EXHIBIT 10.1
October 1, 2004
Xx. Xxxxxx X. Xxxx
[address]
Dear Xxxxx:
In order to encourage you to remain in the employ of the Company, this
Agreement sets forth those benefits which the Company will provide to you in the
event your employment with the Company (1) is Terminated without Cause during
the term of this Agreement, or (2) you resign for Good Reason following a Change
in Control of the Company under the circumstances described below.
SECTION A. DEFINITIONS
1. "Agreement" shall mean this letter agreement.
2. "Average Annual Bonus" shall be the highest of (i) the most recent
annual bonus paid to you, (ii) if your date of termination occurs after the end
of the calendar year but prior to the payment of annual bonuses with respect to
the prior year, the amount calculated as payable as your annual bonus pursuant
to the bonus targets approved by the Board of Directors of the Company for such
year compared to the actual performance of the Company for such year; or (iii)
the average annual bonus paid to you in the three full calendar years proceeding
the Date of Termination. If you have not been employed by the Company, for three
full calendar years prior to the Date of Termination, the average annual bonus
for purposes of clause (iii) of this definition shall be a percentage of your
highest annual salary in effect at any time during the term of this Agreement
equal to the average percentage of annual base pay paid as an annual bonus by
all executives of the Company at your Incentive Compensation level in the three
calendar years proceeding the Date of Termination.
3. "Board" shall mean the Company's Board of Directors.
4. "Cause" shall occur hereunder only upon (A) the willful and
continued failure by you substantially to perform your duties with the Company
(other than any such failure resulting from your incapacity due to physical or
mental illness) after a written demand for substantial performance is delivered
to you by the Board which specifically identifies the manner in which the Board
believes that you have not substantially performed your duties, (B) the willful
engaging by you in gross misconduct materially and demonstrably injurious to the
Company including, without limitation, a violation of the Company's Code of
Business Conduct in effect from time to time, or (C) your conviction of or the
entering of a plea of nolo contendere to the commission of a
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felony. For purposes of this paragraph, no act, or failure to act, on your part
shall be considered "willful" unless done, or omitted to be done, by you not in
good faith and without reasonable belief that your action or omission was in the
best interest of the Company. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to you a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters of the entire membership of the Board at a meeting
of the Board called and held for the purpose, among others (after at least 20
days prior notice to you and an opportunity for you, together with your counsel,
to be heard before the Board), of finding that (i) in the good faith opinion of
the Board you failed to perform your duties or engaged in misconduct as set
forth above in subparagraph (A) or (B) of this paragraph, and, if applicable,
that you did not correct such failure or cease such misconduct after being
requested to do so by the Board, or (ii) as set forth in subparagraph (C) of
this paragraph, you have been convicted of or have entered a plea of nolo
contendere to the commission of a felony.
5. "Change in Control" shall be deemed to have occurred if (i) there
shall be consummated (A) any consolidation, merger, or share exchange of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's Common Stock would be converted into
cash, securities or other property, other than a merger of the Company in which
the holders of the Company's Common Stock immediately prior to the merger have
substantially the same proportionate ownership of common stock of the surviving
corporation immediately after the merger, or (B) any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all
or substantially all of the assets of the Company, or (ii) the shareholders of
the Company shall approve any plan or proposal for the liquidation or
dissolution of the Company, or (iii) at any time during a period of two (2)
consecutive years, "Continuing Directors" shall cease for any reason to
constitute at least a majority of the Board. For such purpose, "Continuing
Directors" shall be directors who were in office at the beginning of such two
year period and new directors whose election or nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds of the
Continuing Directors then in office.
6. "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation
Act, as amended.
7. "Common Stock" shall mean the common stock, par value $0.01 per
share, of the Company.
8. "Company" shall mean Arch Coal, Inc. and any successor to its
business and/or assets which executes and delivers the agreement provided for in
Section F, paragraph 1 hereof or which otherwise becomes bound by all the terms
and provisions of this Agreement by operation of law.
9. "Competitive Activity" shall have the meaning as set forth in
Section D, paragraph 4.
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10. "Competitive Operation" shall have the meaning as set forth in
Section D, paragraph 4.
