million; and Alpha is also obligated to pay a cash termination fee of $360 million if the merger agreement is terminated because the merger is not completed on or before January 27, 2012 and on such date, all closing conditions are satisfied but Alpha has not received sufficient financing due to a breach by the lenders; each as more fully described in the section entitled “The Merger Agreement — Termination Fees” beginning on page 160;

 

   

the belief that the terms of the merger agreement, including the parties’ representations, warranties and covenants and the conditions to their respective obligations, are reasonable;

 

   

the fact that a vote of Massey’s stockholders entitled to vote on the merger is required under Delaware law to adopt the merger agreement, and that stockholders who do not vote in favor of the adoption of the merger agreement will have the right to demand appraisal of the fair value of their shares under Delaware law if the merger is approved and consummated;

 

   

the expected qualification of the merger as a “reorganization” within the meaning of Section 368(a) of the Code, which generally allows Massey stockholders to defer the recognition of any gain from the receipt of the share portion of the merger consideration, as described in the section entitled “Material United States Federal Income Tax Consequences” beginning on page 135; and

 

   

the financial analysis of Perella Weinberg presented to the Massey board of directors on January 27, 2011.

In addition to these factors, the Massey board of directors also considered the potential adverse impact of other factors weighing against the merger, including, without limitation, the following:

 

   

the fact that the merger might not be completed in a timely manner or at all, due to a failure of certain conditions, including in particular (i) the difficulty Alpha would have completing the merger if the financing outlined in the commitment letter received by Alpha from Morgan Stanley and Citigroup was not disbursed (ii) the approval by Alpha’s stockholders of the issuance of Alpha common stock in connection with the merger and (iii) the approval of the transaction by antitrust regulatory authorities;

 

   

the risks and contingencies relating to the announcement and pendency of the merger and the risks and costs to Massey if the merger does not close timely or does not close at all, including the impact on Massey’s relationships with employees and with third parties;

 

   

the risk of diverting management focus, employee attention and resources from other strategic opportunities and from operational matters while working to complete the merger and implement merger integration efforts;

 

   

the challenges of combining the businesses, operations and workforces of Massey and Alpha and realizing the anticipated cost savings and operating synergies;

 

   

the risk that the parties may incur significant costs and delays resulting from seeking governmental consents and approvals necessary for completion of the merger;

 

   

the terms and conditions of the merger agreement, including:

 

   

the restrictions on Massey’s ability to solicit or participate in discussions or negotiations regarding alternative business combination transactions, subject to specified exceptions;

 

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the requirement that Massey provide Alpha with an opportunity to propose revisions to the merger agreement prior to being able to terminate the merger agreement to accept a superior proposal;

 

   

that Massey must pay to Alpha a termination fee of $251 million if the merger agreement is terminated under circumstances specified in the merger agreement, as described in the section entitled “The Merger Agreement — Termination Fees” beginning on page 160, which may have the effect of discouraging third parties from proposing a competing business combination transaction;

 

   

the requirement that Massey generally conduct its business only in the ordinary course and that Massey is subject to a variety of other restrictions on the conduct of its business prior to the completion of the merger, any of which may delay or prevent Massey from pursuing business opportunities that may arise or may delay or preclude Massey from taking actions that would be advisable if it were to remain an independent company; and

 

   

that, under certain circumstances and subject to certain conditions more fully described in the section entitled “The Merger Agreement — Covenants and Agreements — No Solicitation” beginning on page 147, Alpha may furnish information to, and conduct negotiations with, a third party in connection with an unsolicited proposal for a business combination or acquisition of Alpha that is likely to lead to a superior proposal and the Alpha board of directors can terminate the merger agreement in order to accept a superior proposal or, under certain circumstances, change its recommendation prior to Massey stockholders’ approval of the merger agreement; and

 

   

because the stock portion of the merger consideration is a fixed number of shares of Alpha common stock per Massey share, the Massey stockholders could be adversely affected by a decrease in the trading price of Alpha common stock after the date of execution of the merger agreement, and the merger agreement does not provide Massey with a price-based termination right or other similar protection for Massey or its stockholders, such as a “collar” with respect to Alpha’s stock price;

 

   

the fact that Massey’s directors and executive officers have interests in the merger that may be different from, or in addition to, those of Massey’s stockholders generally, including those interests that are a result of employment and compensation arrangements with Massey’s executive officers and the manner in which they would be affected by the merger, as described more fully in the section entitled “— Interests of Massey’s Directors and Executive Officers in the Transaction” beginning on page 115;