11. "Confidential Information" shall mean information relating to the
Company's, its divisions' and Subsidiaries' and their successors' business
practices and business interests, including, but not limited to, customer and
supplier lists, business forecasts, business and strategic plans, financial and
sales information, information relating to products, process, equipment,
operations, marketing programs, research, or product development, engineering
records, computer systems and software, personnel records or legal records.
12. "Constructive Termination" shall mean your resignation of
employment with the Company after the occurrence of any one of the following
events: (i) a reduction in your base salary or Incentive Compensation level or
participation in any of the benefit plans or compensation plans of the Company
for which you are currently or become eligible during the term of this
Agreement; (ii) a diminution of your position, duties, title, status or
responsibilities during the term of this Agreement; (iii) a failure by the
Company to, in good faith, review the appropriateness of your base salary and
incentive compensation package on at least an annual basis; or (iv) any breach
by the Company of any material provision of this Agreement.
13. "Date Of Termination" shall mean: (A) if this Agreement is
terminated for Disability, thirty (30) days after the Notice of Termination is
given by the Company to you (provided that you shall not have returned to the
performance of your duties on a full-time basis during such thirty (30) day
period), (B) if your employment is terminated for Good Reason by you, the date
specified in the Notice of Termination, and (C) if your employment is Terminated
for any other reason, the date on which a Notice of Termination is received or
delivered by you unless a later date is specified.
14. "Disability" shall occur when: if, as a result of your incapacity
due to physical or mental illness, you shall have been absent from your duties
with the Company for six (6) consecutive months and shall not have returned to
full-time performance of your duties within thirty (30) days after written
notice is given to you by the Company.
15. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
16. "Excise Tax" shall have the meaning as set forth in Section E.
17. "Good Reason" shall mean:
(a) without your express written consent, the assignment to you after a
Change in Control of the Company, of any duties inconsistent with, or a
significant diminution of, your position, duties, responsibilities or
status with the
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Company immediately prior to a Change in Control of the Company, or a
diminution in your titles as in effect immediately prior to a Change in
Control of the Company or any removal of you from, or any failure to
reelect you to, any of such positions;
(b) a reduction by the Company in your base salary in effect
immediately prior to a Change in Control of the Company or a failure by
the Company to increase (within fifteen months of your last increase in
base salary) your base salary after a Change in Control of the Company
in an amount which is substantially similar, on a percentage basis, to
the average percentage increase in base salary for all corporate
officers of the Company during the preceding twelve (12) months;
(c) the failure by the Company to continue in effect any thrift, stock
ownership, pension, life insurance, health, dental and accident or
disability plan in which you are participating or are eligible to
participate at the time of a Change in Control of the Company (or plans
providing you with substantially similar benefits), except as otherwise
required by the terms of such plans as in effect at the time of any
Change in Control of the Company, or the taking of any action by the
Company which would adversely affect your participation in or
materially reduce your benefits under any of such plans or deprive you
of any material fringe benefits enjoyed by you at the time of the
Change in Control of the Company or the failure by the Company to
provide you with the number of paid vacation days to which you are
entitled in accordance with the vacation policies of the Company in
effect at the time of a Change in Control of the Company, unless a
comparable plan is substituted therefor;
(d) the failure by the Company to continue in effect any incentive plan
or arrangement (including without limitation, the Company's incentive
compensation plan, annual bonus and contingent bonus arrangements and
credits and the right to receive performance awards and similar
incentive compensation benefits) in which you are participating at the
time of a Change in Control of the Company (or to substitute and
continue other plans or arrangements providing you with substantially
similar benefits), or a reduction in your Incentive Compensation level
in effect at the time of a Change in Control of the Company except as
otherwise required by the terms of such plans as in effect at the time
of any Change in Control of the Company;
(e) the failure by the Company to continue in effect any plan or
arrangement to receive securities of the Company (including, without
limitation, any plan or arrangement to receive and exercise stock
options, stock appreciation rights, restricted stock or grants thereof
or to acquire stock or other securities of the Company) in which you
are participating at the time of a Change in Control of the Company (or
to substitute and continue plans or arrangements providing you with
substantially similar benefits), except as otherwise required by the
terms of such plans as in effect at the time of any Change in Control
of the Company, or
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the taking of any action by the Company which would adversely affect
your participation in or materially reduce your benefits under any such
plan;
(f) the relocation of the Company's principal executive offices to a
location outside the St. Louis metropolitan area, or the Company's
requiring you to be based anywhere other than at your current location
or at the location of the Company's principal executive or divisional
offices, except for required travel on the Company's business to an
extent substantially consistent with your present business travel
obligations, or, in the event you consent to any such relocation of the
Company's principal executive or divisional offices, the failure by the
Company to pay (or reimburse you for) all reasonable moving expenses
incurred by you relating to a change of your principal residence in
connection with such relocation and to indemnify you against any loss
(defined as the difference between the actual sale price of such
residence and the greater of (a) your aggregate investment in such
residence, or (b) the fair market value of such residence as determined
by a real estate appraiser reasonably satisfactory to both you and the
Company) realized in the sale of your principal residence in connection
with any such change of residence;
(g) any breach by the Company of any material provision of this
Agreement; or
(h) any failure by the Company to obtain the assumption of this
Agreement by any successor or assign of the Company.
18. "Gross-up Payment" shall have the meaning as set forth in Section
E.
19. "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of your employment under the provision so indicated.
20. "Payment" shall have the meaning as set forth in Section E.
21. "Person" shall have the meaning as set forth in Sections 13(d) and
14(d)(2) of the Exchange Act.
22. "Qualifying Termination" shall mean the termination of your
employment after a Change in Control of the Company while this Agreement is in
effect, unless such termination is (a) by reason of your death or Disability,
(b) by the Company for Cause, or (c) by you other than for Good Reason.
23. "Salary Continuation Period" shall have the meaning set forth in
Section C, paragraph 1.
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24. "Significant Stockholder" shall mean any shareholder of the Company
who, immediately prior to the Effective Date, owned more than 5% of the common
stock of the company.
25. "Subsidiary" shall mean any corporation of which more than 20% of
the outstanding capital stock having ordinary voting power to elect a majority
of the board of directors of such corporation (irrespective of whether or not at
the time capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency) is at the
time directly or indirectly owned by the Company, by the Company and one or more
other Subsidiaries, or by one or more other Subsidiaries.
26. "Termination" shall mean the actual or Constructive Termination of
your employment with the Company.
SECTION B. TERM AND BENEFITS
This Agreement shall be in effect for a period of one (1) year from the
date you accept this Agreement and shall automatically renew for successive one
(1) year periods unless terminated by either party by at least one (1) year
advance written notice prior to the commencement of the next succeeding one (1)
year period at which time the Agreement shall terminate at the end of the next
succeeding one (1) year period. During the term of employment hereunder, you
agree to devote your full business time and attention to the business and
affairs of the Company and to use your best efforts, skills and abilities to
promote its interests.
In the event of your retirement, at your election or in accordance with
the Company's generally applicable retirement policies, as in effect from time
to time, this Agreement shall automatically terminate, without additional notice
to you, as of the effective date of your retirement. Notwithstanding the first
sentence of this paragraph and the first sentence of this Section B, if a Change
in Control of the Company should occur while you are still an employee of the
Company and while this Agreement is in effect, then this Agreement shall
continue in effect from the date of such Change in Control of the Company for a
period of two years. Prior to a Change in Control of the Company, your
employment may be terminated by the Company for Cause at any time pursuant to a
Notice of Termination. In such event, you shall not be entitled to the benefits
provided hereunder. No benefits shall be payable hereunder unless your
employment is terminated without Cause or there shall have been a Change in
Control of the Company and your employment by the Company shall thereafter
terminate in accordance with Section D hereof.
SECTION C. TERMINATION PRIOR TO CHANGE IN CONTROL
1. Compensation Prior to a Change in Control. If you are Terminated by
the Company without Cause during the term of this Agreement and prior to a
Change in Control of the Company, you shall be entitled to receive:
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(a) payment of the higher of; (1) your salary immediately prior to your
Date of Termination, or (2) your highest salary during the prior three
fiscal years preceding the fiscal year in which your Date of
Termination occurs, for a period of two (2) years after your Date of
Termination ("Salary Continuation Period");
(b) continuation of your and your eligible dependents' existing
participation at regular employee rates, in effect from time to time,
in all of the Company's medical, dental and group life plans and other
programs in which you were participating immediately prior to your Date
of Termination during the Salary Continuation Period, after which time
you and your eligible dependents will be eligible for coverage under
COBRA. In the event that your continued participation in any such plan
or program is for whatever reason impossible, the Company shall arrange
upon comparable terms to provide you with benefits substantially
equivalent on an after tax basis to those which you and your eligible
dependents are, or become, entitled to receive under such plans and
programs;
(c) if and when payments are made, payment in cash of any pro-rata
portion (up through your Date Of Termination) of any amounts you would
have received under the Company's performance unit/share plans, Annual
Incentive Compensation Plan, and any other similar executive
compensation plan in which you were a participant immediately prior to
your Date of Termination;
(d) provide for payment in cash an amount equal to your Average Annual
Bonus;
(e) continuation of your existing participation in the Company's thrift
plan, cash balance pension plan, non-qualified supplemental pension
plan, deferred compensation plan and financial counseling services plan
during the Salary Continuation Period (payments made pursuant to
paragraph 1(a) and 1(c) hereof shall be deemed includable compensation
under these plans to the same extent as if you had remained an active
employee of the company and the payments were made for base salary and
annual bonus, respectively);
(f) outplacement services substantially similar to those historically
offered by the Company to displaced senior executives; for a period not
to exceed the Salary Continuation Period;
(g) pay to you an amount equal to the value of all unused, earned and
accrued vacation as of your Date of Termination; and
(h) provide for the immediate vesting of all stock options held by you,
as of your Date of Termination, under any Company stock option plan and
all such options shall be exercisable during the Salary Continuation
Period and for 120 days thereafter.
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However, in the event that your employment with the Company is Terminated during
the term of this Agreement and prior to a Change in Control of the Company and
such Termination is not a Termination without Cause (including, without
limitation, termination by reason of your voluntary termination (other than
Constructive Termination), retirement, death, or Disability), or if your
employment is terminated for Cause during the term of this Agreement, you shall
not be entitled to receive any benefits under this Agreement.
2. Release. In exchange for the benefits herein, you completely release
the Company to the fullest extent permitted by law from all claims you may have
against the Company on your Date of Termination except claims related to (a)
claims for benefits to which you are entitled under this Agreement and (b) any
applicable worker's compensation or unemployment compensation.
3. Payment of Benefits. Unless otherwise provided in this Agreement, in
the applicable compensation or stock option plan or program, or unless you
otherwise elect, all payments shall be made to you in a single lump sum within
thirty (30) days after your Date of Termination. Notwithstanding the payment of
benefits hereunder in a lump sum, the benefits stated herein to continue through
the Salary Continuation Period shall continue through the period. These benefits
are in addition to all accrued and vested benefits to which you are entitled to
under any of the Company's plans and arrangements, including but not limited to,
the accrued vested benefits to which you are eligible for and entitled to
receive under any of the Company's qualified and non-qualified benefit or
retirement plans, or any successor plans in effect on your Date of Termination
hereunder.
4. No Duty to Mitigate. You shall not be required to mitigate the
amount of any payment provided for in this Section by seeking other employment
or otherwise, nor shall the amount of any payment provided for in this Section
be reduced by any compensation earned by you as the result of employment by
another employer after your Date of Termination, or otherwise. Except as
provided herein, the Company shall have no right to set off against any amount
owing hereunder any claim which it may have against you.
SECTION D. TERMINATION FOLLOWING CHANGE IN CONTROL
1. Qualifying Termination. If your termination is a Qualifying
Termination, you shall be entitled to receive the payments and benefits provided
in this Section.
2. Notice of Termination. Except as provided in Section F, paragraph 1,
any termination of your employment following a Change in Control of the Company
shall be communicated by written Notice of Termination to the other party
hereto. No termination shall be effective without such Notice of Termination.
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3. Compensation Upon Termination After a Change in Control.
(a) If your termination is a Qualifying Termination, then the Company
shall pay to you as severance pay (and without regard to the provisions
of any benefit or incentive plan), in a lump sum cash payment on the
fifth (5th) day following your Date of Termination, an amount equal to
three (3) times the higher of; (1) your salary immediately prior to
your Date of Termination, or (2) your highest salary during the prior
three (3) fiscal years preceding the fiscal year in which your Date of
Termination occurs or, if greater, the prior three (3) fiscal years
preceding the fiscal year in which the Change in Control of the Company
occurs.
(b) If your termination is a Qualifying Termination, the Company shall,
in addition to the payments required by the preceding paragraph:
(i) provide for continuation of your and your eligible
dependents' participation at regular employee rates, in effect
from time to time, in all of the Company's medical, dental and
group life plans and other programs in which you were
participating immediately prior to your Date of Termination
for a period of three years from your Date of Termination,
after which time you and your eligible dependents will be
eligible for coverage under COBRA. In the event that your
continued participation in any such plan or program is for
whatever reason impossible, the Company shall arrange upon
comparable terms to provide you with benefits substantially
equivalent on an after tax basis to those which you and your
eligible dependents are, or become, entitled to receive under
such plans and programs;
(ii) provide for full payment in cash of any performance
unit/share awards in existence on your Date of Termination
less any amounts paid to you under the applicable performance
unit/share plan upon a Change in Control of the Company
pursuant to the provisions of such plan; plus any pro rata
portion (up through your date of termination) of any amounts
you would have received under the Company's Incentive
Compensation Plan and any other similar executive compensation
plan in which you were a participant immediately prior to your
Date of Termination;
(iii) provide for payment in cash of an amount equal to three
times your Average Annual Bonus;
(iv) provide those benefits or compensation under any
compensation plan, arrangement or agreement not in existence
as of the date hereof but which may be established by the
Company prior to your Date of Termination at such time as
payments are made thereunder to the same extent as if you had
been a full-time employee on the date such payments would
otherwise have been made or benefits vested;
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(v) for three (3) years after your Date of Termination,
provide and pay for outplacement services, by a firm
reasonably acceptable to you, that have historically been
offered to displaced employees generally by the Company under
substantially the same terms and fee structure as is
consistent with an employee in your then current position (or,
if higher, your position immediately prior to the Change in
Control of the Company);
(vi) for three (3) years after your Date of Termination,
provide and pay for financial planning services, by a firm
reasonably acceptable to you, that have historically been
offered to you under substantially the same terms and fee
structure as is consistent with an employee in your then
current position (or, if higher, your position immediately
prior to the Change in Control of the Company);
(vii) pay to you an amount equal to the value of all unused,
earned and accrued vacation as of your Date of Termination
pursuant to the Company's policies in effect immediately prior
to the Change in Control of the Company; and
(viii) provide for the immediate vesting of all stock options
held by you, as of your Date of Termination, under any Company
stock option plan and all such options shall be exercisable
for the remaining terms of the options.
(ix) payments made pursuant to paragraphs 3.(a) and 3.(b)(iii)
hereof shall be deemed includable compensation under the
Company's thrift plan, cash balance pension plan,
non-qualified supplemental pension plan and deferred
compensation plan as if you had remained an active employee of
the Company and payments were made for base salary and annual
bonus, respectively.
4. Release. In exchange for the benefits herein, you completely release
the Company to the fullest extent permitted by law from all claims you may have
against the Company on your Date of Termination except claims related to (a)
claims for benefits to which you are entitled under this Agreement and (b) any
applicable worker's compensation or unemployment compensation.
5. Payment of Benefits. Unless otherwise provided in this Agreement or
in the applicable compensation or stock option plan or program, or unless you
otherwise elect, all payments shall be made to you within thirty (30) days after
your Date of Termination. These benefits are in addition to all accrued and
vested benefits to which you are entitled to under any of the Company's plans
and arrangements, including but not limited to, the accrued vested benefits to
which you are eligible for and entitled to receive under any of the Company's
qualified and non-qualified benefit or retirement plans, or any successor plans
in effect on your Date of Termination hereunder.
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6. No duty to Mitigate. You shall not be required to mitigate the
amount of any payment provided for in this Section by seeking other employment
or otherwise, nor shall the amount of any payment provided for in this Section
be reduced by any compensation earned by you as the result of employment by
another employer after your Date of Termination, or otherwise. Except as
provided herein, the Company shall have no right to set off against any amount
owing hereunder any claim which it may have against you.
7. Competitive Activity. In consideration of the foregoing, you agree
that if your employment is terminated during the term of this Agreement and
after a Change in Control of the Company, then during a period ending six (6)
months following your Date of Termination you shall not engage in any
Competitive Activity; provided, you shall not be subject to the foregoing
obligation if the Company breaches a material provision of this Agreement. If
you choose to engage in any Competitive Activity during that period, the Company
shall be entitled to recover any benefits paid to you under this Agreement. For
purposes of this Agreement, "Competitive Activity" shall mean your
participation, without the written consent of the General Counsel of the
Company, in the management of any business operation of any enterprise if such
operation (a "Competitive Operation") engages in substantial and direct
competition with any business operation actively conducted by the Company or its
divisions and Subsidiaries on your Date of Termination. For purposes of this
paragraph, a business operation shall be considered a Competitive Operation if
such business sells a competitive product or service which constitutes (i) 15%
of that business's total sales or (ii) 15% of the total sales of any individual
subsidiary or division of that business and, in either event, the Company's
sales of a similar product or service constitutes (i) 15% of the total sales of
the Company or (ii) 15% of the total sales of any individual Subsidiary or
division of the Company. Competitive Activity shall not include (i) the mere
ownership of securities in any enterprise, or (ii) participation in the
management of any enterprise or any business operation thereof, other than in
connection with a Competitive Operation of such enterprise.
SECTION E. ADDITIONAL PAYMENTS BY THE COMPANY
Notwithstanding anything to the contrary in this Agreement, in the
event that any payment or distribution by the Company to or for your benefit,
whether paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, or any
interest or penalties with respect to such excise tax (such excise tax, together
with any such interest or penalties, are hereinafter collectively referred to as
the "Excise Tax"), the Company shall pay to you an additional payment (a
"Gross-up Payment") in an amount such that after payment by you of all taxes
(including any interest or penalties imposed with respect to such taxes),
including any income, employment and Excise Tax imposed on any Gross-up Payment,
you retain an amount of the Gross-up Payment equal to the Excise Tax imposed
upon the Payments. You and the Company shall make an initial determination as to
whether a
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Gross-up Payment is required and the amount of any such Gross-up Payment. If you
and the Company can not agree on whether a Gross-up Payment is required or the
amount thereof, then an independent nationally recognized accounting firm,
appointed by you, shall determine the amount of the Gross-up Payment. The
Company shall pay all expenses which you may incur in determining the Gross-up
Payment. You shall notify the Company in writing of any claim by the Internal
Revenue Service which, if successful, would require the Company to make a
Gross-up Payment (or a Gross-up Payment in excess of that, if any, initially
determined by the Company and you) within ten days of the receipt of such claim.
The Company shall notify you in writing at least ten days prior to the due date
of any response required with respect to such claim if it plans to contest the
claim. If the Company decides to contest such claim, you shall cooperate fully
with the Company in such action; provided, however, the Company shall bear and
pay directly or indirectly all costs and expenses (including additional interest
and penalties) incurred in connection with such action and shall indemnify and
hold you harmless, on an after-tax basis, for any Excise Tax or income tax,
including interest and penalties with respect thereto, imposed as a result of
the Company's action. If, as a result of the Company's action with respect to a
claim, you receive a refund of any amount paid by the Company with respect to
such claim, you shall promptly pay such refund to the Company. If the Company
fails to timely notify you whether it will contest such claim or the Company
determines not to contest such claim, then the Company shall immediately pay to
you the portion of such claim, if any, which it has not previously paid to you.
SECTION F. MISCELLANEOUS
1. Assumption of Agreement. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, share exchange
or otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to you, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of a material provision
of this Agreement and shall entitle you to compensation in the same amount and
on the same terms as you would be entitled pursuant to Section D, except that
for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed your Date of Termination without a
Notice of Termination being given.
2. Confidentiality. All Confidential Information which you acquire or
have acquired in connection with or as a result of the performance of services
for the Company, whether under this Agreement or prior to the effective date of
this Agreement, shall be kept secret and confidential by you unless (a) the
Company otherwise consents, (b) the Company breaches any material provision of
this Agreement, or (c) you are legally required to disclose such Confidential
Information by a court of competent jurisdiction. This covenant of
confidentiality shall extend beyond the term of this Agreement and shall survive
the termination of this Agreement for any
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reason. If you breach this covenant of confidentiality, the Company shall be
entitled to recover from any benefits paid to you under this Agreement its
damages resulting from such breach.
3. Employment. You agree to be bound by the terms and conditions of
this Agreement and to remain in the employ of the Company during any period
following any public announcement by any Person of any proposed transaction or
transactions which, if effected, would result in a Change in Control of the
Company until a Change in Control of the Company has taken place. However,
nothing contained in this Agreement shall impair or interfere in any way with
the right of the Company to terminate your employment for Cause prior to a
Change in Control of the Company.
4. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled exclusively by
arbitration in accordance with the Center for Public Resources' Model ADR
Procedures and Practices, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
Notwithstanding the foregoing, the Company shall not be restricted from seeking
equitable relief, including injunctive relief as set forth in paragraph 5 of
this Section, in the appropriate forum. Any cost of arbitration will be paid by
the Company. In the event of a dispute over the existence of Good Reason or
Cause after a Change in Control of the Company, the Company shall continue to
pay your salary, bonuses and plan benefits pending resolution of the dispute. If
you prevail in the arbitration, the remaining amounts due to you under this
Agreement are to be immediately paid to you.
5. Injunctive Relief. You acknowledge and agree that the remedy of the
Company at law for any breach of the covenants and agreements contained in
paragraph 2 of this Section and in Section D, paragraph 4 will be inadequate,
and that the Company will be entitled to injunctive relief against any such
breach or any threatened, imminent, probable or possible breach. You represent
and agree that such injunctive relief shall not prohibit you from earning a
livelihood acceptable to you.
6. Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notices to the Company shall be directed to the attention of the
General Counsel of the Company, or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.
7. Indemnification. The Company will indemnify you to the fullest
extent permitted by the laws of the State of Missouri and the existing By-laws
of the Company, in respect of all your services rendered to the Company and its
divisions and Subsidiaries prior to your Date of Termination. You shall be
entitled to the protection of any insurance policies the Company now or
hereafter maintains generally for the benefit
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of its directors, officers and employees (but only to the extent of the coverage
afforded by the existing provisions of such policies) to protect against all
costs, charges and expenses whatsoever incurred or sustained by you in
connection with any action, suit or proceeding to which you may be made a party
by reason of your being or having been a director, officer or employee of the
Company or any of its divisions or Subsidiaries during your employment
therewith.
8. Further Assurances. Each party hereto agrees to furnish and execute
such additional forms and documents, and to take such further action, as shall
be reasonably and customarily required in connection with the performance of
this Agreement or the payment of benefits hereunder.
9. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by you and such officer(s) as may be specifically designated
by the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.
10. Termination of other Agreements. Upon execution by both parties,
this Agreement shall terminate and shall replace all prior employment and
severance agreements between you and the Company and its divisions or
Subsidiaries and the terms hereof shall govern as if executed on the initial
date of such prior employment and severance agreements.
11. Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
12. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
13. Legal Fees And Expenses. Any other provision of this Agreement
notwithstanding, the Company shall pay all legal fees and expenses which you may
incur as a result of the Company's unsuccessful contesting of the validity,
enforceability or your interpretation of, or determinations under, any part of
this Agreement.
14. Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Missouri.
15. Agreement Binding on Successors. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and
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assigns. This Agreement shall inure to the benefit of and be enforceable by your
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you should die while any amounts would
still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your devisee, legatee, or other designee or, if there
be no such designee, to your estate.
16. Headings. All Headings are inserted for convenience only and shall
not affect any construction or interpretation of this Agreement.
If this Agreement correctly sets forth our agreement on the subject
matter hereof, please sign and return to the Company the enclosed copy of this
Agreement which will then constitute our agreement on this matter.
Sincerely,
ARCH COAL, INC.
By:
-----------------------------------
ACCEPTED as of the day
first above written
-------------------------------
Employee
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